Required Sale in Connection with a Sale of the Company. (a) Subject to the provisions of Section 2.1 and this Section 2.3, if the CCMP Investors at any time propose that the Company consummate (or commit to consummate) a Liquidity Event (an “Approved Sale”), then each Stockholder will agree to consent to and shall raise no objections against the Approved Sale. If the Approved Sale is structured as (i) a merger, recapitalization, consolidation of the Company, or a sale of all or substantially all of the Company’s assets, then each Stockholder shall waive any dissenter’s rights, appraisal rights or similar rights in connection with such transaction and shall vote in favor of such Approved Sale, or (ii) a Transfer of the issued and outstanding Stockholder Shares, each Stockholder will, and hereby agrees to, Transfer his, her or its Stockholder Shares on the terms and conditions approved by the CCMP Investors (in proportion to such Stockholder’s pro rata owned portion of the particular class, series or type of Stockholder Shares, on a fully diluted basis, subject to this Section 2.3, if such Approved Sale involves less than 100% of all such issued and outstanding Stockholder Shares (the “Stockholder’s Sale Requirement”)). In each such Approved Sale, the value to be received by the Stockholders shall be allocated among the Stockholders as if the Company was being liquidated and its assets were being distributed in accordance with the Certificate; provided, that any liabilities of the Company shall not be entitled to be satisfied more than once. All Stockholders and the Company shall cooperate fully and in good faith in connection with the conduct of the sale process and the consummation of the Approved Sale and agree to execute such agreements and instruments and take actions reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Approved Sale that are agreed to by the CCMP Investors (with the CCMP Investors being subject to the same terms on a per share basis for the same classes of shares that are owned by the Other Stockholders and being made subject to this Section 2.3) and to obtain all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Approved Sale. Additionally, the Company agrees to, and to cause the Company Group Employees to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken in connection with such Approved Sale. In connection with this Section 2.3, each Stockholder that holds Common Stock Equivalents, which are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, shall be obligated to exercise or convert all such Common Stock Equivalents pursuant to the underlying agreements governing such Common Stock Equivalents prior to the consummation of the Approved Sale; provided, that such Stockholder may, in lieu of exercising or converting such Common Stock Equivalents, elect to receive (x) the aggregate amount of consideration such Stockholder would have received in connection with the Approved Sale had such Stockholder exercised or converted all such Common Stock Equivalents less (y) the aggregate exercise or conversion price of all such Common Stock Equivalents; provided, further, that such Stockholder shall not be required to exercise or convert such Common Stock Equivalents if the CCMP Investors waive such Stockholder’s obligation to exercise or convert in writing, in which case such Stockholder shall continue to participate as a holder of Securities. Notwithstanding the foregoing, if the Approved Sale is a Transfer of less than 100% of the issued and outstanding Stockholder Shares, each Stockholder will only be required to exercise or convert (i) a number of Common Stock Equivalents as are necessary so that the Stockholder has sufficient Stockholder Shares to sell to meet his, her or its Stockholder’s Sale Requirement, or (ii) Common Stock Equivalents that are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, if such Stockholder is able to sell the Stockholder Shares obtained upon such exercise or conversion for cash or liquid Securities in such Approved Sale. (b) The Company shall deliver written notice to each Stockholder setting forth in reasonable detail the terms (including purchase price, timing and form of payment) of any Approved Sale (the “Approved Sale Notice”). Within fifteen (15) days following receipt of the Approved Sale Notice, each Stockholder shall deliver to the Company written notice (in form and substance reasonably satisfactory to the CCMP Investors) setting forth such Stockholder’s agreement (i) to consent to and raise no objections against, or impediments to, the Approved Sale (including, waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as a sale of stock, to sell its Stockholder Shares on the terms and conditions set forth in the Approved Sale Notice. (c) The obligations of the Stockholders to participate in any Approved Sale pursuant to this Section 2.3 are subject to the satisfaction of the following conditions: (i) if any Stockholder (other than any Management Stockholder) is given an option as to the form and amount of consideration to be received with respect to Securities in a class, all holders of Securities and of such class will be given the same option; (ii) no Stockholder shall be required to make any representations and warranties other than with respect to ownership of its Stockholder Shares, tax status, authority to enter into such Approved Sale, conflicts with Law or contracts, organizational documents applicable to such Stockholder, other representations and warranties customary for the type of party at issue and the transaction being consummated, and representations and warranties with respect to any other matters particular to such Stockholder; (iii) in the event that the Stockholders are required to provide any indemnities (including indemnities for representations and warranties made by the Company and its Subsidiaries in connection with a Liquidity Event), (A) no Stockholder shall be liable for more than its Pro Rata Amount of any such indemnification obligation and (B) any such -14- liability will not exceed the total purchase price received by such Stockholder (net of broker fees and the selling expenses described in Section 2.3(e)) from such purchaser for his, her or its Stockholder Shares; and (iv) the AIMCo Investor shall not be required to agree or enter in to any non-competition agreement or covenant imposed on the AIMCo Investor in connection with such Approved Sale; provided, however, that if the CCMP Investors agree to or enter into any agreement or covenant not to solicit or hire any employees of the Company or any of its Subsidiaries, the AIMCo Investor shall be required to enter into or agree to the same such employee non-solicitation or no hire agreement or covenant. (d) If the Company and any of the Stockholders or their Representatives enter into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Stockholder who is not an accredited investor (as such term is defined in Rule 501 under the Securities Act) will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to the Company. (e) The reasonable costs and expenses incurred by or on behalf of a Stockholder in connection with a consummated Approved Sale shall be paid by the Company or the acquiring Person. (f) The restrictions on Transfers of Stockholder Shares set forth in Section 2.2 shall not apply in connection with any Transfer made pursuant to an Approved Sale. (g) If any Other Stockholder is in breach of its obligations under this Section 2.3, then, in addition to any other remedies available to the Company or any other Stockholder, the Company may execute, on behalf of such defaulting Other Stockholder, any agreement, instrument or waiver executed by the non-defaulting Other Stockholders in connection with an Approved Sale. Each Other Stockholder (other than the AIMCo Investor) appoints the Company as his, her or its attorney-in-fact to carry out the intent of this Section 2.3(g), and acknowledges that such power of attorney is coupled with an interest, cannot be terminated without the consent of the Company and is binding on all of such Other Stockholder’s Transferees of Stockholder Shares. To the extent an Other Stockholder (other than the AIMCo Investor) fails to comply with the provisions of this Section 2.3, such Other Stockholder hereby indemnifies, defends and holds the Company harmless against all liability, loss or damage, together with all reasonable costs and expenses (including reasonable legal fees and expenses), relating to or arising from its exercise of the power of attorney granted hereby.
Appears in 1 contract
Samples: Stockholders’ Agreement
Required Sale in Connection with a Sale of the Company. (a) Subject to the provisions of Section 2.1 and this Section 2.32.4, if the CCMP Requisite FS Investors at any such time propose that the Company consummate (or commit to consummate) a Liquidity Event (an “Approved Sale”), then each Stockholder will agree to consent to and shall raise no objections against the Approved Sale. If the Approved Sale is structured as (i) a merger, recapitalization, consolidation of the Company, or a sale of all or substantially all of the Company’s assets, then each Stockholder shall waive any dissenter’s dissenters rights, appraisal rights or similar rights in connection with such transaction and shall vote (and shall use its best efforts to cause the Board to vote) in favor of such Approved Sale, Sale or (ii) a Transfer sale of the issued and outstanding Stockholder Shares, each Stockholder will, and hereby agrees to, Transfer his, her sell his or its Stockholder Shares on the terms and conditions approved by the CCMP Investors (in proportion to such Stockholder’s pro rata owned portion of the particular class, series or type of Stockholder Shares, on a fully diluted basis, subject to this Section 2.3, if such Approved Sale involves less than 100% of all such issued and outstanding Stockholder Shares (the “Stockholder’s Sale Requirement”))FS Investors. In each such Approved Sale, the value to be received by the Stockholders shall be allocated among the Stockholders as if the Company was being liquidated and its assets were being distributed in accordance with the Certificate; provided, that any liabilities liquidation preference sections of the Company shall not be entitled to be satisfied more than onceCertificate. All Stockholders and the Company shall will cooperate fully and in good faith in connection with the conduct of the sale process and the consummation of the Approved Sale and agree to execute such agreements and instruments and take actions reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Approved Sale that are agreed to by the CCMP FS Investors (with the CCMP FS Investors being subject to the same terms on a per share basis for the same classes of shares that are owned by the Other Stockholders and being made subject to this Section 2.3) and to obtain all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Approved Sale. Additionally, the Company agrees to, and to cause the Company Group Employees to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken in connection with such Approved Sale. In connection with this Section 2.3, each Stockholder that holds Common Stock Equivalents, which are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, shall be obligated to exercise or convert all such Common Stock Equivalents pursuant to the underlying agreements governing such Common Stock Equivalents prior to the consummation of the Approved Sale2.4); provided, that in the event a buyer requires that certain Stockholders provide an escrow to secure their indemnity obligations because such Stockholder may, in lieu of exercising or converting such Common Stock Equivalents, elect to receive (x) the aggregate amount of consideration such Stockholder would have received in connection buyer is not satisfied with the Approved Sale had creditworthiness of such Stockholder exercised or converted all Stockholders, then such Common Stock Equivalents less (y) Stockholders will agree to provide the aggregate exercise or conversion price of all such Common Stock Equivalents; provided, further, that such Stockholder shall not be required to exercise or convert such Common Stock Equivalents if the CCMP Investors waive such Stockholder’s obligation to exercise or convert in writing, in which case such Stockholder shall continue to participate as a holder of Securities. Notwithstanding the foregoing, if the Approved Sale is a Transfer of less than 100% of the issued and outstanding Stockholder Shares, each Stockholder will only be required to exercise or convert (i) a number of Common Stock Equivalents as are necessary so that the Stockholder has sufficient Stockholder Shares to sell to meet his, her or its Stockholder’s Sale Requirement, or (ii) Common Stock Equivalents that are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, escrow even if such Stockholder escrow is able to sell not required from the Stockholder Shares obtained upon such exercise or conversion for cash or liquid Securities in such Approved SaleFS Investors.
(b) The Company shall deliver written notice to each Stockholder setting forth in reasonable detail the terms (including purchase price, timing time and form of payment) of any Approved Sale (the “Approved Sale Notice”). Within fifteen (15) days following receipt of the Approved Sale Notice, each Stockholder shall deliver to the Company written notice (in form and substance reasonably satisfactory to the CCMP FS Investors) setting forth such Stockholder’s agreement (i) to consent to and raise no objections against, or impediments to, the Approved Sale (including, waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as a sale of stock, to sell its Stockholder Shares on the terms and conditions set forth in the Approved Sale Notice.
(c) The obligations of the Stockholders to participate in any Approved Sale pursuant to this Section 2.3 2.4 are subject to the satisfaction of the following conditions:
(d) (i) upon the consummation of the Approved Sale, each Stockholder shall receive the same proportion of the aggregate consideration from such Approved Sale that such holder would have received if such aggregate consideration (net of any Stockholder (other than any Management Stockholderproceeds escrowed to secure indemnity claims) is given an option as had been distributed by the Company in complete liquidation pursuant to the form rights and amount of consideration preferences set forth in the Company’s Certificate as in effect immediately prior to be received with respect to Securities in a class, all holders of Securities and of such class will be given the same option;
(ii) no Stockholder shall be required to make any representations and warranties other than with respect to ownership of its Stockholder Shares, tax status, authority to enter into such Approved Sale, conflicts with Law or contracts, organizational documents giving effect to applicable to such Stockholder, other representations and warranties customary for the type orders of party at issue priority and the transaction being consummated, and representations and warranties with respect provisions of the various agreements relating to any other matters particular to such Stockholder;
(iii) in the event that the Stockholders are required to provide any indemnities (including indemnities for representations and warranties made by the Company and its Subsidiaries in connection with a Liquidity Event), (A) no Stockholder shall be liable for more than its Pro Rata Amount of any such indemnification obligation and (B) any such -14- liability will not exceed the total purchase price received by such Stockholder (net of broker fees and the selling expenses described in Section 2.3(e)) from such purchaser for his, her stock or its Stockholder Shares; and
(iv) the AIMCo Investor shall not be required to agree or enter in to any non-competition agreement or covenant imposed on the AIMCo Investor in connection with such Approved Sale; provided, however, that if the CCMP Investors agree to or enter into any agreement or covenant not to solicit or hire any employees options of the Company or (it being understood that any of its Subsidiaries, the AIMCo Investor shall be required to enter into or agree to the same such employee non-solicitation or no hire agreement or covenant.
(d) If the Company proceeds held in escrow and any of the Stockholders or their Representatives enter into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Stockholder who is not an accredited investor (as such term is defined in Rule 501 under the Securities Act) will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to the Company.
(e) The reasonable costs and expenses incurred funded by or on behalf of a Stockholder all Stockholders to secure indemnity claims will be distributed in connection with a consummated Approved Sale shall be paid by the Company or the acquiring Person.
(f) The restrictions on Transfers of Stockholder Shares set forth in Section 2.2 shall not apply in connection with any Transfer made manner contemplated pursuant to an Approved Sale.
this clause (gi) If any Other Stockholder is in breach of its obligations under after taking into account all prior distributions pursuant to this Section 2.3, then, in addition to any other remedies available to the Company or any other Stockholder, the Company may execute, on behalf of such defaulting Other Stockholder, any agreement, instrument or waiver executed by the non-defaulting Other Stockholders in connection with an Approved Sale. Each Other Stockholder clause (other than the AIMCo Investor) appoints the Company as his, her or its attorney-in-fact to carry out the intent of this Section 2.3(gi), and acknowledges that such power of attorney is coupled with an interest, cannot be terminated without the consent of the Company and is binding on all of such Other Stockholder’s Transferees of Stockholder Shares. To the extent an Other Stockholder (other than the AIMCo Investor) fails to comply with the provisions of this Section 2.3, such Other Stockholder hereby indemnifies, defends and holds the Company harmless against all liability, loss or damage, together with all reasonable costs and expenses (including reasonable legal fees and expenses), relating to or arising from its exercise of the power of attorney granted hereby.;
Appears in 1 contract
Required Sale in Connection with a Sale of the Company. (a) Subject to the provisions of Section 2.1 and this Section 2.3, if the CCMP Investors at any time propose that the Company consummate (or commit to consummate) a Liquidity Event (an “Approved Sale”), then each Stockholder will agree to consent to and shall raise no objections against the Approved Sale. If the Approved Sale is structured as (i) a merger, recapitalization, consolidation of the Company, or a sale of all or substantially all of the Company’s assets, then each Stockholder shall waive any dissenter’s rights, appraisal rights or similar rights in connection with such transaction and shall vote in favor of such Approved Sale, or (ii) a Transfer of the issued and outstanding Stockholder Shares, each Stockholder will, and hereby agrees to, Transfer his, her or its Stockholder Shares on the terms and conditions approved by the CCMP Investors (in proportion to such Stockholder’s pro rata owned portion of the particular class, series or type of Stockholder Shares, on a fully diluted basis, subject to this Section 2.3, if such Approved Sale involves less than 100% of all such issued and outstanding Stockholder Shares (the “Stockholder’s Sale Requirement”)). In each such Approved Sale, the value to be received by the Stockholders shall be allocated among the Stockholders as if the Company was being liquidated and its assets were being distributed in accordance with the Certificate; provided, that any liabilities of the Company shall not be entitled to be satisfied more than once. All Stockholders and the Company shall cooperate fully and in good faith in connection with the conduct of the sale process and the consummation of the Approved Sale and agree to execute such agreements and instruments and take actions reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Approved Sale that are agreed to by the CCMP Investors (with the CCMP Investors being subject to the same terms on a per share basis for the same classes of shares that are owned by the Other Stockholders and being made subject to this Section 2.3) and to obtain all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Approved Sale. Additionally, the Company agrees to, and to cause the Company Group Employees to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken in connection with such Approved Sale. In connection with this Section 2.3, each Stockholder that holds Common Stock Equivalents, which are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, shall be obligated to exercise or convert all such Common Stock Equivalents pursuant to the underlying agreements governing such Common Stock Equivalents prior to the consummation of the Approved Sale; provided, that such Stockholder may, in lieu of exercising or converting such Common Stock Equivalents, elect to receive (x) the aggregate amount of consideration such Stockholder would have received in connection with the Approved Sale had such Stockholder exercised or converted all such Common Stock Equivalents less (y) the aggregate exercise or conversion price of all such Common Stock Equivalents; provided, further, that such Stockholder shall not be required to exercise or convert such Common Stock Equivalents if the CCMP Investors waive such Stockholder’s obligation to exercise or convert in writing, in which case such Stockholder shall continue to participate as a holder of Securities. Notwithstanding the foregoing, if the Approved Sale is a Transfer of less than 100% of the issued and outstanding Stockholder Shares, each Stockholder will only be required to exercise or convert (i) a number of Common Stock Equivalents as are necessary so that the Stockholder has sufficient Stockholder Shares to sell to meet his, her or its Stockholder’s Sale Requirement, or (ii) Common Stock Equivalents that are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, if such Stockholder is able to sell the Stockholder Shares obtained upon such exercise or conversion for cash or liquid Securities in such Approved Sale.
(b) The Company shall deliver written notice to each Stockholder setting forth in reasonable detail the terms (including purchase price, timing and form of payment) of any Approved Sale (the “Approved Sale Notice”). Within fifteen (15) days following receipt of the Approved Sale Notice, each Stockholder shall deliver to the Company written notice (in form and substance reasonably satisfactory to the CCMP Investors) setting forth such Stockholder’s agreement (i) to consent to and raise no objections against, or impediments to, the Approved Sale (including, waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as a sale of stock, to sell its Stockholder Shares on the terms and conditions set forth in the Approved Sale Notice.
(c) The obligations of the Stockholders to participate in any Approved Sale pursuant to this Section 2.3 are subject to the satisfaction of the following conditions:
(i) if any Stockholder (other than any Management Stockholder) is given an option as to the form and amount of consideration to be received with respect to Securities in a class, all holders of Securities and of such class will be given the same option;
(ii) no Stockholder shall be required to make any representations and warranties other than with respect to ownership of its Stockholder Shares, tax status, authority to enter into such Approved Sale, conflicts with Law or contracts, organizational documents applicable to such Stockholder, other representations and warranties customary for the type of party at issue and the transaction being consummated, and representations and warranties with respect to any other matters particular to such Stockholder;
(iii) in the event that the Stockholders are required to provide any indemnities (including indemnities for representations and warranties made by the Company and its Subsidiaries in connection with a Liquidity Event), (A) no Stockholder shall be liable for more than its Pro Rata Amount of any such indemnification obligation and (B) any such -14- liability will not exceed the total purchase price received by such Stockholder (net of broker fees and the selling expenses described in Section 2.3(e)) from such purchaser for his, her or its Stockholder Shares; and
(iv) the AIMCo Investor shall not be required to agree or enter in to any non-competition agreement or covenant imposed on the AIMCo Investor in connection with such Approved Sale; provided, however, that if the CCMP Investors agree to or enter into any agreement or covenant not to solicit or hire any employees of the Company or any of its Subsidiaries, the AIMCo Investor shall be required to enter into or agree to the same such employee non-solicitation or no hire agreement or covenant.
(d) If the Company and any of the Stockholders or their Representatives enter into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Stockholder who is not an accredited investor (as such term is defined in Rule 501 under the Securities Act) will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to the Company.
(e) The reasonable costs and expenses incurred by or on behalf of a Stockholder in connection with a consummated Approved Sale shall be paid by the Company or the acquiring Person.
(f) The restrictions on Transfers of Stockholder Shares set forth in Section 2.2 shall not apply in connection with any Transfer made pursuant to an Approved Sale.
(g) If any Other Stockholder is in breach of its obligations under this Section 2.3, then, in addition to any other remedies available to the Company or any other Stockholder, the Company may execute, on behalf of such defaulting Other Stockholder, any agreement, instrument or waiver executed by the non-defaulting Other Stockholders in connection with an Approved Sale. Each Other Stockholder (other than the AIMCo Investor) appoints the Company as his, her or its attorney-in-fact to carry out the intent of this Section 2.3(g), and acknowledges that such power of attorney is coupled with an interest, cannot be terminated without the consent of the Company and is binding on all of such Other Stockholder’s Transferees of Stockholder Shares. To the extent an Other Stockholder (other than the AIMCo Investor) fails to comply with the provisions of this Section 2.3, such Other Stockholder hereby indemnifies, defends and holds the Company harmless against all liability, loss or damage, together with all reasonable costs and expenses (including reasonable legal fees and expenses), relating to or arising from its exercise of the power of attorney granted hereby.
Appears in 1 contract
Required Sale in Connection with a Sale of the Company. (a) Subject to the provisions of Section 2.1 and this Section 2.32.4, if the CCMP Investors at any such time propose that the Company consummate (or commit to consummate) a Liquidity Event (an “Approved Sale”), then each Stockholder will agree to consent to and shall raise no objections against the Approved Sale. If the Approved Sale is structured as (i) a merger, recapitalization, consolidation of the Company, or a sale of all or substantially all of the Company’s assets, then each Stockholder shall waive any dissenter’s dissenters rights, appraisal rights or similar rights in connection with such transaction and shall vote (and shall use its best efforts to cause the Board to vote) in favor of such Approved Sale, Sale or (ii) a Transfer sale of the issued and outstanding Stockholder Shares, each Stockholder will, and hereby agrees to, Transfer his, her sell his or its Stockholder Shares on the terms and conditions approved by the CCMP Investors (pro rata, in proportion to such Stockholder’s pro rata owned portion of the particular class, series or type of Stockholder Shares, on a fully diluted basis, subject to this Section 2.3Pro Rata Amount, if such Approved Sale involves less than 100% of all such issued and outstanding Stockholder Shares (the “Stockholder’s Sale Requirement”)Shares). In each such Approved Sale, the value to be received by the Stockholders shall be allocated among the Stockholders as if the Company was being liquidated and its assets were being distributed in accordance with the Certificate; provided, that any liabilities of the Company shall not be entitled to be satisfied more than once. All Stockholders and the Company shall will cooperate fully and in good faith in connection with the conduct of the sale process and the consummation of the Approved Sale and agree to execute such agreements and instruments and take actions reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Approved Sale that are agreed to by the CCMP Investors (with the CCMP Investors being subject to the same terms on a per share basis for the same classes of shares that are owned by the Other Stockholders and being made subject to this Section 2.3) and to obtain all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Approved Sale. Additionally, the Company agrees to, and to cause the Company Group Employees to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken in connection with such Approved Sale. In connection with this Section 2.3, each Stockholder that holds Common Stock Equivalents, which are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, shall be obligated to exercise or convert all such Common Stock Equivalents pursuant to the underlying agreements governing such Common Stock Equivalents prior to the consummation of the Approved Sale; provided, that such Stockholder may, in lieu of exercising or converting such Common Stock Equivalents, elect to receive (x) the aggregate amount of consideration such Stockholder would have received in connection with the Approved Sale had such Stockholder exercised or converted all such Common Stock Equivalents less (y) the aggregate exercise or conversion price of all such Common Stock Equivalents; provided, further, that such Stockholder shall not be required to exercise or convert such Common Stock Equivalents if the CCMP Investors waive such Stockholder’s obligation to exercise or convert in writing, in which case such Stockholder shall continue to participate as a holder of Securities. Notwithstanding the foregoing, if the Approved Sale is a Transfer of less than 100% of the issued and outstanding Stockholder Shares, each Stockholder will only be required to exercise or convert (i) a number of Common Stock Equivalents as are necessary so that the Stockholder has sufficient Stockholder Shares to sell to meet his, her or its Stockholder’s Sale Requirement, or (ii) Common Stock Equivalents that are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, if such Stockholder is able to sell the Stockholder Shares obtained upon such exercise or conversion for cash or liquid Securities in such Approved Sale2.4).
(b) The Company shall deliver written notice to each Stockholder setting forth in reasonable detail the terms (including purchase price, timing time and form of payment) of any Approved Sale (the “Approved Sale Notice”). Within fifteen (15) days following receipt of the Approved Sale Notice, each Stockholder shall deliver to the Company written notice (in form and substance reasonably satisfactory to the CCMP Investors) setting forth such Stockholder’s agreement (i) to consent to and raise no objections against, or impediments to, the Approved Sale (including, waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as a sale of stock, to sell its Stockholder Shares on the terms and conditions set forth in the Approved Sale Notice.
(c) The obligations of the Stockholders to participate in any Approved Sale pursuant to this Section 2.3 2.4 are subject to the satisfaction of the following conditions:
(i) subject to Section 2.4(c)(v), if any Stockholder (other than any Management Stockholder) is given an option as to the form and amount of consideration to be received with respect to Securities in a class, all holders of Securities and of such class will be given the same option;
(ii) if any Stockholder holds options, warrants or convertible Securities of the Company with a fair market value that exceeds the applicable exercise or conversion price, such Stockholder shall exercise or convert all such options, warrants or convertible Securities of the Company prior to the consummation of the Approved Sale;
(iii) no Stockholder shall be required to make any representations and warranties other than with respect to ownership of its Stockholder Shares, tax status, authority to enter into such Approved Sale, conflicts with Law or contracts, organizational documents applicable to such Stockholder, other representations and warranties customary for the type of party at issue and the transaction being consummated, and representations and warranties with respect to any other matters particular to such Stockholder;
(iiiiv) in the event that the Stockholders are required to provide any indemnities (including indemnities for representations and warranties made by the Company and its Subsidiaries in connection with a Liquidity Event), (A) no Stockholder shall be liable for more than its Pro Rata Amount of any such indemnification obligation and (B) any such -14- liability will not exceed the total purchase price received by such Stockholder (net of broker fees and the selling expenses described in Section 2.3(e)fees) from such purchaser for his, her his or its Stockholder Shares; and
(ivv) if the AIMCo Investor Approved Sale is not a Distressed Sale and if the consideration offered by the purchaser in such Approved Sale (the “Approved Purchaser”) includes illiquid Securities that comprise greater than thirty-three per cent (33%) of the aggregate consideration to be received by the Management Stockholders, the CCMP Investors shall either (A) cause the Approved Purchaser to increase the cash and/or liquid Securities portion of the consideration payable to the Other Stockholders such that not be required more than thirty-three per cent (33%) of such consideration is in the form of illiquid Securities, or (B) offer to agree purchase (or enter in cause another financially capable Person to any non-competition agreement or covenant imposed on offer to purchase) from each Management Stockholder, at the AIMCo Investor in connection with per share value ascribed to such illiquid Securities pursuant to the terms of such Approved Sale, that portion of such illiquid Securities such that the amount of illiquid Securities retained by such Management Stockholder after such disposition constitutes not more than thirty-three per cent (33%) of the aggregate consideration received by such Management Stockholder. For the avoidance of doubt, the determination regarding whether any Security received as consideration in an Approved Sale is liquid shall be made by the Board in its reasonable discretion. Any purchase of illiquid Securities described in clause (B) shall occur on the date that the Approved Sale is closed. The Management Stockholder selling illiquid Securities will execute a selling agreement (in form and substance reasonably acceptable to the purchasers); provided, however, that if the CCMP Investors agree to or enter into any such agreement or covenant not to solicit or hire any employees of the Company or any of its Subsidiaries, the AIMCo Investor shall be required to enter into or agree to the same such employee non-solicitation or no hire agreement or covenantcontain only those representations and warranties described in Section 2.4(c)(iii).
(d) If the Company and any of the Stockholders or their Representatives enter into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Stockholder who is not an accredited investor (as such term is defined in Rule 501 under the Securities Act) will, at the request of the Company, each appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to the Company.
(e) The reasonable costs and expenses incurred by or on behalf of a Stockholder in connection with a consummated Approved Sale shall be Sale, to the extent such expenses are not otherwise paid by the Company or the acquiring Personparty, shall be paid by all Stockholders in accordance with their respective pro rata percentage (based on the proceeds to be received by such Stockholder).
(f) The restrictions on Transfers of Stockholder Shares set forth in Section Sections 2.2 and 2.3 shall not apply in connection with any Transfer made pursuant to an Approved Sale.
(g) If any Other Stockholder is in breach of its his obligations under this Section 2.32.4, then, in addition to any other remedies available to the Company or any other Stockholder, the Company may execute, on behalf of such defaulting Other Stockholder, any agreement, instrument or waiver executed by the non-defaulting Other Stockholders in connection with an Approved Sale. Each Other Stockholder (other than the AIMCo Investor) appoints the Company as his, her his or its attorney-in-fact to carry out the intent of this Section 2.3(g2.4(g), and acknowledges that such power of attorney is coupled with an interest, cannot be terminated without the consent of the Company and is binding on all of such Other Stockholder’s Transferees of Stockholder Shares. To the extent an Other Stockholder (other than the AIMCo Investor) fails to comply with the provisions of this Section 2.32.4, such Other Stockholder hereby indemnifies, defends and holds the Company harmless (severally in accordance with his, her or its pro rata share of consideration received in any such Approved Sale (not jointly and severally)) against all liability, loss or damage, together with all reasonable costs and expenses (including reasonable legal fees and expensesexpense), relating to or arising from its exercise of the power of attorney granted hereby.
Appears in 1 contract
Samples: Stockholders' Agreement (Francesca's Holdings CORP)
Required Sale in Connection with a Sale of the Company. (a) Subject to the provisions of set forth in Section 2.1 2.1(d) and this Section 2.3, if the CCMP Investors at any time propose that Requisite Investor Stockholders and the Board approve a Sale of the Company consummate (or commit to consummate) a Liquidity Event (an “Approved Sale”), then each Stockholder will agree to shall consent to to, vote in favor of and shall raise no objections against the Approved Sale. If , and if the Approved Sale is structured as a sale of the issued and outstanding capital stock of the Company (i) a whether by merger, recapitalization, consolidation or Transfer of the CompanyStockholder Shares, other Securities or a sale of all or substantially all of the Company’s assetsotherwise), then each Stockholder shall waive any dissenter’s dissenters rights, appraisal rights or similar rights in connection with such transaction and shall vote in favor of such Approved Sale, or (ii) a Transfer Sale of the issued Company and outstanding Stockholder Shares, each Stockholder will, and hereby agrees to, Transfer shall agree to sell his, her or its Stockholder Shares on the terms and conditions approved by the CCMP Investors (in proportion to such Stockholder’s pro rata owned portion of the particular class, series or type of Stockholder Shares, on a fully diluted basis, subject to this Section 2.3, if such Approved Sale involves less than 100% of all such issued and outstanding Stockholder Shares (the “Stockholder’s Sale Requirement”)). In each such Approved Sale, the value to be received by the Stockholders shall be allocated among the Stockholders as if the Company was being liquidated and its assets were being distributed in accordance with the Certificate; provided, that any liabilities of the Company shall not be entitled to be satisfied more than once. All Requisite Investor Stockholders and the Company Board. Each Stockholder shall cooperate fully take all necessary and in good faith desirable actions in connection with the conduct of the sale process and the consummation of the Approved Sale and agree to execute Sale, including, but not limited to, the execution of such agreements and instruments and take other actions reasonably necessary to provide the representations, warranties, indemnities, covenants, conditions, escrow agreements agreement and other provisions and agreements relating to such Approved Sale Sale. In the event that are agreed any Stockholder fails for any reason to by take any of the CCMP Investors (with the CCMP Investors being subject foregoing actions after reasonable notice thereof, he, she or it hereby grants an irrevocable power of attorney and proxy to the same Company or its designees to take all necessary actions and execute and deliver all documents deemed necessary or desirable by such Person to effectuate the terms on a per share basis for the same classes of shares that are owned by the Other Stockholders and being made subject to this Section 2.3. The restrictions on Transfers of Stockholder Shares and the other terms set forth in Sections 2.1 (other than Section 2.1(d), if applicable) and to obtain all governmental and third-party approvals and consents reasonably necessary or desirable to consummate such Approved Sale. Additionally, the Company agrees to, and to cause the Company Group Employees to, use its and their reasonable best efforts to facilitate and support any due diligence process being undertaken shall not apply in connection with such Approved Sale. In connection with this Section 2.3, each Stockholder that holds Common Stock Equivalents, which are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, shall be obligated to exercise or convert all such Common Stock Equivalents pursuant to the underlying agreements governing such Common Stock Equivalents prior to the consummation of the Approved Sale; provided, that such Stockholder may, in lieu of exercising or converting such Common Stock Equivalents, elect to receive (x) the aggregate amount of consideration such Stockholder would have received in connection with the Approved Sale had such Stockholder exercised or converted all such Common Stock Equivalents less (y) the aggregate exercise or conversion price of all such Common Stock Equivalents; provided, further, that such Stockholder shall not be required to exercise or convert such Common Stock Equivalents if the CCMP Investors waive such Stockholder’s obligation to exercise or convert in writing, in which case such Stockholder shall continue to participate as a holder of Securities. Notwithstanding the foregoing, if the Approved Sale is a Transfer of less than 100% of the issued and outstanding Stockholder Shares, each Stockholder will only be required to exercise or convert (i) a number of Common Stock Equivalents as are necessary so that the Stockholder has sufficient Stockholder Shares to sell to meet his, her or its Stockholder’s Sale Requirement, or (ii) Common Stock Equivalents that are either vested or will vest in connection with the Approved Sale, with an underlying fair market value that exceeds the applicable exercise or conversion price, as the case may be, if such Stockholder is able to sell the Stockholder Shares obtained upon such exercise or conversion for cash or liquid Securities in such Approved Sale.
(b) The Company shall deliver written notice to each Stockholder setting forth in reasonable detail the terms (including purchase price, timing time and form of payment) of any Approved Sale (the “Approved Sale Notice”). Within fifteen ten (1510) days following receipt of the Approved Sale Notice, each Stockholder shall deliver to the Company written notice (in form and substance reasonably satisfactory to the CCMP InvestorsCompany) setting forth such Stockholder’s holders’ agreement (i) to consent to and raise no objections against, or impediments to, the Approved Sale (including, including waiving all dissenter’s and similar rights) and (ii) if the Approved Sale is structured as a sale of stock, to sell his, her or its Stockholder Shares on the terms and conditions set forth in the Approved Sale Notice.
(c) The obligations of the Stockholders to participate in any Approved Sale pursuant to this Section 2.3 are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Approved Sale, each Stockholder shall receive the same proportion of the aggregate consideration from such Approved Sale that such holder would have received if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the rights and preferences set forth in the Certificate as in effect immediately prior to such Approved Sale (giving effect to applicable orders of priority and the provisions of the various agreements relating to vested stock or vested options of the Company);
(ii) if any Stockholder (other than any Management Stockholder) is Stockholders are given an option as to the form and amount of consideration to be received with respect to Securities in a class, all holders of Securities and of such class will be given the same option;
(iiiii) no Stockholder shall be required obligated to make any representations and warranties other than with respect to ownership of its Stockholder Shares, tax status, authority to enter into such Approved Sale, conflicts with Law or contracts, organizational documents applicable to such Stockholder, other representations and warranties customary for the type of party at issue and the transaction being consummated, and representations and warranties with respect to any other matters particular to such Stockholder;
(iii) in the event that the Stockholders are required to provide any indemnities (including indemnities for representations and warranties made by the Company and its Subsidiaries in connection with a Liquidity Event), (A) no Stockholder shall be liable for pay more than its Pro Rata Amount of any such indemnification obligation and (B) any such -14- liability will not exceed the total purchase price received by such Stockholder (net of broker fees and the selling expenses described in Section 2.3(e)) from such purchaser for his, her or its Stockholder Shares; and
(iv) the AIMCo Investor shall not be required to agree or enter in to any non-competition agreement or covenant imposed on the AIMCo Investor pro rata amount of reasonable expenses incurred in connection with a consummated Approved Sale to the extent such Approved Sale; provided, however, that if expenses are incurred for the CCMP Investors agree to or enter into any agreement or covenant benefit of all Stockholders and are not to solicit or hire any employees of otherwise paid by the Company or any of its Subsidiaries, the AIMCo Investor shall be required to enter into or agree to the same such employee non-solicitation or no hire agreement or covenant.
acquiring party (d) If the Company and any of the Stockholders or their Representatives enter into any negotiation or transaction for which Rule 506 under the Securities Act (or any similar rule then in effect) may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), each Stockholder who is not an accredited investor (as such term is defined in Rule 501 under the Securities Act) will, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 under the Securities Act) reasonably acceptable to the Company.
(e) The reasonable costs and expenses incurred by or on behalf of a Stockholder for its or his sole benefit not being considered expenses incurred for the benefit of all Stockholders);
(iv) with respect to the obligations of the Bond Stockholders only to so participate in connection with such an Approved Sale, and except in a consummated transaction effected pursuant to the “Merger Exception” as defined in Article Four, Part B, Section 5(a)(i) of the Certificate, the terms of the Approved Sale shall be provide that (A) the holders of the Series AA Preferred Stock shall receive an amount in cash equal to at least the aggregate liquidation preference of all outstanding shares of Series AA Preferred Stock and, (B) prior to or simultaneously with the closing of such Approved Sale, either (I) the New Senior Subordinated Notes are paid in full in cash or (II) the Company gives written notice of redemption of all New Senior Subordinated Notes to the trustee and the holders thereof pursuant to the related indenture and deposits the redemption price therefor with a bank or trust company acting as paying agent or otherwise segregates and holds in trust the redemption price as permitted by the indenture; and
(v) any indemnification obligations for breaches of representations, warranties and covenants made by the Company or and its Subsidiaries shall be pro-rata among the acquiring PersonStockholders based on the aggregate consideration payable with respect to the equity Securities of the Company.
(fd) The restrictions on Transfers obligations of Stockholder Shares the Stockholders set forth in this Section 2.2 2.3 shall apply solely with respect to the Stockholder Shares and shall not apply in connection with any Transfer made pursuant to an Approved Sale.
(g) If any Other Stockholder is in breach of its obligations under this Section 2.3, then, in addition respect to any other remedies available to the Company or shares of Series AA Preferred Stock owned by any other Stockholder, the Company may execute, on behalf of such defaulting Other Stockholder, any agreement, instrument or waiver executed by the non-defaulting Other Stockholders in connection with an Approved Sale. Each Other Stockholder (other than the AIMCo Investor) appoints the Company as his, her or its attorney-in-fact to carry out the intent of this Section 2.3(g), and acknowledges that such power of attorney is coupled with an interest, cannot be terminated without the consent of the Company and is binding on all of such Other Stockholder’s Transferees of Stockholder Shares. To the extent an Other Stockholder (other than the AIMCo Investor) fails to comply with the provisions of this Section 2.3, such Other Stockholder hereby indemnifies, defends and holds the Company harmless against all liability, loss or damage, together with all reasonable costs and expenses (including reasonable legal fees and expenses), relating to or arising from its exercise of the power of attorney granted hereby.
Appears in 1 contract
