STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, is made on January 2, 2002 (the
"Agreement"), among LAS VEGAS SANDS, INC., a Nevada corporation (the "Company"),
SHELDON G. ADELSON, an individual (the "Principal Stockholder"), and the persons
listed on Schedule I hereto (the "Additional Stockholders") and any Permitted
Transferees thereof.
Recitals
- --------
WHEREAS, as of the date hereof, the Principal Stockholder owns 100% of
the issued and outstanding shares of Common Stock, par value $0.10 per share, of
the Company (the "Common Stock");
WHEREAS, the Company is entering into Stock Option Agreements (the
"Stock Option Agreements") with the Additional Stockholders, pursuant to which
the Company shall grant to such Additional Stockholders rights and options to
purchase shares of Common Stock;
WHEREAS, it is intended that the Additional Stockholders to whom such
options to purchase shares of Common Stock are issued pursuant to a Stock Option
Agreement may immediately exercise such options and become stockholders of the
Company and parties hereto as Additional Stockholders;
WHEREAS, as of the date hereof, each Additional Stockholder has an
option to purchase the number of shares of Common Stock set forth next to his
name on Schedule A hereto; and
WHEREAS, the parties hereto wish to restrict the transfer of the
shares of Common Stock which such Additional Stockholder may receive upon
exercise of such options and to provide for tag-along rights, incidental
registration rights and preemptive rights with respect to all such shares of
Common Stock.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Additional Stockholder Exercise Period" has the meaning assigned
to such term in Section 5.2.1.
"Additional Stockholders" has the meaning assigned to such term in
the first paragraph of this Agreement.
"Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"After-Acquired Stock" has the meaning assigned to such term in
Section 7.
"Agreement" has the meaning assigned to such term in the first
paragraph of this Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" has the meaning assigned to such term in the first
Whereas clause of this Agreement.
"Company" has the meaning assigned to such term in the first
paragraph of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any rules or regulations promulgated thereunder.
"Gross Cash Proceeds" shall mean, with respect to any Initial
Public Offering, the gross proceeds received by the Company, before brokerage
commissions or underwriting fees or any other fees and expenses relating to such
Initial Public Offering.
1
"Initial Public Offering" shall mean the sale in any underwritten
offering by the Company of its Common Stock pursuant to a registration statement
on Form S-1 (or any successor or similar forms then in effect) under the
Securities Act with Gross Cash Proceeds in excess of $50 million.
"Liens" has the meaning assigned to such term in Section 3.4
"Losses" has the meaning assigned to such term in Section 4.6(f).
"Maximum Sale Amount" has the meaning assigned to such term in
Section 3.2.
"Nevada Gaming Authorities" means, collectively, the Nevada Gaming
Commission, the Nevada State Gaming Control Board and the Clark County Liquor
and Gaming Licensing Board.
"New Issuance Notice" has the meaning assigned to such term in
Section 5.1.
"New Securities" has the meaning assigned to such term in Section
5.1.
"Offering Notice" has the meaning assigned to such term in Section
3.1.
"Options" means the options granted pursuant to the Stock Option
Agreements.
"Permitted Transferee" means, with respect to any Stockholder, such
Stockholder's parents, spouse, former spouse, siblings, children (including
sons-in-law, daughters-in law, stepchildren and adopted children)or
grandchildren or other issue or any Affiliate of such Stockholder or a trust
created for the benefit of such Stockholder or Permitted Transferee.
"Person" means any individual, corporation, limited liability
company or partnership, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government of any nation,
state, city, locality or other political subdivision or entity thereof, or other
entity of any kind, and shall include any successor (by merger or otherwise) of
any such entity.
"Principal Stockholder" has the meaning assigned to such term in
the first paragraph of this Agreement.
"Proposed Price" has the meaning assigned to such term in Section
5.1.
"Registrable Securities" means (i) all shares of Common Stock
underlying the Options and issued to the Additional Stockholders pursuant to the
Stock Option Agreements, (ii) all shares of Common Stock purchased pursuant to a
stock purchase agreement and (iii) any securities of the Company issued or
issuable with respect to any of such shares of Common Stock by way of a dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued, such securities shall cease to be
Registrable Securities when (I) a registration statement with respect to the
sale of such Registrable Securities has become effective under the Securities
Act and such Registrable Securities have been disposed of in accordance with
such registration statement, (II) such Registrable Securities are permitted to
be sold under Rule 144 (or any successor provision) of the Securities Act, (III)
such Registrable Securities have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer have been delivered
by the Company and subsequent public distribution of them does not require
registration of such distribution under the Securities Act or (IV) such
Registrable Securities have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 4, including, without
limitation, all registration and filing fees, all fees of the New York Stock
Exchange, Inc., other national securities exchanges or the National Association
of Securities Dealers, Inc., all fees and expenses of complying with securities
or blue sky laws, all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of
"comfort" letters required by or incident to such performance and compliance,
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities (excluding any underwriting discounts or commissions with
respect to the shares of Common Stock registered).
"Requesting Stockholder" has the meaning assigned to such term in
Section 4.1.
"S Corporation" has the meaning assigned to such term in Section
2.2.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Stock Option Agreements" has the meaning assigned to such term in
the second Whereas clause of this Agreement.
2
"Stockholders" means, collectively, the Principal Stockholder, the
Additional Stockholders and any Permitted Transferee who has agreed to be bound
by the terms and conditions of this Agreement in accordance with Section 2.5.
"Tag-Along Acceptance" has the meaning assigned to such term in
Section 3.3.
"Tag-Along Closing Date" has the meaning assigned to such term in
Section 3.4.
"Tag-Along Right" has the meaning assigned to such term in Section
3.1.
"Tag-Along Shares" has the meaning assigned to such term in Section
3.4.
"Third Party Transferee" means any Person (other than a Permitted
Transferee) who is not a party to this Agreement and proposes to acquire shares
of Common Stock from a Stockholder.
"transfer" has the meaning assigned to such term in Section 2.1.
2. Restrictions on Transfer.
------------------------------
2.1 Limitation on Transfer. No Additional Stockholder shall sell,
give, assign, hypothecate, pledge, encumber, grant a security interest in or
otherwise dispose of (whether by operation of law or otherwise) any shares of
Common Stock or any right, title or interest therein (each a "transfer"), except
in accordance with the provisions of this Agreement, provided, however, that
shares acquired pursuant to a Stock Option Agreement may be pledged to secure
any note delivered to the Company (or other grantor) to pay the exercise price
or any note the proceeds of which are used to pay such note to the Company or
other grantor. Any attempt to transfer any shares of Common Stock or any rights,
title or interest therein in violation of this Agreement shall be null and void
ab initio and the Company shall refuse to register any such transfer.
2.2 Transfers in Compliance with Law; Substitution of Transferee.
Notwithstanding any other provision of this Agreement, an Additional Stockholder
shall not transfer any shares of Common Stock or any right, title or interest
therein unless (a) the transfer complies in all respects with the applicable
provisions of this Agreement and applicable federal, state and foreign
securities laws, including, without limitation, the Securities Act, (b) all
necessary licenses or approvals are received from the Nevada Gaming Authorities,
(c) the transfer complies in all respects with federal laws, rules and
regulations relating to corporations taxed under subchapter S of the Code (an "S
Corporation"), such that the transfer would not cause the Company to cease
qualifying as such a corporation, (d) the transfer does not require the Company
to register under the Exchange Act and (e) if requested by the Company in its
sole judgment, the transferring Additional Stockholder provides, at its own
expense, an opinion of counsel, in a form and from counsel reasonably acceptable
to the Company, to the effect that such transfer complies with (a), (b) and (c)
above. In addition to the foregoing, without the prior consent of the Company
(which may be granted or withheld in its sole discretion), an Additional
Stockholder shall not transfer any shares of Common Stock or any right, title or
interest therein, if, for purposes of determining the Company's status as an S
Corporation, the number of stockholders would be increased as a result of the
transfer. In connection with any transfer by a Stockholder, such Stockholder
agrees to provide the Company with such representations, warranties and opinions
of counsel concerning the transfer, the transferee and transferor as the Company
may reasonably require to demonstrate compliance with the restrictions in this
Section 2 (including, without limitation, a representation and warranty by the
Third Party Transferee that such Third Party Transferee is an individual who
qualifies as a "United States Person" under Section 7701(a)(30) of the Code).
2.3 Permitted Transfer Procedures. If any Additional Stockholder
desires to transfer its shares of Common Stock or any right, title or interest
therein to a Permitted Transferee, it shall give notice to the Company and to
the Nevada Gaming Authorities of its intention to make such transfer not less
than thirty (30) days prior to effecting such transfer, which notice shall state
the name and address of the Permitted Transferee, the relationship between such
Additional Stockholder and the Permitted Transferee and the number of shares of
Common Stock proposed to be transferred (or describing any rights or interests
therein to be transferred), and any other information required by law to be
provided to the Nevada Gaming Authorities.
2.4 Additional Stockholders to Execute Consents. Each Additional
Stockholder agrees to execute and file, in a timely fashion, all consents and
other instruments that may be deemed necessary or advisable by counsel to the
Company with respect to the Company's election to be an S Corporation.
2.5 Transferee to Become Party to this Agreement. Except for any
transfer to any Third Party Transferee under Section 3 hereof, prior to any
transfer of Common Stock or any right, title or interest therein, any transferee
must agree in writing to be bound by the terms and conditions of this Agreement
3
in the same manner as its transferor of Common Stock (or any interest therein).
A Third Party Transferee under Section 3 hereof may agree in writing to be bound
by the terms and conditions of this Agreement. Following any transfer made in
accordance with Section 2.1, 2.2 and 2.3 and this Section 2.5, the transferee
who has agreed to be bound by the terms and conditions of this Agreement shall
be substituted for, and shall enjoy the same rights and be subject to the same
obligations as its predecessor hereunder.
2.6 Termination of S Corporation Provisions. The transfer restrictions
set forth in Section 2.2(c) and the last sentence of Section 2.2 shall be
terminated (i) at any time at the option of the Company upon written notice to
the Stockholders and (ii) at any time after the Company has ceased to be an S
Corporation and the Board of Directors has approved such action.
3. Tag-Along Right.
---------------------
3.1 Transfer by Principal Stockholder. Until such time as an Initial
Public Offering has occurred, if at any time the Principal Stockholder desires
to transfer all or any portion of his shares of Common Stock to any Third Party
Transferee and such transfer would result in the transfer of 20% or more of the
outstanding shares of Common Stock determined as of the date of such proposed
transfer, the Principal Stockholder shall send written notice of his intention
to the Additional Stockholders (the "Offering Notice") not less than 15 days
prior to the proposed consummation of such transfer, and each Additional
Stockholder shall have the opportunity to participate in such transfer upon the
same terms and conditions as the Principal Stockholder (the "Tag-Along Right").
3.2 Offering Notice. The Offering Notice shall include the name of the
Third Party Transferee, the number of shares of Common Stock proposed to be
transferred, the proposed amount and form of consideration, the terms and
conditions of payment offered by the Third Party Transferee and the maximum
number of shares of Common Stock of each Additional Stockholder that may be sold
to the Third Party Transferee (the "Maximum Sale Amount"). The Maximum Sale
Amount of each Additional Stockholder shall equal the product of (a) the number
of shares of Common Stock proposed to be transferred, multiplied by (b) a
fraction having a numerator equal to the total number of shares of Common Stock
then owned by such Additional Stockholder and a denominator equal to the total
number of shares of Common Stock then owned by the Principal Stockholder and the
Additional Stockholders and any other stockholders of the Company entitled to
participate in such sale as a result of any tag-along rights granted to such
stockholders.
3.3 Exercise of Tag-Along Right. The Tag-Along Right shall be
exercisable by the Additional Stockholder by delivering written notice to the
Principal Stockholder no later than 10 days following receipt of the Offering
Notice stating such Additional Stockholder's intention to exercise its Tag-Along
Right and the number of shares of Common Stock such Additional Stockholder
wishes to transfer (up to the Maximum Sale Amount) (the "Tag-Along Acceptance").
The failure of any Additional Stockholder to respond within such period shall be
regarded as an election not to exercise its Tag-Along Right. To the extent that
such Additional Stockholder exercises its Tag-Along Right by delivering its
Tag-Along Acceptance, the number of shares of Common Stock proposed to be sold
to the Third Party Transferee by the Principal Stockholder shall be reduced
proportionately.
3.4 Closing of Tag-Along Right. The closing of any sale under this
Section 3 shall be held within 90 days following the date on which the Principal
Stockholder received the last of the Tag-Along Acceptances from the Additional
Stockholders (the "Tag-Along Closing Date") or at such other time and place as
the parties to the transaction may agree. At such closing, each Additional
Stockholder that is selling Common Stock under this Section 3 shall deliver to
the Third Party Transferee certificates, if applicable, or other instruments or
documents representing the number of shares of Common Stock (the "Tag-Along
Shares") being sold under this Section 3, and such Tag-Along Shares shall be
free and clear of any liens, claims, options, charges, encumbrances or rights
("Liens") (other than those arising hereunder), including, without limitation,
any Lien arising through the action or inaction of such Additional Stockholder,
and such Additional Stockholder shall so represent and warrant, and shall
further represent and warrant that it is the beneficial owner of such Tag-Along
Shares. The Third Party Transferee shall deliver to each Additional Stockholder
at the closing payment in full in immediately available funds (and/or other
consideration in respect of such shares) for such Tag-Along Shares of such
Additional Stockholder. At such closing, all of the parties to the transaction
shall execute such additional documents as are otherwise necessary or
appropriate.
4. Registration Rights.
-------------------------
4.1 "Piggy-Back" Right to Include Registrable Securities in
Registration. If the Company at any time after the completion of an Initial
Public Offering proposes to register any of its shares of Common Stock or any
other class of Registrable Securities or other securities convertible into or
exchangeable for shares of its Common Stock or any other class of Registrable
Securities under the Securities Act other than in a rights offering or on Forms
S-4 or S-8 (or any successor forms), whether or not for sale for its own
4
account, it will each such time give written notice at least 10 days prior to
such proposed registration to all registered holders of Registrable Securities
of its intention to register and of such holders' rights under this Section 4.
Upon the written request of any such holder (a "Requesting Stockholder") made
within five (5) days after receipt of any such notice, the Company shall use its
reasonable best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the Requesting Stockholder; provided, that prior to the effective date of the
registration statement filed in connection with such registration, immediately
upon notification to the Company from the managing underwriter of the price at
which such shares of Common Stock are to be sold, if such price is below the
price which any Requesting Stockholder finds acceptable, such Requesting
Stockholder shall then have the right, by written notice to the Company, to
withdraw its request to have its Registrable Securities included in such
registration statement; provided further, however, that if, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the 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 Requesting Stockholder and (x) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses in
connection therewith), and (y) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities,
for the same period as the delay in registering such other securities.
4.2 Priority in Incidental Registrations. If the managing underwriter
of any underwritten offering shall inform the Company in writing of its opinion
that the number of shares or kind of Registrable Securities requested to be
included in such registration would materially adversely affect such offering,
and the Company has so advised the Requesting Stockholders, then the Company
will include in such registration, to the extent of the number and kind which
the Company is so advised can be sold in (or during the time of) such offering,
the following: (a) first, all securities of the Company to be sold for its own
account; (b) second, such registrable securities requested by any stockholder of
the Company who holds demand registration rights (other than the Principal
Stockholder) and has requested that such shares be included in such
registration, pro rata (based on the number of registrable securities owned by
all such stockholders); and (c) third, such registrable securities requested to
be included in such registration by any stockholder of the Company (including,
without limitation, the Additional Stockholders and the Principal Stockholder)
pro rata (based on the number of registrable securities owned by such
stockholders).
4.3 Expenses. The Company will pay all Registration Expenses in
connection with any registration contemplated pursuant to this Section 4. Each
Additional Stockholder participating in a registration under Section 4.1 shall
pay (or reimburse the Company for its payment of) all applicable filing fees and
underwriting discounts and commissions of the Additional Stockholders and taxes
payable by the Additional Stockholders in respect of the shares of Common Stock
being sold by them in the applicable registration statement and all fees and
expenses of their counsel. In the event that the Company shall determine, in
accordance with this Section 4, not to register any securities with respect to
which it had given written notice of its intention to so register to the
Additional Stockholders, all of the filing fees incurred by the Additional
Stockholders in connection with such registration shall be paid by the Company.
4.4 Registration Procedures. If and whenever the Company is required
to use its reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 4.1, the Company
shall, as expeditiously as possible:
(a) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
reasonable best efforts to cause such registration statement to become
effective; provided, however, that the Company may discontinue any registration
at any time prior to the effective date of the registration statement relating
thereto;
(b) furnish to each Stockholder, such number of conformed copies
of such registration statement (including all amendments, supplements and
exhibit thereto) and such other documents, as such Stockholder may reasonably
request;
(c) use its reasonable best efforts (x) 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 states of the
United States of America in such jurisdictions as determined by the managing
underwriters in the offering (or, if there are none, then as determined by the
Company), (y) to keep such registration or qualification in effect for so long
as such registration statement remains in effect and (z) to take any other
action which may be reasonably necessary or advisable to enable such
Stockholders to consummate the disposition in such jurisdictions, except that
the Company shall not for any such purpose be required to qualify generally to
5
do business as a foreign corporation or become subject to taxation in any
jurisdiction wherein it would not but for the requirements of this clause (c) be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(d) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by the Nevada Gaming Authorities and such other federal or state
governmental agencies or authorities (other than as described in clauses (a) and
(c) above) as may be necessary in the reasonable opinion of counsel to the
Company and counsel to the Stockholders to enable the Stockholders to consummate
the disposition of such Registrable Securities;
(e) if there is no managing underwriter for the offering, furnish
at the effective date of such registration statement to each Stockholder a
signed counterpart of:
(i) an opinion of counsel for the Company, and
(ii) to the extent that such a letter may be furnished by an
independent public accountant under applicable guidelines, a "comfort" letter
signed by the independent public accountants who have certified the Company's
financial statements included or incorporated by reference in such registration
statement, covering substantially the same matters with respect to such
registration statement and, in the case of the comfort letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in comfort letters delivered to the
underwriters in underwritten public offerings of securities;
(f) notify each Stockholder at any time when a prospectus
relating thereto required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, in the light of the circumstances under which they were made, and at
the request of any such Stockholder, promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, 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 not misleading in
the light of the circumstances under which they were made;
(g) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
Stockholders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months beginning with the first day of the first
full fiscal quarter of the Company after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 promulgated thereunder;
(h) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration; and
(i) use its reasonable best efforts to list all Registrable
Securities covered by such registration statement on any national securities
exchange on which securities of the Company are then listed.
The Company may require each Stockholder to furnish the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing and, if requested by
the Company, an executed custody agreement and power of attorney in form and
substance reasonably satisfactory to the Company with respect to the Registrable
Securities to be registered pursuant to this Agreement. If a Stockholder does
not promptly comply with the terms of the preceding sentence or Section 4.5, the
Company may elect to exclude the Registrable Securities of such Requesting
Stockholder from the registration statement under Section 4.1.
Each Requesting Stockholder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in clause
(f) of this Section 4.4, such Requesting Stockholder will forthwith discontinue
such holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause (f)
of this Section 4.4 and, if so directed by the Company, will 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 relating to such Registrable
Securities current at the time of receipt of such notice.
6
If any registration statement under Section 4.1 provides for an
offering under Rule 415 under the Securities Act (or any successor provision),
each Requesting Stockholder agrees that, upon receipt of any written notice from
the Company of the happening of a material acquisition by the Company or other
material transaction of the Company, it shall, and shall cause all Persons
acting on its behalf to, cease all selling efforts of the Registrable Securities
of the Requesting Stockholder for a period of up to 90 days from the date of
such notice (as determined by the Company).
4.5 Underwritten Offerings. If the Company proposes to register any of
its securities under the Securities Act as contemplated by Section 4.1 and such
securities are to be distributed by or through one or more underwriters, the
Company will, if requested by any Requesting Stockholder, use its reasonable
best efforts to arrange for such underwriters to include all Registrable
Securities to be offered and sold by such Requesting Stockholder among the
securities of the Company to be distributed by such underwriters, subject to the
provisions of Section 4.2. The Requesting Stockholders of Registrable Securities
to be distributed by such underwriters shall become parties to an underwriting
agreement between the Company and such underwriters containing customary terms
and provisions.
4.6 Indemnification and Contribution. (a) In the event of any
registration of any securities under the Securities Act pursuant to Section 4.1,
the Company will, and it hereby agrees to, indemnify and hold harmless, to the
extent permitted by law, each seller of any Registrable Securities covered by
such registration statement, its directors, officers, employees and agents, each
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, as follows:
(i) against any and all loss, liability, claim, damage or expense
whatsoever arising out of or based upon an untrue statement or alleged untrue
statement of a material fact contained in any registration statement (including
all documents incorporated therein by reference) pursuant to which any
Registrable Securities are registered or any preliminary prospectus, final
prospectus, summary prospectus or term sheet included therein (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Company; and
(iii) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under clauses (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any such seller or underwriter expressly for use in the preparation of
any registration statement (or any amendment thereto) or any preliminary
prospectus or prospectus (or any amendment or supplement thereto); and provided,
further, that the Company will not be liable to any Person who participates as
an underwriter or seller in the offering or sale of Registrable Securities or
any other Person, if any, who controls such underwriter or seller within the
meaning of the Securities Act, under the indemnity agreement in this Section
4.6(a) with respect to any preliminary prospectus or final prospectus or final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, claim, damage or liability of such underwriter or controlling
Person results from the fact that such underwriter or seller sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus or of the
final prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously furnished copies thereof to such underwriter or
seller. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller, director, officer, employee,
agent, underwriter or controlling Person, and shall survive the transfer of such
securities by such seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 4.1 hereof, that the Company shall have received an undertaking
reasonably satisfactory to it from the prospective seller of such Registrable
Securities or any underwriter, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 4.6(a) hereof) the Company
and its directors and officers and each other Person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary, final or summary prospectus contained therein, or
any such amendment or supplement, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such seller or
7
underwriter specifically stating that it is for use in the preparation of such
registration statement, preliminary, final or summary prospectus or amendment or
supplement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller. In that event, the obligations of the Company and such sellers
pursuant to this Section 4.6 are to be several and not joint.
(c) Promptly after receipt by an indemnified party hereunder
of written notice of the commencement of any action or proceeding involving a
claim referred to in this Section 4.6, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give written
notice to such indemnifying party of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 4.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim (in which case the indemnifying party
shall not be liable for the fees and expenses of more than one counsel for the
sellers of Registrable Securities or for more than one counsel for the
underwriters in connection with any one action or separate but similar or
related actions), the indemnifying party will be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party shall be liable for
any settlement of any proceeding effected without its prior written consent.
(d) The Company and each seller of Registrable Securities
shall provide for the foregoing indemnity (with appropriate modifications) in
any underwriting agreement with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority.
(e) Notwithstanding anything herein to the contrary, the
rights and obligations contained in this Section 4.6 shall survive any
termination of this Agreement.
(f) In order to provide for just and equitable contribution
in circumstances under which the indemnity contemplated by Section 4.6(a) and
(b) hereof is for any reason not available, the parties required to indemnify by
the terms thereof shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
(collectively, "Losses") incurred by the Company, any seller of Registrable
Securities and one or more of the underwriters, except to the extent that
contribution is not permitted under Section 11(f) of the Securities Act. In
determining the amounts which the respective parties shall contribute, there
shall be considered the relative fault of the indemnifying party on the one hand
and the indemnified party on the other hand in connection with statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission and any other
equitable considerations appropriate under the circumstances. The Company and
each Person selling securities agree with each other that no seller of
Registrable Securities shall be required to contribute any amount in excess of
the amount such seller would have been required to pay to an indemnified party
if the indemnity under Section 4.6(a) and (b) hereof were available. The Company
and each such seller agree with each other and the underwriters of the
Registrable Securities, if requested by such underwriters, that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the underwriters were treated as one entity for such
purpose) or for the underwriters' portion of such contribution to exceed the
percentage that the underwriting discount bears to the initial public offering
price of the Registrable Securities. For purposes of this Section 4.6, each
Person, if any, who controls an underwriter within the meaning of the Securities
Act shall have the same rights to contribution as such underwriter, and each
director and each officer of the Company who signed the registration statement,
and each Person, if any, who controls the Company or a seller of Registrable
Securities, shall have the same rights to contribution as the Company or a
seller of Registrable Securities, as the case may be. Notwithstanding anything
herein the contrary, the rights and obligations contained in this Section 4.6
shall survive any termination of this Agreement.
5. Future Issuance of Shares; Preemptive Rights.
--------------------------------------------------
8
5.1 Offering Notice. Except for (a) options, warrants or Common Stock
of the Company which may be issued to employees, consultants or directors of the
Company pursuant to a stock option plan or other employee benefit arrangement
issued or in consideration for services to any Person, in each case approved by
the Board of Directors, (b) a subdivision of the outstanding shares of Common
Stock into a larger number of shares of Common Stock (or any stock dividend),
(c) Common Stock issued upon exercise, conversion or exchange of any security or
obligation which is by its terms convertible into shares of Common Stock (or any
stock dividend payable in shares of Common Stock or securities convertible,
exchangeable or exercisable into Common Stock), or (d) Common Stock or other
capital stock of the Company issued in consideration of an acquisition, approved
by the Board of Directors, by the Company of assets or another Person, if the
Company wishes to issue any shares of Common Stock or any other securities
convertible into or exchangeable for Common Stock of the Company (collectively,
"New Securities") prior to an Initial Public Offering, then the Company shall
offer such New Securities to the Additional Stockholders by sending written
notice (the "New Issuance Notice") to the Additional Stockholders, which New
Issuance Notice shall state (a) the number of New Securities proposed to be
issued and (b) the proposed purchase price per share of the New Securities that
the Company is willing to accept (the "Proposed Price"). Upon delivery of the
New Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in Section 5.2 shall have been waived or shall have expired.
5.2 Preemptive Rights; Exercise.
---------------------------------
5.2.1 Exercise Periods. For a period of 10 days after the giving
of the New Issuance Notice pursuant to Section 5.1 (the "Additional Stockholder
Exercise Period"), the Additional Stockholders who are then employed by the
Company shall have the right to purchase the New Securities at a purchase price
equal to the Proposed Price and upon the terms and conditions set forth in the
New Issuance Notice. Each Additional Stockholder shall have the right to
purchase that percentage of the New Securities determined by dividing (x) the
total number of Shares then owned by such Additional Stockholder by (y) the
total number of shares of outstanding Common Stock on a fully diluted basis.
5.2.2 Notices. The right of the Additional Stockholders to
purchase the New Securities under subsection 5.2.1 above shall be exercisable by
delivering written notice of the exercise thereof, prior to the expiration of
the Additional Stockholder Exercise Period, to the Company, which notice shall
state the amount of New Securities that such Additional Stockholder elects to
purchase pursuant to Section 5.2.1. The failure of an Additional Stockholder to
respond within the time periods specified above shall be deemed to be a waiver
of such Additional Stockholder's rights under Section 5.2.1.
5.3 Closing. The closing of the purchase of New Securities
subscribed for by the Additional Stockholders under Section 5.2 shall be held at
the executive office of the Company on (a) the later to occur of (i) the 30th
day after the giving of the New Issuance Notice pursuant to Section 5.1 or (ii)
two (2) days after the receipt of all approvals required or (b) at such other
time and place as the parties to the transaction may agree. At such closing, the
Company shall deliver certificates representing the New Securities, and such New
Securities shall be issued free and clear of all Liens and the Company shall so
represent and warrant, and further represent and warrant that such New
Securities shall be, upon issuance thereof to the Additional Stockholders and
after payment therefor, duly authorized, validly issued, fully paid and
nonassessable. The Additional Stockholders purchasing the New Securities shall
deliver at the closing payment in full in immediately available funds for the
New Securities purchased by him or her. At such closing, all of the parties to
the transaction shall execute such additional documents as are otherwise
necessary or appropriate.
5.4 Permitted Sale. Unless all of the New Securities are elected
to be purchased pursuant to Section 5.2, the Company may at any time after the
Additional Stockholder Exercise Period sell to any Person (including, without
limitation, the Principal Stockholder) all of the New Securities not elected to
be purchased by the Additional Stockholders pursuant to Section 5.2 on terms and
conditions that are no more favorable than those set forth in the New Issuance
Notice.
6. Lock-up Agreement. Each Additional Stockholder hereby agrees, to
the extent not inconsistent with applicable law, that during the period of
duration (not to exceed 180 days) specified by the Company and only if required
by the Company's investment banker(s) in connection with a public offering of
Common Stock (or other securities convertible into or exchangeable into Common
Stock), following the effective date of a registration statement of the Company
filed under the Securities Act relating to such public offering, it shall not,
to the extent requested by the Company and such managing underwriter, (i)
directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of any securities of the Company held by it at any time during such
period (except securities of such Additional Stockholder included in such
registration) and (ii) engage in any hedging or other transaction which is
designed to or reasonably expects to lead to or result in a disposition of such
shares of Common Stock, even if such shares would be disposed of by someone
other than the Additional Stockholder. Such prohibited hedging or other
transaction would include, without limitation, any short sale or any purchase,
sale or grant of any right (including, without limitation, any put or call
option with respect to any such shares or with respect to any security that
includes, relates to or derives any significant part of its value from the
shares).
7. After-Acquired Stock. Whenever any additional Stockholder acquires
any additional shares of Common Stock or securities of the Company that are
convertible into or exchangeable for Common Stock ("After-Acquired Stock")
(including, without limitation, upon stock dividends or stock splits or the
exercise of any options or warrants), such After-Acquired Stock shall be subject
9
to all of the terms and conditions of this Agreement; provided, however, that
such After-Acquired Stock shall not be subject to, nor receive the benefit of,
Section 4 except to the extent that such After-Acquired Stock is a Registrable
Security. All calculation of the percentages and number of shares of Common
Stock under this Agreement shall be done on a fully diluted basis.
8. Stock Certificate Legend. A copy of this Agreement shall be filed
with the Secretary of the Company and kept with the records of the Company. Each
certificate representing shares of Common Stock (or other securities convertible
or exchangeable into Common Stock) now held or hereafter acquired by any
Stockholder shall, for as long as this Agreement is effective, bear legends
substantially in the following forms:
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION OF THIS SECURITY OR ANY INTEREST HEREIN (EACH A
"TRANSFER") IS RESTRICTED BY THE TERMS OF THE STOCKHOLDERS' AGREEMENT,
DATED JANUARY 2, 2002, AMONG THE COMPANY AND THE STOCKHOLDERS NAMED
THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL
OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES
ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN
MADE IN COMPLIANCE WITH THE TERMS OF SUCH STOCKHOLDERS' AGREEMENT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO NEVADA
GAMING LAWS AND ALL LOCAL GAMING LAWS AND MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO SUCH LAWS.
9. Specific Performance. The parties hereto intend that each of them
have the right to seek damages or specific performance in the event that any
other party hereto fails to perform such other party's obligations hereunder.
Therefore, if any party shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an
adequate remedy at law.
10. Miscellaneous.
------------------
10.1 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(a) if to the Company:
3355 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Telecopier No.: (702) 733-5620
Attention: Sheldon G. Adelson,
Chairman of the Board
with a copy to:
Paul G. Roberts, Esq.
300 First Avenue
Needham, MA 02494
Telecopier No. (781) 449-6500
(b) if to any Stockholder, at his address as it appears on
the record books of the Company.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five business
days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if delivered by telecopier.
10.2 Amendment and Waiver.
-------------------------------
(a) No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties
hereto at law, in equity or otherwise.
(b) Except as provided in Section 10.2(c), any amendment,
supplement or modification of or to any provision of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure by any
party hereto from the terms of any provision of this Agreement, shall be
10
effective (i) only if it is made or given in writing and signed by the Principal
Stockholder and the holders of a majority of the shares of Common Stock held by
the Additional Stockholders and (ii) only in the specific instance and for the
specific purpose for which made or given. Notwithstanding the foregoing, the
observance of any terms of this Agreement which benefit only the Principal
Stockholder may be waived by the Principal Stockholder.
(c) Without the consent of the Principal Stockholder and the
Additional Stockholders, this Agreement may be amended by the Company from time
to time to permit additional stockholders of the Company, who have entered into
Stock Option Agreements or stock purchase agreements with the approval of the
Board of Directors and who desire to become Additional Stockholders, to become
Additional Stockholders under this Agreement. Any such amendment may be effected
by the Company by adding a signature page executed by the new Additional
Stockholder and a revised Schedule I to this Agreement.
10.3 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
10.4 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
10.5 Entire Agreement. This Agreement, together with the exhibits
hereto, is 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 in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement, together with the exhibits hereto, supersedes all prior agreements
and understandings on the subject matter hereof.
10.6 Term of Agreement. This Agreement shall become effective
upon the execution hereof and shall continue in effect until the termination of
this Agreement by written agreement of the Principal Stockholder and the holders
of a majority of the shares of Common Stock held by the Additional Stockholders;
provided, however, that Sections 3, 4 and 10.2(c) shall only continue in effect
until the earlier to occur (a) the closing of an Initial Public Offering and (b)
the termination of this Agreement by written agreement of the Principal
Stockholder and the holders of a majority of the shares of Common Stock held by
the Additional Stockholders.
10.7 Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
10.8 Rules of Construction. Unless the context otherwise
requires, "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Agreement.
10.9 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Nevada applicable to
agreements made and to be performed entirely within such State.
10.10 Further Assurances. Each of the parties shall, and shall
cause their respective Affiliates to, execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
10.11 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto (including, without limitation, in the case of any party hereto
that is an individual, the heirs, estate and personal representatives of such
party). This Agreement is not assignable except to permitted transferees of the
Common Stock of a Stockholder under Section 2 (including, without limitation,
any Third Party Transferee under Section 3 hereof) or with the written consent
of the Principal Stockholder and the Company.
10.12 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first written above.
LAS VEGAS SANDS, INC.
By: ---------------------------
Name:
Title:
/s/Sheldon G. Adelson
-----------------------------------
Sheldon G. Adelson
/s/William P. Weidner
-----------------------------------
William P. Weidner
/s/Bradley H. Stone
-----------------------------------
Bradley H. Stone
/s/Robert G. Goldstein
-----------------------------------
Robert G. Goldstein
/s/David Friedman
-----------------------------------
David Friedman
12
SCHEDULE A
ADDITIONAL STOCKHOLDERS
No. of Shares of Common
Name of Stockholder Stock underlying Option
- ------------------- -----------------------
William P. Weidner 19,960
Bradley H. Stone 14,970
Robert G. Goldstein 9,980
David Friedman 4,990
TABLE OF CONTENTS
Page
1. Definitions. ...........................................................1
2. Restrictions on Transfer................................................5
2.1 Limitation on Transfer. ......................................5
2.2 Transfers in Compliance with Law; Substitution of Transferee...5
2.3 Permitted Transfer Procedures. ...............................6
2.4 Additional Stockholders to Execute Consents. .................6
2.5 Transferee to Become Party to this Agreement. ................6
2.6 Termination of S Corporation Provisions. ......................6
3. Tag-Along Right.........................................................6
3.1 Transfer by Principal Stockholder. ...........................6
3.2 Offering Notice. ..............................................7
3.3 Exercise of Tag-Along Right. .................................7
3.4 Closing of Tag-Along Right. ..................................7
4. Registration Rights.....................................................8
4.1 Right to Include Registrable Securities in Registration........8
4.2 Priority in Incidental Registrations. ........................8
4.3 Expenses. ....................................................9
4.4 Registration Procedures........................................9
4.5 Underwritten Offerings. .....................................12
4.6 Indemnification and Contribution. ...........................12
5. Future Issuance of Shares; Preemptive Rights...........................15
5.1 Offering Notice. .............................................15
5.2 Preemptive Rights; Exercise...................................16
5.3 Closing.......................................................16
5.4 Permitted Sale. .............................................16
6. Lock-up Agreement. ...................................................16
7. After-Acquired Stock...................................................17
8. Stock Certificate Legend. ............................................17
9. Specific Performance. ................................................18
10. Miscellaneous..........................................................18
10.1 Notices. ....................................................18
10.2 Amendment and Waiver..........................................19
10.3 Headings. ....................................................19
10.4 Severability..................................................19
10.5 Entire Agreement. ...........................................20
10.6 Term of Agreement. ..........................................20
10.7 Variations in Pronouns. ......................................20
10.8 Rules of Construction. ......................................20
10.9 Governing Law. ..............................................20
10.10 Further Assurances. .........................................20
10.11 Successors and Assigns. .....................................20
10.12 Counterparts. ...............................................21
SCHEDULES
A Additional Stockholders
STOCKHOLDERS' AGREEMENT
among
LAS VEGAS SANDS, INC.
and
THE STOCKHOLDERS NAMED HEREIN
----------
January 2, 2002
----------