Standstill Effective from the date of this Agreement and continuing until the later of the certification of votes for the Company 2017 Annual Meeting of Stockholders or the certification of votes for the FSFR (as defined below) 2017 Annual Meeting of Stockholders (the “Standstill Period”), except to the extent expressly permitted by the terms of this Agreement, none of the Sellers shall, and Sellers shall cause their respective controlled Affiliates not to, directly or indirectly, in any manner, alone or in concert with others:
(a) solicit, or knowingly encourage or in any way engage in any solicitation of, any proxies or consents or become a “participant” in a “solicitation,” directly or indirectly, as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of proxies or consents (including, without limitation, any solicitation of consents that seeks to call a special meeting of stockholders or by encouraging or participating in any “withhold” or similar campaign), in each case, with respect to securities of the Company or Fifth Street Senior Floating Rate Corp. (“FSFR”) or any securities convertible or exchangeable into or exercisable for any such securities (collectively, “securities of the Companies”);
(b) make any proposal for consideration by stockholders at any annual or special meeting of the stockholders of the Company or FSFR, whether pursuant to Rule 14a-8 under the Exchange Act, either such company’s constituent documents or otherwise;
(c) knowingly advise, encourage, support, instruct or influence any person with respect to any of the matters covered by this Section 3.1 or with respect to the voting or disposition of any securities of the Companies at any annual or special meeting of stockholders of the Company or FSFR, except in accordance with Section 3.4, or seek to do so;
(d) agree, attempt, seek or propose to deposit any securities of the Companies in any voting trust or similar arrangement, or subject any securities of the Companies to any arrangement or agreement with respect to the voting thereof, except in accordance with Section 3.4;
(e) knowingly seek or encourage any person to submit nominations in furtherance of a “contested solicitation” or take other action for the election or removal of directors with respect to the Company or FSFR, including any action that is intended to, or is reasonably likely to result in, the replacement of the investment advisor of the Company or FSFR, or a modification to the terms or conditions of either the Company’s or FSFR’s investment advisory agreement;
(f) form, join in or in any way participate in a partnership, limited partnership, syndicate or other group, including, without limitation, a group as defined under Section 13(d) of the Exchange Act (except such participation related to the reasonable unwinding of any such group currently existing as of the date of this Agreement) with any person who is not identified on Schedule I hereto (any such person, a “Third Party”), with respect to any securities of the Companies or take any other action that would interfere with the ability of Sellers to vote in accordance with this Agreement;
(g) make any disclosure, communication, announcement or statement regarding any intent, purpose, plan or proposal with respect to the FSC Board of Directors (the “Company Board”), the Company investment advisor or the terms and conditions of the Company’s investment advisory agreement, the FSFR Board of Directors (the “FSFR Board”), the FSFR investment advisor or the terms and conditions of FSFR’s investment advisory agreement, the Company, FSFR, or the management, policies or affairs of either the Company or FSFR, or with respect to this Agreement, that is inconsistent with the provisions of this Agreement;
(h) effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of assets, liquidation, dissolution, extraordinary dividend, significant share repurchase or other extraordinary transaction involving the Company, FSFR or either of their investment advisors, or any of their subsidiaries or joint ventures or any of their respective securities (each, an “Extraordinary Transaction”), or make any statement or disclosure regarding any intent, purpose, plan or proposal with respect to any Extraordinary Transaction or this Agreement that is inconsistent with the provisions of this Agreement, including any intent, purpose, plan or proposal that is conditioned on, or would require waiver, amendment, nullification or invalidation of, any provision of this Agreement or take any action that could require the Company or FSFR to make any public disclosure relating to any such intent, purpose, plan, proposal or condition;
(i) (i) call or seek to call or request the calling of any meeting of stockholders at either the Company or FSFR, including by written consent, (ii) seek, alone or in concert with others, representation on, or nominate any candidate to, the Company Board or the FSFR Board, (iii) seek the removal of any member of the Company Board or the FSFR Board, (iv) seek, alone or in concert with others, or support any Third Party in seeking, to replace the investment advisor of the Company or the investment advisor of FSFR, (v) solicit consents from the Company or FSFR stockholders or otherwise act or seek to act by written consent, (vi) conduct a referendum of the Company or FSFR stockholders or (vii) make a request for any stockholders list or any other books and records in Sellers’ capacity as a Company or FSFR stockholder;
(j) purchase or cause to be purchased or otherwise acquire or agree to acquire beneficial ownership of any securities issued by the Company or FSFR, or any securities convertible into or exchangeable for securities issued by the Company or FSFR;
(k) sell, offer to sell, give, pledge, grant a security interest in, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of (each, a “Transfer”) any securities issued by the Company and/or any securities convertible into or exchangeable for securities issued by the Company, unless any Buyer fails to timely perform each of its obligations under Section 1.2(b), Section 1.3(c) and/or Section 1.3(d)(i) of this Agreement;
(l) institute, solicit or join, as a party, or knowingly assist any other person in instituting, soliciting or joining, any litigation, arbitration or other proceeding against the Company or FSFR or any of their current or former directors or officers (including derivative actions), other than (i) litigation to enforce the provisions of this Agreement and (ii) counterclaims with respect to any proceeding initiated by, or on behalf of, a party to this Agreement or FSFR against Sellers;
(m) enter into or engage in any short sale or purchase, sale or grant of any option, warrant, derivative, convertible security, stock appreciation right or other similar right (including, without limitation, any put or call option or swap transaction) with respect to or having any measurement relating to any securities of the Companies;
(n) enter into any negotiations, arrangements, understanding or agreements (whether written or oral) with, or advise, finance, assist, seek to knowingly persuade or encourage, any Third Party to take any action or make any statement in connection with any of the foregoing, or make any investment in or enter into any arrangement with any other person that engages, or offers or proposes to engage, in any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or
(o) take any action challenging the validity or enforceability of this Agreement, or make or in any way advance any request or proposal that the Company, FSFR, the Company Board or the FSFR Board amend, modify or waive any provision of this Agreement.
Third Party Standstill Agreements During the period from the date of this Agreement through the Effective Time, the Company shall not terminate, amend, modify or waive any provision of any confidentiality or standstill agreement to which the Company or any of its Subsidiaries is a party (other than any involving Parent). During such period, the Company agrees to enforce, to the fullest extent permitted under applicable law, the provisions of any such agreements, including, but not limited to, obtaining injunctions to prevent any breaches of such agreements and to enforce specifically the terms and provisions thereof in any court of the United States or any state thereof having jurisdiction.
Standstill Agreement (A) During the Standstill Period, and, if this Agreement is terminated prior to Closing pursuant to Section 10.1(a), for the one year period after the end of the Standstill Period (such one year period, the "Post Termination Standstill Period"), unless the Company shall have materially breached its obligation to nominate Investor Nominees or to appoint any Fully Independent Director pursuant to Section 5 (provided that, with respect to any such material breach that does not concern a Pre-Approved Person, a court of competent jurisdiction shall have determined pursuant to a final non-appealable order that the Company has so materially breached its obligations), the Investor shall not, shall cause each other member of the Investor Group not to, and shall use reasonable commercial efforts to cause other Affiliates and Associates of the Investor not members of the Investor Group ("Other Investor Affiliates") not to, directly or indirectly, alone or in concert with others:
(a) acquire, offer or propose to acquire or agree to acquire, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other 13D Group or otherwise, Beneficial Ownership of any Voting Securities, Derivative Securities or any other securities of the Company or any rights to acquire (whether currently, upon lapse of time, following the satisfaction of any conditions, upon the occurrence of any event or any combination of the foregoing) any Voting Securities, other than (i) the purchase of Shares or other Voting Securities expressly permitted by this Agreement, (ii) the acquisition of Voting Securities as a result of any stock split, stock dividends or other distributions, recapitalizations or offerings made available by the Company to holders of Voting Securities generally or (iii) in a transaction in which the Investor or a Subsidiary of the Investor acquires a previously unaffiliated business entity that, to the knowledge of the Investor after reasonable inquiry, owns shares of Common Stock that represents less than 4% of the Company's outstanding Common Stock and less than 10% of the unaffiliated entity's assets; provided, that all such Voting Securities shall be subject to the terms of this Agreement; provided, further, however, that in the event of a transaction as contemplated by clause (iii) hereof, the Investor will transfer, or cause such Subsidiary to transfer, in a manner consistent with Section 6.3, such shares of Common Stock previously owned by the unaffiliated entity within twelve months following the consummation of such transaction and all such shares of Common Stock, pending their transfer, shall be voted by the Investor or such Subsidiary in accordance with the requirements of clauses (w) through (z) of Section 6.2 and on any other matter in the same proportion as the votes cast by or on behalf of all holders of the Company's Voting Securities other than the Investor Group and Other Investor Affiliates;
(b) propose or seek to effect any merger, business combination, restructuring, recapitalization or similar transaction involving the Company or any of its Subsidiaries or the sale or other disposition outside the ordinary course of business of any material portion of the assets of the Company or any of its Subsidiaries except pursuant to Section 8.2 hereof;
(c) deposit any Voting Securities in a voting trust or subject any Voting Securities to any arrangement or agreement with respect to the voting of such Voting Securities except pursuant to Section 8.8 hereof;
(d) seek election to, seek to place a representative on, or seek the removal of any member of, the Board, except pursuant to Section 5 hereof;
(e) engage in any "solicitation" (within the meaning of rule 14a-1 under the Exchange Act) of proxies or consents (whether or not relating to the election or removal of directors) with respect to the Company, or become a "participant" in any "election contest" (within the meaning of Rule 14a-11 under the Exchange Act) or, unless the execution by the Investor, member of the Investor Group or Other Investor Affiliate is first approved by the Board, execute any written consent in lieu of a meeting of the holders of any class of Voting Securities that is solicited by or on behalf of any shareholder of the Company;
(f) call or seek to have called any meeting of the shareholders of the Company (except for the exercise by the Investor of its rights pursuant to Section 5.1(d));
(g) initiate, propose or otherwise solicit shareholders for the approval of any shareholder proposal (as described in Rule 14a-8 under the Exchange Act or otherwise) with respect to the Company;
(h) form, join or in any way participate in or assist in the formation of a 13D Group with respect to any Voting Securities, other than any such "group" consisting exclusively of the Investor and other wholly-owned United States Subsidiaries of the Investor who have acquired Voting Securities in accordance with Section 2.2(b) or Section 6.3(a);
(i) otherwise act, alone or in concert with others, to seek control or influence the management, the Board or the policies of the Company in a manner designed or having the deliberate effect of circumventing the restrictions otherwise imposed under this Section 6.1(A);
(j) disclose or publicly announce any intention, plan or arrangement inconsistent with the foregoing;
(k) advise, assist or encourage or finance any other persons in connection with any of the foregoing types of activities; or
(l) request the Company (or its directors, officers, employees or agents) to amend or waive any provision of this Agreement; provided that nothing in this Section 6.1(A) shall limit any rights of the members of the Investor Group under the Joint Venture Agreement or the Research Alliance Agreement, or (I) prohibit any individual who is serving as a Director of the Company, solely in his or her capacity as such Director and provided no public disclosure thereof by the Company would be required, from (x) taking any action or making any statement at any meeting of the Board of Directors or of any committee thereof, (y) making any statement to any Representative of the Company, or (z) making any statement or disclosure required under federal securities laws or other applicable Law, (II) restrict any private communications not requiring public disclosure between the Investor and any Investor Nominee, (III) restrict any disclosure or statements required to be made by any member of the Investor Group under applicable Law to the extent any such requirement does not arise from actions by the Investor Group inconsistent with this Agreement, or (IV) limit the rights of the Investor Group pursuant to Section 6.2, Section 6.9 or Section 8.2.
(B) Notwithstanding the foregoing, if this Agreement is terminated prior to Closing pursuant to Section 10.1(a), the provisions of paragraph (A) of this Section 6.1 (other than the provisions of clauses (a) (except as to proposals to the Company as to the matters in clause (b)) and (h) thereof and the provisions of (i), (j), (k) and (l) thereof to the extent such provisions relate to the acquisition of Voting Securities or other securities of the Company) shall cease to apply during the Post-Termination Standstill Period if (i) the Company enters into an agreement contemplating a Change in Control Transaction or a Competing Investment or the Company makes any filing with respect to, or seeks expiration of the waiting period under, the HSR Act with respect to a Change in Control Transaction or Competing Investment; (ii) the Board of Directors publicly announces its intention to solicit or publicly solicits any Proposal or publicly approves, accepts, authorizes or recommends to shareholders of the Company their approval of or the conveyance of shares pursuant to a Change in Control Transaction or Competing Investment; (iii) during or prior to the pendency of a bona fide tender or exchange offer made by any Person or 13D Group (other than a member of the Investor Group), the Board of Directors determines or resolves to, or announces its intention to, or is ordered or directed by any Governmental Entity to, redeem, amend or modify (to render inapplicable (including by taking action to cause a Section 11(a)(ii) Event or Section 13 Event (each as defined in the Amended Rights Agreement as in effect on the date hereof), not to occur that, absent such action, would otherwise have occurred, or to redeem the Preferred Stock Purchase Rights) thereto or otherwise exempt therefrom) the Preferred Stock Purchase Rights or the Amended Rights Agreement (or a Substantially Similar Agreement) or; (iv) any Person other than the Investor or an Excluded Person acquires or agrees to acquire 20% or more of the then outstanding Voting Securities or Common Securities.
Market Stand-Off Agreement Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred and eighty (180) days in the case of the IPO), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 6.11 shall apply only to the IPO, shall not (A) prohibit any Holder from buying registered shares of Common Stock in the IPO or in the aftermarket or selling such shares of Common Stock, or (B) apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Investors only if all officers and directors are subject to the same restrictions. The underwriters in connection with such registration are intended third party beneficiaries of this Section 6.11 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 6.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Investors subject to such agreements based on the number of shares subject to such agreements.
Standstill Provisions (a) Potomac agrees that, from the date of this Agreement until the earlier of (i) the date that is (ten) 10 business days prior to the deadline for the submission of shareholder nominations for the 2013 Annual Meeting pursuant to the Company’s bylaws and (ii) the date that is one-hundred (100) days prior to the first anniversary of the 2012 Annual Meeting (the “Standstill Period”), neither it nor any of its Affiliates or Associates under its control or direction will, and it will cause each of its Affiliates and Associates under its control not to, directly or indirectly, in any manner:
(i) solicit, or encourage or in any way engage in any solicitation of, any proxies or consents or become a “participant” in a “solicitation” as such terms are defined in Regulation 14A under the Exchange Act of proxies or consents (including, without limitation, any solicitation of consents that seeks to call a special meeting of shareholders), in each case, with respect to securities of the Company;
(ii) advise, encourage, support or influence any person with respect to the voting or disposition of any securities of the Company at any annual or special meeting of shareholders, except in accordance with Section 1, or seek to do so;
(iii) form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that includes all or some of the persons identified on Exhibit A, but does not include any other entities or persons not identified on Exhibit A as of the date hereof); provided, however, that nothing herein shall limit the ability of an Affiliate of Potomac to join the “group” following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement;
(iv) deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock, other than any such voting trust, arrangement or agreement solely among the members of Potomac and otherwise in accordance with this Agreement;
(v) seek or encourage any person to submit nominations in furtherance of a “contested solicitation” for the election or removal of directors with respect to the Company; provided, however, that nothing herein will limit the ability of Potomac to recommend a Potomac Replacement Director(s) in accordance with Section 1(j);
(vi) (A) make any proposal for consideration by shareholders at any annual or special meeting of shareholders of the Company or (B) make any offer or proposal (with or without conditions) with respect to a merger, acquisition, disposition or other business combination involving Potomac and the Company or any subsidiary or Affiliate of the Company, or encourage, initiate or support any other third party in any such related activity or (C) make any public communication in opposition to any Company acquisition or disposition activity approved by the Board;
(vii) seek, alone or in concert with others, representation on the Board, except as specifically contemplated in Section 1;
(viii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to the matters set forth in this Section 2; or
(ix) take any action which could cause or require the Company or any Affiliate of the Company to make a public announcement regarding any of the foregoing, publicly seek or request permission to do any of the foregoing, publicly make any request to amend, waive or terminate any provision of this Section 2 (including, without limitation, this Section 2(a)(ix), or make or seek permission to make any public announcement with respect to any of the foregoing.
(b) Nothing in this Section 2 shall prevent (i) Potomac from voting its shares of Common Stock and all shares of Common Stock represented by properly executed GOLD proxy cards in favor of the Potomac Nominees at the 2012 Annual Meeting in accordance with Section 1, (ii) Potomac from taking any actions as contemplated in Section 1(f) in furtherance of reconstituting the Board in a manner consistent with the composition of the Board as set forth in Section 1(a) or (iii) either of the Potomac Nominees, or their respective Potomac Replacement Director, as applicable, from taking any action in their capacity as directors of the Company in accordance with their respective fiduciary duties.
Agreement to Restrict Trading Intermediary agrees to execute written instructions from the Fund to restrict or prohibit further purchases or exchanges of Shares by a Shareholder that has been identified by the Fund as having engaged in transactions of the Fund’s Shares (directly or indirectly through the Intermediary’s account) that violate policies established or utilized by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding Shares issued by the Fund.
Confidentiality Restrictions The Product is a trade secret, copyrighted and proprietary product. Licensee and its employees will keep the Product strictly confidential, and Licensee will not disclose or otherwise distribute or reproduce any Product to anyone other than as authorized under the terms of Contract. Licensee will not remove or destroy any proprietary markings of Contractor.
Anti-Takeover Provisions The Company is not party to a shareholder rights agreement, “poison pill” or similar agreement or plan. The Company Board has taken all necessary action so that any takeover, anti-takeover, moratorium, “fair price”, “control share” or other similar Laws enacted under any Laws applicable to the Company (each, a “Takeover Statute”) does not, and will not, apply to this Agreement or the Transactions other than the CICL.
Lock-Ups The Purchaser acknowledges that the Securities will be subject to the Lock-ups contained in the Insider Letter.
Confidentiality Agreement As an employee of the Company, you will continue to have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, your acceptance of this Agreement confirms that the terms of the Company’s At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement you previously signed with the Company (the “Confidentiality Agreement”) still apply.
