Exhibit 10.8
SHAREHOLDERS
AGREEMENT
This SHAREHOLDERS AGREEMENT (this
“ Agreement ”), dated as of June 12, 2006
is made by and among Cellu Parent Corporation, a Delaware
corporation, and each of the Securityholders.
RECITALS
The parties hereto desire to provide
for certain transfer restrictions, call rights, rights of co-sale,
drag-along rights, rights of first offer on sales of certain
securities by the Company, as well as certain other matters, all
according to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties to this
Agreement, intending to be legally bound hereby, agree as
follows:
1.
Certain Definitions
.
As used in this Agreement, the
following terms shall have the following respective
meanings:
(a)
“
Affiliate ” shall mean, with respect to a specified
Person, any other Person, directly or indirectly, controlling,
controlled by or under common control with such specified
Person. For purposes of this definition, the term
“control,” including the terms
“controlling,” “controlled by” and
“under common control,” shall mean the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through
ownership of voting securities, by contract or
otherwise.
(b)
“ Board ” shall
mean the board of directors of the Company.
(c)
“ Cause ” with
respect to any Other Shareholder, shall have the meaning set forth
in the employment agreement then in effect, if any, between such
holder and the Company or its Subsidiaries or if there is no such
meaning in such employment agreement or there is no such employment
agreement then in effect, shall mean, the following events or
conditions: (i) the repeated and willful refusal or
failure (other than during periods of illness, disability or
vacation) to perform the duties of the Other Shareholder set forth
in the Other Shareholder’s respective employment agreement
with the Company or under any lawful directive of the Board
(consistent with the terms of the applicable employment agreement),
(ii) the Other Shareholder’s willful misconduct or gross
neglect in the performance of the duties set forth in the Other
Shareholder’s respective employment agreement which in either
case is materially injurious to the Company, monetarily or
otherwise, (iii) the willful material breach of the employment
agreement, (iv) the commission of fraud, embezzlement, theft
or other dishonesty by the Other Shareholder, (v) the
conviction of the Other Shareholder of, or plea by such of nolo
contendere to, any felony or any other crime involving dishonesty
or moral turpitude, and (vi) any other conduct that involves a
breach of fiduciary obligation on the part of the Other Shareholder
or otherwise could reasonably be expected to have a material
adverse effect upon the business, interests or reputation of the
Company or any of its Affiliates.
(d)
“ Cellu Paper ”
shall mean Cellu Paper Holdings, Inc., a Delaware corporation
and a direct, wholly-owned Subsidiary of the Company.
(e)
“ Cellu Tissue ”
shall mean Cellu Tissue Holdings, Inc., a Delaware corporation
and an indirect, wholly-owned Subsidiary of the Company.
(f)
“ Change of Control
” shall mean (i) a sale of all or substantially all of
the assets of the Company, Cellu Paper or Cellu Tissue to a Person
in which the Shareholders of the Company immediately prior to such
transaction do not, directly or indirectly, own securities
representing more than 50% of the voting power of the Person
acquiring such assets immediately following the transaction,
(ii) a sale of Shares by the Company or the Shareholders
resulting in more than 50% of the voting power of the Company being
held, directly or indirectly, by a Person other than the
Shareholders immediately prior to such sale, (iii) a sale by
the Company of the equity securities of Cellu Paper or Cellu Tissue
resulting in more than 50% of the voting power of Cellu Paper or
Cellu Tissue (as the case may be) being held directly or indirectly
by a Person other than the Company or the Shareholders immediately
prior to such sale, or (iv) a merger or consolidation of the
Company, Cellu Paper or Cellu Tissue with or into another Person,
if and only if, after such merger or consolidation, more than 50%
of the voting power of the Company, Cellu Paper or Cellu Tissue (as
the case may be) is directly or indirectly owned by a Person other
than the Company or the Shareholders immediately prior to such
merger or consolidation.
(g)
“ Common Stock ”
shall mean the Common Stock, par value $0.001, of the
Company.
(h)
“ Company ” shall
mean Cellu Parent Corporation, a Delaware corporation, and its
successors and permitted assigns.
(i)
“ Convertible
Securities ” shall mean (i) any debt or equity
securities of the Company (including but not limited to Preferred
Stock) that are convertible into or exchangeable, directly or
indirectly, for Common Stock and (ii) any rights, warrants or
options to subscribe for or purchase, directly or indirectly,
Common Stock or any securities described in clause (i).
(j)
“ Cost ” shall
mean, for any security, the original price paid to the issuer for
such security, as appropriately adjusted for any events referenced
in Section 16 after that date of such issuance (it being
acknowledged and agreed that the Cost of any Shares issued pursuant
to any Rollover Agreement shall be the value of such Shares under
such Rollover Agreement as of the date of issuance
thereof).
(k)
“ Drag-Along Percentage
” shall mean a fraction, the numerator of which is the
aggregate number of Equivalent Shares that are to be Transferred by
the WP Parties in a Drag-Along Sale, and the denominator of which
is the aggregate number of Equivalent Shares owned at such time by
the WP Parties.
(l)
“ Earn-Out Warrant
” shall mean the Series A Convertible Preferred Stock
Purchase Warrant issued by the Company to the WP Party on or about
the date of this Agreement.
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(m)
“ Equivalent Shares
” shall mean, at any date of determination, (a) as to
any outstanding shares of Common Stock, such number of shares of
Common Stock, but excluding any Shares of Restricted Stock that are
not then vested or will not become vested on or prior to, or by
reason of, the transaction or circumstance in connection with which
the number of Equivalent Shares is to be determined, plus
(b) as to any outstanding Convertible Securities, the maximum
number of shares of Common Stock issuable upon exercise, conversion
or exchange of the vested portion of such Convertible Securities
(including for purposes of determining the vested portion of such
Convertible Securities any amounts that will become vested on or
prior to, or by reason of, the transaction or circumstance in
connection with which the number of Equivalent Shares is to be
determined),.
(n)
“ Fair Market Value
” shall mean, as of any date, as to any Share, the
Board’s good faith determination of the fair value of such
Share as of the applicable reference date.
(o)
“ Good Reason ”
with respect to any Other Shareholder, shall have the meaning, if
any, set forth in the employment agreement then in effect, if any,
between such holder and the Company or its subsidiaries.
(p)
“ HSR Act ” shall
mean the Hart-Scott-Rodino Antitrust Improvements Act of 1986, as
amended.
(q)
“ New Securities
” shall mean any Common Stock or Convertible Securities,
whether now authorized or not; provided , however ,
that “ New Securities ” shall not include:
(i) securities issued as consideration for the acquisition of
any assets, securities or business entity by the Company, whether
by merger, purchase of assets or capital stock of such entity,
reorganization or otherwise, provided such acquisition is
approved by the Board, (ii) securities issued to employees,
officers and directors of, and consultants and advisors to, the
Company, pursuant to any arrangement approved by the Board
(including but not limited to Common Stock issued to any Other
Shareholder pursuant to a Stock Option Agreement and Restricted
Stock issued pursuant to any Restricted Stock Agreement),
(iii) securities issued to any bank, subordinated debt lender,
equipment lessor, landlord or other similar financial institution
or creditor if and to the extent that the transaction in which such
issuance is to be made is approved by the Board,
(iv) securities issued pursuant to any rights or agreements,
including, without limitation, securities issued upon exercise,
conversion or exchange of any Convertible Securities,
provided that the Company shall have complied, to the extent
required, with the rights established by Section 7 with
respect to the initial sale or grant by the Company of such rights
or agreements, including, without limitation, Convertible
Securities, (v) securities issued upon the exercise,
conversion or exchange of any Convertible Securities outstanding on
the date hereof (including but not limited to the Earn-Out
Warrant), (vi) securities issued in connection with any stock
split, stock combination, stock dividend, distribution or
recapitalization by the Company, (vii) Common Stock issued in
a Qualified IPO, or (viii) securities issued to any strategic
vendor or partner in a transaction approved by the Board in which
there is a substantial commercial aspect to the
transaction.
(r)
“ Other Stock ”
shall mean, with respect to an Other Shareholder, all Shares held
beneficially or of record, directly or indirectly, by such Other
Shareholder.
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(s)
“ Other Shareholders
” shall mean the Securityholders set forth on
Exhibit A to this Agreement, other than the WP Parties,
and any Person (other than the Company or the WP Parties) to whom
any such Securityholder Transfers Shares in accordance with this
Agreement and, as a result, such Person is required by this
Agreement to become a party hereto.
(t)
“ Permitted Transfer
” shall mean a Transfer by an Other Shareholder of shares of
Other Stock made (i) to the Company or the WP Parties, or
(ii) if such Other Shareholder is an individual, (A) by
way of gratuitous donation to any trust exclusively for the benefit
of such Other Shareholder or such Other Shareholder’s spouse,
direct descendants (including legally adopted children) or direct
ascendants or (B) by way of bequest or inheritance upon the
death of such Other Shareholder to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries;
provided , however , that, in the event of any
Transfer made pursuant to one of the exemptions provided by clause
(ii) above, (1) the Other Shareholder making such
Transfer pursuant to clause (ii)(A) above shall notify the
Company and the WP Parties of such Transfer at least 15 days prior
to making the Transfer (such notice to contain a representation by
the Other Shareholder to the Company and the WP Parties identifying
all of the beneficiaries of such trust), (2) the Other
Shareholder making such Transfer pursuant to clause
(ii)(A) above shall retain all rights to vote such Transferred
shares of Other Stock, grant or withhold consents or approvals with
respect to such Transferred shares of Other Stock, and to make any
and all other determinations with respect such Transferred shares
of Other Stock, and (3) the transferee, assignee or donee
shall have become a party to this Agreement in the capacity of an
Other Shareholder and Securityholder and shall have furnished the
Company and the WP Parties with an executed copy of the joinder to
this Agreement in the form attached hereto as Exhibit B
, completed as specified by the Company.
(u)
“ Permitted Transferee
” shall mean a Person to whom Shares are Transferred in a
Permitted Transfer.
(v)
“ Person ” shall
mean any individual, partnership, limited liability company,
corporation, trust, joint venture, unincorporated organization,
other legal entity, government or agency or political subdivision
thereof.
(w)
“ Preferred Stock
” shall mean the Preferred Stock, par value $0.001, of the
Company, including the Series A Convertible Preferred
Stock.
(x)
“ Qualified IPO ”
means a firm commitment underwritten public offering by the Company
of shares of its Common Stock pursuant to an effective registration
statement on Form S-1, or any successor form, filed under the
Securities Act, with aggregate gross proceeds to the Company of at
least $20,000,000.
(y)
“ Registration Rights
Agreement ” means that certain Registration Rights
Agreement among the WP Parties, the Company and certain of the
Other Shareholders, dated as of the date hereof, as from time to
time in effect.
(z)
“ Restricted Stock
” shall mean shares of capital stock of the Company which are
initially issued pursuant or subject to a Restricted Stock
Agreement and which remain at the relevant time of determination
subject to the restrictions therein set forth.
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(aa)
“ Restricted Stock
Agreement ” shall mean a Restricted Stock Agreement
entered into between the Company and an employee or consultant of
the Company pursuant to a plan or arrangement approved by the
Board.
(bb)
“ Rollover Agreement
” shall mean any one of the Rollover Agreements by and
between the Company and each of Mr. Russell Taylor,
Ms. Dianne Scheu or Mr. Steven Ziessler, each dated on or
about the date hereof.
(cc)
“ Rule 144 ”
shall mean Rule 144 under the Securities Act (or any successor
Rule).
(dd)
“ Securities Act
” shall mean the Securities Act of 1933, as
amended.
(ee)
“ Securityholders
” shall mean the parties listed on Exhibit A to
this Agreement, as amended from time to time in accordance with the
terms hereof, and any of such parties’ permitted
assigns.
(ff)
“ Series A Convertible
Preferred Stock ” shall mean the Series A
Convertible Preferred Stock, par value $0.001, of the
Company.
(gg)
“ Series A
Directors ” shall mean the WP Designees.
(hh)
“ Series A
Shareholder ” shall mean the WP Parties.
(ii)
“ Shares ” shall
mean, as of the time of determination, all outstanding shares of
Common Stock and Convertible Securities of the Company at such
time.
(jj)
“ Shareholders ”
shall mean the parties listed on Exhibit A to this
Agreement who are holders of shares of capital stock of the
Company, as amended from time to time in accordance with the terms
hereof, and any of such parties’ permitted
assigns.
(kk)
“ Stock Option
Agreement ” shall mean a Stock Option Agreement entered
into between the Company and an employee or consultant of the
Company pursuant to a plan or arrangement approved by the
Board.
(ll)
“ Subsidiary ”
shall mean any and all corporations, partnerships, limited
liability companies and other entities with respect to which
another specified corporation or other entity directly or
indirectly owns more than 50% of (i) the securities having the
power to elect members of the board of directors or similar body
governing the affairs of such entity or (ii) the equity
interests of such entity.
(mm)
“ Transfer ”
means, with respect to any Shares, any direct or indirect,
voluntary or involuntary, offer to sell, transfer, sale,
assignment, pledge, hypothecation, short sales, loan, grant of an
option to purchase or other disposition of any of the Shares (in
each case, whether by merger, consolidation or otherwise), or the
entering of any contract or agreement to do any of the
foregoing.
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(nn)
“ Voting Stock ”
shall mean shares of outstanding capital stock of the Company that
are entitled to vote for the election of directors of the
Company.
(oo)
“ WP Parties ”
shall mean Weston Presidio V, L.P., a Delaware limited partnership,
and any Person to whom a WP Party Transfers Shares; provided
such Person becomes a party to this Agreement in the capacity of a
WP Party.
2.
Transfer Restrictions
.
(a) Transfer
Restrictions on Other Stock . In addition to the other
restrictions contained herein, without the written consent of the
Company and the WP Parties, which they may withhold in their sole
discretion, each Other Shareholder agrees not to Transfer any
shares of its Other Stock. Notwithstanding the foregoing,
each Other Shareholder may Transfer any shares of its Other Stock
pursuant to (i) Permitted Transfers made in compliance with
this Agreement and (ii) Transfers permitted or required
pursuant to Sections 4 or 5 of this Agreement. In addition,
without the consent of the Company and the WP Parties, which they
may withhold in their sole discretion, each Other Shareholder
agrees not to Transfer any shares of its Other Stock to a
competitor, supplier or customer of the Company or any of its
Subsidiaries. Any attempt to Transfer any shares of Other
Stock not in compliance with this Agreement shall be null and void,
and neither the Company nor any transfer agent shall give any
effect in the Company’s stock records to such attempted
Transfer.
(b) Market
Stand-off . The Securityholders hereby agree that, if so
requested by the Company or any managing underwriter in respect of
an underwritten public offering of the Company’s securities,
the Securityholders shall not sell, make any short sale of, loan,
grant any option for the purchase of, hypothecate, hedge or
otherwise dispose of any securities of the Company (other than
those included in the registration statement with respect to such
offering) during the up to 180-day period specified by the Company
or the managing underwriter(s) following the commencement of
the Company’s Qualified IPO, and during the up to 90-day
period specified by the Company or the managing
underwriter(s) following the commencement of any subsequent
underwritten public offering of equity securities of the
Company. In order to enforce the foregoing covenants, the
Company may impose stop-transfer instructions with respect to the
securities of each Securityholder. The Securityholders agree
to enter into a separate agreement providing for the foregoing, as
may be requested by the managing underwriter(s) of any such
public offering. The foregoing provisions of this
Section 2(b) are subject in their entirety to the
requests and requirements of the managing underwriters of any
underwritten public offering; provided that such requests
and requirements are applied uniformly; provided ,
further , that the underwriters may have requests and
requirements applicable to executive officers, directors and senior
management which are different from their requests and requirements
applicable to others.
(c) Securities Laws
Compliance . Each of the Other Shareholders agrees and
acknowledges that to the extent such Other Shareholder is permitted
pursuant to this Agreement to Transfer Other Stock, such Other
Shareholder will not Transfer any shares of Other Stock unless
(i) the Transfer is pursuant to an effective registration
statement under the Securities Act, or the rules and
regulations in effect thereunder or (ii) counsel for the Other
Shareholder (which counsel shall be reasonably acceptable to the
Company) shall have furnished the Company with
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an opinion, 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
Securities Act and any state securities or blue sky laws applicable
to the Company or the Shares proposed to be Transferred.
Notwithstanding the foregoing, the Company acknowledges and agrees
that a Permitted Transfer shall be deemed to be in compliance with
this Section 2(c) and that no opinion of counsel is
required in connection therewith.
(d) Legend
. Any certificate representing outstanding Shares that are
held by a party to this Agreement or otherwise subject to the terms
hereof shall bear the following legend, in addition to any other
legend required by law or otherwise:
“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF THAT CERTAIN
SHAREHOLDERS AGREEMENT, DATED AS OF JUNE 12, 2006 (AS IN EFFECT
FROM TIME TO TIME, THE “ SHAREHOLDERS AGREEMENT
”), A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
COMPANY. ANY ATTEMPT TO TRANSFER OR ENCUMBER ANY INTEREST IN
THE SHARES REPRESENTED BY THIS CERTIFICATE NOT IN ACCORDANCE WITH
SUCH SHAREHOLDERS AGREEMENT SHALL BE NULL AND VOID, AND NEITHER THE
COMPANY NOR ANY TRANSFER AGENT OF SUCH SECURITIES SHALL GIVE ANY
EFFECT TO SUCH ATTEMPTED TRANSFER OR ENCUMBRANCE IN ITS SHARE
RECORDS. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF IT,
AGREES TO BE BOUND BY THE TERMS OF THE SHAREHOLDERS
AGREEMENT.”
“THE SECURITIES EVIDENCED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ ACT ”). EXCEPT
AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION, OPTION, LOAN OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR (B) IF THE COMPANY HAS
BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE
HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS IN EFFECT
THEREUNDER, AND IN COMPLIANCE WITH PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS.”
(e) Termination of
1933 Act Legend . The requirement imposed by clause
(d) hereof as to the Securities Act shall cease and terminate
as to any particular Shares (a) when, in the opinion of
Ropes & Gray LLP, or other counsel reasonably acceptable
to the Company, such legend is no longer required in order to
assure compliance by the Company with the Securities Act or
(b) when such Shares have been effectively registered under
the Securities Act or transferred pursuant to Rule 144.
Wherever (x) such requirement shall cease and terminate as to
any Shares or (y) such Shares shall be transferable under
paragraph (k) of Rule 144, the holder
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thereof shall be entitled to receive from the
Company, without expense, new certificates not bearing the legend
set forth in clause (d) hereof as to the Securities
Act.
3.
Call Rights
.
(a) Call Option
. Except as the Company may otherwise agree with any Other
Shareholder with respect to such Other Shareholder’s Shares,
upon and following any termination of the employment by the Company
and its Subsidiaries of any Other Shareholder for any reason, the
Company shall have the right (the “ Call Option
”) to purchase for cash all or any portion of the Shares held
by such Other Shareholder or any of its Affiliates or originally
issued to such Other Shareholder or any of its Affiliates but held
by one or more their respective Permitted Transferees
(collectively, the “ Stockholder Call Group ”)
at a per Share price equal to the Fair Market Value of such Shares
(the “ Call Price ”); provided ,
however , that if such termination is (i) by the
Company for Cause or (ii) by an Other Shareholder who has a
then effective employment agreement with the Company or any of its
Subsidiaries and who voluntarily terminates his or her employment
without Good Reason, then in each case the Call Price shall instead
be a per Share price equal to the lesser of the Cost or the Fair
Market Value of such Shares; provided , further ,
that, in the event that an Other Shareholder breaches any covenant
or agreement with the Company regarding non-solicitation or
non-competition, whether in an employment agreement or otherwise
(each, a “ Restrictive Covenant ”), the Company
shall have a Call Option to purchase for cash all or any portion of
the Shares held by such Other Shareholder’s Stockholder Call
Group for a Call Price equal to the lesser of the Cost or the Fair
Market Value of such Shares.
(b) Notices
. Any Call Option may be exercised by delivery of written
notice thereof (the “ Call Notice ”) to all
members of the applicable Stockholder Call Group not later than the
90th day after the effectiveness of the applicable termination
of employment, provided that in the case of an exercise of a Call
Option following breach of a Restrictive Covenant, such 90 day
limitation shall not apply (the “ Call Option Exercise
Period ”). The Call Notice shall state that the
Company has elected to exercise the Call Option, and the number and
price of the Shares with respect to which the Call Option is being
exercised.
(c) Closing
. The closing of any purchase and sale of Shares pursuant to
this Section 3 shall take place as soon as reasonably
practicable and in no event later than 30 days after termination of
the applicable Call Option Exercise Period at the principal office
of the Company, or at such other time and location as the parties
to such purchase may mutually determine. At such closing, the
holders of Shares to be sold shall deliver to the Company a
certificate or certificates representing the Shares to be purchased
by the Company duly endorsed, or with stock (or equivalent) powers
duly endorsed, for transfer with signature guaranteed, free and
clear of any lien or encumbrance, with any necessary stock (or
equivalent) transfer tax stamps affixed, and the Company shall pay
to such holder, by certified or bank check or wire transfer of
immediately available federal funds, the purchase price of the
Shares being purchased by the Company. The delivery of a
certificate or certificates for Shares by any Person selling Shares
pursuant to any Call Option shall be deemed a representation and
warranty by such Person that: (i) such Person has full
right, title and interest in and to such Shares; (ii) such
Person has all necessary power and authority and has taken all
necessary action to sell such Shares as contemplated;
(iii) such Shares are free and clear of any and all liens or
encumbrances;
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and (iv) there is no adverse claim with
respect to such Shares. Each Other Shareholder acknowledges
and agrees that neither the Company nor any Person directly or
indirectly affiliated with the Company (in each case whether as a
director, officer, manager, employee, shareholder, agent or
otherwise) shall have any duty or obligation to affirmatively
disclose to such holder, and such holder shall not have any right
to be advised of, any material information regarding the Company or
otherwise at any time prior to, upon, or in connection with any
termination of his employment by the Company and its subsidiaries
upon the exercise of any Call Option or any purchase of the Shares
in accordance with the terms hereof.
4.
Other Shareholders’ Right
of Co-Sale .
(a) Definition
. For as long as the WP Parties own collectively at least a
majority of the voting power of the Voting Stock, if the WP Parties
propose to, directly or indirectly, Transfer for value an interest
in any Shares owned by the WP Parties to any Person (the “
Transferee ”), except as set forth in
Section 4(d) or for Transfers pursuant to Section 5,
each Other Shareholder shall have a right of co-sale (the “
Right of Co-Sale ”) to sell a number of shares of
Other Stock (if any) held by such Other Shareholder equal to his or
her Right of Co-Sale Pro Rata Share (as defined below) multiplied
by the number of Shares (treating any Convertible Securities as a
number of Shares equal to the number of Equivalent Shares
represented by such Convertible Securities) proposed to be
transferred by the WP Parties to the Transferee (the “
Transferor Securities ”), on the terms and subject to
the conditions set forth in this Section 4 and Section 6;
provided , however , that an Other Shareholder may
exercise its Right of Co-Sale only with respect to the type or
types of Shares that the WP Parties propose to sell.
(b) Right of Co-Sale
Pro Rata Share . The “ Right of Co-Sale Pro Rata
Share ” for each Other Shareholder shall be that
percentage equal to the number of Equivalent Shares at the time
outstanding and owned by such Other Shareholder divided by
(A) the number of Equivalent Shares at the time outstanding
and owned by such Other Shareholder plus (B) the number of
Equivalent Shares at the time outstanding and owned by the WP
Parties and by all other holders of Shares entitled to the benefits
of any other “tag-along” rights in connection with such
sale. Each Other Shareholder shall have the right to sell
that number of Equivalent Shares of Transferor Securities (if any)
held by such Other Shareholder to the Transferee (or, upon the
unwillingness of any Transferee to purchase directly from such
Other Shareholder, to the WP Parties simultaneously with the
closing of the sale by the Transferor to the Transferee) up to its
respective Right of Co-Sale Pro Rata Share of the Transferor
Securities determined as of the date the Transfer Notice (as
defined below) is delivered to the Company, upon the terms and
subject to the conditions pursuant to which the WP Parties sell its
Transferor Securities to the Transferee.
(c) Mechanics of
Sale .
(i)
Exercise by the Other
Shareholders . If
the WP Parties propose to Transfer any Transferor Securities in a
transaction subject to this Section 4, then it shall notify,
or cause to be notified, the Other Shareholders and the Company, in
writing, of each such proposed Transfer (the “ Transfer
Notice ”). Such Transfer Notice shall set forth
(i) the name of the Transferee and the number and type of
Shares proposed
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to be Transferred and (ii) the proposed
amount and form of consideration and (to the extent then known by
the WP Parties) material terms and conditions of the
Transfer. An Other Shareholder shall be entitled to exercise
its Right of Co-Sale by delivering a written notice to the WP
Parties (the “ Co-Sale Notice ”) within 15 days
following receipt of the Transfer Notice. The Co-Sale Notice
shall state the number of shares of Other Stock that such Other
Shareholder offers to include in such Transfer to the Transferee,
which number may not exceed its Right of Co-Sale Pro Rata Share of
the Transferor Securities; provided , however ,
that an Other Shareholder may not exercise its Right of Co-Sale
with respect to any shares of Other Stock that then constitute
Restricted Stock and will constitute Restricted Stock upon the
consummation of the Transfer by the WP Parties. Upon the
giving of a Co-Sale Notice by an Other Shareholder, the offer of
such Other Shareholder contained in its Co-Sale Notice shall be
irrevocable and such Other Shareholder shall be obligated to sell
the number and type of Shares set forth in its Co-Sale Notice to
the Transferee on the terms and conditions set forth in the
Transfer Notice. Each Other Shareholder who does not deliver
a Co-Sale Notice within the 15-day period described above shall be
deemed to have waived all of its rights with respect to the
proposed Transfer by the WP Parties.
(ii)
Assignment of Interest
. If an Other Shareholder
exercises its respective Right of Co-Sale, then the WP Parties
shall assign to such Other Shareholder as much of its interest in
the agreement of sale with the Transferee as such Other Shareholder
shall be entitled to and shall accept, and such Other Shareholder
shall be obligated to provide the same representations, warranties,
indemnification and covenants to the Transferee as the WP Parties
under such agreement of sale. To the extent that any
Transferee prohibits such assignment or otherwise refuses to
purchase shares of Other Stock, as the case may be, from an Other
Shareholder exercising its Right of Co-Sale hereunder, then the WP
Parties shall not sell to such Transferee any Transferor Securities
unless and until, simultaneously with such sale, the WP Parties
shall purchase such shares of Other Stock from such Other
Shareholder for the same consideration per share and on the same
terms and subject to th