UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
CLEAN HARBORS, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
184496107
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(CUSIP Number)
with a copy to:
Stephen Feinberg Robert G. Minion, Esq.
299 Park Avenue Lowenstein Sandler PC
22nd Floor 65 Livingston Avenue
New York, New York 10171 Roseland, New Jersey 07068
(212) 421-2600 (973) 597-2424
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 30, 2004
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Cusip No. 184496107
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1) Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only):
Stephen Feinberg
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) Not
(b) Applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: *
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Shares Beneficially 8) Shared Voting Power: *
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Owned by
Each Reporting 9) Sole Dispositive Power: *
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Person With 10) Shared Dispositive Power: *
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
3,165,650*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions): Not Applicable
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13) Percent of Class Represented by Amount in Row (11): 19.9%*
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14) Type of Reporting Person (See Instructions): IA, IN
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* Cerberus CH LLC, a Delaware limited liability company ("Cerberus CH"), is the
holder of warrants to purchase an aggregate of 1,859,250 shares (subject to
adjustments in certain circumstances) of common stock, par value $0.01 per share
(the "Shares"), of Clean Harbors, Inc., a Massachusetts corporation (the
"Company"). In addition, Cerberus Partners, L.P., a Delaware limited partnership
("Cerberus"), is the holder of 195,000 Shares, Cerberus International, Ltd., a
corporation organized under the laws of the Bahamas ("International"), is the
holder of 543,100 Shares, Cerberus Series Two Holdings, LLC, a Delaware limited
liability company ("Cerberus Series Two"), is the holder of 255,000 Shares,
Cerberus America Series One Holdings, LLC, a Delaware limited liability company
("Cerberus America"), is the holder of 50,800 Shares, and various other private
investment funds (the "Funds") hold in the aggregate 262,500 Shares. Stephen
Feinberg possesses sole power to vote and direct the disposition of all
securities held by Cerberus CH, Cerberus, International, Cerberus Series Two,
Cerberus America and the Funds. Thus, as of June 30, 2004, for the purposes of
Reg. Section 240.13d-3, Stephen Feinberg is deemed to beneficially own 3,165,650
Shares, or 19.9% of the Shares deemed issued and outstanding as of that date.
Item 2. Identity and Background.
-----------------------
The person filing this statement is Stephen Feinberg, whose business
address is 299 Park Avenue, 22nd Floor, New York, New York 10171. Mr. Feinberg
serves as (i) the managing member of Cerberus Associates, L.L.C., which is the
general partner of Cerberus Partners, L.P., a Delaware limited partnership
("Cerberus"), which is the managing member of Cerberus CH LLC, a Delaware
limited liability company ("Cerberus CH"), and (ii) through one or more
intermediate entities, the investment manager for each of Cerberus Series Two
Holdings, LLC, a Delaware limited liability company ("Cerberus Series Two"),
Cerberus America Series One Holdings, LLC, a Delaware limited liability company
("Cerberus America"), Cerberus International, Ltd., a corporation organized
under the laws of the Bahamas ("International"), and various other private
investment funds (the "Funds"). Cerberus, Cerberus CH, Cerberus Series Two,
Cerberus America, International and the Funds are engaged in the investment in
personal property of all kinds, including but not limited to capital stock,
depository receipts, investment companies, mutual funds, subscriptions,
warrants, bonds, notes, debentures, options and other securities of whatever
kind and nature. Mr. Feinberg also provides investment management and other
services for various other third parties.
Mr. Feinberg has never been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has he been a party
to any civil proceeding commenced before a judicial or administrative body of
competent jurisdiction as a result of which he was or is now subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws. Mr. Feinberg is a citizen of the United
States.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Pursuant to a Preferred Stock Redemption Agreement, dated as of June
30, 2004, by and among the Company, Cerberus CH and certain other parties
thereto (the "Redemption Agreement"), on June 30, 2004, among other things, the
Company redeemed all of the shares of Series C Convertible Preferred Stock, par
value $0.01 per share, of the Company (the "Preferred Shares"), held by Cerberus
CH in exchange for (a) cash in an amount equal to the sum of (i) the liquidation
preference of each such Preferred Share (including accrued and unpaid dividends
thereon through and including the date and time of the closing of the
transactions contemplated by the Redemption Agreement) and (ii) $14.50 per
Preferred Share, and (b) warrants to purchase an aggregate of 1,859,250 Shares
(subject to adjustments in certain circumstances).
All funds used to purchase or acquire the securities of the Company by
Cerberus, Cerberus CH, Cerberus Series Two, Cerberus America, International and
the Funds came directly from the assets of Cerberus, Cerberus CH, Cerberus
Series Two, Cerberus America, International and the Funds, respectively. See
Item 5 of this Schedule 13D Amendment No. 4 for further information.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Based upon information provided by the Company, as of June 14, 2004
there were 14,047,649 Shares issued and outstanding. As of June 30, 2004,
Cerberus CH is the holder of warrants to purchase an aggregate of 1,859,250
Shares (subject to adjustments in certain circumstances), Cerberus is the holder
of 195,000 Shares, International is the holder of 543,100 Shares, Cerberus
Series Two is the holder of 255,000 Shares, Cerberus America is the holder of
50,800 Shares and the Funds hold in the aggregate 262,500 Shares. Stephen
Feinberg possesses sole power to vote and direct the disposition of all
securities held by Cerberus CH, Cerberus, International, Cerberus Series Two,
Cerberus America and the Funds. Thus, as of June 30, 2004, for the purposes of
Reg. Section 240.13d-3, Stephen Feinberg is deemed to beneficially own 3,165,650
Shares, or 19.9% of the Shares deemed issued and outstanding as of that date.
During the sixty days prior to June 30, 2004, the only transaction in
Shares, or securities convertible into, exercisable for or exchangeable for
Shares, by Mr. Feinberg or any person or entity controlled by him or any person
or entity for which he possesses voting or investment control over the
securities thereof, was the June 30, 2004 redemption of all of the Preferred
Shares pursuant to the Redemption Agreement for (a) cash in an amount equal to
the sum of (i) the liquidation preference of each such Preferred Share
(including accrued and unpaid dividends thereon through and including the date
and time of the closing of the transactions contemplated by the Redemption
Agreement) and (ii) $14.50 per Preferred Share, and (b) warrants to purchase an
aggregate of 1,859,250 Shares (subject to adjustments in certain circumstances),
as described in this Schedule 13D Amendment No. 4.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
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In connection with the redemption of the Preferred Shares, in addition
to the Redemption Agreement which is attached as Exhibit 1 hereto, Cerberus CH
entered into an Investors Rights Agreement, dated as of June 30, 2004, pursuant
to which, among other things, the Company, Cerberus CH and certain other parties
agreed to the terms pursuant to which (a) the Company shall register, among
other securities, the Shares issuable upon exercise of the warrants for resale
by the filing of a registration statement with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, as well as
perform various other obligations and agreements related to such registration
and (b) Cerberus CH and certain other parties were granted co-sale rights with
respect to certain sales of Shares by one or more shareholders of the Company,
as more particularly set forth and described in the Investors Rights Agreement
attached as Exhibit 2 hereto.
In addition, pursuant to the Redemption Agreement, the Company,
Cerberus CH and certain other parties terminated that certain Investors Rights
Agreement, dated as of September 6, 2002, by and among the Company, Cerberus CH
and certain other parties thereto.
The descriptions of the transactions and agreements set forth in this
Schedule 13D are qualified in their entirety by reference to the complete
agreements governing such matters, each of which are attached to this Schedule
13D as exhibits pursuant to Item 7 hereof.
Except as otherwise described herein, no contracts, arrangements,
understandings or similar relationships exist with respect to the securities of
the Company between Stephen Feinberg and any person or entity.
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Preferred Stock Redemption Agreement, dated as of June 30, 2004,
by and among the Company, Cerberus CH and certain other parties identified
therein.
2. Investors Rights Agreement, dated as of June 30, 2004, by and
among the Company, Cerberus CH and certain other parties identified therein.
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
July 1, 2004
/s/ Stephen Feinberg
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Stephen Feinberg, on behalf of Cerberus
Associates, L.L.C., the general partner
of Cerberus Partners, L.P., the managing
member of Cerberus CH LLC, and Cerberus
Series Two Holdings, LLC, Cerberus
America Series One Holdings, LLC,
Cerberus International, Ltd. and the
Funds
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
Execution Version
PREFERRED STOCK REDEMPTION AGREEMENT
PREFERRED STOCK REDEMPTION AGREEMENT (the "Agreement"), dated as of
June 30, 2004, by and among Clean Harbors, Inc., a Massachusetts corporation,
with headquarters located at 1501 Washington Street, Braintree, Massachusetts
02184 (the "Company") and the Investors listed on the signature pages hereto
(the "Investors").
WHEREAS:
A. The Company and certain of the Investors entered into that certain
Securities Purchase Agreement, dated as of September 6, 2002 (the "Securities
Purchase Agreement"), pursuant to which, among other things, such Investors
purchased from the Company an aggregate of 25,000 shares of Series C Convertible
Preferred Stock, par value $0.01 per share, of the Company (the "Preferred
Stock") which are convertible into shares (the "Conversion Shares") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock");
B. Contemporaneously with the execution and delivery of the Securities
Purchase Agreement, the Company, certain of the Investors, Alan S. McKim and the
Trustees of the Alan S. McKim Children's Trust (collectively, "McKim"), who are
significant shareholders of the Company, entered into an Investors Rights
Agreement, dated as of September 6, 2002 (the "Original Investors Rights
Agreement"), pursuant to which, among other things, the Company agreed to
provide certain registration rights with respect to the Registrable Securities
(as defined in the Original Investors Rights Agreement) under the Securities Act
of 1933, as amended (the "1933 Act"), and the rules and regulations promulgated
thereunder, and applicable state securities, laws and McKim, among other things,
agreed to grant such Investors certain rights to tag-along to sales of Common
Stock by McKim;
C. The Company and all of the Investors desire to enter into this
Agreement, pursuant to which, among other things, the Company will redeem each
share of Preferred Stock held by the Investors in exchange for (a) cash in an
amount equal to the sum of (i) the liquidation preference of each such share of
Preferred Stock (including accrued and unpaid dividends thereon through and
including the Closing Date) and (ii) $14.50 per share of Preferred Stock, and
(b) warrants (the "Warrants") to acquire shares of Common Stock in the form
attached hereto as Exhibit A (each, a "Warrant" and together with any warrants
issued in replacement or substitution thereof in accordance with the terms
thereof, the "Warrants"), which Warrants shall be exercisable for an aggregate
of 2,775,000 shares of Common Stock (subject to adjustment in the manner
provided in the Warrants);
D. The Company and the Investors party thereto desire to terminate the
Original Investors Rights Agreement and the Company and all of the Investors
desire to enter into a new Investors Rights Agreement in the form attached
hereto as Exhibit B (the "Investors Rights Agreement") to provide for, among
other things, the registration of the shares of Common Stock issuable upon
exercise of the Warrants and for McKim, among other things, to grant the
Investors certain rights to tag-along to sales of Common Stock by McKim;
E. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed to them in the Securities Purchase
Agreement.
9588751.7
NOW, THEREFORE, the Company and the Investors hereby agree as follows:
1. REDEMPTION OF PREFERRED STOCK AND ISSUANCE OF WARRANTS.
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(a) Redemption of Preferred Stock. Subject to satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7, the Company shall
redeem from each Investor on the Closing Date (as defined below) that number of
shares of Preferred Stock set forth opposite such Investor's name on the
Schedule of Investors (the "Closing").
(b) Closing Date. The date and time of the Closing (the "Closing
Date") shall be 10:00 a.m., New York Time, on June 30, 2004, subject to
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 6 and 7 below (or such later date as is mutually agreed to by
the Company and the Investors). The Closing shall occur on the Closing Date at
the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York
10022.
(c) Form of Payment. On the Closing Date, (i) the Company (A)
shall pay to each Investor for each share of Preferred Stock listed on the
Schedule of Investors an amount equal to the sum of (x) the Stated Value (as
defined and calculated in the Certificate of Vote with respect to the Preferred
Stock (the "Certificate")) with respect to each share of Preferred Stock, which
includes the amount of all Accrued Dividend Payments (as defined in the
Certificate) on each such share of Preferred Stock through and including the
Closing Date and (y) an amount equal to $14.50 for each share of Preferred Stock
(collectively, the "Per Share Redemption Price" and the aggregate of the Per
Share Redemption Price to be paid to such Investor for all of such Investor's
shares of Preferred Stock being redeemed hereunder is referred to as such
Investor's "Aggregate Redemption Price"), all as set forth on the Schedule of
Investors, by wire transfer of immediately available funds in accordance with
such Investor's written wire instructions set forth on the Schedule of Investors
and (B) shall issue and deliver to such Investor a Warrant for the amount of
shares of Common Stock as set forth on the Schedule of Investors, duly executed
on behalf of the Company and registered in the name of such Investor or its
designee and (ii) the Investor shall deliver to the Company certificate(s)
representing the shares of Preferred Stock being redeemed hereby, together with
duly executed stock transfer powers in favor of Company.
2. REPRESENTATIONS AND WARRANTIES OF INVESTORS
-------------------------------------------
Each Investor represents and warrants with respect to only itself
that:
(a) Organization and Qualification. Such Investor is an entity
duly authorized and validly existing under the laws of its jurisdiction of
organization and has the requisite power to carry on its business as it is now
being conducted and currently proposed to be conducted.
(b) Authorization; Enforcement; Validity. This Agreement and the
Investors Rights Agreement have been duly and validly authorized, executed and
delivered on behalf of such Investor and are legal, valid and binding
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obligations of such Investor, enforceable against such Investor in accordance
with their terms, subject as to enforceability to general principles of equity
and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.
(c) Investment Purpose. Such Investor is acquiring the Warrants
for its own (or an Affiliate's) account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, such Investor does not agree to hold
any of the Warrants or any shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") for any minimum or other specific term and
reserves the right, subject to compliance with applicable securities laws, to
dispose of the Warrants and the Warrant Shares at any time.
(d) Accredited Investor Status. Such Investor is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the 1933 Act.
(e) Reliance on Exemptions. Such Investor understands that
the Warrants are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and such Investor's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Investor set forth herein
in order to determine the availability of such exemptions and the eligibility of
such Investor to acquire the Warrants.
(f) Transfer or Resale. Such Investor understands that except as
provided in the Investors Rights Agreement, the Warrants and the Warrant Shares
have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (i) subsequently registered thereunder, (ii) such Warrants and the
Warrant Shares to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (iii) such
Investor provides the Company with reasonable assurance, upon request by the
Company, that such Warrants and Warrant Shares can be sold, assigned or
transferred pursuant to Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) ("Rule 144").
(g) Legends. Such Investor understands that, until such time as
the sale of the Warrants and Warrant Shares have been registered under the 1933
Act as contemplated by the Investors Rights Agreement, the stock certificates
representing the Warrant Shares, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) EXCEPT
PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
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SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS OR (B) PURSUANT TO RULE 144
UNDER SAID ACT OR (C) ANY OTHER EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT RELATING TO THE DISPOSITION OF
SECURITIES.
(h) The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of the Warrant
Shares upon which it is stamped, if, (i) such Warrant Shares are registered for
resale under the 1933 Act, (ii) in connection with a sale transaction, such
holder provides the Company with an opinion of counsel, in a form reasonably
acceptable to the Company, to the effect that a public sale, assignment or
transfer of the Warrant Shares may be made without registration under the 1933
Act, or (iii) such holder provides the Company with reasonable assurances that
the Warrant Shares can be sold pursuant to Rule 144 without any restriction as
to the number of securities acquired as of a particular date that can then be
immediately sold.
(i) Such Investor is the sole record owner of the shares of
Preferred Stock set forth such Investor's name on the Schedule of Investors and
has good and marketable title to such shares, free and clear of all claims,
liens, encumbrances, restrictions and security interests of any kind whatsoever.
There are no outstanding options or agreements to which such Investor is a party
under which any person or entity has the right, present or future, to acquire
from Investor such shares of Preferred Stock.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to the Investors as
follows:
(a) Organization and Qualification. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns 50% or more of the capital stock or
other equity, economic or similar interests or owns capital stock or holds an
equity, economic or similar interest which ownership entitles the Company to
elect 50% or more of the board of directors or similar governing body of such
entity,) are entities duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are incorporated, and have the
requisite corporate or other power and authorization to own their properties and
to carry on their business as now being conducted and currently proposed to be
conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "Material Adverse Effect" means any material adverse
effect on the business, properties, assets, operations, results of operations,
prospects or financial condition of the Company and its Subsidiaries, taken as a
whole, on the business, assets (tangible and intangible), accounts receivable,
rights, contracts, agreements, instruments, equipment, inventory, intellectual
property, claims, property (real or otherwise), licenses, permits,
authorizations, approvals, bank accounts, lockbox arrangements, banks and
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records and goodwill and liabilities, or on the transactions contemplated hereby
or by the agreements and instruments to be entered into in connection herewith,
or on the authority or ability of the Company to perform its obligations under
this Agreement, the Investors Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5) or the Warrants (collectively, the
"Transaction Documents").
(b) Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and the other Transaction Documents and to
issue the Warrants and the Warrant Shares issuable upon exercise of the Warrants
in accordance with the terms of the Warrants. The execution and delivery of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance and reservation for issuance of the Warrant and the Warrant Shares
issuable upon exercise thereof have been duly authorized by the Company's Board
of Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders. The Transaction Documents have been
duly executed and delivered by the Company. The Transaction Documents constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
(c) Capitalization. The authorized capital stock of the Company
consists of (i) 20,000,000 shares of Common Stock, of which as of June 14, 2004,
14,047,649 shares were issued and outstanding, no shares were held in treasury,
and no shares are issuable or reserved for issuance pursuant to securities other
than (A) the Warrants, (B) 2,134,684 shares were reserved for issuance pursuant
to the Company's stock option and purchase plans, (C) 340,480 shares were
reserved for issuance pursuant to conversion of the Company's Series B
Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred
Stock"), and (D) the Conversion Shares reserved for issuance pursuant to the
conversion of the Preferred Stock (which shares will cease to be so reserved
upon the redemption of the Preferred Stock), and (ii) 2,000,000 shares of
preferred stock, of which (A) 894,585 shares have been designated Series A
Preferred Stock (of which none are issued and outstanding), (B) 156,416 shares
which have been designated as Series B Preferred Stock (of which 112,000 shares
are issued and outstanding), and (C) 25,000 shares of the Preferred Stock (of
which none will remain issued and outstanding upon the redemption of the
Preferred Stock). All of such outstanding shares have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Except for the
Preferred Stock or as disclosed in Schedule 3(c), (A) no Capital Stock of the
Company or any of its Subsidiaries are subject to preemptive rights or any other
similar rights (arising under Massachusetts law, the Company's Articles of
Organization (defined below) or By-laws (defined below) or any agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound) or any pledges, claims,
liens, mortgages, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens") granted or created by the Company or
any of its Subsidiaries; (B) there are no outstanding debt securities issued by
the Company or any of its Subsidiaries which are convertible or exercisable into
or exchangeable for Capital Stock of the Company or any of its Subsidiaries; (C)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
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or commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any Capital Stock of the Company or any of
its Subsidiaries, or contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue
additional Capital Stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exercisable
or exchangeable for, any Capital Stock of the Company or any of its
Subsidiaries; (D) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their Capital Stock under the 1933 Act (other than the Investors Rights
Agreement); (E) there is no outstanding Capital Stock or instrument of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem any Capital Stock or any debt security of the Company or any of
its Subsidiaries (other than in this Agreement and the Warrants); (F) there is
no outstanding Capital Stock or instrument of the Company or any of its
Subsidiaries containing anti-dilution or similar provisions that will be
triggered by the issuance of the Warrants or the Warrant Shares as described in
this Agreement; and (G) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement. For
purposes of this Agreement, the term "Capital Stock" means (A) with respect to
any Person that is a corporation, any and all shares, interests, participations
or other equivalents (however designated and whether or not voting) of corporate
stock, and (B) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
(d) Issuance of Securities. The Warrants have been duly
authorized and, upon issuance in accordance with the terms hereof, shall be (i)
validly issued, fully paid and non-assessable, (ii) free from all taxes, and
Liens with respect to the issuance thereof and (iii) entitled to the rights and
preferences set forth in the Warrants. As of the Closing Date, 2,775,000 shares
of Common Stock will have been duly authorized and reserved for issuance of the
Warrant Shares. Upon exercise of the Warrants in accordance with the terms
thereof, the Warrant Shares will be validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock. Based in part on the representations made by the Investors in Section 2
hereof, the issuance by the Company of the Warrants and the Warrant Shares is
exempt from registration under the 1933 Act.
(e) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation,
the reservation for issuance and issuance of the Warrant Shares) do not and will
not (i) result in a violation of the Articles of Organization or the By-laws;
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, indenture, lease or instrument, permit, concession, franchise or
license to which the Company or any of its Subsidiaries is a party; (iii) result
in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the rules and
regulations of the Principal Market (as defined below)) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected. Neither the Company nor
- 6 -
its Subsidiaries is in violation, in any material respect, of any term of its
Articles of Organization or its By-laws or their organizational charter or
by-laws or other constituent documents, respectively. Except as specifically
contemplated by this Agreement and as required under the 1933 Act or under any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or Governmental Authority in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents. All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company and its Subsidiaries are
unaware of any facts or circumstances which might give rise to any of the
foregoing. The Company is not in violation of the listing requirements of the
Principal Market and has no actual knowledge of any facts which would reasonably
lead to delisting or suspension of the Common Stock by the Principal Market in
the foreseeable future.
(f) SEC Documents; Financial Statements. Since January 1, 2002,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act")
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). As of the date of filing of such SEC Documents, such SEC Documents,
as it may have been subsequently amended by filings made by the Company with the
SEC prior to the date hereof, complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents. None of the SEC
Documents, as of the date filed and as they may have been subsequently amended
by filings made by the Company with the SEC prior to the date hereof, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). None of the Company nor any of its
Subsidiaries have any material liabilities or obligations of any nature (whether
known or unknown, and whether absolute, accrued, contingent, matured,
liquidated, unasserted or otherwise) of a kind required by generally accepted
accounting principles ("GAAP") to be set forth on a financial statement that is
not fully and adequately reflected or reserved against in the financial
statements contained in the Company's most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q filed with the SEC, other than liabilities and
obligations incurred since December 31, 2003 in the ordinary course of business
consistent with past practice that are not material in amount.
- 7 -
(g) Full Disclosure. No other information provided by or on
behalf of the Company to the Investors which is not included in the SEC
Documents, contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are or were made, not misleading.
The Company is not required to file and will not be required to file any
agreement, note, lease, mortgage, deed or other instrument entered into prior to
the date hereof and to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound which has not been previously filed
as an exhibit to its reports filed with the SEC under the 1934 Act.
(h) Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court or Governmental Authority,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company or any
of the Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such, except as
expressly set forth in the SEC Documents, which seeks injunctive or declaratory
relief against or affecting the Company, any of its Subsidiaries or any of their
respective assets or properties or, with respect to the Company and its
Subsidiaries, that if adversely determined, could have a Material Adverse
Effect.
(i) Compliance with Law. Except for the regulatory proceedings
arising under environmental laws and regulations which are described in the SEC
Documents, none of the Company or any of its Subsidiaries (i) has violated or
conducted its business or operations in violation of, and has not used or
occupied its properties or assets in material violation of, any statute, law,
ordinance, rule, regulation, permit, order, writ, judgment, injunction, decree
or award issued, enacted or promulgated by any Governmental Authority or any
arbitrator ("Legal Requirements"), (ii) to the Company's knowledge, has been
alleged to be in material violation of any Legal Requirement, or (iii) has
received any notice of any violation or alleged material violation of, or any
citation for material non-compliance with, any Legal Requirements.
(j) Acknowledgment Regarding Investor's Purchase of Securities.
The Company acknowledges and agrees that each of the Investors is acting solely
in the capacity of an arm's length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that each Investor is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby and
any advice given by any of the Investors or any of their respective
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Investor's purchase of the Warrants.
(k) No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Warrants.
(l) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
- 8 -
issuance by the Company of any of the Warrants or Warrant Shares under the 1933
Act or cause this offering of the Warrants or Warrant Shares to be integrated
with prior offerings by the Company for purposes of the 1933 Act or any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the Principal Market, nor will the Company or any
of its Subsidiaries take any action or steps that would require registration of
the issuance by the Company of any of the Securities under the 1933 Act or cause
the offering of the Warrants or Warrant Shares to be integrated with other
offerings.
(m) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(n) Unconditional Obligation. The Company understands and
acknowledges that its obligation to issue Warrant Shares upon exercise of the
Warrants in accordance with this Agreement and Warrants is, in each case,
absolute and unconditional (except to the extent set forth in the Warrants)
regardless of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.
(o) Application of Takeover Protections. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement), including, without
limitation, pursuant to any shareholder rights plan or similar agreement or
instrument or other similar anti-takeover provision under the Articles of
Organization or the laws of the state of its incorporation which is or could
become applicable to the Investors as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the
Warrants and the Investors ownership of the Warrants or Warrant Shares.
(p) Shareholder's Rights Plan. The Company has not adopted a
shareholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of Common Stock or a change in control of the Company.
(q) Investment Company Status. The Company is not, and upon
consummation of the issuance of the Warrants or the Warrant Shares issuable upon
exercise of the Warrants, will not be, an "investment company," a company
controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(r) Broker's or Finder's Commissions. No broker's or finder's
fee or commission will be payable by or on behalf of the Company or any of its
Subsidiaries with respect to the redemption of the Preferred Stock or the
issuance and sale of the Warrants or Warrant Shares.
- 9 -
4. CERTAIN COVENANTS
-----------------
(a) Reasonable Best Efforts. Each party shall use its reasonable
best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.
(b) Financial Information.
(i) So long as any of the Warrants remain outstanding, the
Company will provide the following information to each Investor:
(a) as soon as practicable and in any event within
45 days after the end of each quarterly period (other than
the last quarterly period) in each fiscal year, consolidated
statements of operations, stockholders' equity and cash
flows of the Company and its Subsidiaries for the period
from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated balance sheet of
the Company and its Subsidiaries as at the end of such
quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding
fiscal year, and certified by the Chief Financial Officer of
the Company, subject to changes resulting from year-end
adjustments;
(b) as soon as practicable and in any event within
90 days after the end of each fiscal year, consolidated
statements of operations, stockholders' equity and cash
flows of the Company and its Subsidiaries for such year, and
the consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, setting forth in
each case in comparative form corresponding consolidated
figures from the preceding annual audit and certified to the
Company by independent public accountants of recognized
national standing selected by the Company;
(c) promptly after their becoming available,
copies of all registration statements and reports which the
Company or any of its Subsidiaries shall have filed with the
SEC or any national securities exchange or quotation system;
(d) promptly after the mailing thereof to the
holders of Common Stock of the Company, copies of all
financial statements, reports and proxy statements so
mailed; and
(e) true, complete and correct copies of all
documents, reports, financial data and other information
that each Investor may reasonably request.
(ii) The Company shall permit the authorized representatives
designated by each Investor to visit and inspect any of the properties
of the Company or any of its Subsidiaries, including their books of
account, and to discuss their affairs, finances and accounts with
their officers, all at such times as each Investor may reasonably
request.
(iii) Each Investor shall have the right to consult with and
advise the management of the Company and its Subsidiaries, upon
reasonable notice at reasonable times from time to time, on all
matters relating to the operation of the Company and its Subsidiaries.
- 10 -
(c) Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance of shares of Common Stock needed to provide for the issuance of the
Warrant Shares issuable upon exercise of all outstanding Warrants (without
regard to any limitations on exercise) in accordance with the terms of the
Warrants.
(d) Listing. The Company shall promptly secure the listing of
all of the Registrable Securities (as defined in the Investors Rights Agreement)
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents and the Warrants. So long
as any Warrants or Warrant Shares are outstanding, the Company shall maintain
the Common Stock's authorization for quotation on the Nasdaq National Market or
for listing on the New York Stock Exchange (as applicable, the "Principal
Market"). So long as any Warrants are outstanding and other than in connection
with a Change of Control (as defined in the Warrants), neither the Company nor
any of its Subsidiaries shall take any action which would be reasonably expected
to result in the delisting or suspension of the Common Stock from the Principal
Market. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(d).
(e) Compliance with Law. The Company shall, and shall cause
its Subsidiaries, to comply in all material respects with all applicable Legal
Requirements (including, without limitation, all Environmental Laws).
5. TRANSFER AGENT INSTRUCTIONS.
---------------------------
(a) The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at the Depository Trust Company
("DTC"), registered in the name of each Investor or its respective nominee(s),
for the Warrant Shares in such amounts as specified from time to time by each
Investor to the Company upon exercise of the Warrants (the "Irrevocable Transfer
Agent Instructions"), a form of which is attached as Exhibit C hereto. Prior to
registration of the Warrant Shares under the 1933 Act, all such certificates
shall bear the restrictive legend specified in Section 2(g) of this Agreement.
After registration, the restrictive legend shall be removed. The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 and stop transfer instructions to
give effect to Section 2(f) hereof (in the case of the Warrant Shares, prior to
registration of the Warrant Shares under the 1933 Act) will be given by the
Company to its transfer agent and that the Warrants and the Warrant Shares shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement, the Warrants and the Investors Rights
Agreement. If an Investor provides the Company with an opinion of counsel, in a
form reasonably acceptable to the Company, to the effect that a public sale,
assignment or transfer of the Warrants or the Warrant Shares may be made without
registration under the 1933 Act or the Investor provides the Company with
reasonable assurances that such Warrant and/or Warrant Shares can be sold
pursuant to Rule 144 without any restriction as to the number of securities
acquired as of a particular date that can then be immediately sold, the Company
- 11 -
shall permit the transfer, and, in the case of the Warrant Shares, promptly
instruct its transfer agent to issue one or more certificates, or credit shares
to one or more balance accounts at DTC, in such name and in such denominations
as specified by such Investor and without any restrictive legend. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investors by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Investors shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
6. CONDITIONS TO COMPANY'S OBLIGATIONS HEREUNDER.
---------------------------------------------
The obligations of the Company hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion by providing the Investors with prior written notice
thereof:
(a) The Investors shall have executed this Agreement and the
Investors Rights Agreement and delivered the same to the Company.
(b) The Investors shall have delivered to the Company the shares
of Preferred Stock being redeemed hereby duly endorsed for transfer.
(c) The representations and warranties of each Investor shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Investor shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Investor at or prior to the Closing Date.
(d) The Company shall have completed the debt refinancing
transactions necessary to finance the purchase of the Preferred Stock as
provided hereunder.
7. CONDITIONS TO INVESTORS OBLIGATIONS HEREUNDER.
---------------------------------------------
The obligations of the Investors hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for each Investor's sole benefit and may be waived by such Investor at any
time in its sole discretion by providing the Company with prior written notice
thereof:
(a) (i) The Company shall have executed each of the Transaction
Documents and delivered the same to such Investor and (ii) McKim shall have
executed and delivered to the Investors the Investors Rights Agreement.
- 12 -
(b) The Company and its Subsidiaries shall have obtained all
required licenses, waivers, consents and approvals, governmental and otherwise
in connection with the transactions contemplated by this Agreement.
(c) The Common Stock (x) shall be designated for quotation or
listed on the Principal Market and (y) shall not have been suspended by the SEC
or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened either (A) in
writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.
(d) The representations and warranties of the Company shall be
true, complete and correct in all material respects (except for representations
and warranties qualified by materiality or Material Adverse Effect or such
similar qualification, which shall not be further qualified) as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied with the covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. Such Investor
shall have received a certificate, executed by the Chief Executive Officer or
the Chief Financial Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
such Investor.
(e) Such Investor shall have received the opinion of Davis,
Malm & D'Agostine, P.C., dated as of the Closing Date, in form, scope and
substance satisfactory to such Investor.
(f) The Company shall have executed and delivered to such
Investor the Warrants (in such denominations as such Investor shall request) for
the Warrants being issued to such Investor at the Closing.
(g) The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b) above and in a form reasonably
acceptable to such Investor (the "Resolutions").
(h) As of the Closing Date, the Company shall have reserved out
of its authorized and unissued Common Stock, solely for the purpose of effecting
the exercise of the Warrants, 2,775,000 shares of Common Stock.
(i) The Irrevocable Transfer Agent Instructions, in the form of
Exhibit C attached hereto, shall have been delivered to such Investor, duly
executed by the Company and acknowledged in writing by the Company's transfer
agent.
(j) The Company shall have delivered to such Investor a
certificate evidencing the incorporation and good standing of the Company in
such entity's jurisdiction of incorporation or organization issued by the
Secretary of State of such jurisdiction of incorporation as of a date within
five days of the Closing Date.
- 13 -
(k) The Company shall have delivered to such Investor a certified
copy of the Articles of Organization as certified by the Secretary of the
Commonwealth of Massachusetts as of a date within five (5) days of the Closing
Date.
(l) The Company shall have delivered to such Investor a
secretary's certificate, dated as of the Closing Date, certifying as to (A) the
Resolutions, (B) the Articles of Organization and (C) the By-laws, each as in
effect at the Closing.
(m) The Company shall have made all filings under all applicable
federal and state securities laws necessary to consummate the issuance of the
Warrants pursuant to this Agreement in compliance with such laws.
(n) The Company shall have paid by wire transfer of immediately
available funds the Aggregate Redemption Price to such Investor, as set forth on
the Schedule of Investors.
(o) Such Investor shall have received such other agreements,
instruments, certificates and other documents as it may determine are customary
for the transactions contemplated by the Transaction Documents, in each case in
form and substance satisfactory to such Investor.
(p) The Company shall have repaid in full all obligations owing
under all agreements and instruments evidencing indebtedness owing under the
credit facility between the Company, certain of its Subsidiaries and Affiliates
of Cerberus CH, LLC.
8. INDEMNIFICATION.
---------------
(a) In consideration of each Investor's execution and delivery of
the Transaction Documents and engaging in the transactions contemplated hereby
and thereby and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Investor and each other holder of Warrants and all of their
stockholders, officers, directors, managers, members, employees and direct or
indirect investors and any of the foregoing persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents, or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of action, suit or claim brought or made against such Indemnitee
(other than a cause of action, suit or claim which is (x) brought or made by the
Company and (y) is not a shareholder derivative suit) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
- 14 -
Transaction Documents, or any other certificate, instrument or document
contemplated hereby or thereby or (ii) the status of such Investor or holder of
Warrants or Warrant Shares as an investor in the Company. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.
Except as otherwise set forth herein, the mechanics and procedures with respect
to the rights and obligations under this Section 8 shall be the same as those
set forth in Section 5 of the New Investors Rights Agreement, including, without
limitation, those procedures with respect to the settlement of claims and the
Company's rights to assume the defense of claims.
9. MISCELLANEOUS.
-------------
(a) Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
- 15 -
(e) Entire Agreement; Amendments. This Agreement supersedes all
other prior oral or written agreements between each Investor, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended or waived other than by an instrument in writing
signed by the Company and the holders of at least a majority of the Warrant
Shares issuable upon exercise of all Warrants then outstanding. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Warrants then outstanding. No consideration shall be offered
or paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration also
is offered to all of the parties to the Transaction Documents or holders of
Warrants, as the case may be.
(f) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Attention: Chief Financial Officer
Telephone: 781-849-1800, Ext. 4450
Facsimile: 781-848-1632
With a copy to:
Davis, Malm & D'Agostine, P.C.
One Boston Place
Boston, Massachusetts 02108
Attention: C. Michael Malm, Esq.
Telephone: 617-365-2500
Facsimile: 617-525-6215
If to the Transfer Agent:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Fran Noftel or Donna Ansbro
Telephone: 718-921-8200
Facsimile: 718-921-8337
- 16 -
If to a Investor, to it at the address and facsimile number set forth
on the Schedule of Investors, with copies to such Investor's representatives as
set forth on the Schedule of Investors, or at such other address and/or
facsimile number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party five days prior
to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Warrants. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the Warrant Shares issuable
upon exercise of all Warrants then outstanding, including by merger or
consolidation. An Investor may assign some or all of its rights hereunder or
sell, transfer or dispose of any or all of its shares of Preferred Stock without
the consent of the Company; provided, however, that the transferee or purchaser
of the Preferred Stock has agreed in writing to be bound by the applicable
provisions of this Agreement.
(h) No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(i) Survival. The representations, warranties and covenants of
the Company and the Investors and the indemnification provisions set forth in
Section 8, shall survive the Closing. Each Investor shall be responsible only
for its own representations, warranties, agreements and covenants hereunder.
(j) Fees and Expenses. At the Closing, the Company shall pay
to the Investor's their legal fees and expenses incurred in connection with its
due diligence and the preparation and negotiation of the Transaction Documents.
Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other
taxes and duties levied in connection with the sale and issuance of the Warrants
and the Warrant Shares.
(k) Publicity. The Company and each Investor shall have the right
to approve before issuance any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior approval of any Investor, to
make any press release or other public disclosure with respect to such
- 17 -
transactions as is required by applicable law and regulations (although each
Investor shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release and shall be provided
with a copy thereof and in no event may the Company disclose publicly the
identity of any Investor or their nominees or affiliates without the prior
consent of such Investor).
(l) Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(m) Placement Agent. Except as disclosed in writing to the
Investors, the Company acknowledges that it has not engaged any Person as
placement agent or broker in connection with the issuance of the Warrants. The
Company shall be responsible for the payment of any placement agent's fees,
financial advisory fees, or brokers' commissions (other than for persons engaged
by or on behalf of any Investor) relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold each Investor harmless
against, any liability, loss or expense (including, without limitation,
attorney's fees and out-of-pocket expenses) arising in connection with any such
claim.
(n) No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(o) Remedies. Each Investor and each holder of the Warrants
and/or Warrant Shares shall have all rights and remedies set forth in the
Transaction Documents and all rights and remedies which such holders have been
granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
(p) Original Investors Rights Agreement. The parties agree that,
upon the Closing Date, the Original Investors Rights Agreement will terminate
and be of no further force and effect and be superseded by the Investors Rights
Agreement.
(q) Termination. If the Closing has not occurred on or before
June 30, 2004, this Agreement shall terminate without liability to any of the
parties hereto, unless such date is mutually extended in a written instrument
executed by each of the parties hereto.
(r) Investor Consent. The Investors, in their capacity as the
holders of all of the issued and outstanding shares of Preferred Stock, hereby
consent to (i) any of the debt financing transactions consummated by the Company
as of the Closing Date that are necessary to permit the Company to pay the
Aggregate Redemption Price and (ii) the termination as of the Closing Date of
the Voting Agreement dated as of September 6, 2002 among the Company and the
shareholders of the Company and the Investors listed on the signature pages to
- 18 -
such Voting Agreement, so long as: (A) the Company complies with all of its
obligations under this Agreement and there has been no breach of this Agreement
by the Company, (B) the Company uses a portion of the proceeds to pay in full
the Aggregate Redemption Price no later than the first date on which any such
debt financing transactions occurs and (C) no such debt financing transaction
shall involve or contemplate the issuance or deemed issuance of any equity or
equity-linked securities of the Company or any of its Subsidiaries.
[Signature Page Follows]
- 19 -
IN WITNESS WHEREOF, the Investors and the Company have caused this
Redemption Agreement to be duly executed as of the date first written above.
COMPANY:
CLEAN HARBORS, INC.
By: ______________________________
Name:
Title:
- 20 -
INVESTORS:
CERBERUS CH LLC
By: Cerberus Partners, L.P.
its Managing Member
By: Cerberus Associates, L.L.C.
its General Partner
By: _____________________________
Name:
Title:
- 21 -
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.
its General Partner
By: Oak Hill Securities MGP, Inc.
its General Partner
By: _______________________________
Name:
Title:
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.
its General Partner
By: Oak Hill Securities MGP II, Inc.
its General Partner
By: _______________________________
Name:
Title:
LERNER ENTERPRISES, L.P.
By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
Lerner Enterprises
By: _______________________________
Name:
Title:
- 22 -
P&PK FAMILY LTD. PARTNERSHIP
By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
P&PK Family Ltd. Partnership
By: _______________________________
Name:
Title:
CARDINAL INVESTMENT PARTNERS I, L.P.
By: Oak Hill Advisors, L.P.
As advisor and attorney-in-fact to
Cardinal Investment Partners I, L.P.
By: Oak Hill Advisors MGP, Inc.
its General Partner
By: _______________________________
Name:
Title:
BASSO HOLDINGS LTD.
(f/k/a AIG DKR SoundShore Holdings Ltd.)
By: __________________________
Howard I. Fischer
Authorized Signatory
- 23 -
SCHEDULE OF INVESTORS
Investor Address Number Aggregate Number Investor's Representatives' Wire
and Facsimile Number of Redemption Price of Address and Instructions
Preferred Warrants Facsimile Number
Shares
Cerberus CH LLC 16,750 $18,308,132.12, 1,859,250 Schulte Roth & Zabel LLP Account Name: Cerberus
450 Park Avenue, 28th Floor assuming the 919 Third Avenue Partners, L.P.
New York, NY 10022 Closing occurs on New York, NY 10022 Bank Name: Citibank, N.A,
Telephone: (212) 891-2100 June 30, 2004. If Attn: Stuart Freedman, Esq. ABA #: 021-000-089
Facsimile: (212) 891-1540 the Closing occurs Telephone: (212) 756-2000 Account Number: 37839889
Attention: Kevin Genda and after June 30, 2004, Facsimile: (212) 593-5955 Attn: Michael Hisler
Daniel Wolf the Aggregate RE: Clean Harbors -
Redemption Price Preferred Redemption
shall include an
additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $3,010.88.
Oak Hill Securities Fund, 1,675 $1,830,813.21, 185,925 Paul, Weiss, Rifkind, The Bank of New York
L.P. assuming the Wharton & Garrison ABA#: 021-000-018
65 East 55th Street Closing occurs on 1285 Avenue of the Americas BBK/IOC/565/Institutional
New York, New York 10022 June 30, 2004. If New York, NY 10019 Custody
Telephone: (212) 326-1552 the Closing occurs Telephone: (212) 373-3000 Acct.: Oak Hill Securities
Facsimile: (212) 838-8411 after June 30, 2004, Facsimile: (212) 757-3990 Fund, L.P.
Attention: William H. the Aggregate Attention: Eric Goodison Acct #: 272244
Bohnsack, Jr. Redemption Price
shall include an
additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $301.09.
Oak Hill Securities Fund 3,465 $3,787,324.05, 384,615 Paul, Weiss, Rifkind, The Bank of New York
II, L.P. assuming the Wharton & Garrison ABA#: 021-000-018
65 East 55th Street Closing occurs on 1285 Avenue of the Americas BBK/IOC/565/Institutional
New York, New York 10022 June 30, 2004. If New York, NY 10019 Custody
Telephone: (212) 326-1552 the Closing occurs Telephone: (212) 373-3000 Acct.: Oak Hill Securities
Facsimile: (212) 838-8411 after June 30, 2004, Facsimile: (212) 757-3990 Fund II, L.P.
Attention: William H. the Aggregate Attention: Eric Goodison Acct #: 272244
Bohnsack, Jr. Redemption Price
shall include
an additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $622.85.
Lerner Enterprises, L.P. 730 $797,906.65, 81,030 Paul, Weiss, Rifkind, Citibank, NA
65 East 65th Street assuming the Wharton & Garrison ABA #: 021-000-089
New York, New York 10022 Closing occurs on 1285 Avenue of the Americas Acct: Bear Stearns & Co.
Telephone: (212) 326-1552 June 30, 2004. If New York, NY 10019 Acct #: 092-53186
Facsimile: (212) 838-8411 the Closing occurs Telephone: (212) 373-3000 For further Credit: Lerner
Attention: William H. after June 30, 2004, Facsimile: (212) 757-3990 Enterprises, L.P.
Bohnsack, Jr. the Aggregate Attention: Eric Goodison Acct #: 102-03854-21
Redemption Price
shall include
an additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $131.22.
P&PK Family Ltd. Partnership 165 $180,348.76, 18,135 Paul, Weiss, Rifkind, Citibank, NA
65 East 55th Street assuming the Wharton & Garrison ABA #: 021-000-089
New York, New York 10021 Closing occurs on 1285 Avenue of the Americas Acct: Bear Stearns & Co.
Telephone: (212) 326-1552 June 30, 2004. If New York, NY 10019 Acct #: 092-53186
Facsimile: (212) 838-8411 the Closing occurs Telephone: (212) 373-3000 For further Credit: P&PK
Attention: William H. after June 30, 2004, Facsimile: (212) 757-3990 Family Ltd. Partnership
Bohnsack, Jr. the Aggregate Attention: Eric Goodison Acct #: 102-03522-23
Redemption Price
shall include
an additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $29.66.
Cardinal Investment 425 $464,534.70, 47,175 Paul, Weiss, Rifkind, Citibank, NA
Partners I, L.P. assuming the Wharton & Garrison ABA #: 021-000-089
65 East 55th Street Closing occurs on 1285 Avenue of the Americas Acct: Bear Stearns & Co.
New York, New York 10021 June 30, 2004. If New York, NY 10019 Acct #: 092-53186
Telephone: (212) 326-1552 the Closing occurs Telephone: (212) 373-3000 For further Credit:
Facsimile: (212) 838-8411 after June 30, 2004, Facsimile: (212) 757-3990 Cardinal Investment
Attention: William H. the Aggregate Attention: Eric Goodison Partners I, L.P.
Bohnsack, Jr. Redemption Price Acct #: 102-03522-23
shall include
an additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $76.40.
Basso Holdings Ltd. 1,790 $1,956,510.84, 198,690 Basso Holdings Ltd. Citibank NA, NY
c/o Basso Capital assuming the c/o Basso Capital ABA #: 021-000-089
Management, L.P. Closing occurs on Management, L.P. Acct: Basso Holdings Ltd.
1266 East Main Street June 30, 2004. If 1281 East Main Street Acct #: 40764566
Stamford, Connecticut 06902 the Closing occurs Stamford, Connecticut 06902
Telephone: (203) 352-6100 after June 30, 2004, Telephone: (203) 352-6100
Facsimile: (203) 352-6194 the Aggregate Facsimile: (203) 352-6194
Attention: Howard I. Fischer Redemption Price Attention: Marc Seidenberg
shall include
an additional per
diem amount for each
day after June 30,
2004 until and
including the
Closing Date equal
to $321.76.
Schedule 3(c)
-------------
Capital Stock Rights
--------------------
Schedule 3(c)
-------------
Capital Stock Rights
--------------------
(A) Preemptive rights - none.
(B) Convertible debt securities - none.
(C) Other outstanding rights:
(i) 112,000 shares of Series B Preferred Stock which are now convertible
in Common Stock at a conversion ratio of 3.040 shares of Common Stock for each
share of Series B Preferred Stock.
(ii) Employee stock option and stock purchase plans (and stock options
issued thereunder):
(A) Clean Harbors, Inc. 1987 Stock Option Plan
(expired but some options granted thereunder remain
outstanding). As of June 14, 2004, there were 34,750
options outstanding. There are no further options
authorized to be issued.
(B) Clean Harbors, Inc. 1992 Equity Incentive Plan
expired but some options granted thereunder remain
outstanding). As of June 14, 2004, there were 493,040
options outstanding. There are no further options
authorized to be issued.
(C) Clean Harbors, Inc. 2000 Stock Incentive Plan.
As of June 14, 2004, there were 1,227,120 options
outstanding and an additional 214,214 shares available
for grant.
(D) Clean Harbors Employee Stock Purchase Plan. As
of June 14, 2004, there were 165,560 shares available
to be issued.
(D) Registration Rights Agreements:
Investors Rights Agreement dated September 6, 2002 in favor of the
Investors.
(E) Redemption Agreements - While the Series B Convertible Stock is redeemable
at the option of the Company, there is no redemption obligation.
(F) Anti-dilution Provisions:
The Series B Preferred Stock provides for "weighted average" anti-dilution
protection in the event the Company issues Common Stock or rights therefore
at less than market value (subject to certain permitted transactions)
(G) Phantom Stock Plans - none.
EXECUTION VERSION
================================================================================
CLEAN HARBORS, INC.
INVESTORS RIGHTS AGREEMENT
Dated as of June 30, 2004
================================================================================
9590099.8
TABLE OF CONTENTS
Page
1. DEFINITIONS...............................................................1
2. REGISTRATION UNDER THE SECURITIES ACT.....................................5
2.1. Demand Registration.............................................5
2.2. Incidental Registration.........................................9
2.3. S-3 Registration; Shelf Registration............................11
2.4. Underwritten Offerings..........................................11
2.5. Expenses........................................................12
2.6. Conversions; Exercises..........................................12
2.7. Registration Eligibility........................................12
3. HOLDBACK ARRANGEMENTS.....................................................13
3.1. Restrictions on Sale by Holders of Registrable Securities.......13
3.2. Restrictions on Sale by the Company and Others..................13
4. REGISTRATION PROCEDURES...................................................13
4.1. Obligations of the Company......................................13
4.2. Seller Information..............................................18
4.3. Notice to Discontinue...........................................18
5. INDEMNIFICATION; CONTRIBUTION.............................................18
5.1. Indemnification by the Company..................................18
5.2. Indemnification by Holders......................................19
5.3. Conduct of Indemnification Proceedings..........................19
5.4. Contribution....................................................20
5.5. Indemnification Payments........................................21
5.6. Other Indemnification...........................................21
6. GENERAL PROVISIONS REGARDING REGISTRATIONS.................................21
6.1. Adjustments Affecting Registrable Securities....................21
6.2. Registration Rights to Others...................................21
6.3. Availability of Information; Rule 144; Rule 144A; Other
Exemptions....................................................21
7. PROVISIONS APPLICABLE TO SECURITYHOLDERS...................................22
7.1. General Restriction.............................................22
7.2. Right of Co-Sale................................................22
7.3. Permitted Transfers.............................................23
8. GENERAL................................................................... 23
8.1. Amendments and Waivers..........................................23
8.2. Notices.........................................................24
8.3. Successors and Assigns..........................................25
8.4. Counterparts....................................................25
Page
8.5. Descriptive Headings, Etc.......................................25
8.6. Severability....................................................25
8.7. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER......................26
8.8. Remedies; Specific Performance..................................26
8.9. Entire Agreement................................................26
8.10. Further Assurances..............................................27
8.11. Construction....................................................27
8.12. No Inconsistent Agreement.......................................27
8.13. Costs and Attorneys' Fees.......................................27
-ii-
INVESTORS RIGHTS AGREEMENT
This INVESTORS RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of June 30, 2004, by and among Clean Harbors, Inc., a Massachusetts
corporation (the "Company"), the investors identified as Initial Holders on the
signature pages hereto (the "Initial Holders"), Alan S. McKim and the Trustees
of Alan S. McKim's Children's Trust (the "Trust," and together with Alan S.
McKim, "McKim").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, simultaneously herewith, the Company and the Initial Holders,
have entered into a Preferred Stock Redemption Agreement dated as of June 30,
2004 (the "Redemption Agreement"), pursuant to which the Company agreed, subject
to the terms and conditions therein stated, to redeem an aggregate of 25,000
shares of Series C Convertible Redeemable Preferred Stock, par value $0.01 per
share, of the Company (the "Series C Preferred Stock") in exchange for cash and
the issuance to the Initial Holders of warrants (the "Warrants") to purchase an
aggregate of 2,775,000 share of Common Stock (as defined herein), subject to
adjustment as provided in the Warrants.
WHEREAS, in connection with the Redemption Agreement, (i) the Company
is hereby granting the Initial Holders registration rights and certain other
rights and (ii) McKim, who will benefit as a significant shareholder of the
Company by the Initial Holders agreeing to have the Series C Preferred Stock
redeemed by the Company under the Redemption Agreement, is hereby granting the
Initial Holders the right to tag-along to certain sales of Company securities by
McKim, all subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" shall mean (i) with respect to any Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person, and (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"Agents" shall have the meaning set forth in Section 5.1.
"Agreement" shall have the meaning set forth in the preamble.
"Common Stock" shall mean shares of common stock, par value $.01 per
share, of the Company.
"Company" shall have the meaning set forth in the preamble.
9590099.8
"Convey" has the meaning set forth in Section 7.1.
"Demand Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement of
the Company which covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 2.1 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference (or deemed to be incorporated by
reference) therein.
"Encumbrance" shall mean any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other restriction of any kind.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Governmental Entity" shall mean any domestic (federal and state),
foreign or supranational court, commission, governmental body, regulatory
agency, authority or tribunal.
"Holders" shall mean the Initial Holders for so long as they are the
registered owner of any Registrable Securities and such of their heirs,
successors and permitted assigns (including any permitted transferees of
Registrable Securities) who acquire or are otherwise the transferee of
Registrable Securities, directly or indirectly, from any Initial Holder (or any
subsequent Holder), for so long as such heirs, successors and permitted assigns
are the registered owner of any Registrable Securities. For purposes of this
Agreement, a Person will be deemed to be a Holder whenever such Person holds an
option to purchase, or a security convertible into or exercisable or
exchangeable for, Registrable Securities (including the Warrants), whether or
not such purchase, conversion, exercise or exchange has actually been effected
and disregarding any legal restrictions upon the exercise of such rights.
Registrable Securities issuable upon exercise of an option or upon conversion,
exchange or exercise of another security shall be deemed outstanding for the
purposes of this Agreement.
"Holder's Counsel" shall mean one firm of counsel (per registration)
to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of a Demand Registration, by the
Initiating Holders holding a majority of the Registrable Securities for which
registration was requested in the Request, and (ii) in all other cases, by the
Majority Holders of the Registration.
"Incidental Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
statement of the Company, which covers the Registrable Securities requested to
be included therein pursuant to the provisions of Section 2.2 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
2
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Initial Holders" shall have the meaning set forth in the preamble.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for such registration.
"Inspector" or "Inspectors" has the meaning set forth in Section
4.1(g).
"Majority Holders" shall mean one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders of Registrable Securities who would
hold a majority of the Registrable Securities to be included in such
registration.
"McKim" has the meaning set forth in the preamble.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq National Market" shall have the meaning set forth in Section
4.1(k).
"No-Action Letter" shall have the meaning set forth in Section 2.7
"Permitted Family Transferee" has the meaning set forth in Section
7.3.
"Person" shall mean any individual, firm, partnership, corporation,
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Pro Rata Share" has the meaning set forth in Section 7.2(a).
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act) and any such Prospectus as amended or
supplemented by any prospectus supplement, and all other amendments and
supplements to such Prospectus, including post-effective amendments, and in each
case including all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Purchaser" has the meaning set forth in Section 7.2(a).
"Purchase Offer" has the meaning set forth in Section 7.2(a).
"Records" shall have the meaning set forth in Section 4.1(g).
3
"Redemption Agreement" has the meaning set forth in the first recital.
"Registrable Securities" shall mean (i) any Warrant Shares, and (ii)
any other securities of the Company (or any successor or assign of the Company,
whether by merger, consolidation, sale of assets or otherwise) which may be
issued with respect to, in exchange for, or in substitution of, Warrant Shares
by reason of any dividend or stock split, combination of shares, merger,
consolidation, recapitalization, reclassification, reorganization, sale of
assets or similar transaction. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (B) such securities are sold
pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act, (C) such securities have been otherwise transferred and a new
certificate or other evidence of ownership for them not bearing the legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act, or (D) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all reasonable out of
pocket expenses incident to performance of or compliance with this Agreement by
the Company and its subsidiaries, including, without limitation (i) all SEC,
stock exchange, NASD and other registration, listing and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and compliance with the rules of any stock exchange (including
fees and disbursements of counsel in connection with such compliance and the
preparation of a blue sky memorandum and legal investment survey), (iii) all
printers' fees and costs incurred in printing, distributing, mailing and
delivering any Registration Statement, any Prospectus and any other document
relating to the performance of or compliance with this Agreement, (iv) the fees
and disbursements of counsel for the Company, (v) the fees and disbursements of
Holders' Counsel, (vi) the fees and disbursements of all independent public
accountants (including the expenses of any audit and/or "cold comfort" letters)
and the fees and expenses of other Persons, including experts, retained by the
Company, (vii) the expenses incurred in connection with making road show
presentations and holding meetings with potential investors to facilitate the
distribution and sale of Registrable Securities, (viii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, (ix) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered, and (x) all internal expenses of the Company (including all
salaries and expenses of officers and employees performing legal or accounting
duties); provided, however, Registration Expenses shall not include discounts
and commissions payable to underwriters, selling brokers, dealer managers or
other similar Persons engaged in the distribution of any of the Registrable
Securities; provided, further, that in any case where Registration Expenses are
not to be borne by the Company, such expenses shall not include salaries of
Company personnel or general overhead expenses of the Company, auditing fees,
premiums or other expenses relating to liability insurance required by
underwriters of the Company or other expenses for the preparation of financial
statements or other data normally prepared by the Company in the ordinary course
of its business or which the Company would have incurred in any event; and
provided, further, that in the event the Company shall not register any
securities with respect to which it had given written notice of its intention to
4
register to Holders, notwithstanding anything to the contrary in the foregoing,
all of the costs incurred by the Holders in connection with such registration
shall be deemed to be Registration Expenses.
"Registration Statement" shall mean any registration statement of the
Company which covers any Registrable Securities and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Request" shall have the meaning set forth in Section 2.1(a).
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Series C Preferred Stock" shall have the meaning set forth in the
first recital.
"Shelf Registration" shall have the meaning set forth in Section
2.1(a).
"Stockholders" shall mean, collectively, the holders of Common Stock.
"Underwriters" shall mean the underwriters, if any, of the offering
being registered under the Securities Act. "Underwritten Offering" shall mean a
sale of securities of the Company to an Underwriter or Underwriters for
reoffering to the public.
"Warrant Shares" shall mean the shares of Common Stock or other
securities issued or issuable upon exercise of the Warrants.
"Withdrawn Demand Registration" shall have the meaning set forth in
Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT.
2.1. Demand Registration.
(a) Right to Demand Registration. Subject to Section
2.1(c) and Section 2.7 hereof, at any time or from time to time, any Initial
Holder (or an assignee to whom such Initial Holder has expressly delegated or
assigned all or any portion of its rights under this sentence) shall have the
right to request in writing that the Company register all or part of such
Holders' Registrable Securities (a "Request") (which Request shall specify the
amount of Registrable Securities intended to be disposed of by such Holders and
5
the intended method of disposition thereof) by filing with the SEC a Demand
Registration Statement. As promptly as practicable, but no later than 15 days
after receipt of a Request, the Company shall give written notice of such
requested registration to all other Holders of Registrable Securities. Subject
to Section 2.1(b), the Company shall include in a Demand Registration (A) the
Registrable Securities intended to be disposed of by the Initiating Holders and
(B) the Registrable Securities intended to be disposed of by any other Holder
which shall have made a written request (which request shall specify the amount
of Registrable Securities to be registered and the intended method of
disposition thereof) to the Company for inclusion thereof in such registration
within 20 days after the receipt of such written notice from the Company. The
Company shall, as expeditiously as reasonably practicable following a Request,
use its best efforts to cause to be filed with the SEC a Demand Registration
Statement providing for the registration under the Securities Act of the
Registrable Securities which the Company has been so requested to register by
all such Holders, to the extent necessary to permit the disposition of such
Registrable Securities to be registered in accordance with the intended methods
of disposition thereof specified in such Request or further requests (including,
without limitation, by means of a shelf registration pursuant to Rule 415 under
the Securities Act (a "Shelf Registration") if so requested and if the Company
is then eligible to use such a registration). The Company shall use its best
efforts to have such Demand Registration Statement declared effective by the SEC
as soon as practicable thereafter and to keep such Demand Registration Statement
continuously effective for the period specified in Section 4.1(b).
(i) A Request may be withdrawn prior to the filing of the
Demand Registration Statement by the Majority Holders of the
Registration (a "Withdrawn Request") and a Demand Registration
Statement may be withdrawn prior to the effectiveness thereof by the
Majority Holders of the Registration (a "Withdrawn Demand
Registration"), and such withdrawals shall be treated as a Demand
Registration which shall have been effected pursuant to this Section
2.1, unless the Holders of Registrable Securities to be included in
such Registration Statement reimburse the Company for its reasonable
out-of-pocket Registration Expenses relating to the preparation and
filing of such Demand Registration Statement (to the extent actually
incurred), in which case such withdrawal shall not be treated as a
Demand Registration effected pursuant to this Section 2.1 (and shall
not be counted toward the number of Demand Registrations); provided,
however, that if a Withdrawn Request or Withdrawn Registration
Statement is made (A) because of a material adverse change in the
business, financial condition or prospects of the Company, or (B)
because the sole or lead managing Underwriter advises that the amount
of Registrable Securities to be sold in such offering be reduced
pursuant to Section 2.1(b) by more than 15% of the Registrable
Securities to be included in such Registration Statement, then such
withdrawal shall not be treated as a Demand Registration effected
pursuant to this Section 2.1 (and shall not be counted toward the
number of Demand Registrations) and the Company shall pay all
Registration Expenses in connection therewith, and, provided further,
that if a Withdrawn Request or Withdrawn Demand Registration is made
with respect to a Request or Demand Registration Statement of which
Basso, as defined below, is the Initiating Holder, the Company shall
continue to effect the Demand Registration in accordance with this
Agreement with respect to the Registrable Securities sought to be
registered by Basso. Any Holder requesting inclusion in a Demand
6
Registration may, at any time prior to the effective date of the
Demand Registration Statement (and for any reason) revoke such request
by delivering written notice to the Company revoking such requested
inclusion.
(ii) The registration rights granted pursuant to the
provisions of this Section 2.1 shall be in addition to the
registration rights granted pursuant to the other provisions of
Section 2 hereof.
(b) Priority in Demand Registrations. If a Demand
Registration involves an Underwritten Offering, and the sole or lead managing
Underwriter, as the case may be, of such Underwritten Offering shall advise the
Company in writing (with a copy to each Holder requesting registration) on or
before the date five days prior to the date then scheduled for such offering
that, in its opinion, the amount of Registrable Securities requested to be
included in such Demand Registration exceeds the number which can be sold in
such offering within a price range acceptable to the Majority Holders of the
Registration (such writing to state the basis of such opinion and the
approximate number of Registrable Securities which may be included in such
offering), and the Request is not thereafter withdrawn, the Company shall
include in such Demand Registration, to the extent of the number which the
Company is so advised may be included in such offering, the Registrable
Securities requested to be included in the Demand Registration by the Holders
allocated pro rata in proportion to the number of Registrable Securities
requested to be included in such Demand Registration by each of such Holders. In
the event the Company shall not, by virtue of this Section 2.1(b), include in
any Demand Registration all of the Registrable Securities of any Holder
requested to be included in such Demand Registration, such Holder may, upon
written notice to the Company given within five days of the date such Holder
first is notified of such matter, further reduce the amount of Registrable
Securities it desires to have included in such Demand Registration, whereupon
only the Registrable Securities, if any, that it desires to have included will
be so included and the Holders not so reducing shall be entitled to a
corresponding pro rata increase in the amount of Registrable Securities to be
included in such Demand Registration.
(c) Limitations on Registrations. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: in no event shall the Company
be required to effect a Demand Registration unless the aggregate offering price,
net of underwriting discounts and commissions, is at least $1,000,000; provided,
however, that the Company shall be required to effect a Demand Registration
regardless of the aggregate offering price in the event that the Majority
Holders are disposing of all of the Registrable Securities held by them; and
(iii) in no event shall the Company be required to effect more than (A) two
Demand Registrations for the benefit of Cerberus CH LLC, an Initial Holder, and
its successors and assigns, (B) one Demand Registration for the benefit of all
of the Initial Holders that are Affiliates of Oak Hill Advisors, Inc. ("Oak
Hill") or accounts or funds that Oak Hill or its Affiliates control or advise,
and their successor and assigns and (C) one Demand Registration for the benefit
of Basso Holdings Ltd., an Initial Holder, and its successors and assigns
(collectively, "Basso"); provided, however, that such number shall be increased
to the extent the Company (x) does not include in what would otherwise be the
final registration for which the Company is required to pay Registration
7
Expenses the number of Registrable Securities requested to be registered by the
Holders by reason of Section 2.1(b) or (y) terminates a Shelf Registration
pursuant to Section 2.3 prior to the time that all Registrable Securities
covered by such Shelf Registration have been sold; and provided, further, that
the Registration Expenses in connection with each additional Demand Registration
shall be allocated pro rata among all Persons on whose behalf securities of the
Company are included in such registration, on the basis of the respective
amounts of the securities then being registered on their behalf.
(d) Underwriting; Selection of Underwriters. Notwithstanding
anything to the contrary contained in Section 2.1(a), if the Initiating Holders
holding a majority of the Registrable Securities for which registration was
requested in the Request so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of a firm commitment
Underwritten Offering and such Initiating Holders may require that all Persons
(including other Holders) participating in such registration sell their
Registrable Securities to the Underwriters at the same price and on the same
terms of underwriting applicable to the Initiating Holders. If any Demand
Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration shall be selected by the Company subject to
the approval of the Majority Holders of the Registration.
(e) Effective Registration Statement; Suspension. A
Demand Registration Statement shall not be deemed to have become effective (and
the related registration will not be deemed to have been effected) (i) unless it
has been declared effective by the SEC and remains effective in compliance with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Demand Registration Statement for the
time period specified in Section 4.1(b), (ii) if the offering of any Registrable
Securities pursuant to such Demand Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, or (iii) if, in the case of an Underwritten
Offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied (other than by the sole reason of
any breach or failure by the Holders of Registrable Securities) and are not
otherwise waived.
(f) Registration Statement Form. Registrations under this
Section 2.1 shall be on Form S-3 (or a successor form thereto adopted by the
SEC) or, if such Form is not then available, on such other appropriate
registration form of the SEC as shall be selected by the Initiating Holders
holding a majority of the Registrable Securities for which the registration was
requested in the Request and which shall be available for the sale of
Registrable Securities in accordance with the intended method or methods of
disposition specified in the requests for registration. The Company agrees to
include in any such Registration Statement all information which any selling
Holder, upon advice of counsel, shall reasonably request.
(g) Other Registrations. During the period (i) beginning on
the date of a Request and (ii) ending on the date that is 90 days after the date
that a Demand Registration Statement filed pursuant to such Request has been
declared effective by the SEC or, if the Holders shall withdraw such Request or
such Demand Registration Statement, on the date of such Withdrawn Request or
such Withdrawn Registration Statement, the Company shall not, without the
consent of the Majority Holders of the Registration, file a registration
statement pertaining to any other securities of the Company.
8
2.2. Incidental Registration.
(a) Right to Include Registrable Securities. (i) If the
Company at any time or from time to time proposes to register any of its
securities under the Securities Act (other than in a registration on Form S-4 or
S-8 or any successor form to such forms and other than pursuant to Section 2.1
or 2.3) whether or not pursuant to registration rights granted to other holders
of its securities and whether or not for sale for its own account, the Company
shall deliver prompt written notice (which notice shall be given at least 45
days prior to such proposed registration) to all Holders of Registrable
Securities of its intention to undertake such registration, describing in
reasonable detail the proposed registration and distribution (including the
anticipated range of the proposed offering price, the class and number of
securities proposed to be registered and the distribution arrangements) and of
such Holders' right to participate in such registration under this Section 2.2
as hereinafter provided. Subject to the other provisions of this Section 2.2(a)
and Section 2.2(b), upon the written request of any Holder made within 30 days
after the receipt of such written notice (which request shall specify the amount
of Registrable Securities to be registered and the intended method of
disposition thereof), the Company shall effect the registration under the
Securities Act of all Registrable Securities requested by Holders to be so
registered (an "Incidental Registration"), to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the Registration Statement which covers the securities which the
Company proposes to register and shall cause such Registration Statement to
become and remain effective with respect to such Registrable Securities in
accordance with the registration procedures set forth in Section 4. If an
Incidental Registration involves an Underwritten Offering, immediately upon
notification to the Company from the Underwriter of the price at which such
securities are to be sold, the Company shall so advise each participating
Holder. The Holders requesting inclusion in an Incidental Registration may, at
any time prior to the effective date of the Incidental Registration Statement
(and for any reason), revoke such request by delivering written notice to the
Company revoking such requested inclusion.
(ii) If at any time after giving written notice of its
intention to register any securities and prior to the effective date
of the Incidental Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may,
at its election, give written notice of such determination to each
Holder of Registrable Securities and, thereupon, (A) in the case of a
determination not to register, the Company shall be relieved of its
obligation to register any Registrable Securities in connection with
such registration (but not from its obligation to pay the Registration
Expenses incurred in connection therewith), without prejudice,
however, to the rights of Holders to cause such registration to be
effected as a registration under Section 2.1 and (B) in the case of a
determination to delay such registration, the Company shall be
permitted to delay the registration of such Registrable Securities for
the same period as the delay in registering such other securities;
provided, however, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable
Securities in such Incidental Registration, then the Company shall
again give all Holders the opportunity to participate therein and
shall follow the notification procedures set forth in the preceding
9
paragraph. There is no limitation on the number of such Incidental
Registrations pursuant to this Section 2.2 which the Company is
obligated to effect.
(iii) The registration rights granted pursuant to the
provisions of this Section 2.2 shall be in addition to the
registration rights granted pursuant to the other provisions of
Section 2 hereof.
(b) Priority in Incidental Registration. If an Incidental
Registration involves an Underwritten Offering (on a firm commitment basis), and
the sole or the lead managing Underwriter, as the case may be, of such
Underwritten Offering shall advise the Company in writing (with a copy to each
Holder requesting registration) on or before the date five days prior to the
date then scheduled for such offering that, in its opinion, the amount of
securities (including Registrable Securities) requested to be included in such
registration exceeds the amount which can be sold in such offering without
materially interfering with the successful marketing of the securities being
offered (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering without such
effect), the Company shall include in such registration, to the extent of the
number which the Company is so advised may be included in such offering without
such effect, (i) in the case of a registration initiated by the Company, (A)
first, the securities that the Company proposes to register for its own account
(but solely to the extent that the proceeds thereof shall not be used to
purchase shares of common stock of the Company or other securities of the
Company), (B) second, the Registrable Securities requested to be included in
such registration by the Holders, allocated pro rata in proportion to the number
of Registrable Securities requested to be included in such registration by each
of such Holders, and (C) third, other securities of the Company to be registered
on behalf of any other Person, and (ii) in the case of a registration initiated
by a Person other than the Company, (A) first, the Registrable Securities
requested to be included in such registration by the Holders, and any Persons
initiating such registration, allocated pro rata in proportion to the number of
securities requested to be included in such registration by each of them, (B)
second, the securities that the Company proposes to register for its own
account, and (C) third, the securities of the Company to be registered on behalf
of any other Person; provided, however, that in the event the Company will not,
by virtue of this Section 2.2(b), include in any such registration all of the
Registrable Securities of any Holder requested to be included in such
registration, such Holder may, upon written notice to the Company given within
three days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding pro rata increase in the amount of Registrable
Securities to be included in such registration.
(c) Selection of Underwriters. If any Incidental
Registration involves an Underwritten Offering, the sole or managing
Underwriter(s) and any additional investment bankers and managers to be used in
connection with such registration shall be subject to the approval of the
Majority Holders of the Registration (such approval not to be unreasonably
withheld).
10
2.3. S-3 Registration; Shelf Registration.
(a) Shelf Registration. If a request made pursuant to
Section 2.1 is for a Shelf Registration, subject to Section 2.7, the Company
shall use its best efforts to keep the Shelf Registration continuously effective
through the date on which all of the Registrable Securities covered by such
Shelf Registration may be sold pursuant to Rule 144(k) under the Securities Act
(or any successor provision having similar effect); provided, however, that
prior to the termination of such Shelf Registration, the Company shall first
furnish to each Holder of Registrable Securities participating in such Shelf
Registration (i) an opinion, in form and substance satisfactory to the Majority
Holders of the Registration, of counsel for the Company satisfactory to the
Majority Holders of the Registration stating that such Registrable Securities
are freely saleable pursuant to Rule 144(k) under the Securities Act (or any
successor provision having similar effect) or (ii) a "No-Action Letter" from the
staff of the SEC stating that the SEC would not recommend enforcement action if
the Registrable Securities included in such Shelf Registration were sold in a
public sale other than pursuant to an effective registration statement.
2.4. Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole
or lead managing Underwriter for any Underwritten Offering effected pursuant to
a Demand Registration, the Company shall enter into a customary underwriting
agreement with the Underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Company and each Holder of
Registrable Securities participating in such offering and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 5.
(b) Holders of Registrable Securities to be Parties to
Underwriting Agreement. The Holders of Registrable Securities to be distributed
by Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement between the Company and such Underwriters
and may, at such Holders' option, require that any or all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such Underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such Underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holders of
Registrable Securities; provided, however, that the Company shall not be
required to make any representations or warranties with respect to written
information specifically provided by a selling Holder for inclusion in the
Registration Statement. No Holder shall be required to make any representations
or warranties to, or agreements with, the Company or (in the case of an
Incidental Registration) the Underwriters other than representations, warranties
or agreements regarding such Holder, such Holder's Registrable Securities and
such Holder's intended method of disposition.
(c) Participation in Underwritten Registration.
Notwithstanding anything herein to the contrary, no Person may participate in
any underwritten registration hereunder unless such Person (i) agrees to sell
its securities on the same terms and conditions provided in any underwritten
11
arrangements approved by the Persons entitled hereunder to approve such
arrangement and (ii) accurately completes and executes in a timely manner all
questionnaires, powers of attorney, indemnities, custody agreements,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
2.5. Expenses. The Company shall pay all Registration Expenses
in connection with any Demand Registration, Incidental Registration or Shelf
Registration whether or not such registration shall become effective and whether
or not all Registrable Securities originally requested to be included in such
registration are withdrawn or otherwise ultimately not included in such
registration, except as otherwise provided with respect to a Withdrawn Request
and a Withdrawn Demand Registration in Section 2.1(a).
2.6. Conversions; Exercises. Notwithstanding anything to the
contrary herein, in order for any Registrable Securities that are issuable upon
the exercise of conversion rights, options or warrants to be included in any
registration pursuant to Section 2 hereof, the exercise of such conversion
rights, options or warrants must be effected no later than immediately prior to
the closing of any sales under the Registration Statement pursuant to which such
Registrable Securities are to be sold.
2.7. Registration Eligibility. The Company and each Initial
Holder acknowledge that the Company is operating on the date hereof pursuant a
No-Action Letter from the SEC in the form attached hereto as Exhibit A (the
"No-Action Letter"), which may limit the Company's ability to have Registration
Statements covering Registrable Securities declared effective by the SEC. In
light of the foregoing, the Company and the Initial Holders agree that if the
Company, solely by virtue of the limitations expressly set forth in the
No-Action Letter, is unable to have any Registration Statement covering
Registrable Securities declared effective by the SEC, the Company shall not be
in breach of its obligation to register Registrable Securities pursuant to this
Agreement if, and only, if during the effectiveness of this Agreement (whether
or not a Request is pending) the Company is using its best efforts to remedy the
condition giving rise to such limitations expressed in the No-Action Letter,
which "best efforts" shall include, but not be limited to, (a) seeking further
effective waivers or no-action relief (to the extent, if any, then required)
from the SEC no later than the earlier of (i) the date thirty (30) days after a
Request is made to register Registrable Securities and (ii) 120 days after
December 31, 2004 (and, to the extent such relief is not granted, seeking such
waivers or no-action relief on a no less frequent basis than annually following
each prior request until such relief is granted), to the effect that the Company
may register the Registrable Securities with the SEC without compliance by the
Company with the requirement to file historical audited financial statements for
the CSD, and (b) taking such other actions as are reasonably requested by the
Holders or that would otherwise reasonably be expected to allow the Company to
register Registrable Securities without complying with SEC rules and regulations
concerning the filing of historical audited financial statements for the CSD.
The Company shall not seek no-action or other relief from the SEC with regard to
the registration of any other securities of the Company unless at the same time
and on at least as favorable a basis the Company seeks relief with regard to the
registration of Registrable Securities.
12
3. HOLDBACK ARRANGEMENTS.
3.1. Restrictions on Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities agrees, by acquisition of such Registrable
Securities, if timely requested in writing by the sole or lead managing
Underwriter, not to make any short sale of, loan, grant any option for the
purchase of or effect any public sale or distribution, of any of the Company's
equity securities (or any security convertible into or exchangeable or
exercisable for any of the Company's equity securities) during the time period
reasonably requested by the sole or lead managing Underwriter not to exceed 90
days, beginning on the effective date of the applicable registration statement
(except as part of such underwritten registration or pursuant to registrations
on Forms S-4 or S-8 or any successor form to such forms), unless the sole or
lead Managing Underwriter in such Underwritten Offering otherwise agrees;
provided, however, that to the extent the Company or the sole lead Managing
Underwriter releases any Person from the foregoing restrictions in whole or in
part it shall, on the same day, notify the Initial Holder of such release and
such parties shall automatically be released to the same extent.
3.2. Restrictions on Sale by the Company and Others. The Company
and McKim agree that if timely requested in writing by the sole or lead managing
Underwriter in an Underwritten Offering of any Registrable Securities, not to
make any short sale of, loan, grant any option for the purchase of or effect any
public sale or distribution of any of the Company's equity securities (or any
security convertible into or exchangeable or exercisable for any of the
Company's equity securities) during the nine business days (as such term is used
in Rule 10b-6 under the Exchange Act) prior to, and during the time period
reasonably requested by the sole or lead managing Underwriter not to exceed 180
days, beginning on the effective date of the applicable registration statement
(except as part of such underwritten registration or pursuant to registrations
on Forms S-4 or S-8 or any successor form to such forms), unless the sole or
lead Managing Underwriter in such Underwritten Offering otherwise agrees. The
Company will use its reasonable best efforts to cause each director or officer
of the Company and each holder of 5% or more of the equity securities (or any
security convertible into or exchangeable or exercisable for any of its equity
securities) of the Company purchased from the Company at any time after the date
of this Agreement (other than in a registered public offering or in a public
sale) to so agree.
4. REGISTRATION PROCEDURES.
4.1. Obligations of the Company. Whenever the Company is
required to effect the registration of Registrable Securities under the
Securities Act pursuant to Section 2 of this Agreement, the Company shall, as
expeditiously as possible:
(a) prepare and file with the SEC (promptly, and in any
event within 60 days after receipt of a request to register Registrable
Securities) the requisite Registration Statement to effect such registration,
which Registration Statement shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and the Company shall use
its best efforts, consistent with its obligations under Section 2.7 hereof and
applicable law, to cause such Registration Statement to become effective within
13
120 days after receipt of a request to register Registrable Securities;
provided, that the Company may discontinue any registration of its securities
that are not Registrable Securities, and, under the circumstances specified in
Section 2.2, its securities that are Registrable Securities. Before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
or comparable statements under securities or blue sky laws of any jurisdiction,
the Company shall (i) provide Holders' Counsel and any other Inspector (as
defined below) with an adequate and appropriate opportunity to participate in
the preparation of such Registration Statement and each Prospectus included
therein (and each amendment or supplement thereto or comparable statement) to be
filed with the SEC, which documents shall be subject to the review and comment
of Holders' Counsel, and (ii) not file any such Registration Statement or
Prospectus (or amendment or supplement thereto or comparable statement) with the
SEC to which Holder's Counsel, any selling Holder or any other Inspector shall
have reasonably objected on the grounds that such filing does not comply in all
material respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to keep such Registration Statement effective,
and (ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement, in each case until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller(s) thereof set forth in such Registration Statement;
(c) furnish, without charge, to each selling Holder
of such Registrable Securities and each Underwriter, if any, of the securities
covered by such Registration Statement, such number of copies of such
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits), and the Prospectus included in such Registration
Statement (including each preliminary Prospectus) in conformity with the
requirements of the Securities Act, and other documents, as such selling Holder
and Underwriter may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such selling Holder
(the Company hereby consenting to the use in accordance with applicable law of
each such Registration Statement (or amendment or post-effective amendment
thereto) and each such Prospectus (or preliminary prospectus or supplement
thereto) by each such selling Holder of Registrable Securities and the
Underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Registration Statement or Prospectus);
(d) prior to any public offering of Registrable Securities,
use its best efforts to register or qualify all Registrable Securities and other
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as any selling Holder of Registrable
Securities covered by such Registration Statement or the sole or lead managing
Underwriter, if any, may reasonably request to enable such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder and to continue such registration or qualification
in effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals), and
do any and all other acts and things which may be necessary or advisable to
enable any such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such selling Holder;
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(e) use its best efforts to obtain all other approvals,
consents, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the selling Holders of such
Registrable Securities to consummate the disposition of such Registrable
Securities;
(f) notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or
post-effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the Company becomes aware or the happening of any
event which results in (A) the Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading or (B)
the Prospectus included in such Registration Statement containing an untrue
statement of a material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein, in the light of the
circumstances under which they were made, not misleading, (vi) if at any time
the representations and warranties contained in any underwriting agreement in
respect of such offering cease to be true and correct in all material respects,
and (vii) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate or that there exists
circumstances not yet disclosed to the public which make further sales under
such Registration Statement inadvisable pending such disclosure and
post-effective amendment; and, if the notification relates to an event described
in any of the clauses (ii) through (vii) of this Section 4.1(f), the Company
shall promptly prepare a supplement or post-effective amendment to such
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that (1) such
Registration Statement shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (2) as thereafter delivered to
the purchasers of the Registrable Securities being sold thereunder, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading (and shall furnish to each such Holder and each Underwriter, if
any, a reasonable number of copies of such Prospectus so supplemented or
amended); and if the notification relates to an event described in clause (iii)
of this Section 4.1(f), the Company shall take all reasonable action required to
prevent the entry of such stop order or to remove it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
15
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants who have
certified the Company's financial statements included or incorporated by
reference in such Registration Statement, in each case dated the effective date
of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
Majority Holders of the Registration, and furnish to each Holder participating
in the offering and to each Underwriter, if any, a copy of such opinion and
letter addressed to such Holder (in the case of the opinion) and Underwriter (in
the case of the opinion and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities
and provide and cause to be maintained a transfer agent and registrar for all
such Registrable Securities covered by such Registration Statement not later
than the effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and any other governmental agency or
authority having jurisdiction over the offering, and make available to its
security holders, as soon as reasonably practicable but no later than 90 days
after the end of any 12-month period, an earnings statement (i) commencing at
the end of any month in which Registrable Securities are sold to Underwriters in
an Underwritten Offering and (ii) commencing with the first day of the Company's
calendar month next succeeding each sale of Registrable Securities after the
effective date of a Registration Statement, which statement shall cover such
12-month periods, in a manner which satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the
Registration, use its best efforts to cause all such Registrable Securities to
be (i) duly included for quotation on the Nasdaq Stock Market's National Market
(the "Nasdaq National Market") or listed on the principal national securities
exchange on which the Company's similar securities are then listed, if
applicable, or (ii) if securities of the Company are not at the time included on
the Nasdaq National Market or listed on any national securities exchange (or if
the listing of Registrable Securities is not permitted under the rules of each
national securities exchange on which the Company's securities are then listed),
on the National Nasdaq Market or a national securities exchange designated by
the Majority Holders of the Registration;
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(l) enter into and perform customary agreements (including,
if applicable, an underwriting agreement in customary form) and provide
officers' certificates and other customary closing documents;
(m) cooperate with each selling Holder of Registrable
Securities and each Underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and the
requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering;
(n) cooperate with the selling Holders of Registrable
Securities and the sole or lead managing Underwriter, if any, to facilitate the
timely preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale of
Registrable Securities to the Underwriters or, if not an Underwritten Offering,
in accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(o) keep each selling Holder of Registrable Securities
advised in writing as to the initiation and progress of any registration under
Section 2 hereunder;
(p) furnish to each Holder participating in the offering and
the sole or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those deemed to be
incorporated by reference);
(q) if requested by the sole or lead managing Underwriter,
if any, or any selling Holder of Registrable Securities, promptly incorporate in
a prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the Company, including, without
limitation, information with respect to the number of shares of the Registrable
Securities being sold to the Underwriters, the purchase price being paid
therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; and supplement or make
amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities; and
17
(r) use its best efforts to take all other steps necessary
to expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
4.2. Seller Information. The Company may require each selling
Holder of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding such seller and the
disposition of such securities as the Company may from time to time reasonably
request in writing; provided, however, that such information shall be used only
in connection with such Registration. If any Registration Statement or
comparable statement under "blue sky" laws refers to any Holder by name or
otherwise as the Holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance satisfactory to such Holder and the Company, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company and (ii)
in the event that such reference to such Holder by name or otherwise is not in
the judgment of the Company, as advised by counsel, required by the Securities
Act or any similar federal statute or any state "blue sky" or securities law
then in force, the deletion of the reference to such Holder.
4.3. Notice to Discontinue. Each Holder of Registrable
Securities agrees by acquisition of such Registrable Securities that, (a) upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4.1(f)(ii) through 4.1(f)(vii), such Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
4.1(f) and, (b) if so directed by the Company, such Holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession, of the Prospectus covering such Registrable
Securities which is current at the time of receipt of such notice. If the
Company shall give any such notice, the Company shall extend the period during
which such Registration Statement shall be maintained effective pursuant to this
Agreement (including, without limitation, the period referred to in Section
4.1(b)) by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 4.1(f) to and including the date
when the Holder shall have received the copies of the supplemented or amended
prospectus contemplated by and meeting the requirements of Section 4.1(f).
5. INDEMNIFICATION; CONTRIBUTION.
5.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each Holder
of Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates, advisers, attorneys and agents
(collectively, "Agents") and each Person who controls such Holder (within the
meaning of the Securities Act) and its Agents with respect to each registration
which has been effected pursuant to this Agreement, against any and all losses,
claims, damages or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) in respect thereof, and expenses (as incurred
or suffered and including, but not limited to, any and all expenses incurred in
18
investigating, preparing or defending any litigation or proceeding, whether
commenced or threatened, and the reasonable fees, disbursements and other
charges of legal counsel) in respect thereof (collectively, "Claims"), insofar
as such Claims arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (including any preliminary, final or summary prospectus and any
amendment or supplement thereto) related to any such registration or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, or any qualification or
compliance incident thereto; provided, however, that the Company will not be
liable in any such case to the extent that any such Claims arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact so made in reliance upon and
in conformity with written information furnished to the Company by a Holder
expressly for use therein. The Company shall also indemnify any Underwriters of
the Registrable Securities, their Agents and each Person who controls any such
Underwriter (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders of Registrable
Securities. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any Person who may be entitled to
indemnification pursuant to this Section 5 and shall survive the transfer of
securities by such Holder or Underwriter.
5.2. Indemnification by Holders. Each Holder, if Registrable
Securities held by it are included in the securities as to which a registration
is being effected, agrees to, severally and not jointly, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such securities and its Agents and each Person who controls the
Company (within the meaning of either Section 15 of the Securities Act of
Section 20 of the Exchange Act) against any and all Claims, insofar as such
Claims arise out of or are based upon any untrue or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus (including
any preliminary, final or summary prospectus and any amendment or supplement
thereto) related to such registration, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by a Holder expressly for use therein; provided,
however, that the aggregate amount which any such Holder shall be required to
pay pursuant to this Section 5.2 shall in no event be greater than the amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims
less all amounts previously paid by such Holder with respect to any such Claims.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Person who may be entitled to
indemnification pursuant to this Section 5 and shall survive the transfer of
securities by such Holder or Underwriter.
5.3. Conduct of Indemnification Proceedings. Promptly after
receipt by an indemnified party of notice of any Claim or the commencement of
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any action or proceeding involving a Claim under this Section 5, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 5, (a) notify the indemnifying party in
writing of the Claim or the commencement of such action or proceeding; provided,
that the failure of any indemnified party to provide such notice shall not
relieve the indemnifying party of its obligations under this Section 5, except
to the extent the indemnifying party is materially and actually prejudiced
thereby and shall not relieve the indemnifying party from any liability which it
may have to any indemnified party otherwise than under this Section 5, and (b)
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any
indemnified party shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party has agreed in writing to pay such fees and expenses, (ii) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such indemnified party within 20 days
after receiving notice from such indemnified party that the indemnified party
believes it has failed to do so, or (C) in the reasonable judgment of any such
indemnified party, based upon advice of counsel, a conflict of interest shall
exist between such indemnified party and the indemnifying party with respect to
such claims; it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to no more
than one firm of local counsel) at any time for all such indemnified parties. No
indemnifying party shall be liable for any settlement of any such claim or
action effected without its written consent, which consent shall not be
unreasonably withheld. No indemnifying party shall, without the consent of the
indemnified party, which consent shall not be unreasonable withheld, consent to
entry of any judgment or enter into any settlement of any claim or action in
respect of which indemnification or contribution may be sought hereunder, unless
such settlement, (x) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim, (y) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party, and (z) does not provide for any action on
the part of any party other than the payment of money damages which is to be
paid in full by the indemnifying party.
5.4. Contribution. If the indemnification provided for in Section
5.1 or 5.2 from the indemnifying party for any reason is unavailable to (other
than by reason of exceptions provided therein), or is insufficient to hold
harmless an indemnified party hereunder in respect of any Claim, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claim in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other hand, in connection with the actions which resulted in such Claim, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. If, however, the foregoing allocation is not permitted by applicable
20
law, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative faults but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
5.5. Indemnification Payments. The indemnification and
contribution required by this Section 5 shall be made by periodic payments of
the amount thereof during the course of any investigation or defense, as and
when bills are received or any expense, loss, damage or liability is incurred.
5.6. Other Indemnification. Indemnification similar to that
specified in the preceding Sections 5.1 and 5.2 (with appropriate modifications)
shall be given by the Company and each selling Holder of Registrable Securities
with respect to any required registration or other qualification of securities
under any Federal or state law or regulation of any governmental authority,
other than the Securities Act. The indemnity agreements contained herein shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
6. General Provisions Regarding Registrations.
6.1. Adjustments Affecting Registrable Securities. The Company
agrees that it shall not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the Holder of
any Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
6.2. Registration Rights to Others. The Company represents
and warrants that it is not currently a party to any agreement with respect to
its securities granting registration rights to Persons. If the Company shall at
any time hereafter provide to any holder of any securities of the Company rights
with respect to the registration of such securities under the Securities Act,
(i) such rights shall not be in conflict with or adversely affect any of the
rights provided in this Agreement to the Holders and (ii) if such rights are
provided on terms or conditions more favorable to such holder than the terms and
conditions provided in this Agreement, the Company shall provide (by way of
amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Holders.
6.3. Availability of Information; Rule 144; Rule 144A; Other
Exemptions. The Company covenants that it shall timely file any reports required
to be filed by it under the Securities Act or the Exchange Act (including, but
not limited to, the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c) of Rule 144 under the Securities Act), and that
it shall take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 and Rule
144A under the Securities Act, as such rules may be amended from time to time,
or (ii) any other rule or regulation now existing or hereafter adopted by the
21
SEC. Upon the request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements.
7. PROVISIONS APPLICABLE TO SECURITYHOLDERS.
7.1. General Restriction. Prior to the earlier of (i) 270 days
after the exercise of all of the Warrants or (ii) December 31, 2009 (the period
ending on the earlier of such dates being the referred to below as the "Co-Sale
Period"), McKim may not, directly or indirectly, sell, assign, transfer, pledge,
bequeath, hypothecate, mortgage, grant any proxy with respect to, or in any
other way encumber or otherwise dispose of ("Convey"), any shares of Common
Stock except pursuant to the provisions of this Article 7.
7.2. Right of Co-Sale. (a) If during the Co-Sale Period, McKim
desires to Convey shares of Common Stock to any Person (the "Purchaser"), each
Holder shall have the right to require, as a condition to such Conveyance, that
the Purchaser purchase from such Holder at the same price and on the same terms
and conditions as involved in such sale or disposition by McKim (the "Purchase
Offer") the number of shares of Common Stock owned by such Holder equal to the
aggregate number of shares of Common Stock proposed to be purchased by the
Purchaser from McKim multiplied by a fraction, the numerator of which is the
number of shares of Common Stock held of record by such Holder and the
denominator of which is the aggregate number of shares of Common Stock held of
record by McKim and the Holders. The amount of shares of Common Stock that each
Holder is entitled to sell under this Section 7.2 shall be referred to as its
"Pro Rata Share". McKim shall deliver to each Holder not more than 60 days and
not less than 30 days prior to the proposed Conveyance to the Purchaser a copy
of the Purchase Offer, if in writing, and a description of all other material
terms and conditions of the Purchase Offer. Within 25 days after receipt of the
Purchase Offer, a Holder shall give notice to McKim of its intent to sell all or
a portion of its Pro Rata Share. In the event that a Holder shall elect to
participate in any such sale or disposition, such Holder shall communicate in
writing such election to participate to McKim, which communication shall be
delivered to McKim pursuant to Section 8.2 hereof, and the number of shares of
Common Stock to be Conveyed by McKim to the Purchaser shall be reduced
accordingly.
(b) McKim and each participating Holder may, up to and
including 90 days after but not until at least 60 days after McKim's delivery of
the notice of the Purchase Offer to the Holders, Convey any or all of their
shares of Common Stock to the Purchaser, in quantities and on terms and
conditions no more favorable in any material respect to those specified in the
Purchase Offer or otherwise disclosed to the Holders, and the Holders shall not
have the right to require that the Purchaser purchase any of their shares of
Common Stock as to which they did not exercise their co-sale rights hereunder.
If such sale is not consummated by the expiration of such 90 day period, the
restrictions provided for herein shall again become effective, and no Conveyance
of such shares of Common Stock may be made thereafter by McKim without again
complying with the requirements of this Section 7.2.
(c) The closing of any sale of the shares of Common Stock
by the Holders and/or McKim pursuant to this Section 7.2 shall be held at the
Company's principal office at 10:00 a.m., local time, no later than 30 days
after the dates of expiration of the right to sell referred to in Sections
22
7.2(a) and 7.2(b) hereof, or at such other time and place as the parties to the
transaction may agree. At such closing, each Holder (if it has elected to
participate in accordance with this Section 7.2) and/or McKim shall Convey all
the shares of Common Stock purchased by the Purchaser pursuant to this Section
7.2 free and clear of any Encumbrances (other than restrictions imposed by the
organizational documents of the Company, including without limitation, this
Agreement, and pursuant to applicable federal and state securities laws), and
each such Holder and/or McKim shall so represent and warrant, and further
represent and warrant that it is the record and beneficial owner of such shares
of Common Stock. The Purchaser shall deliver at such closing, in cash by wire
transfer of immediately available funds, payment in full to the each of the
Holders and/or McKim for its respective portion of such shares of Common Stock
sold.
(d) The election by a Holder not to exercise its rights
under this Section 7.2 in any one instance shall not affect the rights of that
Holder as to any subsequent proposed Conveyance by McKim. Any Conveyance by
McKim of any of its shares of Common Stock without first giving the Holders the
rights described in this Section 7.2 shall be void and of no force or effect.
7.3. Permitted Transfers. Subject to the final proviso of this
paragraph, the provisions of Section 7.1 or 7.2 shall not apply to the
Conveyance of Common Stock by McKim (a) in a public offering registered under
the Securities Act; provided; that the Holders shall have had the opportunity to
participate in such offering, without limitation (except as expressly provided
in Section 2 hereof) on the number of Registrable Securities covered thereby, in
accordance with Section 2 hereof, (b) in a sale pursuant to Rule 144 of the
Securities Act, (c) pursuant to a bona fide pledge of the Common Stock to a
nationally recognized financial institution as security for a bona fide
financing arrangement by McKim and (d) to any one or more persons or entities
each of which is a "Permitted Holder" as such term is defined in the Certificate
of Vote in respect of the Series C Preferred Stock as in effect on September 10,
2002 (collectively "Permitted Family Transferees"); provided, however, that such
Permitted Family Transferee(s) shall take such shares of Common Stock subject to
and be fully bound by this Agreement with the same effect as if it were a party
hereto and shall execute and deliver to the Company and each Holder an
instrument of accession and such additional documentation as the Company's Board
of Directors and the Holders may reasonably require to bind such Permitted
Family Transferee in the same manner that McKim is bound under this Agreement,
and references herein to McKim shall be deemed to include any such Permitted
Family Transferee(s).
8. General.
8.1. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified,
supplemented or terminated, and waivers or consents to departures from the
provisions hereof may not be given, without the written consent of the Company
and the Majority Holders and if adverse to McKim, McKim; provided, however, that
no such amendment, modification, supplement, waiver or consent to departure
shall reduce the aforesaid percentage of Registrable Securities without the
written consent of all of the Holders of Registrable Securities and no
amendment, modification supplement, waiver or consent that adversely affects the
rights of a particular Holder (as opposed to the Holders generally) shall be
made or given without the written consent of such particular Holder; and
provided further, that nothing herein shall prohibit any amendment,
23
modification, supplement, termination, waiver or consent to departure the effect
of which is limited only to those Holders who have agreed to such amendment,
modification, supplement, termination, waiver or consent to departure.
8.2. Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to the applicable party at the address set forth below or such other
address as may hereafter be designated in writing by such party to the other
parties in accordance with the provisions of this Section:
If to the Company: Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Attn: Chief Financial Officer
Fax No. (781) 848-1632
with copies to: Davis, Malm & D'Agostine, P.C.
One Boston Place
Boston, MA 02108
Attn: C. Michael Malm
Fax No. (617) 523-6215
If to McKim: Alan S. McKim
c/o Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Fax No. (781) 848-1632
with copies to: Davis, Malm & D'Agostine, P.C.
One Boston Place
Boston, MA 02108
Attn: C. Michael Malm
Fax No. (617) 523-6215
If to a Holder, to its address and facsimile set forth on the Schedule
of Holders attached hereto, with copies to such Holder's representatives as set
forth on the Schedule of Holders, or to such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. All such notices and communications (and
deliveries) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; when receipt is acknowledged, if telecopied; on
the next business day, if timely delivered to a courier guaranteeing overnight
delivery; and five days after being deposited in the mail, if sent first class
or certified mail, return receipt requested, postage prepaid.
24
8.3. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors and permitted assigns (including any permitted transferee of
Registrable Securities or the Warrants). Any Holder may assign to any transferee
of its Warrants or Registrable Securities (other than a transferee that acquires
such Registrable Securities or Warrants in a registered public offering or
pursuant to a sale under Rule 144 of the Securities Act (or any successor
rule)), its rights and obligations under this Agreement; provided, however, if
any transferee shall take and hold the Warrants or Registrable Securities, such
transferee shall promptly notify the Company and by taking and holding such
Registrable Securities or the Warrants such transferee shall automatically be
entitled to receive the benefits of and be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement as
if it were a party hereto (and shall, for all purposes, be deemed a Holder under
this Agreement). If the Company shall so request any heir, successor or
permitted assign (including any permitted transferee) wishing to avail itself of
the benefits of this Agreement shall agree in writing to acquire and hold the
Registrable Securities or the Warrants subject to all of the terms hereof. For
purposes of this Agreement, "successor" for any entity other than a natural
person shall mean a successor to such entity as a result of such entity's
merger, consolidation, sale of substantially all of its assets, or similar
transaction. Except as provided above or otherwise permitted by this Agreement,
neither this Agreement nor any right, remedy, obligation or liability arising
hereunder or by reason hereof shall be assignable by any Holder, McKim or by the
Company without the consent of the other parties hereto.
8.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
8.5. Descriptive Headings, Etc. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (a) words of any gender shall be deemed to include each
other gender; (b) words using the singular or plural number shall also include
the plural or singular number, respectively; (c) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (d) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (e) "or" is not
exclusive; and (f) provisions apply to successive events and transactions.
8.6. Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
25
8.7. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY OF
THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND
THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. THE
COMPANY, MCKIM AND THE INITIAL HOLDERS WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 8.7.
THE COMPANY, MCKIM AND THE INITIAL HOLDERS HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH OF THE COMPANY, MCKIM AND THE INITIAL
HOLDERS REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
8.8. Remedies; Specific Performance. The parties hereto
acknowledge that money damages would not be an adequate remedy at law if any
party fails to perform in any material respect any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court specified in Section 8.7 hereof, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by a
party hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
8.9. Entire Agreement. This Agreement, the Warrants and the
Redemption Agreement (collectively, the "Other Agreements") are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
26
in respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants or undertakings relating to
such subject matter, other than those set forth or referred to herein or in the
Other Agreements. This Agreement and the Other Agreements supersede all prior
agreements and understandings between the Company and the other parties to this
Agreement with respect to such subject matter.
8.10. Further Assurances. Each party hereto shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
8.11. Construction. Each of the Company, McKim and the Initial
Holders acknowledge that it has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel and that this Agreement shall be construed as if jointly drafted
by the Company, McKim and the Initial Holders.
8.12. No Inconsistent Agreement. Neither the Company nor McKim
will hereafter enter into any agreement which is inconsistent with the rights
granted to the Holders in this Agreement.
8.13. Costs and Attorneys' Fees. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement, the Company, McKim and the Initial Holders agree that the prevailing
party shall recover from the non-prevailing party all of such prevailing party's
costs and reasonable attorneys' fees incurred in each and every such action,
suit or other proceeding, including any and all appeals or petitions therefrom.
[Remainder of this page intentionally left blank. Signature page follows.]
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
THE COMPANY
CLEAN HARBORS, INC.
By: ___________________________
Name:
Title
INITIAL HOLDERS
CERBERUS CH LLC
By: Cerberus Partners, L.P.
its Managing Member
By: Cerberus Associates, L.L.C.
its General Partner
By: ___________________________
Name:
Title:
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.
its General Partner
By: Oak Hill Securities MGP, Inc.
its General Partner
By: ___________________________
Name:
Title:
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.
its General Partner
By: Oak Hill Securities MGP II, Inc.
its General Partner
By: ___________________________
Name:
Title:
LERNER ENTERPRISES, L.P.
By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
Lerner Enterprises
By: ___________________________
Name:
Title:
P&PK FAMILY LTD. PARTNERSHIP
By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
P&PK Family Ltd. Partnership
By: ___________________________
Name:
Title:
CARDINAL INVESTMENT PARTNERS I, L.P.
By: As advisor and attorney-in-fact to
Cardinal Investment Partners I, L.P.
By: Oak Hill Advisors MGP, Inc.
its General Partner
By: ___________________________
Name:
Title:
BASSO HOLDINGS LTD.
(f/k/a AIG DKR SoundShore Holdings Ltd.)
By: __________________________
Howard I. Fischer
Authorized Signatory
MCKIM
By: ___________________________
Name: Alan S. McKim
Alan S. McKim's Children's Trust
By: ___________________________
C. Michael Malm, Trustee
By: ___________________________
Carol R. Cohen, Trustee
SCHEDULE OF HOLDERS
Holder Address Investor's Representatives' Address
and Facsimile Number and Facsimile Number
----------------------------------------- ------------------------------------------------
Cerberus CH LLC Schulte Roth & Zabel LLP
450 Park Avenue, 28th Floor 919 Third Avenue
New York, NY 10022 New York, NY 10022
Telephone: (212) 891-2100 Attn: Stuart Freedman, Esq.
Facsimile: (212) 891-1540 Telephone: (212) 756-2000
Attention: Daniel Wolf and Kevin Genda Facsimile: (212) 593-5955
Oak Hill Securities Fund, L.P. Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55th Street 1285 Avenue of the Americas
New York, New York 10022 New York, NY 10019
Telephone: (212) 326-1552 Telephone: (212) 373-3000
Facsimile: (212) 838-8411 Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr. Attention: Eric Goodison
Oak Hill Securities Fund II, L.P. Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55th Street 1285 Avenue of the Americas
New York, New York 10022 New York, NY 10019
Telephone: (212) 326-1552 Telephone: (212) 373-3000
Facsimile: (212) 838-8411 Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr. Attention: Eric Goodison
Lerner Enterprises, L.P. Paul, Weiss, Rifkind, Wharton & Garrison
65 East 65th Street 1285 Avenue of the Americas
New York, New York 10022 New York, NY 10019
Telephone: (212) 326-1552 Telephone: (212) 373-3000
Facsimile: (212) 838-8411 Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr. Attention: Eric Goodison
P&PK Family Ltd. Partnership Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55th Street 1285 Avenue of the Americas
New York, New York 10021 New York, NY 10019
Telephone: (212) 326-1552 Telephone: (212) 373-3000
Facsimile: (212) 838-8411 Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.
Cardinal Investment Partners I, L.P. Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55th Street 1285 Avenue of the Americas
New York, New York 10021 New York, NY 10019
Telephone: (212) 326-1552 Telephone: (212) 373-3000
Facsimile: (212) 838-8411 Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr. Attention: Eric Goodison
Basso Holdings Ltd. Basso Holdings Ltd.
c/o Basso Capital Management, L.P. c/o Basso Capital Management, L.P.
1266 East Main Street 1266 East Main Street
Stamford, Connecticut 06902 Stamford, Connecticut 06902
Telephone: (203) 352-6100 Telephone: (203) 352-6100
Facsimile: (203) 352-6194 Facsimile: (203) 352-6194
Attention: Howard I. Fischer Attention: Marc Seidenberg
EXHIBIT A
[SEC NO-ACTION LETTER]
9590099.8