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