INVESTMENT AGREEMENT, dated as of
May 26, 2020 (this “
Agreement”), by and among KAR Auction Services, Inc., a Delaware corporation (the “
Company”) and Periphas Capital GP, LLC, a Delaware limited
liability company (the “
Investor”).
WHEREAS,
the Company desires to issue, sell and deliver to the Investor, and the Investor desires to purchase and acquire from
the Company, pursuant to the terms and conditions set forth in this Agreement, up to an
aggregate of 50,000 shares of
the Company’s Series A Convertible Preferred Stock, par value $0.01 per share (the “
Series A Preferred Stock”), having the powers, designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations and restrictions thereof specified in the form of Certificate of Designations attached hereto as
Exhibit A (the “
Certificate of Designations”); and
WHEREAS, substantially simultaneously with the execution of this Agreement,
the Company has entered into that certain investment agreement, by and between
the Company and Ignition Parent LP (the “
Apax Investment
Agreement”).
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. (a) As used in this Agreement (including the recitals hereto), the following terms shall have the following meanings:
“25% Beneficial Ownership Requirement” means that the Investor Parties continue to beneficially own at all times shares of Series A Preferred Stock and/or shares of Common Stock that were issued upon conversion
of shares of Series A Preferred Stock that represent in the aggregate and on an as converted basis, at least 25% of the number of shares of Common Stock beneficially owned by the Investor Parties, on an as converted basis, as of immediately
following the Initial Closing, or from and after the Second Closing, as of immediately following the Second Closing.
“50% Beneficial Ownership Requirement” means that the Investor Parties continue to beneficially own at all times shares of Series A Preferred Stock and/or shares of Common Stock that were issued upon conversion
of shares of Series A Preferred Stock that represent in the aggregate and on an as converted basis, at least 50% of the number of shares of Common Stock beneficially owned by the Investor Parties, on an as converted basis, as of immediately
following the Initial Closing, or from and after the Second Closing, as of immediately following the Second Closing.
“Accrued Per Share Amount” means the amount of dividends accrued on a share of Series A Preferred Stock from and including the Initial Closing Date (as defined in the Agreement) through to but excluding the
Second Closing Date.
“Action” has the meaning set forth in Section 3.07.
“
Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person;
provided,
however, (i) that the
Company and its
Subsidiaries, on the one hand, and any Investor Party or any of its Affiliates, on the other hand, shall not be deemed to be Affiliates; (ii)
“portfolio companies” (as such term is customarily used among institutional investors) in
which any Investor Party or any of its Affiliates has an investment (whether as debt or equity) shall not be deemed an Affiliate of such Investor Party and (iii) the Excluded Sponsor Parties shall not be deemed to be Affiliates of any Investor
Party,
the Company or any of
the Company’s
Subsidiaries. For this purpose, “
control” (including its correlative meanings, “
controlling”, “
controlled by” and “
under common control with”), with respect to the relationship
between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs, management or polices of a Person, whether through the ownership of voting securities, as trustee or
executor, by
Contract or otherwise.
“Aggregate Purchase Price” has the meaning set forth in Section 2.03(b).
“Agreement” has the meaning set forth in the Preamble.
“Anti-Corruption Laws” has the meaning set forth in Section 3.08(b).
“
Anti-Money Laundering Laws” means anti-money laundering-related laws, regulations, and codes of practice applicable to
the Company and its
Subsidiaries and their operations from time to time, including without
limitation the EU Anti-Money Laundering Directives and any laws, decrees, administrative orders, circulars, or instructions implementing or interpreting the same.
“Apax Investment Agreement” has the meaning set forth in the Recitals.
“
Apax Registration Rights Agreement” means that certain Registration
Rights Agreement, to be entered into by
the Company and Apax in connection with the transactions contemplated by the Apax Investment
Agreement, or any successor agreement thereto, as the foregoing may be amended, supplemented or otherwise modified.
“as converted basis” means (i) with respect to the outstanding shares of Common Stock as of any date, all outstanding shares of Common Stock calculated on a basis in which all shares of Common Stock issuable
upon conversion of the outstanding shares of Series A Preferred Stock (at the Conversion Rate in effect on such date as set forth in the Certificate of Designations) are assumed to be outstanding as of such date and (ii) with respect to any
outstanding shares of Series A Preferred Stock as of any date, the number of shares of Common Stock issuable upon conversion of such shares of Series A Preferred Stock on such date (at the Conversion Rate in effect on such date as set forth in the
Certificate of Designations).
“
Available Registration Statement” shall mean, with respect to a Registration Statement as of a date, that (i) as of such date such Registration Statement is effective for an offering to be made on a delayed or
continuous basis, there is no stop order with respect thereto and
the Company reasonably believes that such Registration Statement will be continuously available for the resale of Registrable Securities for the next ten (10) Business Days and (ii)
as of such date and continuously for the next ten (10) Business Days, (a) there is not in effect a Postponement Period or Quarterly Blackout Period (as each such term is defined in the Registration
Rights Agreement) and (b) the Investor Parties are
not restricted by the holdback provision of
Section 9(a) of the Registration
Rights Agreement or any related
“lock-up” agreement.
“Balance Sheet Date” has the meaning set forth in Section 3.05(c).
“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.03(a).
Any Person shall be deemed to “beneficially own”, to have “beneficial ownership” of, or to be “beneficially owning” any securities (which securities shall also be deemed “beneficially owned”
by such Person) that such Person is deemed to “beneficially own” within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act; provided that any Person shall be deemed to beneficially own any securities that such Person has the right
to acquire, whether or not such right is exercisable immediately (including assuming conversion of all Series A Preferred Stock, if any, owned by such Person to Common Stock).
“Business Day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are authorized or required by Law to be closed with respect to the provision of “essential
services” (as defined by any applicable Governmental Authority from time to time).
“Capitalization Date” has the meaning set forth in Section 3.02(a).
“Certificate of Designations” has the meaning set forth in the Recitals.
“Closings” means together, the Initial Closing and the Second Closing, if any.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“
Common Stock” means the common stock, par value $0.01 per share, of
the Company.
“Company” has the meaning set forth in the Preamble.
“
Company Charter Documents” means
the Company’s
certificate of incorporation and
by-laws, each as amended to the date of this Agreement, and shall include the Certificate of Designations, as filed with the
Secretary of State of the State of Delaware.
“Company Disclosure Letter” has the meaning set forth in Article III.
“
Company Plan” means each plan, program, policy, agreement or other arrangement covering current or former employees, directors or consultants, that is (i) an employee welfare plan within the meaning of
Section 3(1) of ERISA, (ii) an employee pension benefit plan within the meaning of Section 3(2) of ERISA, other than any plan which is a
“multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (iii) a stock option, stock purchase, stock
appreciation right or other stock-based agreement, program or plan, (iv) an individual employment, consulting, severance, retention or other similar agreement or (v) a bonus, incentive, deferred compensation, profit-sharing, retirement,
post-retirement, vacation, severance or termination pay, benefit or fringe-benefit plan, program, policy, agreement or other arrangement, in each case that is sponsored, maintained or contributed to by
the Company or any of its
Subsidiaries or to
which
the Company or any of its
Subsidiaries is obligated to contribute to or has or may have any liability, other than any plan, program, policy, agreement or arrangement sponsored and administered by a Governmental Authority.
“Company PRSUs” means a performance-based restricted stock unit with respect to Common Stock.
“Company RSUs” means a restricted stock unit with respect to Common Stock.
“Company SEC Documents” has the meaning set forth in Section 3.05(a).
“Company Securities” has the meaning set forth in Section 3.02(b).
“Company Stock Options” means an option to purchase shares of Common Stock.
“Company Stock Plans” means the KAR Auction Services, Inc. 2009 Omnibus Stock and Incentive Plan, as amended and the KAR Auction Services, Inc. Employee Stock Purchase Plan, in each case as amended from time to
time.
“
Competitor” means any Person that is primarily engaged in any business that directly or indirectly competes with
the Company’s or any of its
Subsidiaries’ businesses, including without limitation those related
to vehicle auction, vehicle remarketing, floorplan financing or original equipment manufacturer services in Australia, Canada, Europe, Mexico, the United Kingdom and the United States.
“Confidential Information” has the meaning set forth in Section 5.05.
“Confidentiality Agreement” has the meaning set forth in Section 5.05.
“
Contract” has the meaning set forth in
Section 3.03(b).
“Conversion Rate” has the meaning set forth in the Certificate of Designations.
“DGCL” means the Delaware General Corporation Law, as amended, supplemented or restated from time to time.
“DOJ” has the meaning set forth in Section 5.02(c).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Sponsor Parties” means the Sponsor Group, other than the Investor Parties, in their businesses distinct from and not engaged in the corporate private equity business of the Investor.
“
Existing Credit Agreement” means the Amended and Restated Credit Agreement, dated
March 11, 2014, as amended on
March 9, 2016,
May 31, 2017 and
September 19, 2019, among KAR Auction Services, Inc., as the
borrower, the several banks and other financial institutions or entities from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
“
Export Control Laws” means the EC Regulation 428/2009 and the implementing laws and regulations of the EU member states; the U.S. Export Administration Act, U.S. Export Administration Regulations, U.S. Arms
Export Control Act, U.S. International Traffic in Arms Regulations, and their respective implementing rules and regulations; the U.K. Export Control Act 2002 (as amended and extended by the Export Control Order 2008) and its implementing rules and
regulations; and other similar export control laws or restrictions applicable to
the Company, its
Subsidiaries and their respective operations from time to time.
“Fall-Away of Investor Observer Rights” means the first day on which the Investor Parties no longer meet the 50% Beneficial Ownership Requirement.
“Filed SEC Documents” has the meaning set forth in Article III.
“Fraud” means actual, not constructive, common law fraud (under the laws of the State of Delaware) in the making of the representations and warranties expressly given in this Agreement.
“FTC” has the meaning set forth in Section 5.02(c).
“GAAP” means generally accepted accounting principles, as in effect in the United States from time to time.
“Governmental Authority” means any government, court, regulatory or administrative agency, commission, arbitrator or authority or other legislative, executive or judicial governmental official or entity (in each
case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“HSR Form” has the meaning set forth in Section 5.02(b).
“Infringe” has the meaning set forth in Section 3.18.
“Initial Acquired Shares” has the meaning set forth in Section 2.01.
“Initial Closing” has the meaning set forth in Section 2.02(a).
“Initial Closing Date” has the meaning set forth in Section 2.02(a).
“
Initial Expense Reimbursement Amount” means reimbursement for certain reasonable out-of-pocket costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred by
the Company through the Initial Closing in connection with this Agreement and the Transactions, in the amount of $200,000.00.
“Initial Purchase” has the meaning set forth in Section 2.01.
“Initial Purchase Price” has the meaning set forth in Section 2.02(b).
“Intellectual Property” has the meaning set forth in Section 3.18.
“Investor” has the meaning set forth in the Preamble. Any reference to any action by the Investor Parties in this Agreement that requires an instrument in writing signed by the Investor Parties shall require an
instrument in writing signed by the Investor, so long as it is the sole Investor Party, or each of the Investor Parties; provided that an instrument in writing signed by the Investor Representative shall be deemed to be an instrument in
writing signed by each of the Investor Parties.
“Investor Board Observer” means an Investor Designee who was appointed as a non-voting observer of the Board.
“Investor Designee” means an individual designated in writing by the Investor Parties and reasonably acceptable to the Board to be appointed as a non-voting observer of the Board pursuant to Section 5.10(a).
“Investor Material Adverse Effect” means any effect, change, event or occurrence that, individually or in the aggregate, would or would reasonably be expected to, prevent, materially delay, interfere with,
hinder or impair (i) the consummation by the Investor of any of the Transactions or (ii) the compliance by the Investor with its obligations under this Agreement.
“Investor Parties” means the Investor and each Permitted Transferee of the Investor to whom shares of Series A Preferred Stock or Common Stock issued upon conversion of shares of Series A Preferred Stock are
transferred pursuant to Section 5.08(b)(i).
“Investor Representative” has the meaning set forth in Section 8.12.
“IRS” has the meaning set forth in Section 5.12(a).
“Issuer Agreement” has the meaning set forth in Section 5.18.
“Judgments” has the meaning set forth in Section 3.07.
“
Knowledge” means, with respect to
the Company, the actual knowledge of the individuals listed on
Section 1.01 of
the Company Disclosure Letter, after reasonable inquiry.
“Laws” has the meaning set forth in Section 3.08(a).
“
Liens” means any mortgage, pledge, lien, charge, encumbrance, security interest or other restriction of any kind or nature, whether based on common law, statute or
contract.
“Lock-Up Period” means the period commencing on the Initial Closing Date and ending on the date that is one (1) year after the Initial Closing Date.
“
Material Adverse Effect” means any effect, change, event or circumstance that, individually or in the aggregate with all other effects, changes, events or circumstances, has had, or would reasonably be expected
to (i) have a material adverse effect on the business, assets, properties, financial condition or results of operation of
the Company and its
Subsidiaries, taken as a whole;
provided,
however, that any effects, changes, events or
circumstances resulting from the following items shall not, individually or taken together, be deemed to constitute a Material Adverse Effect or considered when determining whether a Material Adverse Effect has occurred: (a) changes in economic,
political, regulatory, financial or capital market conditions generally or in the industries in which
the Company and its
Subsidiaries operate, (b) any acts of war, sabotage, terrorist activities or changes imposed by a Governmental Authority
associated with national security, (c) effects of epidemics, pandemics or disease outbreaks (including the COVID-19 virus) or weather or meteorological events, (d) any change of Law, accounting standards, regulatory policy or industry standards
after the date of this Agreement, (e) the announcement, execution or delivery of this Agreement or the consummation of the Transactions (it being understood that this clause (e) shall not apply to a breach of any representation or warranty set
forth in
Section 3.01,
Section 3.03 or
Section 3.04), (f) any actions taken by, or at the written request of, Investor or the Investor Parties and (g) any failure by
the Company to meet projections or forecasts or revenue or
earnings predictions for any period (but, for the purposes of clarity, not the underlying cause of such failure), except, solely with respect to clauses (a), (b), (c) and (d), to the extent
the Company and its
Subsidiaries, taken as a whole, are
materially and disproportionately affected thereby relative to other participants in the industry or industries in which
the Company and its
Subsidiaries operate (in which case only the incremental material and disproportionate effect or effects
may be taken into account in determining whether there has been a Material Adverse Effect) or (ii) prevent or materially delay, interfere with, hinder or impair (x) the consummation by
the Company or its
Subsidiaries of any of the Transactions on a
timely basis or (y) the compliance by
the Company or its
Subsidiaries with its respective obligations under this Agreement.
“New Security” has the meaning set forth in Section 5.16(a).
“Non-Recourse Party” has the meaning set forth in Section 8.05(b).
“NYSE” means the New York Stock Exchange.
“OECD” means the Organisation for Economic Co-operation and Development.
“OFAC” has the meaning set forth in Section 3.08(d).
“Permits” has the meaning set forth in Section 3.08(a).
“Permitted Loan” has the meaning set forth in Section 5.08(b)(v).
“
Permitted Transferee” means (i) an Affiliate (other than any
“portfolio company” described below) of the Investor, (ii) any successor entity, or (iii) any investment fund, vehicle, holding company or similar
entity with respect to which a member of the Sponsor Group serves as a general partner, managing member, manager or advisor, or any successor entity of the Persons described in this clause (iii);
provided,
however, that in no event
shall (x)
the Company or any of its
Subsidiaries, (y) any
“portfolio company” (as such term is customarily used among institutional investors) of any Person or any entity controlled by any portfolio company of any Person or (z) any Competitor
(whether or not an Affiliate of the Investor) constitute a
“Permitted Transferee”.
“Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof, any other form of entity or any group comprised of two or more of the foregoing.
“Preemptive Securities” has the meaning set forth in Section 5.15(a).
“Preemptive Rights Portion” has the meaning in Section 5.16(b).
“
Registrable Securities” has the meaning set forth in the Registration
Rights Agreement.
“
Registration Rights Agreement” means that certain Registration
Rights Agreement, which, subject to
Section 2.03(b), is to be entered into by
the Company and the Investor on the Second Closing Date, the
form of which is set forth as
Exhibit B hereto, as it may be amended, supplemented or otherwise modified.
“
Registration Statement” has the meaning set forth in the Registration
Rights Agreement.
“Representatives” means, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys,
accountants, other advisors and other representatives.
“Restraints” has the meaning set forth in Section 6.01(a).
“Sanctions” has the meaning set forth in Section 3.08(d).
“SEC” means the Securities and Exchange Commission.
“Second Closing” has the meaning set forth in Section 2.03(a).
“Second Closing Date” has the meaning set forth in Section 2.03(a).
“Second Expense Reimbursement Amount” means reimbursement for certain reasonable out-of-pocket costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred by the
Company through the Initial Closing in connection with this Agreement and the Transactions, in an amount equal to 1% of the aggregate dollar amount of the Supplemental Acquired Shares that the Investor syndicated prior to the Second Closing to fund
the Supplemental Purchase.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series A Preferred Stock” has the meaning set forth in the Recitals.
“Standstill Expiration Date” has the meaning set forth in Section 5.07.
“Stockholder Approval” has the meaning set forth in Section 5.17.
“Sponsor Group” means Investor and the funds advised by it (whether currently or in the future) or any of their respective Affiliates.
“Subsidiary” means with respect to any entity, (i) any corporation of which a majority of the securities entitled to vote generally in the election of directors thereof, at the time as of which any determination
is being made, are owned by such entity, either directly or indirectly, and (ii) any joint venture, general or limited partnership, limited liability company or other legal entity in which such entity is the record or beneficial owner, directly or
indirectly, of a majority of the voting interests or the general partner.
“Supplemental Acquired Shares” has the meaning set forth in Section 2.01.
“Supplemental Per Share Purchase Price” means $1,000.00 plus the Accrued Per Share Amount.
“Supplemental Purchase” has the meaning set forth in Section 2.01.
“Supplemental Purchase Price” has the meaning set forth in Section 2.01.
“Tax” or “Taxes” mean all taxes, imposts, levies, duties, deductions, withholdings (including backup withholding), assessments, fees or other like assessments or charges, in each case in the nature of a
tax, imposed by a Governmental Authority, together with all interest, penalties and additions imposed with respect to such amounts.
“Tax Return” means any report, return, information return, filing, claim for refund or other information filed or required to be filed with a Governmental Authority in connection with Taxes, including any
schedules or attachments thereto, and any amendments to any of the foregoing.
“Termination Date” has the meaning set forth in Section 7.01(b).
“
Transaction Documents” means this Agreement, the Certificate of Designations, the Registration
Rights Agreement and all other documents, certificates or agreements executed in connection with the transactions
contemplated by this Agreement, the Certificate of Designations and the Registration
Rights Agreement.
“Transactions” means the Initial Purchase, the Supplemental Purchase (if any) and the other transactions expressly contemplated by this Agreement and the other Transaction Documents, including the exercise by
any Investor Party of the right to convert Initial Acquired Shares or Supplemental Acquired Shares into shares of Common Stock.
“
Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any
contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any shares of equity securities beneficially owned by a Person or any interest in any shares of equity
securities beneficially owned by a Person;
provided,
however, that, notwithstanding anything to the contrary in this Agreement, a Transfer shall not include (i) the conversion of one or more shares of Series A Preferred Stock into
shares of Common Stock pursuant to the Certificate of Designations, (ii) the redemption or other acquisition of Common Stock or Series A Preferred Stock by
the Company, (iii) the direct or indirect transfer of any limited partnership interests or
other equity interests in an Investor Party (or any direct or indirect parent entity of such Investor Party) (
provided that if any transferor or transferee referred to in this clause (iii) ceases to be controlled (directly or indirectly) by
the Person (directly or indirectly) controlling such Person immediately prior to such transfer, such event shall be deemed to constitute a “
Transfer”) or (iv) the making any short sale of, granting any option for the purchase of, or entering
into any hedging or similar transaction with the same economic effect as a short sale of or the purpose of which is to offset the loss which results from a decline in the market price of, any shares of Series A Preferred Stock or Common Stock, or
otherwise establishing or increasing, directly or indirectly, a put equivalent position, as defined in Rule 16a-1(h) under the Exchange Act, with respect to the any of the Series A Preferred Stock or Common Stock or any other capital stock of the
Company. In the event that any Person that is a corporation, partnership, limited liability company or other legal entity (other than an individual, trust or estate) ceases to be controlled by the Person controlling such Person or a Permitted
Transferee thereof, such event shall be deemed to constitute a “
Transfer” subject to the restrictions on Transfer contained or referenced herein.
ARTICLE II
Purchase and Sale
Section 2.01
Purchase and Sale. On the terms of this Agreement and subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by the party entitled to the
benefit thereof) of the conditions set forth in
Article VI, (a) at the Initial Closing, the Investor shall, or shall cause one or more of its designees (provided each such designee is a Permitted Transferee) to, purchase and acquire
from
the Company, and
the Company shall issue, sell and deliver to the Investor, or such designee, an aggregate of 20,000 shares of Series A Preferred Stock (the “
Initial Acquired Shares”) for a purchase price per Initial Acquired Share
equal to $1,000.00, and (b) at the Second Closing, the Investor shall, subject to the Investor’s delivery of an Exercise Notice in compliance with
Section 2.04, have the option in its sole discretion to, or cause one or more of its
designees (provided each such designee is a Permitted Transferee) to, purchase and acquire from
the Company, and subject to the Investor’s delivery of an Exercise Notice in compliance with
Section 2.04,
the Company shall issue, sell and
deliver to the Investor, or such designee, an aggregate of up to such number of shares of Series A Preferred Stock specified in the Exercise Notice, but not more than 30,000 shares of Series A Preferred Stock (the “
Supplemental Acquired
Shares”) for a purchase price per Supplemental Acquired Share equal to the Supplemental Per Share Purchase Price. The purchase and sale of the Initial Acquired Shares pursuant to this
Section 2.01 is referred to as the “
Initial
Purchase” and the purchase and sale of the Supplemental Acquired Shares, if any, pursuant to this
Section 2.01 is referred to as the “
Supplemental Purchase”.
Section 2.02
Initial Closing. (a) On the terms of this Agreement, the closing of the Initial Purchase (the “
Initial Closing”) shall occur at 10:00 a.m. (New York City time) on
the second (2
nd) Business Day following such date on which the conditions to the Initial Closing set forth in
Article VI of this Agreement have been
satisfied or, to the extent permitted by applicable Law, waived by the party entitled to the benefit thereof (other than those conditions that by their nature are to be satisfied at the Initial Closing, but subject to the satisfaction or waiver
of those conditions at such time), and shall be conducted remotely via the electronic exchange of documents and signatures, or at such other place, time and date as shall be agreed between
the Company and the Investor;
provided that
notwithstanding anything to the contrary herein, the Investor shall not be required to effect the Initial Closing prior to the fifteenth (15
th) day after the date
hereof (the date on which the Initial Closing occurs, the “
Initial Closing Date”).
(b) At the Initial Closing:
(i)
the Company shall deliver to the Investor or its designee the Initial Acquired Shares, free and clear of all Liens, except restrictions imposed by the Certificate of Designations,
the Securities Act,
Section 5.08 and any applicable securities Laws and evidence of the issuance of the Initial Acquired Shares to the Investor credited to book-entry accounts maintained by the transfer agent of
the Company; and
(ii) the Investor shall, or shall cause its designee to pay an amount equal to $20,000,000.00 (the “
Initial Purchase Price”)
plus the
Initial Expense Reimbursement Amount to
the Company, by wire transfer of immediately available U.S. federal funds, to the account designated by
the Company in writing at least two (2) Business Days prior to the Initial Closing Date.
Section 2.03
Second Closing. (a) On the terms of this Agreement, the closing of the Supplemental Purchase, if any, (the “
Second Closing”) shall occur at 10:00 a.m. (New York
City time) on
June 29, 2020, subject to the conditions to the Second Closing set forth in
Article VI of this Agreement being satisfied or, to the extent permitted by applicable Law, waived by the party entitled to the benefit thereof,
at such time, and shall be conducted remotely via the electronic exchange of documents and signatures, or at such other place, time and date as shall be agreed between
the Company and the Investor; provided that notwithstanding anything to the
contrary herein, the Investor shall not be required to effect the Second Closing after the Outside Date (the date on which the Second Closing occurs, the “
Second Closing Date”).
(b) At the Second Closing:
(i)
the Company shall deliver to the Investor or its designee (A) any Supplemental Acquired Shares, free and clear of all Liens, except restrictions imposed by the Certificate of
Designations, the Securities Act,
Section 5.08 and any applicable securities Laws and evidence of the issuance of the Supplemental Acquired Shares to the Investor credited to book-entry accounts maintained by the transfer agent of the
Company and (B) if the number of Supplemental Acquired Shares is greater than 20,000, the Registration
Rights Agreement, duly executed by
the Company; and
(ii) the Investor shall, or shall cause one or more of its designees to, (A) pay to
the Company, by wire transfer of immediately available U.S. federal funds, to the account designated by
the Company in writing at least two (2) Business Days prior to the Second Closing Date an amount in cash equal to the product of (1) the Supplemental Per Share Purchase Price and (2) the number of Supplemental Acquired Shares (the “
Supplemental
Purchase Price” and together with the Initial Purchase Price the “
Aggregate Purchase Price”)
plus the Second Expense Reimbursement Amount, and (B) if the number of Supplemental Acquired
Shares is greater than 20,000, deliver to
the Company the Registration
Rights Agreement, duly executed by the Investor.
Section 2.04
Exercise Notice. No later than 3:00 p.m. New York City time on
June 17, 2020 (or, if the Second Closing occurs on any date other than
June 29, 2020, on the eighth (8
th) Business Day prior to the date of the Second Closing), the Investor shall, if it desires to exercise its option to purchase any Supplemental Acquired Shares pursuant to
Section 2.01,
provide written notice to
the Company (at
the Company’s address set forth in the notice provision of this Agreement) of the number of Supplemental Acquired Shares that the Investor wishes to acquire in the Supplemental Purchase (the “
Exercise
Notice”). For the avoidance of doubt and notwithstanding anything to the contrary in this Agreement, unless and until the Investor has delivered the Exercise Notice (and from and after such time, subject to the satisfaction, or to the
extent permitted by applicable Law, waiver by the party entitled to the benefit thereof of the conditions to the consummation of the Second Closing set forth in
Article VI), the Investor shall have no obligation to acquire any
Supplemental Acquired Shares or otherwise consummate the Second Closing.
ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to the Investor as of the date of this Agreement and as of the Initial Closing and as of the Second Closing (except to the extent made only as of a specified date, in which case such
representation and warranty is made as of such date) that, except as (A) set forth in the confidential disclosure letter delivered by
the Company to the Investor prior to the execution of this Agreement (the “
Company Disclosure Letter”) (it
being understood that any information, item or matter set forth on one section or subsection of
the Company Disclosure Letter shall only be deemed disclosed with respect to, and shall only be deemed to apply to and qualify, the section or
subsection of this Agreement to which it corresponds in number and each other section or subsection of this Agreement to the extent that it is reasonably apparent on its face that such information, item or matter is relevant to such other section
or subsection) or (B) disclosed in any report, schedule, form, statement or other document (including exhibits) filed with, or furnished to, the SEC (and publicly available) after
January 1, 2018 and prior to the date of this Agreement (the “
Filed
SEC Documents”), other than any risk factor disclosures in any such Filed SEC Document contained in the
“Risk Factors” or
“Forward-Looking Statements” section (or similarly titled sections) or any forward-looking statements within the meaning
of the Securities Act or the Exchange Act thereof (it being acknowledged that nothing disclosed in the Filed SEC Documents shall be deemed to qualify or modify the representations and warranties set forth in
Sections 3.01(a),
3.02,
3.03,
3.10 and
3.11):
Section 3.01
Organization; Standing. (a)
The Company is a corporation duly organized and validly existing under the Laws of the State of Delaware, is in good standing and has all
requisite corporate power and corporate authority necessary to carry on its business as it is now being conducted, except (other than with respect to
the Company’s due organization and valid existence) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The Company is duly licensed or qualified to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction in which the
nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. True and complete copies of
the Company Charter Documents are included in the Filed SEC Documents.
(b) Each of
the Company’s
Subsidiaries is duly organized, validly existing and in good standing (where such concept is recognized under applicable Law) under the Laws of the jurisdiction of its organization,
except where the failure to be so organized, existing and in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each of
the Company’s
Subsidiaries is duly licensed or qualified to
do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.02
Capitalization. (a) The authorized capital stock of
the Company consists of 400,000,000 shares of Common Stock, 100,000,000 shares of preferred stock, par value $0.01 per
share. At the close of business on
May 21, 2020, there were 129,214,723 shares of common stock issued and outstanding. At the close of business on
December 31, 2019 (the “
Capitalization Date”), (i) 5,147,288 shares of Common Stock were
reserved and available for future issuance pursuant to
the Company Stock Plans (excluding dividend equivalent units), of which amount (A) 711,400 shares of Common Stock were subject to outstanding Company Stock Options, (B) 550,767 Company RSUs
(including dividend equivalent units) were outstanding and (C) 697,918 Company PRSUs (including dividend equivalent units) were outstanding, and (ii) no shares of preferred stock were issued or outstanding.
Section 3.02(a) of the
Company Disclosure Letter sets forth the number of Company RSUs, Company PRSUs and deferred director stock awards that
the Company has granted following the Capitalization Date and prior to the date hereof.
(b) Except as described in this
Section 3.02, there are (i) no outstanding shares of capital stock of, or other equity or voting interests of any character in,
the Company as of the date hereof other
than shares that have become outstanding after the Capitalization Date which were reserved for issuance as of the Capitalization Date as set forth in
Section 3.02(a), (ii) no outstanding securities of
the Company convertible into or
exercisable or exchangeable for shares of capital stock of, or other equity or voting interests of any character in,
the Company, (iii) no outstanding obligations, options, warrants, rights, pledges, calls, puts, phantom equity, premptive rights,
or other rights, commitments, agreements or arrangements of any character to acquire from
the Company, or that obligate
the Company to issue, any capital stock of, or other equity or voting interests (or voting debt) in, or any securities
convertible into or exercisable or exchangeable for shares of capital stock of, or other equity or voting interests (or voting debt) in,
the Company other than obligations under
the Company Stock Plans in the ordinary course of business, (iv) no
obligations of
the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interests (or
voting debt) in,
the Company (the items in clauses (i), (ii), (iii) and (iv) being referred to collectively as “
Company Securities”) and (v) no other obligations by
the Company or any of its
Subsidiaries to make any payments based on the
price or value of any Company Securities. There are no outstanding agreements of any kind which obligate
the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities (other than pursuant to the cashless
exercise of Company Stock Options or the forfeiture or withholding of Taxes with respect to Company Stock Options, Company RSUs or Company PRSUs), or obligate
the Company to grant, extend or enter into any such agreements relating to any Company
Securities, including any agreements granting any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal or similar rights with respect to any Company Securities. Except as set forth on
Section 3.02(b) of the
Company Disclosure Letter, none of
the Company or any Subsidiary of
the Company is a party to any stockholders’ agreement,
voting trust agreement, registration
rights agreement or other similar agreement or understanding relating to any Company
Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities. All outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and
were not issued in violation of any purchase option, call option, right of first refusal, subscription right, preemptive or similar rights of a third Person,
the Company Charter Documents or any agreement to which
the Company is a party. All of
the outstanding shares of capital stock or equity interests of
the Company’s
Subsidiaries have been duly authorized, validly issued, fully paid and non-assessable and none of such capital stock or equity interests are subject to or were issued in
violation of any applicable Laws and are not subject to and have not been issued in violation of any stockholders agreement, proxy, voting trust or similar agreement, or any preemptive rights, rights of first refusal or similar rights of any
Person, except as would not reasonably be expected to be material to
the Company and its
Subsidiaries, taken as a whole.
Section 3.03
Authority; Noncontravention. (a)
The Company has all necessary corporate power and corporate authority to execute and deliver this Agreement and the other Transaction
Documents and to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by
the Company of this Agreement and the other Transaction Documents, and the consummation by it of
the Transactions, have been duly authorized by the Board and no other corporate action on the part of
the Company is necessary to authorize the execution, delivery and performance by
the Company of this Agreement and the other Transaction
Documents and the consummation by it of the Transactions. This Agreement has been and at the Initial Closing or the Second Closing, as applicable, the other Transaction Documents will be, duly executed and delivered by
the Company and,
assuming due authorization, execution and delivery hereof or thereof, as applicable, by the Investor, constitutes (or in the case of the other Transaction Documents, at the Initial Closing or the Second Closing, as applicable, will constitute)
a legal, valid and binding obligation of
the Company, enforceable against
the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity (the “
Bankruptcy
and Equity Exception”).
(b) Neither the execution and delivery of this Agreement or the other Transaction Documents by
the Company, nor the consummation by
the Company of the Transactions, nor performance or compliance by
the Company
with any of the terms or provisions hereof or thereof, will (i) conflict with or violate any provision of (A)
the Company Charter Documents or (B) the similar organizational documents of any of
the Company’s
Subsidiaries or (ii) assuming that the
authorizations, consents and approvals referred to in
Section 3.04 are obtained prior to the Initial Closing Date and the filings referred to in
Section 3.04 are made and any waiting periods thereunder have terminated or expired
prior to the Initial Closing Date, (x) violate any Law or Judgment applicable to
the Company or any of its
Subsidiaries or (y) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or
constitute a default) under, result in the termination of or a right of termination or cancellation under, result in the loss of any benefit or require a payment or incur a penalty under, any of the terms or provisions of any loan or credit
agreement,
indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease, license,
contract or other agreement (each, a “
Contract”) to which
the Company or any of its
Subsidiaries is a party or by which it is bound or accelerate
the Company’s or, if applicable, any of its
Subsidiaries’ obligations under any such
Contract, except, in the case of clause (ii), as would not, individually or in the aggregate, have or reasonably be expected to have, a Material Adverse Effect.
The Company has complied and will comply with the conditions set forth in the temporary waiver of certain of the stockholder approval requirements in Section 312.03 of the NYSE Listed Company Manual set forth in SEC Release No. 34-88572 as
applicable to the issuance of the Series A Preferred Stock and of the Common Stock issuable on conversion thereof.
Section 3.04
Governmental Approvals. Except for (a) the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, (b) filings required under, and
compliance with other applicable requirements of the HSR Act, and (c) compliance with any applicable state securities or blue sky laws, no consent or approval of, or filing, license, permit or authorization, declaration or registration with,
any Governmental Authority is necessary for the execution and delivery of this Agreement and the other Transaction Documents by
the Company, the performance by
the Company of its obligations hereunder and thereunder and the consummation by the
Company of the Transactions, other than such other consents, approvals, filings, licenses, permits or authorizations, declarations or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 3.05
Company SEC Documents; Undisclosed Liabilities. (a)
The Company has filed with the SEC, on a timely basis, all required reports, schedules, forms, statements and other
documents required to be filed by
the Company with the SEC pursuant to the Exchange Act since
January 1, 2018 (collectively, the “
Company SEC Documents”). As of their respective SEC filing dates,
the Company SEC Documents complied in
all material respects with the requirements of the Securities Act, the Exchange Act and/or the Sarbanes-Oxley Act of 2002 (and the regulations promulgated thereunder), as the case may be, applicable to such Company SEC Documents, and none of
the Company SEC Documents as of such respective dates (or, if amended prior to the date of this Agreement, the date of the filing of such amendment, with respect to the disclosures that are amended) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) The consolidated financial statements of
the Company and its
Subsidiaries (including all related notes or schedules) included or
incorporated by reference in
the Company SEC Documents complied as to form,
as of their respective dates of filing with the SEC, in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited quarterly
statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except (i) as may be indicated in the notes thereto or (ii) as permitted by Regulation S-X) and
present fairly, in all material respects, the consolidated financial position of
the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods shown (subject,
in the case of unaudited quarterly financial statements, to normal year‑end adjustments. which are not reasonably expected to be materially adverse individually or in the aggregate to
the Company and its
Subsidiaries, taken as a whole).
(c) Neither
the Company nor any of its
Subsidiaries has any liabilities of any nature (whether accrued, absolute, contingent or otherwise) that would be required under GAAP, to be reflected on a consolidated
balance sheet of
the Company (including the notes thereto) except liabilities (i) reflected or reserved against in the balance sheet (or the notes thereto) of
the Company and its
Subsidiaries as of
December 31, 2019 (the “
Balance Sheet Date”)
included in the Filed SEC Documents, (ii) incurred after the Balance Sheet Date in the ordinary course of business and that do not arise from any material breach of a
Contract, (iii) as expressly contemplated by this Agreement or otherwise incurred
in connection with the Transactions, (iv) that have been discharged or paid prior to the date of this Agreement or (v) as would not, individually or in the aggregate, have had or reasonably be expected to have, a Material Adverse Effect.
(d)
The Company has established and maintains, and at all times since
January 1, 2018 has maintained, disclosure controls and procedures and a system of internal controls over financial reporting (as such
terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act relating to
the Company and its consolidated
Subsidiaries sufficient to provide reasonable assurance
that (a) transactions are executed in accordance with Company management’s general or specific authorization, (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, consistently applied,
and to maintain accountability for assets, (c) access to assets is permitted only in accordance with Company management’s general or specific authorization and (d) the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any differences. There are no
“significant deficiencies” or
“material weaknesses” (as defined by the Public Company Accounting Oversight Board) in the design or operation of the
Company’s internal controls over, and procedures relating to, financial reporting which would reasonably be expected to adversely affect in any material respect
the Company’s ability to record, process, summarize and report financial data, in each
case which has not been subsequently remediated. Since
January 1, 2018, there has not been any Fraud, whether or not material, that involves management or other employees of
the Company or any of its
Subsidiaries who have a significant role in the
Company’s internal controls over financial reporting. As of the date of this Agreement, to the Knowledge of
the Company, there is no reason that its outside auditors and its chief executive officer and chief financial officer will not be able to
give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due.
(e) There is no transaction, arrangement or other relationship between
the Company and/or any of its
Subsidiaries and an unconsolidated or other off-balance sheet entity that is required by applicable Law to
be disclosed by
the Company in its Filed SEC Documents and is not so disclosed.
Section 3.06
Absence of Certain Changes. Since
December 31, 2019, there has not been any Material Adverse Effect or any event, change or occurrence that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.07
Legal Proceedings. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no (a) pending or, to the
Knowledge of
the Company, threatened legal, regulatory or administrative proceeding, suit, proceeding, dispute, investigation, arbitration or action (an “
Action”) against
the Company or any of its
Subsidiaries, including any Company
Plan, (b) outstanding order, judgment, injunction, ruling, writ or decree of any Governmental Authority (“
Judgments”) imposed upon
the Company or any of its
Subsidiaries or any of their respective assets, in each case, by or before any
Governmental Authority, or (c) to the Knowledge of
the Company, environmental contamination that would reasonably be expected to result in any such Action or Judgment against, or liability of,
the Company or any of its
Subsidiaries.
Section 3.08 Compliance with Laws; Permits.
(a)
The Company and each of its
Subsidiaries, including with respect to any Company Plan, are and since
January 1, 2018 have been, in compliance with all state or federal laws, common law, statutes,
ordinances, codes, rules or regulations or other similar requirement enacted, adopted, promulgated, or applied by any Governmental Authority (“
Laws”), Judgments, in each case, that are applicable to
the Company or any of its
Subsidiaries,
except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company and each of its
Subsidiaries hold all licenses, franchises, permits, certificates, approvals and authorizations from
Governmental Authorities (“
Permits”) necessary for the lawful conduct of their respective businesses, except where the failure to hold the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(b)
The Company, each of its
Subsidiaries, and to
the Company’s Knowledge, each of their respective officers, directors, employees and, agents acting on their behalf is, and for the last five (5) years has
been, in compliance in all material respects with (i) the Foreign Corrupt Practices Act of 1977 and any rules and regulations promulgated thereunder; (ii) the UK Bribery Act 2010; (iii) anti-bribery legislation promulgated by the European Union and
implemented by its member states; (iv) legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and (v) any other Laws applicable to
the Company and its
Subsidiaries that address the prevention of corruption, bribery or terrorism (collectively, the “
Anti-Corruption Laws”). None of
the Company, any of its
Subsidiaries or any director, officer, or, to
the Company’s Knowledge, any agent,
employee, or other person associated with or acting on behalf of
the Company or its
Subsidiaries within the last five (5) years has offered, promised, provided, or authorized the provision of any money or other thing of value, directly or
indirectly, to any Person to improperly influence official action or secure an improper advantage, or to encourage the recipient to breach a duty of good faith or loyalty or the policies of his/her employer, nor has violated or is in violation of
any provision of any Anti-Corruption Laws.
(c)
The Company, each of its
Subsidiaries, and to
the Company’s Knowledge, each of their respective officers, directors, employees and, to
the Company’s Knowledge, agents acting on their behalf is, and for the
last five (5) years has been, in material compliance with Anti-Money Laundering Laws and Export Control Laws.
(d)
The Company, each of its
Subsidiaries, and to
the Company’s Knowledge, each of their officers, directors, employees and agents acting on their behalf is, and, for the last five (5) years has been, in
compliance with all Laws or other financial restrictions administered by (i) the United States (including without limitation regulations administered by the Office of Foreign Assets Control of the United States Treasury Department (“
OFAC”)
and the U.S. Department of State), (ii) the European Union and enforced by its member states, (iii) the United Nations, (iv) Her Majesty’s Treasury or (v) other similar governmental bodies with regulatory authority over
the Company, its
Subsidiaries and their respective operations from time to time (collectively, “
Sanctions”). None of
the Company, any of its
Subsidiaries, or any director, officer, or to
the Company’s Knowledge, agent, or employee of
the Company or any of
its
Subsidiaries is currently the subject or the target of any Sanctions, nor is
the Company or any of its
Subsidiaries (x) located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without
limitation, Cuba, Iran, North Korea, Syria and Crimea, or (y) majority-owned or controlled by a Person that is the subject of Sanctions.
(e) To
the Company’s Knowledge,
the Company and its
Subsidiaries have not engaged in, nor are now engaged in, any dealings or transactions with or for the benefit of any person (i) located, organized, or
ordinarily resident in Cuba, Iran, North Korea, Sudan, Syria, or Crimea, or (ii) with any person that is the subject of Sanctions (including, without limitation, persons listed on OFAC’s Specially Designated Nationals and Blocked Persons List or
the Entity List maintained by the U.S. Department of Commerce’s Bureau of Industry and Security), in each case directly or indirectly, including through agents or other persons acting on its behalf.
(f) Neither
the Company nor any of its
Subsidiaries is party to any actual or threatened legal proceedings or outstanding enforcement action relating to any breach or suspected breach of Anti-Corruption Laws,
Anti-Money Laundering Laws, Sanctions or Export Control Laws.
(g)
The Company and its
Subsidiaries will not use the proceeds from the Transactions (i) in furtherance of an offer, payment, promise to pay or authorization of the payment or giving of money or anything else
of value, to any Person in violation of any Anti-Corruption Laws, or (ii) directly or indirectly to fund or facilitate any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject
or the target of Sanctions.
(h)
The Company and its
Subsidiaries have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, compliance with all applicable
Anti-Corruption Laws, Sanctions, Anti-Money Laundering Laws, and Export Control Laws. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its
Subsidiaries
with respect to Anti-Corruption Laws or Sanctions is pending or, to the Knowledge of
the Company, threatened.
Section 3.09
Tax Matters. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (a)
the Company and each of its
Subsidiaries
has prepared (or caused to be prepared) and timely filed (taking into account valid extensions of time within which to file) all Tax Returns required to be filed by it, and all such filed Tax Returns (taking into account all amendments thereto)
are true, complete and accurate, (b) all Taxes owed by
the Company and each of its
Subsidiaries that are due (whether or not shown on any Tax Return) have been timely paid, except for Taxes that are being contested in good faith by appropriate
proceedings and that have been adequately reserved against in accordance with GAAP, (c) no examination or audit of any Tax Return relating to any Taxes of
the Company or any of its
Subsidiaries or with respect to any Taxes due from
the Company
or any of its
Subsidiaries by any Governmental Authority is currently in progress or threatened in writing, (d) none of
the Company or any of its
Subsidiaries has liability for any other Person (other than
the Company and its
Subsidiaries)
under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, or by
contract and (e) none of
the Company or any of its
Subsidiaries has engaged in any
“listed transaction”
within the meaning of Treasury Regulations Section 1.6011-4(b)(2).
Section 3.10
No Rights Agreement; Anti-Takeover Provisions. (a) As of the date of this Agreement, neither
the Company nor any of its
Subsidiaries is party to a stockholder rights
agreement,
“poison pill” or similar anti-takeover agreement or plan.
(b) The Board has taken all necessary actions to ensure that no restrictions included in any
“control share acquisition,” “fair price,” “moratorium,” “business combination” or other state anti-takeover Law
(including Section 203 of the DGCL) is, or as of the Initial Closing and the Second Closing will be, applicable to the Transactions, including
the Company’s issuance of shares of Common Stock upon conversion of the Series A Preferred Stock and any
issuance pursuant to
Section 5.15.
Section 3.11
Brokers and Other Advisors. Except as set forth on
Section 3.11 of
the Company Disclosure Letter, no broker, investment banker, financial advisor or other Person is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based upon arrangements made by or on behalf of the
Company or any of its
Subsidiaries.
Section 3.12
Sale of Securities. Assuming the accuracy of the representations and warranties set forth in
Section 4.08, the offer, sale and issuance of the shares of Series A
Preferred Stock pursuant to this Agreement is exempt from the registration and prospectus delivery requirements of the Securities Act and the rules and regulations thereunder. Without limiting the foregoing, neither
the Company nor any other
Person authorized by
the Company to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of Series A Preferred
Stock, and neither
the Company nor any Person acting on its behalf has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of Series A Preferred
Stock under this Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act that would result in none of Regulation D or any other applicable exemption from registration under the Securities Act to be
available, nor will
the Company take any action or steps that would cause the offering or issuance of Series A Preferred Stock under this Agreement to be integrated with other offerings by
the Company.
Section 3.13
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and listed on the NYSE, and
the Company has taken no
action designed to, or which to the Knowledge of
the Company is reasonably likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the NYSE, nor has
the Company
received any notification that the SEC or the NYSE is contemplating terminating such registration or listing.
The Company is in compliance in all material respects with the listing and listing maintenance requirements of the NYSE applicable to
it for the continued trading of its Common Stock on the NYSE.
Section 3.14
Status of Securities. As of the Initial Closing and the Second Closing, the Initial Acquired Shares and the Supplemental Acquired Shares, as applicable, any shares of
Series A Preferred Stock to be issued as in-kind dividends and the shares of Common Stock issuable upon conversion of any of the foregoing shares and any accrued and compounded dividends, will be, when issued, duly authorized by all necessary
corporate action on the part of
the Company, validly issued, fully paid and nonassessable and issued in compliance with all applicable federal and state securities Laws and will not be subject to preemptive rights of any other stockholder of
the Company, and will be free and clear of all Liens, except restrictions imposed by the Certificate of Designations, the
Securities Act,
Section 5.08 and any applicable securities Laws. The
respective rights, preferences, privileges, and restrictions of the Series A Preferred Stock and the Common Stock are as stated in
the Company Charter Documents or as otherwise provided by applicable Law. As of the Initial Closing and as of the
Second Closing, the Initial Acquired Shares and the Supplemental Acquired Shares, as applicable, shares of Series A Preferred Stock to be issued as in-kind dividends and the shares of Common Stock issuable upon conversion of the Initial
Acquired Shares or Supplemental Acquired Shares and any accrued and compounded dividends have been duly reserved for issuance.
Section 3.15
Certain Material Indebtedness Neither
the Company nor any of its
Subsidiaries is, as of the date of this Agreement, in default in the payment of any material indebtedness
or in default under any agreement relating to its material indebtedness.
Section 3.16
Investment Company Status. Neither
the Company nor any of its
Subsidiaries is, and immediately after the sale of the Initial Acquired Shares and immediately after the sale
of the Supplemental Acquired Shares hereunder, none of
the Company nor any of its
Subsidiaries will be, required to be registered as an
“investment company” under the Investment Company Act of 1940, as amended.
Section 3.17
Ability to Pay Dividends. Except with respect to the covenants contained in (a) the Existing Credit Agreement or (b) the
Indenture,
the Company is not party to any
material Contract, and is not subject to any provision in
the Company Charter Documents or resolutions of the Board that, in each case, by its terms prohibits or prevents
the Company from paying dividends in form and the amounts contemplated by
the Certificate of Designations or from redeeming the Series A Preferred Stock in the manner and at the times contemplated by the Certificate of Designations.
The Company and its
Subsidiaries are not in material breach of, or default or
violation under, the Existing Credit Agreement or the
Indenture.
Section 3.18 Intellectual Property; Cybersecurity.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i)
the Company and each of its
Subsidiaries exclusively own, free and clear of all Liens,
its material proprietary patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names and other source indicators, copyrights and copyrightable works (including software),
know-how, trade secrets, inventions, methods, processes and all other worldwide intellectual property rights (collectively, “
Intellectual Property”) and owns or has a right to use all other Intellectual Property used in the conduct of their
respective businesses, (ii) the conduct of the businesses of
the Company and each of its
Subsidiaries does not infringe, misappropriate or otherwise violate (“
Infringe”), and since the
January 1, 2016 has not Infringed, any Intellectual
Property rights of any Person and (iii) no Person is challenging or threatening to challenge the ownership, use, validity or enforceability of, or, to the Knowledge of Company, Infringing, the Intellectual Property of
the Company or its
Subsidiaries.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect,
the Company and each of its
Subsidiaries take, and since
January 1, 2016 have taken, all
reasonable actions to protect (i) their trade secrets and confidential information and (ii) the confidentiality, integrity, continuous operation and security of the systems, applications,
websites, databases, hardware, software and other
information technology assets used in their businesses (and all data therein), and there have been no breaches, outages, unauthorized access or other violations of the same.
Section 3.19
No Other Company Representations or Warranties. Except for the representations and warranties made by
the Company in this
Article III (as modified by
the Company
Disclosure Letter) and in any certificate or other document delivered in connection with this Agreement, neither
the Company nor any other Person acting on its behalf makes any other express or implied representation or warranty with respect to
the Series A Preferred Stock, the Common Stock,
the Company or any of its
Subsidiaries or their respective businesses, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or
disclosure to the Investor or its Representatives of any documentation, forecasts or other information with respect to any one or more of the foregoing, and the Investor acknowledges the foregoing. In particular, and without limiting the
generality of the foregoing, except for the representations and warranties made by
the Company in this
Article III (as modified by
the Company Disclosure Letter) and in any certificate or other document delivered in connection with
this Agreement, neither
the Company nor any other Person makes or has made any express or implied representation or warranty to the Investor or its Representatives with respect to (a) any financial projection, forecast, estimate, budget or
prospect information relating to
the Company, any of its
Subsidiaries or their respective businesses or (b) any oral or written information presented to the Investor or its Representatives in the course of its due diligence investigation of the
Company, the negotiation of this Agreement or the course of the Transactions or any other transactions or potential transactions involving
the Company and the Investor.
Section 3.20
No Other Investor Representations or Warranties. Except for the representations and warranties expressly set forth in
Article IV and in any certificate or other
document delivered in connection with this Agreement,
the Company hereby acknowledges that neither the Investor nor any other Person, (a) has made or is making any other express or implied representation or warranty with respect to the Investor
or any of its
Subsidiaries or their respective businesses, operations, assets, liabilities, condition (financial or otherwise) or prospects, including with respect to any information provided or made available to
the Company or any of its
Representatives or any information developed by
the Company or any of its Representatives or (b) will have or be subject to any liability or indemnification obligation to
the Company resulting from the delivery, dissemination or any other
distribution to
the Company or any of its Representatives, or the use by
the Company or any of its Representatives, of any information, documents, estimates, projections, forecasts or other forward-looking information, business plans or other
material developed by or provided or made available to
the Company or any of its Representatives, including in due diligence materials, in anticipation or contemplation of any of the Transactions or any other transactions or potential
transactions involving
the Company and the Investor.
The Company, on behalf of itself and on behalf of its respective Affiliates, expressly waives any such claim relating to the foregoing matters.
ARTICLE IV
Representations and Warranties of the Investor
The Investor represents and warrants to
the Company, as of the date of this Agreement and as of each applicable Closing (except to the extent made only as of a specified date, in which case such representation and
warranty is made as of such date):
Section 4.01 Organization; Standing. The Investor is a Delaware limited liability company duly organized, validly existing and in good standing under the Laws of its jurisdiction of
organization and the Investor has all requisite power and authority necessary to carry on its business as it is now being conducted and, except (other than with respect to the Investor’s due organization and valid existence) as would not,
individually or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect. The Investor is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect.
Section 4.02
Authority; Noncontravention. The Investor has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents, to perform its
obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by the Investor of this Agreement and the other Transaction Documents and the consummation by the Investor of the Transactions
have been duly authorized and approved by all necessary action on the part of the Investor, and no further action, approval or authorization by any of its stockholders, partners, members or other equity owners, as the case may be, is necessary
to authorize the execution, delivery and performance by the Investor of this Agreement and the other Transaction Documents and the consummation by the Investor of the Transactions. This Agreement has been and at the applicable Closing, the
other Transaction Documents will be, duly executed and delivered by the Investor and, assuming due authorization, execution and delivery hereof or thereof, as applicable, by
the Company, constitutes (or in the case of the other Transaction
Documents, at the applicable Closing will constitute) a legal, valid and binding obligation of the Investor, enforceable against it in accordance with its terms, subject to the Bankruptcy and Equity Exception. Neither the execution and
delivery of this Agreement or the other Transaction Documents by the Investor, nor the consummation of the Transactions by the Investor, nor performance or compliance by the Investor with any of the terms or provisions hereof or thereof, will
(i) conflict with or violate any provision of the certificate or
articles of incorporation,
bylaws or other comparable charter or organizational documents of the Investor or (ii) assuming that the authorizations, consents and approvals referred
to in
Section 4.03 are obtained prior to the Initial Closing Date and the filings referred to in
Section 4.03 are made and any waiting periods with respect to such filings have terminated or expired prior to the Initial Closing
Date, (x) violate any Law or Judgment applicable to the Investor or any of its
Subsidiaries or (y) violate or constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default) under
any of the terms, conditions or provisions of any
Contract to which the Investor or any of its
Subsidiaries is a party or accelerate the Investor’s or any of its
Subsidiaries’, if applicable, obligations under any such
Contract, except, in the
case of clause (ii), as would not, individually or in the aggregate, reasonably be expected to have an Investor Material Adverse Effect.
Section 4.03
Governmental Approvals. Except for (a) the filing by
the Company of the Certificate of Designations with the Secretary of State of the State of Delaware and (b) filings
required under, and compliance with other applicable requirements of, the HSR Act, to the extent required, no consent or approval of, or filing, license, permit or authorization, declaration or registration with, any Governmental Authority is
necessary for the execution and delivery of this Agreement and the other Transaction Documents by the Investor, the performance by the Investor of its obligations hereunder and thereunder and the consummation by the Investor of the
Transactions, other than such other consents, approvals, filings, licenses, permits, authorizations, declarations or registrations that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to have
an Investor Material Adverse Effect.
Section 4.04 Financing. The Investor, on the Initial Closing Date, will have available funds necessary to consummate the Initial Purchase and pay the Initial Purchase Price in full on
the terms and conditions contemplated by this Agreement. As of the date hereof, the Investor is not aware of any reason why the funds sufficient to fulfill its obligations to pay the Initial Purchase Price under Article II will not be
available on the Initial Closing Date. For the avoidance of doubt, the Investor makes no representation or warranty with respect to funds necessary to pay all or any portion of the Supplemental Purchase Price.
Section 4.05 Ownership of Company Stock. None of the Investor nor any funds advised by the Investor owns any Common Stock.
Section 4.06
Brokers and Other Advisors. No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee
or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based upon arrangements made by or on behalf of the Investor or any of their respective
Subsidiaries, except for Persons, if any, whose
fees and expenses will be paid by the Investor (or pursuant to the expense reimbursement provisions hereof).
Section 4.07
Non-Reliance on Company Estimates, Projections, Forecasts, Forward-Looking Statements and Business Plans. In connection with the due diligence investigation of
the Company
by the Investor and its Representatives, the Investor and its Representatives have received and may continue to receive from
the Company and its Representatives certain estimates, projections, forecasts and other forward-looking information, as
well as certain business plan information containing such information, regarding
the Company and its
Subsidiaries and their businesses and operations. The Investor hereby acknowledges that there are uncertainties inherent in attempting to make
such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans, with which the Investor is familiar, that the Investor is making its own evaluation of the adequacy and accuracy of all estimates,
projections, forecasts and other forward-looking information, as well as such business plans, so furnished to the Investor (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, forward-looking
information or business plans), and that except for the representations and warranties made by
the Company in
Article III of this Agreement (as modified by
the Company Disclosure Letter) and in any certificate or other document
delivered in connection with this Agreement, the Investor will have no claim against
the Company and its
Subsidiaries, or any of their respective Representatives with respect thereto, except with respect to Fraud.
Section 4.08
Purchase for Investment. The Investor acknowledges that the Series A Preferred Stock and the Common Stock issuable upon the conversion of the Series A Preferred Stock have
not been registered under the Securities Act or under any state or other applicable securities Laws. The Investor (a) acknowledges that it is acquiring the Series A Preferred Stock and the Common Stock issuable upon the conversion of the
Series A Preferred Stock pursuant to an exemption from registration under the Securities Act solely for investment with no intention to distribute any of the foregoing to any Person (other than to a Permitted Transferee), (b) will not sell,
transfer or otherwise dispose of any Series A Preferred Stock and the Common Stock issuable upon the conversion of the Series A Preferred Stock, except in compliance with this Agreement and the registration requirements or exemption provisions
of the Securities Act and any other applicable securities Laws, (c) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in
the Series A Preferred Stock and the Common Stock issuable upon the conversion of the Series A Preferred Stock and of making an informed investment decision, (d) is an
“accredited investor” (as that term is defined by Rule 501 of the Securities
Act), and (e) (i) has been furnished with or has had access to all the information that it considers necessary or appropriate to make an informed investment decision with respect to the Series A Preferred Stock and the Common Stock issuable
upon the conversion of the Series A Preferred Stock, (ii) has had an opportunity to discuss with
the Company and its Representatives the intended business and financial affairs of
the Company and to obtain information necessary to verify any
information furnished to it or to which it had access and (iii) can bear the economic risk of (x) an investment in the Series A Preferred Stock and the Common Stock issuable upon the conversion of the Series A Preferred Stock indefinitely and
(y) a total loss in respect of such investment. The Investor has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of, and form an investment decision with respect to its
investment in, the Series A Preferred Stock and the Common Stock issuable upon the conversion of the Series A Preferred Stock and to protect its own interest in connection with such investment under the terms of this Agreement.
Section 4.09
No Other Investor Representations or Warranties. Except for the representations and warranties made by the Investor in this
Article IV and in any certificate or
other document delivered in connection with this Agreement, neither the Investor nor any other Person acting on its behalf makes any other express or implied representation or warranty with respect to the Investor or any of its Affiliates or
their respective businesses, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to
the Company or its Representatives of any documentation, forecasts or other
information with respect to any one or more of the foregoing, and
the Company acknowledges the foregoing. In particular, and without limiting the generality of the foregoing, except for the representations and warranties made by the Investor
in this
Article IV and in any certificate or other document delivered in connection with this Agreement, neither the Investor nor any other Person makes or has made any express or implied representation or warranty to
the Company or its
Representatives with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating to the Investor, any of its
Subsidiaries or their respective businesses or (b) any oral or written information presented
to
the Company or its Representatives in the course of the negotiation of this Agreement or the course of the Transactions or any other transactions or potential transactions involving the Investor and
the Company.
Section 4.10
No Other Company Representations or Warranties. Except for the representations and warranties expressly set forth in
Article III (as modified by
the Company
Disclosure Letter) and in any certificate or other document delivered in connection with this Agreement, the Investor hereby acknowledges that neither
the Company nor any of its
Subsidiaries, nor any other Person, (a) has made or is making any
other express or implied representation or warranty with respect to the Series A Preferred Stock, the Common Stock,
the Company or any of its
Subsidiaries or their respective businesses, operations, assets, liabilities, condition (financial or
otherwise) or prospects, including with respect to any information provided or made available to the Investor or any of its Representatives or any information developed by the Investor or any of its Representatives or (b) will have or be
subject to any liability or indemnification obligation to the Investor resulting from the delivery, dissemination or any other distribution to the Investor or any of its Representatives, or the use by the Investor or any of its Representatives,
of any information, documents, estimates, projections, forecasts or other forward-looking information, business plans or other material developed by or provided or made available to the Investor or any of its Representatives, including in due
diligence materials, or management presentations (formal or informal), in anticipation or contemplation of any of the Transactions and the Investor, on behalf of itself and on behalf of its respective Affiliates, expressly waives any such claim
relating to the foregoing matters.
ARTICLE V
Additional Agreements
Section 5.01
Negative Covenants. Except as required by applicable Law, Judgment or to comply with any notice from a Governmental Authority, as expressly contemplated, required or
permitted by this Agreement or as described in
Section 5.01 of
the Company Disclosure Letter, during the period from the date of this Agreement until the earlier of the Outside Date and the Second Closing Date (or such earlier date on
which this Agreement may be terminated pursuant to
Section 7.01), (1) unless the Investor Parties otherwise consent in writing (such consent not to be unreasonably withheld, delayed or conditioned)
the Company shall, and shall cause its
Subsidiaries to, use their commercially reasonable efforts to operate their businesses in all material respects in the ordinary course of business and (2) unless the Investor Parties otherwise consent in writing (such consent not to be
unreasonably withheld, delayed or conditioned),
the Company shall not and shall cause its
Subsidiaries not to:
(a) other than the authorization and issuance of the Series A Preferred Stock to the Investor and the consummation of the other Transactions, issue, sell or grant any shares of its capital stock or other
equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or
options to purchase any shares of its capital stock or other equity or voting interests;
provided that
the Company may issue or grant shares of Common Stock or other securities in the ordinary course of business pursuant to the terms of a
Company Plan in effect on the date of this Agreement;
(b) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or
other equity or voting interests (other than pursuant to the cashless exercise of Company Stock Options or the forfeiture or withholding of Taxes with respect to Company Stock Options, Company RSUs or Company PRSUs);
(c) solely with respect to
the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or
other equity or voting interests;
(d) split, combine, subdivide, recapitalize, reclassify or make any like change to any shares of its capital stock or other equity or voting interests;
(e) amend or supplement
the Company Charter Documents or make any material amendments to the organizational documents of any of
the Company’s
Subsidiaries or take or authorize any action to wind up its affairs
or dissolve;
(g) make any material change in
the Company’s or its
Subsidiaries’ financial accounting principles, except as required by changes in GAAP (or any interpretation thereof) or in applicable Law; or
(h) agree or commit to do any of the foregoing.
Section 5.02
Reasonable Best Efforts; Filings. (a) Subject to the terms and conditions of this Agreement, each of
the Company and the Investor Parties shall cooperate with each other
and use (and shall cause their Affiliates to use) their respective reasonable best efforts (unless, with respect to any action, another standard of performance is expressly provided for herein) to promptly (i) take, or cause to be taken, all
actions, and do, or cause to be done, and assist and cooperate with each other in doing, all things necessary, proper or advisable to obtain the expiration or termination of the waiting period under the HSR Act and cause the conditions to the
Closings to be satisfied as promptly as reasonably practicable and to consummate and make effective, in the most expeditious manner reasonably practicable, the Transactions, including preparing and filing promptly and fully all documentation to
effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, (ii) obtain all approvals, consents, registrations, waivers, permits, authorizations, orders and other
confirmations from any Governmental Authority or third party necessary, proper or advisable to consummate the Transactions and (iii) execute and deliver any additional instruments necessary to consummate the Transactions and (iv) defend or
contest in good faith any Action brought by a third party that could otherwise prevent or impede, interfere with, hinder or delay in any material respect the consummation of the Transactions.
(b)
The Company and the Investor Parties shall, and shall cause their Affiliates to, (i) make an appropriate filing of a Notification and Report Form (“
HSR Form”) pursuant to the HSR Act with respect to
the Transactions (which shall request the early termination of any waiting period applicable to the Transactions under the HSR Act), as promptly as reasonably practicable following the date of this Agreement and, in any event within ten (10)
Business Days after the date of this Agreement, and (ii) supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to the HSR Act, in connection with such other filings or by any
Governmental Authority, and use reasonable best efforts to promptly take any and all steps necessary to avoid or eliminate each and every impediment and obtain all consents that may be required pursuant to the HSR Act, in connection with such other
filings or other applicable Law, so as to enable the parties hereto to consummate the Transactions. Notwithstanding anything to the contrary in this
Section 5.02, nothing in this
Section 5.02 or this Agreement shall require or
obligate any Investor Party to, and
the Company shall not, without prior written consent of the Investor Parties, agree, propose, commit to, or effect, or otherwise be required, by consent decree, hold separate, or otherwise, any sale, divestiture,
hold separate, or any other action otherwise limiting the freedom of action in any respect with respect to any businesses, products, rights, services, licenses, assets, or interest therein, of (i) the Investor or any Affiliate (including Investor
and its Affiliates and any investment funds or investment vehicles affiliated with, or managed or advised by, Investor or any portfolio company (as such term is commonly understood in the private equity industry)) or investment of Investor, or (ii)
the Company or any its Affiliates or
subsidiaries.
(c) Each of
the Company and the Investor Parties shall, and shall cause their Affiliates to, use their respective reasonable best efforts to (i) cooperate in all respects with the other party in connection
with any filing or submission with a Governmental Authority in connection with the Transactions and in connection with any investigation or other inquiry by or before a Governmental Authority relating to the Transactions (including to determine
whether a Governmental Authority has jurisdiction over the Transactions), (ii) keep the other party informed in all material respects and on a reasonably timely basis of any material communication received by
the Company, the Investor Parties or
their Affiliates, as the case may be, from or given by
the Company, the Investor Parties or their Affiliates, as the case may be, to the Federal Trade Commission (“
FTC”), the Department of Justice (“
DOJ”) or any other Governmental
Authority, and of any material communication received or given in connection with any proceeding by a private Person, in each case regarding the Transactions, (iii) subject to applicable Laws relating to the exchange of information, consult with
the other party with respect to information relating to such party and its respective
Subsidiaries, as the case may be, that appears in any filing made with, or written materials submitted to, any third Person or any Governmental Authority in
connection with the Transactions, other than
“4(c) and 4(d) documents” as that term is used in the rules and regulations under the HSR Act and other confidential information contained in the HSR Form and (iv) to the extent permitted by the FTC, the
DOJ or such other applicable Governmental Authority or other Person, give the other party the opportunity to attend and participate in meetings and conferences with the FTC, DOJ, or any other applicable Governmental Authority. Any documents or
other materials provided pursuant to this
Section 5.02(c) may be redacted or withheld as necessary to address reasonable privilege or confidentiality concerns, and to remove references concerning the valuation of
the Company or other
competitively sensitive material, and the parties may, as each deems advisable, reasonably designate any material provided under this
Section 5.02(c) as
“outside counsel only material”.
Section 5.03
Corporate Actions. (a) At any time that any Series A Preferred Stock is outstanding,
the Company shall:
(i) from time to time take all lawful action within its control to cause the authorized capital stock of
the Company to include a sufficient number of authorized but unissued shares of
Common Stock to satisfy the conversion requirements of all shares of the Series A Preferred Stock then outstanding and all accrued and unpaid dividends thereon;
(ii) not effect any voluntary deregistration under the Exchange Act or any voluntary delisting of the Common Stock from the NYSE other than in connection with a Change of Control (as
defined in the Certificate of Designations) pursuant to which the Investor has elected with respect to all outstanding shares of Series A Preferred Stock to exercise its conversion rights or Change of Control Put (as defined in the Certificate
of Designations) under
Section 9 of the Certificate of Designations and
the Company agrees to satisfy, or will otherwise cause the satisfaction in full of its obligations under
Section 9 of the Certificate of Designations or is
otherwise consistent with the terms set forth in
Section 9 of the Certificate of Designations; and
(iii) not take any action that would result in the issuer of the Series A Preferred Stock being treated as an entity other than a corporation for U.S. federal income tax purposes.
(b) Prior to the Initial Closing,
the Company shall file with the Secretary of State of the State of Delaware the Certificate of Designations in the form attached hereto as
Exhibit A, with such changes
thereto as the parties to the Apax Investment Agreement may reasonably agree; provided that no such changes shall disproportionately and adversely affect the rights, preferences, privileges, and restrictions of the shares of Series A Preferred
Stock held by the Investor Parties as compared to the shares of Series A Preferred Stock held by other holders.
(c) If any occurrence since the date of this Agreement until the applicable Closing would have resulted in an adjustment to the Conversion Rate pursuant to the Certificate of Designations if the Series A
Preferred Stock had been issued and outstanding since the date of this Agreement,
the Company shall adjust the Conversion Rate, effective as of the applicable Closing, in the same manner as would have been required by the Certificate of
Designations if the Series A Preferred Stock had been issued and outstanding since the date of this Agreement.
(d)
The Company shall not adopt any stockholder
rights agreement,
“poison pill” or similar anti-takeover agreement or plan that prohibits the Investor Parties from taking any of the actions permitted by this
Agreement or the Certificate of Designations.
Section 5.04
Public Disclosure. The Investor Parties and
the Company shall, and shall cause their Affiliates to, consult with each other and Ignition Parent LP before issuing, and give
each other the reasonable opportunity to review and comment upon, any
press release or other public statements with respect to the Transaction Documents or the Transactions or the transactions contemplated by the Apax Investment Agreement, and
shall not, and shall cause their Affiliates not to, issue any such
press release or make any such public statement prior to such consultation, except as may be required by applicable Law, Judgment, court process or the rules and regulations of
any national securities exchange or national securities quotation system;
provided that the initial announcement with respect to the Transaction Documents and the Transactions shall be mutually agreed between the Investor Parties and
the Company. Notwithstanding the forgoing, this
Section 5.04 shall not apply to any
press release or other public statement made by
the Company or the Investor Parties (a) which does not contain any information relating to the
Transactions that has not been previously announced or made public in accordance with the terms of this Agreement or (b) is made in the ordinary course of business and does not relate specifically to the signing of the Transaction Documents or
the Transactions. Notwithstanding anything to the contrary in this Agreement (other than
Section 5.05) or the Confidentiality Agreement, in no event shall either this
Section 5.04 or any provision of the Confidentiality
Agreement limit disclosure by any Investor Party and their respective Affiliates of ordinary course communications regarding this Agreement and the Transactions to its existing general and limited partners, equityholders, members, managers and
investors of any Affiliates of such Person or any prospective partners or members of any Affiliate of or investment fund of such Investor Party in connection with the syndication of the Supplemental Purchase, including disclosing information
about the Transactions on their
websites in the ordinary course of business consistent with past practice.
Section 5.05 Confidentiality. The Investor Parties will, and will direct their
Affiliates and Representatives who actually receive Confidential Information to, keep confidential any information (including oral, written and electronic information) concerning the Company, its Subsidiaries or its Affiliates that may be
furnished to any Investor Party, its Affiliates or its or their respective Representatives by or on behalf of the Company or any of its Representatives pursuant to this Agreement, including any such information provided pursuant to Section 5.15 of this Agreement (“Confidential Information”) and
to use the Confidential Information solely for the purposes of monitoring, administering or managing the Investor Parties’ investment in the Company made pursuant to this Agreement; provided that Confidential Information will not include information that (a) was or becomes available to the public other than as a result of a breach of any confidentiality obligation in this Agreement
or the Confidentiality Agreement by any Investor Party or its Affiliates or their respective Representatives, (b) was or becomes available to any Investor Party or its Affiliates or their respective Representatives from a source other than
the Company or any of its Subsidiaries or their respective Representatives, (c) was already in the possession of an Investor Party or its Affiliates or their respective Representatives prior to the date of this Agreement and was not obtained
from the Company or any of its Subsidiaries or their respective Representatives; provided that in the case of
clauses (b) and (c) of this Section 5.05, such source is reasonably believed
by such Investor Party or its Affiliates not to be subject to an obligation of confidentiality (whether by agreement or otherwise) or (d) was independently developed by any Investor Party or its Affiliates or their respective Representatives
without reference to, incorporation of, or other use of any Confidential Information; provided that an Investor
Party may disclose Confidential Information (i) to its attorneys, accountants, consultants and financial and other professional advisors solely to the extent necessary to obtain their services in connection with its investment in the Company, (ii) to any prospective financing sources in connection with the syndication and marketing of any Permitted Loan or any prospective
purchaser of Initial Acquired Shares or Supplemental Acquired Shares from such Investor Party, including any actual or potential partners or members in any Affiliate of or investment fund of any such Investor Party (provided that disclosure to any such person under this clause (ii) of this Section 5.05 may not be made without the prior written consent of the Company, which consent shall not be unreasonably withheld,
conditioned or delayed), in each case, solely for the purpose of and to the extent necessary or reasonably advisable with respect to, the evaluation, negotiation or consummation of such syndication, marketing, purchase or investment in such
Affiliate or investment fund, as long as such prospective purchaser, lender, partner or member, as applicable, agrees to be bound by similar confidentiality or non-disclosure terms as are contained in this Agreement (with the Company as an
express third party beneficiary of such agreement), (iii) to any Affiliate, partner, member, or related investment fund of such Investor Parties and their Affiliates and their respective directors, officers, employees, consultants, financing
sources and representatives, in each case in the ordinary course of business (provided that the recipients of such
confidential information are directed to abide by the confidentiality and non-disclosure obligations contained herein), (iv) as may be reasonably determined by such Investor Party to be necessary in connection with such Investor Party's
enforcement of its rights in connection with this Agreement or its investment in the Company, or (v) as may otherwise be required by applicable law or legal, judicial or regulatory process, provided that prior to such disclosure pursuant to clause (v) of this Section 5.05, the Investor will provide the Company with prompt notice (to the extent legally permitted) so that the Company will have a reasonable opportunity
to timely seek a protective order or other appropriate remedy to limit, condition or quash such disclosure; and provided, further, that (x) any breach of the confidentiality and use terms herein by any Person to whom such Investor
Party may disclose confidential information pursuant to clause (i) or clause (iii) of this Section 5.05, shall be attributable to such Investor Party for purposes of determining such Investor Party’s compliance with this Section 5.05, except for any such Person who has entered into a separate confidentiality or
non-disclosure agreement or obligation with the Company and (y) such Investor Party shall use reasonable best efforts to minimize the extent of any required disclosure described in clause (v) of this Section 5.05. The amended and restated confidentiality and nondisclosure agreement, dated as of May 12, 2020, by
and between Periphas Capital, LP and the Company (the “Confidentiality Agreement”) shall terminate simultaneously
with the Initial Closing.
Section 5.06
NYSE Listing of Shares. To the extent
the Company has not done so prior to the date of this Agreement,
the Company shall as promptly as practicable following the date of
this Agreement cause the aggregate number of shares of Common Stock issuable upon the conversion of the Initial Acquired Shares and Supplemental Acquired Shares and any accrued and unpaid dividends to be approved for listing on the NYSE. From
time to time following the Initial Closing Date,
the Company shall cause the number of shares of Common Stock issuable upon conversion or redemption of the then outstanding shares of Series A Preferred Stock, and any accrued and unpaid
dividends thereon, to be approved for listing on the NYSE.
Section 5.07 Standstill. The Investor Parties agree that until the later of (i) the three (3) year anniversary of the Initial Closing Date (the “Standstill Expiration Date”) and (ii) the occurrence
of the Fall-Away of Investor Observer Rights, without the prior written approval of the Board, the Investor Parties will not, directly or indirectly, and will cause their Affiliates not to:
(a)
effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist,
facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of (or obtaining any right to direct the voting or disposition of) any securities
(including any derivative securities), or rights or options to acquire (or obtain any right to direct the voting or disposition of) any securities, or any assets, indebtedness or businesses of the Company, in each case, whether or not any of the
foregoing may be acquired or obtained immediately or only after the passage of time or upon the satisfaction of one or more conditions (whether or not within the Investor’s control) pursuant to any agreement, arrangement or understanding or
otherwise, (ii) any tender or exchange offer, consolidation, business combination, acquisition, merger, amalgamation, joint venture, partnership or similar transaction involving the Company or any of the assets of the Company, (iii) any
recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the SEC) to vote any voting securities
of the Company or consent to any action from any holder of any voting securities of the Company or seek to advise or influence any person with respect to the voting of or the granting of any consent with respect to any voting securities of the
Company;
(b)
form, join or in any way participate in a “group” (as defined under the Exchange Act) in connection with the voting securities of the Company or otherwise act in concert
with any person in respect of any such securities;
(c)
otherwise act, alone or in concert with others, to seek to advise, control or influence the management, Board or policies of the Company or to seek to obtain
representation on the Board;
(d)
make any public statement with respect to the restrictions of this Section 5.07, or take any action which would reasonably be expected to require that the Company
make a public announcement regarding the possibility of a strategic business and/or investment opportunity; or
(e) advise, assist, encourage or direct any Person to do, or to advise, assist, encourage or direct any other Person to do, any of the foregoing;
provided, however, that nothing in this Section 5.07 will limit the Investor Parties’ ability to Transfer
(subject to Section 5.08) or convert shares of Series A Preferred Stock into Common Stock (subject to applicable provisions in the Certificate of Designations), make any transfer pursuant to a Permitted Loan or any foreclosure thereunder
or transfer in lieu of a foreclosure thereunder, or the Investor Parties’ ability to confidentially request a waiver of the provisions of this Section 5.07 to privately make and submit to the chief executive officer of the Company any
friendly offer or proposal that is intended by the Investor Parties to be made and submitted on a non-publicly disclosed or announced basis (and would not reasonably be expected to require public disclosure by any Person), participate in rights
offerings made by the Company to all holders of its Common Stock, receive any dividends or similar distributions with respect to any securities of the Company held by the Investor Parties, tender shares of Common Stock or Series A Preferred Stock
into any tender or exchange offer (subject to Section 5.08), effect an adjustment to the Conversion Rate pursuant to the Certificate of Designations or otherwise exercise rights under its Common Stock or Series A Preferred Stock that are
not the subject of this Section 5.07 (in each case, in accordance with the terms of this Agreement and the Certificate of Designations).
Section 5.08 Transfer Restrictions. (a) Except as otherwise permitted in this Agreement, including Section 5.08(b), until the expiration of the Lock-Up Period, the Investor
Parties will not Transfer any Series A Preferred Stock or any Common Stock issued upon conversion of the Series A Preferred Stock.
(b) Notwithstanding Section 5.08(a), the Investor Parties shall be permitted to Transfer any portion or all of their Series A Preferred Stock or Common Stock issued upon conversion of the Series A
Preferred Stock at any time under the following circumstances:
(i) Transfers to any Permitted Transferees, but only if the transferee agrees in writing prior to such Transfer for the express benefit of
the Company (in form and substance reasonably
satisfactory to
the Company and with a copy thereof to be furnished to
the Company) to be bound by the terms of this Agreement and if the transferee and the transferor agree for the express benefit of
the Company that the transferee shall
Transfer the Series A Preferred Stock or Common Stock so Transferred back to the transferor at or before such time as the transferee ceases to be a Permitted Transferee of the transferor;
(ii) Transfers pursuant to a merger, tender offer or exchange offer or other business combination, acquisition of assets or similar transaction or any change of control transaction
involving
the Company or any Subsidiary that, in each case, is approved by the Board;
(iv) Transfers after commencement by
the Company or a significant subsidiary (as such term is defined in Rule 12b-2 under the Exchange Act) of
the Company of bankruptcy, insolvency or
other similar proceedings; and
(v) Transfers in connection with a total return swap or bona fide loan or other financing arrangement, in each case entered into with a nationally recognized financial institution,
including a pledge to such a financial institution to secure a bona fide debt financing and any foreclosure by such financial institution or transfer to such financial institution in lieu of foreclosure and subsequent sale of the securities
(each, a “
Permitted Loan”). Any Permitted Loan entered into by an Investor Party or its Affiliates shall be with one or more financial institutions reasonably acceptable to
the Company and, except as specified above, nothing contained in
this Agreement or the Registration
Rights Agreement shall prohibit or otherwise restrict the ability of any lender (or its securities affiliate) or collateral agent to foreclose upon, or accept a transfer in lieu of foreclosure, and sell,
dispose of or otherwise transfer the Series A Preferred Stock and/or shares of Common Stock issued upon conversion of Series A Preferred Stock (including shares of Common Stock received upon conversion or redemption of the Series A Preferred
Stock following foreclosure or transfer in lieu of foreclosure on a Permitted Loan) mortgaged, hypothecated and/or pledged to secure the obligations of the borrower following an event of default under a Permitted Loan. Subject to the preceding
provisions of this clause (iv), in the event that any lender or other creditor under a Permitted Loan transaction (including any agent or trustee on their behalf) or any affiliate of the foregoing exercises any rights or remedies in respect of
the Series A Preferred Stock or the shares of Common Stock issuable or issued upon conversion of the Series A Preferred Stock or any other collateral for any Permitted Loan, no lender, creditor, agent or trustee on their behalf or affiliate of
any of the foregoing (other than, for the avoidance of doubt, an Investor Party or its Affiliates) shall be entitled to any rights or have any obligations or be subject to any transfer restrictions or limitations hereunder except and to the
extent for those expressly provided for in Registration
Rights Agreement.
(c) Notwithstanding
Sections 5.08(a) and
(b), the Investor Parties will not at any time knowingly, directly or indirectly (without the prior written consent of the Board), Transfer any Series A
Preferred Stock or Common Stock issued upon conversion of the Series A Preferred Stock to a Competitor; provided, that these restrictions shall not apply to (i) Transfers into the public market pursuant to a bona fide, broadly distributed
underwritten public offering, in each case made pursuant to the Registration
Rights Agreement or through a bona fide sale to the public without registration effectuated pursuant to Rule 144 under the Securities Act or (ii) Transfers of shares of
Series A Preferred Stock or Common Stock issued upon conversion of the Series A Preferred Stock in connection with any foreclosure or exercise of remedies under a Permitted Loan.
(d) Any attempted Transfer in violation of this Section 5.08 shall be null and void ab initio.
Section 5.09 Legend. (a) Except to the extent otherwise agreed in any Issuer Agreement, all certificates or other instruments representing the Series A Preferred Stock or Common Stock
issued upon conversion of the Series A Preferred Stock will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF
MAY 26, 2020, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE ISSUER.
(b) (i) Upon request of the applicable Investor Party, upon receipt by
the Company of an opinion of counsel reasonably satisfactory to
the Company to the effect that such legend is no longer required under the
Securities Act and applicable state securities Laws,
the Company shall promptly cause the first paragraph of the legend to be removed from any certificate for Series A Preferred Stock or Common Stock to be Transferred in accordance with the terms
of this Agreement and (ii) the second paragraph of the legend shall be removed upon the expiration of such transfer restrictions set forth in this Agreement (and, for the avoidance of doubt, immediately prior to any termination of this Agreement).
Section 5.10
Board of Directors. (a) Upon the Initial Closing and until the occurrence of the Fall-Away of Investor Observer Rights,
the Company shall cause the Investor Designee set
forth on
Section 5.10 to
the Company Disclosure Letter to be appointed as the Investor Board Observer. The Investor Board Observer shall be permitted to attend, strictly as an observer, meetings of the Board and material information
delivered to the Board shall be delivered to the Investor Board Observer at substantially the same time as delivered to other non-executive directors;
provided,
however, that
the Company shall have the right to withhold any
information and to exclude the Investor Board Observer from all or any portion of any meeting of the Board, or any committee thereof, if access to such information or attendance at such meeting or portion of a meeting could reasonably be
expected to (i) adversely affect the attorney-client privilege or work product protection, (ii) violate any Law, or (iii) violate the terms of any confidentiality agreement or other
contract with a third party. The Investor Board Observer shall
not have any voting rights with respect to any matters considered or determined by the Board or any committee thereof. Any action taken by the Board at any meeting will not be invalidated by the absence of the Investor Board Observer at such
meeting.
(b)
The Company’s obligations to have such Investor Designee as the Investor Board Observer shall be subject to such Investor Designee’s satisfaction of all requirements regarding service as a director of the
Company under applicable Law and stock exchange rules regarding service as a director of
the Company and all other criteria and qualifications for service as a director applicable to all directors of
the Company;
provided that in no event
shall such Investor Designee’s relationship with the Investor Parties or their Affiliates (or any other actual or potential lack of independence resulting therefrom) nor the ownership by the Investor Parties of any shares of Class A Preferred Stock
or shares of Common Stock issuable upon conversion thereof, in and of itself, be considered to disqualify such Investor Designee from being the Investor Board Observer pursuant to this
Section 5.10. The Investor Parties will cause the
Investor Designee to make himself or herself reasonably available for interviews and to consent to such reference and background checks or other investigations as the Board may reasonably request to determine such Investor Designee’s eligibility
and qualification to serve as Investor Board Observer. No Investor Designee shall be eligible to serve as the Investor Board Observer if he or she has been involved in any of the events enumerated under Item 2(d) of Schedule 13D under the Exchange
Act or Item 401(f) of Regulation S-K under the Securities Act or is subject to any Judgment prohibiting service as a director of any public company. As a condition to the appointment of an Investor Designee as the Investor Board Observer, the
Investor Parties and the Investor Designee must provide to
the Company:
(i) all information requested by
the Company that is required to be or is customarily disclosed for directors, candidates for directors and their respective Affiliates and
Representatives in a proxy statement or other filings in accordance with applicable Law, any stock exchange rules or listing standards or
the Company Charter Documents or corporate governance guidelines, in each case, relating to the Investor
Designee’s appointment as Investor Board Observer or
the Company’s operations in the ordinary course of business;
(ii) all information requested by
the Company in connection with assessing eligibility and other criteria applicable to directors or satisfying compliance and legal or regulatory
obligations, in each case, relating to the Investor Designee’s appointment as Investor Board Observer or
the Company’s operations in the ordinary course of business; and
(iii) an undertaking in writing by the Investor Designee:
a. to be subject to, bound by and duly comply with the code of conduct in the form agreed upon by the other directors of
the Company and the confidentiality obligations and use
restrictions set forth in this Agreement;
provided that no such code of conduct shall restrict any Transfer of securities by the Investor Parties or their Affiliates except as provided herein; and
b. to waive notice of and recuse himself or herself from any meetings, deliberations or discussion of the Board or any committee thereof regarding any Transaction Document, the
Transactions or any other transactions involving the Investor.
(c) The parties hereto agree that the Investor Board Observer shall be entitled to reimbursement from
the Company for the reasonable out-of-pocket fees or expenses incurred in connection with his or her
service as the Investor Board Observer, in each case, in a manner consistent with
the Company’s practices with respect compensation or reimbursement, respectively, for other members of the Board, including reimbursement pursuant to customary
indemnification arrangements.
Section 5.11 Voting. Until the Fall-Away of Investor Observer Rights:
(a) Upon expiration or termination of the waiting period under the HSR Act, the Investor shall, and shall (to the extent necessary to comply with this
Section 5.11) cause the Investor Parties to, at
each meeting of the stockholders of
the Company and at every postponement or adjournment thereof, take such action as may be required so that all of the Initial Acquired Shares, Supplemental Acquired Shares, shares of Common Stock issued upon
conversion of the Series A Preferred Stock, or other shares of Common Stock owned, directly or indirectly, of record or beneficially by such Investor and entitled to vote at such meeting of stockholders are voted (i) in favor of each director
nominated or recommended by the Board for election at any such meeting, and against the removal of any director who has been elected following nomination or recommendation by the Board; (ii) against any shareholder nomination for director that is
not approved by the Board; (iii) in favor of
the Company’s
“say-on-pay” proposal and any proposal by
the Company relating to equity compensation that has been approved by the Board or the Compensation Committee of the Board (or any successor
committee, however denominated); (iv) in favor of
the Company’s proposal for ratification of the appointment of
the Company’s independent registered public accounting firm; and (v) following the two (2) year anniversary of the Initial Closing, in
accordance with the recommendation of the Board with respect to any proposed Change of Control (as defined in the Certificate of Designations). In furtherance of the foregoing, Investor shall, and shall (to the extent necessary to comply with this
Section 5.11) cause the Investor Parties to, be present, in person or by proxy, at all meetings of the stockholders of
the Company so that all shares of Series A Preferred Stock or Common Stock beneficially owned by the Investor or the
Investor Parties may be counted for the purposes of determining the presence of a quorum and voted in accordance with this
Section 5.11(a) at such meetings (including at any adjournments or postponements thereof).
(b) The provisions of Section 5.11(a) shall not apply to the exclusive consent and voting rights of the holders of Series A Preferred Stock set forth in Section 13(b) and Section 14 of
the Certificate of Designations and, for the avoidance of doubt, shall not apply following any exercise of remedies under a Permitted Loan with respect to any shares of Series A Preferred Stock or Common Stock issued upon conversion of the Series A
Preferred Stock.
Section 5.12
Tax Matters. (a)
The Company and its paying agent shall be entitled to deduct and withhold Taxes on all payments on the Series A Preferred Stock or Common Stock or other
securities issued upon conversion of the Series A Preferred Stock to the extent required by applicable Law. Promptly following the date of this Agreement or, in the case of a Permitted Transferee, the date such Permitted Transferee first
acquires any Series A Preferred Stock or Common Stock or other securities issued upon conversion of the Series A Preferred Stock, each Investor Party shall deliver to
the Company or its paying agent a duly executed, accurate and properly
completed Internal Revenue Service (“
IRS”) Form W-9 or an appropriate IRS Form W-8, as applicable. If the information on any such form provided by an Investor Party changes, or upon
the Company’s reasonable request, the Investor Party
shall provide
the Company with an updated version of such form.
(b) Absent a change in law or a contrary determination (as defined in Section 1313(a) of the Code), the Investor Parties and
the Company agree not to treat the Series A Preferred Stock (based on its terms as
set forth in the Certificate of Designations) as
“preferred stock” within the meaning of Section 305 of the Code and Treasury Regulation Section 1.305-5 for United States federal income Tax and withholding Tax purposes, and shall not take any
position inconsistent with such treatment.
(c)
The Company shall pay any and all documentary, stamp and similar issue or transfer Tax due on (x) the issue of the Series A Preferred Stock and (y) the issue of shares of Common Stock upon conversion of
the Series A Preferred Stock. However, in the case of conversion of Series A Preferred Stock,
the Company shall not be required to pay any Tax or duty that may be payable in respect of any Transfer involved in the issue and delivery of shares of
Common Stock or Series A Preferred Stock to a beneficial owner other than the beneficial owner of the Series A Preferred Stock immediately prior to such conversion, and no such issue or delivery shall be made unless and until the person requesting
such issue has paid to
the Company the amount of any such Tax or duty, or has established to the satisfaction of
the Company that such Tax or duty has been paid.
Section 5.13
Use of Proceeds.
The Company shall use the proceeds from the issuance and sale of the Initial Acquired Shares and any Supplemental Acquired Shares for working capital and
general corporate purposes.
Section 5.14 Sponsor Group. (a) Notwithstanding anything to the contrary set forth in this Agreement, none of the terms or provisions of this Agreement (including, for the avoidance
of doubt, Section 5.07 and Section 5.08) shall in any way limit the activities of the Excluded Sponsor Parties, so long as (i) no such Excluded Sponsor Party or any of its Representatives is acting on behalf of or at the
direction of any Investor Party with respect to any matter that otherwise would violate any term or provision of this Agreement and (ii) no Confidential Information is made available to or is received by any Excluded Sponsor Party or any of its
Representatives who are not involved in the corporate private equity business of Investor by or on behalf of any Investor Party or any of their Representatives.
(b) The Investor and
the Company agree and acknowledge that, subject to applicable Law, the Investor Board Observer may share Confidential Information about
the Company and its
Subsidiaries with the Investor
Parties and their Affiliates, subject to compliance with the confidentiality obligations and use restrictions set forth in this Agreement.
(c) The Investor Parties and
the Company hereby agree, notwithstanding anything to the contrary in any other agreement or at Law or in equity, that, to the maximum extent permitted by Law, when the Investor
Parties take any action under this Agreement to give or withhold their consent, the Investor Parties shall have no duty (fiduciary or other) to consider the interests of
the Company or the other stockholders of
the Company and may act exclusively
in their own interest;
provided, however, that the foregoing shall in no way affect the obligations of the parties hereto to comply with the provisions of this Agreement.
Section 5.15
Information Rights. Following the Initial Closing and so long as the 25% Beneficial Ownership Requirement is satisfied, in order to facilitate (i) the Investor Parties’
compliance with legal and regulatory requirements applicable to the beneficial ownership by the Investor Parties and its Affiliates of equity securities of
the Company and (ii) the Investor Representative’s oversight of the Investor Parties’
investment in
the Company,
the Company agrees to provide each of the Investor Parties and the Investor Representative with the following:
(a) within ninety (90) days after the end of each fiscal year of
the Company, (A) an audited, consolidated balance sheet of
the Company and its
Subsidiaries as of the end of such fiscal year, (B) an audited,
consolidated statements of income of
the Company and its
Subsidiaries for such fiscal year and (C) an audited, consolidated statements of cash flows of
the Company and its
Subsidiaries for such fiscal year;
provided that this requirement
shall be deemed to have been satisfied if on or prior to such date
the Company files its annual report on Form 10-K for the applicable fiscal year with the SEC;
(b) within forty-five (45) days after the end of each of the first three quarters of each fiscal year of
the Company, (A) an unaudited, consolidated balance sheet of
the Company and its
Subsidiaries as of the
end of such fiscal quarter, (B) an unaudited, consolidated statements of income of
the Company and its
Subsidiaries for such fiscal quarter and (C) an unaudited, consolidated statement of cash flows of
the Company and its
Subsidiaries for such
fiscal quarter;
provided that this requirement shall be deemed to have been satisfied if on or prior to such date
the Company files its quarterly report on Form 10-Q for the applicable fiscal year with the SEC; and
(c) reasonable access, to the extent reasonably requested by the Investor Parties or the Investor Representative, to
the Company’s books and records, and to
the Company’s officers to discuss
the Company’s
affairs, finances and accounts with its officers, all upon reasonable notice and at such reasonable times as the Investor Parties and the Investor Representative may reasonably request;
provided that any investigation pursuant to this
Section
5.15 shall be conducted in a manner as not to interfere with the conduct of the business of
the Company and its
Subsidiaries;
provided,
further that
the Company shall not be obligated to provide such access or materials if the
Company determines, in its reasonable judgment, that doing so would reasonably be expected to (i) result in the disclosure of trade secrets or competitively sensitive information to third parties (other than Investor Parties), (ii) violate
applicable Law, an applicable Judgment or a
Contract or obligation of confidentiality owed to a third party, (iii) jeopardize the protection of an attorney-client privilege, attorney work product protection or other legal privilege, or (iv) expose
the Company to risk of liability for disclosure of personal information;
provided that the Parties shall use their commercially reasonable efforts to disclose such information in a manner that would not violate the foregoing. In addition,
notwithstanding anything to the contrary contained herein, neither
the Company nor any of its
Subsidiaries will be required to provide any information or material that relates to, contains or reflects any analyses, studies, notes, memoranda and
other information related to or prepared in connection with any Transaction Document or the Transactions or any matters relating thereto or any transactions with or matters relating to the Investor Parties or any Affiliates of the Investor.
Section 5.16 Preemptive Rights.
(a) From and after the Initial Closing and so long as the 25% Beneficial Ownership Requirement is satisfied, if
the Company makes any public or non-public offering of any capital stock of, other equity or
voting interests in, or equity-linked securities of,
the Company or any securities that are convertible or exchangeable into (or exercisable for) capital stock of, other equity or voting interests in, or equity-linked securities of,
the Company
(collectively “
Preemptive Securities”), including, for the purposes of this
Section 5.16, warrants, options or other such rights (any such security, a “
New Security”) (other than (1) issuances of Preemptive Securities to
directors, officers, employees, consultants or other agents of
the Company, (2) issuances of Preemptive Securities pursuant to an employee stock option plan, management incentive plan, restricted stock plan, stock purchase plan or stock ownership
plan or similar benefit plan, program or agreement, (3) issuances made as consideration for any acquisition (by sale, merger in which
the Company is the surviving corporation, or otherwise) by
the Company of equity in, or assets of, another Person,
business unit, division or business, (4) issuances of any securities issued as a result of a stock split, stock dividend, reclassification or reorganization or similar event, (5) issuances of shares of Preemptive Securities in connection with a
bona fide strategic partnership or commercial arrangement with a Person that is not an Affiliate of
the Company or any of its
Subsidiaries (other than (x) any such strategic partnership or commercial arrangement with a private equity firm or
similar financial institution or (y) an issuance the primary purpose of which is the provision of financing), (6) securities issued pursuant to the conversion, exercise or exchange of Series A Preferred Stock issued to the Investor Parties, or any
of the
“Investor Parties” as such term is defined in the Apax Investment Agreement, (7) shares of a Subsidiary of
the Company issued to
the Company or a wholly owned Subsidiary of
the Company and (8) issuances of any securities to the Investor
Parties pursuant to this Agreement at the Second Closing or issuances of any securities pursuant to the Apax Investment Agreement in connection with the
“Second Closing” (as such term is defined in the Apax Investment Agreement)), then the Investor
and each Investor Party to which the Investor later Transfers any shares of Series A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock shall be afforded the opportunity to acquire from
the Company such Investor
Party’s Preemptive Rights Portion of such New Securities for the same price as that offered to the other purchasers of such New Securities;
provided, that the Investor Parties shall not be entitled to acquire any New Securities pursuant to
this
Section 5.16 to the extent the issuance of such New Securities to the Investor Parties would require approval of the stockholders of
the Company as a result of any such Investor Party’s status, if applicable, as an Affiliate of the
Company or pursuant to the rules and listing standards of the NYSE (including NYSE Listed Company Manual Section 312.03(c)), in which case
the Company may consummate the proposed issuance of New Securities to other Persons prior to obtaining
approval of the stockholders of
the Company (subject to compliance by
the Company with
Section 5.16(f) below).
(b) Subject to the foregoing proviso in Section 5.16(a), the amount of New Securities that each Investor Party shall be entitled to purchase in the aggregate shall be determined by multiplying (1) the
total number of such offered shares of New Securities by (2) a fraction, the numerator of which is the number of shares of shares Series A Preferred Stock and/or shares of Common Stock (in the aggregate and on an as converted basis) held by such
Investor Party, as of such date, and the denominator of which is the aggregate number of shares of Common Stock (on an as converted basis) outstanding as of such date (the “Preemptive Rights Portion”).
(c) If
the Company proposes to offer New Securities, it shall give the Investor written notice of its intention, describing the anticipated price (or range of anticipated prices), anticipated amount of New
Securities and other material terms and timing upon which
the Company proposes to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement
filed with respect to such offering) at least seven (7) Business Days prior to such issuance (or, in the case of a registered public offering, at least seven (7) Business Days prior to the commencement of such registered public offering) (
provided
that, to the extent the terms of such offering cannot reasonably be provided seven (7) Business Days prior to such issuance, notice of such terms may be given as promptly as reasonably practicable but in any event prior to such issuance). The
Company may provide such notice to the Investor Parties on a confidential basis prior to public disclosure of such offering. Other than in the case of a registered public offering, the Investor Parties may notify
the Company in writing at any time
on or prior to the second (2
nd) Business Day immediately preceding the date of such issuance (or, if notice of all such terms has not been given prior to the second
(2nd) Business Day immediately preceding the date of such issuance, at any time prior to such issuance) whether any of the Investor Parties will exercise such preemptive rights and as to the amount of New Securities the Investor Parties desires to
purchase, up to the maximum amount calculated pursuant to
Section 5.16(b). In the case of a registered public offering, the Investor Parties shall notify
the Company in writing at any time prior to the second (2nd) Business Day immediately
preceding the date of commencement of such registered public offering (or, if notice of all such terms has not been given prior to the second (2nd) Business Day immediately preceding the date of commencement of such registered public offering, at
any time prior to the date of commencement of such registered public offering) whether any of the Investor Parties will exercise such preemptive rights and as to the amount of New Securities the Investor Parties desires to purchase, up to the
maximum amount calculated pursuant to
Section 5.16(b). Such notice to
the Company shall constitute a binding commitment by the Investor Parties to purchase the amount of New Securities so specified at the price and other terms set forth in
the Company’s notice to it. Subject to receipt of the requisite notice of such issuance by
the Company, the failure of the Investor Parties to respond prior to the time a response is required pursuant to this
Section 5.16(c) shall be deemed
to be a waiver of the Investor Parties’ purchase rights under this
Section 5.16 only with respect to the offering described in the applicable notice.
(d) Each Investor Party shall purchase the New Securities that it has elected to purchase under this
Section 5.16 concurrently with the related issuance of such New Securities by
the Company (subject
to the receipt of any required approvals from any Governmental Authority to consummate such purchase by such Investor Party);
provided, that if such related issuance is prior to the twentieth (20th) Business Day following the date on which
such Investor Party has notified
the Company that it has elected to purchase New Securities pursuant to this
Section 5.16, then each Investor Party shall purchase such New Securities within twenty (20) Business Days following the date of
the related issuance. If the proposed issuance by
the Company of securities which gave rise to the exercise by the Investor Parties of its preemptive rights pursuant to this
Section 5.16 shall be terminated or abandoned by
the Company
without the issuance of any New Securities, then the purchase rights of the Investor Parties pursuant to this
Section 5.16 shall also terminate as to such proposed issuance by
the Company (but not any subsequent or future issuance), and any
funds in respect thereof paid to
the Company by the Investor Parties in respect thereof shall be promptly refunded in full.
(e) In the case of the offering of securities for consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable),
the consideration other than cash shall be deemed to be the fair value thereof as reasonably determined by the Board; provided, however, that such fair value as determined by the Board shall not exceed the aggregate market price of
the securities being offered as of the date the Board authorizes the offering of such securities.
(f) In the event that the Investor Parties are not entitled to acquire any New Securities pursuant to this
Section 5.16 because such issuance would require
the Company to obtain stockholder approval in
respect of the issuance of such New Securities to the Investor Parties as a result of any such Investor Party’s status, if applicable, as an Affiliate of
the Company or pursuant to the rules and listing standards of the NYSE (including NYSE Listed
Company Manual Section 312.03(c)),
the Company shall, upon the Investor’s reasonable request delivered to
the Company in writing within seven (7) Business Days following its receipt of the written notice of such issuance to the Investor Parties
pursuant to
Section 5.16(c), at the Investor’s election, (i) waive the restrictions set forth in
Section 5.08 solely to the extent necessary to permit any Investor Party to acquire such number of New Securities equivalent to its
Preemptive Rights Portion of such issuance such Investor Party would have been entitled to purchase had it been entitled to acquire such New Securities pursuant to
Section 5.16(a)-(c); (ii) consider and discuss in good faith modifications
proposed by the Investor Parties to the terms and conditions of such portion of the New Securities which would otherwise be issued to the Investor Parties such that
the Company would not be required to obtain stockholder approval in respect of the
issuance of such New Securities as so modified; and/or (iii) solely to the extent that stockholder approval is required in connection with the issuance of New Securities to Persons other than the Investor Parties, use reasonable best efforts to
seek stockholder approval in respect of the issuance of any New Securities to the Investor Parties.
(g) The election by any Investor Party to not exercise its subscription rights under this Section 5.16 in any one instance shall not affect its rights as to any subsequent proposed issuance.
(h)
The Company and the Investor Parties shall cooperate in good faith to facilitate the exercise of the Investor Parties’ rights pursuant to this
Section 5.16, including securing any required approvals
or consents.
Section 5.17 Company Actions.
(a) Following the date hereof and prior to the Initial Closing,
the Company shall submit to its stockholders, to the extent required under the listing rules of the NYSE, a proposal to approve any issuance of
shares of Common Stock issued upon conversion of the Series A Preferred Stock, that would, in each case, absent such approval violate NYSE Section 312.03 (or its successor) (“
Stockholder Approval”).
(b) From and after the time the Certificate of Designations is filed pursuant to
Section 5.03(b),
the Company shall not amend, terminate or supplement the Certificate of Designations, or agree to do
any of the foregoing, in a way that would disproportionately and adversely affect the rights, preferences, privileges, and restrictions of the shares of Series A Preferred Stock held by the Investor Parties as compared to the shares of Series A
Preferred Stock held by other holders.
Section 5.18
Financing Cooperation. If requested by the Investor Parties,
the Company will use commercially reasonable efforts to provide the following cooperation in connection with
the Investor Parties obtaining any Permitted Loan: (i) entering into an issuer agreement (an “
Issuer Agreement”) with each lender in customary form in connection with such transactions (which agreement may include, without limitation,
agreements and obligations of
the Company relating to procedures and specified time periods for effecting transfers and/or conversions upon foreclosure, agreements to not hinder or delay exercises of remedies on foreclosure, acknowledgments
regarding corporate policy, if applicable and certain acknowledgments regarding securities law status of the pledge arrangements) and subject to the consent of
the Company (which will not be unreasonably withheld or delayed), with such changes
thereto as are requested by such lender, (ii) (A) remove any restrictive legends on certificates representing pledged Series A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock and depositing such pledged Series
A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock in book-entry form on the books of The Depository Trust Company when eligible to do so (and providing any necessary indemnities to the transfer agent in
connection therewith) or (B) without limiting the generality of clause (A), if such Series A Preferred Stock is eligible for resale under Rule 144A, depositing such pledged Series A Preferred Stock in book entry form on the books of The
Depository Trust Company or other depository with customary Rule 144A restrictive legends in lieu of the legends specified in
Section 5.09(a) above, (iii) if so requested by such lender or counterparty, as applicable, re-registering the
pledged Series A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock in the name of the relevant lender, counterparty, custodian or similar party to a Permitted Loan, with respect to Permitted Loans solely as
securities intermediary and only to the extent an Investor Party or its Affiliates continues to beneficially own such pledged Series A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock, (iv) entering into
customary triparty agreements with each lender and the Investor Parties relating to the delivery of the Series A Preferred Stock or Common Stock issued upon conversion of Series A Preferred Stock to the relevant lender for crediting to the
relevant collateral accounts upon funding of the loan and payment of the purchase price including a right for such lender as a third-party beneficiary of
the Company’s obligations hereunder to issue the Series A Preferred Stock or Common Stock
issued upon conversion of Series A Preferred Stock upon payment of the purchase therefor in accordance with the terms of this Agreement and (v) such other cooperation and assistance as the Investor Parties may reasonably request (which
cooperation and assistance, for the avoidance of doubt, shall not include any requirements that
the Company deliver information, compliance certificates or any other materials typically provided by borrowers to lenders) that will not
unreasonably disrupt the operation of
the Company’s business. Anything in the preceding sentence to the contrary notwithstanding,
the Company’s obligation to deliver an Issuer Agreement is conditioned on the Investor certifying to
the Company
in writing that (A) the loan agreement with respect to which the Issuer Agreement is being delivered constitutes a Permitted Loan being entered into in accordance with this Agreement, the Investor Party has pledged the Series A Preferred Stock
and/or the underlying shares of Common Stock as collateral to the lenders under such Permitted Loan and that the execution of such Permitted Loan and the terms thereof do not violate the terms of this Agreement, (B) to the extent applicable,
whether the registration rights under the Registration
Rights Agreement are being assigned to the lenders under that Permitted Loan and (C) the Investor Parties acknowledge and agree that
the Company will be relying on such certificate when
entering into the Issuer Agreement and any inaccuracy in such certificate will be deemed a breach of this Agreement. The Investor Parties acknowledge and agree that the statements and agreements of
the Company in an Issuer Agreement are solely
for the benefit of the applicable lenders party thereto and that in any dispute between
the Company and the Investor Parties under this Agreement the Investor Parties shall not be entitled to use the statements and agreements of
the Company in
an Issuer Agreement against
the Company.
Section 5.19
Available Registration Statement.
The Company will not effect a Mandatory Conversion (as defined in the Certificate of Designations) if any Investor Party holds or would hold upon such
Mandatory Conversion (or any earlier conversion following the dates of the Notice of Mandatory Conversion (as defined in the Certificate of Designations)) shares of Common Stock that are Registrable Securities unless as of the date of Notice of
Mandatory Conversion and as of the Mandatory Conversion Date (as defined in the Certificate of Designations) there is an Available Registration Statement covering resale of such shares of Common Stock by the Investor Parties.
ARTICLE VI
Conditions to Closing
Section 6.01
Conditions to the Obligations of the Company and the Investor. The respective obligations of each of
the Company and the Investor to effect the Initial Closing or the
Second Closing, as applicable, shall be subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Initial Closing Date or the Second Closing Date, as applicable, of the following condition:
(a) no temporary or permanent Judgment shall have been enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority nor shall any proceeding brought by a Governmental Authority
seeking any of the foregoing be pending, or any applicable Law shall be in effect enjoining or otherwise prohibiting consummation of the Transactions (collectively, “Restraints”).
Section 6.02
Conditions to the Obligations of the Company. The obligations of
the Company to effect the Initial Closing or the Second Closing, as applicable, shall be further subject
to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Initial Closing Date or the Second Closing Date, as applicable, of the following conditions:
(a) the representations and warranties of the Investor set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Initial Closing Date or the
Second Closing Date, as applicable, with the same effect as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date);
(b) the Investor shall have complied with or performed in all material respects its obligations required to be complied with or performed by it pursuant to this Agreement at or prior to the Initial Closing and
the Second Closing, as applicable; and
(c)
the Company shall have received a certificate, signed on behalf of the Investor by a duly authorized officer thereof, certifying that the conditions set forth in
Section 6.02(a) and
Section
6.02(b) have been satisfied.
Section 6.03 Conditions to the Obligations of the Investor. The obligations of the Investor to effect the Initial Closing or the Second Closing, as applicable, shall be further subject
to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Initial Closing Date or the Second Closing Date, as applicable, of the following conditions:
(a) the representations and warranties of
the Company (i) set forth in
Sections 3.01,
3.02,
3.03(a),
3.10, 3.11,
3.12,
3.13,
3.14 and
3.17
shall be true and correct (disregarding all qualifications or limitations as to
“materiality”,
“Material Adverse Effect” and words of similar import set forth therein) in all material respects as of the date of this Agreement and as of the Initial
Closing Date or the Second Closing Date, as applicable, with the same effect as though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), (ii) set forth in
Section
3.06(b) shall be true and correct in all respects as of the date of this Agreement and as of the Initial Closing Date or the Second Closing Date, as applicable, with the same effect as though made on and as of such date and (iii) set forth in
this Agreement, other than in
Sections 3.01,
3.02,
3.03(a),
3.06(b),
3.10,
3.11,
3.12,
3.13,
3.14 and
3.17, shall be true and correct (disregarding all qualifications
or limitations as to
“materiality”,
“Material Adverse Effect” and words of similar import set forth therein) as of the date of this Agreement and as of the Initial Closing Date or the Second Closing Date, as applicable, with the same effect as
though made on and as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this clause (iii), where the failure to be true and correct has not had and would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(b)
the Company shall have complied with or performed in all material respects its obligations required to be complied with or performed by it pursuant to this Agreement at or prior to the Initial Closing and
the Second Closing, as applicable;
(c) the Investor shall have received a certificate, signed on behalf of
the Company by a duly authorized officer thereof, certifying that the conditions set forth in
Section 6.03(a) and
6.03(b)
have been satisfied;
(d) prior to the Initial Closing,
the Company shall have duly adopted and filed with the Secretary of State of the State of Delaware the Certificate of Designations, and a certified copy thereof shall have
been delivered to the Investor, which shall continue to be in full force and effect as of the Initial Closing or the Second Closing, as applicable; and
(e) with respect to the Investor’s obligations to consummate the Initial Closing, the contemporaneous consummation of the “Initial Closing” (as such term is defined in the Apax Investment Agreement) shall have
occurred in accordance with the Apax Investment Agreement.
ARTICLE VII
Termination; Survival
Section 7.01 Termination. This Agreement may be terminated and the Transactions abandoned at any time prior to the Initial Closing:
(a) by the mutual written consent of
the Company and the Investor;
(b) by either
the Company or the Investor upon written notice to the other, if the Initial Closing has not occurred on or prior to
June 30, 2020 (the “
Termination Date”);
provided that the right
to terminate this Agreement under this
Section 7.01(b) shall not be available to any party if any breach by such party of its representations and warranties set forth in this Agreement or the failure of such party to perform any of its
obligations under this Agreement has been a principal cause of or primarily resulted in the events specified in this
Section 7.01(b);
(c) by either
the Company or the Investor if any Restraint enjoining or otherwise prohibiting consummation of the Transactions shall be in effect and shall have become final and non-appealable prior to the
Initial Closing Date;
provided that the right to terminate this Agreement pursuant to this
Section 7.01(c) shall not be available to any party unless such party has complied in all material respects with its obligations under
Section
5.02;
(d) by the Investor if
the Company shall have breached any of its representations or warranties or failed to perform any of its covenants or agreements set forth in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in
Section 6.03(a) or
Section 6.03(b) and (ii) is incapable of being cured prior to the Termination Date, or if capable of being cured, shall not have been cured
within thirty (30) calendar days (but in no event later than the Termination Date) following receipt by
the Company of written notice of such breach or failure to perform from the Investor stating the Investor’s intention to terminate this
Agreement pursuant to this
Section 7.01(d) and the basis for such termination;
provided that the Investor shall not have the right to terminate this Agreement pursuant to this
Section 7.01(d) if the Investor is then in
material breach of any of its representations, warranties, covenants or agreements hereunder which breach would give rise to the failure of a condition set forth in
Section 6.02(a) or
Section 6.02(b); or
(e) by
the Company if the Investor shall have breached any of its representations or warranties or failed to perform any of its covenants or agreements set forth in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in
Section 6.02(a) or
Section 6.02(b) and (ii) is incapable of being cured prior to the Termination Date, or if capable of being cured, shall not have been cured
within thirty (30) calendar days (but in no event later than the Termination Date) following receipt by the Investor of written notice of such breach or failure to perform from
the Company stating
the Company’s intention to terminate this Agreement
pursuant to this
Section 7.01(e) and the basis for such termination;
provided that
the Company shall not have the right to terminate this Agreement pursuant to this
Section 7.01(e) if
the Company is then in material breach
of any of its representations, warranties, covenants or agreements hereunder which breach would give rise to the failure of a condition set forth in
Section 6.03(a) or
Section 6.03(b).
Section 7.02
Effect of Termination. In the event of the termination of this Agreement as provided in
Section 7.01, written notice thereof shall be given to the other party,
specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void (other than
Article I, this
Section 7.02 and
Article VIII, all of which shall survive
termination of this Agreement and the Confidentiality Agreement (which shall survive in accordance with its terms except as otherwise provided herein)), and there shall be no liability on the part of the Investor or
the Company in connection
with this Agreement, except that no such termination shall relieve any party hereto from liability for damages to another party resulting from a willful and material breach of any representation, warranty, covenant or agreement in this
Agreement prior to the date of termination or from Fraud;
provided that, notwithstanding any other provision set forth in this Agreement, except in the case of Fraud, neither the Investor, on the one hand, nor
the Company, on the other
hand, shall have any such liability in excess of the Initial Purchase Price.
Section 7.03 Survival. All of the covenants or other agreements of the parties contained in this Agreement that by their terms are to be performed following the Initial Closing or the
Second Closing, as applicable, shall survive the Initial Closing or the Second Closing, as applicable, until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is waived in writing by
the party entitled to such performance. Except for the warranties and representations contained in Sections 3.01, 3.02, 3.03(a), 3.10, 3.11, 3.12, 3.13, 3.14, 3.17, 4.01,
4.02 and 4.06, which shall survive until the fourth (4th) anniversary of the Initial Closing Date (or, if the Second Closing occurs, of the Second Closing Date), the representations and warranties made herein shall survive for
one (1) year following the Initial Closing Date (or, if the Second Closing occurs, of the Second Closing Date) and shall then expire; provided that nothing herein shall relieve any party of liability for any inaccuracy or breach of such
representation or warranty to the extent that any good faith allegation of such inaccuracy or breach is made in writing prior to such expiration by a Person entitled to make such claim pursuant to the terms and conditions of this Agreement.
For the avoidance of doubt, claims may be made with respect to the breach of any representation, warranty or covenant until the applicable survival period therefor as described above expires.
ARTICLE VIII
Miscellaneous
Section 8.01 Amendments; Waivers. Subject to compliance with applicable Law, this Agreement may be amended or supplemented in any and all respects only by written agreement of the
parties hereto.
Section 8.02
Extension of Time, Waiver, Etc.
The Company and the Investor may, subject to applicable Law and pursuant to a written instrument delivered by such party, (a) waive any
inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other party contained herein
or (c) waive compliance by the other party with any of the agreements contained herein applicable to such party or, except as otherwise provided herein, waive any of such party’s conditions. Notwithstanding the foregoing, no failure or delay
by
the Company or an Investor Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right
hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
Section 8.03 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by
any of the parties hereto without the prior written consent of the other party hereto; provided, however, that (a) the Investor or any Investor Party may assign its rights, interests and obligations under this Agreement, in
whole or in part (including, without limitation, solely the right to purchase the Initial Acquired Shares at the Initial Closing or the Supplemental Acquired Shares at the Second Closing, as applicable, in accordance with Section 2.02),
to one or more Permitted Transferees, or as otherwise contemplated in Section 5.08 and (b) in the event of such assignment, the assignee shall agree in writing to be bound by the provisions of this Agreement, including the rights,
interests and obligations so assigned; provided that no such assignment will relieve any Investor Party of its obligations hereunder prior to the Initial Closing or the Second Closing, as applicable; provided, further,
that no party hereto shall assign any of its obligations hereunder with the primary intent of avoiding, circumventing or eliminating such party’s obligations hereunder. Subject to the immediately preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.
Section 8.04 Counterparts. This Agreement may be executed in one or more counterparts (including by electronic mail), each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.
Section 8.05
Entire Agreement; No Third Party Beneficiaries; No Recourse. (a) This Agreement, including
the Company Disclosure Letter, together with the Confidentiality Agreement, the
Registration
Rights Agreement and the Certificate of Designations, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any of them,
with respect to the subject matter hereof and thereof.
(b) No provision of this Agreement shall confer upon any Person other than the parties hereto and their permitted assigns any rights or remedies hereunder, except that the Non-Recourse Parties shall be third
party beneficiaries of this
Section 8.05(b). Except as may be set forth in any triparty agreement entered into pursuant to
Section 5.18, this Agreement may only be enforced against, and any claims or causes of action that may be
based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, including entities that become parties
hereto after the date of this Agreement or that agree in writing for the benefit of
the Company to be bound by the terms of this Agreement applicable to the Investor Parties, and no former, current or future equityholders, controlling persons,
directors, officers, employees, general or limited partner, member, manager, advisor, agents, successors, assigns or Affiliates of any party hereto or any former, current or future equityholder, controlling person, director, officer, employee,
general or limited partner, member, manager, advisor, agent successors, assigns or Affiliate of any of the foregoing (each, a “
Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement
or for any claim (whether in tort,
contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any representations (whether written or oral) made or alleged to be made in connection
herewith, and no personal liability shall attach to, be imposed upon or otherwise be incurred by the Non-Recourse Parties through the Investor or otherwise, whether by or through attempted piercing of the corporate (or partnership or limited
liability company) veil, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law, or otherwise, except for
the Company’s rights against Investor under the Confidentiality
Agreement and
the Company’s right under the Equity Commitment Letter in accordance with its terms. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this
Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party.
Section 8.06
Governing Law; Jurisdiction. (a) This Agreement and all matters, claims or Actions (whether at law, in equity, in
Contract, in tort or otherwise) based upon, arising out
of or relating to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed
entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.
(b) All Actions arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept
jurisdiction over any Action, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the defense of
an inconvenient forum or lack of jurisdiction to the maintenance of any such Action. The consents to jurisdiction and venue set forth in this Section 8.06 shall not constitute general consents to service of process in the State of Delaware
and shall have no effect for any purpose except as provided in this Section 8.06(b) and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in
any Action arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in Section 8.09 of this Agreement. The parties hereto agree that a final judgment in any such
Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided that nothing in the foregoing shall restrict any party’s rights to seek any
post-judgment relief regarding, or any appeal from, a final trial court judgment.
Section 8.07
Specific Enforcement. The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the
event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, including if the parties hereto fail to take any action required of them hereunder to cause the Closings to occur in
accordance with the terms of this Agreement. The parties acknowledge and agree that (a) the parties shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches or threatened breaches of
this Agreement and to enforce specifically the terms and provisions hereof to be funded and the Initial Purchase and Supplemental Purchase to be consummated on the terms and subject to the conditions set forth in this Agreement) in the courts
described in
Section 8.06 without proof of damages or otherwise (in each case, subject to the terms and conditions of this
Section 8.07), this being in addition to any other remedy to which they are entitled under this Agreement
and (b) the right of specific enforcement is an integral part of the Transactions and without that right, neither
the Company nor the Investor would have entered into this Agreement. The parties hereto agree not to assert that a remedy of
specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at
Law. The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this
Section 8.07
shall not be required to provide any bond or other security in connection with any such order or injunction.
Section 8.08 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES,
AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY AND (D) IT HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 8.08.
Section 8.09 Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, emailed (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:
By mail or courier:
KAR Auction Services, Inc.
11299 N. Illinois Street
| |
Attention:
|
Eric Loughmiller
|
Chuck Coleman
By email:
| |
Attention:
|
Eric Loughmiller
|
Chuck Coleman
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York,
NY 10001Dohyun Kim
(b) If to the Investor or any Investor Party at:
with a copy (which shall not constitute notice) to:
| |
Attention:
|
Daniel A. Neff
|
Eric M. Feinstein
or such other address or email address as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of actual receipt by the recipient
thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
Section 8.10 Severability. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being
enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term, condition or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law.
Section 8.11
Interpretation. (a) When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words “
include”, “
includes” or “
including” are used in this Agreement, they shall be deemed to be followed by the words “
without limitation”. The words “
hereof”, “
herein” and “
hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement unless the context requires otherwise. The terms “
or”, “
any” and “
either”
are not exclusive. The word “
extent” in the phrase “
to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “
if”. The word “
will” shall be construed to
have the same meaning and effect as the word “
shall”. The words “
made available to the Investor” and words of similar import refer to documents delivered in Person or electronically to an Investor Party or its Representatives in
each case no later than one (1) Business Day prior to the date of this Agreement. All accounting terms used and not defined herein shall have the respective meanings given to them under GAAP. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “
dollars” or “
$” shall refer to the lawful
money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this
Agreement, the date that is the reference date in calculating such period shall be excluded (and unless, otherwise required by Law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding
Business Day).
(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be
construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provision of this Agreement.
Section 8.12
Investor Representative. Each Investor Party hereby consents to and authorizes (a) the appointment of the Investor as the Investor Representative hereunder (the “
Investor
Representative”) and as the attorney-in-fact for and on behalf of such Investor Party, and (b) the taking by the Investor Representative of any and all actions and the making of any decisions required or permitted by, or with respect to,
this Agreement and the Transactions, including (i) the exercise of the power to agree to execute any consents under this Agreement and (ii) to take all actions necessary in the judgment of the Investor Representative for the accomplishment of
the foregoing and all of the other terms, conditions and limitations of this Agreement and the Transactions. Each Investor Party shall be bound by the actions taken by the Investor Representative exercising the rights granted to it by this
Agreement, and
the Company shall be entitled to rely on any such action or decision of the Investor Representative. If the Investor Representative shall resign or otherwise be unable to fulfill its responsibilities hereunder, the Investor
Parties shall appoint a new Investor Representative as soon as reasonably practicable by written consent of holders of a majority of the then outstanding Series A Preferred Stock and/or shares of Common Stock that were issued upon conversion of
shares of Series A Preferred Stock beneficially owned by the Investor or Investor Parties that are successors or assigns of the Investor by sending notice and a copy of the duly executed written consent appointing such new Investor
Representative to
the Company.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
| |
KAR AUCTION SERVICES, INC.
|
| |
|
|
|
| |
By:
|
|
| |
|
Name:
|
|
| |
|
Title:
|
Executive Vice President and
Chief Financial Officer
|
[Signature Page to Investment Agreement]
| |
INVESTOR:
|
| |
|
|
| |
PERIPHAS CAPITAL GP, LLC
|
| |
|
|
| |
By:
|
SKM, LLC
|
| |
|
its managing member
|
| |
|
|
|
| |
By:
|
|
| |
|
Name:
|
|
| |
|
Title:
|
Authorized Person
|
[Signature Page to Investment Agreement]
EXHIBIT A
CERTIFICATE OF DESIGNATIONS OF
SERIES A CONVERTIBLE PREFERRED STOCK,
PAR VALUE $0.01,
OF
KAR AUCTION SERVICES, INC.
Pursuant to Section 151 of the Delaware General Corporation Law (as amended, supplemented or restated from time to time, the “DGCL”), KAR AUCTION SERVICES, INC., a corporation organized and
existing under the laws of the State of Delaware (the “Company”), in accordance with the provisions of Section 103 of the DGCL, DOES HEREBY CERTIFY:
That, the Amended and Restated
Certificate of Incorporation of
the Company, as filed with the Secretary of State of the State of Delaware (the “
Certificate of Incorporation”), authorizes the
issuance of 500,000,000 shares of capital stock, consisting of 400,000,000 shares of common stock, par value $0.01 per share (“
Common Stock”), and 100,000,000 shares of preferred stock, par value $0.01 per share (“
Preferred Stock”);
That, subject to the provisions of the
Certificate of Incorporation, the board of directors of
the Company (the “
Board”) is authorized to fix from time to time by resolution or resolutions
the number of shares of any class or series of Preferred Stock, and to determine the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions
thereof, of any such class or series; and
That, pursuant to the authority conferred upon the Board by the
Certificate of Incorporation, the Board, on
May 23, 2020, adopted the following resolution designating a new series of Preferred Stock
as
“Series A Convertible Preferred Stock”:
RESOLVED, that, pursuant to the authority vested in the Board in accordance with the provisions of Article Fourth of the
Certificate of Incorporation and the provisions of Section 151 of the DGCL, a
series of Preferred Stock of
the Company is hereby authorized, and the number of shares to be included in such series, and voting powers, designations, preferences and relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions of the shares of Preferred Stock included in such series, shall be as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The shares of such series of Preferred Stock shall be designated as
“Series A Convertible Preferred Stock” (the “
Series A
Preferred Stock”). The number of authorized shares constituting the Series A Preferred Stock shall be 1,500,000. That number from time to time may be increased or decreased (but not below the number of shares of Series A Preferred Stock
then outstanding) by further resolution duly adopted by the Board, or any duly authorized committee thereof and by the filing of a certificate pursuant to the provisions of the DGCL stating that such increase or decrease, as applicable, has been
so authorized.
The Company shall not have the authority to issue fractional shares of Series A Preferred Stock.
SECTION 2. RANKING. The Series A Preferred Stock will rank, with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of
the Company:
(a) on a parity basis with each other class or series of Capital Stock of
the Company now existing or hereafter authorized, the terms of which expressly provide that such class or series
ranks on a parity basis with the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company (such Capital Stock, “
Parity
Stock”);
(b) junior to each other class or series of Capital Stock of
the Company now existing or hereafter authorized, the terms of which expressly provide that such class or series ranks senior
to the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company (such Capital Stock, “
Senior Stock”); and
(c) senior to the Common Stock and each other class or series of Capital Stock of
the Company now existing or hereafter authorized, the terms of which do not expressly provide that such
class or series ranks on a parity basis with or senior to the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the
Company (such Capital Stock, “
Junior Stock”).
SECTION 3. DEFINITIONS. As used herein with respect to Series A Preferred Stock:
“Accrued Dividend Record Date” has the meaning set forth in Section 4(e).
“Accrued Dividends” means, as of any date, with respect to any share of Series A Preferred Stock, all Dividends that have accrued on such share pursuant to Section 4(b), whether or
not declared, but that have not, as of such date, been paid.
“
Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person;
provided,
however, (i) that
the Company and its
Subsidiaries shall not be deemed to be Affiliates of any Investor Party or Periphas or any of their respective Affiliates, (ii) portfolio
companies (as such term is customarily used among institutional investors) in which any Investor Party or Periphas or any of their respective Affiliates has an investment (whether as debt or equity) shall not be deemed an Affiliate of such
Investor Party or Periphas, as applicable, and (iii) the Excluded Sponsor Parties shall not be deemed to be Affiliates of any Investor Party, Periphas,
the Company or any of
the Company’s
Subsidiaries. For this purpose,
“control” (including,
with its correlative meanings,
“controlled by” and
“under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership
of securities or partnership or other ownership interests, by
contract or otherwise.
“Base Amount” means, with respect to any share of Series A Preferred Stock, as of any date of determination, the sum of (a) the Liquidation Preference and (b) the Base Amount Accrued
Dividends with respect to such share as of such date.
“Base Amount Accrued Dividends” means, with respect to any share of Series A Preferred Stock, as of any date of determination, (a) if a Dividend Payment Date has occurred since the issuance
of such share, the Accrued Dividends with respect to such share as of the Dividend Payment Date immediately preceding such date of determination (taking into account the payment of Dividends, if any, on or with respect to such Dividend Payment
Date) or (b) if no Dividend Payment Date has occurred since the issuance of such share, zero.
Any Person shall be deemed to “beneficially own,” to have “beneficial ownership” of, or to be “beneficially owning” any securities (which securities shall also be deemed
“beneficially owned” by such Person) that such Person is deemed to “beneficially own” within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act; provided that any Person shall be deemed to
beneficially own any securities that such Person has the right to acquire, whether or not such right is exercisable within sixty (60) days or thereafter (including assuming conversion of all Series A Preferred Stock, if any, owned by such Person
to Common Stock).
“Board” has the meaning set forth in the recitals hereto.
“Business Day” means any weekday that is not a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to be closed.
“Capital Stock” means, with respect to any Person, any and all shares of, interests in, rights to purchase, warrants to purchase, options for, participations in or other equivalents of or
interests in (however designated) stock issued by such Person.
“Cash Dividend” has the meaning set forth in Section 4(c).
“Certificate of Designations” means this Certificate of Designations relating to the Series A Preferred Stock, as it may be amended from time to time.
“Change of Control” means the occurrence of one of the following, whether in a single transaction or a series of related transactions:
(a) any
“person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority of the total voting power of the Voting Stock of
the Company, other than as a result of a transaction in which (1) the holders of securities that represented 100% of the Voting Stock of the
Company immediately prior to such transaction are substantially the same as the holders of securities that represent a majority of the Voting Stock of the surviving Person or its Parent Entity immediately following such transaction and (2) the
holders of securities that represented 100% of the Voting Stock of
the Company immediately prior to such transaction own directly or indirectly Voting Stock of the surviving Person or its Parent Entity in substantially the same proportion to each
other as immediately prior to such transaction;
(b) the merger or consolidation of
the Company with or into another Person or the merger of another Person with or into
the Company, or the sale, transfer or lease of all or substantially
all the assets of
the Company (determined on a consolidated basis), whether in a single transaction or a series of related transactions, to another Person, or any recapitalization, reclassification or other transaction in which all or
substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, other than a transaction following which (1) in the case of a merger or consolidation transaction, holders of securities that represented
100% of the Voting Stock of
the Company immediately prior to such transaction own directly or indirectly (in substantially the same proportion to each other as immediately prior to such transaction, other than changes in proportionality as a
result of any cash/stock election provided under the terms of the definitive agreement regarding such transaction) at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction
immediately after such transaction, and (2) in the case of a sale, transfer or lease of all or substantially all of the assets of
the Company, other than to a Subsidiary or a Person that becomes a Subsidiary of
the Company; or
(c) shares of Common Stock or shares of any other Capital Stock into which the Series A Preferred Stock is convertible are not listed for trading on any United States national securities
exchange or cease to be traded in contemplation of a de-listing (other than as a result of a transaction described in the foregoing clause (b)).
“Change of Control Effective Date” has the meaning set forth in Section 9(c).
“Change of Control Purchase Date” means, with respect to each share of Series A Preferred Stock, the date on which the Change of Control Put Purchaser makes the payment in full of the Change
of Control Put Price for such share to the Holder thereof.
“Change of Control Put” has the meaning set forth in Section 9(a).
“Change of Control Put Price” has the meaning set forth in Section 9(a).
“Change of Control Put Purchaser” has the meaning set forth in Section
9(a).
“close of business” means 5:00 p.m. (New York City time).
“
Closing Price” of the Common Stock on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price, of the shares of the
Common Stock on the NYSE on such date. If the Common Stock is not traded on the NYSE on any date of determination, the Closing Price of the Common Stock on such date of determination means the closing sale price as reported in the composite
transactions for the principal United States securities exchange or automated quotation system on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal United States
securities exchange or automated quotation system on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a United States securities exchange or automated quotation system, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by OTC Markets Group Inc. or any similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by an Independent
Financial Advisor retained by
the Company for such purpose.
“Common Stock” has the meaning set forth in the recitals hereto.
“Company” has the meaning set forth in the recitals hereto.
“Company Redemption Date” has the meaning set forth in Section 10(a)(ii).
“Company Redemption Right” has the meaning set forth in Section 10(a)(i).
“Constituent Person” has the meaning set forth in Section 12(a).
“Conversion” means an Optional Conversion or a Mandatory Conversion, as applicable.
“Conversion Agent” means the Transfer Agent acting in its capacity as conversion agent for the Series A Preferred Stock, and its successors and assigns.
“Conversion Date” has the meaning set forth in Section 8(a).
“Conversion Price” means, for each share of Series A Preferred Stock, a dollar amount equal to $1,000 divided by the Conversion Rate.
“Conversion Rate” means, for each share of Series A Preferred Stock, 56.3380 shares of Common Stock, subject to adjustment as set forth herein.
“Conversion Restriction” has the meaning set forth in Section 6(b).
“Covered Repurchase” has the meaning set forth in Section 11(a)(iii).
“Current Market Price” per share of Common Stock, as of any date of determination, means the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full
Trading Days ending on the Trading Day immediately preceding such day, appropriately adjusted to take into account the occurrence during such period of any event described in Section 11.
“DGCL” has the meaning set forth in the recitals hereto.
“Distributed Property” has the meaning set forth in Section 11(a)(iv).
“
Distribution Transaction” means any distribution of equity securities of a Subsidiary of
the Company to holders of Common Stock, whether by means of a spin-off, split-off, redemption,
reclassification, exchange, stock dividend, share distribution, rights offering or similar transaction.
“Dividend Payment Date” means March 31, June 30, September 30 and December 31 of each year; provided that if any such Dividend Payment Date is not a
Business Day, then the applicable Dividend shall be payable on the next Business Day immediately following such Dividend Payment Date, without any interest.
“Dividend Payment Period” means in respect of any share of Series A Preferred Stock the period from and including the Original Issuance Date to but excluding the next Dividend Payment Date
and, subsequently, in each case the period from and including any Dividend Payment Date to but excluding the next Dividend Payment Date.
“Dividend Rate” means 7.0%.
“Dividend Record Date” has the meaning set forth in Section 4(e).
“Dividends” has the meaning set forth in Section 4(a).
“Excess Amount” has the meaning set forth in Section 6(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Property” has the meaning set forth in Section 12(a).
“Excluded Issuances” has the meaning set forth in Section 11(a)(viii).
“Excluded Sponsor Parties” has the meaning set forth in the Investment Agreement.
“Expiration Date” has the meaning set forth in Section 11(a)(iii).
“Fair Market Value” means, with respect to any security or other property, the fair market value of such security or other property as reasonably determined in good faith by a majority of the
Board, or an authorized committee thereof, (i) after consultation with an Independent Financial Advisor, as to any security or other property with a Fair Market Value of less than $50,000,000, or (ii) otherwise using an Independent Financial
Advisor to provide a valuation opinion.
“Fall-Away of Investor Board Rights” has the meaning set forth in the Investment Agreement.
“
Holder” means a Person in whose name the shares of the Series A Preferred Stock are registered, which Person shall be treated by
the Company, Transfer Agent, Registrar, paying agent and
Conversion Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling conversions and for all other purposes;
provided that, to the fullest extent
permitted by law, no Person that has received shares of Series A Preferred Stock in violation of the Investment Agreement or in violation of the Periphas Investment Agreement shall be a Holder, the Transfer Agent, Registrar, paying agent and
Conversion Agent, as applicable, shall not, unless directed otherwise by
the Company, recognize any such Person as a Holder and the Person in whose name the shares of the Series A Preferred Stock were registered immediately prior to such transfer
shall remain the Holder of such shares.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“Implied Quarterly Dividend Amount” means, with respect to any share of Series A Preferred Stock, as of any date, the product of (a) the Base Amount of such share on the first day of the
applicable Dividend Payment Period (or in the case of the first Dividend Payment Period for such share, as of the Issuance Date of such share) multiplied by (b) one fourth of the Dividend Rate applicable
on such date.
“
Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant of nationally recognized standing;
provided,
however, that such firm or consultant is not an Affiliate of
the Company.
“
Individual Holder Share Cap” means, with respect to any individual Holder as of any date, the maximum number of shares of Common Stock that could be issued by
the Company to such Holder as
of such date without triggering a change of control under Section 312.03(d) (or its successor) of the NYSE Listed Company Manual.
“Initial Change of Control Notice” has the meaning set forth in Section 9(b).
“
Initial Dividends” means all Dividends the Holders are entitled to receive pursuant to
Section 4(b) with respect to each Dividend Payment Period beginning prior to
June 30, 2022.
“
Investment Agreement” means that certain Investment Agreement between
the Company and the Investor dated as of
May 26, 2020, as it may be amended, supplemented or otherwise modified from
time to time, with respect to certain terms and conditions concerning, among other things, the rights of and restrictions on certain of the Holders.
“Investor” has the meaning set forth in the Investment Agreement.
“Investor Designee” means an individual nominated by the Board as a “Investor Designee” for election to the Board pursuant to Section 5.10(a), Section 5.10(b) or Section
5.10(c) of the Investment Agreement, as applicable.
“Investor Parties” means the Investor and each Permitted Transferee of the Investor to whom shares of Series A Preferred Stock or Common Stock are transferred pursuant to Section
5.08(b)(i) of the Investment Agreement.
“Issuance Date” means, with respect to any share of Series A Preferred Stock, the date of issuance of such share.
“Junior Stock” has the meaning set forth in Section 2(c).
“Liquidation Preference” means, with respect to any share of Series A Preferred Stock, as of any date, $1,000 per share.
“Mandatory Conversion” has the meaning set forth in Section 7(a).
“Mandatory Conversion Date” has the meaning set forth in Section 7(a).
“Mandatory Conversion Notice” has the meaning set forth in Section 7(b).
“Mandatory Conversion Price” means, as of any date, 175% of the Conversion Price, as of such date. The Mandatory Conversion Price shall initially be $31.0625.
“Market Disruption Event” means any of the following events:
(a) any suspension of, or limitation imposed on, trading of the Common Stock by any exchange or quotation system on which the Closing Price is determined pursuant to the definition of the
term
“Closing Price” (the “
Relevant Exchange”) during the one-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period
or periods aggregating one half-hour or longer during the regular trading session on the relevant day) and whether by reason of movements in price exceeding limits permitted by the Relevant Exchange as to securities generally, or otherwise
relating to the Common Stock or options
contracts relating to the Common Stock on the Relevant Exchange; or
(b) any event that disrupts or impairs (as determined by
the Company in its reasonable discretion) the ability of market participants during the one-hour period prior to the close of
trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day)
in general to effect transactions in, or obtain market values for, the Common Stock on the Relevant Exchange or to effect transactions in, or obtain market values for, options
contracts relating to the Common Stock on the Relevant Exchange.
“Notice of Company Redemption” has the meaning set forth in Section 10(a)(ii).
“NYSE” means the New York Stock Exchange.
“
Officer’s Certificate” means a certificate signed by the Chief Executive Officer, the Chief Financial Officer or the Secretary of
the Company.
“Optional Conversion” has the meaning set forth in Section 6(a).
“Optional Conversion Notice” has the meaning set forth in Section 8(a)(i).
“Original Issuance Date” means the Initial Closing Date, as defined in the Investment Agreement.
“Parent Entity” means, with respect to any Person, any other Person of which such first Person is a direct or indirect wholly owned Subsidiary.
“Parity Stock” has the meaning set forth in Section 2(a).
“Participating Dividend” has the meaning set forth in Section 4(g).
“Periphas” means Periphas Capital GP, LLC.
“
Periphas Investment Agreement” means that certain Investment Agreement between
the Company and Periphas, dated as of
May 26, 2020, as it may be amended, supplemented or otherwise modified
from time to time, with respect to certain terms and conditions concerning, among other things, the rights of and restrictions on certain of the Holders.
“Permitted Transferee” has the meaning set forth in the Investment Agreement.
“Person” means any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any other
entity.
“PIK Dividend” has the meaning set forth in Section 4(c).
“PIK Dividend Ratio” has the meaning set forth in Section 4(c).
“Preferred Stock” has the meaning set forth in the recitals hereto.
“
Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other
property (whether such date is fixed by the Board or by statute,
contract or otherwise).
“
Redemption Date” means, with respect to each share of Series A Preferred Stock, the date on which
the Company makes the payment in full of the Redemption Price for such share either to the
Holder of such share or to the Transfer Agent, irrevocably, for the benefit of such Holder.
“Redemption Price” has the meaning set forth in Section 10(a)(i).
“Registrar” means the Transfer Agent acting in its capacity as registrar for the Series A Preferred Stock, and its successors and assigns.
“Relevant Exchange” has the meaning set forth in the definition of the term “Market Disruption Event.”
“Reorganization Event” has the meaning set forth in Section 12(a).
“Senior Stock” has the meaning set forth in Section 2(b).
“Series A Preferred Stock” has the meaning set forth in Section 1.
“Stockholder Approval” has the meaning set forth in the Investment Agreement.
“Subsidiary,” when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (i) securities or other
ownership interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) or (ii) sufficient voting rights to elect at least a majority of the board of
directors or other governing body are, as of such date, owned by such Person or one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person.
“Trading Day” means a Business Day on which the Relevant Exchange is scheduled to be open for business and on which there has not occurred a Market Disruption Event.
“Trading Period” has the meaning set forth in Section 7(a).
“Transfer Agent” means the Person acting as Transfer Agent, Registrar and paying agent and Conversion Agent for the Series A Preferred Stock, and its successors and assigns. The Transfer
Agent initially shall be American Stock Transfer & Trust Company, LLC.
“Trigger Event” has the meaning set forth in Section 11(a)(vii).
“
Voting Stock” means (i) with respect to
the Company, the Common Stock, the Series A Preferred Stock (subject to the limitations set forth herein) and any other Capital Stock of
the Company
having the right to vote generally in any election of directors of the Board and (ii) with respect to any other Person, all Capital Stock of such Person having the right to vote generally in any election of directors of the board of directors of
such Person or other similar governing body.
“
VWAP” per share of Common Stock on any Trading Day means the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg (or, if Bloomberg ceases to
publish such price, any successor service reasonably chosen by
the Company) page
“KAR <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the open of trading on the relevant Trading Day
until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of Common Stock on such Trading Day determined, using a volume-weighted average method, by an Independent
Financial Advisor retained for such purpose by
the Company).
SECTION 4. DIVIDENDS.
(a) Holders shall be entitled to receive dividends of the type and in the amount determined as set forth in this Section 4 (such dividends, “Dividends”).
(b)
Accrual of Dividends. Dividends on each share of Series A Preferred Stock (i) shall accrue on a daily basis from and including the Original Issuance Date (or, if later, the
most recent Dividend Payment Date preceding the issuance date of such share), whether or not declared and whether or not
the Company has assets legally available to make payment thereof, at a rate equal to the Dividend Rate as further specified
in this
Section 4(b) and (ii) shall be payable quarterly in arrears, if, as and when authorized by the Board, or any duly authorized committee thereof, and declared by
the Company, to the extent not prohibited by law, on each Dividend
Payment Date, commencing on the first Dividend Payment Date following the Issuance Date of such share. The amount of Dividends accruing with respect to any share of Series A Preferred Stock for any day shall be determined by dividing (x) the
Implied Quarterly Dividend Amount as of such day by (y) the actual number of days in the Dividend Payment Period in which such day falls. The amount of Dividends payable with respect to any share of Series A Preferred Stock for any Dividend
Payment Period shall equal the sum of the daily Dividend amounts accrued in accordance with the prior sentence of this
Section 4(b) with respect to such share during such Dividend Payment Period. For the avoidance of doubt, for any share
of Series A Preferred Stock with an Issuance Date that is not a Dividend Payment Date, the amount of Dividends payable with respect to the initial Dividend Payment Period for such share shall equal the product of (A) the daily accrual determined
as specified in the prior sentence, assuming a full Dividend Payment Period in accordance with the definition of such term, and (B) the number of days from (and including) the Original Issuance Date (or, if later, the most recent Dividend Payment
Date preceding the Issuance Date of such share) to (but excluding) the next Dividend Payment Date.
(c)
Payment of Dividend. With respect to any Dividend Payment Date,
the Company will pay, to the extent permitted by applicable law, Dividends in the form of, in
the Company’s sole
discretion, (i) cash (any Dividend or portion of a Dividend paid in cash, a “
Cash Dividend”), if, as and when authorized by the Board, or any duly authorized committee thereof, and declared by
the Company, (ii) as a dividend in kind,
additional duly authorized, validly issued and fully paid and nonassessable shares of Series A Preferred Stock (any Dividend or portion of a Dividend paid in the manner provided in this clause, a “
PIK Dividend”) having value (as determined
in accordance with the immediately following sentence) equal to the amount of Accrued Dividends during such Dividend Payment Period or (iii) through a combination of either of the foregoing;
provided
that (A)
the Company shall pay all Initial Dividends solely in the form of PIK Dividends, (B) Cash Dividend payments shall be aggregated per Holder and shall be made to the nearest cent (with $.005 being rounded upward), (C) if
the Company pays a
PIK Dividend, no fractional shares of Series A Preferred Stock shall be issued to any Holder (after taking into account all shares of Series A Preferred Stock held by such Holder) and in lieu of any such fractional share,
the Company shall pay to
such Holder, at
the Company’s option, either (1) an amount in cash equal to the applicable fraction of a share of Series A Preferred Stock multiplied by the Liquidation Preference per share of Series A Preferred Stock or (2) one additional whole
share of Series A Preferred Stock and (D) with respect to any Dividend Payment Date where
the Company pays a combination of a PIK Dividend and a Cash Dividend, the proportion of a Dividend paid to any Holder that consists of a PIK Dividend (the “
PIK
Dividend Ratio”) shall be the same as the PIK Dividend Ratio with respect to each Dividend paid to each other Holder that receives a Dividend on such Dividend Payment Date. In the event that
the Company pays a PIK Dividend, each share of
Series A Preferred Stock paid in connection therewith shall have a deemed value for such purpose equal to the Liquidation Preference per share of Series A Preferred Stock, and the number of additional shares of Series A Preferred Stock issuable
to Holders in connection with the payment of a PIK Dividend will be, with respect to each share of Series A Preferred Stock, and without limiting the foregoing proviso concerning fractional shares, the number (or fraction) obtained from the
quotient of (1) the value (as determined in accordance with this Section 4(c)) of the applicable PIK Dividend per share of Series A Preferred Stock
divided by (2)
the Liquidation Preference per share of Series A Preferred Stock.
(d) Arrearages. Dividends shall accumulate from the most recent date through which Dividends shall have been paid, or, if no Dividends have been paid, from the Original Issuance
Date.
(e) Record Date. Dividends shall be paid pro rata to the Holders of shares of Preferred Stock entitled thereto. The record date for payment of Dividends that are declared and paid
on any relevant Dividend Payment Date will be the close of business on the fifteenth (15th) day of the calendar month which contains the relevant Dividend Payment
Date (each, a “Dividend Record Date”), and the record date for payment of any Accrued Dividends that were not declared and paid on any relevant Dividend Payment Date will be the close of business on the date that is established by the
Board, or a duly authorized committee thereof, as such, which will not be more than forty-five (45) days prior to the date on which such Dividends are paid (each, an “Accrued Dividend Record Date”), in each case whether or not such day is
a Business Day.
(f)
Priority of Dividends. So long as any shares of Series A Preferred Stock remain outstanding, unless full Dividends on all outstanding shares of Series A Preferred Stock have
been declared and paid, including any accrued and unpaid Dividends on the Series A Preferred Stock that are then in arrears, or have been or contemporaneously are declared and a sum sufficient for the payment of those Dividends has been or is set
aside for the benefit of the Holders,
the Company may not declare any dividend on, or make any distributions relating to, Junior Stock or Parity Stock, or redeem, purchase, acquire (either directly or through any Subsidiary) or make a liquidation
payment relating to, any Junior Stock or Parity Stock, other than:
(i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment
contract, benefit plan or other similar arrangement with or
for the benefit of current or former employees, officers, directors or consultants;
(ii) purchases of Junior Stock through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock;
(iii) as a result of an exchange or conversion of any class or series of Parity Stock or Junior Stock for any other class or series of Parity Stock (in the case of Parity
Stock) or Junior Stock (in the case of Parity Stock or Junior Stock);
(iv) purchases of fractional interests in shares of Parity Stock or Junior Stock pursuant to the conversion or exchange provisions of such Parity Stock or Junior Stock or
the security being converted or exchanged;
(v) payment of any dividends in respect of Junior Stock where the dividend is in the form of the same stock or rights to purchase the same stock as that on which the
dividend is being paid;
(vi) distributions of Junior Stock or rights to purchase Junior Stock; or
(vii) any dividend in connection with the implementation of a shareholders’ rights or similar plan, or the redemption or repurchase of any rights under any such plan.
Notwithstanding the foregoing, for so long as any shares of Series A Preferred Stock remain outstanding, if dividends are not declared and paid in full upon the shares of Series A Preferred Stock
and any Parity Stock, all dividends declared upon shares of Series A Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that all
accrued and unpaid dividends as of the end of the most recent Dividend Payment Period per share of Series A Preferred Stock and accrued and unpaid dividends as of the end of the most recent dividend period per share of any Parity Stock bear to
each other.
Subject to the provisions of this
Section 4, dividends may be authorized by the Board, or any duly authorized committee thereof, and declared and paid by
the Company, or any duly authorized
committee thereof, on any Junior Stock and Parity Stock from time to time, subject to
Section 4(g).
(g) Participating Dividends. In addition to Dividends accrued under Section 4(b), Holders shall fully participate, on an as-converted basis, in any dividends declared and
paid or distributions on Common Stock as if the Series A Preferred Stock were converted pursuant to Section 6(a) into shares of Common Stock (without regard to any limitations on conversion) immediately prior to the Record Date for such
dividend or distribution, at the Conversion Price in effect on such Record Date (such dividend or other distribution on the Series A Preferred Stock, a “Participating Dividend”), as and when paid with respect to the Common Stock and using
the same Record Date as is used for the Common Stock.
(h) Conversion Following a Record Date. If the Conversion Date for any shares of Series A Preferred Stock is prior to the close of business on a Dividend Record Date or an Accrued
Dividend Record Date, the Holder of such shares will not be entitled to any dividend in respect of such Dividend Record Date or Accrued Dividend Record Date, as applicable, other than through the inclusion of Accrued Dividends as of the
Conversion Date in the calculation under Section 6(a) or Section 7(a), as applicable. If the Conversion Date for any shares of Series A Preferred Stock is after the close of business on a Dividend Record Date or an Accrued
Dividend Record Date, or the close of business on the Record Date for a Participating Dividend but prior to the corresponding payment date for such dividend, the Holder of such shares as of such Dividend Record Date or Accrued Dividend Record
Date or record date for such Participating Dividend, as applicable, shall be entitled to receive such dividend, notwithstanding the conversion of such shares prior to the applicable Dividend Payment Date or payment date for such Participating
Dividend; provided that the amount of such Dividend shall not be included for the purpose of determining the amount of Accrued Dividends under Section 6(a) or Section 7(a), as applicable,
with respect to such Conversion Date.
SECTION 5. LIQUIDATION RIGHTS.
(a)
Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company, the Holders shall be entitled, out of assets
legally available therefor, before any distribution or payment out of the assets of
the Company may be made to or set aside for the holders of any Junior Stock, and subject to the rights of the holders of any Senior Stock or Parity Stock and the
rights of
the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per share of Series A Preferred Stock equal to the greater of (i) the sum of (A) the Liquidation Preference
plus (B) the Accrued Dividends with respect to such share of Series A Preferred Stock as of the date of such voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company and
(ii) the amount such Holders would have received had such Holders, immediately prior to such voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company, converted such shares of Series A Preferred Stock into
Common Stock pursuant to
Section 6, without regard to any of the limitations on convertibility contained therein. Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation,
dissolution or winding up of the affairs of
the Company other than what is expressly provided for in this
Section 5 and will have no right or claim to any of
the Company’s remaining assets.
(b)
Partial Payment. If in connection with any distribution described in
Section 5(a), the assets of
the Company or proceeds therefrom are not sufficient to pay in full the
aggregate liquidating distributions required to be paid pursuant to
Section 5(a) to all Holders and the liquidating distributions payable to all holders of any Parity Stock, the amounts distributed to the Holders and to the holders of all
such Parity Stock shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled if all amounts payable thereon were paid in full.
(c)
Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this
Section 5, the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property and assets of
the Company shall not be deemed a voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company, nor shall the merger,
consolidation, statutory exchange or any other business combination transaction of
the Company into or with any other Person or the merger, consolidation, statutory exchange or any other business combination transaction of any other Person into
or with
the Company be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company.
SECTION 6. OPTIONAL CONVERSION BY THE HOLDERS.
(a) At any time after the one (1)-year anniversary of the Original Issuance Date, each Holder shall have the right, at such Holder’s option, subject to the conversion procedures set forth
in Section 8 and subject to Section 9(f), to convert each share of such Holder’s Series A Preferred Stock into (i) the number of shares of Common Stock equal to the quotient of (A) the sum of the Liquidation Preference and the
Accrued Dividends with respect to such share of Series A Preferred Stock as of the applicable Conversion Date divided by (B) the Conversion Price of such share as of the applicable Conversion Date plus (ii) cash in lieu of fractional shares, if any, as provided by Section 11(h) (an “Optional Conversion”); provided that no such Optional Conversion
shall be permitted until the expiration or early termination of the applicable waiting period under the HSR Act with respect to any Optional Conversion of the Series A Preferred Stock; provided, further
that the one (1)-year period set forth above shall not apply in respect of an Optional Conversion effected by a lender or counterparty (or any agent or trustee on its behalf) in connection with any foreclosure or transfer in lieu of foreclosure
under any Permitted Loan (as defined in the Investment Agreement) or any Permitted Loan (as defined in the Periphas Investment Agreement). The right of Optional Conversion may be exercised as to all or any portion of such Holder’s Series A
Preferred Stock from time to time; provided that, in each case, no right of Optional Conversion may be exercised by a Holder in respect of fewer than 1,000 shares of Series A Preferred Stock (unless such
Optional Conversion relates to all shares of Series A Preferred Stock held by such Holder).
(b) Notwithstanding the foregoing or anything else in this Certificate of Designations to the contrary, unless and until the Stockholder Approval (to the extent required under the listing
rules of the NYSE) is obtained, no Holder shall have the right to acquire shares of Common Stock, and
the Company shall not be required to issue shares of Common Stock to such Holder, in excess of such Holder’s Individual Holder Share Cap (the “
Conversion
Restriction”), and in each case,
the Company shall either, at
the Company’s sole discretion, obtain Stockholder Approval of such issuances or deliver, in lieu of any shares of Common Stock otherwise deliverable upon conversion in excess of
the Conversion Restriction, an amount of cash per share equal to the VWAP per share of Common Stock on the Trading Day immediately preceding the Conversion Date (such cash amount, the “
Excess Amount”);
provided,
however, that the Conversion Restriction shall not apply to a Conversion in connection with and conditioned upon the completion of (i) a transfer by the Holder of the shares of Common Stock to be received
upon Conversion, (ii) a
bona fide third party tender offer for the shares of Common Stock issuable thereupon, or (iii) a Reorganization Event or Change of Control if, in the case of each of clauses (i),
(ii) and (iii), such Holder and its Affiliates will not beneficially own or directly or indirectly hold following the consummation of such specified event (and with respect to a Reorganization Event or Change of Control, measured with respect to
the surviving Person if other than
the Company) in excess of the maximum number of shares of Capital Stock, measured by number of shares or voting power, as applicable, that would not trigger a change of control under Section 312.03(d) (or its
successor) of the NYSE Listed Company Manual. Upon the written request of the Holder,
the Company shall within two (2) Business Days confirm in writing to the Holder the number of shares of Common Stock and the number of shares of any other
class of Voting Stock then outstanding.
(a) At any time after the three (3)-year anniversary of the Original Issuance Date, if the Closing Price on Bloomberg (or, if Bloomberg ceases to publish such price, any successor service
reasonably chosen by
the Company) of the Common Stock exceeds the Mandatory Conversion Price for at least twenty (20) Trading Days in any period of thirty (30) consecutive Trading Days (such thirty (30) consecutive Trading Day period, the “
Trading
Period”),
the Company may, at
the Company’s sole discretion, elect to convert (a “
Mandatory Conversion”) all or any portion of the outstanding shares of Series A Preferred Stock into shares of Common Stock (the date selected by the
Company for any Mandatory Conversion pursuant to this
Section 7(a), the “
Mandatory Conversion Date”). In the case of a Mandatory Conversion, each share of Series A Preferred Stock then outstanding shall be converted into (i) the
number of shares of Common Stock equal to the quotient of (A) the sum of the Liquidation Preference and the Accrued Dividends with respect to such share of Series A Preferred Stock as of the applicable Conversion Date
divided by (B) the Conversion Price of such share as of the applicable Conversion Date
plus (ii) cash in lieu of fractional shares, if any, as provided by
Section 11(h);
provided,
however, that, unless and until the Stockholder Approval is obtained,
the Company may effect a Mandatory Conversion only to the extent that, as of the
applicable Mandatory Conversion Date, such Mandatory Conversion would not violate Section 312.03(d) (or its successor) of the NYSE Listed Company Manual.
(b)
Mandatory Conversion Notice. If
the Company elects to effect a Mandatory Conversion,
the Company shall, within ten (10) Business Days following the completion of the applicable
thirty (30) day Trading Period referred to in
Section 7(a), provide notice of Mandatory Conversion to each Holder (such notice, a “
Mandatory Conversion Notice”). For the avoidance of doubt, a Mandatory Conversion Notice does not
limit a Holder’s right to convert on a Conversion Date prior to the Mandatory Conversion Date. The Mandatory Conversion Date selected by
the Company shall be no less than ten (10) Business Days and no more than twenty (20) Business Days after
the date on which
the Company provides the Mandatory Conversion Notice to the Holders. The Mandatory Conversion Notice shall state, as appropriate:
(i) the Mandatory Conversion Date selected by
the Company; and
(ii) the Conversion Price as in effect on the Mandatory Conversion Date, the number of shares of Common Stock to be issued to such Holder upon conversion of each share
of Series A Preferred Stock held by such Holder and, if applicable, the amount of Accrued Dividends as of the Mandatory Conversion Date.
(c)
Partial Mandatory Conversion. In the event that the Mandatory Conversion is exercised with respect to shares of Series A Preferred Stock representing less than all the shares of
Series A Preferred Stock outstanding at such time, the shares to be converted shall be converted by
the Company on a pro rata basis based on the then-outstanding shares of Series A Preferred Stock.
SECTION 8. CONVERSION PROCEDURES AND EFFECT OF CONVERSION.
(a) Conversion Procedure. A Holder must do each of the following in order to exercise such Holder’s right to an Optional Conversion pursuant to this Section 8(a):
(i) in the case of an Optional Conversion, complete and manually sign the conversion notice provided by the Conversion Agent (the “Optional Conversion Notice”),
and deliver such notice to the Conversion Agent; provided that an Optional Conversion Notice may be conditional on the completion of a transfer, a Change of Control or other corporate transaction;
(ii) deliver to the Conversion Agent the certificate or certificates (if any) representing the shares of Series A Preferred Stock to be converted;
(iii) if required, furnish appropriate endorsements and transfer documents; and
(iv) if required, pay any stock transfer, documentary, stamp or similar taxes not payable by
the Company pursuant to
Section 21.
The foregoing clauses (ii), (iii) and (iv) shall be conditions to the issuance of shares of Common Stock to the Holders in the event of a Mandatory Conversion pursuant to Section 7. The
Holder may, in respect of a Mandatory Conversion, deliver a notice to the Conversion Agent specifying, in respect of the deliverable shares of Common Stock, a delivery method of either book-entry basis, through the facilities of The Depositary
Trust Company or certificated form. If no such notice is delivered, the Holder shall be deemed to have chosen delivery by book-entry.
The “Conversion Date” means (A) with respect to an Optional Conversion, the date on which such Holder complies with the procedures in this Section 8(a) (including the satisfaction of
all conditions to such Optional Conversion set forth in the Optional Conversion Notice) and (B) with respect to any Mandatory Conversion pursuant to Section 7(a), the Mandatory Conversion Date.
(b) Effect of Conversion. Effective immediately prior to the close of business on the Conversion Date applicable to any shares of Series A Preferred Stock, Dividends shall no
longer accrue or be declared on any such shares of Series A Preferred Stock, and such shares of Series A Preferred Stock shall cease to be outstanding.
(c)
Record Holder of Underlying Securities as of Conversion Date. The Person or Persons entitled to receive the Common Stock and, to the extent applicable, cash, securities or
other property issuable upon conversion of Series A Preferred Stock on a Conversion Date shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or cash, securities or other property as of the close of
business on such Conversion Date. As promptly as practicable on or after the Conversion Date and compliance by the applicable Holder with the relevant procedures contained in
Section 8(a) (and in any event no later than three (3) Trading
Days thereafter;
provided,
however, that, if a written notice from the Holder in accordance with
Section 8(a) specifies a date of delivery for any shares
of Common Stock, such shares shall be delivered on the date so specified, which shall be no earlier than the second (2nd) Business Day immediately following the date of such notice and no later than the seventh (7th) Business Day thereafter), the
Company shall issue the number of whole shares of Common Stock issuable upon conversion (and deliver payment of cash in lieu of fractional shares as set out in
Section 11(h) and any Excess Amount) and, to the extent applicable, any cash,
securities or other property issuable thereon. Such delivery of shares of Common Stock, securities or other property shall be made by book-entry or, at the request of the Holder, by delivering a notice to the Conversion Agent, through the
facilities of The Depositary Trust Company or in certificated form. Any such certificate or certificates shall be delivered by
the Company to the appropriate Holder on a book-entry basis, through the facilities of The Depositary Trust Company,
or by mailing certificates evidencing the shares to the Holders, in each case at their respective addresses as set forth in the Optional Conversion Notice (in the case of a conversion pursuant to
Section 6(a)) or in the records of the
Company or as set forth in a notice from the Holder to the Conversion Agent, as applicable (in the case of a Mandatory Conversion). In the event that a Holder shall not by written notice designate the name in which shares of Common Stock (and
payments of cash in lieu of fractional shares) and, to the extent applicable, cash, securities or other property to be delivered upon conversion of shares of Series A Preferred Stock should be registered or paid, or the manner in which such
shares, cash, securities or other property should be delivered,
the Company shall be entitled to register and deliver such shares, securities or other property, and make such payment, in the name of the Holder and in the manner shown on the
records of
the Company.
(d)
Status of Converted or Reacquired Shares. Shares of Series A Preferred Stock converted in accordance with this Certificate of Designations, or otherwise acquired by
the Company
in any manner whatsoever, shall be retired promptly after the conversion or acquisition thereof. All such shares shall, upon their retirement and any filing required by the DGCL, become authorized but unissued shares of Preferred Stock, without
designation as to series until
such shares are once more designated as part of a particular series by the Board pursuant to the provisions of the
Certificate of Incorporation.
(e)
Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon a
Conversion, such number of shares of Common Stock as shall from time to time be issuable upon a Conversion of all the shares of Series A Preferred Stock then outstanding. Any shares of Common Stock issued upon a Conversion shall be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 9. CHANGE OF CONTROL.
(a)
Holder Rights Upon Change of Control. Subject to
Section 9(c), upon the occurrence of a Change of Control, each Holder of outstanding shares of Series A Preferred Stock
shall either (i) receive such number of shares of Common Stock into which it is entitled to convert all or a portion of its shares of Series A Preferred Stock pursuant to
Section 6(a) at the then-current Conversion Price, effective as of
immediately prior to the Change of Control, (ii) receive, in respect of all or a portion of its shares of Series A Preferred Stock, the greater of (x) the amount per share of Series A Preferred Stock that such Holder would have received had such
Holder, immediately prior to such Change of Control, converted such share of Series A Preferred Stock into Common Stock pursuant to
Section 6, without regard to any of the limitations on convertibility contained therein, and (y) a
purchase price per share of Series A Preferred Stock, payable in cash (a “
Change of Control Put”) that is paid, at the option of
the Company, either by
the Company or a third party arranged by
the Company (
the Company or such third party,
as applicable, the “
Change of Control Put Purchaser”), equal to the product of (A) 105%
multiplied by (B) the sum
of the Liquidation Preference and the Accrued Dividends with respect to such share of Series A Preferred Stock, in each case as of the applicable Change of Control Purchase Date (the “
Change of Control Put Price”), or (iii) unless the
consideration in such Change of Control is payable entirely in cash, retain all or a portion of such Holder’s shares of Series A Preferred Stock;
provided, that, if
the Company is the Change of Control
Put Purchaser,
the Company shall be required to pay the Change of Control Put Price only to the extent such purchase can be made out of funds legally available therefor in accordance with
Section 9(g).
(b)
Initial Change of Control Notice. On or before the twentieth (20th) Business Day prior to the date on which
the Company anticipates consummating a Change of Control (or, if
later, promptly after
the Company discovers that a Change of Control may occur), a written notice shall be sent by or on behalf of
the Company to the Holders as they appear in the records of
the Company, which notice shall (i) contain the date on
which the Change of Control is anticipated to be effected (or, if applicable, the date on which a Schedule TO or other schedule, form or report disclosing a Change of Control was filed) and (ii) specify the identity of the Change of Control Put
Purchaser (the “
Initial Change of Control Notice”). No later than ten (10) Business Days prior to the date on which
the Company anticipates consummating the Change of Control as set forth in the Initial Change of Control Notice (or, if
the Change of Control has already occurred as provided in the Initial Change of Control Notice, promptly, but no later than the tenth (10th) Business Day following receipt thereof), any Holder that desires to exercise its rights pursuant to
Section
9(a) shall notify
the Company in writing thereof and shall specify (x) whether such Holder is electing to exercise its rights pursuant to clause (i), (ii) or (iii) of
Section 9(a) and (y) the number of shares of Series A Preferred
Stock subject to each such election.
(c)
Final Change of Control Put Notice. If a Holder elects to exercise its Change of Control Put rights pursuant to
Section 9(a)(ii), within two (2) days following the
effective date of the Change of Control (the “
Change of Control Effective Date”) (or if
the Company discovers later than such date that a Change of Control has occurred, promptly following the date of such discovery), a final written
notice shall be sent by or on behalf of
the Company to the Holders as they appear in the records of
the Company on such Change of Control Effective Date, which notice shall contain:
(i) a statement setting forth in reasonable detail the calculation of the Change of Control Put Price with respect to such Holder;
(ii) the Change of Control Purchase Date, which shall be between thirty (30) and sixty (60) days after such notice is mailed; and
(iii) the instructions a Holder must follow to receive the Change of Control Put Price in connection with such Change of Control.
(d) Change of Control Put Procedure. To receive the Change of Control Put Price, a Holder must, no later than 5:00 p.m., New York City time, on the Change of Control Purchase Date,
surrender to the Transfer Agent any certificates representing the shares of Series A Preferred Stock to be repurchased by the Change of Control Put Purchaser or lost stock affidavits therefor to the extent applicable.
(e)
Delivery upon Change of Control Put. Upon a Change of Control Put, subject to
Section 9(g) below and subject to the Change of Control Put Purchaser's receipt of any
certificates representing the shares of Series A Preferred Stock to be repurchased by
the Company or lost stock affidavits therefor to the extent applicable in accordance with
Section 9(d), the Change of Control Put Purchaser (or its
successor) shall deliver or cause to be delivered to the Holder by wire transfer of immediately available funds, the Change of Control Put Price for such Holder’s shares of Series A Preferred Stock.
(f) Treatment of Shares. Until a share of Series A Preferred Stock with respect to which the Holder has elected the Change of Control Put is purchased by the payment in full (or
the deposit with the Transfer Agent) of the applicable Change of Control Put Price, such share of Series A Preferred Stock will remain outstanding and will be entitled to all of the powers, designations, preferences and other rights provided
herein; provided that no such shares of Series A Preferred Stock with respect to which the Holder has elected the Change of Control Put may be converted into shares of Common Stock following the Change of
Control Effective Date. Upon payment in full (or the deposit with the Transfer Agent) of the applicable Change of Control Put Price in respect of any shares of Series A Preferred Stock subject to a Change of Control Put, such shares of Series A
Preferred Stock will cease to be entitled to any dividends that may thereafter be payable on the Series A Preferred Stock, such shares of Series A Preferred Stock will no longer be deemed to be outstanding for any purpose and all rights (except
the right to receive the Change of Control Put Price) of the Holder of such shares of Series A Preferred Stock shall cease and terminate with respect to such shares of Series A Preferred Stock.
(g)
Sufficient Funds. This
Section 9(g) applies if
the Company is the Change of Control Put
Purchaser. If
the Company shall not have sufficient funds legally available under the DGCL to purchase all shares of Series A Preferred Stock that Holders have requested to be purchased under
Section 9(a)(ii),
the Company shall (i)
purchase, pro rata among the Holders that have requested their shares be purchased pursuant to
Section 9(a)(ii), a number of shares of Series A Preferred Stock with an aggregate Change of Control Put Price equal to the amount legally
available for the purchase of shares of Series A Preferred Stock under the DGCL and (ii) purchase any shares of Series A Preferred Stock not purchased because of the foregoing limitations at the applicable Change of Control Put Price as soon as
practicable after
the Company is able to make such purchase out of assets legally available for the purchase of such share of Series A Preferred Stock. The inability of
the Company (or its successor) to make a purchase payment for any reason
shall not relieve
the Company (or its successor) from its obligation to effect any required purchase when, as and if permitted by applicable law. Notwithstanding the foregoing, in the event a Holder exercises a Change of Control Put pursuant to
this
Section 9 at a time when
the Company is restricted or prohibited (contractually or otherwise) from redeeming some or all of the Series A Preferred Stock subject to the Change of Control Put,
the Company will use its commercially
reasonable efforts to obtain the requisite consents to remove or obtain an exception or waiver to such restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in
equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to
the Company’s failure to comply with its obligations under this
Section 9.
(h) Change of Control Agreements. The Company shall not enter into any agreement for a transaction constituting a Change of Control unless such agreement provides for or does not interfere with or
prevent (as applicable) the exercise by the Holders of their Change of Control Put in a manner that is consistent with and gives effect to this Section 9.
SECTION 10. REDEMPTION.
(i) At any time on or after the six (6)-year anniversary of the Original Issuance Date,
the Company shall have the right (the “
Company Redemption Right”) to
redeem, in whole or, from time to time in part, the shares of Series A Preferred Stock of any Holder outstanding at such time at a redemption price equal to (A) the sum of (x) the Liquidation Preference of the shares of Series A Preferred Stock
to be redeemed
plus (y) the Accrued Dividends with respect to such shares of Series A Preferred Stock as of the applicable Redemption Date,
multiplied by (B)
(1) if the Redemption Date occurs at any time on or after the six (6)-year anniversary of the Original Issuance Date and prior to the seven (7)-year anniversary of the Original Issuance Date, 105%, or (2) if the Redemption Date occurs at any time
on or after the seven (7)-year anniversary of the Original Issuance Date, 100% (such price, the “
Redemption Price”). Notwithstanding the foregoing,
the Company will not exercise
the Company Redemption Right, or otherwise send a Notice of
Company Redemption in respect of the redemption of, any Series A Preferred Stock pursuant to this
Section 10 unless
the Company has sufficient funds legally available to fully pay the Redemption Price in respect of all shares of Series A
Preferred Stock called for redemption. The Redemption Price shall be payable in cash. If fewer than all of the shares of Series A Preferred Stock then outstanding are to be redeemed pursuant to this
Section 10(a), then such redemption
shall occur on a pro rata
basis with respect to all Holders based on the total number of shares of Series A Preferred Stock then held by such Holder relative to the total number of shares of Series A
Preferred Stock then outstanding.
(ii) To exercise
the Company Redemption Right pursuant to this
Section 10(a),
the Company shall deliver written notice thereof (a “
Notice of Company
Redemption”) to the Holders and the Transfer Agent at least ten (10) days prior to the date designated therein for such redemption (the “
Company Redemption Date”). The Notice of Company Redemption shall contain instructions whereby
Holders will surrender to the Transfer Agent all shares of Series A Preferred Stock specified to be redeemed by
the Company.
The Company shall deliver or cause to be delivered to each Holder that has complied with the instructions set forth in
such Notice of Company Redemption, cash by wire transfer in an amount equal to the Redemption Price of the shares of Series A Preferred Stock in respect of which such Holder has complied with such instructions in accordance herewith.
(iii) From and after
the Company Redemption Date, with respect to any share of Series A Preferred Stock specified to be redeemed by
the Company and which has been
redeemed in accordance with the provisions of this
Section 10(a), or for which
the Company has deposited an amount equal to the Redemption Price in respect of such share with the Transfer Agent, then (i) Dividends shall cease to accrue on
such share, (ii) such share shall no longer be deemed outstanding and (iii) all rights with respect to such share shall cease and terminate. Notwithstanding the preceding sentence, if
the Company Redemption Date occurs after the record date for
a Participating Dividend but prior to the corresponding payment date for such Participating Dividend, the Holder as of such record date of any shares of Series A Preferred Stock to be redeemed shall be entitled to receive such Participating
Dividend, notwithstanding the redemption of such shares prior to the applicable payment date for such Participating Dividend.
(b)
Partial Redemption. In the event that
the Company Redemption Right is exercised with respect to shares of Series A Preferred Stock representing less than all the shares of
Series A Preferred Stock held by a Holder, upon such redemption,
the Company shall execute and the Transfer Agent shall countersign and deliver to such Holder, at the expense of
the Company, a certificate representing the shares of Series A
Preferred Stock held by the Holder as to which a Company Redemption Right was not exercised (or book-entry interests representing such shares).
SECTION 11. ANTI-DILUTION ADJUSTMENTS.
(a)
Adjustments. The Conversion Rate will be subject to adjustment, without duplication, upon the occurrence of the following events, except that
the Company shall not make any
adjustment to the Conversion Rate if the Holders of the Series A Preferred Stock participate, at the same time and upon the same terms as holders of Common Stock and solely as a result of holding shares of Series A Preferred Stock, in any
transaction described in this
Section 11(a), without having to convert their Series A Preferred Stock, as if the respective Holders held such number of shares of Common Stock into which the number of shares of Series A Preferred Stock
held by such respective Holders are then convertible pursuant to
Section 6(a) (without regard to any limitations on conversion):
(i) The issuance of Common Stock as a dividend or distribution to all or substantially all holders of Common Stock, or a subdivision or combination of Common Stock or a
reclassification of Common Stock into a greater or lesser number of shares of Common Stock, in which event the Conversion Rate shall be adjusted based on the following formula:
CR1 = CR0 x (OS1 / OS0)
CR0 = the Conversion Rate in effect immediately prior to the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such
subdivision, combination or reclassification
CR1 = the new Conversion Rate in effect immediately after the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such
subdivision, combination or reclassification
OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on (i) the Record Date for such dividend or distribution or (ii) the effective
date of such subdivision, combination or reclassification
OS1 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, the completion of such event
Any adjustment made pursuant to this clause (i) shall be effective immediately after the close of business on the Record Date for such dividend or distribution, or the effective date of such
subdivision, combination or reclassification. If any such event is announced or declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such event shall not occur, to the Conversion
Rate that would then be in effect if such event had not been declared.
(ii) The dividend, distribution or other issuance to all or substantially all holders of Common Stock of rights (other than rights, options or warrants distributed in
connection with a stockholder rights plan (in which event the provisions of Section 11(a)(vii) shall apply)), options or warrants entitling them to subscribe for or purchase shares of Common Stock for a period expiring forty-five (45)
days or less from the date of issuance thereof, at a price per share that is less than the Current Market Price as of the Record Date for such issuance, in which event the Conversion Rate will be increased based on the following formula:
CR1 = CR0 x [(OS0+X)] / (OS0+Y)
CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend, distribution or issuance
CR1 = the new Conversion Rate in effect immediately following the close of business on the Record Date for such dividend, distribution or issuance
OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend, distribution or issuance
X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants
Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the Current Market Price as of the Record
Date for such dividend, distribution or issuance.
For purposes of this clause (ii), in determining whether any rights, options or warrants entitle the holders to purchase the Common Stock at a price per share that is less than the Current Market
Price as of the Record Date for such dividend, distribution or issuance, there shall be taken into account any consideration
the Company receives for such rights, options or warrants, and any amount payable on exercise thereof, with the value of
such consideration, if other than cash, to be the Fair Market Value thereof.
Any adjustment made pursuant to this clause (ii) shall become effective immediately following the close of business on the Record Date for such dividend, distribution or issuance. In the event that
such rights, options or warrants are not so issued, the Conversion Rate shall be readjusted, effective as of the date the Board publicly announces its decision not to issue such rights, options or warrants, to the Conversion Rate that would then
be in effect if such dividend, distribution or issuance had not been declared. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such
rights, options or warrants upon the exercise of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the dividend, distribution or issuance of
such rights, options or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered.
(iii)
The Company or one or more of its
Subsidiaries purchases Common Stock pursuant to a tender offer or exchange offer (other than an exchange offer that constitutes a
Distribution Transaction subject to
Section 11(a)(v)) by
the Company or a Subsidiary of
the Company for all or any portion of the Common Stock, or otherwise acquires Common Stock (except (1) in an open market purchase in compliance with
Rule 10b-18 promulgated under the Exchange Act, (2) through an
“accelerated share repurchase” on customary terms or (3) in connection with tax withholding upon vesting or settlement of options, restricted stock units, performance share units or
other similar equity awards or upon forfeiture or cashless exercise of options or other equity awards) (a “
Covered Repurchase”), if the cash and value of any other consideration included in the payment per share of Common Stock validly
tendered, exchanged or otherwise acquired through a Covered Repurchase exceeds the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next
succeeding the last day on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) or shares of Common Stock are otherwise acquired through a Covered Repurchase (the “
Expiration Date”), in
which event the Conversion Rate shall be increased based on the following formula:
CR1 = CR0 x [(FMV + (SP1 x OS1))] / (SP1 x OS0)
CR0 = the Conversion Rate in effect immediately prior to the close of business on the Expiration Date
CR1 = the new Conversion Rate in effect immediately after the close of business on the Expiration Date
FMV = the Fair Market Value, on the Expiration Date, of all cash and any other consideration paid or payable for all shares validly tendered or exchanged and not withdrawn, or
otherwise acquired through a Covered Repurchase, as of the Expiration Date
OS0 = the number of shares of Common Stock outstanding immediately prior to the last time tenders or exchanges may be made pursuant to such tender or exchange offer (including the
shares to be purchased in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase
OS1 = the number of shares of Common Stock outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (after giving
effect to the purchase of shares in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase
SP1 = the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next
succeeding the Expiration Date
Such adjustment shall become effective immediately after the close of business on the Expiration Date. If an adjustment to the Conversion Rate is required under this Section 11(a)(iii),
delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 11(a)(iii) shall be delayed to the extent necessary in order to complete the calculations
provided for in this Section 11(a)(iii).
In the event that
the Company or any of its
Subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer, exchange offer or other commitment to acquire shares of Common Stock
through a Covered Repurchase but is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be the Conversion Rate that would have been then
in effect if such tender offer, exchange offer or Covered Repurchase had not been made.
(iv)
The Company shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock (other than for cash in lieu of fractional shares),
shares of any class of its Capital Stock, evidences of its indebtedness, assets, other property or securities, but excluding (A) dividends or distributions referred to in
Section 11(a)(i) or
Section 11(a)(ii) hereof, (B)
Distribution Transactions as to which
Section 11(a)(v) shall apply, (C) dividends or distributions paid exclusively in cash as to which
Section 11(a)(vi) shall apply and (D) rights, options or warrants distributed in connection
with a stockholder rights plan as to which
Section 11(a)(vii) shall apply (any of such shares of its Capital Stock, indebtedness, assets or property that are not so excluded are hereinafter called the “
Distributed Property”), then,
in each such case the Conversion Rate shall be increased based on the following formula:
CR1 = CR0 x [SP0 / (SP0 - FMV)]
CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution
CR1 = the new Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution
SP0 = the Current Market Price as of the Record Date for such dividend or distribution
FMV = the Fair Market Value of the portion of Distributed Property distributed with respect to each outstanding share of Common Stock on the Record Date for such dividend or
distribution;
provided that, if FMV is equal or greater than SP0, then in lieu of the foregoing adjustment,
the Company shall distribute to each Holder on the date the applicable Distributed Property is
distributed to holders of Common Stock, but without requiring such Holder to convert its shares of Series A Preferred Stock, in respect of each share of Series A Preferred Stock held by such Holder, the amount of Distributed Property such Holder
would have received had such Holder owned such number of shares of Common Stock into which a share of Series A Preferred Stock would have been convertible pursuant to
Section 6(a) (without regard to limitations on conversion) at the
Conversion Price in effect on the Record Date for such dividend or distribution.
Any adjustment made pursuant to this clause (iv) shall be effective immediately after the close of business on the Record Date for such dividend or distribution. If any such dividend or
distribution is declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such dividend or distribution shall not occur, to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.
(v)
The Company effects a Distribution Transaction, in which case the Conversion Rate in effect immediately prior to the effective date of the Distribution Transaction
shall be increased based on the following formula:
CR1 = CR0 x [(FMV + MP0) / MP0]
CR0 = the Conversion Rate in effect immediately prior to the close of business on the effective date of the Distribution Transaction
CR1 = the new Conversion Rate in effect immediately after the close of business on the effective date of the Distribution Transaction
FMV = the arithmetic average of the volume-weighted average prices for the number of shares of the capital stock or other interests distributed per share of Common Stock to holders
of Common Stock on the principal United States securities exchange or automated quotation system on which such capital stock or other interest trades, as reported by Bloomberg (or, if Bloomberg ceases to publish such price, any successor service
chosen by
the Company) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of such
capital stock or other interest on such Trading Day determined, using a volume-weighted average method, by an Independent Financial Advisor retained for such purpose by
the Company), for each of the ten consecutive full Trading Days commencing
with, and including, the effective date of the Distribution Transaction
MP0 = the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the effective date of the
Distribution Transaction
Such adjustment shall become effective immediately following the close of business on the effective date of the Distribution Transaction. If an adjustment to the Conversion Rate is required under
this Section 11(a)(v), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 11(a)(v) shall be delayed to the extent necessary in order
to complete the calculations provided for in this Section 11(a)(v).
(vi)
The Company makes a cash dividend or distribution to all or substantially all holders of the Common Stock, the Conversion Rate shall be increased based on the
following formula:
CR1 = CR0 x [SP0 / (SP0 – C)]
CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution
CR1 = the new Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution
SP0 = the Current Market Price as of the Record Date for such dividend or distribution
C = the amount in cash per share of Common Stock
the Company distributes to all or substantially all holders of its Common Stock;
provided
that, if C is equal or greater than SP0, then in lieu of the foregoing adjustment,
the Company shall pay to each Holder on the date the applicable cash dividend or distribution is made to holders of Common Stock, but without requiring such Holder
to convert its shares of Series A Preferred Stock, in respect of each share of Series A Preferred Stock held by such Holder, the amount of cash such Holder would have received had such Holder owned such number of shares of Common Stock into which
a share of Series A Preferred Stock would have been convertible pursuant to
Section 6(a) (without regard to limitations on conversion) at the Conversion Price in effect on the Record Date for such dividend or distribution.
Any adjustment made pursuant to this clause (vi) shall be effective immediately after the close of business on the Record Date for such dividend or distribution. If any dividend or distribution is
declared but not paid, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such dividend or distribution will not be paid, to the Conversion Rate that would then be in effect if such had dividend or
distribution not been declared.
(vii) If
the Company has a stockholder rights plan in effect with respect to the Common Stock on any Conversion Date, upon conversion of any shares of the Series A
Preferred Stock, Holders of such shares will receive, in addition to the applicable number of shares of Common Stock, the rights under such rights plan relating to such Common Stock, unless, prior to such Conversion Date, the rights have (i)
become exercisable or (ii) separated from the shares of Common Stock (the first of such events to occur, a “
Trigger Event”), in which case, the Conversion Rate will be adjusted, effective automatically at the time of such Trigger Event, as
if
the Company had made a distribution of such rights to all holders of Common Stock as described in
Section 11(a)(ii) (without giving effect to the forty-five (45) day limit on the exercisability of rights, options or warrants ordinarily
subject to such
Section 11(a)(ii)), subject to appropriate readjustment in the event of the expiration, termination or redemption of such rights prior to the exercise, deemed exercise or exchange thereof. Notwithstanding the foregoing,
to the extent any such stockholder rights are exchanged by
the Company for shares of Common Stock or other property or securities, the Conversion Rate shall be appropriately readjusted as if such stockholder rights had not been issued, but the
Company had instead issued such shares of Common Stock or other property or securities as a dividend or distribution of shares of Common Stock pursuant to
Section 11(a)(i) or
Section 11(a)(iv), as applicable.
To the extent that such rights are not exercised prior to their expiration, termination or redemption, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had
the adjustments made upon the occurrence of the Trigger Event been made on the basis of the issuance of, and the receipt of the exercise price with respect to, only the number of shares of Common Stock actually issued pursuant to such rights.
Notwithstanding anything to the contrary in this Section 11(a)(vii), no adjustment shall be required to be made to the Conversion Rate with respect to any Holder which is, or is an
“affiliate” or “associate” of, an “acquiring person” under such stockholder rights plan or with respect to any direct or indirect transferee of such Holder who receives Series A Preferred Stock in such transfer after the time such Holder becomes,
or its affiliate or associate becomes, such an “acquiring person”.
(viii)
Certain Issuances of Common Stock or Convertible Securities. If, on or prior to the two (2)-year anniversary of the Original Issuance Date,
the Company
issues shares of Common Stock (or rights or warrants or other securities (whether debt or equity) exercisable or convertible into or exchangeable (collectively for purpose of this clause (viii), a “
conversion”) for Common Stock)
(collectively, “
convertible securities”) (other than in Excluded Issuances (as defined below) or a transaction to which
Section 11(a)(i),
Section 11(a)(ii),
Section 11(a)(iv) or
Section 11(a)(v) applies)
without consideration or at a consideration per share (or having a conversion price per share) that is less than the Conversion Price in effect immediately prior to the execution of the definitive agreement on pricing such shares (or such
convertible securities) then, in such event, the Conversion Rate shall be increased based on the following formula:
CR1 = CR0 x [(A + B) / (A + C)]
CR0 = the Conversion Rate in effect immediately prior to the execution of the definitive agreement on pricing of such shares (or of such convertible securities)
CR1 = the Conversion Rate in effect immediately after the execution of the definitive agreement on pricing of such shares (or of such convertible securities)
A = the number of shares of Common Stock outstanding on such date prior to the issuance of additional shares (treating for this purpose as outstanding all shares of Common
Stock issuable upon conversion of all convertible securities of
the Company)
B = the number of additional shares of Common Stock issued (or into which convertible securities may be converted)
C = the number of shares of Common Stock (or into which such convertible securities may be converted) that would have been issued assuming such additional shares of Common
Stock had been issued or deemed issued at a price per share of Common Stock equal to the Conversion Price (such amount determined by dividing the aggregate consideration receivable by
the Company for the total number of shares of Common Stock to
be issued (or into which such convertible securities may be converted) by the Conversion Price immediately prior to the execution of the definitive agreement on pricing such shares (or such convertible securities)).
For purposes of this
Section 11(a)(viii), the aggregate consideration receivable by
the Company in connection with the issuance of such shares of Common Stock or convertible securities shall
be deemed to be equal to the sum of (x) the purchase price payable solely in cash of all such securities, plus (y) the minimum aggregate amount, if any, payable upon conversion of any such convertible securities into shares of Common Stock plus
(z) the Fair Market Value of any consideration that consists all or in part of property other than cash; and “
Excluded Issuances” means issuances (i) as consideration for an acquisition of businesses and/or related assets, (ii) pursuant to
employee benefit plans and compensation related arrangements approved by the Board, (iii) pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this sentence and outstanding as
of
May 26, 2020 and disclosed in
the Company’s most recent financial statements filed with the Securities and Exchange Commission as of such date, or pursuant to issuance, exercise or conversion of securities or rights issued pursuant to a
distribution in which shares of the Series A Preferred Stock participate or a stockholder rights plan, or (iv) of
the Company’s Series A Preferred Stock and the conversion thereof. Any adjustment made pursuant to this
Section 11(a)(viii)
shall become effective immediately upon the date of such issuance of such Common Stock or Convertible Securities, as applicable.
Upon the expiration or termination of any unconverted convertible security which resulted in an adjustment to the Conversion Rate pursuant to the terms of this Section 11(a)(viii), the
Conversion Rate shall be readjusted to such Conversion Rate that would then be in effect if such convertible security had never been issued.
(b)
Calculation of Adjustments. All adjustments to the Conversion Rate shall be calculated by
the Company to the nearest 1/10,000th of one share of Common Stock (or if there is not
a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment to the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent of the Conversion Rate;
provided,
however, that any such adjustment that is not required to be made will be carried forward and taken into account in any subsequent adjustment;
provided,
further, that any such adjustment of less than one percent that has not been made will be made upon any Conversion Date or redemption or repurchase date.
(c) When No Adjustment Required.
(i) Except as otherwise provided in this Section 11, the Conversion Rate will not be adjusted for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing, or for the repurchase of Common Stock.
(ii) Except as otherwise provided in this Section 11, the Conversion Rate will not be adjusted as a result of the issuance of, the distribution of separate
certificates representing, the exercise or redemption of, or the termination or invalidation of, rights pursuant to any stockholder rights plans.
(iii) No adjustment to the Conversion Rate will be made:
(A) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities
of
the Company and the investment of additional optional amounts in Common Stock under any plan in which purchases are made at market prices on the date or dates of purchase, without discount, and whether or not
the Company bears the ordinary
costs of administration and operation of the plan, including brokerage commissions;
(B) upon the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by
the Company or any of its
Subsidiaries or of any employee agreements or arrangements or programs, including, without limitation, any stock incentive plan of
the Company;
(C) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security, including the Series A
Preferred Stock;
(D) for dividends or distributions declared and paid to holders of Common Stock to the extent the Holders participate pursuant to Section 4(g); or
(E) for a change in the par value of the Common Stock.
(d) Successive Adjustments. After an adjustment to the Conversion Rate under this Section 11, any subsequent event requiring an adjustment under this Section 11
shall cause an adjustment to each such Conversion Rate as so adjusted.
(e) Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Conversion Rate pursuant to this Section 11 under more than
one subsection hereof, such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder; provided, however,
that if more than one subsection of this Section 11 is applicable to a single event, the subsection shall be applied that produces the largest adjustment.
(f)
Notice of Adjustments. Whenever the Conversion Rate is adjusted as provided under this
Section 11,
the Company shall as soon as reasonably practicable following the
occurrence of an event that requires such adjustment (or if
the Company is not aware of such occurrence, as soon as reasonably practicable after becoming so aware):
(i) compute the adjusted applicable Conversion Rate in accordance with this Section 11 and prepare and transmit to the Conversion Agent an Officer’s Certificate
setting forth the applicable Conversion Rate, the method of calculation thereof, and the facts requiring such adjustment and upon which such adjustment is based; and
(ii) provide a written notice to the Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the
applicable Conversion Rate was determined and setting forth the adjusted applicable Conversion Rate.
(g)
Conversion Agent. The Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any
adjustment of the Conversion Rate or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in
relying on any Officer’s Certificate delivered pursuant to
Section 11(f)(i) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such
certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, that may at the time be issued or delivered with respect to
any Series A Preferred Stock and the Conversion Agent makes no representation with respect thereto. The Conversion Agent shall not be responsible for any failure of
the Company to issue, transfer or deliver any shares of Common Stock pursuant to
the conversion of Series A Preferred Stock or to comply with any of the duties, responsibilities or covenants of
the Company contained in this
Section 11.
(h)
Fractional Shares. No fractional shares of Common Stock will be delivered to the Holders upon conversion. In lieu of fractional shares otherwise issuable, the Holders will be
entitled to receive, at
the Company’s sole discretion, either (i) an amount in cash equal to the fraction of a share of Common Stock
multiplied by the Closing Price of the Common Stock on the Trading Day
immediately preceding the applicable Conversion Date or (ii) one additional whole share of Common Stock. In order to determine whether the number of shares of Common Stock to be delivered to a Holder upon the conversion of such Holder’s shares
of Series A Preferred Stock will include a fractional share, such determination shall be based on the aggregate number of shares of Series A Preferred Stock of such Holder that are being converted and/or issued on any single Conversion Date.
SECTION 12. ADJUSTMENT FOR REORGANIZATION EVENTS.
(a) Reorganization Events. In the event of:
(i) any reclassification, statutory exchange, merger, consolidation or other similar business combination of
the Company with or into another Person, in each case,
pursuant to which at least a majority of the Common Stock is changed or converted into, or exchanged for, cash, securities or other property of
the Company or another Person;
(ii) any sale, transfer, lease or conveyance to another Person of all or a majority of the property and assets of
the Company, in each case pursuant to which the Common
Stock is converted into cash, securities or other property; or
(iii) any statutory exchange of securities of
the Company with another Person (other than in connection with a merger or acquisition) or reclassification,
recapitalization or reorganization of the Common Stock into other securities;
other than, in each case, any such transaction that constitutes a Change of Control in which the Common Stock is converted solely into cash, with respect to which, for the avoidance of doubt, the provisions of
Section
9 shall apply (each of which is referred to as a “
Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the Holders and subject to
Section
12(d) and
Section 13(b), remain outstanding but shall become convertible into, out of funds legally available therefor, at the option of the Holder, (x) the number, kind and amount of securities, cash and other property (the “
Exchange
Property”) (without any interest on such Exchange Property) that the Holder of such share of Series A Preferred Stock would have received in such Reorganization Event had such Holder converted its shares of Series A Preferred Stock into the
applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event using the Conversion Price applicable immediately prior to the effective date of the Reorganization Event, as adjusted following such
Reorganization Event for events described in
Section 12(d)(ii), and the Liquidation Preference and Accrued Dividends, if any, applicable at the time of such subsequent conversion, and (y) the amount the Holder of such shares would have
received had such Holder, immediately prior to such Reorganization Event, converted such shares of Series A Preferred Stock into Common Stock pursuant to
Section 6, without regard to any of the limitations on convertibility contained
therein;
provided that the foregoing shall not apply if such Holder is a Person with which
the Company consolidated or into which
the Company merged or which merged into
the Company or to which such sale
or transfer was made, as the case may be (any such Person, a “
Constituent Person”), or an Affiliate of a Constituent Person, to the extent such Reorganization Event provides for different treatment of Common Stock held by such Constituent
Persons or such Affiliate thereof. If the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by a
Person (other than a Constituent Person or an Affiliate thereof), then for the purpose of this
Section 12(a), the kind and amount of securities, cash and other property receivable upon conversion following such Reorganization Event will
be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock.
(b) Successive Reorganization Events. The foregoing provisions of this Section 12 shall similarly apply to successive Reorganization Events and the provisions of Section
11 shall apply to any shares of Capital Stock received by the holders of the Common Stock in any such Reorganization Event.
(c)
Reorganization Event Notice.
The Company (or any successor) shall, no less than thirty (30) days prior to the anticipated effective date of any Reorganization Event, provide
written notice to the Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this
Section
12.
(d)
Reorganization Event Agreements.
The Company shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or
does not interfere with or prevent (as applicable) conversion of the Series A Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this
Section 12, and (ii) to the extent that
the Company is
not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event or is not the issuer of any securities that constitute Exchange Property, proper provision shall be made in the
agreements governing such Reorganization Event for the conversion of the Series A Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity or issuing entity in such Reorganization Event, and for
the Conversion Rate to be adjusted following such Reorganization Event pursuant to provisions that are as nearly equivalent as possible to the provisions of
Section 11 hereof (to the extent the Exchange Property consists of property other
than cash and the Holders do not participate, on an as-converted basis in applicable events with respect thereto).
SECTION 13. VOTING RIGHTS.
(a)
General. Except as provided in
Section 13(b), Holders of shares of Series A Preferred Stock shall be entitled to vote as a single class with the holders of the Common
Stock and the holders of any other class or series of Capital Stock of
the Company then entitled to vote with the Common Stock on all matters submitted to a vote of the holders of Common Stock (and, if applicable, holders of any other class or
series of Capital Stock of
the Company);
provided that no Holder of shares of Series A Preferred Stock shall be entitled to vote with the holders of Common Stock or any other class or series of Capital
Stock of
the Company until the expiration or early termination of the applicable waiting period under the HSR Act with respect to any conversion of the Series A Preferred Stock. Each Holder shall be entitled to the number of votes, not to exceed
such Holder’s Individual Holder Share Cap, equal to the product of (i) the largest number of whole shares of Common Stock into which all shares of Series A Preferred Stock could be converted pursuant to
Section 6 (taking into account the
Conversion Restriction to the extent applicable)
multiplied by (ii) a fraction the numerator of which is the number of shares of Series A Preferred Stock held by such Holder and the denominator of which
is the aggregate number of issued and outstanding shares of Series A Preferred Stock, in each case at and calculated as of the record date for the determination of stockholders entitled to vote or consent on such matters or, if no such record
date is established, at and as of the date such vote or consent is taken or any written consent of stockholders is first executed. The Holders shall be entitled to notice of any meeting of holders of Common Stock in accordance with the
Certificate of Incorporation and
Bylaws of
the Company.
(b) Adverse Changes. The vote or consent of the Holders of at least a majority of the shares of Series A Preferred Stock outstanding at such time, voting together as a separate
class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required
pursuant to the DGCL:
(i) any amendment, alteration or repeal (whether by merger, consolidation or otherwise) of any provision of the
Certificate of Incorporation (including this Certificate
of Designations) or
Bylaws that would have an adverse effect on the rights, preferences, privileges or voting power of the Series A Preferred Stock or the Holder thereof;
(ii) any amendment or alteration (whether by merger, consolidation or otherwise) of, or any supplement (whether by a certificate of designations or otherwise) to, the
Certificate of Incorporation or any provision thereof, or any other action to authorize or create, or increase the number of authorized or issued shares of, or any securities convertible into shares of, or reclassify any security into, or issue,
any Parity Stock or Senior Stock or any other class or series of Capital Stock of
the Company ranking senior to, or on a parity basis with, the Series A Preferred Stock as to dividend rights or rights on the distribution of assets on any
voluntary or involuntary liquidation, dissolution or winding up of the affairs of
the Company; and
(iii) any increase or decrease in the authorized number of shares of Series A Preferred Stock or issuance of shares of Series A Preferred Stock after the Original
Issuance Date other than (i) shares of Series A Preferred Stock that were issued on the Second Closing Date (as defined in the Investment Agreement) or on the Second Closing Date (as defined in the Periphas Investment Agreement) or (ii) shares
issued as PIK Dividends with respect to shares of Series A Preferred Stock that were issued on the Original Issuance Date, the Second Closing Date (as defined in the Investment Agreement) or the Second Closing Date (as defined in the Periphas
Investment Agreement), or (iii) successive issuances of PIK Dividends with respect to shares of Series A Preferred Stock that were issued under the preceding clause (ii) or this clause (iii).
provided, however, (A) that, with respect to the occurrence of any of the events set forth in clause (i) of this Section 13(b), so long as (1) the Series A Preferred Stock remains outstanding with the terms thereof materially
unchanged, or (2) the Holders receive equity securities with rights, preferences, privileges and voting power substantially the same as those of the Series A Preferred Stock, then the occurrence of such event shall not be deemed to adversely
affect such rights, preferences, privileges or voting power of the Series A Preferred Stock, and in such case such Holders shall not have any voting rights with respect to the occurrence of any of the events set forth in clause (i) of this Section
13(b) and (B) that the authorization or creation of, or the increase in the number of authorized or issued shares of, or any securities convertible into shares of, or the reclassification of any security (other than the Series A Preferred
Stock) into, or the issuance of, Junior Stock will not require the vote the Holders.
For purposes of this
Section 13, the filing in accordance with applicable law of a certificate of designations or any similar document setting forth or changing the designations, powers,
preferences, rights, qualifications, limitations and restrictions of any class or series of stock of
the Company shall be deemed an amendment to the
Certificate of Incorporation.
(c) Each Holder will have one vote per share on any matter on which Holders are entitled to vote separately as a class, whether at a meeting or by written consent.
(d) The vote or consent of the Holders of a
majority of the shares of Series A Preferred Stock outstanding at such time, voting together as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be
sufficient to waive or amend the provisions of Section 9(h), and any amendment or waiver of any of the provisions of Section 9(h) approved by such percentage of the Holders shall be binding on all of the Holders.
(e) For the avoidance of doubt and notwithstanding anything to the contrary in the
Certificate of Incorporation or
Bylaws of
the Company, the Holders shall have the exclusive consent and
voting rights set forth in
Section 13(b) and may take action or consent to any action with respect to such rights without a meeting by delivering a consent in writing or by electronic transmission of the Holders of the Series A Preferred
Stock entitled to cast not less than the minimum number of votes that would be necessary to authorize, take or consent to such action at a meeting of stockholders.
SECTION 14. ELECTION OF DIRECTORS. Provided that the Fall-Away of Investor Board Rights has not occurred, (i) the Holders of a majority of the then outstanding shares of Series
A Preferred Stock held by the Investor Parties shall have, at each annual meeting of
the Company’s stockholders at which the Board is obligated to nominate one or more Investor Designees for election to the Board pursuant to and in accordance
with the Investment Agreement, the exclusive right, voting separately as a class, to elect or appoint such Investor Designee(s) to the Board, irrespective of whether the Board has nominated such Investor Designee(s), (ii) notwithstanding anything
to the contrary in the
Certificate of Incorporation or
Bylaws, Investor Parties shall have the exclusive right to remove any Investor Designee(s) at any time for any reason or no reason (with or without cause) by sending a written notice to the
Company and, upon receipt of such notice by
the Company, such Investor Designee(s) shall be deemed to have resigned from the Board, and (iii) in the event of the death, disability, resignation or removal of any Investor Designee(s), the Investor
Parties shall have the exclusive right to designate or appoint a successor to fill the vacancy created thereby. The Board and the holders of Common Stock shall not have the right to remove any Investor Designee from the Board (even for cause),
such right of removal being vested exclusively with the Holders of a majority of the then outstanding shares of Series A Preferred Stock.
SECTION 15. PREEMPTIVE RIGHTS. Except for the right to participate in any issuance of new equity securities by
the Company as set forth in the Investment Agreement and the
Periphas Investment Agreement, the Holders shall not have any preemptive rights.
SECTION 16. TERM. Except as expressly provided in this Certificate of Designations, the shares of Series A Preferred Stock shall not be redeemable or otherwise mature and the
term of the Series A Preferred Stock shall be perpetual.
SECTION 17. CREATION OF CAPITAL STOCK. Subject to
Section 13(b)(ii) and
Section 13(b)(iii), the Board, or any duly authorized committee thereof, without the vote
of the Holders, may authorize and issue additional shares of Capital Stock of
the Company.
SECTION 18. NO SINKING FUND. Shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund.
SECTION 19. TRANSFER AGENT, CONVERSION AGENT, REGISTRAR AND PAYING AGENT. The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the Series A
Preferred Stock shall be American Stock Transfer & Trust Company, LLC.
The Company may, in its sole discretion, appoint any other Person to serve as Transfer Agent, Conversion Agent, Registrar or paying agent for the Series A Preferred Stock
and thereafter may remove or replace such other Person at any time. Upon any such appointment or removal,
the Company shall send notice thereof to the Holders.
SECTION 20. REPLACEMENT CERTIFICATES.
(a)
Mutilated, Destroyed, Stolen and Lost Certificates. If physical certificates evidencing the Series A Preferred Stock are issued,
the Company shall replace any mutilated
certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent.
The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to
the Company and the Transfer
Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and
the Company.
(b)
Certificates Following Conversion. If physical certificates representing the Series A Preferred Stock are issued,
the Company shall not be required to issue replacement
certificates representing shares of Series A Preferred Stock on or after the Conversion Date applicable to such shares. In place of the delivery of a replacement certificate following the applicable Conversion Date, the Transfer Agent, upon
receipt of the satisfactory evidence and indemnity described in
Section 20(a), shall deliver the shares of Common Stock issuable upon conversion of such shares of Series A Preferred Stock formerly evidenced by the physical certificate.
SECTION 21. TAXES.
(a) Transfer Taxes.
The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series A
Preferred Stock or shares of Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. However, in the case of conversion of Series A Preferred Stock,
the Company shall not be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series A Preferred Stock, shares of Common Stock or other securities to a beneficial owner
other than the beneficial owner of the Series A Preferred Stock immediately prior to such conversion, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance,
delivery or payment has paid to
the Company the amount of any such tax or has established, to the satisfaction of
the Company, that such tax has been paid or is not payable.
(b) Withholding. All payments and distributions (or deemed distributions) on the shares of Series A Preferred Stock (and on the shares of Common Stock received upon their
conversion) shall be subject to withholding and backup withholding of taxes to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by the Holders.
SECTION 22. NOTICES. All notices referred to herein shall be in writing and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the
earlier of receipt thereof or three (3) Business Days after the mailing thereof if sent by registered or certified mail with postage prepaid, or by private courier service addressed: (i) if to
the Company, to its office at KAR Auction Services,
Inc, 11299 N. Illinois Street,
Carmel,
Indiana 46032 (Attention: General Counsel), (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of
the Company (which may include the records of the
Transfer Agent) or (iii) to such other address as
the Company or any such Holder, as the case may be, shall have designated by notice similarly given.
SECTION 23. FACTS ASCERTAINABLE. When the terms of this Certificate of Designations refers to a specific agreement or other document to determine the meaning or operation of a
provision hereof, the Secretary of
the Company shall maintain a copy of such agreement or document at the principal executive offices of
the Company and a copy thereof shall be provided free of charge to any Holder who makes a request therefor.
The Secretary of
the Company shall also maintain a written record of the Issuance Date, the number of shares of Series A Preferred Stock issued to a Holder and the date of each such issuance, and shall furnish such written record free of charge
to any Holder who makes a request therefor.
SECTION 24. WAIVER. Notwithstanding any provision in this Certificate of Designations to the contrary, any provision contained herein and any right of the Holders granted
hereunder may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the vote or written consent of the Holders of a majority of the shares of Series A Preferred Stock then outstanding.
SECTION 25. SEVERABILITY. If any term of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other terms set forth herein which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such
term unless so expressed herein.
SECTION 26. BUSINESS OPPORTUNITIES. To the fullest extent permitted by Section 122(17) of the DGCL (or any successor provision) and except as may be otherwise expressly agreed
in writing by
the Company and the Investor Parties,
the Company, on behalf of itself and its
Subsidiaries, renounces any interest or expectancy of
the Company and its
Subsidiaries in, or in being offered an opportunity to participate in, business
opportunities, that are from time to time presented to the Investor Parties, or any of their respective officers, representatives, directors, agents, stockholders, members, partners, Affiliates,
Subsidiaries (other than
the Company and its
Subsidiaries), or any of their respective designees on
the Company’s Board and/or any of their respective representatives who, from time to time, may act as officers of
the Company, even if the opportunity is one that
the Company or its
Subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and no such person shall be liable to
the Company or any of its
Subsidiaries for breach of any fiduciary or other
duty, as a director or officer or otherwise, by reason of the fact that such person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information
regarding such business opportunity, to
the Company or its
Subsidiaries unless, in the case of any such person who is a director or officer of
the Company, such business opportunity is expressly offered to such director or officer solely in his
or her capacity as a director or officer of
the Company (a
“Directed Opportunity”), in which case such director or officer shall be obligated to communicate such Directed Opportunity to
the Company. Any Person purchasing or otherwise acquiring
any interest in any shares of Capital Stock of
the Company shall be deemed to have notice of and consented to the provisions of this
Section 26. Neither the alteration, amendment or repeal of this
Section 26, nor the adoption of
any provision of the
Certificate of Incorporation or this Certificate of Designations inconsistent with this
Section 26, nor, to the fullest extent permitted by Delaware law, any modification of law, shall eliminate or reduce the effect
of this
Section 26 in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this
Section 26, would accrue or arise, prior to such alteration,
amendment, repeal, adoption or modification. If any provision or provisions of this
Section 26 shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (a) the validity, legality and
enforceability of such provisions in any other circumstance and of the remaining provisions of this
Section 26 (including, without limitation, each portion of this
Section 26 containing any such provision held to be invalid,
illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to the fullest extent possible, the provisions of this
Section 26 (including, without
limitation, each such portion of this
Section 26 containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit
the Company to protect its directors, officers, employees and agents from
personal liability in respect of their good faith service to or for the benefit of
the Company to the fullest extent permitted by law. This
Section 26 shall not limit any protections or defenses available to, or indemnification or
advancement rights of, or any otherwise applicable fiduciary duties of, any director, officer, employee or agent of
the Company under the
Certificate of Incorporation, the
Bylaws, any other agreement between
the Company and such director,
officer, employee or agent or applicable law.
SECTION 27. RULE 144A INFORMATION.
The Company will, during any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange Act, furnish to Holders of the
Series A Preferred Stock and prospective investors, upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act of 1933, as amended.
SECTION 28. NO OTHER RIGHTS. The Series A Preferred Stock will have no rights, preferences or voting powers except as provided in this Certificate of Designations or the
Certificate of Incorporation or as required by applicable law;
provided,
however, that in the event of any conflict between the
Certificate of Incorporation and
the provisions set forth in this Certificate of Designations, this Certificate of Designations shall control.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Certificate of Designations to be executed this [●] day of [●], 2020.
| |
KAR AUCTION SERVICES, INC.
|
| |
|
| |
By:
|
|
| |
Name:
|
| |
Title:
|
[Signature Page to Certificate of Designations]
REGISTRATION
RIGHTS AGREEMENT, dated as of [●], 2020 (the “
Agreement”), by and among KAR Auction Services, Inc., a Delaware corporation (the “
Company”), and Periphas Capital GP, LLC, a Delaware
limited liability company (together with its successors and assigns, the “
Investor”). The Investor and any other party that may become a party hereto pursuant to
Section 9(c) are referred to collectively as the “
Stockholders”
and individually each as a “
Stockholder”.
RECITALS
WHEREAS,
the Company and the Investor are parties to the Investment Agreement, dated as of
May 26, 2020 (as amended from time to time, the “
Investment Agreement”), pursuant to which
the Company is selling
to the Investor, and the Investor is purchasing from
the Company, up to 50,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “
Series A Preferred Stock”), which is convertible into shares of Common
Stock;
WHEREAS, as a condition to the obligations of
the Company and the Investor under the Investment Agreement,
the Company and the Investor are entering into this Agreement for the purpose of granting certain
registration and other rights to the Stockholders.NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the following capitalized terms shall have the following respective meanings:
“
Adverse Disclosure” means public disclosure of material non-public information that, in the good faith judgment of
the Company: (i) would be required to be made in any Registration Statement, Prospectus
or report filed with the SEC by
the Company so that such Registration Statement or Prospectus would not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading; (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement or Prospectus; and (iii)
the Company
has a bona fide business purpose for not disclosing publicly.
“
Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, “
control”
(including its correlative meanings, “
controlling”, “
controlled by” and “
under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of
the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise.
“as converted basis” means with respect to the outstanding shares of Common Stock as of any date, all outstanding shares of Common Stock calculated on a basis in which all shares of Common Stock issuable
upon conversion of the outstanding shares of Series A Preferred Stock (at the Conversion Rate in effect on such date as provided in the Certificate of Designations) are assumed to be outstanding as of such date.
“
Business Day” or “
business day” means any day except a Saturday, a Sunday or other day on which the SEC or banks in the City of New York are authorized or required by law
to be closed.
“Certificate of Designations” means the Certificate of Designations setting forth voting powers, designations, preferences and relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions of the Series A Preferred Stock, dated as of the date hereof, as may be amended from time to time.
“Charitable Gifting Event” means any transfer by a Holder, or any subsequent transfer by such Holder’s members, partners or other employees, in connection with a bona fide gift to any Charitable
Organization made in connection with sales of Registrable Securities by a Holder pursuant to an effective registration statement.
“Charitable Organization” means a charitable organization as described by Section 501(c)(3) of the Internal Revenue Code of 1986, as in effect from time to time.
“
Common Stock” means all shares currently or hereafter existing of
the Company’s common stock, par value $0.01 per share.
“Conversion Rate” has the meaning set forth in the Certificate of Designations.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
“FINRA” means the Financial Industry Regulatory Authority.
“
Holdback Period” means the period commencing on the date of an underwriters’ request (which shall be no earlier than four (4) Business Days prior to the expected
“pricing” of the related underwritten
offering) and continuing for not more than ninety (90) calendar days after the date of the final prospectus (or final prospectus supplement if the offering is made pursuant to a shelf registration), pursuant to which such underwritten
offering shall be made, or such lesser period as is required by such underwriters (which shall also apply equally to all Holders) or as applies to
the Company.
“Holder” means any Stockholder holding Registrable Securities.
“Ignition” means Ignition Parent LP, a Delaware limited partnership.
“Lock-Up Period” has the meaning set forth in the Investment Agreement.
“NYSE” means the New York Stock Exchange.
“
Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof, any other form of entity or any group comprised of two or more of the foregoing.
“
Prospectus” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement (including any preliminary or final prospectus supplement prepared in connection with
any shelf take-down), with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material
incorporated by reference or deemed to be
incorporated by reference in such prospectus.
“register”, “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement or the automatic effectiveness of such registration statement, as applicable.
“Registrable Securities” means, as of any date of determination, any shares of Series A Preferred Stock and any shares of Common Stock issued pursuant to the conversion of any shares of Series A Preferred
Stock, any securities acquired pursuant to Section 5.16 of the Investment Agreement (or acquired pursuant to conversion, exchange or exercise of such securities), and any other securities issued or issuable with respect to any such shares of
Common Stock or Series A Preferred Stock or such other securities by way of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable Securities when (i) they are sold pursuant to an effective Registration Statement under the Securities Act, (ii) they are sold pursuant to Rule 144 (or other exemption
from registration under the Securities Act after which such securities are not “restricted securities” under Rule 144), (iii) in the case of any shares of Common Stock held by a Holder, all shares of Common Stock held by such Holder, on an as
converted basis, constitute less than 1% of all outstanding shares of Common Stock and may be sold in a single day pursuant to Rule 144, (iv) they shall have ceased to be outstanding or (v) they have been sold in a private transaction in
which the transferor’s rights under this Agreement are not assigned to the transferee of the securities.
“
Registration Statement” means any registration statement of
the Company filed with the SEC under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this
Agreement or the Existing Registration
Rights Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material
incorporated by reference or
deemed to be
incorporated by reference in such registration statement.
“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
“SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.
“Substantial Marketing Efforts” shall mean marketing efforts, in connection with an underwritten offering, that involve one-on-one in-person meetings with prospective purchasers of the Registrable
Securities over multiple days and other customary marketing activities, as recommended by the underwriter(s).
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
2. Incidental Registrations.
(a) Right to Include Registrable Securities. If
the Company proposes to register its Common Stock under the Securities Act for a sale that will occur
following the expiration of the Lock-Up Period (other than pursuant to a Registration Statement filed by
the Company on Form S‑4 or S‑8, or any successor or other forms promulgated for similar purposes or filed solely in connection with an
exchange offer or any employee benefit or dividend reinvestment plan), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, it
will, at each such time, give prompt written notice to all Holders of its intention to do so and of such Holders’ rights under this
Section 2;
provided,
however, that nothing in this Agreement shall obligate the
Company to provide notice to any Holder or holder of
the Company's equity securities in the case of a sale of Registrable Securities (as such term is defined under the Existing Registration
Rights Agreement) by Ignition to one or several
purchasers pursuant to an underwritten offering by means of a bought deal, a block trade or a similar transaction that is an underwritten offering (a “
Block Sale”). Upon the written request of any such Holder made within seven (7)
calendar days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder),
the Company will use its reasonable best efforts to effect the registration under the
Securities Act of all Registrable Securities which
the Company has been so requested to register by the Holders thereof, to the extent required to permit the disposition of the Registrable Securities so to be registered;
provided that
(i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration,
the Company shall determine for any reason
not to proceed with the proposed registration of the securities to be sold by it,
the Company may, at its election, give written notice of such determination to each Holder and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its obligation to pay the registration expenses pursuant to
Section 6 hereof in connection therewith), and (ii) if such registration involves an underwritten
offering, all Holders requesting to be included in
the Company’s registration and to participate in the underwritten offering must enter into an
underwriting agreement to sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to
the Company, with such differences, including any with respect to indemnification and liability, as are customary in combined primary and secondary offerings by
the Company and the
Investor. If a registration requested pursuant to this
Section 2(a) involves an underwritten public offering, any Holder requesting to be included in such registration may elect, in writing at least two business days prior to the
effective date of the Registration Statement filed in connection with such registration or, in the case of a takedown from a Shelf Registration Statement, prior to the launch of such takedown, not to register such securities in connection
with such registration.
The Company shall not be required to maintain the effectiveness of the Registration Statement for a registration requested pursuant to this
Section 2(a) beyond the earlier to occur of (i) 180 calendar days
after the effective date thereof and (ii) consummation of the distribution by the Holders of the Registrable Securities included in such Registration Statement. Any Holder who has elected to sell Registrable Securities in an offering
pursuant to this
Section 2 shall be permitted to withdraw from such registration by written notice to
the Company if the price to the public at which the Registrable Securities are proposed to be sold will be less than 90% of the
average closing price of the class of stock being sold in the offering during the 10 trading days preceding the date on which the notice of such offering was given pursuant to this
Section 2(a).
(b) Priority in Incidental Registrations. The Company shall use reasonable efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit Holders who have requested to include Registrable Securities in such offering to include in such offering all Registrable Securities so requested to be included on the same terms and conditions as any other
shares of capital stock, if any, of
the Company included in the offering. Notwithstanding the foregoing, if the managing underwriter or underwriters of such underwritten offering have informed
the Company in writing that it is their good
faith opinion that the total amount of securities that are intended to be included in such offering is such as to adversely affect the success of such offering (including adversely affect the per-share offering price), then the amount of
securities to be offered shall be reduced to the amount recommended by such managing underwriter or underwriters in its or their good faith opinion, which will be allocated in the following order of priority: (i) first, the securities to be
proposed to be sold by
the Company for its own account, (ii) second, the Registrable Securities of Ignition, (iii) third, the Registrable Securities of the
“Holders” (as defined in the Existing Registration
Rights Agreement) other than
Ignition that have requested to participate in such underwritten offering, allocated pro rata among such holders on the basis of the percentage of the Registrable Securities requested to be included in such underwritten offering by such
holders, (iv) fourth, the Registrable Securities of the Holders that have requested to participate in such underwritten offering, allocated pro rata among such Holders on the basis of the percentage of the Registrable Securities requested to
be included in such underwritten offering by such Holders and (v) fifth, for the account of any other holders of Common Stock that have requested to be included in such underwritten offering as a result of registration rights or otherwise.
3. Shelf Registration Statement.
(a) No later than the expiration of the Lock-Up Period,
the Company shall file with the SEC a shelf Registration Statement (on Form S-3 to the extent permissible) (a
“Shelf Registration Statement”) covering the resale of all Registrable Securities, and shall use reasonable best efforts to cause such registration statement to become effective no later than the expiration of the Lock-Up Period. Upon
filing the Shelf Registration Statement,
the Company shall use its reasonable best efforts to keep such Shelf Registration Statement effective with the SEC at all times and to re-file such Shelf Registration Statement upon its expiration.
(b) If
the Company is a well-known seasoned issuer (as defined in Rule 405) (a “
WKSI”) at a time when it is obligated to file a Shelf Registration Statement
pursuant to this Agreement,
the Company shall file an automatic shelf registration statement (as defined in Rule 405 of the Securities Act) on Form S-3 (an “
Automatic Shelf Registration Statement”) in accordance with the requirements
of the Securities Act and the rules and regulations of the SEC thereunder, that covers the Registrable Securities.
The Company shall pay the registration fee for all Registrable Securities to be registered pursuant to an Automatic Shelf
Registration Statement at the time of filing of the Automatic Shelf Registration Statement and shall not elect to pay any portion of the registration fee on a deferred basis. If at any time following the filing of an Automatic Shelf
Registration Statement 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 post-effectively amend the Automatic Shelf Registration
Statement to a Shelf Registration Statement that is not automatically effective or file a new Shelf Registration Statement.
(c) To the extent that
the Company becomes ineligible to use Form S-3,
the Company shall file a
“shelf” registration statement on Form S-1 registering the Registrable
Securities for resale not later than thirty (30) calendar days after the date of such ineligibility and use its reasonable best efforts to have such registration statement declared effective as promptly as practicable.
4. Registration Procedures. If and whenever
the Company is required to use its reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in
Section 2 hereof,
the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto
the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:
(a) prepare and file, in each case as promptly as practicable, with the SEC a Registration Statement or Registration Statements on such form as
shall be available for the sale of the Registrable Securities by the Holders thereof or by
the Company in accordance with the intended method or methods of distribution thereof, make all required filings with FINRA and use its reasonable best
efforts to cause such Registration Statement to become effective as soon as practicable and to remain effective as provided herein;
provided,
however, that before filing a Registration Statement or Prospectus or any amendments
or supplements thereto (including any free writing prospectuses under Rule 433 under the Securities Act (each a “
Free Writing Prospectus”) and including such documents that would be incorporated or deemed to be incorporated therein by
reference),
the Company shall furnish or otherwise make available to the Holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriters, if any, copies of all such documents proposed
to be filed, which documents will be subject to the reasonable review and comment of such counsel, and such other documents reasonably requested by such counsel, including any comment letter from the SEC, and, if requested by such counsel,
provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the
Securities Act, including reasonable access to
the Company’s books and records, officers, accountants and other advisors;
(b) subject to Section 3, prepare and file with the SEC such amendments, post-effective amendments and supplements to each Registration
Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective during the period provided herein and comply
in all material respects with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement; and cause the related Prospectus to be supplemented by any Prospectus
supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act, in each case, until such time as all of such securities have been disposed of in accordance with the intended method or methods of disposition by the seller or sellers
thereof set forth in such Registration Statement;
(c) notify each selling Holder, its counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if at any time
the Company has reason to believe that the representations and warranties of
the Company
contained in any agreement (including any
underwriting agreement) contemplated by
Section 4(n) below cease to be true and correct, (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (vi) of the happening of any event that makes any
statement made in such Registration Statement, related Prospectus, Free Writing Prospectus, amendment or supplement thereto or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they were made, not misleading (which notice shall notify the selling 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);
(d) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;
(e) if requested by the managing underwriters, if any, promptly include in a Prospectus supplement or post-effective amendment such information as
the managing underwriters, if any, or Holders, as the case may be, may reasonably request in order to permit the intended method of distribution of such Registrable Securities and make all required filings of such Prospectus supplement or
such post-effective amendment as soon as practicable after
the Company has received such request;
provided,
however, that
the Company shall not be required to take any actions under this
Section 4(e) that are not, in
the opinion of counsel for
the Company, in compliance with applicable law;
(f) deliver to each selling Holder, its counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of Prospectus) and each amendment, supplement or post-effective amendment thereto as such Persons may reasonably request from time to time in connection with the distribution of the Registrable Securities; and the
Company, subject to the last paragraph of this Section 4, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;
(g) prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling
Holders, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities
or
“Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and to take any other action that may be necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdiction in accordance
with the intended method or methods of disposition thereof;
provided,
however, that
the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so required to qualify but
for this paragraph (g) or (ii) subject itself to taxation in any such jurisdiction or (iii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject (other than service of
process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith);
(h) cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates
(not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each Holder of such Registrable Securities that the Registrable Securities represented by the certificates so delivered by
such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or Holders may request;
(i) use its reasonable best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities within the United States as may be necessary in light of the business or operations of
the Company to enable the seller or sellers thereof or the managing underwriters, if any, to consummate the
disposition of such Registrable Securities, in accordance with the intended method or methods thereof, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case
the Company will cooperate
in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such
Registrable Securities in accordance with the intended method or methods thereof;
(j) upon the occurrence of any event contemplated by Section 4(c)(vi) above, promptly prepare a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not contain 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 light of the
circumstances under which they were made, not misleading;
(k) prior to the effective date of the Registration Statement relating to the Registrable Securities, use its reasonable best efforts to provide a
CUSIP number for the Registrable Securities;
(l) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from
and after a date not later than the effective date of such Registration Statement (and in connection therewith, if reasonably required by
the Company’s transfer agent,
the Company will cause an opinion of counsel as to the effectiveness of
the Registration Statement to be delivered to such transfer agent, together with any other authorizations, certificates and directions reasonably required by the transfer agent which authorize and direct the transfer agent to issue such
Registrable Securities without any legend upon sale by the Holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, of such Registrable Securities under the Registration Statement);
(m) use its reasonable best efforts to cause all shares of Registrable Securities covered by such Registration Statement to be listed on the NYSE
or other national securities exchange on which the Common Stock is then listed, prior to the effectiveness of such Registration Statement (or, if no Common Stock issued by
the Company is then listed on any securities exchange, use its
reasonable best efforts to cause such Registrable Securities to be so listed on the NYSE or NASDAQ, as determined by
the Company);
(n) enter into such agreements (including an
underwriting agreement in form, scope and substance as is customary in underwritten offerings) and
take all such other actions reasonably requested by the Holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or
facilitate the disposition of such Registrable Securities, and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and
warranties to the Holders of such Registrable Securities and the underwriters, if any, with respect to the business of
the Company and its
subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be
incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its reasonable
best efforts to furnish to the selling Holders and the underwriters, if any, opinions of outside counsel to
the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any), addressed to each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and
underwriters, (iii) use its reasonable best efforts to obtain
“cold comfort” letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public accountants
of any subsidiary of
the Company or of any business acquired by
the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements
included in such Registration Statement, addressed to each selling Holder (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any,
such letters to be in customary form and covering matters of the type customarily covered in
“cold comfort” letters in connection with underwritten offerings, (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures substantially to the effect set forth in
Section 5 hereof with respect to all parties to be indemnified pursuant to
Section 5 except as otherwise agreed by the Holders and (v) deliver
such documents and certificates as may be reasonably requested by the Holders of a majority of the Registrable Securities being sold pursuant to such Registration Statement or their counsel or the managing underwriters, if any, to evidence
the continued validity of the representations and warranties made pursuant to
Section 4(n)(i) above and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by
the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;
(o) make available for inspection by a representative of the selling Holders, any underwriter participating in any such disposition of Registrable
Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and
properties of
the Company and its
subsidiaries, and cause the officers, directors and employees of
the Company and its
subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney
or accountant in connection with such Registration Statement;
provided,
however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such
Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law or applicable legal process, or (iii) such
information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give
the Company written notice of the proposed disclosure prior to such disclosure and, if requested by
the Company, assist
the Company in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information
shall be used by such Person as the basis for any market transactions in securities of
the Company or its
subsidiaries in violation of law;
(p) cause its officers, including its executive officers, to use their reasonable best efforts to support the marketing of the Registrable
Securities covered by the Registration Statement (including, without limitation, participation in
“road shows” and other customary marketing activities) taking into account
the Company’s business needs;
(q) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required to be made with FINRA;
(r) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of
the Company’s first full calendar quarter after the effective date of the Registration
Statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and
(s) cooperate with the Holders subject to the Registration Statement and with the underwriter(s) or agent participating in the distribution, if
any, to facilitate any Charitable Gifting Event and to prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to permit any such
recipient Charitable Organization to sell in the underwritten offering if it so elects.
The Company may require each Holder as to which any registration is being effected to furnish to
the Company in writing such information required in connection with such registration regarding such seller and the
distribution of such Registrable Securities as
the Company may, from time to time, reasonably request in writing and
the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish
such information within a reasonable time after receiving such request.
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
used in connection therewith, that refers to any Holder covered thereby by name, or otherwise identifies such Holder as the holder of any securities of
the Company, without the consent of such Holder, such consent not to be unreasonably
withheld or delayed, unless and to the extent such disclosure is required by law.
If
the Company files any Shelf Registration Statement for the benefit of the holders of any of its securities other than the Holders,
the Company agrees that it shall use its reasonable best efforts to 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 such 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.
Notwithstanding any provision hereof to the contrary, to the extent that any pro rata or other allocation or reduction of Registrable Securities is required pursuant to Sections 2(b), or any other section
herein, (i) all Registrable Securities transferred by a Holder to a Charitable Organization in connection with an underwritten offering for which such pro rata or other allocation is required shall be included in the number of Registrable
Securities deemed to be held by each Holder (or deemed to be included in such Holder’s request for inclusion of Registrable Securities) for purposes of calculating such Holder’s pro rata allocation or reduction in such underwritten offering
and (ii) the number of Registrable Securities that a Holder is otherwise entitled to include in such underwritten offering shall be reduced by the number of Registrable Securities transferred by such Holder to a Charitable Organization in
connection with such underwritten offering.
Each Holder agrees if such Holder has Registrable Securities covered by such Registration Statement that, upon receipt of any notice from
the Company of the happening of any event of the kind described in
Section
4(c)(ii),
4(c)(iii),
4(c)(iv),
4(c)(v) or
4(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such
Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 4(j) hereof, or until it is advised in writing by
the Company that the use of the applicable Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
5. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by law,
each Holder whose Registrable Securities are covered by a Registration Statement or Prospectus, the officers, directors, partners, members, managers, shareholders, accountants, attorneys, agents and employees of each of them, each Person who
controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, shareholders, accountants, attorneys, agents and employees of each
such controlling person, each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter (each such person being referred to herein as a “
Covered
Person”), from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in
connection with any investigation or proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “
Losses”), as incurred, arising out of or based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any Prospectus, offering circular, or other document (including any related Registration Statement, notification, or the like or Free Writing Prospectus or any amendment thereof or supplement thereto
or any document
incorporated by reference therein) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by
the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation thereunder applicable to
the Company and (without limitation of the
preceding portions of this
Section 5(a)) will reimburse each such Covered Person for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such Loss,
provided that
the Company will not be liable in any such case to the extent that any such Loss arises out of or is based on any untrue statement or omission by such Covered Person related to such Covered Person or its Affiliates (other than
the Company or
any of its
subsidiaries, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, Prospectus, offering circular, Free Writing Prospectus or any
amendment thereof or supplement thereto, or any document
incorporated by reference therein, or other document in reliance upon and in conformity with written information furnished to
the Company by such Covered Person with respect to such
Covered Person for use therein. It is agreed that the indemnity agreement contained in this
Section 5(a) shall not apply to amounts paid in settlement of any such Loss or action if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably delayed or withheld),
provided that notwithstanding the foregoing, the indemnity agreement contained in this
Section 5(a) shall apply to amounts paid in settlement of any
Loss or action even if such settlement is effected without the consent of
the Company if
the Company does not timely reply to a request for its consent.
(b) Indemnification by Holder. The Company may require, as a condition to including any Registrable Securities in any Registration Statement filed in
accordance with
Section 4 hereof, that
the Company shall have received an undertaking reasonably satisfactory to it from the participating Holder of such Registrable Securities to indemnify, to the fullest extent permitted by law,
severally and not jointly with any other Holders,
the Company, its directors and officers and each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), from and against
all Losses arising out of or based on any untrue statement of a material fact contained in any such Registration Statement, Prospectus, Free Writing Prospectus, offering circular, or other document, or any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, and will (without limitation of the portions of this
Section 5(b)) reimburse
the Company, such directors, officers and controlling persons
for any legal or any other expenses reasonably incurred in connection with investigating or defending any such Loss, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration
Statement, Prospectus, Free Writing Prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to
the Company by such Holder with respect to such Holder for inclusion in such
Registration Statement, Prospectus, offering circular or other document;
provided,
however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such Losses (or actions in respect
thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and
provided,
further, that the liability of such Holder shall be individual, not joint and
several, for each Holder and shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement, Prospectus, offering circular or other document containing such
untrue statement (or alleged untrue statement) or omission (or alleged omission) (less the aggregate amount of any damages which such Holder has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising
from the sale of such Registrable Securities).
(c) Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnification hereunder (an “Indemnified Party”), such Indemnified
Party shall give prompt notice to the party from which such indemnity is sought (the “Indemnifying Party”) of any claim or of the commencement of any proceeding with respect to which such Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the delay or failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any obligation or liability except to the extent that the
Indemnifying Party has been materially prejudiced by such delay or failure. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party promptly after the receipt of written notice from such
Indemnified Party of such claim or proceeding, to, unless in the Indemnified Party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, assume, at the Indemnifying
Party’s expense, the defense of any such claim or proceeding, with counsel reasonably satisfactory to such Indemnified Party; provided, however, that an Indemnified Party shall have the right to employ separate counsel in any
such claim or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (i) the Indemnifying Party agrees to pay such fees and expenses; or (ii)
the Indemnifying Party fails promptly to assume, or in the event of a conflict of interest cannot assume, the defense of such claim or proceeding or fails to employ counsel reasonably satisfactory to such Indemnified Party; in which case the
Indemnified Party shall have the right to employ counsel and to assume the defense of such claim or proceeding at the Indemnifying Party’s expense; provided, further, however, that the Indemnifying Party shall not, in
connection with any one such claim or proceeding or separate but substantially similar or related claims or proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one firm of attorneys (together with appropriate local counsel) at any time for all of the Indemnified Parties, or for fees and expenses that are not reasonable. Whether or not such defense is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably delayed or withheld). Without the prior written consent of the
Indemnified Party, the Indemnifying Party shall not consent to entry of any judgment or enter into any settlement that (x) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of
a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder or (y) involves the
imposition of equitable remedies or the imposition of any obligations on the Indemnified Party or adversely affects such Indemnified Party other than as a result of financial obligations for which such Indemnified Party would be entitled to
indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section 5 is unavailable to an Indemnified Party in respect of any Losses (other than in
accordance with its terms), then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made (or omitted) by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), an Indemnifying Party that is a selling Holder shall not be required to contribute
any amount in excess of the net proceeds to such Holder from the Registrable Securities sold pursuant to the Registration Statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which the Holder
has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Securities). 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. No selling Holder shall be liable for contribution under this Section 5(d), except under such circumstances
and limited to the amount as such selling Holder would have been liable for indemnification under this Section 5 if such indemnification were enforceable under applicable law.
Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten offering are more
favorable to the Holders than the foregoing provisions, the provisions in the
underwriting agreement shall control.
(e) Deemed Underwriter. To the extent that any of the Holders is, or would be expected to be, deemed to be an underwriter of Registrable Securities pursuant
to any SEC comments or policies or any court of law or otherwise,
the Company agrees that (i) the indemnification and contribution provisions contained in this
Section 5 shall be applicable to the benefit of such Holder in its role as
deemed underwriter in addition to its capacity as a Holder (so long as the amount for which any other Holder is or becomes responsible does not exceed the amount for which such Holder would be responsible if the Holder were not deemed to be
an underwriter of Registrable Securities) and (ii) such Holder and its representatives shall be entitled to conduct the due diligence which would normally be conducted in connection with an offering of securities registered under the
Securities Act, including receipt of customary opinions and comfort letters.
(f) Other Indemnification. Indemnification similar to that specified in the preceding provisions of this
Section 5 (with appropriate modifications)
shall be given by
the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the
Securities Act.
(g) Non-Exclusivity. The obligations of the parties under this Section 5 shall be in addition to any liability which any party may otherwise have to
any other party.
6. Registration Expenses. All reasonable fees and expenses incident to the performance of or compliance with this Agreement by
the Company (including,
without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the SEC, NYSE, or FINRA and (B) of compliance with securities or Blue Sky laws,
including, without limitation, any fees and disbursements of counsel for the underwriters in connection with Blue Sky qualifications of the Registrable Securities pursuant to
Section 4(h)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriters,
if any, or by the Holders of a majority of the Registrable Securities included in any Registration Statement), (iii) messenger, telephone and delivery expenses of
the Company, (iv) fees and disbursements of counsel for
the Company, (v)
expenses of
the Company incurred in connection with any road show, (vi) fees and disbursements of all independent certified public accountants referred to in
Section 4(o) hereof (including, without limitation, the expenses of any
“cold comfort” letters required by this Agreement) and any other persons, including special experts retained by
the Company and (vii) reasonable, documented out-of-pocket fees and disbursements up to $100,000 of one counsel for the Holders
whose shares are included in a Registration Statement (which counsel shall be selected as set forth in
Section 8)) shall be borne by
the Company whether or not any Registration Statement is filed or becomes effective. In addition,
the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing of the securities to be registered on the NYSE or such other national securities exchange on which the Common Stock is listed and rating agency fees and the fees and expenses of any Person, including special
experts, retained by
the Company.
The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth in this
Section 6 and in
Section 8 or pursuant
to the
underwriting agreement entered into in connection with such offering), (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry
professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by
the Company), or (iii) any other expenses of the Holders not specifically required to be paid by
the Company
pursuant to the first paragraph of this
Section 6.
7. Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder, and 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 shares of
Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specific requirements with which it
did not so comply. Notwithstanding anything contained in this
Section 7,
the Company may deregister under Section 12 of the Exchange Act if it then is permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder.
8. Selection of Counsel. In connection with any registration of Registrable Securities pursuant to Section 2 hereof, if Ignition is participating in such
registration, Ignition may select one counsel to represent it and all other Holders participating in such registration, and if Ignition is not participating in such registration pursuant to Section 2 or 3 hereof, the Holders other than
Ignition of a majority of the Registrable Securities covered by any such registration may select one counsel to represent such other Holders covered by such registration;
provided,
however, that in the event that the counsel
selected as provided above is also acting as counsel to
the Company in connection with such registration, the Holders shall be entitled to select one additional counsel at
the Company’s expense to represent all Holders.
9. Miscellaneous.
(a) Holdback Agreement. In consideration for
the Company agreeing to its obligations under this Agreement, each Holder agrees in connection with any
underwritten offering of
the Company’s securities with respect to which
the Company has complied with its obligations under
Section 2 hereof, and in which offering such Holder has an opportunity to participate subject to the priority
set forth in
Section 2(b) (whether or not such Holder is participating in such offering), upon the request of the underwriters managing any such underwritten offering, not to effect (other than pursuant to such offering) any public
sale or distribution of Registrable Securities, including, but not limited to, any sale pursuant to Rule 144, or make any short sale of, grant any option for the purchase of, or otherwise dispose of any Registrable Securities, any other
equity securities of
the Company or any securities convertible into or exchangeable or exercisable for any equity securities of
the Company, in each case without the prior written consent of such underwriters and subject to customary
exceptions (including for Charitable Gifting Events), during the Holdback Period;
provided that nothing herein will prevent (i) any Holder that is a partnership or corporation from making a transfer to an Affiliate that is otherwise
in compliance with applicable securities laws, (ii) any pledge of Registrable Securities by a Holder in connection with a Permitted Loan (as defined in the Investment Agreement) or (iii) any foreclosure in connection with a Permitted Loan (as
defined in the Investment Agreement) or transfer in lieu of a foreclosure thereunder, in each case that is otherwise in compliance with applicable securities laws. Notwithstanding the foregoing, any discretionary waiver or termination of
this holdback provision by such underwriters with respect to any of the Holders shall apply to the other Holders as well, pro rata based upon the number of shares subject to such obligations.
(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given without the written consent of each of
the Company and the Holders of a majority of the Registrable Securities;
provided,
however, that (x) any
amendment, modification, supplement, waiver or consent to departures from the provisions of this Agreement that would subject a Stockholder to adverse differential treatment relative to the other Stockholders shall require the agreement of
the differentially treated Stockholder and (y) any amendment, modification, supplement, waiver or consent to departures from the provisions of this Agreement that would be adverse to a right specifically granted to a specific Stockholder
herein (but not to other Stockholders) shall require the agreement of that Stockholder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Registration Statement.
(c) Successors, Assigns and Transferees. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The provisions of this Agreement which are for the benefit of the parties hereto other than
the Company may be transferred or assigned to any Person in connection with a Transfer (as defined in the
Investment Agreement) of Series A Preferred Stock or Common Stock issued upon conversion of the Series A Preferred Stock or other Registrable Securities to such Person in a Transfer permitted by
Section 5.08(b)(i) of the Investment
Agreement, to a lender in connection with a Permitted Loan, or to a transferee or group of Affiliated transferees in connection with a Transfer of Registrable Securities with a liquidation preference or market value of at least $50,000,000;
provided,
however, that (i) (insofar as practicable) prior written notice of such assignment of rights is given to
the Company and (ii) such transferee agrees in writing to be bound by, and subject to, this Agreement as a
“Holder” pursuant to a
written instrument in form and substance reasonably acceptable to
the Company. If
the Company consolidates or merges with or into any Person or otherwise becomes party to a Reorganization Event (as defined in the Certificate of Designations)
and the Common Stock or any other Registrable Securities are, in whole or in part, converted into or exchanged for securities of a different issuer or become convertible or exchangeable into securities of a different issuer, and any Holder
that immediately prior to such event holds Registrable Securities would, following completion of such event (x) hold securities that are (or, in the case of securities issuable upon the conversion or exchange of other securities, if then
issued would be)
“restricted securities” or
“control securities” (as such terms are used for purpose of Rule 144 under the Securities Act) in the hands of such Holder or (y) beneficially own (as defined in the Certificate of Designations),
together with such Holder’s Affiliates, at least 5% of the class of such securities when such securities are issued (or when such securities may be acquired upon conversion, exercise or exchange, in the case of securities issuable upon the
conversion, exchange or exercise of other securities), then
the Company will use its best efforts to cause such issuer to assume all of
the Company’s rights and obligations under this Agreement with respect to such securities of such issuer
to the extent (treating such issuer as the
“Company” hereunder with respect to such securities) any such securities are Registrable Securities, in a written instrument delivered to the Holders. Except as provided in
Section 5 with
respect to an Indemnified Party, nothing expressed or mentioned in this Agreement is intended or shall be construed to give any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable
right, remedy or claim under, or in respect of this Agreement or any provision herein contained.
(d) Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally,
emailed (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:
KAR Auction Services, Inc.
11299 N. Illinois Street
|
Attention: |
Eric Loughmiller
|
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
if to the Stockholders or the Investor, to the Investor, to:
Periphas Capital GP, LLC
667 Madison Avenue, 15th Floor
with a copy (which shall not constitute notice) to:
Wachtell Lipton Rosen & Katz
51 W 52nd Street
|
Attention: |
Daniel A. Neff
|
or such other address or email address as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of actual receipt by the
recipient thereof if received prior to 5:00 p.m. local time in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until
the next succeeding business day in the place of receipt.
(e) Descriptive Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms
contained herein.
(f) Severability. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term, condition or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted
by applicable law.
(g) Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or electronic mail), each of which shall be deemed to be
an original but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.
(h) Governing Law; Submission to Jurisdiction. This Agreement and all legal or administrative proceedings, suits, investigations, arbitrations or actions (“
Actions”) (whether at law, in equity, in
contract, in tort or otherwise) based upon, arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of laws
principles.
All Actions arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept
jurisdiction over any Action, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the
defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action. The consents to jurisdiction and venue set forth in this Section 9(h) shall not constitute general consents to service of process in the
State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such
party in any Action arising out of or relating to this Agreement shall be effective if notice is given by overnight courier at the address set forth in Section 9(d) of this Agreement. The parties hereto agree that a final judgment in
any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law; provided that nothing in the foregoing shall restrict any party’s rights to seek
any post-judgment relief regarding, or any appeal from, a final trial court judgment.
(i) Specific Performance. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or
agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an
injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.
(j) Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any
other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties hereunder.
(k) Termination. The provisions of this Agreement (other than
Section 5 and
Section 6) shall terminate upon the earliest to occur of (i) its
termination by the written agreement of all parties hereto or their respective successors in interest, (ii) the date on which all shares of Common Stock and Series A Preferred Stock and any other Registrable Securities have ceased to be
Registrable Securities and (iii) the dissolution, liquidation or winding up of
the Company. Nothing herein shall relieve any party from any liability for the breach of any of the agreements set forth in this Agreement.
(l) No Inconsistent Agreements; Most Favored Nations. The Company shall not hereafter enter into any agreement with respect to its securities that is
inconsistent with or violates the rights granted to the Holders in this Agreement. In the event that
the Company desires to enter into any agreement with any Person, including any holder or prospective holder of any securities of the
Company, giving or granting any registration (or related) rights the terms of which are more favorable than or senior to the registration or other rights granted to the Holders hereunder, then (i)
the Company shall provide prior written
notice thereof to the Holders and (ii) upon execution by
the Company of such other agreement, the terms and conditions of this Agreement shall be, without any further action by the Holders or
the Company, automatically amended and modified in
an economically and legally equivalent manner such that the Holders shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such other agreement,
provided that upon written notice to
the Company at any time, any Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to such Holder as it was in effect
immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to such Holder.
(m) Available Registration Statement.
The Company will not effect a Mandatory Conversion (as defined in the Certificate of Designations) of the Series A
Preferred Stock if any Holder holds or would hold upon such Mandatory Conversion (or any earlier conversion following the dates of the Mandatory Conversion Notice (as defined in the Certificate of Designations)) shares of Common Stock that
are Registrable Securities unless as of the date of Mandatory Conversion Notice and as of the Mandatory Conversion Date (as defined in the Certificate of Designations) there is an Available Registration Statement (as defined in the Investment
Agreement) covering resale of such shares of Common Stock by such Holder.
[Signature Page Follows]
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be duly executed on its behalf as of the date first written above.
| |
KAR AUCTION SERVICES, INC.
|
| |
|
|
|
| |
By:
|
|
|
| |
|
Name:
|
[●]
|
| |
|
Title:
|
[●]
|
| |
PERIPHAS CAPITAL GP, LLC
|
| |
|
| |
By:
|
|
, |
|
| |
|
its general partner
|
|
|
