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EXHIBIT 4.2
ORBCOMM INC.
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made and
entered
into as of February 17, 2004, by and among ORBCOMM Inc., a Delaware
corporation
(the "Company"), each of the persons and entities listed on Exhibit
A hereto
(each, a "Preferred Stockholder" and, collectively, the
"Preferred
Stockholders") and the persons and entities listed on Exhibit B
hereto (each a
"Common Stockholder" and, collectively, the "Common
Stockholders").
WHEREAS, the Common Stockholders are the beneficial owners of
an
aggregate of 8,486,901 shares of the Common Stock of the Company
("Common
Stock");
WHEREAS, the Preferred Stockholders are holders of all of the
Company's outstanding shares of Series A Preferred Stock (the
"Preferred
Stock");
WHEREAS, the parties desire to enter into this Agreement in order
to
protect the management and control of the Company.
NOW, THEREFORE, in consideration of the premises and for other
good
and valuable consideration, the receipt and sufficiency of which
are hereby
acknowledged, the parties agree hereto as follows:
1. Definitions.
1.1 "Affiliates" shall mean, with respect to any Person, any
Person
which, directly or indirectly through one or more intermediaries,
controls, is
controlled by or is under common control with such Person or any
Affiliate of
such Person, including, without limitation, any partner, officer,
director,
member or employee of such Person and any venture capital fund now
or hereafter
existing which is controlled by or under common control with one or
more general
partners or shares the same management company with such
Person.
1.2 "Common Stock Equivalents" shall mean the Common Stock and
shares
of Common Stock issued or issuable upon conversion of the Preferred
Stock or
exercise of any option, warrant or other security or right of any
kind
convertible into or exchangeable for Common Stock; provided that,
for purposes
of calculating a Stockholder's pro rata participation rights
pursuant to this
Agreement, the Common Stock Equivalents held by a Stockholder shall
include the
number of Common Stock Equivalents of the Company held by Orbcomm
Asset Holdings
allocable to such Stockholder, if any, based on the number of
shares of fully
paid capital stock of Orbcomm Asset Holdings held by such
Stockholder.
1.3 "Common
Stockholders" shall have the meaning given in the first
paragraph hereof, but shall also include their Permitted
Transferees and Persons
required to become additional parties to this Agreement pursuant to
Section 8,
and Trust Beneficiaries upon distribution of the Common Stock held
by the Trust.
1.4 "Holdings" shall mean ORBCOMM Holdings LLC, a Delaware
limited
liability company.
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1.5 "Members of Holdings" shall mean the holders of membership
interests in Holdings.
1.6 "Notice of Transfer" shall mean a written notice which shall
(i)
specifically identify the Third Party to whom a Stockholder
proposes to Transfer
Shares pursuant to a bona fide Third Party Offer, (ii) include a
copy of such
Third Party Offer and (iii) be irrevocable for at least the
applicable notice
periods set forth in Articles 3 and 4.
1.7 "Offered Shares" shall mean the Shares proposed to be
Transferred
to a Third Party by a Stockholder pursuant to a Notice of
Transfer.
1.8
"Orbcomm Asset Holdings" means Orbcomm Asset Holdings Ltd., a
Cayman Islands limited company.
1.9 "Permitted Transferees" shall mean, in the case of a
Stockholder
that is a natural person, the spouse (including widow) or issue of
the
Stockholder, a trust that benefits the Stockholder and/or his
spouse (including
widow), issue or a charity or any Person controlled by such a trust
or an entity
controlled directly or indirectly by the Stockholder (including
individual
retirement accounts).
1.10 "Person" shall mean a natural person, corporation, limited
partnership, general partnership, joint stock company, joint
venture,
association, company, trust, bank, trust company, and trust,
business trust or
other organization, whether or not a legal entity, or a government
or agency or
any political subdivision thereof.
1.11 "Shares" shall mean shares of voting capital stock of the
Company.
1.12 "Stockholder" shall mean the Common Stockholders and
Preferred
Stockholders.
1.13 "Third Party" shall mean a reputable offeror, who shall not be
an
Affiliate of the Stockholder proposing to Transfer Shares, who has
adequate
financial resources to purchase the relevant Offered Shares.
1.14 "Third Party Offer" shall mean a bona fide written offer by
a
Third Party to purchase all or a portion of a Stockholder's Shares,
which notice
shall specify the terms and conditions of the proposed Transfer,
including (i)
the name and address of the Third Party, (ii) the manner in which a
disposition
is proposed to be made, (iii) the price or consideration (which
shall be cash or
indebtedness) at which and the form in which the proposed Transfer
is to be
made, and (iv) all material terms and conditions of and to the
Transfer.
1.15 "Transfer" shall mean any sale, assignment, encumbrance,
hypothecation, pledge, conveyance in trust, gift, transfer by
bequest, devise or
descent, or other transfer or disposition of any kind, including,
but not
limited to, transfers to receivers, levying creditors, trustees or
receivers in
bankruptcy proceedings or general assignees for the benefit of
creditors,
whether voluntary or by operation of law, directly or indirectly,
of any of the
Shares held by a Stockholder.
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1.16 "Trust" shall mean the Liquidating Trust of OBRCOMM Global
L.P.,
formerly a Delaware limited partnership.
1.15 "Trust Beneficiaries" shall mean the beneficiaries of the
Trust.
2. Restriction on Transfers of Shares.
2.1 Notwithstanding anything in this Agreement to the contrary,
unless
approved by the parties necessary to amend this Agreement, no
Stockholder shall
Transfer any Shares for a period of three years from the date of
this Agreement.
Except as expressly permitted by Sections 3, 4, 5 or 6 hereof, each
Stockholder
agrees that it will not directly or indirectly, Transfer any Shares
or any
interest therein or enter into any commitment to do any of the
foregoing without
the prior written consent of the Company. The Company agrees not to
record any
Transfer of Shares unless such Transfer has been completed in
compliance with
the provisions set forth in this Agreement. Notwithstanding the
three (3)-year
restriction on transfers, the parties agree that (a) a distribution
or transfer
of Common Stock by the Trust to the Trust Beneficiaries shall be
permitted
without such approval and, upon such distribution or transfer, the
Trust
Beneficiaries will be bound by the terms of this Agreement and will
have all of
the rights, benefits and obligations of this Agreement as if they
had been
original signatories and (b) a distribution or transfer of Common
Stock by
Holdings to the Members of Holdings shall be permitted without such
approval
provided that each of the Members of Holdings has executed a
counterpart of this
Agreement prior to the date of such distribution or transfer, and,
upon such
distribution or transfer, each Member of Holdings will be bound by
the terms of
this Agreement and will have all of the rights, benefits and
obligations of this
Agreement as if they had been original signatories. For the
avoidance of doubt,
the foregoing three year period shall begin on the date of this
Agreement for
any transferee that is a Trust Beneficiary or a Member of Holdings,
without
reference to the ownership period of any such transferee. The
Company agrees to
record any transfer or distribution of Common Stock from the Trust
to the Trust
Beneficiaries and any transfer or distribution of Common Stock from
Holdings to
the Members of Holdings made in accordance with the terms of this
Agreement.
2.2 Orbcomm Asset Holdings hereby irrevocably assigns its rights
of
refusal and tag-along rights under this Agreement to the
Stockholders who are
members of Orbcomm Asset Holdings in proportion to their fully paid
membership
interests in Orbcomm Asset Holdings, which are set forth on Exhibit
C hereto.
The foregoing assignment shall not affect the enforceability of the
other
provisions of this Agreement as to Orbcomm Asset Holdings, and
Orbcomm Asset
Holdings, and its Shares, shall remain subject to the restrictions
on Transfer,
the Drag-Along provision, and other provisions of this
Agreement.
Notwithstanding any provision of this Agreement to the contrary,
the provisions
of Section 5.1 of this Agreement relating to Exempt Transfers shall
not apply to
Orbcomm Asset Holdings.
3. Right of First Refusal.
3.1 Transfers by Common Stockholders. (i) In connection with a
proposed Transfer of Shares by a Common Stockholder (the "Selling
Common
Stockholder"), the Selling Common Stockholder shall first deliver
to the
Company, the other Common Stockholders (the
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"Other Common Stockholders") and the Preferred Stockholders a
Notice of Transfer
offering to the Company, the Other Common Stockholders and the
Preferred
Stockholders all of the Offered Shares on the terms and conditions
specified in
the Notice of Transfer and in the manner set forth in this Section
3.
(ii) The Company shall have the first right and option for a period
of
twenty (20) days after delivery to it of the Notice of Transfer to
accept any or
all of the Offered Shares on the terms and conditions specified in
the Notice of
Transfer. The Company may exercise its option by delivering to the
Selling
Common Stockholder prior to the expiration of such twenty (20) day
period a
written notice specifying the number of Offered Shares which the
Company has
elected to purchase. If the Company elects to purchase less than
all of the
Offered Shares, the Company shall deliver, within two (2) days
after termination
of such twenty (20) day period, a written notice to the Other
Common
Stockholders and the Preferred Stockholders indicating the number
of Offered
Shares which the Company has elected to purchase.
(iii) The Other Common
Stockholders shall thereafter have the second
right and option for a period of ten (10) days after delivery to
them of such
notice from the Company to elect to purchase any or all of the
Offered Shares
which the Company did not elect to purchase on the terms and
conditions
specified in the Notice of Transfer. The Offered Shares which the
Company did
not elect to purchase shall be allocated among the Other Common
Stockholders on
a pro rata basis, based on the Common Stock Equivalents held by
each Other
Common Stockholder. Each of the Other Common Stockholders may
exercise its
option by delivering a written notice to the Company and the
Selling Common
Stockholder prior to the termination of such ten (10) day period
specifying the
number of the remaining Offered Shares such Other Common
Stockholder has elected
to purchase. In the event that one or more Other Common
Stockholders do not
elect to purchase all of the Offered Shares allocated to them,
Other Common
Stockholders who have elected to purchase their full allocation
within the ten
(10) day period shall have an additional option, for a period of
five (5) days
next succeeding the expiration of the ten (10) day period, to
purchase all or
any part of the balance of such remaining Offered Shares on the
terms and
conditions set forth in the Notice of Transfer, which option shall
be exercised
by the delivery of written notice to the Company and the Selling
Common
Stockholder prior to the termination of such five (5) day period
specifying the
number of additional Offered Shares such Other Common Stockholder
has elected to
purchase. In the event there are two or more such Other Common
Stockholders that
choose to exercise the last-mentioned option for a total number of
remaining
Offered Shares in excess of the number available, the remaining
Offered Shares
available for each such Other Common Stockholder's option shall be
allocated to
such Other Common Stockholder pro rata based on the number of
Common Stock
Equivalents owned by the Other Common Stockholders so electing. If
the Company
and the Other Common Stockholders elect to purchase less than all
of the Offered
Shares, the Company shall deliver, within two (2) days after the
termination of
the five (5) day period discussed above, a written notice to the
Preferred
Stockholders indicating the number of Offered Shares which the
Company and the
Other Common Stockholders have elected to purchase.
(iv) The Preferred Stockholders shall thereafter have the third
right
and option, at their sole discretion for a period of ten (10) days
after
delivery to them of such notice by the Company to elect to purchase
any or all
of the Offered Shares which the Company and the Other
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Common Stockholders did not elect to purchase on the terms and
conditions
specified in the Notice of Transfer. The Offered Shares which the
Company and
the Other Common Stockholders did not elect to purchase shall be
allocated among
the Preferred Stockholders on a pro rata basis, based on the Common
Stock
Equivalents held by each Preferred Stockholder. Each of the
Preferred
Stockholders may exercise its option by delivering a written notice
to the
Company and the Selling Common Stockholder prior to the termination
of such ten
(10) day period specifying the number of the remaining Offered
Shares such
Preferred Stockholder has elected to purchase. In the event that
one or more
Preferred Stockholders do not elect to purchase all of the Offered
Shares
allocated to them, Preferred Stockholders who have elected to
purchase their
full allocation within the ten (10) day period shall have an
additional option,
for a period of five (5) days next succeeding the expiration of the
ten (10) day
period, to purchase all or any part of the balance of such
remaining Offered
Shares on the terms and conditions set forth in the Notice of
Transfer, which
option shall be exercised by the delivery of a written notice to
the Company and
the Selling Common Stockholder prior to the termination of such
five (5) day
period specifying the number of additional Offered Shares such
Preferred
Stockholder has elected to purchase. In the event that there are
two or more
such Preferred Stockholders that choose to exercise the
last-mentioned option
for a total number of remaining Offered Shares in excess of the
number
available, the remaining Offered Shares available for each such
Preferred
Stockholder's option shall be allocated to such Preferred
Stockholder pro rata
based on the number of Common Stock Equivalents owned by the
Preferred
Stockholders so electing. Within two (2) days following the end of
such five (5)
day period, the Company shall deliver a notice to the all of the
Stockholders
indicating the total number of Offered Shares which the Company,
the Other
Common Stockholders and the Preferred Stockholders have elected to
purchase.
3.2 Transfers by Preferred Stockholders. (i) In connection with
a
proposed Transfer of Shares by a Preferred Stockholder (the
"Selling Preferred
Stockholder"), the Selling Preferred Stockholder shall first
deliver to the
Company, the other Preferred Stockholders (the "Other Preferred
Stockholders")
and the Common Stockholders a Notice of Transfer offering to the
Company, the
Other Preferred Stockholders and the Common Stockholders all of the
Offered
Shares on the terms and conditions specified in the Notice of
Transfer and in
the manner set forth in this Section 3.
(ii) The Company shall have the first right and option for a period
of
twenty (20) days after delivery to it of the Notice of Transfer to
accept any or
all of the Offered Shares on the terms and conditions specified in
the Notice of
Transfer. The Company may exercise its option by delivering to the
Selling
Preferred Stockholder prior to the expiration of such twenty (20)
day period a
written notice specifying the number of Offered Shares which the
Company has
elected to purchase. If the Company elects to purchase less than
all of the
Offered Shares, the Company shall deliver, within two (2) days
after termination
of such twenty (20) day period, a written notice to the Other
Preferred
Stockholders and the Common Stockholders indicating the number of
Offered Shares
which the Company has elected to purchase.
(iii) The Other Preferred Stockholders shall thereafter have
the
second right and option for a period of ten (10) days after
delivery to them of
such notice from the Company to elect to purchase any or all of the
Offered
Shares which the Company did not elect to purchase on the terms and
conditions
specified in the Notice of Transfer. The Offered Shares which
the
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Company did not elect to purchase shall be allocated among the
Other Preferred
Stockholders on a pro rata basis, based on the Common Stock
Equivalents held by
each Other Preferred Stockholder. Each of the Other Preferred
Stockholders may
exercise its option by delivering a written notice to the Company
and the
Selling Preferred Stockholder prior to the termination of such ten
(10) day
period specifying the number of the remaining Offered Shares such
Other
Preferred Stockholder has elected to purchase. In the event that
one or more
Other Preferred Stockholders do not elect to purchase all of the
Offered Shares
allocated to them, Other Preferred Stockholders who have elected to
purchase
their full allocation within the ten (10) day period shall have an
additional
option, for a period of five (5) days next succeeding the
expiration of the ten
(10) day period, to purchase all or any part of the balance of such
remaining
Offered Shares on the terms and conditions set forth in the Notice
of Transfer,
which option shall be exercised by the delivery of written notice
to the Company
and the Selling Preferred Stockholder prior to the termination of
such five (5)
day period specifying the number of additional Offered Shares such
Other
Preferred Stockholder has elected to purchase. In the event there
are two or
more such Other Preferred Stockholders that choose to exercise
the
last-mentioned option for a total number of remaining Offered
Shares in excess
of the number available, the remaining Offered Shares available for
each such
Other Preferred Stockholder's option shall be allocated to such
Other Preferred
Stockholder pro rata based on the number of Common Stock
Equivalents owned by
the Other Preferred Stockholders so electing. If the Company and
the Other
Preferred Stockholders elect to purchase less than all of the
Offered Shares,
the Company shall deliver, within two (2) days after the
termination of the five
(5) day period discussed above, a written notice to the Common
Stockholders
indicating the number of Offered Shares which the Company and the
Other
Preferred Stockholders have elected to purchase.
(iv) The Common Stockholders shall thereafter have the third right
and
option, at their sole discretion for a period of ten (10) days
after delivery to
them of such notice by the Company to elect to purchase any or all
of the
Offered Shares which the Company and the Other Preferred
Stockholders did not
elect to purchase on the terms and conditions specified in the
Notice of
Transfer. The Offered Shares which the Company and the Other
Preferred
Stockholders did not elect to purchase shall be allocated among the
Common
Stockholders on a pro rata basis, based on the Common Stock
Equivalents held by
each Common Stockholder. Each of the Common Stockholders may
exercise its option
by delivering a written notice to the Company and the Selling
Preferred
Stockholder prior to the termination of such ten (10) day period
specifying the
number of the remaining Offered Shares such Common Stockholder has
elected to
purchase. In the event that one or more Common Stockholders do not
elect to
purchase all of the Offered Shares allocated to them, Common
Stockholders who
have elected to purchase their full allocation with the ten (10)
day period
shall have an additional option, for a period of five (5) days next
succeeding
the expiration of the ten (10) day period, to purchase all or any
part of the
balance of such remaining Offered Shares on the terms and
conditions set forth
in the Notice of Transfer, which option shall be exercised by the
delivery of a
written notice to the Company and the Selling Preferred Stockholder
prior to the
termination of such five (5) day period specifying the number of
additional
Offered Shares such Common Stockholder has elected to purchase. In
the event
that there are two or more such Common Stockholders that choose to
exercise the
last-mentioned option for a total number of remaining Offered
Shares in excess
of the number available, the remaining Offered Shares available for
each such
Common Stockholder's option shall be allocated to such Common
Stockholder pro
rata based on the
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number of Common Stock Equivalents owned by the Common Stockholders
so electing.
Within two (2) days following the end of such five (5) day period,
the Company
shall deliver a notice to the all of the Stockholders indicating
the total
number of Offered Shares which the Company, the Other Preferred
Stockholders and
the Common Stockholders have elected to purchase.
3.3 If not all of the Offered Shares are purchased pursuant to
paragraphs 3.1 and 3.2 above, the Selling Common Stockholder or
Selling
Preferred Stockholder, as the case may be (such person, a
"Selling
Stockholder"), may Transfer to the Third Party all of the Offered
Shares not
purchased pursuant to paragraphs 3.1 and 3.2 above, at a purchase
price not less
than the price and on terms and conditions no more favorable to the
Third Party
than the purchase price, terms and conditions set forth in the
applicable Notice
of Transfer at any time within the one hundred twenty (120) day
period following
the expiration of the applicable acceptance periods provided in
paragraph 3.1 or
3.2 above, subject to the rights of the Stockholders (other than
the Selling
Stockholder) set forth in Section 4 hereof. In the event the
Selling Stockholder
does not Transfer to the Third Party within such one hundred twenty
(120) day
period, the right of such Selling Stockholder to Transfer the
Offered Shares
shall terminate and the obligations of this Section 3 shall be
reinstated with
respect to the Offered Shares.
3.4 Transfers, if any, of Offered Shares to any Stockholders
pursuant
to the terms of paragraph 3.1 or 3.2 above shall be made at the
registered
office of the Company (or such other place as the Company may
designate in
writing upon three (3) days notice) on a mutually satisfactory
business day
within fifteen (15) days after the expiration of the applicable
acceptance
period provided for in paragraph 3.1 or 3.2. Delivery of
certificates and duly
executed instruments of transfer of the Offered Shares shall be
made on such
date against payment of the purchase price therefor, which shall be
made in
accordance with the terms and conditions of the Notice of Transfer.
If a Selling
Stockholder shall fail or refuse to Transfer any Shares to a
purchaser as
required hereunder, the Company may authorize any person to execute
and deliver
on his or its behalf the necessary Transfer documents. The Company
may receive
the purchase money in trust for the Selling Stockholder and cause
the purchaser
to be registered as the holder of the relevant Shares. The receipt
by the
Company of the purchase money shall be a good discharge to the
purchaser (who
shall not be bound to see to the application thereof). The Company
shall not be
obliged to earn or pay interest on any money received by it on
behalf of a
Selling Stockholder.
4. Tag-Along Right.
4.1 Tag-Along Rights on Transfers of Common Stock. (i) In the
event
that the Company, the Other Common Stockholders and the Preferred
Stockholders
do not exercise their options to purchase all of the Selling
Common
Stockholder's Offered Shares, such Selling Common Stockholder shall
offer each
Other Common Stockholder and each Preferred Stockholder
(collectively, the
"Remaining Stockholders"), the opportunity to require that the
Transfer by the
Selling Common Stockholder be conditioned upon the Third Party
purchasing from
such Remaining Stockholder and from the Selling Common Stockholder
a pro rata
portion of each such Stockholder's Shares, based upon the number of
Common Stock
Equivalents owned by the Selling Common Stockholder and all
Remaining
Stockholders exercising rights pursuant to this paragraph 4.1 (a
"Tag-Along
Sale"). The Remaining Stockholders may exercise this right
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by delivering to the Company and the Selling Common Stockholder a
Tag-Along
Notice in accordance with paragraph 4.1(ii) below. The Remaining
Stockholders
delivering such a notice are hereinafter referred to as the
"Tag-Along
Stockholders." In connection with a Tag-Along Sale, (i) the
only
representations, warranties and covenants which any Tag-Along
Stockholder shall
be required to make in connection with any Transfer are
representations and
warranties with respect to its own ownership of the Shares to be
sold by it and
its ability to convey title thereto free and clear of liens,
encumbrances or
adverse claims, its due organization (if applicable), its due
authorization,
execution and delivery of definitive purchase agreements (if
applicable),
enforceability of such purchase agreement against it and no
conflict of it with
such purchase agreement, and (ii) the liability of the Tag-Along
Stockholder
with respect to any representation and warranty made in connection
with any
Transfer is the several liability of such Tag-Along Stockholder
(and not joint
with any other person).
(ii) The Tag-Along Stockholders may exercise their rights pursuant
to
clause (i) above by providing written notice (the "Tag-Along
Notice") to the
Company and the Selling Common Stockholder no less than thirty (30)
days after
the expiration of the final option election period in Section 3.1
above. The
Tag-Along Notice shall set forth the number of Shares each of the
Tag-Along
Stockholders has elected to include in the Tag-Along Sale. The
Tag-Along Notice
shall constitute the Tag-Along Stockholders' binding agreement to
sell the
Shares specified in the Tag-Along Notice on the terms and
conditions applicable
to the Tag-Along Sale; provided, however, that in the event there
is any
material change in the terms and conditions of such Tag-Along Sale
after the
Tag-Along Notice is given, then, notwithstanding anything herein to
the
contrary, each Tag-Along Stockholder shall have the right to
withdraw from the
Tag-Along Sale with respect to all Shares affected thereby. If the
Third Party
does not consummate the purchase of all of the Shares requested to
be included
in the Tag-Along Sale on the same terms and conditions applicable
to the Selling
Common Stockholder, the Selling Common Stockholder shall not
consummate the
Transfer of any of its Shares to the Third Party. If no Tag-Along
Notice is
received by the Selling Common Stockholder prior to the end of the
thirty (30)
day period specified above, the Selling Common Stockholder shall
have the right
to consummate the Transfer to the Third Party, together with any
Tag-Along Sale,
without the participation of such Remaining Stockholders on the
terms and
conditions set forth in the Notice of Transfer and only if such
sale is
consummated within the one hundred twenty (120) day period
specified in Section
3.3. If the Tag-Along Sale does not occur within such one hundred
twenty (120)
day period, the Shares that were subject to the Tag-Along Sale
shall continue to
be subject to all of the restrictions contained in this
Agreement.
(iii) On the date of the Tag-Along Sale, each Tag-Along
Stockholder
shall deliver a certificate or certificates for the Shares to be
sold in
connection with the Tag-Along Sale, duly endorsed for transfer, to
the Third
Party in the manner and at the address specified in the Tag-Along
Notice against
delivery of the purchase price therefor, which shall be in
accordance with the
terms of the Notice of Transfer; provided, however, that if the
Third Party
objects to the delivery of Preferred Stock in lieu of Common Stock,
such
Tag-Along Stockholder delivering Preferred Stock shall convert such
Preferred
Stock to Common Stock and deliver Common Stock to the Third Party.
The Company
agrees to make the conversion concurrent with the actual Transfer
of Shares to
the Third Party.
<PAGE>
4.2 Tag-Along Rights on Transfers of Preferred Stock. (i) In the
event
that the Company, the Other Preferred Stockholder and the Common
Stockholders do
not exercise their options to purchase all of the Selling
Preferred
Stockholder's Offered Shares, such Selling Preferred Stockholder
shall offer
each Other Preferred Stockholder (collectively, the "Remaining
Preferred
Stockholders"), the opportunity to require that the Transfer by the
Selling
Preferred Stockholder be conditioned upon the Third Party
purchasing from such
Remaining Preferred Stockholder and from the Selling Preferred
Stockholder a pro
rata portion of each such Stockholder's Shares, based upon the
number of Common
Stock Equivalents owned by the Selling Preferred Stockholder and
all Remaining
Preferred Stockholders exercising rights pursuant to this paragraph
4.2 (a
"Preferred Tag-Along Sale"). The Remaining Preferred Stockholders
may exercise
this right by delivering to the Company and the Selling Preferred
Stockholder a
Preferred Tag-Along Notice in accordance with paragraph 4.2(ii)
below. The
Remaining Preferred Stockholders delivering such a notice are
hereinafter
referred to as the "Tag-Along Preferred Stockholders." In
connection with a
Preferred Tag-Along Sale, (i) the only representations, warranties
and covenants
which any Tag-Along Preferred Stockholder shall be required to make
in
connection with any Transfer are representations and warranties
with respect to
its own ownership of the shares of Preferred Stock to be sold by it
and its
ability to convey title thereto free and clear of liens,
encumbrances or adverse
claims, its due organization (if applicable), its due
authorization, execution
and delivery of definitive purchase agreements (if applicable),
enforceability
of such purchase agreement against it and no conflict of it with
such purchase
agreement, and (ii) the liability of the Tag-Along Preferred
Stockholder with
respect to any representation and warranty made in connection with
any Transfer
is the several liability of such Tag-Along Preferred Stockholder
(and not joint
with any other person).
(ii) The Tag-Along Preferred Stockholders may exercise their
rights
pursuant to clause (i) above by providing written notice (the
"Preferred
Tag-Along Notice") to the Company and the Selling Preferred
Stockholder no less
than thirty (30) days after the expiration of the final option
election period
in Section 3.2 above. The Preferred Tag-Along Notice shall set
forth the number
of shares of Preferred Stock each of the Tag-Along Preferred
Stockholders has
elected to include in the Preferred Tag-Along Sale. The Preferred
Tag-Along
Notice shall constitute the Tag-Along Preferred Stockholders'
binding agreement
to sell the shares of Preferred Stock specified in the Preferred
Tag-Along
Notice on the terms and conditions applicable to the Preferred
Tag-Along Sale;
provided, however, that in the event there is any material change
in the terms
and conditions of such Preferred Tag-Along Sale after the Preferred
Tag-Along
Notice is given, then, notwithstanding anything herein to the
contrary, each
Tag-Along Preferred Stockholder shall have the right to withdraw
from the
Preferred Tag-Along Sale with respect to all shares of Preferred
Stock affected
thereby. If the Third Party does not consummate the purchase of all
of the
shares of Preferred Stock requested to be included in the Preferred
Tag-Along
Sale on the same terms and conditions applicable to the Selling
Preferred
Stockholder, the Selling Preferred Stockholder shall not consummate
the Transfer
of any of its shares of Preferred Stock to the Third Party. If no
Preferred
Tag-Along Notice is received by the Selling Preferred Stockholder
prior to the
end of the thirty (30) day period specified above, the Selling
Preferred
Stockholder shall have the right to consummate the Transfer to the
Third Party,
together with any Preferred Tag-Along Sale, without the
participation of such
Remaining Preferred Stockholders on the terms and conditions set
forth in the
Notice of Transfer and only if such sale is consummated within the
one hundred
twenty (120) day period specified in
<PAGE>
Section 3.3. If the Preferred Tag-Along Sale does not occur within
such one
hundred twenty (120) day period, the shares of Preferred Stock that
were subject
to the Preferred Tag-Along Sale shall continue to be subject to all
of the
restrictions contained in this Agreement.
(iii) On the date of the Preferred Tag-Along Sale, each
Tag-Along
Preferred Stockholder shall deliver a certificate or certificates
for the shares
of Preferred Stock to be sold in connection with the Preferred
Tag-Along Sale,
duly endorsed for transfer, to the Third Party in the manner and at
the address
specified in the Preferred Tag-Along Notice against delivery of the
purchase
price therefor, which shall be in accordance with the terms of the
Notice of
Transfer.
4.3 The exercise or non-exercise of the rights of the
Stockholders
hereunder to participate in one or more Transfers of a the Selling
Stockholder
shall not adversely affect their rights to participate in
subsequent Transfers
of Shares subject to the restrictions set forth in this
Agreement.
5. Exempt Transfers.
5.1 Notwithstanding the foregoing, the restrictions on
transfer,
rights of first refusal and tag-along rights set forth in Sections
2, 3 and 4 of
this Agreement shall not apply to: (i) any transfer by a Preferred
Stockholder,
if an entity, to its members (or members of its members),
shareholders,
partners, or any direct or indirect majority-owned subsidiary, (ii)
any
Stockholder to a Permitted Transferee, or (iii) any distribution or
transfer of
Common Stock by the Trust to the Trust Beneficiaries; provided that
in the event
any such transfer is made to any such Person, Trust Beneficiary, or
a Permitted
Transferee, (A) such Person, Trust Beneficiary, or the Permitted
Transferee
shall inform the Company of such transfer or gift prior to
effecting it and (B)
such Person, Trust Beneficiary, or the Permitted Transferee shall
furnish the
Stockholders and the Company with a written agreement to be bound
by and comply
with all provisions of this Agreement and the Registration Rights
Agreement to
the same extent as the transferor. Any purported transfer in
violation of this
Section 5.1 shall be void ab initio. Upon such exempt transfer, the
Person,
Trust Beneficiary, or Permitted Transferee shall have all of the
rights,
benefits and obligations of a Stockholder under this Agreement and
the
Registration Rights Agreement.
5.2 Notwithstanding anything in this Agreement to the contrary,
the
provisions of Sections 3 and 4 shall not apply to the sale of any
Common Stock
pursuant to a registration statement filed with, and declared
effective by, the
Securities and Exchange Commission under the Securities Act of
1933, as amended
(the "Securities Act").
5.3 This Agreement is subject to and shall in no manner limit
any
right the Company may have to repurchase securities from any
Stockholder
pursuant to a stock restriction agreement or other agreement
between the Company
and such Stockholder in connection with his or her employment with
the Company
or any Affiliate of the Company. In the event of a right of first
refusal held
by the Company on Shares held by any Stockholder, the right of
refusal and
tag-along provisions shall apply upon the expiration of the right
of first
refusal held by the Company.
<PAGE>
6. Drag-Along Rights.
6.1 (i)
Each of the Stockholders agrees to hold all Shares registered
in its name or beneficially owned by it as of the date hereof and
any and all
Shares legally or benefici
