[White & Case Draft of 9/21/07]
EXHIBIT B
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of _______ __, 200_,
among [New Xxxx Corporation], a [_______] corporation (the "Company"),(1)
Appaloosa Management, L.P., a Delaware limited partnership ("Appaloosa"), and
______ , a __________ (together with any Qualified Purchaser Transferee thereof,
"Purchaser").(2)
A. Xxxx Corporation, a Virginia corporation and the predecessor to the
Company for certain Bankruptcy Code purposes ("Xxxx"), entered into an
Investment Agreement, dated as of September [ ], 2007 (the "Investment
Agreement"), with Appaloosa, Purchaser and the other parties thereto, pursuant
to which, among other things, on the terms and subject to the conditions
thereof, Purchaser has agreed to acquire up to 2,500,000 shares of the Company's
4.0% Series A Convertible Preferred Stock, par value $0.01 per share (the
"Series A Preferred"), and up to 5,000,000 shares of the Company's 4.0% Series B
Convertible Preferred Stock, par value $0.01 per share (the "Series B
Preferred"). The Series A Preferred and Series B Preferred are convertible into
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"), on the terms set forth in the Articles (defined below).
B. The Series A Preferred owned by Purchaser constitutes 100% of the
shares of Series A Preferred outstanding on the date hereof, and the Series B
Preferred owned by Purchaser constitutes ___% of the shares of Series B
Preferred outstanding on the date hereof. Together, the shares of Series A
Preferred and Series B Preferred owned by Purchaser constitute ___% of the
shares of the Common Stock outstanding on the date hereof, on an as-converted
basis.
C. The Company, Purchaser and Appaloosa desire to make certain provisions
in respect of their relationship.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:
I. DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere herein,
the following terms have the following meanings when used herein:
"Affiliate" has the meaning given to such term in the Articles;
provided,
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(1) Corporate name/jurisdiction of reorganized company to be determined.
(2) Note: Standby Purchasers (if any) to be added as parties and throughout
document in appropriate places.
however, that as such term is used in this Agreement, the members of the
Investor Group will not be included as Affiliates of the Company.
"Articles" means the Company's Articles of Serial Designation of 4.0%
Series A Convertible Preferred Stock and 4.0% Series B Convertible Preferred
Stock, in the form attached hereto as Exhibit A.
"Assumption Agreement" means an agreement in writing in substantially
the form of Exhibit B hereto pursuant to which the party thereto agrees to be
bound by the terms and provisions of this Agreement.
"Bankruptcy Code" means chapter 11 of title 11 of the United States
Code.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York.
A Person will be deemed the "beneficial owner" of, and will be deemed
to "beneficially own," and will be deemed to have "beneficial ownership" of:
(i) any securities that such Person or any of such Person's
Affiliates is deemed to "beneficially own" within the meaning of Rule 13d-3
under the Exchange Act, as in effect on the date of this Agreement and any
securities deposited into a trust established by the Person the sole
beneficiaries of which are the shareholders of the Person; and
(ii) any securities (the "underlying securities") that such Person
or any of such Person's Affiliates has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written or oral),
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (it being understood that such Person
will also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities); and
(iii) any securities beneficially owned by persons that are part of a
"group" (within the meaning of Rule 13d-5(b) under the Exchange Act) with
such Person.
"Board" means the Board of Directors of the Company.
"Chapter 11 Plan" means the joint plan of reorganization filed by Xxxx
and its debtor subsidiaries with the Bankruptcy Court.
"Charter" means the Company's Restated Articles of Incorporation, as
in effect from time to time, together with the Articles.
"Company Sale" has the meaning given to such term in the Articles.
"Current Market Price" has the meaning given to such term in the
Articles.
"Director Designation Termination Date" means the date on which shares
of Series A Preferred having an aggregate Series A Liquidation Preference of at
least $125 million are no longer owned by Purchaser.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" has the meaning given to such term in the
Articles.
"Indebtedness" means all indebtedness of a Person, including without
limitation obligations for borrowed money, lease financing and indebtedness of
another Person guaranteed by such Person or secured by the assets of such
Person.
"Independent Director" has the meaning given to such term in the
Articles.
"Investor Group" means Purchaser and its Affiliates, including
Appaloosa.(3)
"Person" has the meaning given to such term in the Articles.
"Purchaser Designees" means the directors of the Company who were
designated for nomination pursuant to Article III of this Agreement.
"Qualified Purchaser Transferee" means an Affiliate of Purchaser that
executes an Assumption Agreement, but only to the extent that such Qualified
Purchaser Transferee is a corporation or other organization, whether
incorporated or unincorporated, of which either Purchaser or Appaloosa directly
or indirectly owns or controls 100% of the securities or other interests having
by their terms ordinary voting power to elect the board of directors (or others
performing similar functions) of such corporation or other organization.(4)
"Representatives" means, with respect to a Person, such Person's
directors, officers, employees, agents, counsel, consultants, accountants,
experts, auditors, examiners, financial advisors or other representatives,
agents or professionals.
"Series A Liquidation Preference" means $100.00 per share, as adjusted
from time to time in accordance with the Articles.
"Subsidiary" means, when used with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which such Person directly or indirectly owns or controls more than 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions.
"Voting Securities" means the Common Stock, all other equity
securities
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(3) Note: see footnote 2.
(4) Note: see footnote 2.
entitled to vote in the election of directors of the Company and all other
securities convertible into, exchangeable for or exercisable for any such
securities (whether immediately or otherwise), including the Series A Preferred
and the Series B Preferred.
II. STANDSTILL
2.1 Limitation During Standstill Period. Subject to Section 2.2,
during the period commencing on the date of this Agreement and ending on the
tenth anniversary thereof, none of Purchaser, Appaloosa or any of their
respective Affiliates will, and none of their respective Representatives will on
their behalf, publicly propose or publicly announce or otherwise disclose
publicly an intent to propose, or enter into an agreement with any Person for,
singly or with any other Person or directly or indirectly, (a) any form of
business combination, acquisition or other transaction relating to the Company
or any of its Subsidiaries, (b) any form of restructuring, recapitalization or
similar transaction with respect to the Company or any of its Subsidiaries, or
(c) any demand, request or proposal to amend, waive or terminate any provision
of this Article II, nor except as aforesaid during such period will Purchaser,
Appaloosa or any of their respective Affiliates or any of their Representatives
on their behalf (i) acquire, or offer, propose or agree to acquire, by purchase
or otherwise, subject to applicable securities laws, any Voting Securities, (ii)
make, or in any way participate in, any solicitation of proxies or votes with
respect to any such Voting Securities (including by the execution of action by
written consent), become a participant in any election contest with respect to
the Company or any of its Subsidiaries, seek to influence any person with
respect to any such Voting Securities, make a shareholder proposal with respect
to the Company or its Subsidiaries or demand a copy of any the Company's or its
Subsidiaries' lists of shareholders or other books and records, (iii)
participate in or encourage the formation of any partnership, syndicate or other
group which owns or seeks or offers to acquire beneficial ownership of any such
Voting Securities or which seeks to affect control of the Company or any of its
Subsidiaries or has the purpose of circumventing any provision of this
Agreement, (iv) otherwise act, alone or in concert with others (including by
providing financing for another person), to seek or to offer to control or
influence, in any manner, the Company's and its Subsidiaries' management, board
of directors or policies, or (v) make any proposal or other communication
designed to, or which could be reasonably expected to, compel the Company to
make a public announcement thereof in respect of any matter referred to in this
Section 2.1.
2.2 Exceptions. Notwithstanding anything to the contrary set forth
in Section 2.1, nothing in Section 2.1 will limit or affect or be deemed to
apply to a Purchaser Designee's actions taken in connection with such Purchaser
Designee's service as a director of the Company, and nothing herein will
prohibit Purchaser, Appaloosa or any of their respective Affiliates from:
(a) acquiring the shares of Series A Preferred and Series B Preferred
pursuant to the Investment Agreement and the Chapter 11 Plan, and any
Common Stock received upon conversion thereof (or any dividends or
distributions received thereon);
(b) acquiring beneficial ownership of any Voting Securities, unless
following such acquisition Purchaser, Appaloosa and their respective
Affiliates would beneficially own more than 30% of the Voting Securities
issued and outstanding at such time;
(c) taking any action with the approval of a majority of the members
of the Board; or
(d) in the event a majority of the members of the Board who are not
Purchaser Designees approves a transaction described in Section 2.1(a) or
(b) above, (i) voting to approve such transaction, subject to the
restrictions contained in Section 4.3, and (ii) selling any securities of
the Company owned by the Investor Group in connection with, and pursuant to
the terms of, such transaction.
III. BOARD REPRESENTATION
3.1 Series A Preferred Directors. (a) The holders of the Series A
Preferred have the director election rights set forth in Section 6(b) and (c) of
the Articles for the time periods and to the extent set forth therein.
(b) Beginning with the Company's first annual meeting of shareholders
to elect directors following the date hereof (the "Director Designation
Commencement Date"), the Company will ensure that Purchaser may designate
nominees for each of the three directors to be elected by the Series A Preferred
pursuant to Section 6(b)(i) of the Articles, including following the removal of
any such director. In case of any vacancy (other than by removal) in the office
of a Purchaser Designee, the vacancy will be filled with a designee of Purchaser
by the remaining Purchaser Designees.
(c) From and after the Director Designation Termination Date,
Purchaser will cause any Purchaser Designees to resign promptly after the
Company so requests.
(d) Upon the election of the initial Board, the Board shall cause to
be established a Nominating and Corporate Governance Committee of the Board (the
"Nominating and Corporate Governance Committee"). Following the initial election
of the Executive Chairman and the Chief Executive Officer (each of whom shall be
reasonably acceptable to Appaloosa), the Executive Chairman and Chief Executive
Officer shall be nominated for election to the Board by the Nominating and
Corporate Governance Committee. Such nominee shall be elected to the Board by
the holders of the Common Stock and the Preferred Stock, voting as a class. The
Executive Chairman of the Board shall be selected as described in Section 3.1(f)
below.
(e) After the initial selection of the Series A Directors, until the
Director Designation Termination Date, (a) holders of the Series A Preferred
shall continue to directly elect (including removal and replacement) the Series
A Directors and (b) the number of directors on the Board may not be increased.
The rights of holders of Series A Preferred described in this Section 3.1(e) are
referred to as "Series A Board Rights".
Upon the Director Designation Termination Date, the Series A Directors shall
serve out their remaining term and thereafter be treated as ordinary Directors.
(f) The initial Executive Chairman shall be selected by a selection
committee (the "Selection Committee") comprised of one representative of
Appaloosa, one representative of the Creditors Committee and one representative
of the Standby Purchasers (other than Appaloosa). The Executive Chairman shall
be approved by a majority vote of the Selection Committee (such majority to
include the Appaloosa representative). Any successor Executive Chairman shall be
selected by the Nominating and Governance Committee, subject (but only until the
Director Designation Termination Date) to the approval of Appaloosa. Upon
approval, such candidate shall be recommended by the Nominating and Corporate
Governance Committee to the Board for appointment as the Executive Chairman and
nomination to the Board. Holders of the Series A Preferred will vote on the
candidate's election to the Board on an as-converted basis together with holders
of Common Stock. The Executive Chairman shall be a full-time employee of the
Company with his or her principal office in the Company's world headquarters in
Toledo, Ohio and shall devote substantially all of his or her business activity
to the business affairs of the Company. The Executive Chairman shall cause the
Company to and the Company shall be obligated to meaningfully consult with the
representatives of holders of the Series A Preferred Shares with respect to the
annual budget and material modifications thereto prior to the time it is
submitted to the Board for approval.
(g) Purchaser shall have the non-exclusive right to propose, pursuant
to written notice to the Board, the termination of (i) the Executive Chairman,
(ii) the Chief Executive Officer and/or (iii) the Chief Financial Officer, in
each case, subject to a vote of the Board. If Purchaser proposes such
termination of the Executive Chairman, the Chief Executive Officer or the Chief
Financial Officer, the Board shall convene and vote on such proposal within ten
(10) days of the Board's receipt of written notice regarding such proposed
termination; provided, that the then current Executive Chairman and the then
current Chief Executive Officer of the Corporation shall not be entitled to vote
on any proposal made pursuant to this provision for the termination of the
Executive Chairman, the Chief Executive Officer or the Chief Financial Officer
of the Corporation.
3.2 Effectiveness. This Article III (other than Section 3.1(f))
will terminate without further action on the Director Designation Termination
Date.
IV. CERTAIN VOTING RIGHTS
4.1 Purchaser Approval Rights. The Company may not, and may not
permit its Subsidiaries to, take any of the following actions without
Purchaser's prior written consent; provided, however, that if such written
consent is withheld by Purchaser, the Company may, solely with respect to an
action described below in Sections 4.1(a), 4.1(c), 4.1(d)(ii) (if such action
would not adversely impact Purchaser's rights or its investment in the Company),
4.1(e), 4.1(f) or 4.1(g), notwithstanding the withholding of such written
consent, take any such actions that are first approved by the affirmative vote
or consent of holders of not less than two-thirds of the Voting Securities
that are not held by Appaloosa, Purchaser or any of their respective Affiliates:
(a) enter into any transaction with any director or officer of the
Company, or any holder of 10% or more of the Voting Securities outstanding
at such time, except for (i) compensation or incentive arrangements with
officers or directors that have been approved by the Board or Compensation
Committee thereof and (ii) transactions that are not material to the
Company;
(b) issue any security that ranks senior to or on parity with the
Series A Preferred (or the Series B Preferred, if any shares of Series B
Preferred are outstanding and owned by Purchaser) as to dividend rights and
rights on liquidation, winding up and dissolution of the Company (including
without limitation additional shares of Series A Preferred or Series B
Preferred), or issue any options, rights, warrants or securities
convertible into or exercisable or exchangeable for such shares; provided,
however, that the written consent of Purchaser will not be necessary for
the Company to authorize or issue any Indebtedness incurred to refinance,
extend, renew, refund, repay, prepay, redeem, defease, exchange or replace
(collectively, "Refinancings") any Indebtedness of the Company existing at
the applicable time, as long as such Refinancings are (i) on prevailing
market terms with respect to the economics thereof in all material respects
and (ii) are on substantially the same terms (including without limitation
with respect to obligors, tenor, security and ranking) as the Indebtedness
to which such Refinancings relate with respect to other terms;
(c) issue or authorize the issuance of any capital stock of the
Company (or rights to acquire any capital stock of the Company) for a price
per share that is less than (A) if such issuance is for Common Stock or
options, rights, warrants or securities of the Company which are
convertible into or exercisable or exchangeable for Common Stock of the
Company ("Common Stock Derivatives"), the Current Market Price for the
Common Stock at the time of such issuance, or (B) if such issuance is for
capital stock of the Company or rights to acquire capital stock of the
Company other than Common Stock or Common Stock Derivatives, the Fair
Market Value of such capital stock or rights to acquire such capital;
(d) (i) amend, alter or repeal any amendment to the Company's By-Laws
that materially changes the rights of any member of the Investor Group or
any Qualified Purchaser Transferee (in such Person's capacity as a holder
of Series A Preferred) or the Company's shareholders generally or (ii)
authorize, adopt or approve an amendment to, or repeal any provision of,
the Charter or the Articles;
(e) take any action that results in the purchase or redemption by the
Company or any subsidiary of the Company of any equity securities of the
Company involving aggregate cash payments by the Company in excess of $10
million during any 12-month period after the date hereof; provided,
however, that the written consent of Purchaser will not be required for
(i) the repurchase of any
equity securities from any individual whose employment with the Company is
terminated as long as such repurchase is approved by the Board (by majority
vote of all members) or (ii) cashless exercise of, or surrender of shares
for payment of withholding tax in connection with, any option, right,
warrant or other security that is convertible into or exchangeable for
Common Stock in accordance with the terms of its issuance;
(f) effect a Company Sale;
(g) voluntarily or involuntarily liquidate, wind up or dissolve; or
(h) except pursuant to Section 3(a) of the Articles, pay or declare
any dividend in cash on any shares of capital stock that ranks junior to or
on parity with the Series A Preferred, including Series B Preferred.
4.2 Termination of Purchaser Approval Rights. The provisions of
Sections 4.1(a) - (h) will terminate upon the earlier to occur of the (a) third
anniversary of the date hereof and (b) the date on which Purchaser no longer
owns shares of Series A Preferred having an aggregate Series A Liquidation
Preference of at least $125 million.
4.3 Certain Limitations. Without limiting any other provision hereof,
Purchaser(5) will, and will cause each other member of the Investor Group to, at
any meeting of holders of Voting Securities, however such meeting is called and
regardless of whether such meeting is a special or annual meeting of
shareholders of the Company, or at any adjournment thereof, or in connection
with any written consent of shareholders of the Company, vote, or cause to be
voted, the Investor Group's Voting Securities in excess of 40% of the issued and
outstanding Voting Securities (the "Voting Threshold") in the same proportion
that the Company's other shareholders vote their Voting Securities with respect
to any proposal submitted to the Company's shareholders for a vote, so that, as
a result, the percentage of the Investor Group's Voting Securities in excess of
the Voting Threshold that are voted in favor of such proposal will equal the
percentage of the outstanding Voting Securities held by all other Company
shareholders voted in favor of such proposal, and the percentage of the Investor
Group's Voting Securities in excess of the Voting Threshold that are voted
against such proposal will equal the percentage of the outstanding Voting
Securities held by all other Company shareholders voted against such proposal.
4.4 Certain Transactions. Except as expressly contemplated by this
Agreement, the Investment Agreement or the documents referred to herein or
therein, without the approval of a majority of the members of the Board who are
not Purchaser Designees, none of Appaloosa, Purchaser or any of their respective
Affiliates may enter into any transaction or agreement with the Company or any
Subsidiary of the Company or any amendment or waiver of this Agreement.
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(5) Note: see footnote 2.
V. MISCELLANEOUS
5.1 Notice of Certain Matters. Without limiting Section 8 of the
Articles, if Purchaser at any time sells, assigns, transfers, pledges,
hypothecates or otherwise encumbers or disposes of in any way all or any part of
an interest in any shares of Series A Preferred (a "Transfer"), then Purchaser
will, as promptly as practicable but in any event within five business days of
such Transfer, provide notice to the Company in accordance with Section 5.3
stating (a) the date on which such Transfer occurred and (b) the name and
contact information of such Transferee.
5.2 Specific Performance. The parties agree that any breach by any of
them of any provision of this Agreement would irreparably injure the Company or
Purchaser and Appaloosa, as the case may be, and that money damages would be an
inadequate remedy therefor. Accordingly, the parties agree that the other
parties will be entitled to one or more injunctions enjoining any such breach
and requiring specific performance of this Agreement and consent to the entry
thereof, in addition to any other remedy to which such other parties are
entitled at law or in equity.
5.3 Notices. Any notice or other communication required to be given
hereunder will be in writing and sent by reputable courier service (with proof
of service), by hand delivery, or by email or facsimile (followed on the same
day by delivery by courier service (with proof of delivery) or by hand
delivery), addressed as follows:
If to the Company, to:
[New Xxxx Corporation]
0000 Xxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: General Counsel and Secretary
Fax: (000)000-0000
with a copy to:
Xxxxx Day
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx
Email: xxxxx@xxxxxxxx.xxx
Fax: (000)000-0000
and
Attention: Xxxxxxx X. Xxxxxx
Email: xxxxxxxx@xxxxxxxx.xxx
Fax: (000)000-0000
If to Purchaser or Appaloosa, to:
Appaloosa Management L.P.
00 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Email: x.xxxxx@xxxx.xxx
Fax: (000)000-0000
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx (xxxxxxx@xxxxxxxxx.xxx)
Xxxxxx Xxxx (xxxxx@xxxxxxxxx.xxx)
Fax: (000) 000-0000/5766
And
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx (xxxxxx@xxxxxxxxx.xxx)
Xxxxxx Xxxxxxxx (xxxxxxxxx@xxxxxxxxx.xxx)
Fax: 000-000-0000
or to such other address as any party may specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so emailed,
telecommunicated or personally delivered.
5.4 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any party hereto
(whether by operation of law or otherwise) without the prior written consent of
the other parties, except that Purchaser(6) may transfer any of its rights under
Article III or IV to any Qualified Purchaser Transferee to which it transfers
shares of Series A Preferred without violating the restrictions on transfer of
the Series A Preferred set forth in Section 8 of the Articles; provided,
however, that neither Purchaser nor Appaloosa will dispose of a majority of the
voting power of such Qualified Purchaser Transferee in any transaction or series
of transactions unless such shares of Series A Preferred have been transferred
and the rights under this Agreement have been assigned back, in each
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(6) Note: see footnote 2.
case to the original transferor thereof. Subject to this Section 5.4, this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and assign. Notwithstanding anything contained
in this Agreement to the contrary, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or,
if applicable, any Qualified Purchaser Transferee or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
5.5 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties with respect thereto
(including the Confidentiality Agreement, dated July 21, 2007, between Appaloosa
and the Company).
5.6 Amendment. Subject to applicable law, this Agreement may only be
amended by an instrument in writing signed by the Company and Appaloosa (who
will have the authority to bind Purchaser and all other members of the Investor
Group).
5.7 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, without regard to its
conflict of laws principles.
5.8 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
A facsimile copy of a signature page will be deemed to be an original signature
page.
5.9 Headings. Headings of the Articles and Sections of this Agreement
are for convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
5.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation any investigation by or
on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any of the covenants or agreements
contained in this Agreement. The waiver by any party hereto of a breach of any
provision hereunder will not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder. Any party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto and (b) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver will be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
5.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to
the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision will be interpreted to be only so
broad as is enforceable.
5.12 Calculation of Beneficial Ownership. Any provision in this
Agreement that refers to a percentage of Common Stock or Voting Securities will
be calculated based on the aggregate number of issued and outstanding securities
at the time of such calculation (on an as-converted basis, in the case of Voting
Securities), but will not include any such securities issuable upon any options
or warrants that are exercisable for such securities.
5.13 Jurisdiction; Consent to Service of Process. (a) Each party
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Supreme Court of the State of New York located
in New York, New York or the United States District for the Southern District of
New York (as applicable, a "New York Court"), and any appellate court from any
such court, in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, or for recognition or
enforcement of any judgment resulting from any such suit, action or proceeding,
and each party hereby irrevocably and unconditionally agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined in
the New York Court.
(b) It will be a condition precedent to each party's right to bring
any such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in a New York Court, and if each such court refuses
to accept jurisdiction with respect thereto, such suit, action or proceeding may
be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from a New York Court to another jurisdiction, (ii) consolidate any
such suit, action or proceeding brought in a New York Court with a suit, action
or proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in a New York Court for the purpose of bringing the same in
another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a New York Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
5.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN
EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT.
5.15 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
5.16 Confidentiality. (a) The Investor Group will maintain, and
Purchaser will cause each member of the Investor Group and each of its and their
respective Representatives to maintain, the confidentiality of all material
non-public information obtained by any member of the Investor Group from the
Company or any of its Subsidiaries or its or their respective Representatives (a
"Company Person"), and not to use such information for any purpose other than
(i) the evaluation and protection of the investment by Purchaser in the Company,
(ii) the exercise by Purchaser of any of its rights under this Agreement, and
(iii) the exercise by the Purchaser Designees of their fiduciary duties as
members of the Board.
(b) Notwithstanding the foregoing, the confidentiality obligations of
Section 5.16(a) will not apply to information obtained other than in violation
of this Agreement:
(i) which any member of the Investor Group or any of its
Representatives is required to disclose by judicial or administrative
process, or by other requirements of applicable law or regulation or
any governmental authority; provided, however, that, where and to the
extent practicable, such disclosing party (A) gives the Company
reasonable notice of any such requirement and, to the extent
protective measures consistent with such requirement are available,
the opportunity to seek appropriate protective measures and (B)
reasonably cooperates with the Company (at the Company's expense) in
attempting to obtain such protective measures;
(ii) which becomes available to the public other than as a result
of a breach of Section 5.16(a); or
(iii) which has been provided to a member of the Investor Group
or any of its Representatives by a source other than a Company Person,
unless either Purchaser or such member of the Investor Group knows
that the source of such information was bound by a confidentiality
agreement with, or other contractual, legal or fiduciary objections of
confidentiality to, the Company or any other Person with respect to
such information.
5.17 Acknowledgment of Securities Laws. Purchaser hereby acknowledges
that it is aware, and that it will advise the other members of the Investor
Group and its and their respective Representatives who are informed as to the
material non-public information that is the subject of Section 5.16, that the
United States securities laws prohibit any Person who has received from an
issuer material, non-public information from purchasing or selling securities of
such issuer or from communication of such information to any other Person under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell such securities.
5.18 Premiums Upon a Change of Control. None of Appaloosa,
Purchaser(7) or any of their respective Affiliates may receive, or be entitled
to receive, any premium, payment or fee from any Person (a "Payor") in
connection with voting in favor of, or transferring any Voting Securities in
connection with, a transaction that results in (either alone or in connection
with a series of related transactions) a Company Sale (as defined in the
Articles), unless such amount is shared with, or payable by such Payor to, all
holders of the same class and/or series of capital stock of the Company in
respect of which such amount is paid to Appaloosa, Purchaser and their
respective Affiliates, on a pro rata basis; provided, that this restriction
shall not prohibit the reimbursement of expenses incurred by any holder of
Series A Preferred or Series B Preferred and shall not prohibit the payment of
fees by the Company to any holder of Series A Preferred or Series B Preferred if
the Company has engaged such holder or its Affiliates as an advisor or
consultant in connection with any transaction.
[Signature page follows]
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(7) Note: see footnote 2.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
[NEW XXXX CORPORATION]
By:
------------------------
Name
Title:
APPALOOSA MANAGEMENT L.P.
By:
------------------------
Name
Title: Authorized Person
[PURCHASER]
By:
------------------------
Name
Title: Authorized Person
EXHIBIT A
ARTICLES
[To be attached]
EXHIBIT B
FORM OF ASSUMPTION AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to become a
party to, and be bound by the provisions of, the Shareholders Agreement (the
"Agreement") dated as of _________ ___, 200_ by and among [New Xxxx
Corporation], Appaloosa Management L.P. and [Purchaser], and for all purposes of
the Agreement, the undersigned will be a "Qualified Purchaser Transferee" (as
defined in the Agreement). Without limiting the foregoing, the undersigned
acknowledges that the shares of Series A Preferred (as defined in the Agreement)
transferred to the undersigned in connection herewith are subject to the
transfer restrictions set forth in the Articles (as defined in the Agreement).
The address and facsimile number to which notices may be sent to the undersigned
is as follows:
---------------------------------
---------------------------------
---------------------------------
Facsimile No.
-------------------
[Name]
By:
------------------------
Name
Title:
