STOCKHOLDERS AGREEMENT by and among

Exhibit 4.1

 

STOCKHOLDERS AGREEMENT

by and among

STREAM GLOBAL SERVICES, INC.,

ARES CORPORATE OPPORTUNITIES FUND II, L.P.,

EGS DUTCHCO, B.V.,

NEWBRIDGE INTERNATIONAL INVESTMENT LTD.,

MR. R. SCOTT MURRAY

and

TRILLIUM CAPITAL LLC

Dated as of August 14, 2009

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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STOCKHOLDERS AGREEMENT

This Stockholders Agreement (the “ Agreement ”) is made as of August 14, 2009 and is by and among

(i) Stream Global Services, Inc., a Delaware corporation (the “ Company ”);

(ii) Ares Corporate Opportunities Fund II, L.P., a Delaware limited partnership (“ Ares ”; together with its Permitted Transferees, if any, that become parties to this Agreement as “ Investors ” in accordance with Section 3.2, the “ Ares Investors ”);

(iii) EGS Dutchco B.V., a Netherlands corporation (“ PEP ”; together with its Permitted Transferees, if any, that become parties to this Agreement as “ Investors ” in accordance with Section 3.2, the “ PEP Investors ”);

(iv) NewBridge International Investment Ltd., a British Virgin Islands company (“ Ayala ”; together with its Permitted Transferees, if any, that become parties to this Agreement as “ Investors ” in accordance with Section 3.2, the “ Ayala Investors ”);

(v) Mr. R. Scott Murray, a resident of Wellesley Massachusetts (“ Mr. Murray ”; together with his Permitted Transferees, if any, that become parties to this Agreement as “ Investors ” in accordance with Section 3.2, the “ Murray Investors ”); and

(vi) Trillium Capital LLC, a Delaware limited liability company (“ Trillium ”; together with its Permitted Transferees, if any, that become parties to this Agreement as “ Investors ” in accordance with Section 3.2, the “ Trillium Investors ”).

RECITALS

1. The Company is party to the Share Exchange Agreement, dated as of the date hereof (the “ Exchange Agreement ”), by and among the Company, EGS Corp., Ayala and PEP, pursuant to which the Company has agreed to acquire (the “ Transaction ”) all of the issued and outstanding shares of EGS Corp. (the “ EGS Corp. Shares ”).

2. In connection with the closing of the Transaction (the “ Closing ”), (a) the Company will issue shares of Common Stock and/or Non-Voting Common Stock to Ayala and PEP in exchange for all of the EGS Corp. Shares and (b) the Company will issue shares of Common Stock to Ares upon conversion of all of the issued and outstanding shares of preferred stock of the Company and in exchange for warrants to purchase 7,500,000 shares of Common Stock held by Ares.

3. The parties believe that it is in the best interests of the Company and the Investors to set forth in this Agreement their agreements on certain matters.

AGREEMENT

Therefore, the parties hereto hereby agree as follows:

1. EFFECTIVENESS; DEFINITIONS.

1.1 Effectiveness . This Agreement is being entered into before, but will not become effective until, the consummation of the Transaction. If the Exchange Agreement is terminated prior to the consummation of the Transaction, then this Agreement will automatically terminate. Upon the effectiveness of this Agreement, the Stockholder’s Agreement dated as of August 7, 2008 by and between the Company and Ares shall terminate and be of no further force or effect.

1.2 Definitions . Certain terms are used in this Agreement as specified in Section 11.2. For purposes of this Agreement, each share of Non-Voting Common Stock shall be deemed to be the share of Common Stock issuable upon conversion of such share of Non-Voting Common Stock, whether or not then convertible.

2. VOTING AGREEMENT AMONG VOTING INVESTORS.

2.1 Board of Directors .

2.1.1 Board Size . Each Voting Investor hereby agrees to take all necessary actions to cause the size of the board of directors of the Company (the “ Board ”) to be fixed at the number of directors elected in accordance with Section 2.1.2, which number shall initially be ten (10).

2.1.2 Designation of Directors . Each Voting Investor hereby agrees to cast all votes to which such Voting Investor is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, so as to elect as the members of the Board:

(a) (i) a total of three (3) directors designated by the Ares Significant Investor for so long as such Ares Significant Investor, together with its Affiliates, continues to own Shares representing (A) at least two-thirds of the total number of Shares owned by Ares and its Affiliates upon the Closing and (B) at least fifteen percent (15%) of the then outstanding shares of Common Stock; or (ii) a total of two (2) directors designated by the Ares Significant Investor for so long as such Ares Significant Investor, together with its Affiliates, continues to own Shares representing (A) at least fifty percent (50%) of the total number of Shares owned by Ares and its Affiliates upon the Closing and (B) at least seven and one-half percent (7.5%) of the then outstanding shares of Common Stock; or (iii) one (1) director designated by the Ares Significant Investor for so long as the Ares Significant Investor, together with its Affiliates, continues to own Shares representing at least twenty-five percent (25%) of the total number of Shares owned by Ares and its Affiliates upon the Closing;

(b) (i) a total of three (3) directors designated by the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) for so long as such Ayala Significant Investor and such PEP Significant

 

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Investor, together with their respective Affiliates, collectively continue to own Shares representing (A) at least two-thirds of the total number of Shares owned by Ayala, PEP and their respective Affiliates upon the Closing and (B) at least fifteen percent (15%) of the then outstanding shares of Common Stock; or (ii) a total of two (2) directors designated by the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) for so long as such Ayala Significant Investor and such PEP Significant Investor, together with their respective Affiliates, collectively continue to own Shares representing (A) at least fifty percent (50%) of the total number of Shares owned by Ayala, PEP and their respective Affiliates upon the Closing and (B) at least seven and one-half percent (7.5%) of the then outstanding shares of Common Stock; or (iii) one (1) director designated by the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) for so long as such Ayala Significant Investor and such PEP Significant Investor, together with their respective Affiliates, collectively continue to own Shares representing at least twenty-five percent (25%) of the total number of Shares owned by Ayala, PEP and their respective Affiliates upon the Closing;

(c) one Independent Director designated by the Board with Requisite Board Approval; provided , that such Independent Director shall be Mr. Paul Joubert until Mr. Joubert’s successor is duly elected and qualified, or until Mr. Joubert’s death, or until Mr. Joubert’s earlier disqualification, resignation, retirement or removal;

(d) one Independent Director designated (i) by the Ares Significant Investor for so long as the Ares Significant Investor, together with its Affiliates, continues to own Shares representing (A) at least one-third of the total number of Shares owned by Ares and its Affiliates upon the Closing or (B) at least fifteen percent (15%) of the then outstanding shares of Common Stock and (ii) thereafter, by the Board with Requisite Board Approval;

(e) one Independent Director designated (i) by the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) for so long as the Ayala Significant Investor and the PEP Significant Investor, together with their respective Affiliates, collectively continue to own Shares representing (A) at least one-third of the total number of Shares owned by Ayala, PEP and their respective Affiliates upon the Closing or (B) at least fifteen percent (15%) of the then outstanding shares of Common Stock and (ii) thereafter, by the Board with Requisite Board Approval; and

(f) the individual who holds the position of Chief Executive Officer of the Company from time to time.

Each of the members of the Board elected pursuant to this Section 2.1.2 (other than the members of the Board elected pursuant to clauses (c) or (f) hereof) is referred to herein as a “ Significant Investor Director. ” The PEP Significant Investor and the Ayala Significant

 

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Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) shall inform the Company with respect to directors that from time to time are designated pursuant to clauses (b) or (e) hereof whether such director shall be referred to herein as a “ PEP Director ” or an “ Ayala Director. ” Any director designated by the Ares Significant Investor pursuant to clauses (a) or (d) hereof shall be referred to herein as an “ Ares Director. ”

2.1.3 Removal; Replacement; Vacancies . No Voting Investor shall cast any vote to which such Voting Investor is entitled in respect of the Shares, whether at any annual meeting or special meeting, by written consent or otherwise, to remove any member of the Board elected pursuant to Section 2.1.2 (other than clause (f) thereof) except for cause or with respect to (i) any Significant Investor Director, upon the express written instructions of the Significant Investor(s) that designated such director in accordance with Section 2.1.2 and (ii) (A) any director elected pursuant to Section 2.1.2(c) and (B) any Significant Investor Director elected by the Board with Requisite Board Approval pursuant to Section 2.1.2(d) or (e), upon the express written instructions of the Board with Requisite Board Approval (each of the Significant Investor(s) designating a director pursuant to Section 2.1.2 and the Board with Requisite Board Approval designating the director elected pursuant to Section 2.1.2(c) shall be referred to herein as a “ Designating Party ”). If, following election to the Board, any member of the Board elected pursuant to Section 2.1.2 (other than clause (f) thereof) resigns, is removed in accordance with this Section 2.1.3, or is unable to serve for any reason prior to the expiration of his or her term as a director, then the applicable Designating Party may designate a replacement. If the applicable Designating Party does not designate a replacement, then the Voting Investors shall cause the relevant directorship to be vacant. The Company shall take all actions as and when reasonably requested by a Designating Party, and each Voting Investor hereby agrees to cast all votes to which such Voting Investor is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in each case so as to (i) cause the election to the Board of any person designated as a replacement Significant Investor Director or as a replacement to the director elected pursuant to Section 2.1.2(c) in accordance with this Section 2.1.3 and (ii) cause the removal of a Significant Investor Director or the removal of the director elected pursuant to Section 2.1.2(c) upon the express written instructions of the applicable Designating Party to remove such Significant Investor Director or director elected pursuant to Section 2.1.2(c). No Voting Investor shall cast any vote to which such Voting Investor is entitled in respect of the Shares, whether at any annual meeting or special meeting, by written consent or otherwise to remove the director elected pursuant to Section 2.1.2(f), except for cause, if such director continues to serve as the Chief Executive Officer of the Company. In the event that the director elected pursuant to Section 2.1.2(f) no longer serves as the Chief Executive Officer of the Company, each Voting Investor hereby agrees to cast all votes to which such Voting Investor is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in each case so as to remove such person from the Board without cause and to appoint the Chief Executive Officer of the Company as such director’s replacement.

 

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2.1.4 Committees . The Company shall, and each Voting Investor shall, take all necessary actions to, cause the Board to maintain the following committees: (a) an audit committee, (b) a compensation committee, (c) a nominating and governance committee and (d) such other committees, if any, as the Board may determine to maintain; provided that the appointment of committee members and the delegation of the Board’s authority to a committee shall be consistent with the by-laws of the Company; and provided , further , that, subject to any applicable law or rule or regulation of any national securities exchange or market or national securities association that is then applicable to the Company (including applicable “director independence” requirements), the Company shall, and each Voting Investor shall, take all necessary actions to, cause (i) for so long as the Ayala Significant Investor and the PEP Significant Investor, together with their respective Affiliates, collectively continue to own Shares representing at least twenty-five percent (25%) of the total number of Shares owned by Ayala, PEP and their respective Affiliates upon the Closing, except as otherwise agreed in writing by the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor, the composition of any committee of the Board to include a number of directors (rounded down to the nearest whole number (but not less than one)) designated to serve on such committee by the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor) equal to the product of (x) the result obtained by dividing (A) the number of directors then designated by the Ayala Significant Investor and the PEP Significant Investor pursuant to Sections 2.1.2(b) and (e) by (B) the total number of directors on the Board and (y) the total number of directors on such committee, and (ii) for so long as the Ares Significant Investor, together with its Affiliates, continues to own Shares representing at least twenty-five percent (25%) of the total number of Shares owned by Ares and its Affiliates upon the Closing, except as otherwise agreed in writing by the Ares Significant Investor, the composition of any committee of the Board to include a number of directors (rounded down to the nearest whole number (but not less than one)) designated to serve on such committee by the Ares Significant Investor equal to the product of (x) the result obtained by dividing (A) the number of directors then designated by the Ares Significant Investor pursuant to Sections 2.1.2(a) and (d) by (B) the total number of directors on the Board and (y) the total number of directors on such committee. Notwithstanding anything to the contrary herein, no director designated by a Significant Investor pursuant to Section 2.1.2 shall serve as a member of any committee established by the Board to consider any transaction as to which such Significant Investor may have a conflict of interest, as reasonably determined by a majority of the non-interested directors serving on the Board.

2.1.5 Chairman of the Board; Vice Chairman of the Board; Officers . The Company shall, and each Voting Investor shall, take all necessary actions to, cause the Board (a) to elect the individual serving as the Company’s Chief Executive Officer as the Chairman of the Board for so long as he serves as Chief Executive Officer and (b) for so long as Mr. Fred Ayala is a member of the Board designated by the Ayala Significant Investor and the PEP Significant Investor pursuant to Section 2.1.2(b), to elect Mr. Ayala as the Vice Chairman of the Board and as the non-executive chairman of the boards of

 

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directors of the Company’s subsidiaries, EGS Corp., EGS Acquisition Corp. and eTelecare Global Solutions, Inc. The Company and each Significant Investor agree that, upon the Closing, subject to the Board’s and the Significant Investors’ ability to remove such persons from such positions after the Closing, (i) Mr. R. Scott Murray shall serve as the Company’s Chief Executive Officer and Chairman of the Board and (ii) Mr. Paul Joubert shall serve as a member of the Board and the Chairman of the audit committee of the Board.

2.1.6 Independent Directors . Each Significant Investor agrees to reasonably cooperate with each other Significant Investor to designate as directors pursuant to Sections 2.1.2(a) and (b) such number of individuals who would satisfy the applicable director independence requirements as is necessary for the continued listing of the Common Stock on the New York Stock Exchange, American Stock Exchange or such other national securities exchange or market on which the Common Stock is then listed (assuming the Board makes such affirmative determination of independence as is required by the applicable rules or regulations of such exchange). In the event that, after taking into account the director designees of the Significant Investors pursuant to Sections 2.1.2(a) and (b), the Board would not satisfy the independence requirements necessary for the continued listing of the Common Stock on the New York Stock Exchange, American Stock Exchange or such other national securities exchange or market on which the Common Stock is then listed, the Significant Investors agree to negotiate in good faith to replace their designated directors, to the extent necessary, in order to satisfy the applicable director independence requirements necessary for the continued listing of the Common Stock on the New York Stock Exchange, American Stock Exchange or such other national securities exchange or market on which the Common Stock is then listed.

2.1.7 Subsidiaries . The board of directors (and any committees thereof) of all Subsidiaries of the Company will consist of such persons as the Company shall designate, subject to applicable laws; provided that if a representative of a Significant Investor is appointed to the board of directors (or any committee thereof) of a Subsidiary of the Company (other than EGS Corp., EGS Acquisition Corp. or eTelecare Global Solutions, Inc.), then each of the Ares Significant Investor, on the one hand, and the Ayala Significant Investor and the PEP Significant Investor (by action of the holders of a majority of the Shares owned by the Ayala Significant Investor and the PEP Significant Investor), on the other hand, shall have the right to appoint members to such board of directors (or committees) in the same manner as provided for committees of the Board in Section 2.1.4.

2.1.8 Quorum of the Board . The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors established by the Board of Directors pursuant to Section 2.2 of the Company’s By-laws shall constitute a quorum of the Board; provided , that so long as an Ares Director, a PEP Director or an Ayala Director serves on the Board, the presence of an Ares Director, a PEP Director and an Ayala Director, as the case may be, shall also be required to constitute a quorum of the Board; provided , however, that, if an Ares Director, a PEP Director or an Ayala Director

 

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is not present at any two consecutive meetings of the Board, then the presence of an Ares Director, a PEP Director or an Ayala Director, as the case may be, shall not be required to constitute a quorum of the Board for the following meeting of the Board. If at any meeting of the Board there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.1.9 Quorum of a Committee of the Board . A majority of the members of any committee of the Board shall constitute a quorum of such committee; provided , that, so long as an Ares Director, a PEP Director or an Ayala Director serves on any committee of the Board, the presence of such Ares Director, PEP Director and Ayala Director, as the case may be, shall also be required to constitute a quorum of such committee of the Board; provided , that, if an Ares Director, a PEP Director or an Ayala Director that is a member of a committee is not present at any two consecutive meetings of such committee of the Board, then the presence of such Ares Director, PEP Director or Ayala Director, as the case may be, shall not be required to constitute a quorum of such committee for the following meeting of the committee. If at any meeting of a committee of the Board there shall be less than such a quorum, a majority of the members of such committee present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.2 Irrevocable Proxy . Each Voting Investor shall, at any time it is then entitled to vote for the election of directors to the Board, vote all of the Shares that it is entitled to vote, or execute proxies or written consents, as the case may be, and take all other necessary action (including causing the Company to call a special meeting of stockholders) in order to ensure that the composition of the Board is as set forth in Section 2.1.2. Solely with respect to the matters contemplated in this Section 2, each Voting Investor hereby grants to each other Voting Investor an irrevocable proxy coupled with an interest to vote, including in any action by written consent, all of the Shares that it is entitled to vote in accordance with such Voting Investor’s agreements contained in this Section 2.

2.3 Nomination . The Company shall cause each individual designated to serve as a director pursuant to Section 2.1.2 to be nominated to serve as a director on the Board, and to take all other necessary actions (including calling a special meeting of the Board and/or stockholders) to ensure that the composition of the Board is as set forth in Sections 2.1.2.

2.4 Period . The foregoing provisions of this Section 2 shall terminate, with respect to any particular provision, on the last date permitted by applicable law (including the rules of the Commission or any national securities exchange or market or national securities association upon which equity securities of the Company are listed) for such provision to remain in effect. For the avoidance of doubt, none of the Murray Investors, including Mr. Murray, nor any of the Trillium Investors, including Trillium, shall be considered an Investor for purposes of this Section 2 nor shall be bound by the terms of this Section 2.

 

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3. TRANSFER RESTRICTIONS.

3.1 Transfers Prohibited . Except as otherwise set forth in Section 3.1.1 or 4.3, no Investor shall Transfer any of such Investor’s Shares or any interest therein to any other Person on or prior to the second anniversary of the date of the Exchange Agreement, without the prior written consent of each Significant Investor. No Investor shall Transfer any of their respective Public Warrants or any interest therein to any other Person (other than to the Company), without the prior written consent of each Significant Investor. If an Investor proposes a Transfer of a type permitted by more than one subsection of this Section 3.1, then such Investor shall designate, by written notice to the Company, the specific subsection pursuant to which such Investor intends to make such Transfer, which will be treated for all purposes under this Agreement as the subsection under which such Transfer is made.

3.1.1 Permissible Transfers . The following Transfers (each a “ Permissible Transfer ”) shall not be subject to the provisions of Section 3.1, 3.1.2, 4.1 or 4.2.

(a) Prior to the exercise of the “drag along right” contained in Section 4.3, any Significant Investor may Transfer any or all of such Significant Investor’s Shares to any of such Significant Investor’s Equity Holders; provided , that such Transfer is consummated as a distribution-in-kind to each of such Significant Investor’s Equity Holders on a pro rata basis. Subject to Section 3.2, any such Equity Holder shall not be entitled to any rights under, nor be bound by the terms of, this Agreement. Any Shares so Transferred shall conclusively be deemed thereafter not to be Shares under this Agreement.

(b) Subject to Section 3.2, any Investor may Transfer any or all of such Investor’s Shares to any of such Investor’s Permitted Transferees, so long as such Permitted Transferee agrees to be bound by the terms of this Agreement in accordance with Section 3.2 (if not already bound hereby). Any Shares so Transferred shall conclusively be deemed thereafter to be Shares under this Agreement. In the event that a Permitted Transferee holding any Shares ceases to qualify, or expects to cease to qualify, as a Permitted Transferee in relation to the initial transferring Investor from whom or which such Permitted Transferee or any previous Permitted Transferee of such initial transferring Investor received such Shares (an “ Unwinding Event ”), prior to such Unwinding Event, such initial transferring Investor shall take all actions necessary to effect a Transfer of all the Shares held by the relevant Permitted Transferee either back to such Investor or, pursuant to this Section 3.1.1, to another Person that qualifies as a Permitted Transferee of such initial transferring Investor.

(c) Transfers by a Participating Seller pursuant to Section 4.2 or 4.3, as applicable.

(d) Transfers pursuant to a tender offer subject to Section 14(d)(1) of the Exchange Act (other than a tender offer made by an Investor).

 

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(e) Transfers pursuant to Rule 144 or an effective registration statement under the Securities Act.

3.1.2 Post Second Anniversary Transfers . After the second anniversary of the date of the Exchange Agreement, each Investor shall have the right to Transfer any or all of such Investor’s Shares or any interest therein to any other Person, subject to the “right of first offer” provisions contained in Section 4.1 and the “tag along” provisions contained in Section 4.2; provided , that any Permissible Transfer shall not be subject to the “right of first offer” provisions contained in Section 4.1 or the “tag along” provisions contained in Section 4.2.

3.2 Transferees to Become Parties . Any transferee receiving Shares in a Transfer pursuant to Section 3.1.1 or 3.1.2 (other than in an Exempt Transfer) shall become an Investor party to this Agreement and be subject to the terms and conditions of, and be entitled to enforce, this Agreement, to the same extent, and in the same capacity, as the Investor that Transfers such Shares to such transferor. Prior to the Transfer of any Shares to any transferee pursuant to Section 3.1.1 or 3.1.2 (other than an Exempt Transfer), and as a condition thereto, the Investor effecting such Transfer shall cause such transferee to deliver to the Company and the other Investors a written agreement substantially in the form of Exhibit A (or in form and substance that is otherwise reasonably satisfactory to the Company and a Requisite Majority), to be bound by the terms and conditions of this Agreement, to the extent described in the preceding sentence.

3.3 Restrictions on Transfers to Competitors . Notwithstanding anything in this Agreement to the contrary, except (i) in connection with a “drag-along sale” pursuant to Section 4.3, (ii) a Change of Control transaction, or (iii) a Transfer unanimously approved by all of the Significant Investors and Mr. Murray (for so long as he is the Chief Executive Officer of the Company), no Investor shall Transfer any of such Investor’s Shares to a Company Competitor.

3.4 Other Restrictions on Transfer . The restrictions on transfer contained in this Agreement are in addition to any other restrictions on transfer to which an Investor may be subject, including any restrictions on transfer contained in the Company’s certificate of incorporation, stock option or warrant agreement, stock purchase agreement or other agreement to which such Investor is a party or by which such Investor is bound or any applicable lock up rules and regulations of any national securities exchange or market or national securities association.

3.5 Impermissible Transfers . Any Transfer of Shares not made in compliance with the terms of this Section 3 shall be null and void ab initio , and the Company shall not in any way give effect to any such Transfer.

 

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4. RIGHT OF FIRST OFFER, TAG ALONG RIGHTS AND DRAG ALONG RIGHTS.

4.1 Right of First Offer . If an Investor or group of Investors (collectively, the “ Prospective Selling Investor ”) desires to Transfer any Shares (the “ Offered Shares ”), other than in a Permissible Transfer, then the provisions of this Section 4.1 will apply to such Transfer.

4.1.1 Notice . The Prospective Selling Investor shall, prior to any such proposed Transfer, furnish a written notice of its desire to do so (the “ Transfer Notice ”) to the Company and each of the Significant Investors. The Transfer Notice shall include the number of Offered Shares.

4.1.2 Company’s Option to Purchase . Subject to Section 4.2, except in the event of a proposed Transfer that would result in a Change of Control (in which case only the Significant Investors shall have the right to purchase the Offered Shares), the Company shall have the first option to offer to purchase, for cash payable at the closing of such Transfer, all or any part of the Offered Shares. The Company may exercise such option, subject to approval by a majority of the disinterested members of the Board, no later than ten (10) days after such Transfer Notice is delivered, by delivering a written notice to the Prospective Selling Investor setting forth the Company’s offer to purchase the Offered Shares, including (i) the cash price per Share at which the Company is willing to purchase the Offered Shares and (ii) the maximum number of Offered Shares the Company is willing to purchase (the “ Company Exercise Notice ”). In the event the Company does not exercise its option within such 10-day period with respect to all of the Offered Shares, the Company shall, by the last day of such period, give written notice of that fact to the Significant Investors (the “ Investor Notice ”). The Investor Notice shall specify the number of Offered Shares that the Company has not offered to purchase (the “ Remaining Shares ”).

4.1.3 Investors’ Option to Purchase . Subject to Section 4.2, each other Significant Investor shall have an option, exercisable for a period of ten (10) days from the date of delivery of the Investor Notice, to offer to purchase, for cash payable at the closing of such Transfer, all or any portion of the Remaining Shares. Such option shall be exercised by delivery by such Significant Investor of written notice to the Prospective Selling Investor and the Company setting forth the principal terms and conditions of the Significant Investor’s offer to purchase the Offered Shares, including (i) the cash price per Share at which such Significant Investor is willing to purchase the Offered Shares and (ii) the maximum number of Offered Shares such Significant Investor is willing to purchase (the “ Investor Exercise Notice ”). If the number of Offered Shares so specified by all other Significant Investors exceeds the total number of Remaining Shares, the Remaining Shares available for purchase by each such Significant Investor shall be allocated to such Significant Investor on a pro rata basis according to the number of Shares then owned by each such Significant Investor. The option to offer to purchase (and all related rights) under this Section 4.1 shall terminate with respect to a Significant Investor on the first date on which such Significant Investor no longer owns Shares representing at least seven and one-half percent (7.5%) of the then outstanding shares of Common Stock.

 

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4.1.4 Acceptance or Rejection of Exercise Notice .

(a) The Prospective Selling Investor shall have (i) ten (10) days from the date of delivery of the Company Exercise Notice or (ii) if an Investor Notice is delivered, ten (10) days from the date of delivery of the Investor Exercise Notice(s), to accept or reject in writing any offer by the Company or any Significant Investor (the “ Acceptance Period ”); provided, that if the accepted offers specify a number of shares in excess of the number of Offered Shares, the Offered Shares available for purchase by each offeror shall be allocated in the manner that will provide the maximum aggregate purchase price. If more than one allocation provides the maximum aggregate purchase price, the Offered Shares shall be allocated (i) first, to the Company, if the Company’s offer has been accepted and such allocation does not reduce the aggregate offering price and (ii) thereafter to each other Significant Investor whose offer has been accepted, first based on highest offer price, and thereafter on a pro rata basis according to the number of Shares then owned by each such Significant Investor. Subject to the foregoing, if the Prospective Selling Investor accepts an offer, the Prospective Selling Investor shall be bound and obligated to Transfer, and the applicable offeror shall be bound and obligated to purchase, the Offered Shares for a purchase price equal to the offer price, payable in cash.

(b) If (i) the Prospective Selling Investor rejects the offer by the Company and/or the Significant Investor(s) or (ii) the Company and/or the Significant Investor(s) do not submit a Company Exercise Notice or an Investor Exercise Notice, as applicable, within the requisite time period, then the Prospective Selling Investor may Transfer all of the Offered Shares to any other Person or Persons, subject to Section 4.2; provided , that

(i) if the Company and/or any Significant Investor(s) offered to purchase all of the Offered Shares, no such Transfer may be made for a per Share price lower than or equal to the highest weighted average price per Share pursuant to such offer that would have resulted in all of the Offered Shares being purchased (it being understood that (x) if any portion of the consideration to be paid by a transferee is in a form other than cash, the value thereof shall be conclusively determined in good faith by the Prospective Selling Investor and (y) in determining the value of the consideration received from the transferee, the Prospective Selling Investor may include its good faith determination of the value of all other potential benefits, including tax benefits, earn-outs and similar items, and other terms and conditions) and

(ii) if such Transfer is not completed by the end of the 270th day after the last day of the Acceptance Period ( provided , that, if such Transfer is subject to any regulatory approval, such 270 day period shall be extended until the expiration of five (5) business days after all such approvals have been received, but in no event later than three hundred (300) days following the last day of the Acceptance

 

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Period), the Transfer Notice shall be null and void, and it shall be necessary for a separate Transfer Notice to be furnished, and the terms and provisions of this Section 4.1 separately complied with, in order to consummate such a subsequent Transfer pursuant to this Section 4.1.

(c) If the Prospective Selling Investor accepts the offer contained in the Company Exercise Notice and/or the Investor Exercise Notice(s), as applicable, subject to Section 4.4, the closing of such Transfer shall take place at the offices of the Company within ten (10) days after the last day of the Acceptance Period ( provided , that, if such Transfer is subject to any regulatory approval, such ten (10) day period shall be extended until the expiration of five (5) business days after all such approvals have been received, but in no event later than sixty (60) days following the last day of the Acceptance Period). The Prospective Selling Investor’s obligation to make representations and warranties to the Company or a Significant Investor shall be limited in each case to representations and warranties to (i) the unencumbered title to the Offered Shares, (ii) the power, authority and legal right to Transfer such Offered Shares and (iii) the absence of any Adverse Claim with respect to such Offered Shares.

4.1.5 Indirect Transfers . No Investor shall permit a direct or indirect equity holder to Transfer any direct or indirect equity interests in such Investor (other than Transfers of equity interests of (i) Ares Corporate Opportunities Fund II, L.P. or any of its affiliated investment funds (or the general partners thereof), (ii) Providence Equity Partners VI International, L.P. or any of its affiliated investment funds (or the general partners thereof), or (iii) Ayala Corporation) in a Transfer of a type that would be subject to this Section 4.1 if such Transfer involved a Transfer of Shares by such Investor (any such Transfer of any such equity interests, an “ Indirect Transfer ”), unless such Investor causes to be provided to each other Investor “rights of first offer” and “tag along” rights with respect to such Indirect Transfer that are substantially equivalent to the “rights of first offer” and “tag along” rights set forth in this Section 4.1 and Section 4.2 and subject to obligations and other terms and conditions that are substantially equivalent to those set forth in this Section 4.1 and Section 4.2.

4.2 Tag Along . If the Company and the Significant Investors do not purchase all of the Offered Shares specified in a Transfer Notice in accordance with the provisions set forth in Section 4.1 and the Prospective Selling Investor proposes a Transfer with a Third Party, the Prospective Selling Investor shall, to the extent such Transfer is subject to this Section 4.2, by written notice (the “ Tag Along Notice ”) to each of the other Investors (the “ Tag Along Offerees ”), first offer the Tag Along Offerees the opportunity to participate in such Transfer in accordance with this Section 4.2 (a “ Tag Along Sale ”).

4.2.1 The Tag Along Notice shall identify (i) the class and number of shares of Offered Shares proposed to be sold by the Prospective Selling Investor, (ii) the fraction expressed as a percentage, determined by dividing the number of Shares to be purchased from the Prospective Selling Investor in such Tag Along Sale by the number of Shares held by such Prospective Selling Investor (the “ Tag Along Sale Percentage ”) (it being understood that the Company shall reasonably cooperate with the Prospective

 

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Selling Investor in respect of the determination of the Tag Along Sale Percentage), (iii) the consideration for which the Transfer is proposed to be made, (iv) the name and address of each proposed Third Party transferee, (v) the proposed Transfer date and (vi) all other material terms and conditions of the Tag Along Offer, including the form of the proposed agreement, if any, and a firm offer by each proposed Third Party transferee to purchase the Offered Shares.

4.2.2 Exercise . Within seven (7) business days after the date of delivery of the Tag Along Notice by the Prospective Selling Investor to each Tag Along Offeree, each Tag Along Offeree desiring to make an offer to include Shares in the proposed Transfer (each a “ Participating Seller ” and, together with the Prospective Selling Investor, collectively, the “ Tag Along Sellers ”) shall furnish a written notice (the “ Tag Along Offer ”) to the Prospective Selling Investor indicating the number of Shares which such Participating Seller desires to have included in the proposed Transfer (not in any event to exceed the Tag Along Sale Percentage of the total number of Shares held by such Tag Along Offeree). Each Tag Along Offeree who does not make a Tag Along Offer in compliance with the above requirements, including the time period, shall have waived and be deemed to have waived all of such holder’s rights with respect to such Transfer, and, the Tag Along Sellers shall thereafter be free to Transfer to the Prospective Buyer, at a per Share price no greater than the per Share price set forth in the Tag Along Notice and on other terms and conditions that are, in all material respects, the same as those set forth in the Tag Along Notice, without any further obligation to such non-accepting Tag Along Offeree pursuant to this Section 4.2. The Prospective Selling Investor shall use its commercially reasonable efforts to interest the Prospective Buyer in purchasing, in addition to the Offered Shares, at the same price per Share and on the terms and conditions set forth in the Transfer Notice, all of the Shares the Participating Sellers wish to sell. If the Prospective Buyer does not wish to purchase all of the Shares made available by the Tag Along Sellers, then each Tag Along Seller shall be entitled to sell, at the same price per Share and on the terms and conditions set forth in the Transfer Notice, a portion of the Shares being sold to the Prospective Buyer, in the same proportion as such Tag Along Seller’s ownership of Shares bears to the aggregate number of Shares owned by all of the Tag Along Sellers. If the Participating Sellers do not elect to sell the full number of Shares which they are entitled to sell pursuant to this Section 4.2.2, the Prospective Selling Investor shall be entitled to sell to the Prospective Buyer, according to the terms and conditions of the Transfer Notice, that number of its own Shares which equals the difference between the number of Shares desired to be purchased by the Prospective Buyer and the number of Shares the Participating Sellers sell pursuant to this Section 4.2.2.

4.2.3 Irrevocable Offer . Subject to Section 4.2.4, the offer of each Investor pursuant to Section 4.2.2 to sell Shares under this Section 4.2 on the terms and conditions set forth in the Tag Along Notice shall be irrevocable, and such Participating Seller shall be bound and obligated to Transfer in the proposed Transfer, on the terms and conditions set forth in the Tag Along Notice, such number of Shares as was specified in such Participating Seller’s Tag Along Offer pursuant to Section 4.2.2.

 

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4.2.4 Additional Compliance . If, prior to consummation, the terms of the proposed Transfer shall change with the result that the per Share price to be paid in such proposed Transfer shall be lower than the offer price set forth in the Tag Along Notice, the number of Shares to be purchased by the Prospective Buyer shall be different than the number of Offered Shares specified in the Tag Along Notice or the other terms or conditions of such proposed Transfer shall be different than those set forth in the Tag Along Notice (other than (i) an increase in the number of Offered Shares to include all of the Shares the Participating Sellers wish to sell or (ii) a change in the form of consideration where the per Share price to be paid is with Marketable Securities with a value equal to or greater than the offer price), then, in any such case, the Tag Along Notice shall be null and void, and it shall be necessary for a separate Tag Along Notice to be furnished, and the terms and provisions of Section 4.1 and this Section 4.2 separately complied with, in order to consummate such proposed Transfer pursuant to this Section 4. In addition, if the Prospective Selling Investor has not completed the proposed Transfer upon the terms set forth in the Tag Along Notice by the end of the 90th day after the date of delivery of the Tag Along Notice to the Company and each of the other Investors, each Participating Seller shall be released from such Participating Seller’s obligations under Section 4.2, the Transfer Notice shall be null and void, and it shall be necessary for a separate Transfer Notice to be furnished, and the terms and provisions of Section 4.1 and this Section 4.2 separately complied with, in order to consummate such proposed Transfer pursuant to Section 4.1 and this Section 4.2.

4.3 Sale Event Drag Along . Subject to compliance with Section 6.1(a), 6.2(a) or 6.2(b), as applicable, if one or more Significant Investors (such Significant Investors, the “ Dragging Investors ”) propose to Transfer any Shares (or to cause the Transfer of all or substantially all of the assets of the Company) to a Prospective Buyer that is not an Affiliate of any such Dragging Investor in a transaction, including a merger, or a series of related transactions that, after giving effect to the provisions of this Section 4.3, would constitute a Change of Control, then subject to compliance with Section 4.1, the provisions of this Section 4.3 will apply to such Transfer and each Investor agrees to Transfer to such Prospective Buyer in connection with such transaction or transactions, as the case may be, a percentage of the Shares owned by such Investor that is equal to the percentage of the aggregate number of Shares then owned by all of the Dragging Investors that are proposed to be Transferred to such Prospective Buyer (the “ Drag Along Sale Percentage ”). For the avoidance of doubt, none of the Murray Investors, including Mr. Murray, nor any of the Trillium Investors, including Trillium, shall be considered an Investor for purposes of this Section 4.3 nor shall be bound by the terms of this Section 4.3.

4.3.1 Exercise . The Dragging Investors shall furnish a written notice (the “ Drag Along Sale Notice ”) to the Company at least ten (10) business days prior to the consummation of such proposed Transfer, and the Company shall promptly furnish any such Drag Along Sale Notice to each Investor other than the Dragging Investors. The Drag Along Sale Notice shall set forth the principal terms and conditions of the

 

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proposed Transfer insofar is it relates to the Shares, including (a) the number of Shares to be acquired from the Dragging Investor, (b) the Drag Along Sale Percentage, (c) the per Share consideration to be received in the proposed Transfer, including the form of consideration (if other than cash), (d) the name and address of the Prospective Buyer and (e) if known, the proposed closing date. If the Dragging Investor consummates the proposed Transfer to which reference is made in the Drag Along Sale Notice, each other Investor (each, a “ Participating Seller, ” and together with the Dragging Investors, the “ Drag Along Sellers ”) shall be bound and obligated to Transfer the Drag Along Sale Percentage of such Investor’s Shares in the proposed Transfer on the same terms and conditions as the Dragging Investor with respect to each Share Transferred (subject to the limitations set forth in the proviso to the first sentence of Section 4.4.2). If, at the end of the 270th day after the date of delivery of the Drag Along Sale Notice, the Dragging Investor has not completed the proposed Transfer, the Drag Along Sale Notice shall be null and void, each Participating Seller shall be released from its obligation under the Drag Along Sale Notice and it shall be necessary for a separate Drag Along Sale Notice to be furnished and the terms and provisions of this Section 4.3 separately complied with, in order to consummate such proposed Transfer pursuant to this Section 4.3.

4.3.2 Waiver of Appraisal Rights . Each Investor agrees not to demand or exercise, and to the fullest extent permitted by applicable law hereby waives, appraisal rights under Section 262 of the DGCL or otherwise with respect to any transaction subject to this Section 4.3, whether or not such appraisal rights are otherwise available.

4.3.3 Drag Along Sale Transactions . If a vote of holders of shares of capital stock of the Company (or any class or series of shares of capital stock of the Company) is required under any applicable law or rule or regulation of any national securities exchange or market or national securities association applicable to the Company, in each case in connection with a transaction being implemented pursuant to this Section 4.3 or is determined to be otherwise desirable by the Dragging Investors, each other Investor agrees to cast all votes to which such Investor is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in such manner as such Dragging Investors may instruct by written notice, to approve any sale, merger, consolidation, reorganization or any other transaction involving the Company or any of its Subsidiaries (or all or any portion of their respective assets) in connection with, or in furtherance of, the exercise by such Dragging Investors of its rights under this Section 4.3 and in all cases consistent with the provisions thereof. The Company shall take all actions reasonably requested by the Dragging Investors in connection with a transaction contemplated by this Section 4.3.

4.4 Miscellaneous Sale Provisions . Notwithstanding anything to the contrary herein, the provisions of Section 4.4 shall apply to any Transfer to which Section 4.1, 4.2 or 4.3 applies.

 

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4.4.1 Certain Legal Requirements . If the consideration to be paid for Shares in a Transfer pursuant to Section 4.3 includes any securities, and the receipt thereof by a Participating Seller would require under applicable law (a) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities where such registration or qualification would not otherwise be required for the Transfer by the Prospective Selling Investor or (b) the provision to any Drag Along Seller of any specified information regarding the Company or any of its Subsidiaries, such securities or the issuer thereof, in each case that is not otherwise required to be provided for the Transfer by the Prospective Selling Investor, then such Participating Seller shall not have the right to Transfer Shares in such Transfer. In such event, the Prospective Selling Investor will have the right, but not the obligation, to cause to be paid to such Participating Seller in lieu of such securities, against surrender of the Shares (in accordance with Section 4.4.5 hereof) that would have otherwise been Transferred by such Participating Seller to the Prospective Buyer in the Transfer, an amount in cash equal to the fair market value of such Shares as of the date such securities would have been delivered in exchange for such Shares, as determined in good faith by the Board, and thereupon such Drag Along Seller shall be obligated to Transfer Shares in such Transfer in accordance with Section 4.3.

4.4.2 Further Assurances . The Company and each Participating Seller whether in such Participating Seller’s capacity as a stockholder, director or officer of the Company or otherwise, shall use its reasonable best efforts to take or cause to be taken all such actions as may be necessary or reasonably desirable in order expeditiously to consummate each Transfer pursuant to Section 4.1, 4.2 or 4.3 and any related transactions, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; furnishing information and copies of documents; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Prospective Selling Investor and the Prospective Buyer; provided , however , that Participating Sellers shall be obligated to become liable in respect of any representations, warranties, covenants, indemnities or otherwise to the Prospective Buyer in connection with such Transfer solely to the extent provided in the immediately following sentence. Without limiting the generality of the foregoing, each Participating Seller agrees to execute and deliver such agreements as may be reasonably specified by the Prospective Selling Investor to which such Prospective Selling Investor will also be party, including agreements to (a)(i) make individual representations, warranties, covenants and other agreements, in each case as to the unencumbered title to its Shares and the power, authority and legal right to Transfer such Shares and the absence of any Adverse Claim with respect to such Shares and (ii) be liable as to such representations, warranties, covenants and other agreements, in each case to the same extent as the Prospective Selling Investor is liable for the comparable representations, warranties, covenants and agreements made by it or on its behalf (with any limit on liability applied based on the relative value of their respective Shares), and (b) be liable (whether by purchase price adjustment, indemnity payments or otherwise, including pro rata participation in any escrow or holdback applicable to the sellers) in respect of

 

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representations, warranties, covenants and agreements in respect of the Company and its Subsidiaries in connection with such Transfer; provided , however , that the aggregate amount of liability described in this clause (b) shall not exceed the lesser of (x) such Participating Seller’s pro rata share of any such liability, to be determined in accordance with such Participating Seller’s portion of the aggregate proceeds to all Participating Sellers and Prospective Selling Investors in connection with such Transfer and (y) the proceeds to such Participating Seller in connection with such Transfer. In connection with any governmental or regulatory approval required for any Transfer pursuant to Section 4.1, 4.2 or 4.3, including any such required approval of the DOJ or FTC, the Company shall file such applications and other materials as are necessary or desirable to file in order to obtain such governmental or regulatory approval, and each Investor shall cooperate with the Company and promptly provide it with any and all information, certifications and other materials necessary or otherwise reasonably requested by the Company to complete the filing of such applications and materials and to obtain such governmental or regulatory approval. Without limitation to the foregoing sentence, the Company shall use its reasonable best efforts to obtain such governmental or regulatory approval as promptly as practicable, including (a) diligently prosecuting any such applications and other filings and, when applicable, opposing any petitions to deny, or any other objections filed with respect to, any such applications or other filings, and (b) promptly taking all other actions reasonably requested by the Prospective Selling Investor as necessary or desirable to facilitate obtaining such governmental or regulatory approval.

4.4.3 Sale Process . The Prospective Selling Investor shall, in its sole discretion, decide whether or not to pursue, consummate, postpone or abandon any proposed Transfer and the terms and conditions thereof, except as provided in Section 4.1. No Investor or Affiliate of any Investor will have any liabil