EXHIBIT 10.10
[FORM OF SHAREHOLDERS AGREEMENT]
SHAREHOLDERS AGREEMENT dated as of o, o (this "Agreement"),
among [NEWCO], a [Delaware] 1 corporation (the "Company"), XXXXXX
AUTOMOTIVE HOLDINGS L.L.C., a Delaware limited liability company
("AAH"), and the other stockholders listed on the signature pages
hereto (collectively, the "Specified Shareholders" and, together
with AAH, the "Shareholders").
Preliminary Statements
WHEREAS, the Shareholders were members of Xxxxxx Automotive Group
L.L.C., a Delaware limited liability company ("Oldco"), and are parties to the
LLC Agreement (as defined below); and
WHEREAS, the LLC Agreement provided for the IPO (as defined below) and
the execution of this Agreement by the Shareholders and the Company; and
WHEREAS, the Company, as successor to Oldco 2 , currently intends to
consummate the IPO.
NOW THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Certain Terms Used Herein. (a) As used
herein, the following terms shall have meanings specified below:
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1/ This form of shareholders agreement assumes that Newco will be a
Delaware corporation. In the event Newco is formed in another jurisdiction, this
form of agreement shall be appropriately modified.
2/ This form of shareholders agreement assumes that all of Oldco's assets
and liabilities will be acquired by the Company by merger or otherwise and Oldco
will cease to exist. In the event another form of transaction is utilized, this
form of agreement shall be appropriately modified.
2
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person. For the purposes of
this definition, "control" when used with respect to any particular person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AAH Matter" shall mean any matter brought before a Shareholders
Meeting and proposed or sponsored by AAH to be acted upon by the stockholders of
the Company at such Shareholders Meeting.
"AAH Nominee" shall mean any person nominated by AAH for election as a
director to the Board of Directors.
"beneficial owner" shall have the meaning assigned to such term in
Rule 13d-3 under the Exchange Act.
"Blackout Period" shall have the meaning specified in Section 5.01(b).
"Board of Directors" shall mean the Board of Directors of the Company.
"Claims" shall have the meaning specified in Section 5.06(a).
"Common Stock" shall mean the common stock, par value $[ ] per share,
of the Company.
"Dealer Nominee" shall mean any person nominated by the holders of a
majority of the Shares held by the Specified Shareholders for election as a
director to the Board of Directors, provided such person is reasonably
acceptable to AAH. AAH agrees that each of the individuals set forth on Schedule
I is an acceptable Dealer Nominee so long as such individual continues to be
employed by the Company or an Affiliate of the Company.
"Demand Holder" shall mean (i) AAH or (ii) a Majority in Interest of
the Specified Shareholders.
"Demand Number" shall mean (i) with respect to AAH, five and (ii) with
respect to the Specified Shareholders, two; provided that if a Triggering Event
occurs and if the Voting Termination Date has not occurred, the Demand Number
with respect to the Specified Shareholders
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shall be three; provided, further, that if a Triggering Event is no longer
continuing or if the Voting Termination Date occurs, the Specified Shareholders'
Demand Number shall revert to two. Each Specified Shareholder shall be deemed to
have exercised a Demand Request if a Majority in Interest of the Specified
Shareholders make a Demand Request.
"Demand Period" shall have the meaning specified in Section 5.01(a).
"Demand Registration" shall have the meaning specified in Section
5.01(a).
"Demand Request" shall have the meaning specified in Section 5.01(a).
"Directors" shall mean members of the Board of Directors.
"DGCL" shall mean the Delaware General Corporation Law, as amended.
"Effective Period" shall have the meaning specified in Section
5.04(a)(iii).
"Effective Time" shall mean the date on which the IPO is consummated.
"Election Meeting" shall mean any Shareholders Meeting relating to the
election of Directors to the Board of Directors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Exercising Demand Holder" shall mean a Demand Holder who has
exercised a Demand Request that it is entitled to exercise under the terms of
this Agreement (together with any Subsidiary Holder thereof whose shares are
included in such Demand Request). If a Majority in Interest of the Specified
Shareholders make a Demand Request, each Specified Shareholder participating in
such Demand Request shall be deemed an Exercising Demand Holder.
"Governmental Entity" shall mean any Federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign.
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"Inspectors" shall have the meaning specified in Section 5.04(a)(iv).
"IPO" shall have the meaning assigned to such term in the LLC
Agreement.
"Liens" shall mean any pledges, claims, liens, charges, encumbrances
or security interests of any kind or nature whatsoever.
"LLC Agreement" shall mean the Third Amended and Restated Limited
Liability Company Agreement of Xxxxxx Automotive Group L.L.C. dated as of
February 1, 2000, among AAH and the Specified Shareholders.
"Majority in Interest of the Specified Shareholders" shall mean the
Specified Shareholders who, at the time in question, hold (together with their
Subsidiary Holders) Shares aggregating more than 50% of all Shares held by all
Specified Shareholders (together with their Subsidiary Holders).
"Material Transaction" shall have the meaning specified in Section
5.01(b).
"Maximum Number" shall have the meaning specified in Section 5.02(b).
"Other Holder" shall have the meaning specified in Section 5.02(b).
"Other Matter" shall mean any matter (including the election of
directors to the Board of Directors) brought before a Shareholders Meeting and
proposed or sponsored by a person other than AAH, to be acted upon by the
stockholders of the Company.
"Piggy Back Registration" shall have the meaning specified in Section
5.02(a).
"Piggy Back Request" shall have the meaning specified in Section
5.02(a).
"Records" shall have the meaning specified in Section 5.04(a)(iv).
"Registered Shares" shall have the meaning specified in Section
5.04(a)(xvii).
"Registration" shall have the meaning specified in Section 5.02(a).
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"Registration Expenses" shall have the meaning specified in Section
5.05.
"SEC" shall mean the United States Securities and Exchange Commission
or any other United States federal agency at the time administering the
Securities Act or the Exchange Act, as applicable, whichever is the relevant
statute.
"Securities Act" shall mean the Securities Act of 1933 and the rules
and regulations thereunder.
"Shareholders Meeting" shall mean (i) any annual or special meeting of
the stockholders of the Company or (ii) any action by written consent of the
stockholders of the Company.
"Shares" shall mean, with respect to a Shareholder, the shares of
Common Stock owned by such Shareholder or any Subsidiary Holder, including any
shares of Common Stock acquired by such Shareholder or any subsidiary Holder
after the date of this Agreement.
"Subsidiary Holder" shall mean any Affiliate of a Shareholder which
has beneficial ownership of any of the Shares while this Agreement is in effect
and has executed a counterpart hereto in accordance with Section 7.06 hereof.
"Triggering Event" shall mean (i) the declaration, pronouncement,
ruling, order, decision or written opinion of the SEC or a United States federal
court that a voting arrangement factually similar to Section 3.01(a) of this
Agreement causes all of the Specified Shareholders collectively to constitute a
single "affiliate" of the Company for purposes of the sale of Shares by the
Specified Shareholders in compliance with the provisions of Rule 144(e)(1)
promulgated under the Securities Act or (ii) the Company's refusal to cause stop
transfer restrictions to be released or the legends described in Section 7.02 to
be removed if the Company has taken the position that the Specified Shareholders
collectively constitute a single "affiliate" of the Company. A Triggering Event
shall be deemed to continue (i) for so long as such declaration, pronouncement,
ruling, order, decision or written opinion remains in effect or is not
rescinded, overruled, repealed or superseded or (ii) until the Company either
(x) causes stop transfer restrictions to be released and the legends described
in Section 7.02 to be removed or (y) ceases to take the position that the
Specified Shareholders collectively constitute a single "affiliate" of the
Company.
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"Voting Termination Date" shall mean the earlier of the date that (i)
is the fifth anniversary of the Effective Time, (ii) is two years after the date
that AAH and its Subsidiary Holders first are the beneficial owners in aggregate
of less than 20% of the outstanding shares of Common Stock or (iii) AAH and its
Subsidiary Holders first are the beneficial owners in aggregate of less than 5%
of the outstanding shares of Common Stock.
(b) All other terms used herein without definitions shall have the
meanings ascribed to such terms in the LLC Agreement.
SECTION 1.02. Usage. The definitions in this Article I shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references in this Agreement to Articles,
Sections and Exhibits shall be deemed to be references to Articles, Sections and
Exhibits of or to this Agreement, unless the context shall otherwise require.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", regardless of whether such phrase so
appears.
ARTICLE II
Representations and Warranties
SECTION 2.01. Representations and Warranties of the Company. The
Company hereby represents and warrants to each other party that it is a
corporation duly organized and validly existing under the laws of the State of
Delaware and has all requisite corporate power and authority to execute and
deliver this Agreement, to carry out the provisions hereof and to perform its
obligations hereunder. The execution, delivery and performance by the Company of
its obligations under this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
SECTION 2.02. Representations and Warranties of the Shareholders. Each
Shareholder hereby represents and warrants to the Company and each other
Shareholder that this Agreement has been duly and validly executed and delivered
by such Shareholder and constitutes the legal, valid and
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binding obligation of such Shareholder, enforceable against it in accordance
with its terms.
ARTICLE III
Voting
SECTION 3.01. Agreement to Vote. (a) At each and every Shareholders
Meeting held after the Effective Time and prior to the Voting Termination Date,
each Specified Shareholder hereby agrees (x) if any annual or special meeting of
the stockholders of the Company is held, to appear at such meeting or otherwise
cause its Shares to be counted as present thereat for purposes of establishing a
quorum, and to vote or (y) to act by written consent with respect to (or cause
to be voted or acted upon by written consent), (i) all Shares for which such
Specified Shareholder or any Subsidiary Holder thereof is the record holder or
beneficial owner at the time of such vote or action by written consent and (ii)
all Shares as to which such Specified Shareholder or any Subsidiary Holder
thereof at the time of such vote or action by written consent has voting
control, in each case:
(A) In favor of:
(i) All of the AAH Nominees;
(ii) Any AAH Matter; and/or
(iii) Any Other Matter, only if AAH has informed (by oral or
written notice) the Specified Shareholders that AAH intends to vote in
favor of such Other Matter; and
(B) Against:
(i) The election of any person or persons nominated in opposition
to the AAH Nominees;
(ii) Any matter brought before such Shareholders Meeting to be
acted upon by the shareholders of the Company that is in opposition to
an AAH Matter; and/or
(iii) Any Other Matter, only if AAH has informed (by oral or
written notice) the Specified Shareholders that AAH intends to vote
against such Other Matter.
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(b) At each and every Shareholders Meeting held after the Effective
Time and prior to the Voting Termination Date, each Shareholder hereby agrees
(x) if any annual or special meeting of the stockholders of the Company is held,
to appear at such meeting or otherwise cause its Shares to be counted as present
thereat for purposes of establishing a quorum, and to vote or (y) act by written
consent with respect to (or cause to be voted or acted upon by written consent),
(i) all Shares for which such Shareholder or any Subsidiary Holder thereof is
the record holder or beneficial owner at the time of such vote or action by
written consent and (ii) all shares as to which such Shareholder or any
Subsidiary Holder thereof at the time of such vote or action by written consent
has voting control, in each case in favor of (A) at least one Dealer Nominee if
the total number of Directors (excluding Directors that are employees of the
Company) on the Board of Directors at the time of such Shareholders Meeting is
less than seven and at least two Dealer Nominees if such number of Directors is
more than six and (B) against the election of any person or persons nominated in
opposition to such Dealer Nominee(s).
SECTION 3.02. Financial and Other Information. Each Shareholder shall
be entitled to receive, and the Company shall provide to such Shareholder (i)
quarterly unaudited financial statements and reports, (ii) annual audited
financial statements and reports, (iii) budgets and financial plans and (iv)
such other data relating to the business, affairs, prospects or condition
(financial or otherwise) of the Company as is available to the Company that (A)
such Shareholder may reasonably request so long as such Shareholder is the
record holder or beneficial owner of at least 5% of the outstanding shares of
Common Stock or (B) such Shareholder is, or is controlled by, one of the
individuals listed on Schedule I hereto.
SECTION 3.03. Grant of Irrevocable Proxy. In the event that any
Specified Shareholder shall fail at any time to vote or act by written consent
with respect to any of such Specified Shareholder's Shares as agreed by such
Specified Shareholder in this Agreement, such Specified Shareholder hereby
irrevocably grants to and appoints AAH (and any officer of AAH or each of them
individually), such Specified Shareholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of such
Specified Shareholder, to vote, act by written consent or grant a consent, proxy
or approval in respect of such Shares with respect to such vote or action by
written consent exclusively as agreed by such Specified Shareholder in this
Agreement. Each Specified Shareholder hereby affirms that any such irrevocable
proxy set forth in this
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Section 3.03 is given in connection with the consummation of the IPO and that
such irrevocable proxy is given to secure the performance of obligations of such
Specified Shareholder under this Agreement. Each such Specified Shareholder
hereby further affirms that any such proxy hereby granted shall be irrevocable
and shall be deemed coupled with an interest, in accordance with Section 212(e)
of the DGCL. Each Specified Shareholder agrees to execute and deliver any
further powers of attorney, consents, proxies or other agreements necessary or
appropriate to give effect to this Section 3.03. This Section 3.03 shall
terminate upon the occurrence of the Voting Termination Date.
SECTION 3.04. Certain Actions. Each Shareholder agrees that it will,
and will cause its subsidiaries and Affiliates to, take all action as a
stockholder of the Company or as is otherwise within its control as are
necessary to give effect to the provisions of this Agreement and to perform, pay
and satisfy all of their respective obligations and liabilities hereunder as and
when due.
ARTICLE IV
Covenants
SECTION 4.01. Lock-Up. Each Specified Shareholder hereby agrees that,
without the prior written consent of the Company, it will not, during the period
ending two years 3 after the Effective Time (the "Lock-Up Period"), (i) offer,
pledge, sell, assign, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
of its Shares or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash, property or otherwise (any action
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3/ The Company agrees to use reasonable efforts to assist the Dealers in
negotiating with the underwriters of the IPO for a shorter lock-up period to the
extent a shorter "lock-up period" is customary for initial public offerings such
as the IPO. If the underwriters of the IPO agree to a shorter "lock-up period",
such shorter period shall be the Lock-Up Period for purposes of this Section
4.01.
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prohibited by the foregoing clauses (i) or (ii), a "Transfer") except that a
Specified Shareholder (x) 180 days or more following the Effective Time, may
Transfer any of its Shares to (A) a person, other than a charity or a trust for
the benefit of a charity, that is a Permitted Transferee (as defined in clauses
(ii) or (iii) of the definition of "Permitted Transferee" in the LLC Agreement)
or (B) a charity or a trust for the benefit of a charity solely controlled by
such Specified Shareholder so long as during the Lock-Up Period such Specified
Shareholder does not Transfer in aggregate pursuant to this clause (x)(B) more
than 15% of the Shares it held at the Effective Time, (y) 180 days or more
following the Effective Time, may pledge Shares to a lender solely in connection
with a recourse loan to such Specified Shareholder so long as the aggregate
principal amount of such recourse loan does not exceed 20% of the fair market
value (determined at the time such recourse loan is made) of the Shares that
such Specified Shareholder pledges as security for such recourse loan pursuant
to this clause (y) and (z) may pledge Shares solely to the extent the pledge of
such Shares is in substitution for and to the same Lender as a pledge by such
Specified Shareholder prior to the Effective Time of all or a portion of its
equity interest in the Company or the predecessor entity of the Company, as
applicable, and such prior pledge complied with Section 7.01(c)(iv) of the LLC
Agreement; provided that each transferee pursuant to the foregoing clauses (x),
(y) and (z) prior to such Transfer shall agree in writing in a form reasonably
acceptable to the Company to be bound by this Section 4.01. In addition, each
Specified Shareholder agrees that, without the prior written consent of the
Company, it will not during the Lock- Up Period exercise any right available to
it under Article V of this Agreement with respect to the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. Each Specified Shareholder agrees to enter into a
"lockup" agreement with the underwriters of the IPO for a term equal to the
Lock-Up Period and that otherwise is substantially the same as this Section
4.01.
SECTION 4.02. Noncompetition. This Section 4.02 applies to each
employee of the Company or any subsidiary of the Company who owns Shares,
whether directly or indirectly, in the Company who is a Specified Shareholder of
the Company or is the beneficial owner of interests in a Specified Shareholder
of the Company (or a Subsidiary Holder thereof) and is not bound by a
non-competition restriction contained in a consulting or employment agreement
between such employee and the Company or any of its subsidiaries (each, a
"Management Employee"); provided, however, that this
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Section 4.02 shall not apply to any Management Employee that is an Affiliate of
AAH (including for this purpose any member of the Board of Directors who was an
AAH Nominee). Each Management Employee shall agree in writing (or if a party to
this Agreement, hereby agrees) that following any termination of his employment
by the Company or a subsidiary thereof "for cause" or his voluntary resignation
from such employment (a) he shall not compete, directly or indirectly (including
as an employee, proprietor, owner, partner, shareholder, member, joint venturer
or agent of, or as a consultant to, any person or entity which competes), with
the retail motor vehicle business of the Company or any of its subsidiaries
within 50 miles of any motor vehicle dealership owned by the Company or any of
its subsidiaries where such Management Employee worked during the year prior to
the termination of his employment and (b) he shall not violate Section 4.03
(with respect to each Management Employee, a "Non-Compete Covenant"). A
Management Employee's Non-Compete Covenant shall become effective on the date
that such Management Employee's employment by the Company or a subsidiary
thereof terminates and shall terminate on the first anniversary of such date.
The Company shall not be obligated to provide any Specified Shareholders with
the benefit of any of the Company's obligations under Section 4.01 or Article V
unless each Management Employee that is a direct or indirect beneficial owner of
such Specified Shareholder has provided the Company with such written agreement
in a form reasonably satisfactory to the Company.
SECTION 4.03. Nonsolicitation. No Specified Shareholder (or if such
Specified Shareholder is not a natural person, any natural person that owns a
beneficial interest in such Specified Shareholder or a Subsidiary Holder
thereof) shall, during the time such Specified Shareholder is a Specified
Shareholder and for one (1) year after such Specified Shareholder ceases to be a
Specified Shareholder or such natural person ceases to own a beneficial interest
in such Specified Shareholder or a Subsidiary Holder thereof, (i) directly or
indirectly employ, solicit, entice or encourage to leave the employ of the
Company or any of its subsidiaries, any person who is, or at any time during the
preceding twelve months was, employed by, or otherwise engaged to perform
services for, the Company or any of its subsidiaries or (ii) otherwise
intentionally interfere with the relationship of the Company or any of its
subsidiaries with any person who is employed by or otherwise engaged to perform
services for the Company or any of its subsidiaries; provided, however, that the
restrictions set forth in this Section 4.03 shall not apply to AAH, any
Affiliate of AAH or to any Specified Shareholder
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or natural person who is bound by a non-solicitation restriction contained in a
consulting or employment agreement between such Member or natural person or the
Company or its subsidiaries.
ARTICLE V
Registration Rights
SECTION 5.01. Demand Registrations. (a) Any time following the
Effective Time and prior to the date on which the Company shall have obtained a
written opinion of legal counsel reasonably satisfactory to each Demand Holder
and addressed to the Company and such Demand Holder to the effect that the
Shares may be publicly offered for sale in the United States by such Demand
Holder or any Subsidiary Holder thereof without restriction as to manner of sale
and amount of securities sold and without registration or other restriction
under the Securities Act (such period, the "Demand Period"), such Demand Holder
shall have the right on a number of occasions equal to the Demand Number for
such Demand Holder to require the Company to file a registration statement under
the Securities Act in respect of all or a portion of the Shares then held by
such Demand Holder and any Subsidiary Holder thereof (so long as such request
covers at least 1% of the shares of Common Stock then outstanding), by
delivering to the Company written notice stating that such right is being
exercised, specifying the number of the Shares to be included in such
registration and describing the intended method of distribution thereof (a
"Demand Request"). In the case of any Demand Holder other than AAH, (i) such
Demand Holder may not make a Demand Request during the Lock-Up Period, (ii) such
Demand Holder may only make one Demand Request during each successive one- year
period following the termination of the Lock-Up Period and (iii) the first
Demand Request made by such Demand Holder shall be limited with respect to each
applicable Exercising Demand Holder to a number of Shares that is less than or
equal to 50% of the number of Shares owned at such time by such Exercising
Demand Holder and any Subsidiary Holder thereof; provided that such Exercising
Demand Holders may not in aggregate register pursuant to such Demand Request
more than 20% of the aggregate number of Shares owned at such time by the
Specified Shareholders and any Subsidiary Holders thereof (the "Share Limit");
provided, further, that if the aggregate number of Shares that such Exercising
Demand Holders have included in their Demand Request exceeds the Share Limit,
the Shares of each Exercising Demand Holder requesting the registration of more
than 20% of the aggregate number of Shares owned at such
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time by such Exercising Demand Holder and any Subsidiary Holder thereof (with
respect to each Exercising Demand Holder, its "20% Limit") shall be excluded
from the Demand Requests, to the extent necessary to comply with the Share
Limit, on a pro rata basis according to the total number of Shares requested to
be registered by all such Exercising Demand Holders until the Demand Request of
each such Exercising Demand Holder has been reduced to (and not below) its 20%
Limit. As promptly as practicable, but in no event later than forty-five (45)
days after the Company receives a Demand Request, the Company shall file with
the SEC and thereafter use its reasonable best efforts to cause to be declared
effective promptly a registration statement (a "Demand Registration") providing
for the registration of such number of Shares as such Exercising Demand
Holder(s) shall have demanded be registered for distribution in accordance with
such intended method of distribution.
(b) Anything in this Agreement to the contrary notwithstanding, the
Company shall be entitled to postpone and delay, for a reasonable period of
time, not to exceed forty-five (45) days in the case of clauses (i) and (ii)
below, or fifteen (15) days in the case of clause (iii) below (each, a "Blackout
Period"), the filing of any Demand Registration if the Company shall determine
that any such filing or the offering of any Shares would (i) in the good faith
judgment of the Board, unreasonably impede, delay or otherwise interfere with
any pending or contemplated material acquisition, corporate reorganization or
other material matter involving the Company (each, a "Material Transaction"),
(ii) based upon advice from the Company's investment banker or financial
advisor, materially adversely affect any pending or contemplated financing,
offering or sale of any class of securities by the Company, or (iii) in the
reasonable and good faith judgment of the Board require disclosure of material
non-public information (other than information relating to an event described in
clause (i) or (ii) of this subsection (b)) which, if disclosed at such time,
would be materially harmful to the interests of the Company and its
stockholders; provided, however, that in the case of a Blackout Period pursuant
to clause (i) or (ii) above, the Blackout Period shall earlier terminate upon
the completion or abandonment of the relevant securities offering or sale,
financing, acquisition, corporate reorganization or other similar material
transaction; and provided, further, that in the case of a Blackout Period
pursuant to clause (iii) above, the Company shall give written notice of its
determination to postpone or delay the filing of any Demand Registration and in
the case of clause (iii) above, the Blackout Period shall earlier terminate upon
public disclosure by the Company or public admission by
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the Company of such material non-public information or such time as such
material non-public information shall be publicly disclosed without breach by
the Exercising Demand Holder(s) of the penultimate sentence of this subsection
(b); and provided, further, that in the case of a Blackout Period pursuant to
clause (i), (ii) or (iii) above, the Company shall furnish to the Exercising
Demand Holder(s) a certificate of an executive officer of the Company to the
effect that an event permitting a Blackout Period has occurred. Notwithstanding
anything herein to the contrary, the Company shall not exercise pursuant to
clause (i), (ii), or (iii) of the preceding sentence the right to postpone or
delay the filing of any Demand Registration for an aggregate period of more than
ninety (90) days in any twelve (12) month period. Upon notice by the Company to
each Exercising Demand Holder of any such determination, such Exercising Demand
Holder covenants that it shall keep the fact of any such notice strictly
confidential, and, in the case of a Blackout Period pursuant to clause (iii)
above or Section 5.01(c) below, promptly halt any offer, sale, trading or
transfer by it or any of its Affiliates of any Common Stock for the duration of
the Blackout Period set forth in such notice (or until such Blackout Period
shall be earlier terminated in writing by the Company) and promptly halt any
use, publication, dissemination or distribution of the Demand Registration, each
prospectus included therein, and any amendment or supplement thereto by it and
any of its Affiliates for the duration of the Blackout Period set forth in such
notice (or until such Blackout Period shall be earlier terminated in writing by
the Company) and, if so directed by the Company, will deliver to the Company any
copies then in such Exercising Demand Holder's possession of the prospectus
covering such Shares, that was in effect at the time of receipt of such notice.
After the expiration of any Blackout Period and without further request from any
Demand Holder, the Company shall effect the filing of the relevant Demand
Registration and shall use its reasonable best efforts to cause any such Demand
Registration to be declared effective as promptly as practicable unless such
Demand Holder shall have, prior to the effective date of such Demand
Registration, withdrawn in writing its initial request, in which case such
withdrawn request shall not constitute a Demand Registration for purposes of
determining the number of Demand Registrations to which such Demand Holder is
entitled under this Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, in
case a Demand Registration has been filed, if a Material Transaction has
occurred, the Company may cause such Demand Registration to be withdrawn and its
effectiveness terminated or may postpone amending or
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supplementing such Demand Registration for a reasonable period of time, not to
exceed forty-five (45) days; provided, however, that in no event shall a Demand
Registration so withdrawn by the Company count for the purposes of determining
the number of Demand Registrations to which the applicable Demand Holder is
entitled under Section 5.01(a); provided further that the Company shall not so
withdraw or terminate a Demand Registration Statement more than one time or
postpone or delay amending or supplementing any Demand Registration Statements
for an aggregate period of more than ninety (90) days during any twelve (12)
month period.
(d) A Demand Holder may withdraw a Demand Request in circumstances
including, but not limited to, the following: if (i) the Company is in material
breach of its obligations hereunder and has not cured such breach after having
received notice thereof and a reasonable opportunity to do so or (ii) the
withdrawal occurs during a Blackout Period. Any Demand Request withdrawn (x)
pursuant to subsection (d)(ii) prior to such Demand Registration becoming
effective or (y) pursuant to subsection (d)(i) shall not constitute a Demand
Registration for the purposes of determining the number of Demand Registrations
to which such Demand Holder is entitled under Section 5.01(a).
(e) Subject to Section 5.02, the Company may elect to include in any
registration statement filed pursuant to this Section 5.01 any Common Stock to
be issued by it or held by any of its subsidiaries or by any other shareholders
only to the extent such Common Stock is offered and sold pursuant to, and on the
terms and subject to the conditions of, any underwriting agreement or
distribution arrangements entered into or effected by the applicable Demand
Holder and only to the extent the managing underwriter thereof does not
reasonably and in good faith advise each applicable Exercising Demand Holder
prior to the consummation of any Demand Registration that the inclusion in such
registration statement of any such Common Stock to be issued by the Company or
sold by any of its subsidiaries or any other shareholder will not create a
substantial risk that the price per share of Common Stock that the Exercising
Demand Holder(s) will derive from such Demand Registration will be materially
and adversely affected or that the number of shares of Common Stock sought to be
registered (including any shares of Common Stock sought to be registered at the
request of the Company and any other shareholder and those sought to be
registered by such Exercising Demand Holder(s)) is a greater number than can be
reasonably sold.
16
(f) The managing underwriter for any Demand Registration shall be
selected by the Demand Holder exercising the Demand Request, provided that such
managing underwriter or underwriters shall be of recognized national standing.
SECTION 5.02. "Piggy-Back" Registrations. (a) Subject to Section 4.01,
if, at any time following the Effective Time, the Company proposes to register
any Common Stock under the Securities Act, whether or not for sale for its own
account, on a registration statement on Form S-1, Form S-2 or Form S-3 (or any
equivalent general registration form then in effect) for purposes of a primary
offering, secondary offering (including any Demand Registration) or combined
offering of such Common Stock, the Company shall give prompt written notice to
each Shareholder of its intention to do so. Such notice shall specify, at a
minimum, the number of shares of Common Stock so proposed to be registered, the
proposed date of filing of such registration statement, any proposed means of
distribution of such Common Stock, any proposed managing underwriter or
underwriters of such offering and a good faith estimate by the Company of the
proposed maximum offering price thereof, as such price is proposed to appear on
the facing page of such registration statement. Upon the written direction of a
Shareholder (a "Piggy-Back Request"), given within thirty (30) business days
following the receipt by such Shareholder of any such written notice (which
direction shall specify the number of the Shares intended to be disposed of by
such Shareholder or any Subsidiary Holder thereof), the Company shall include in
such registration statement (a "Piggy-Back Registration" and, collectively with
a Demand Registration, a "Registration"), subject to the provisions of Section
5.02 hereof, such number of the Shares as shall be set forth in any such
Piggy-Back Request delivered by a Shareholder.
(b) In the event that the Company proposes to register Common Stock in
connection with an underwritten offering and a nationally recognized independent
investment banking firm selected by the Company or a Demand Holder to act as
managing underwriter thereof reasonably and in good faith shall have advised the
Company, any holder of Common Stock (including a Demand Holder if it has made a
Demand Request) intending to offer such Common Stock in a secondary offering or
combined offering (each, an "Other Holder") or any Shareholder who submitted a
Piggy-Back Request in writing that, in its opinion, the inclusion in the
registration statement of some or all of the Shares sought to be registered by
any such Shareholder making a Piggyback Request creates a substantial risk that
the price per share of Common Stock that the Company or any Other Holder will
17
derive from such registration will be materially and adversely affected or that
the number of shares of Common Stock sought to be registered (including any
shares of Common Stock sought to be registered at the request of the Company and
any Other Holder and those sought to be registered by any such Shareholder
making a Piggyback Request) is a greater number than can reasonably be sold, the
Company shall include in such registration statement such number of shares of
Common Stock as the Company, any Other Holder and any such Shareholder making a
Piggyback Request are so advised can be sold in such offering without such an
effect (the "Maximum Number") as follows and in the following order of priority:
(A) first, in the case of a secondary or combined offering, if a Demand Holder
has made a Demand Request, such number of shares of Common Stock as each
applicable Exercising Demand Holder intended to be registered and sold by it
(subject to any limitation pursuant to Section 5.01(a) on the number of Shares
that may be registered under such Demand Request by such Exercising Demand
Holder), provided that if such number exceeds the Maximum Number, the shares of
Common Stock of such Shareholders will be excluded on a pro rata basis according
to the total number of Shares requested to be registered by such persons (after
giving effect to any limitation pursuant to Section 5.01(a)), (B) second, in the
case of a secondary or combined offering, if an Other Holder (other than such
Exercising Demand Holder(s)) has exercised a similar demand registration right
and if to the extent that such number of shares of Common Stock to be registered
under clause (A) is less than the Maximum Number, such number of shares of
Common Stock as the Other Holder intended to be registered and sold by it which,
when added to the number of shares of Common Stock to be registered under clause
(A), is less than or equal to the Maximum Number, (C) third, in the case of a
primary or combined offering and if and to the extent that such number of shares
of Common Stock to be registered under clauses (A) and (B) is less than the
Maximum Number, such number of shares of Common Stock as the Company intended to
be registered and sold by the Company which, when added to the number of shares
of Common Stock to be registered under clauses (A) and (B), is less than or
equal to the Maximum Number, and (D) fourth, in the case of a secondary or
combined offering and if and to the extent that the number of shares of Common
Stock to be registered under clauses (A) , (B) and (C) is less than the Maximum
Number, such number of shares of Common Stock as the Shareholders who submitted
Piggy-Back Requests shall have intended to register which, when added to the
number of shares of Common Stock to be registered under clauses (A), (B), (C)
and (D), is less than or equal to the Maximum Number; provided that if such
number exceeds the Maximum Number, the shares of Common Stock of
18
such Shareholders will be excluded on a pro rata basis according to the total
number of Shares requested to be registered by such persons.
(c) No Piggy-Back Registration effected under this Section 5.02 shall
be deemed to have been effected pursuant to Section 5.01 hereof or shall release
the Company of its obligations to a Demand Holder to effect any Demand
Registration upon request as provided under Section 5.01 hereof.
(d) Notwithstanding any request under this Section 5.02, each
Shareholder who submitted a Piggy-Back Request may elect in writing to withdraw
its request for inclusion of its Shares in any registration statement provided,
however, that (i) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (ii) such withdrawal shall be
irrevocable and, after making such withdrawal, any such Shareholder shall no
longer have any right to include Shares in the registration as to which such
withdrawal was made.
(e) If, at any time after giving written notice of its intention to
register any Common Stock and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such Common
Stock, the Company may, at its election, give written notice of such
determination to each Shareholder who submitted a Piggy-Back Request and (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Shares in connection with such abandoned registration, without
prejudice, however, to the rights of an Exercising Demand Holder under Section
5.01 and (ii) in the case of a determination to delay such registration of the
Company's Common Stock, shall be permitted to delay the registration of such
Shares for the same period as the delay in registering such other Common Stock.
(f) If, as a result of the proration provisions of this Section 5.02,
each Shareholder who submitted a Piggy-Back Request shall not be entitled to
include all Shares in a registration that each such Shareholder has requested to
be included, each such Shareholder may elect to withdraw his request to include
Shares in such registration or may reduce the number of Shares requested to be
included, provided that the same limitations in subsection (d) shall apply.
19
SECTION 5.03. Additional Agreements. Anything in this Agreement to the
contrary notwithstanding, if at any time the Company shall obtain a written
opinion of legal counsel reasonably satisfactory to AAH and addressed to the
Company and the Shareholders to the effect that the Shares may be publicly
offered for sale in the United States by each Shareholder or any Subsidiary
Holder without restriction as to manner of sale and amount of securities sold
and without registration or other restriction under the Securities Act, the
Company shall no longer be obligated to file or maintain a registration
statement with respect to the Shares pursuant to this Agreement. In such case,
the Company shall issue to each Shareholder certificates representing the Shares
without any legend restricting transfer and shall remove all stop transfer
orders relating to the Shares.
SECTION 5.04. Registration Procedures. (a) In connection with each
registration statement prepared pursuant to this Agreement, and in accordance
with the intended method or methods of distribution of the Shares as described
in such registration statement, the Company shall, as soon as reasonably
practicable (and, in any event, subject to the terms of this Agreement,
including, without limitation, Section 5.01(a), at or before the time required
by applicable laws and regulations):
(i) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC, with respect to such Shares,
which form shall be selected by the Company with the Shareholder's
reasonable consent, and use its reasonable best efforts to cause such
registration statement to become and remain effective promptly; provided
that before filing a registration statement or prospectus or any amendments
or supplements thereto, the Company will furnish to one counsel selected by
the Demand Holder exercising the Demand Request and one counsel to the
Shareholders selling under a Piggy-Back Registration, and the sales or
placement agent or agents, if any, for the Shares and the managing
underwriter or underwriters, if any, draft copies of all such documents
proposed to be filed at least seven (7) days prior to such filing, which
documents will be subject to the reasonable review of the Shareholders, the
sales or placement agent or agents, if any, for the Shares and the managing
underwriter or underwriters, if any, and their respective agents and
representatives and the Company will not file any Demand Registration or
amendment thereto or any prospectus or any supplement
20
thereto to which such Demand Holder exercising such Demand Request shall
reasonably object in writing;
(ii) furnish without charge to the Shareholders, the sales or
placement agent or agents, if any, and the managing underwriter or
underwriters, if any, such number of copies of such registration statement
and of each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the summary, preliminary, final,
amended or supplemented prospectuses included in such registration
statement in conformity with the requirements of the Securities Act and any
regulations promulgated thereunder and (upon the reasonable request by the
Shareholders) any documents incorporated therein by reference and such
other documents as the Shareholders may reasonably request in order to
facilitate the public sale or other disposition of such Shares (the Company
hereby consenting to the use in accordance with all applicable law of the
prospectus or any amendment or supplement thereto by the Shareholders in
connection with the offering and sale of the Shares covered by the
prospectus or any amendment or supplement thereto);
(iii) use its reasonable best efforts to keep such registration
statement effective for at least 180 days (not counting any period that
such registration statement is not effective pursuant to Section 5.01(c))
(the "Effective Period"); prepare and file with the SEC such amendments,
post-effective amendments and supplements to the registration statement and
the prospectus as may be necessary to maintain the effectiveness of the
registration for the Effective Period and to cause the prospectus (and any
amendments or supplements thereto) to be filed pursuant to Rules 424 and
430A under the Securities Act and/or any successor rules that may be
adopted by the SEC, as such rules may be amended from time to time; and
comply with the provisions of the Securities Act with respect to the
disposition of all Shares covered by such registration statement during the
applicable period in accordance with the intended method or methods of
distribution thereof, as specified in writing by the Shareholder;
(iv) except during any Blackout Period, make available for inspection
by the Shareholders or by any underwriter, attorney, accountant or other
agent retained by the Shareholders (collectively, the "Inspectors")
financial and other records and pertinent corporate documents of the
Company (collectively, the
21
"Records"), provide the Inspectors with opportunities to discuss the
business of the Company with its officers and provide opportunities to
discuss the business of the Company with the independent public accountants
who have certified its most recent annual financial statements, in each
case to the extent customary for transactions of the size and type
intended, as specified by the Shareholders, but only to the extent
reasonably necessary to enable each Shareholder or any underwriter retained
by the Shareholders to conduct a "reasonable investigation" for purposes of
Section 11(a) of the Securities Act. Records which the Company determines,
in good faith, to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed by the Inspector unless (A) the
disclosure of such Records is necessary to avoid or correct a misstatement
of a material fact or omission to state a material fact in the
Registration, (B) the disclosure of such Records is required by any court
or governmental body with jurisdiction over any of the Shareholders or
Inspector or (C) all of the information contained in such Records has been
made generally available to the public. Each Shareholder agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction or by any governmental body, promptly give prior
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of those Records deemed
confidential;
(v) if requested by (i) a Demand Holder exercising a Demand Request,
use reasonable best efforts to participate in and assist with a "road show"
and other customary marketing efforts in connection with the sale of Shares
pursuant to such registration statement, at such times and in such manner
as the Company and such Demand Holder mutually may determine (and as do not
unreasonably interfere with the Company's operations); provided that the
executives of the Company shall not be required to participate in a "road
show" unless the proposed aggregate offering price of the Shares being sold
pursuant to such registration statement equals or exceeds $35,000,000 and
(ii) a Demand Holder executing a block trade, use reasonable best efforts
to assist with such block trade, at such times and in such manner as the
Company and such Demand Holder mutually may determine (and as do not
unreasonably interfere with the Company's operations);
22
(vi) use its reasonable best efforts to register or qualify the Shares
covered by such registration statement under such other securities or "blue
sky" laws of such jurisdictions in the United States as the Shareholders
shall reasonably request, keep such registrations or qualifications in
effect for so long as the registration statement remains in effect, and do
any and all other acts and things which may be reasonably necessary to
enable the Shareholders or any underwriter to consummate the public sale or
other disposition of the Shares in such jurisdictions; provided, however,
that in no event shall the Company be required to qualify to do business as
a foreign corporation in any jurisdiction where it is not so qualified; to
execute or file any general consent to service of process under the laws of
any jurisdiction; to take any action that would subject it to service of
process in suits other than those arising out of the offer and sale of the
Shares covered by the registration statement; or to subject itself to
taxation in any jurisdiction where it would not otherwise be obligated to
do so, but for this paragraph (vii);
(vii) use its reasonable best efforts to cause the Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the Shareholders to consummate
the public sale or other disposition of the Shares;
(viii) use its reasonable best efforts to cause all Shares covered by
such registration statement to be approved for listing on a national
securities exchange or approved for trading on a national interdealer
quotation system or listed on the securities exchanges on which similar
securities issued by the Company are then listed or traded;
(ix) promptly notify each Shareholder whose Shares are covered by a
Registration, at any time when a prospectus relating to any of the Shares
covered by such registration statement is required to be delivered under
the Securities Act, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing, and, at the
request of the Demand Holder exercising the Demand Request, promptly
prepare and furnish to the
23
Shareholders a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Shares,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing;
(x) promptly notify the Shareholders whose Shares are covered by a
Registration, the sales or placement agent or agents, if any, for the
Shares and the managing underwriter or underwriters, if any, thereof, after
becoming aware thereof, when the registration statement or any related
prospectus or any amendment or supplement has been filed, and, with respect
to the registration statement or any post-effective amendment, when the
same has become effective, (A) of any request by the SEC for amendments or
supplements to the registration statement or the related prospectus or for
additional information, (B) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose, (C) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
of any proceeding for such purpose or (D) within the Effective Period of
the happening of any event which makes any statement in the registration
statement or any post-effective amendment thereto, prospectus or any
amendment or supplement thereto, or any document incorporated therein by
reference untrue in any material respect or which requires the making of
any changes in the registration statement or post- effective amendment
thereto or any prospectus or amendment or supplement thereto so that they
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein (in light of the circumstances under which they were
made) not misleading;
(xi) during the Effective Period, use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of the
registration statement or any post-effective amendment thereto;
(xii) permit AAH if, in AAH's sole judgment exercised in good faith,
it believes it might be deemed to be a controlling person of the Company,
to
24
participate in the preparation of such registration statement and all
discussions between the Company and the SEC or its staff with respect to
such registration statement, and to require the insertion therein of
material, furnished to the Company in writing, which in the sole judgment
exercised in good faith of AAH should be included;
(xiii) deliver promptly to each Shareholder whose Shares are subject
to a Registration, upon such Shareholder's request, copies of all
correspondence between the SEC and the Company, its counsel or auditors and
all memoranda relating to discussions with the SEC or its staff with
respect to the registration statement and permit such Shareholder to do
such investigation, with respect to information contained in or omitted
from the registration statement, as it deems reasonably necessary. Each
such Shareholder agrees that it will use its reasonable efforts not to
interfere unreasonably with the Company's business when conducting any such
investigation;
(xiv) provide a transfer agent and registrar for all such Shares
covered by such registration statement not later than the effective date of
such registration statement, which transfer agent and registrar may be the
Company, subject to any applicable law or regulations;
(xv) cooperate with each Shareholder whose Shares are subject to a
Registration and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
such Shares to be sold under the registration statement, which certificates
shall not bear any restrictive legends except as required by law; and, in
the case of an underwritten offering, enable such Shares to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, may request in writing at least two (2) business days
prior to any sale of the Shares to the underwriters;
(xvi) enter into such agreements (including, if the offering is an
underwritten offering, an underwriting agreement) as are customary in
transactions of such kind and take such other actions as are reasonably
necessary in connection therewith in order to expedite or facilitate the
disposition of such Shares; and (A) make such representations and
warranties with respect to the registration statement,
25
post-effective amendment or supplement thereto, prospectus or any amendment
or supplement thereto, and documents incorporated by reference, if any, to
the managing underwriter or underwriters, if any, of the Shares and, at the
option of each Shareholder whose Shares are subject to a Registration, make
to and for the benefit of such Shareholder the representations, warranties
and covenants of the Company which are being made to the underwriters, in
form, substance and scope as are customarily made by the Company in
connection with offerings of Shares in transactions of such kind
(representations and warranties by the Other Holders shall also be made as
are customary in agreements of that type); provided that the Company shall
not be required to make any representations or warranties with respect to
information specifically provided by such Other Holders for inclusion in
the registration documents; (B) obtain an opinion of counsel to the Company
(which counsel may be internal counsel for the Company unless the managing
underwriter or underwriters shall otherwise reasonably request) in
customary form and covering matters of the type customarily covered by such
an opinion, addressed to such managing underwriter or underwriters, if any,
and to the Shareholders and dated the date of the closing of the sale of
the Shares relating thereto; (C) obtain a "comfort" letter or letters from
the independent certified public accountants who have certified the
Company's most recent audited financial statements that are incorporated by
reference in the registration statement which is addressed to the
Shareholders and the managing underwriter or underwriters, if any, and is
dated the date of the prospectus used in connection with the offering of
such Shares and/or the date of the closing of the sale of such Shares
relating thereto, such letter or letters to be in customary form and
covering such matters of the type customarily covered by "comfort" letters
of such type; (D) deliver such documents and certificates as may be
reasonably requested by any Shareholder whose Shares are subject to a
Registration and the managing underwriter or underwriters, if any, of the
Shares to evidence compliance with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company;
and (E) undertake such obligations relating to expense reimbursement,
indemnification and contribution as provided in Sections 5.05 and 5.06
hereof; and
(xvii) comply with all applicable rules and regulations of the SEC and
generally make available to
26
its security holders an earnings statement (which need not be audited), as
soon as reasonably practicable but in no event later than ninety (90) days
after the end of the period of twelve (12) months commencing on the first
day of any fiscal quarter next succeeding each sale by each Shareholder of
Shares which have been registered pursuant to this Agreement (the
"Registered Shares") after the date hereof, which earnings statement shall
cover such twelve (12) month period and shall satisfy the provisions of
Section 11(a) of the Securities Act and may be prepared in accordance with
Rule 158 under the Securities Act.
(b) In the event that the Company would be required, pursuant to
Section 5.04(a)(xi)(D) above, to notify any Shareholder, the sales or placement
agent or agents, if any, for the Shares and the managing underwriter or
underwriters, if any, thereof, the Company shall, subject to the provisions of
Section 5.01(b) hereof, as promptly as practicable, prepare and furnish to each
Shareholder, to each placement or sales agent, if any, and to each underwriter,
if any, a reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of Registered Shares, such
prospectus shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Each Shareholder agrees that, upon receipt of any notice
from the Company pursuant to Section 5.04(a)(xi)(D) hereof, such Shareholder
shall, and shall use its reasonable best efforts to cause any sales or placement
agent or agents for the Shares and the underwriters, if any, thereof, to
forthwith discontinue disposition of the Shares until such person shall have
received copies of such amended or supplemented prospectus and, if so directed
by the Company, to destroy or to deliver to the Company all copies, other than
permanent file copies, then in its possession of the prospectus (prior to such
amendment or supplement) covering such Shares as soon as practicable after such
Shareholder's receipt of such notice.
(c) Each Shareholder whose Shares are covered by a Registration shall
furnish to the Company in writing such information regarding such Shareholder
and its intended method of distribution of the Shares as the Company may from
time to time reasonably request in writing, but only to the extent that such
information is required in order for the Company to comply with its obligations
under all applicable securities and other laws and to ensure that the prospectus
relating to such Shares conforms to the applicable
27
requirements of the Securities Act and the rules and regulations thereunder.
Each Shareholder whose Shares are covered by a Registration shall notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Shareholder to the Company or of the occurrence of
any event, in either case as a result of which any prospectus relating to the
Shares contains or would contain an untrue statement of a material fact
regarding such Shareholder or its intended method of distribution of such Shares
or omits to state any material fact regarding such Shareholder or its intended
method of distribution of such Shares required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and promptly furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such prospectus shall not contain, with respect to such
Shareholder or the distribution of the Shares, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(d) Each Shareholder agrees not to, and shall not cause any Subsidiary
Holder to, effect any public sale or distribution of any Shares, including any
sale pursuant to Rule 144 under the Securities Act, and not to effect any such
public sale or distribution of any other equity security of the Company or of
any security convertible into or exchangeable or exercisable for any equity
security of the Company (in each case, other than as part of such underwritten
public offering) during the ten (10) days prior to, and during the ninety (90)
day period (or such longer period as the Shareholder and/or the applicable
Subsidiary Holder agrees with the underwriter of such offering) beginning on,
the consummation of any underwritten public offering of the Shares covered by a
registration statement referred to in Section 5.02 to the extent the
Shareholder's or Subsidiary Holder's Registered Shares are being sold
thereunder.
(e) In the case of any registration under Section 5.01 pursuant to an
underwritten offering, or in the case of a Registration under Section 5.02 if
the Company has determined to enter into an underwriting agreement in connection
therewith, all Shares to be included in such Registration shall be subject to
such underwriting agreement and no person may participate in such Registration
unless such person agrees to sell such person's securities on the basis provided
therein which shall be the same for all
28
Shareholders whose Shares are covered by such Registration and completes and
executes all questionnaires, indemnities, underwriting agreements and other
document s(other than powers of attorney) which must be executed in connection
therewith, and provides such other information to the Company or the underwriter
as may be reasonably requested to register such person's Shares.
SECTION 5.05. Registration Expenses. The Company agrees to bear and to
pay, or cause to be paid, promptly upon request being made therefor, all
expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation: (a) all fees and expenses in
connection with the qualification of the Registered Shares for offering and sale
under state securities or "blue sky" laws referred to in Section 5.04(a)(vii)
hereof, including reasonable fees and disbursements of counsel for any placement
or sales agent or underwriter in connection with such qualifications, (b) all
expenses relating to the preparation, printing, distribution and reproduction of
the registration statement, each prospectus included therein or prepared for
distribution pursuant hereto, each amendment or supplement to the foregoing, the
certificates representing the Shares and all other documents relating hereto,
(c) the costs and charges of any escrow agent, transfer agent, registrar, any
custodian or attorney-in-fact appointed to act on behalf of the Shareholders
(including, without limitation, all salaries and expenses of the Company's
officers and employees performing legal or accounting duties), (d) fees,
disbursements and expenses of the Company's counsel and its other advisors and
experts and independent certified public accountants of the Company (including
the expenses of any opinions or "comfort" letters required by or incident to
such performance and compliance), (e) the fees and expenses incurred in
connection with the listing of the Shares on The New York Stock Exchange, Inc.
and any other stock exchange or national securities exchange on which Shares
shall at such time be listed, and (f) fees, disbursements and expenses of one
counsel selected by a Demand Holder exercising a Demand Request and retained on
behalf of all Shareholders registering Shares in connection with such Demand
Request and any Piggyback Request in connection therewith (collectively, the
"Registration Expenses"). To the extent that any Registration Expenses are
incurred, assumed or paid by the Shareholders, any sales or placement agent or
agents for the Shares and the underwriters, if any, thereof, the Company shall
reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor. Each
Shareholder shall pay its pro rata portion
29
of underwriting discounts and commissions and any capital gains, income or
transfer taxes, if any, attributable to the sale of such Shareholder's Shares
being registered.
SECTION 5.06. Indemnification; Contribution. (a) Indemnification by
the Company. The Company shall, and it hereby agrees to, indemnify and hold
harmless each Shareholder, and each person who participates as a placement or
sales agent or as an underwriter in any offering or sale of the Shares, against
any losses, claims, damages or liabilities to which each such Shareholder or
such agent or underwriter may become subject, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
(collectively, "Claims") arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement pursuant to which any Shares of such Shareholder are registered
pursuant to this Agreement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, and the Company shall, and it hereby agrees to,
reimburse each such Shareholder or any such agent or underwriter for any legal
or other out-of-pocket expenses reasonably incurred by them in connection with
investigating or defending any such Claims; provided, however, that the Company
shall not be liable to any such person in any such case to the extent that any
such Claims arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
or preliminary or final prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such Shareholder or any agent, underwriter or representative of such
Shareholder expressly for use therein, or by such Shareholder's failure to
furnish the Company, upon request, with the information with respect to such
Shareholder, or any agent, underwriter or representative of such Shareholder, or
such Shareholder's intended method of distribution, that is the subject of the
untrue statement or omission or if the Company shall sustain the burden of
proving that such Shareholder or such agent or underwriter sold securities to
the person alleging such Claims without sending or giving, at or prior to the
written confirmation of such sale, a copy of the applicable prospectus
(excluding any documents incorporated by reference therein) or of the applicable
prospectus, as then amended or supplemented (excluding any documents
30
incorporated by reference therein), if the Company had previously furnished
copies thereof to such Shareholder or such agent or underwriter, and such
prospectus corrected such untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement.
(b) Indemnification by the Shareholders and Any Agents or
Underwriters. Each Shareholder shall, and hereby agrees, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors,
officers, employees and controlling persons, if any, each other Shareholder, and
each underwriter, its partners, officers, directors, employees and controlling
persons, if any, in any offering or sale of Shares, against any Claims to which
the Company, its directors, officers, employees and controlling persons, if any,
may become subject, insofar as such Claims (including any amounts paid in
settlement as provided herein), or actions or proceedings in respect thereof,
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such registration statement, or any preliminary
or final prospectus contained therein, or any amendment or supplement thereto,
or any document incorporated by reference therein, or arise out of or are based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Shareholder
or any agent, underwriter, or representative (as the case may be) expressly for
use therein, and (ii) reimburse the Company for any legal or other out-of-pocket
expenses reasonably incurred by the Company in connection with investigating or
defending any such Claim.
(c) Notice of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action or proceeding for which indemnification under subsection (a) or (b)
may be requested, such indemnified party shall, without regard to whether a
claim in respect thereof is to be made against an indemnifying party pursuant to
the indemnification provisions of, or as contemplated by, this Section 5.06,
notify such indemnifying party and the underwriter in writing of the
commencement of such action or proceeding; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party in respect of such action or proceeding on account of the
indemnification provisions of
31
or contemplated by Section 5.06(a) or 5.06(b) hereof unless the indemnifying
party was materially prejudiced by such failure of the indemnified party to give
such notice, and in no event shall such omission relieve the indemnifying party
from any other liability it may have to such indemnified party. In case any such
action or proceeding shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, unless in the
reasonable opinion of outside counsel to the indemnified party a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, such indemnifying party shall be entitled to participate therein
and, to the extent that it shall determine, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, such indemnifying party shall not be liable to such indemnified party
for any legal or any other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which are
different from or in addition to the defenses available to such indemnifying
party, in which event the indemnified party shall have the right to control its
defense and shall be reimbursed by the indemnifying party for the expenses
incurred in connection with retaining one separate counsel). If the indemnifying
party is not entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than one counsel for
each indemnified party with respect to such claim. The indemnifying party will
not be subject to any liability for any settlement made without its consent,
which consent shall not be unreasonably withheld or delayed. No indemnifying
party shall, without the prior written consent of the indemnified party,
compromise or consent to entry of any judgment or enter into any settlement
agreement with respect to any action or proceeding in respect of which
indemnification is sought under Section 5.06(a) or (b) (whether or not the
indemnified party is an actual or potential party thereto), unless such
compromise, consent or settlement includes an unconditional term thereof the
giving by the claimant or plaintiff to the indemnified party of a release from
all liability in respect of such claim or litigation and does not subject the
indemnified party to any material injunctive relief or other material equitable
remedy.
32
(d) Contribution. Each Shareholder and the Company agree that if, for
any reason, the indemnification provisions contemplated by Sections 5.06(a) or
5.06(b) hereof are unavailable to or are insufficient to hold harmless an
indemnified party in respect of any Claims referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of, and benefits derived by, the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The relative benefit derived by the parties shall be
determined by reference to the fact that the Company entered into this Agreement
as an integral part of the transactions pursuant to which the Shares were
acquired. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.06(d) were determined by any method of
allocation which does not take account of the equitable considerations referred
to in this Section 5.06(d). The amount paid or payable by an indemnified party
as a result of the Claims referred to above shall be deemed to include (subject
to the limitations set forth in Section 5.06(c) hereof) any legal or other fees
or expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The indemnification and contribution required by this Section 5.06
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(f) Beneficiaries of Indemnification. The obligations of the Company
under this Section 5.06 shall be in addition to any liability that it may
otherwise have and shall extend, upon the same terms and conditions, to each
employee, officer, director and partner of each Shareholder or any Subsidiary
Holder, each agent of such Shareholder or
33
any Subsidiary Holder, each underwriter of the Shares and each person, if any,
who controls such Shareholder or any Subsidiary Holder or any such agent or
underwriter within the meaning of the Securities Act; and the obligations of
such Shareholder and each Subsidiary Holder and any agents or underwriters
contemplated by this Section 5.06 shall be in addition to any liability that
such Shareholder or any Subsidiary Holder or their respective agents or
underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any registration statement as about to become
a director of the Company) and to each person, if any, who controls the Company
within the meaning of the Securities Act.
SECTION 5.07. Underwriters. If any of the Shares are to be sold
pursuant to an underwritten offering, the investment banker or bankers and the
managing underwriter or underwriters thereof shall be selected by the Company
except in the case of a Demand Registration, in which the managing underwriter
or underwriters shall be selected by the Demand Holder exercising the Demand
Request, provided that such managing underwriter or underwriters must be of
recognized national standing.
SECTION 5.08. Exchange Act Filings; Rule 144; Rule 144A. (a) The
Company covenants to and with each Shareholder that to the extent it shall be
required to do so under the Exchange Act, the Company shall timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the SEC
under the Securities Act and the rules and regulations adopted by the SEC
thereunder) and shall take such further action as any Shareholder may reasonably
request, all to the extent required from time to time to enable the Shareholders
to sell Shares without registration under the Securities Act within the
limitations of the exemption provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC. Upon the request of a Shareholder, the Company
shall deliver to such Shareholder a written statement as to whether it has
complied with such requirements.
(b) If at any time the Company is not subject to Section 13 or 15(d)
of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b)
under the Exchange Act, the Company agrees, upon the request of a Shareholder
seeking to transfer Shares in conformity with Rule 144A
34
under the Securities Act, to furnish to such Shareholder or prospective
purchasers of the Shares from the Shareholder the information required by Rule
144A(d)(4)(i) under the Securities Act in the manner and at the times
contemplated by such Rule.
(c) The Company covenants to make available "adequate current public
information" concerning the Company within the meaning of Rule 144(c) under the
Securities Act.
SECTION 5.09. Agreements of the Shareholders. Each Shareholder agrees
not to, and it shall cause its Affiliates not to, make any sale, transfer or
other disposition of Shares except in compliance with the registration
requirements of the Securities Act and the rules and regulations thereunder,
including exemptions, and in accordance with the terms of this Agreement.
SECTION 5.10. Recapitalizations, Exchanges, Etc. Affecting the Shares.
The provisions of this Agreement shall apply to any and all shares of capital
stock of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution of the Shares, by reason of a
stock dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise. Upon the
occurrence of any such event, amounts hereunder shall be appropriately adjusted.
ARTICLE VI
Term of Agreement
SECTION 6.01. Term of Agreement. This Agreement shall take effect
immediately upon the occurrence of Effective Time. This Agreement (other than
the provisions of Section 5.06) shall terminate with respect to any Shareholder
on the date that such Shareholder and its Subsidiary Holders no longer own any
shares of Common Stock.
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Specific Performance. The parties hereto hereby declare
that irreparable damage would occur as a result of the failure of any party
hereto to perform any of its obligations under this Agreement in accordance with
35
the specific terms hereof. Therefore, all parties hereto shall have the right to
specific performance of the obligations of the other parties under this
Agreement and if any party hereto shall institute any action or proceeding to
enforce the provisions hereof, any person against whom such action or proceeding
is brought hereby waives the claim or defense therein that such party has an
adequate remedy at law. The right to specific performance should be in addition
to any other remedy to which a party hereto may be entitled at law or in equity.
SECTION 7.02. Legends. (a) Each certificate representing Shares shall
bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TERMS
AND CONDITIONS (INCLUDING RESTRICTIONS ON VOTING AND TRANSFER) SET
FORTH IN A SHAREHOLDERS AGREEMENT DATED AS OF o, o, A COPY OF WHICH
MAY BE OBTAINED FROM [NEWCO], INC. NO TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF, OR BE EFFECTIVE WITH RESPECT TO, [NEWCO],
INC. UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH AGREEMENT.
(b) In addition, stop transfer restrictions will be given to the
Company's transfer agent(s) with respect to the Shares and there will be placed
on the certificates or instruments representing the Shares, and on any
certificate or instrument delivered in substitution therefor, a legend stating
in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO SUCH REGISTRATION OR IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(c) The Company hereby agrees that it will cause stop transfer
restrictions to be released with respect to any Shares that are transferred in
compliance with the terms and provisions of this Agreement and (i) pursuant to
an effective registration statement under the Securities Act, (ii) pursuant to
Rule 144 or 145 under the Securities Act, (iii) in accordance with the
requirements of Rule 903 or 904 of Regulation S under the Securities Act, or
(iv) pursuant to another exemption from the registration requirements of the
Securities Act; provided, however, that
36
in the case of any transfer pursuant to clause (ii), (iii) or (iv) above, the
request for transfer is accompanied by a written statement signed by a
Shareholder confirming compliance with the requirements of the relevant
exemption from registration; and provided, further, that in the case of any
transfer pursuant to clause (iv) above, other than any transfer by such
Shareholder to one or more of such Shareholder's direct or indirect
subsidiaries, or among such subsidiaries, or by any such subsidiary to such
Shareholder, the Company shall have received a written opinion of counsel
reasonably satisfactory to the Company. The Company further agrees that it will
cause the legends described in subsections (a) and (b) of this Section 7.02 to
be removed in the event of any transfer as provided in clause (i), (ii) or (iii)
above.
SECTION 7.03. Conflicts and Inconsistent Agreements. Each of the
Shareholders and the Company shall take all action necessary, including but not
limited to the voting of capital stock of the Company, to ensure that the
certificate of incorporation and by-laws of the Company and the certificates of
incorporation and by-laws or other governing documents of the Company's
subsidiaries are consistent with, and do not conflict with, the terms of this
Agreement. Neither the Company nor any Shareholder shall enter into any
agreement inconsistent with the terms of this Agreement.
SECTION 7.04. Complete Agreement. This Agreement constitutes the
entire agreement and understanding among the parties hereto with respect to the
matters referred to herein and supersedes all prior agreements and
understandings among the parties hereto with respect to the matters referred to
herein.
SECTION 7.05. Amendment. This Agreement may not be amended, modified
or supplemented and no waivers of or consents to departures from the provisions
hereof may be given unless consented to in writing by the Company, AAH and
Specified Shareholders holding a majority of all Shares held by Specified
Shareholders.
SECTION 7.06. Successors; Assigns; Subsidiary Holders. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, directly or indirectly, including by operation of law, by any
Shareholder without the prior written consent of the Company. The terms and
conditions of this Agreement shall be binding on and inure to the benefit of the
respective successors and permitted assigns of the parties hereto. Each
Shareholder agrees with respect to any Affiliate that
37
becomes a Subsidiary Holder hereunder, to promptly thereafter cause such
Affiliate to execute a counterpart hereof agreeing to be bound by all of the
terms, conditions and restrictions of this Agreement, as and to the same extent
as such Shareholder. The execution of a counterpart hereof by an Affiliate who
has become a Subsidiary Holder does not constitute an assignment of any part of
this Agreement prohibited by this Section 7.06, and the Shareholder with which
such Subsidiary Holder is affiliated with will remain bound by all of the terms,
conditions and restrictions of this Agreement.
SECTION 7.07. Attorney Fees. A party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees and expenses,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement. The payment of such expenses is in addition to any
other relief to which such other party may be entitled.
SECTION 7.08. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
shall be deemed given when so delivered by hand, telexed, cabled or
38
telecopied, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service), as follows (or at such other
address, telephone number and fax number as a party shall notify each other
party hereto):
(i) if to the Company:
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX, 00000
Attention: [ ]
Telecopy: [ ]
Telephone: [ ]
with copies to:
[ ]
[ ]
[ ]
Attention: [ ]
Telecopy: [ ]
Telephone: [ ]
(ii) if to AAH:
c/o Ripplewood Holdings L.L.C.
Xxx Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: [ ]
Telecopy: [ ]
Telephone: [ ]
with copies to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
(iii) if to any of the Specified Shareholders, at the addresses,
telecopy and telephone numbers beneath each Specified Shareholder's
signature on the signature pages hereto.
39
with copies to:
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: [ ]
Telephone: [ ]
SECTION 7.09. Interpretation; Exhibits and Schedules. The headings
contained in this Agreement, in any Exhibit or Schedule hereto and in the table
of contents to this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. All Exhibits
and Schedules annexed hereto or referred to herein are hereby incorporated in
and made a part of this Agreement as if set forth in full herein. Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
SECTION 7.10. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party.
SECTION 7.11. Severability. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstance.
SECTION 7.12. GOVERNING LAW. THIS AGREEMENT AND ALL ACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
SECTION 7.13. SUBMISSION TO JURISDICTION. ANY AND ALL SUITS, LEGAL
ACTIONS OR PROCEEDINGS ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT IN THE
SUPERIOR COURT OR THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
40
OR IN THE SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK COUNTY OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND EACH PARTY
HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE
PURPOSE OF SUCH SUITS, LEGAL ACTIONS OR PROCEEDINGS. IN ANY SUCH SUIT, LEGAL
ACTION OR PROCEEDING, EACH PARTY WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLIANT OR OTHER PROCESS AND AGREES THAT SERVICE THEREOF MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL DIRECTED TO IT AT ITS ADDRESS SET FORTH IN THE
BOOKS AND RECORDS OF THE COMPANY. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY SUCH SUIT, LEGAL ACTION OR
PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT ANY SUIT,
LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 7.14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.14.
SECTION 7.15. No Waiver of Rights. No failure or delay on the part of
any party in the exercise of any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude other or further exercise thereof or of any other right or power.
The waiver by any party or parties hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach hereunder. All rights and remedies
41
existing under this Agreement are cumulative and are not exclusive of any rights
or remedies otherwise available.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
[NEWCO],
by
--------------------------
Name:
Title:
XXXXXX AUTOMOTIVE HOLDINGS L.L.C.,
by
--------------------------
Name:
Title:
SPECIFIED SHAREHOLDERS:
----------------------
[ ]
----------------------
[ ]
----------------------
[ ]
Schedule I
Names of Acceptable Designees as
Dealer Directors
Xxxxx XxXxxxx
Xxxxx Xxxxxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxx
Xxx Xxxxxx
Xxxxxx X. XxXxxxx
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx (X.X.) Tomm
