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Exhibit 4.11
EXECUTION COPY
INVESTORS' RIGHTS AGREEMENT
This Investors'
Rights Agreement (this " Agreement ") is entered into as of
November 20, 2000 among K-L HOLDINGS, INC., a Delaware
corporation (the " Company "), each of the parties listed on
Schedule I attached hereto (" Investors "), KKR 1996
FUND L.P. (the " KKR Fund ") and KKR PARTNERS II, L.P. ("
KKR Partners II " and, together with the KKR Fund, the "
KKR Investors "). The Company, the Investors and the KKR
Investors are hereinafter collectively referred to as the "
Parties ".
Recitals
K-L Sub
1, Inc. (the " PIK Borrower ") has entered into a PIK
Bridge Loan Agreement dated as of date hereof (the " Loan
Agreement ") among the PIK Borrower, Merrill Lynch
International, as arranger thereunder, Merrill Lynch Capital
Corporation, as agent thereunder, and Merrill Lynch Capital
Corporation and the other lenders from time to time party thereto
(the " Lenders "), pursuant to which the Lenders have agreed
to make PIK Bridge Loans (as defined in the Loan Agreement) to the
PIK Borrower, subject to the terms and conditions thereof.
The PIK Borrower
is a wholly owned Subsidiary (as defined in the Loan Agreement) of
the Company.
In consideration
for the making of the PIK Bridge Loans to the PIK Borrower, the
Company has agreed to issue on the date hereof to the Investors
2,968,421 shares of common stock, par value $.01 per share (the "
Common Stock "), of the Company, upon the terms and subject
to the conditions of this Agreement.
To implement the
foregoing and in consideration of the mutual agreements contained
herein, the Parties agree as follows:
1.
Purchase of Stock.
Subject to the terms and conditions of this
Agreement, on or prior to November 20, 2000 (the "
Effective Date "), the Company will issue and sell to each
Investor on the Effective Date, and each such Investor, will,
severally and not jointly, purchase from the Company, the number of
shares of the Company's Common Stock set forth opposite such
Investor's name on Schedule I hereof (the shares of Common
Stock being purchased pursuant to this Agreement, the "
Shares "), for consideration, payable against issuance
thereof, of $.01 per Share (the " Initial Purchase Price ").
Promptly following issuance of the Shares, the Company will deliver
to each Investor a duly executed certificate or certificates,
registered in such Party's name (or the name of a nominee specified
by such Party on Schedule I hereof) and representing the
Shares purchased by such Investor, against the extension of such
Investor's (or its affiliated Lender's) PIK Bridge Loan to the PIK
Borrower and payment of the purchase price therefor set forth
above, together representing payment in full for such Shares
pursuant to this Agreement.
2.
Representations, Warranties and
Agreements by Investors.
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(a) Each
Investor hereby represents and warrants that (i) it is either
(A) an "accredited investor" within the meaning of
Rule 501 under the Securities Act of 1933, as amended, and the
rules and regulations in effect thereunder (the " Act ") or
(B) a "qualified institutional buyer" as defined in the Act,
and (ii) it is acquiring the Shares for investment for its own
account and not with a view to, or for resale in connection with,
the distribution. Each Investor agrees and acknowledges that it
will not, directly or indirectly, offer, transfer, sell, assign,
pledge, hypothecate or otherwise dispose of any Shares unless
(A) such transfer, sale, assignment, pledge, hypothecation or
other disposition complies with this Agreement and all applicable
provisions of state securities laws and (B) either
(I) the transfer, sale, assignment, pledge, hypothecation or
other disposition is pursuant to an effective registration
statement under the Act or (II) counsel for the Investor
(which may be such Investor's in-house counsel responsible for such
matters, or
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such other counsel acceptable to the Company)
shall have furnished the Company with an opinion, reasonably
satisfactory in form and substance to the Company, that no such
registration is required because of the availability of an
exemption from registration under the Act. Notwithstanding the
foregoing, the Company acknowledges and agrees that (i) any
transfer under the last sentence of Section 3 shall be deemed
to be in compliance with this Agreement, (ii) any transfer
under Section 4 shall be deemed to be in compliance with the
Act and this Agreement, and no opinion of counsel shall be required
in connection therewith and (iii) no opinion of counsel shall
be required in connection with any transfer of Shares by an
Investor to an affiliate or to a nominee or designee holding such
Shares on its behalf or at its direction or to another financial
institution that acquires all or substantially all of such
Investor's equity portfolio in a merger with or acquisition of such
Investor (an " Affiliate ").
(b) The
certificate (or certificates) representing the Shares shall bear
the following legend:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF
THE INVESTORS' RIGHTS AGREEMENT, DATED AS OF NOVEMBER 20, 2000,
BETWEEN K-L HOLDINGS, INC. (THE "COMPANY") AND THE PARTIES
LISTED ON SCHEDULE I ATTACHED THERETO, KKR 1996 FUND L.P. AND KKR
PARTNERS II, L.P. (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO
OFFER, TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITIONS OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE UNLESS (A) SUCH OFFER, TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH ALL
APPLICABLE PROVISIONS OF STATE SECURITIES LAWS AND (B) EITHER
(I) THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION IS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR (II) COUNSEL FOR THE HOLDER (WHICH MAY BE SUCH HOLDER'S
IN-HOUSE COUNSEL RESPONSIBLE FOR SUCH MATTERS, OR SUCH OTHER
COUNSEL ACCEPTABLE TO THE COMPANY) SHALL HAVE FURNISHED THE COMPANY
WITH AN OPINION, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO
THE COMPANY, THAT NO SUCH REGISTRATION IS REQUIRED BECAUSE OF THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE ACT.
(c) Each
Investor acknowledges that it has been advised that (i) the
Shares have not been registered under the Act, (ii) the Shares
must be held indefinitely and each Investor must continue to bear
the economic risk of the investment in the Shares unless the Shares
are subsequently registered under the Act or an exemption from such
registration is available and the Shares are disposed of in
accordance with this Agreement, (iii) it is not anticipated
that there will be any public market for the Shares,
(iv) Rule 144 promulgated under the Act is not currently
available with respect to the sales of any securities of the
Company, and the Company has made no covenant to make such Rule
available (except as provided in Section 5), (v) when and
if the Shares may be disposed of without registration in reliance
on Rule 144, such disposition can be made only in limited
amounts in accordance with the terms and conditions of such Rule,
(vi) if the Rule 144 exemption is not available, public
sale without registration will require compliance with
Regulation A or some other exemption under the Act,
(vii) a restrictive legend in the form
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heretofore set forth shall be placed on the
certificates representing the Shares and (viii) a notation
shall be made in the appropriate records of the Company indicating
that the Shares are subject to restriction on transfer and, if the
Company should at some time in the future engage the services of a
stock transfer agent, appropriate stop transfer restrictions will
be issued to such transfer agent with respect to the
Shares.
(d) If
any Shares are to be disposed of in accordance with Rule 144
under the Act or otherwise, the Investor shall promptly notify the
Company of such intended disposition and shall deliver to the
Company at or prior to the time of such disposition such
documentation as the Company may reasonably request in connection
with such sale and, in the case of a disposition pursuant to
Rule 144, shall deliver to the Company an executed copy of any
notice on Form 144 required to be filed with the Securities
and Exchange Commission (" SEC ").
(e) Each
Investor agrees that, if any shares of capital stock of the Company
are offered to the public pursuant to an effective registration
statement under the Act, such Investor will not effect any public
sale or distribution of the Shares or any other shares of capital
stock of the Company not covered by such registration statement
within seven days before or such period after the effective date of
such registration not to exceed 180 days as the underwriting
agreement may require (or such lesser period as the managing
underwriters may permit) and shall be agreed to by the KKR
Investors with respect to their shares of capital stock of the
Company.
(f) Each
Investor represents and warrants that it has been given the
opportunity to obtain any information or documents and to ask
questions and receive answers about such documents, the Company and
the business and prospects of the Company which it deems necessary
to evaluate the merits and risks related to its investment in the
Shares and to verify the information received as indicated in this
Section 2(f), and it has relied solely on such
information.
(g) Each
Investor further represents and warrants that (i) its
financial condition is such that it can afford to bear the economic
risk of holding the Shares for an indefinite period of time and has
adequate means for providing for its current needs and
contingencies, (ii) it can afford to suffer a complete loss of
its investment in the Shares, (iii) all information which it
has provided to the Company concerning itself and its financial
position is correct and complete as of the date of this Agreement,
(iv) it understands and has taken cognizance of all risk
factors related to the purchase of the Shares, and (v) its
knowledge and experience in financial and business matters are such
that it is capable of evaluating the merits and risks of its
purchase of the Shares as contemplated by this Agreement.
3.
Restriction on Transfer.
Except for (a) a sale of Shares
pursuant to an effective registration statement under the Act filed
by the Company or (b) any sale or transfer of Shares in
compliance with Section 2, each Investor agrees that it will
not transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any Shares at any time prior to the closing of the
Company's first Public Offering (as defined in Section 4(b)
below) without the consent of the Company. No transfer of any such
Shares in violation hereof shall be made or recorded on the books
of the Company and any such transfer shall be void and of no
effect.
Notwithstanding
anything herein to the contrary, this Section 3 shall not
prohibit (i) any sale or transfer of Shares by an Investor to
any of its Affiliates, provided that such Affiliate agrees
to be bound by the provisions of this Agreement and makes the
representations of an Investor hereunder by executing a counterpart
hereof, whereupon such Affiliate shall thereafter be deemed to be
an Investor for all purposes of this Agreement or (ii) any
sale or transfer of Shares to a Person that becomes a Lender in
connection with such Person's becoming a party to the Loan
Agreement, provided that such Person agrees to be bound by
the provisions of this Agreement and makes the representations of
an Investor hereunder by executing a counterpart hereof, whereupon
such Person shall thereafter be
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deemed to be an Investor for all purposes of this
Agreement; provided that each sale or transfer pursuant to
this sentence shall be subject to compliance with Section 2(a)
of this Agreement.
4.
Right of First Offer.
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(a) Except
for transfers made in compliance with the last sentence of
Section 3 hereof, if at any time prior to the closing of the
Company's first Public Offering, any of the Investors intends to
sell any or all of its Shares, such Investor shall notify the
Company in writing of its intention to sell such Shares. Such
Investor's notice shall contain an irrevocable offer (the "
Offer ") to sell such Shares to the Company or a third party
designated by the Company (in the manner set forth below), the
number of Shares covered in the Offer, the price in cash that such
Investor proposes to be paid for the Shares in the Offer (the "
Offer Price ") and the other terms and conditions of the
Offer. During the period of 15 days after the date of the
receipt by the Company of such Investor's notice (the " Option
Period "), the Company shall have an irrevocable right and
option to purchase, or to arrange for a KKR Investor or a third
party to purchase, all of the Shares covered by the Offer at the
Offer Price and on the terms and conditions contained in the
Offer.
(b) If,
at the end of the Option Period, the Company, a KKR Investor or a
third party designated by the Company has not tendered the purchase
price for such Shares in the manner set forth in Section 4(d)
(unless such failure to tender is due to such Investor's failure to
deliver certificates or other instruments representing the Shares),
such Investor may during the immediately succeeding 90-day period
sell to a third party (the " Investor's Third Party Buyer ")
not less than all of the Shares covered by the Offer at a price not
lower than the Offer Price and on terms and conditions not
materially less favorable to such Investor than those contained in
the Offer.
(c) In
the event that the proposed purchase by the Investor's Third Party
Buyer of the Shares in the Offer is for a price lower than the
Offer Price and/or on terms and conditions materially less
favorable to such Investor than those set forth in the Offer, such
Investor shall not sell any of the Shares in the Offer to the
Investor's Third Party Buyer unless such Investor shall have first
reoffered the Shares in the Offer to the Company, in the same
manner as provided in Section 4(a) hereof, at such lower price
(the " Reoffer Price ") and/or on such materially less
favorable terms and conditions. The Company shall then have an
irrevocable option to purchase, or to arrange for a KKR Investor or
a third party to purchase, all of the Shares covered by the Offer
at the Reoffer Price and/or on the materially less favorable terms
and conditions exercisable in the same manner as provided in
Section 4(a) hereof.
(d) If
such option to purchase is exercised by the Company, a KKR Investor
or a third party designated by the Company, a certified bank check
or checks in the appropriate amount shall be delivered to such
Investor at the principal office of the Company against delivery of
certificates or other instruments representing the Shares so
purchased, appropriately endorsed by such Investor. No sale may be
made to any Investor's Third Party Buyer unless the Investor's
Third Party Buyer agrees in a writing satisfactory to the Company
to be bound by the provisions of this Agreement. Promptly after
such sale, such Investor shall notify the Company of the
consummation thereof and shall furnish such evidence of the
completion and time of completion of such sale and of the terms
thereof as may reasonably be requested by the Company. If, at the
end of 90 days following the expiration of the Option Period,
such Investor has not completed the sale of such Shares as
aforesaid, all the restrictions on sale, transfer or assignment
contained in this Agreement shall again be in effect with respect
to such Shares.
(e) As
used herein: (i) " Public Offering " shall mean the
sale of shares of common stock or preferred stock of the Company to
the public pursuant to a registration statement under the Act which
has been declared effective by the SEC (other than a registration
statement on Form S-4 or S-8, or any other similar form); and
(ii) " Qualified Public Offering " shall mean a Public
Offering
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5.
Certain Agreements by the Company.
In the event that the Company shall have
filed a registration statement pursuant to the requirements of
Section 12 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations in effect thereunder (the "Exchange
Act"), or shall have engaged in a Public Offering, the Company will
file the reports required to be filed by it under the Act and the
Exchange Act, to the extent required from time to time to enable
the Investors to sell Shares without registration under the Act
within the limitations of the exemptions provided by
(a) Rule 144 under the Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Notwithstanding anything contained in
this Section 5, the Company may deregister under
Section 12 of the Exchange Act if it is then permitted to do
so pursuant to the Exchange Act and, in that event, the Company
shall not be required to file such reports. Nothing in this
Section 5 shall be deemed to limit in any manner the
restrictions on sales of Shares contained in this Agreement.
6.
Registration Rights.
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(a) Each
Investor hereby agrees to be bound by all of the terms, conditions
and obligations of the Registration Rights Agreement, dated as of
November 20, 2000 and as in effect on the date hereof (the "
Registration Rights Agreement "), among the Company and the
investors signatory thereto. Subject in each case to the
limitations set forth in this Section 6, each Investor shall
have the right to request registration under Section 2 of the
Registration Rights Agreement, each Investor shall be deemed a
Holder under and as defined in the Registration Rights Agreement
with respect to the relevant requested registration and shall have
all of the rights and privileges of the Registration Rights
Agreement with respect thereto, in each case as if such Investor
were an original Holder referred to therein. All Shares acquired by
the Investors pursuant to this Agreement shall be deemed to be
Registrable Securities under and as defined in the Registration
Rights Agreement. This Agreement shall be deemed to be a
Supplemental Agreement under Section 8(a) of the Registration
Rights Agreement to the extent necessary to effectuate the
foregoing.
(b) Each
Investor will, if requested by the Company, execute and deliver a
reasonable custody agreement and power of attorney in customary
form with respect to any Shares to be registered pursuant to
Section 6(a) (the " Custody Agreement and Power of
Attorney "). The Custody Agreement and Power of Attorney will
provide, among other things, that each Investor will deliver to and
deposit in custody with an independent custodian and
attorney-in-fact named therein a certificate or certificates
representing such Shares (duly endorsed in blank by the registered
owner or owners thereof or accompanied by duly executed stock
powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as such Investor's agent and attorney-in-fact to
act under the Custody Agreement and Power of Attorney on such
Investor's behalf with respect to the matters specified
therein.
(c) Notwithstanding
any provision hereof or in the Registration Rights Agreement to the
contrary, in connection with any registration of Registrable
Securities on behalf of the Investors as provided herein, the
holders of a majority of the Registrable Securities held by all
Investors may select one counsel to represent all such Investors in
addition to the counsel selected by the Holders (as defined in the
Registration Rights Agreement) pursuant to Section 7 of the
Registration Rights Agreement. If the Investors exercise their
right pursuant to this Section 6(c), then the Investors shall
not be deemed to be "Holders" for purposes of Section 7 of the
Registration Rights Agreement.
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7.
Tag-Along and Drag Along.
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(a) If
at any time any KKR Investor proposes to sell for cash or any other
consideration more than 40% of the shares of the Common Stock held
by the KKR Investors on the Effective Date (such shares of Common
Stock being hereinafter referred to as the " Sale Stock ")
in any transaction or series of related transactions other than
(i) a sale of shares of Common Stock pursuant to an effective
registration statement filed by the Company, or (ii) a sale to
an affiliate of the KKR Investors or a partner, executive or
employee of Kohlberg Kravis Roberts & Co. L.P. ("
KKR ") or an affiliate thereof who agrees in writing to be
bound by the provisions hereof as a KKR Investor (it being
understood that if Common Stock owned by a KKR Investor is pledged
to a financial institution as collateral for a bona fide loan and
such Common Stock is transferred to such financial institution
pursuant to the terms of the definitive agreements evidencing such
loan and pledge, such transfer shall not constitute a Proposed Sale
hereunder), then such KKR Investor will notify each Investor in
writing (a " Notice ") of such proposed sale (a "
Proposed Sale ") and the material terms of the Proposed Sale
as of the date of the Notice (the " Material Terms ")
promptly, and in any event not more than 10 days after the
execution and delivery by all of the parties thereto of the
definitive agreement relating to the Proposed Sale, if any (the "
Sale Agreement "). If within 10 days after such
Investor's receipt of such Notice such KKR Investor receives from
such Investor a written request (an " Investor Request ") to
include Common Stock held by such Investor in the Proposed Sale
(which Investor Request shall be irrevocable unless (x) there
shall be an adverse change in the Material Terms or
(y) otherwise mutually agreed to in writing by such Investor
and the KKR Investor), the Common Stock held by such Investor will
be so included as provided herein; provided that only one
Investor Request, which shall be executed by such Investor, may be
delivered with respect to any Proposed Sale for all Common Stock
held by an Investor.
(b) In
the event of any change in the Material Terms that would be
favorable to the Investors, such KKR Investor will again, promptly,
and in any event not more than 10 days after receipt of such
favorable change in the Material Terms, notify each Investor
that
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