Exhibit 10.12
STOCKHOLDERS’ AGREEMENT
This
Stockholders’ Agreement (this “Agreement”), is
entered into as of November 22, 2005 by and among Accellent
Holding Corp., a Delaware corporation (the “Company”),
Bain Capital Integral Investors, LLC (“Bain”), BCIP
TCV, LLC (“BCIP”) and Accellent Holding LLC, a Delaware
limited liability company (the “KKR
Investor”).
RECITALS
WHEREAS, Accellent
Acquisition Corp., a Delaware corporation (“AAC”), and
Accellent Inc., a Delaware corporation, have entered into that
certain Agreement and Plan of Merger dated as of October 7,
2005 (the “Merger Agreement”), pursuant to which a
wholly owned subsidiary of AAC will merge (the
“Merger”) with and into Accellent Inc. with Accellent
Inc. continuing as the surviving corporation after the
merger;
WHEREAS, pursuant
to the terms of the Merger Agreement, AAC will acquire 100% of the
outstanding shares of common stock, par value $.01 per share, of
Accellent Inc. (the “Common Stock”);
WHEREAS, at the
effective time of the Merger, the Company will own 100% of AAC, AAC
will own 100% of Accellent Inc., and (i) the KKR
Investor and (ii) Bain and BCIP (taken together) will
collectively own 75% and 25%, respectively, of the aggregate
outstanding shares of Common Stock of the Company held by Bain,
BCIP and the KKR Investor; and
WHEREAS, Bain,
BCIP, the KKR Investor and the Company wish to enter into this
Agreement providing for certain rights and obligations of Bain,
BCIP the KKR Investor and the Company.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual covenants herein contained and for
other good and valuable consideration, the parties hereto agree as
follows:
1.
Definitions
As used in this
Agreement, the following capitalized terms shall have the following
meanings:
Affiliate : When used with
respect to a specified Person, another Person that, either directly
or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person
specified.
Bain : Bain Capital Integral
Investors, LLC; provided, that at such time as Bain and its
Affiliates own no shares of Common Stock, for all purposes of this
Agreement other than Section 5(a), “Bain” shall
mean the Bain Holder holding the greatest percentage of Bain
Shares, so long as such Bain Holder holds at least 10% of the
shares of Common Stock held by Bain at the effective time of the
Merger (as appropriately adjusted for stock splits, reverse stock
splits,
recapitalization
and similar transactions). Under no circumstances will any
person other than Bain Capital Integral Investors LLC have any
rights under Section 5(a).
Bain Holder : Bain, BCIP and any
Person to whom Bain or BCIP transfers shares of Common Stock and
any transferee thereof, in either case who is required by this
Agreement to be bound by the provisions of this Agreement.
Bain Shares : As of any date
of determination, the shares of Common Stock then held by the Bain
Holders.
Board : The Board of Directors
of the Company.
Exempt Transaction : Has the
meaning set forth in Section 2(c) hereof.
KKR Affiliate : With respect
to the KKR Investor shall mean a Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is
under common control with the KKR Investor.
KKR Holder : The KKR Investor
and any Person to whom the KKR Investor transfers shares of Common
Stock and any transferee thereof, in either case who is required by
this Agreement to be bound by the provisions of this Agreement.
KKR Shares : As of any date of
determination, the shares of Common Stock then held by the KKR
Holders.
Person : An individual,
partnership, limited liability company, joint venture, corporation,
trust or unincorporated organization, a government or any
department, agency or political subdivision thereof or other
entity.
Private Sale : Any sale of
securities other than a sale made in a public distribution pursuant
to an effective registration statement under the Securities
Act.
Public Offering : Any sale of
the issued and outstanding shares of Common Stock made in a public
distribution pursuant to an effective registration statement under
the Securities Act (other than a registration statement on
Form S-4 or Form S-8 or any similar or successor
forms).
Securities Act : The
Securities Act of 1933, as amended from time to time and the
rules and regulations promulgated thereunder.
2.
(a) ” Tag-Along” Right With Respect to
Private Sales by KKR Holders . (i) Private Sales
of Shares by KKR Holders . Subject to the last sentence
of Section 3(a), with respect to any proposed Private Sale of
any KKR Shares by a KKR Holder or KKR Holders (collectively, for
purposes of this Section 2, the “KKR Holder”)
during the term of this Agreement to a Person (a “Proposed
Purchaser”), other than pursuant to an Exempt Transaction (as
defined in Section 2(c)), Bain and the other Bain Holders
(collectively, for purposes of this Section 2,
“Bain”) shall have the right and option, but not the
obligation, to participate in such
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sale, on the same terms
and subject to the same conditions as the sale by the KKR Holder,
for the number of Bain Shares owned by Bain equaling the number
derived by multiplying the total number of KKR Shares which the KKR
Holder proposes to sell (the “Proposed Number of
Shares”) by a fraction, the numerator of which is the total
number of Bain Shares held by Bain and the denominator of which is
the sum of (A) the total number of Bain Shares, (B) the
total number of KKR Shares, and (C) the total number of shares
of Common Stock (determined on a fully diluted basis) owned by
Persons entitled to the benefits of any other
“tag-along” rights arising as a result of such sale
(“Other Tag Shares”). Any transfer by the
stockholders of a KKR Holder of any interests in such KKR Holder
shall for purposes of this Section 2 be deemed to be a
transfer of a proportionate number of the KKR Shares held by such
KKR Holder.
(ii)
Notices . The KKR Holder shall notify, or cause to be
notified, Bain in writing of each proposed Private Sale subject to
Section 2(a)(i) above. Such notice shall set
forth: (A) the Proposed Number of Shares, (B) the
name and address of the Proposed Purchaser, (C) the proposed
amount of consideration, the material terms and conditions of such
sale (and if the proposed consideration is not cash, the notice
shall describe the terms of the proposed consideration) and the
proposed closing date of such sale, (D) the total number of
KKR Shares and the total number of shares of Common Stock
(determined on a fully diluted basis) owned by Persons entitled to
the benefits of any other “tag-along” rights arising as
a result of such sale and (E) that the Proposed Purchaser has
been informed of the “tag-along” right provided for in
this Section 2(a) and has agreed to purchase Bain Shares
held by Bain in accordance with the terms hereof. The
“tag-along” right may be exercised by Bain by delivery
of a written notice from Bain to the KKR Holder (the
“Tag-Along Notice”) within 15 days following receipt of
the notice specified in the preceding sentence. The Tag-Along
Notice shall state the amount of Bain Shares that Bain proposes to
include in such sale to the Proposed Purchaser. If Bain
delivers a Tag-Along Notice to the KKR Holder, Bain shall
(A) prior to closing of any such sale, execute and deliver (or
cause to be executed and delivered) any purchase agreement or other
documentation required by the Proposed Purchaser to consummate the
sale (including without limitation all legal opinions,
cross-receipts and certificates), which purchase agreement and
other documentation shall be on terms substantially identical to
those executed by the KKR Holder (it being understood that Bain
shall only be required to participate severally on a pro rata basis
(based on the number of shares of Common Stock to be sold) in any
indemnification or other obligations that the KKR Holder agrees to
provide in connection with such sale (other than any such
obligations that relate solely to a particular stockholder, such as
indemnification with respect to representations and warranties
given by a stockholder regarding such stockholder’s title to
and ownership of Common Stock and authority to enter into such
agreement, in which case only such stockholder shall be liable),
and (B) at the closing of any such sale, deliver to the
Proposed Purchaser the certificate or certificates representing the
Bain Shares to be sold pursuant to such sale by Bain, duly endorsed
for transfer with signatures guaranteed, against receipt of the
purchase price thereof.
(iii)
Number of Shares to be Sold . If a Tag-Along Notice is
received pursuant to Section 2(a)(ii), Bain shall be permitted
to sell to the Proposed Purchaser up to the number of Bain Shares
determined as set forth in Section 2(a)(i) above (the
“Proposed Bain Shares”), and the KKR Holder shall be
permitted to sell to the Proposed Purchaser up to a number of
shares of
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Common Stock
(the “Proposed KKR Shares”) equal to the Proposed
Number of Shares multiplied by a fraction, the numerator of which
is the total number of KKR Shares held by the KKR Holder, and the
denominator of which is the sum of the total number of Bain Shares,
KKR Shares, and Other Tag Shares; provided that the KKR
Holder and Bain shall each have the right to sell a number of
additional shares of Common Stock up to the excess of the Proposed
Number of Shares over the sum of the number of Proposed KKR Shares
and Proposed Bain Shares and the number of Other Tag Shares being
sold in such transaction pursuant to other tag-along rights arising
as a result of such sale, if the Proposed Purchaser wants to
purchase such additional shares. If both the KKR Holder and
Bain desire to sell such additional shares to the Proposed
Purchaser, the number of such additional shares of Common Stock to
be sold by each of Bain and the KKR Holder shall be determined on a
pro rata basis based on the total number of shares owned by the KKR
Holder and its Affiliates on the one hand and Bain and its
Affiliates on the other hand. If no Tag-Along Notice is
received by the KKR Holder pursuant to Section 2(a)(ii), the
KKR Holder shall have the right to sell to the Proposed Purchaser
up to the Proposed Number of Shares on terms and conditions no more
favorable in any material respect to the KKR Holder than those
stated in the Tag-Along Notice within 90 days after the expiration
of the notice period. Any securities not transferred during
such 90-day period shall again be subject to the tag-along rights
pursuant to the terms of this paragraph.
(b)
Piggyback Registration Rights With Respect to Public Sales by
KKR Holders . (i) Public Offering of Shares by
KKR Holders . With respect to any proposed Public
Offering of any KKR Shares by a KKR Holder during the term of this
Agreement, Bain shall have the right and option, but not the
obligation (and subject to the cutback provisions in
Section 2(b)(iii) below), to participate in such public
distribution on the same terms and subject to the same conditions
as the sale by the KKR Holder for up to a maximum number of Bain
Shares equal to the product of (x) the total number of Bain Shares
and (y) a fraction, the numerator of which is the number of KKR
Shares requested to be registered in the Public Offering and the
denominator of which is the total number of KKR Shares.
(ii)
Notices . The KKR Holder shall notify, or cause to be
notified, Bain in writing (a “Notice”) of each proposed
Public Offering (a “Proposed Registration”). Such
notice may be given before the filing of such registration
statement and need not specify any price or other terms or
conditions of such sale. If within 10 days of the delivery of
such Notice to Bain, the KKR Holder receives from Bain a written
request (a “Request”) to register shares of Common
Stock held by Bain (which Request will be irrevocable), shares of
Common Stock will be so registered as and to the extent provided in
this Section 2(b) if KKR Shares are so registered.
If Bain delivers a Request to the KKR Holder, Bain will participate
in such public distribution, if any, at the same price and on the
same terms and conditions as the KKR Holder, which price and other
terms and conditions will be determined on behalf of the KKR Holder
and Bain by the KKR Holder in its sole discretion (after reasonable
consultation with Bain if at such time Bain is entitled to
information rights pursuant to either sentence of
Section 5(b)). Nothing in this Agreement shall create
any obligation on the part of the KKR Holder to cause a
registration statement to become effective under the Securities Act
or to sell any shares of Common Stock pursuant to an effective
registration statement under the Securities Act.
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(iii)
Number of Shares to be Sold . If a registration
pursuant to this Section 2(b) involves an underwritten
offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of shares of Common Stock
requested to be included in such registration exceeds the number of
shares of Common Stock which can be sold in such offering, so as to
be likely to have an adverse effect on the price, timing or
distribution of the shares of Common Stock offered in such offering
as contemplated by the Company or that the inclusion of additional
selling stockholders is likely to have such an adverse effect, then
the Company will include in such registration (A) the number
of shares of Common Stock held by Bain equal to the number derived
by multiplying the total number of shares which, in the opinion of
such managing underwriter, can be sold without having the adverse
effect referred to above (the “Piggyback Aggregate
Registration Number”) by a fraction, the numerator of which
is the total number of Bain Shares held by Bain and the denominator
of which is the sum of (i) the total number of Bain Shares,
(ii) the total number of KKR Shares, and (iii) the total
number of shares of Common Stock (determined on a fully diluted
basis) held by Persons entitled to the benefits of any other
piggyback registration rights arising as a result of such
registration (“Other Piggyback Shares”) and
(B) the number of shares of Common Stock held by the KKR
Holder equal to the Piggyback Aggregate Registration Number
multiplied by a fraction, the numerator of which is the total
number of KKR Shares and the denominator of which is the sum of
(i) the total number of Bain Shares, (ii) the total
number of KKR Shares, and (iii) the total number of Other
Piggyback Shares; provided that if the Piggyback Aggregate
Registration Number is in excess of the number of KKR Shares and
Bain Shares determined under clauses (A) and (B) above
together with the number of Other Piggyback Shares to be included
in such registration pursuant to other piggyback registration
rights arising as a result of such registration, then the Company
shall also include in such registration a number of additional KKR
Shares and Bain Shares equal to such excess, which shall be
allocated between Bain and the KKR Holder on a pro rata basis based
on the total number of shares owned by the KKR Holder and its
Affiliates on the one hand and Bain and its Affiliates on the other
hand; and provided further that in the event the aggregate
number of shares of Common Stock to be sold in any such public
distribution is increased or decreased, then the number of Bain
Shares which Bain shall sell in such public distribution shall be
increased or decreased by the product of (i) the number of
shares of Common Stock by which the total number of shares of
Common Stock in such public distribution is increased or decreased
and (ii) a fraction the numerator of which equals the number
of Bain Shares held by Bain originally so registered and the
denominator of which is the total number of shares of Common Stock
originally so registered.
(iv)
Intentionally Omitted .
(v)
Holdback Agreement . (A) In connection with the
initial Public Offering, Bain agrees not to effect any public sale
or distribution, including any sale pursuant to Rule 144 (or
any successor provision) under the Securities Act, of any shares of
Common Stock (other than dispositions made pursuant to the
piggyback registration rights described in this Section 2(b)),
180 days (or such lesser period as the managing underwriters may
permit) after the effective date of such registration, and
(B) in connection with each subsequent Public Offering, Bain
agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144 (or any successor provision) under
the Securities Act, of any shares of Common Stock (other
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than
dispositions made pursuant to the piggyback registration rights
described in this Section 2(b), within 30 days before and a
number of days after to be determined by the managing underwriter
and the KKR Investor; provided however , that
notwithstanding the restrictions set forth in clauses (A) and
(B) above, in no event will Bain be subject to restrictions on
sale in connection with any Public Offering that are more
restrictive than those applicable to the KKR Investor for each such
Public Offering.
(vi)
Additional Agreements . Bain agrees that it will
execute and deliver or cause to be executed and delivered such
other agreements and other documents (such as legal opinions,
cross-receipts and certificates) as the KKR Holder itself is
delivering or as the KKR Holder may otherwise reasonably request to
implement the provisions of this Section 2(b); provided
that such additional agreements will be on terms and conditions
reasonably acceptable to Bain (it being understood that Bain shall
not be required to make any representations or warranties to the
Company or the underwriters or any other Person (other than
representations and warranties regarding Bain and its intended
method of distribution) nor to undertake any indemnification
obligations to the Company or any other Person with respect
thereto, except as described in clause (vii) below).
(vii)
Indemnification .
(A)
With respect to any proposed Public Offering in which a Bain Holder
is participating pursuant to the terms of this Agreement, the
Company will, and it hereby does, indemnify and hold harmless, to
the extent permitted by law, the seller of any Bain Shares covered
by such registration statement, each controlling Affiliate of such
seller and their respective directors and officers, members or
general and limited partners (including any director, officer,
affiliate, employee, agent and controlling Person of any of the
foregoing) (collectively, the “ Indemnified Parties
”), against any and all losses, claims, damages or
liabilities, joint or several, and expenses to which such
Indemnified Party may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof, whether
or not such Indemnified Party is a party thereto) arise out of or
are based upon (a) any untrue statement or alleged untrue
statement of any material fact contained in any registration
statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, or
(b) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus, in light of
the circumstances under which they were made) not misleading, and
the Company will reimburse such Indemnified Party for any legal or
any other expenses reasonably incurred by it in connection with
investigating or defending against any such loss, claim, liability,
action or proceeding; provided that the Company shall not be
liable to any Indemnified Party in any such case to the extent that
any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or amendment or
supplement thereto or in any such preliminary, final or summary
prospectus in reliance upon and
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in
conformity with written information furnished to the Company
through an instrument duly executed by such seller specifically
stating that it is for use in the preparation thereof; and
provided , further , that the Company will not be
liable to any Person who participates as an underwriter in the
offering or sale of Bain Shares or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act,
under the indemnity agreement in this clause (vii) with
respect to any preliminary prospectus or the final prospectus or
the final prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, claim, damage or liability of
such underwriter or controlling Person results from the fact that
such underwriter sold such securities to a person to whom there was
not sent or given, at or prior to the written confirmation of such
sale, a copy of the final prospectus or of the final prospectus as
then amended or supplemented, whichever is most recent, if the
Company has previously furnished copies thereof to such
underwriter. For purposes of the last proviso to the
immediately preceding sentence, the term “prospectus”
shall not be deemed to include the documents, if any, incorporated
therein by reference, and no Person who participates as an
underwriter in the offering or sale of Bain Shares or any other
Person, if any, who controls such underwriter within the meaning of
the Securities Act, shall be obligated to send or give any
supplement or amendment to any document incorporated by reference
in any preliminary prospectus or the final prospectus to any person
other than a person to whom such underwriter had delivered such
incorporated document or documents in response to a written request
therefor. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
seller or any Indemnified Party and shall survive the transfer of
such securities by such seller.
(B)
In connection with any registration statement in which a Bain
Holder or KKR Holder is participating, each such holder shall
furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent
permitted by law. The Company will require, as a condition to
including any Bain Shares or KKR Shares, as applicable, in any
registration statement filed in accordance with this Agreement,
that the Company shall have received an undertaking reasonably
satisfactory to it from the prospective seller of such Bain Shares
or KKR Shares or any underwriter to indemnify and hold harmless (in
the same manner and to the same extent as set forth in
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