GOVERNANCE AGREEMENT
Agreement dated as of September 9, 1997 between Xxxx
International Holdings, Inc., a Delaware corporation (the
"Company ), and LIH Holdings, LLC, a Delaware limited liability
company (the "Stockholder ).
WHEREAS, Xxxxx X. Xxxx ("Xxxx") and the Stockholder propose
to enter into a stock purchase agreement (the "Stock Purchase
Agreement") dated the date hereof pursuant to which, among other
things, subject to the terms and conditions to be contained in
the Stock Purchase Agreement, the Stockholder would acquire from
Xxxx, his family and certain entities related thereto, at the
closing of such purchase and sale (the "Closing"), Beneficial
Ownership of shares of common stock, par value $.10 per share, of
the Company ("Common Stock"), aggregating 1,686,893 shares of
Common Stock (the "Shares"), constituting approximately 38.4%
of the Common Stock outstanding as of the date hereof; and
WHEREAS, Xxxx and the Stockholder have sought Board approval
of the acquisition of Shares for purposes of Section 203 of the
Delaware General Corporation Law; and
WHEREAS, as a condition to such approval, a special
committee formed by the Board and the Board have required that
certain arrangements be put in place relating to the acquisition
and disposition of securities of the Company by the Stockholder
and related provisions concerning the Stockholder s relationship
with the Company, have negotiated the terms of this Agreement and
have concluded that, subject to execution and delivery of this
Agreement, giving its approval under Section 203 of the Delaware
General Corporation Law and implementing the arrangements
contemplated by this Agreement is in the best interests of the
Company and its stockholders; and
WHEREAS, in consideration of such approval, the Stockholder
desires to establish in this Agreement certain terms and
conditions concerning the acquisition and disposition of
securities of the Company by the Stockholder and its Affiliates
and Associates, and related provisions concerning the
Stockholder s relationship with the Company;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending
to be legally bound hereby, the Company and the Stockholder
hereby agree as follows:
ARTICLE I
STANDSTILL AND VOTING
Section 1.01. Acqusition of Voting Securities.
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(a) Until the Standstill Termination Date, the Stockholder
covenants and agrees that the Stockholder will not, and will not
permit its Affiliates or Associates to, Beneficially Own any
Voting Securities in excess of the number of Permitted Shares;
provided that, (i) this Agreement shall not restrict any
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acquisition of Voting Securities in a transaction directly with
the Company and approved in accordance with the provisions of
Section 2.03(b) hereof (including, without limitation, the
acquisition of Voting Securities by any Stockholder Director by
reason of the grant of stock options by the Company to all
directors); and (ii) if a bona fide tender or exchange offer is
made by any Person (other than the Company, the Stockholder or an
Affiliate or Associate of the Stockholder, or any Person acting
in concert with the Stockholder or any of its Affiliates or
Associates, and other than any acquisition or proposed
acquisition of Voting Securities that intentionally has been
induced, in whole or in part and directly or indirectly by the
Stockholder in order to permit the acquisition by Stockholder or
its Affiliates and Associates of Voting Securities under this
paragraph (a)) to purchase outstanding shares of Voting
Securities representing 50% or more of the Total Voting Power and
such offer is not withdrawn or terminated prior to the
Stockholder commencing a tender offer or exchange offer, then the
Stockholder may commence a tender or exchange offer for all
Voting Securities not owned by the Stockholder or its Affiliates
and Associates, and this Agreement shall not prohibit the
acquisition of Voting Securities pursuant to such tender or
exchange offer.
(b) Subject to the proviso in Section 1.01(a) hereof and
any waiver or approval in accordance with the provisions of
Section 5.02(a) hereof, if at any time the Stockholder or its
Affiliates and Associates Beneficially Own more than the
Permitted Shares, inadvertently or otherwise, then the
Stockholder shall promptly take all action necessary to reduce
the amount of Voting Securities Beneficially Owned by such
Persons to an amount not greater than the Permitted Shares.
(c) The Stockholder shall not permit any Affiliate or
Associate thereof to Beneficially Own any Voting Securities
unless such Person becomes a signatory to this Agreement and a
"Stockholder" hereunder.
Section 1.02. Limited Restrictions on Transfer. Prior to
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the Standstill Termination Date, the Stockholder, and each
Affiliate or Associate thereof which acquires Voting Securities
in accordance with the terms of this Agreement, will not Transfer
Beneficial Ownership of any Voting Securities to any of its
Affiliates or Associates unless each such Person becomes a
signatory to this Agreement and a "Stockholder" hereunder. The
Stockholder agrees to inclusion of the following legend on
certificates representing its Shares:
The shares represented by this certificate and any transfer
thereof are subject to a restriction on transfer to any Affiliate
or Associate of the holder hereof as set forth in a Governance
Agreement between the holder and the Company dated as of
September 9, 1997, a copy of which is on file at the principal
executive office of the Company.
Such legend shall be placed on all certificates held by the
Stockholder during the continuance of this Agreement.
Section 1.03. Voting. Until the Standstill Termination
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Date, all Voting Securities Beneficially Owned by the Stockholder
or any Affiliate or Associate thereof shall be voted in the
election of directors, (a) in the case of election of Independent
Directors at the option of the Stockholder, either (1) for the
election of the Independent Directors proposed by the specified
committees in accordance with Article II, or (2) in the same
proportion as the votes cast by other holders of Voting
Securities and (b) for the Stockholder Directors.
Section 1.04. Further Restrictions on Conduct.
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(a) Unless waived or approved in advance in accordance with
Section 5.02(b) hereof, the Stockholder covenants and agrees that
until the Standstill Termination Date, neither the Stockholder
nor any Affiliate or Associate thereof shall:
(i) initiate, propose, make, or in any way participate
in, directly or indirectly, any "solicitation" of "proxies"
to vote, or seek to influence any Person with respect to the
voting of, any Voting Securities, or become a "participant"
in a "solicitation" or "election contest" (as such terms are
defined or used in Regulation 14A under the Exchange Act, as
in effect on the date hereof), in any election contest with
respect to the election or removal of the Independent
Directors proposed by the specified committees in accordance
with Article II;
(ii) other than as contemplated by Section 1.01(a)
solicit, offer, seek or propose to any other Person
(including without limitation the Company) any form of
merger with, tender or exchange offer for securities of,
sale or liquidation of assets of, or similar business
combination transaction with or involving the Company or its
Affiliates or Associates; provided, however, the foregoing
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shall not restrict any such action relating to a merger or
similar business combination with the purpose and effect of
the Company or its Affiliates and Associates acquiring the
business, voting securities or assets of another Person; or
(iii) take any other action inconsistent with the
foregoing.
Section 1.05. Reports. Until the Standstill Termination
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Date, the Stockholder shall deliver to the Company, promptly
after any acquisition or Transfer of Voting Securities, an
accurate written report specifying the amount and class of Voting
Securities acquired or Transferred in such transaction and the
amount of each class of Voting Securities owned by the
Stockholder or any Affiliate or Associate thereof after giving
effect to such transaction; provided, however, that no such
report need be delivered with respect to any such acquisition or
Transfer of Voting Securities by the Stockholder that is reported
in a statement on Schedule 13D filed with the Commission and
delivered to the Company by the Stockholder or any Affiliate or
Associate thereof in accordance with Section 13(d) of the
Exchange Act and the rules thereunder. The Company shall be
entitled to rely on such reports and statements on Schedule 13D
for all purposes of this Agreement.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. Initial Composition of Board of Directors.
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(a) The number of directors comprising the Board of
Directors after the Closing under the Stock Purchase Agreement
shall be seven.
(b) Prior to the Closing, the Board of Directors shall take
such action as is required under applicable law to cause to be
elected to the Board of Directors, effective upon the Closing,
the two Stockholder Directors set forth on Exhibit 1 hereto.
(c) A third director, the Third Independent Director, shall
be proposed by Stockholder, not less than ten business days
following the date hereof and submitted for approval by the
Independent Directors serving on the Company's Board of Directors
prior to Closing. The Stockholder shall provide the Independent
Directors with such information as the Independent Directors may
reasonably request regarding the proposed Third Independent
Director. Such Independent Directors shall notify Stockholder of
such approval or disapproval within ten business days following
receipt of notice of the proposed Third Independent Director.
Failure to so notify Stockholder within such ten business day
period shall be deemed disapproval of such proposed Third
Independent Director. Upon any such disapproval, the Stockholder
may submit for approval another proposed Third Independent
Director in the manner of the original proposal. The Board of
Directors shall take such action as is required under applicable
law to cause to be elected by the Board of Directors, effective
upon Closing, the Third Independent Director.
(d) A fourth director, the Fourth Independent Director,
shall be proposed by the Independent Directors serving on the
Company's Board of Directors prior to Closing not less than ten
business days following the date hereof and submitted for
approval by the Stockholder. The Independent Directors shall
provide the Stockholder with such information as the Stockholder
may reasonably request regarding the proposed Fourth Independent
Director. The Stockholder shall notify such Independent
Directors of such approval or disapproval within ten business
days following receipt of notice of the proposed Fourth
Independent Director. Failure to so notify such Independent
Directors within such ten business day period shall be deemed
disapproval of such proposed Fourth Independent Director. Upon
any such disapproval, such Independent Directors may submit for
approval another proposed Fourth Independent Director in the
manner of the original proposal. The Board of Directors shall
take such action as is required under applicable law to cause to
be elected by the Board of Directors, effective upon Closing, the
Fourth Independent Director.
(e) The remaining directors comprising the Board of
Directors, effective upon the Closing, shall consist of the
Company Director and the two Independent Directors proposed by
the Independent Directors serving on the Company's Board of
Directors prior to Closing and set forth on Exhibit 2 hereto.
(f) Notwithstanding paragraphs (c) and (d) above, if at the
time of Closing, both the Third Independent Director and the
Fourth Independent Director have not been approved in the manner
contemplated by paragraphs (c) and (d), then, at the time of the
Closing, the Board of Directors of the Company shall be comprised
of the directors contemplated by paragraphs (b) and (e) above
and, in addition, the two other Independent Directors currently
serving on the Board of Directors and not named on Exhibit 2
hereto. Immediately following Closing, the nominating committees
of the Board of Directors set forth in Section 2.02 (a) shall be
formed and, consistent with Section 2.02(a), each of the Company
and Stockholder shall use its best efforts to cause the Third
Independent Director and Fourth Independent Director to be
proposed by the Third Independent Director Nominating Committee
and the Fourth Independent Director Nominating Committee,
respectively, to the Board of Directors (i) for inclusion on the
slate of director nominees to be recommended to stockholders by
the Board of Directors at the 1997 Annual Meeting of Stockholders
to serve upon the expiration of the term of the two current
Independent Directors not named on Exhibit 2 hereto, or (ii) if
earlier, to fill any vacancy resulting from the resignation of a
current Independent Director not named on Exhibit 2 hereto. The
Company shall use its best efforts to cause such resignations to
occur as soon as practicable following the proposal of director
candidates by the Third Independent Director and Fourth
Independent Director Nominating Committees and concurrently with
election of the successor directors. In the event of any failure
of either such current Independent Director to resign
concurrently with the proposed election of the new Independent
Director candidate to succeed such current Independent Director,
the Company and the Stockholder shall use their respective best
efforts, for the period until the 1997 Annual Meeting of
Stockholders, to cause the size of the Board of Directors to be
increased to accommodate the proposed election of such new
Independent Director and to cause any such new Independent
Director candidate to be elected to the Board of Directors in the
manner contemplated in Section 2.02 hereof for the filling of
vacancies.
Section 2.02. Proportional Representation.
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(a) Following the Closing and until the Standstill
Termination Date, except as indicated in paragraph (b) below,
each of the Company and Stockholder shall use its best efforts to
cause the composition of the Board to continue to reflect, or if
paragraph (f) of Section 2.01 is operative to fully implement,
the proportionate representation of Stockholder Directors,
Company Director and Independent Directors set forth in paragraph
(a) to (d) of Section 2.01. At each annual meeting of
stockholders following the Closing at which the term of any
Independent Director is to expire, unless such annual meeting
shall be scheduled to occur after the Standstill Termination
Date, or at any time that a vacancy of an Independent Director on
the Board of Directors is to be filled, the identity of such
Independent Director to stand for election to the Board of
Directors or to fill the vacancy on the Board, as the case may
be, shall be determined in the following manner:
(i) If the term of any Third Independent Director,
initially proposed by the Stockholder and thereafter the
Third Independent Director Nominating Committee, expires or
such position on the Board becomes vacant, the Third
Independent Director Nominating Committee shall propose to
the Board of Directors a person to serve as the Third
Independent Director on the slate to be recommended by the
Board of Directors or to fill such vacancy.
(ii) If the term of any Independent Director (excluding
the Fourth Independent Director) initially proposed by the
Independent Directors on the existing Board of Directors and
thereafter by the Independent Director Nominating Committee,
expires or such position on the Board becomes vacant, the
Independent Director Nominating Committee shall propose to
the Board of Directors a person to serve as an Independent
Director on the slate to be recommended by the Board of
Directors or to fill such vacancy.
(iii) If the term of the Fourth Independent
Director, initially proposed by the Independent Directors on
the existing Board of Directors and thereafter by the Fourth
Independent Director Nominating Committee, expires or such
position on the Board becomes vacant, the Fourth Independent
Director Nominating Committee shall propose to the Board of
Directors a person to serve as the Fourth Independent
Director on the slate to be recommended by the Board of
Directors or to fill such vacancy.
(iv) The Board of Directors shall recommend to
stockholders the Independent Directors proposed in
accordance with the foregoing provisions and include such
Independent Directors on their slate of directors or, in the
case of any vacancy elect such Independent Directors to the
Board, unless the Board determines that to do so would
constitute a breach of its fiduciary obligations to the
Company s stockholders.
(b) The number of Stockholder Directors which the
Stockholder shall be entitled to designate shall be reduced to
one if, at the date of determination, the number of shares of
Common Stock Beneficially Owned by Stockholder or any Affiliate
or Associate thereof which is a signatory to this Agreement is
less than 50% of the number of Shares acquired by the Stockholder
at the Closing pursuant to the Stock Purchase Agreement (as
adjusted for stock dividends, splits, recombinations and the
like). In the event that the number of directors which the
Stockholder is entitled to designate is reduced, thereafter such
number of directors may not be increased. All rights of
Stockholder and obligations of the Company relative to
Stockholder's designation of representatives on the Board of
Directors (including Stockholder, Company and Independent
Directors) shall terminate if at any time Stockholder Voting
Power shall be 5% or less of Total Voting Power. In such event,
references in Section 2.02(i) and (iii) to the Third Independent
Director Nominating Committee and Fourth Independent Director
Nominating Committee shall be deemed references to the
Independent Director Nominating Committee.
(c) Other than as set forth in paragraph (b) above, the
Company shall cause each Stockholder Director designated by the
Stockholder to be included in the slate of nominees recommended
by the Board of Directors to the Company's stockholders for
election as directors at each annual meeting of the stockholders
of the Company and shall use all reasonable efforts to cause the
election of each such Stockholder Director, including soliciting
proxies in favor of the election of such persons, or, in the case
of any vacancy affecting any Stockholder Director, elect to the
Board a Stockholder Director designated by the remaining
Stockholder Director, or if none, the Stockholder, unless the
Board of Directors determines that to do so would constitute a
breach of its fiduciary obligations to the Company's
stockholders.
Section 2.03. Voting.
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(a) Until the first to occur of (i) the Standstill
Termination Date, (ii) the number of shares of Common Stock
Beneficially Owned by Stockholder or any Affiliate or Associate
thereof which is a signatory to this Agreement decreasing to less
than 50% of the number of Permitted Shares, or (iii) the
Stockholder Voting Power decreasing to 5% or less of Total Voting
Power, except in the case of a Stockholder Interested Transaction
(as defined below), the Company shall not take any action
described in Exhibit 3 hereto without the affirmative vote of a
majority of the entire Board of Directors, which majority
includes at least one Stockholder Director.
(b) The Company shall not take any action relating to a
Stockholder Interested Transaction, unless such Stockholder
Interested Transaction has been approved by the affirmative vote
of a majority of the Independent Directors. Stockholder agrees
that Stockholder shall not, and shall not take any action which
would cause the Company or its Board of Directors to, enter into
or participate in any Stockholder Interested Transaction which
has not been approved by the affirmative vote of a majority of
the Independent Directors. If requested by a majority of the
Independent Directors, Stockholder shall cause the Stockholder
Directors to not vote upon or consent to any Stockholder
Interested Transaction, but such directors may be counted for
purposes of any quorum necessary to such action. "Stockholder
Interested Transaction" shall mean any transaction with or
involving the Stockholder, its Affiliates or Associates or
relating to this Agreement, including, without limitation, any
amendment, modification or waiver hereof or thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the
---------------------------------------------
Company. The Company represents and warrants to the Stockholder
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that (a) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of
Delaware and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder, (b)
the execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize
this Agreement or any of the transactions contemplated hereby,
and (c) this Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the
Company, and, assuming this Agreement constitutes a valid and
binding obligation of the Stockholder, is enforceable against the
Company in accordance with its terms.
Section 3.02. Representations and Warranties of the
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Stockholder. The Stockholder represents and warrants to the
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Company that (a) it is a limited liability company duly
organized, validly existing and in good standing under the laws
of the state of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this
Agreement by the Stockholder and the consummation by the
Stockholder of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
the Stockholder and no other corporate proceedings on the part of
the Stockholder are necessary to authorize this Agreement or any
of the transactions contemplated hereby, and (c) this Agreement
has been duly executed and delivered by the Stockholder and
constitutes a valid and binding obligation of the Stockholder,
and, assuming this Agreement constitutes a valid and binding
obligation of the Company, is enforceable against the Stockholder
in accordance with its terms.
ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms shall
have the following meanings:
Section 4.01. "Affiliate" or "Associate" shall mean an
affiliate or associate of a person, as such terms are defined in
Section 203 of the Delaware General Corporation Law.
Section 4.02. "Beneficially Own" or "Beneficial Ownership"
with respect to any securities shall mean having "beneficial
ownership" of such securities (as determined pursuant to Rule
13d-3 under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing.
Section 4.03. "Closing" shall have the meaning specified in
the recitals to this Agreement.
Section 4.04. "Commission" shall mean the Securities and
Exchange Commission.
Section 4.05. "Company Director" shall mean the Company s
Chief Executive Officer.
Section 4.06. "Exchange Act" shall mean the Securities
Exchange Act of 1934.
Section 4.07. "Fourth Independent Director" shall mean the
Independent Director nominated in accordance with the provisions
of Section 2.01(d) and Section 2.02(a)(iii).
Section 4.08. "Fourth Independent Director Nominating
Committee" shall mean a committee of three directors, comprised
of two Independent Directors other than the Third Independent
Director and one Stockholder Director. Any action of the Fourth
Independent Director Nominating Committee shall be unanimous.
Section 4.09. "Independent Director" shall mean any person
who is a director of the Company and who is independent of and
otherwise unaffiliated with the Stockholder, the Company or their
Affiliates or Associates (other than as a director, or holder
with Beneficial Ownership of less than 5% of the Voting
Securities, of the Company), and shall not be an officer or an
employee, agent, consultant or advisor (financial, legal or
other) of the Stockholder, the Company or their Affiliates or
Associates, or any person who shall have served in any such
capacity within the three-year period immediately preceding the
date such determination is made.
Section 4.10. "Independent Director Nominating Committee"
shall mean a committee comprised of the Independent Directors,
other than the Third Independent Director.
Section 4.11. "Permitted Shares" shall mean 1,933,346
shares of Common Stock of the Company (as adjusted for stock
dividends, splits, recombinations and the like).
Section 4.12. "Person" shall mean any individual,
partnership, joint venture, corporation, trust, unincorporated
organization, government or department or agency of a government.
Section 4.13. "Standstill Termination Date" shall mean the
third anniversary of the Closing.
Section 4.14. "Stockholder Director" shall mean any person
designated by the Stockholder.
Section 4.15. "Stockholder Interested Transaction" shall
have the meaning set forth in Section 2.03(b).
Section 4.16. "Stockholder Voting Power" at any time shall
mean the aggregate voting power in the general election of
directors of all Voting Securities then Beneficially Owned by the
Stockholder or its Affiliates and Associates which are
signatories to this Agreement.
Section 4.17. "Subsidiary" shall mean, as to any Person,
any corporation at least a majority of the shares of stock of
which having general voting power under ordinary circumstances to
elect a majority of the Board of Directors of such corporation
(irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason
of the happening of any contingency) is, at the time as of which
the determination is being made, owned by such Person, or one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
Section 4.18. "Third Independent Director" shall mean the
Independent Director nominated in accordance with the provisions
of Section 2.01(c) and Section 2.02(a)(i).
Section 4.19. "Third Independent Director Nominating
Committee" shall mean a committee of three directors, comprised
of two Stockholder Directors and one Independent Director, other
than the Third Independent Director. Any action of the Third
Independent Director Nominating Committee shall be unanimous.
Section 4.20. "Total Voting Power" at any time shall mean
the total combined voting power in the general election of
directors of all the Voting Securities then outstanding.
Section 4.21. "Transfer" shall mean any sale, transfer,
pledge, encumbrance or other disposition, and to "Transfer" shall
mean to sell, transfer, pledge, encumber or otherwise dispose of.
Section 4.22. "Voting Securities" shall mean at any time
shares of any class of capital stock of the Company which are then
entitled to vote generally in the election of directors.
ARTICLE V
MISCELLANEOUS
Section 5.01. Notices. All notices, requests and other
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communications to any party hereunder shall be in writing
(including telecopy) and shall be given,
if to the Stockholder,
to: LIH Holdings, LLC
c/o Harvest Partners, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxx X. Xxxxxxxx,
General Partner
with a copy to: Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxxxxxx Xxxxx, Esq.
if to the Company, to: Xxxx International Holdings, Inc.
000 Xxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to: Xxxxxxx, Street and Deinard
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
or such address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto.
Each such notice, request or other communication shall be
effective when delivered personally, telegraphed or telecopied,
or, if mailed, five business days after the date of the mailing.
Section 5.02. Amendments; No Waivers.
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(a) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by the Stockholder and
the Company, or in the case of a waiver, by the party against
whom the waiver is to be effective. No amendment or waiver by
the Company shall be effective unless approved by a majority of
the Independent Directors.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 5.03. Successors and Assigns. The provisions of
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this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns; provided, however, that no party may assign this
Agreement without the other party's prior written consent.
Section 5.04. Governing Law. This Agreement shall be
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construed in accordance with and governed by the internal laws of
the state of Delaware.
Section 5.05. Counterparts; Effectiveness. This Agreement
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may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received
counterparts thereof signed by the other party hereto.
Section 5.06. Specific Performance. The Company and the
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Stockholder each acknowledges and agrees that the parties
respective remedies at law for a breach or threatened breach of
any of the provisions of this Agreement would be inadequate and,
in recognition of that fact, agrees that, in the event of a
breach or threatened breach by the Company or the Stockholder of
the provisions of this Agreement, in addition to any remedies at
law, the Stockholder and the Company, respectively, without
posting any bond shall be entitled to obtain equitable relief in
the form of specific performance, a temporary restraining order,
a temporary or permanent injunction or any other equitable remedy
which may then be available.
Section 5.07. Termination. This Agreement shall terminate
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on the Standstill Termination Date.
Section 5.08. Severability. If any term, provision,
------------
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, provided that the
parties hereto shall negotiate in good faith to attempt to place
the parties in the same position as they would have been in had
such provision not been held to be invalid, void or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first referred to above.
XXXX INTERNATIONAL HOLDINGS, INC.
By /s/ Xxxx International Holdings, Inc.
. . . . . . . . . . . . . . . . . . . . . .
Its . . . . . . . . . . . . . . . . . . .
LIH HOLDINGS, LLC
By /s/ LIH Holdings, LLC
. . . . . . . . . . . . . . . . . . . . . .
Its . . . . . . . . . . . . . . . . . . .
Exhibit 1
STOCKHOLDER DIRECTORS
Xxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Exhibit 2
INDEPENDENT DIRECTORS
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
Exhibit 3
1. Any amendment to the Certificate of Incorporation or By-Laws
of the Company;
2. any reclassification, combination, split, subdivision,
redemption, purchase or other acquisition, directly or
indirectly, of any debt or equity security of the Company or
any Subsidiary;
3. any sale, lease, transfer or other disposition (other than
in the ordinary course of business and other than to the
Company or another wholly owned Subsidiary), in one or more
related transactions, of the assets of the Company or any
Subsidiary the book value of which assets exceeds 2% of
consolidated assets of the Company and its Subsidiaries;
4. any merger, consolidation, liquidation or dissolution of the
Company or any Subsidiary, other than with or into the
Company or another wholly owned Subsidiary;
5. any acquisition of any other business;
6. any investment by the Company or any Subsidiary in or loans,
advances or extensions of credit by the Company or any
Subsidiary to, any Person (other than (i) the Company or a
Subsidiary, (ii) short term investments in the ordinary
course of business, or (iii) loans, or advances to
customers, officers, employees and suppliers in the ordinary
course of business (collectively the "Excepted Investments
and Loans")), which together with all such other
investments, loans and advances at the time owned by the
Company and its Subsidiaries (exclusive of the Excepted
Investments and Loans) would exceed an amount equal to 2% of
consolidated assets;
7. any acquisition by the Company or any Subsidiary of assets,
other than investment or loan assets, not in the ordinary
course of business;
8. issue or sell any capital stock of the Company or any
Subsidiary, other than (i) issuance of capital stock of the
Company authorized for issuance pursuant to stock plans or
agreements in effect at the date hereof; and (ii) issuance
of shares of capital stock of the Company or any Subsidiary,
in one or more related transactions, the amount of which
does not exceed at the date of issuance or sale of such
shares (or the date of issuance or grant of any related
right to acquire such shares) in excess of 2% of the
outstanding shares of capital stock of such class;
9. any declaration or payment of any dividend or distribution
with respect to shares of the Company s capital stock; and
10. any incurrence, assumption or issuance by the Company or its
Subsidiaries of any indebtedness for money borrowed, not in
the ordinary course of business, if, immediately after
giving effect thereto and the application of proceeds
therefrom, the aggregate amount of such indebtedness of the
Company and its Subsidiaries would exceed $5,000,000.
11. Establishment of, or continued existence of, any committee
of the Board of Directors with the power to approve any of
the foregoing.
