EXHIBIT C
EXECUTION COPY
REGISTRATION RIGHTS AND GOVERNANCE AGREEMENT, dated as of
July 3, 2001 (this "Agreement"), by and among Sun International Hotels Limited,
a company incorporated under the laws of The Bahamas (the "Company"), Sun
International Investments Limited, a company incorporated under the laws of the
British Virgin Islands ("SIIL"), World Leisure Group Limited, a company
incorporated under the laws of the British Virgin Islands ("WLG"), Kersaf
Investments Limited, a company incorporated under the laws of the Republic of
South Africa ("Kersaf"), Caledonia Investments PLC, a company incorporated under
the laws of England ("Caledonia"), Mangalitsa Limited, a company incorporated
under the laws of The Bahamas ("Mangalitsa"), Cement Merchants SA, a company,
incorporated under the laws of Panama ("CMS" and together with WLG, Kersaf,
Caledonia and Mangalitsa, the "SIIL Investors"), Rosegrove Limited, a company
incorporated under the laws of the British Virgin Islands ("Rosegrove"), Royale
Resorts Holdings Limited, a company incorporated under the laws of Bermuda
("RRHL") and Sun International Inc., a company incorporated under the laws of
Panama ("SINC").
R E C I T A L S
WHEREAS, each of the SIIL Investors (other than CMS and
Mangalitsa) is a party to that certain Subscription and Shareholders' Agreement,
dated as of October 11, 1993 (the "SIIL Agreement"), relating to SIIL;
WHEREAS, each of SIIL and the Company is a party to that
certain Combination and Restructuring Agreement, dated as of December 12, 1994
(the "SIHL Agreement");
WHEREAS, each of Mangalitsa and RRHL, among others, are party
to that certain Shareholders' Agreement relating to Rosegrove (the "Rosegrove
Agreement" and together with the SIIL Agreement and the SIHL Agreement, the
"Existing Agreements");
WHEREAS, the SIIL Investors shall arrange for the winding-up
and dissolution, and accordingly the distribution (the "Distribution") of the
shares, par value $0.001 per share, of the Company to (a) the shareholders of
SIIL, WLG (or a wholly-owned subsidiary of WLG) and Rosegrove and (b) then by
Rosegrove to its shareholders, RRHL (or a wholly-owned subsidiary thereof), and
Mangalitsa.
WHEREAS, CMS may acquire the CMS Shares from RRHL pursuant to
an option (the "CMS Option") or otherwise.
WHEREAS, the parties hereto desire to (1) modify and supersede
certain provisions contained in the Existing Agreements concerning (a) the
transfer and acquisition of Shares (as defined below) and (b) governance
arrangements in respect of the board of directors of SIHL (as constituted from
time to time, the "Board of Directors" or the "Board"), and (2) provide each of
the SIIL Investors and their Affiliates (as defined herein) with certain
registration rights;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 Certain Definitions. For the purposes of this
Agreement, the following terms shall have the following meanings:
"Acquisition Proposal" means any proposal or inquiry relating
to any merger, consolidation, tender offer, exchange offer, sale of a
Substantial Part of the Company, sale of ten percent (10%) or more of the Equity
Securities or similar business combination transaction involving the Company or
any principal operating or business unit of the Company or its Subsidiaries.
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under direct or indirect common control
with such Person. For the purposes of this Agreement, "control," when used with
respect to any specified Person, shall mean, (a) as determined with respect to
each Person pursuant to the laws of the jurisdiction where such Person is
organized, the actual or deemed direction of the management and policies of such
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise, or (b) the power to direct the management and policies
of such Person whether through ownership of voting securities, by contract or
otherwise if there exists any agreement, arrangement or understanding, whether
oral or written, between such specified Person and the Person who has such power
(together with any Affiliates thereof, the "Power Person") with regard to the
Power Person taking an action that the specified Person is prohibited from
taking under this Agreement or the specified Person not taking an action it is
required to take under this Agreement, or matters related to either of the
foregoing; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing. A Person shall be deemed to direct the management
and policies of another Person if such Person has a designee on such other
Person's Board of Directors or other governing body or such other Person has a
designee on such Person's Board of Directors or other governing body.
"Beneficial Ownership" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act; and the terms "Beneficially Owned" and
"Beneficially Owns" shall have meanings correlative to the foregoing.
"Business Combination" means any one of the following
transactions:
(i) any merger or consolidation of the Company or any of
its Subsidiaries with any Person, or any tender or exchange offer by any such
Person for any Equity Securities of the Company or any of its Subsidiaries; or
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(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition by the Company (in one transaction or a series of
transactions) to any Person of assets constituting a Substantial Part of the
Company; or
(iii) the issuance, exchange or transfer by the Company
or any of its Subsidiaries (in one transaction or series of transactions) of any
securities of the Company or any of its Subsidiaries to any member of the WLG
Group, the Kersaf Group, the Caledonia Group or the CMS Group that increases
such member's Voting Interest, or to any other Person in excess of ten percent
(10%) of the Shares issued and outstanding as of the date of such issuance; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Company; or
(v) any transaction having, with respect to the Company,
the effect of a "Rule 13e-3 transaction" (as defined in Rule 13e-3(a)(3) of the
Securities Exchange Act); or
(vi) any agreement, contract or other arrangement with
any Person providing for any one or more of the actions specified in clauses (i)
to (v) above.
"Caledonia Group" means, as of any date, Caledonia and all of
its Affiliates as of such time, but excluding any Exempt Caledonia Affiliates.
"Caledonia/CMS Tag Shares" means the Caledonia Tag Shares and
the CMS Tag Shares; provided, however, that in the event both the Caledonia
Group and the CMS Group shall elect to register Registrable Securities in
connection with any registration pursuant to Article V and the provisions of
Article V shall so require, the number of Registrable Securities to be
registered by each such Group shall be reduced on a pro rata basis relative to
the number of Registrable Securities proposed to be registered by each such
Group.
"Caledonia Relinquishing Event" means, at any time, Beneficial
Ownership by the Caledonia Group of less than two million (2,000,000) Shares;
provided, however, that if the Caledonia Group shall Beneficially Own a number
of Shares constituting five percent (5%) or more of the Company's Equity
Securities as of such time, a majority of the Independent Directors may direct
that a Caledonia Relinquishing Event shall be deemed not to have occurred.
"Charter Documents" means the Articles of Association and the
Memorandum of Association of the Company as in effect from time to time.
"CMS Group" means, as of any date, CMS and all of its
Affiliates as of such time.
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"CMS Relinquishing Event" means, at any time, Beneficial
Ownership by the CMS Group of less than one million (1,000,000) Shares.
"CMS Shares" means the 1,686,984 Shares subject to the CMS
Option (whether or not the CMS Option is exercised).
"Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act or the
Securities Exchange Act.
"Company's Broker" means any of Bear Xxxxxxx, Xxxxxxx Xxxxx,
Deutsche Bank or Xxxxxx Brothers.
"Controlled Affiliate" shall mean with respect to any Person,
any Affiliate thereof which is controlled by such Person.
"Convertible Securities" means securities of the Company
convertible into or exchangeable for Shares.
"Equity Security" means (i) Shares, (ii) Convertible
Securities and (iii) any options, warrants or other rights issued by the Company
to acquire Shares or Convertible Securities.
"Group" means any of the WLG Group, the Kersaf Group, the
Caledonia Group or the CMS Group.
"Independent Director" means a director of the Company who (a)
is not (apart from such directorship) (i) an officer, Affiliate, employee,
principal stockholder, consultant or partner of any member of the WLG Group or
the Caledonia Group or of any entity that was dependent upon any member of the
WLG Group or the Caledonia Group for more than 5% of its revenues or earnings in
its most recent fiscal year or (ii) an officer, employee, consultant or partner
of the Company or any Affiliate of the Company or an officer, employee,
principal stockholder, consultant or partner of an entity that was dependent
upon the Company or any Affiliate of the Company for more than 5% of its
revenues or earnings in its most recent fiscal year or (b) is appointed by any
of WLG, Caledonia or CMS (whether or not such director is independent in
accordance with clause (a) above) but with respect to the matter under
consideration by the Board, the Group appointing such director does not have an
interest (financial or otherwise) that is different than the interest of the
Company.
"Kersaf Group" means, as of any date, Kersaf and all of its
Affiliates as of such time (including, as of the date hereof, RRHL), but
excluding any Exempt Kersaf Affiliates.
"Omnibus Agreement" means that certain Omnibus Agreement,
dated the date hereof, by and among the parties hereto, among others.
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"Pledge Agreement" means that certain Pledge Agreement, dated
as of the date hereof, by and among the Company and RRHL.
"Person" means any individual, firm, partnership, company,
joint stock company, corporation, partnership, trust, estate, incorporated or
unincorporated association, syndicate, joint venture or organization, or any
government or any department, agency or other political subdivision thereof, or
any other entity, and shall include any successor of any such entity.
"Relinquishing Shareholder" means any of the Caledonia Group,
the CMS Group or the WLG Group, with respect to which the Caledonia
Relinquishment Event, the CMS Relinquishment Event or the WLG Relinquishment
Event, as the case may be, shall have occurred.
"Relinquishment Date" means as to any of the Caledonia Group,
the CMS Group or the WLG Group, such time as the Caledonia Relinquishment Event,
the CMS Relinquishment Event or the WLG Relinquishment Event, as the case may
be, shall have occurred.
"Retaining Shareholder" means any of the Caledonia Group or
the WLG Group, with respect to which the Caledonia Relinquishment Event or the
WLG Relinquishment Event, as the case may be, shall not have occurred.
"Securities Act" means the United States Securities Act of
1933 or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Securities Exchange Act" means the United States Securities
Exchange Act of 1934 or any successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Shares" means (a) the ordinary shares, par value $0.001 per
share, of the Company (including any dividends in kind thereon), or (b) any
other class of stock resulting from any reclassification, exchange,
substitution, combination, stock split or reverse stock split, including in
connection with any merger or otherwise, of such ordinary shares.
"Standstill Expiration Date" means June 30, 2006.
"Subsidiary" means, with respect to any Person, any
corporation or other business entity directly or indirectly controlled by such
Person.
"Substantial Part of the Company" means, as of any date,
twenty percent (20%) or more of the book value of the consolidated tangible
assets of the Company and its Subsidiaries, taken as a whole (without regard to
any liabilities of the Company or any of its Subsidiaries), as of the end of its
most recent fiscal quarter ending prior to the time the determination is made.
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"Underwriter Out" means the occurrence of any of the
following: (1) trading in securities generally on the New York Stock Exchange or
the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (2) a banking
moratorium shall have been declared by federal or state authorities, (3) there
shall have been a declaration of a national emergency or war by the United
States or (4) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it impracticable or inadvisable to proceed with a public
offering or delivery of Shares in the amount contemplated by the Minimum Year
One Sale.
"Underwritten Public Offering" shall mean a sale of securities
of the Company to an underwriter or underwriters for re-offering to the public,
which shall include customary selling efforts.
"Unsolicited Tender Offer" means any bona fide tender or
exchange offer by any Person (other than by any member of any Group or by any
"group" (as such term is used for purposes of Section 13(d) of the Securities
Exchange Act) that includes any such member) for all of the Equity Securities of
the Company that has not been solicited, directly or indirectly, by any member
of any Group.
"Voting Interest" means, as of any date, a fraction, expressed
as a percentage, the numerator of which is the aggregate number of Shares
Beneficially Owned by any Group on such date and the denominator of which is the
total number of Shares outstanding on such date.
"WLG Group" means, as of any date, WLG and all of its
Affiliates as of such time.
"WLG Relinquishing Event" means, at any time, Beneficial
Ownership by the WLG Group of less than two million (2,000,000) Shares;
provided, however, that if the WLG Group shall Beneficially Own a number of
Shares constituting five percent (5%) or more of the Company's Equity Securities
as of such time, a majority of the Independent Directors may direct that a WLG
Relinquishing Event shall be deemed not to have occurred.
SECTION 1.2 Other Definitions. As used herein, the following
terms shall have the meanings ascribed to them in the Section of this Agreement
opposite each such term:
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Term Section
---- -------
Additional Shares 4.2(a)(i)
Affiliated Transferee 4.1
Agreement Preamble
Authorized Representative 5.1(d)
Board Recitals
Board of Directors Recitals
Broker Sale 4.2(b)
Broker Sale Requirements 4.2(b)
Bulk Shares 4.6
Caledonia Preamble
Caledonia Sale Trigger 5.3.2(b)
Caledonia Tag Shares 4.3(a)
CMS Preamble
CMS Option Recitals
CMS Sale Trigger 5.3.2(b)
CMS Tag Shares 4.5(a)
Company Preamble
Company Event 5.2.1(b)
Company Kersaf Sale 4.2(a)(ii)
Company Slate 3.4
Contract Date 4.6(d)
Demand Piggyback Shares 5.3.1(a)(i)
Demand Registration 5.2.1(a)
Distribution Recitals
Election Period 5.3.1(a)(i)
Excess Sale 4.2(b)
Excess Shares 4.2(b)
Exempt Caledonia Affiliates 2.5(b)
Exempt Kersaf Affiliates 2.4
Existing Agreements Recitals
Holder 5.1(c)
Incidental Registration 5.3.1(b)
Indemnified Party (ies) 5.7.1
Initiating Holder 5.2.1(a)
Kersaf Preamble
Mangalitsa Preamble
Minimum Year One Sale 4.2(a)(i)
Minimum Year One Sale Date 4.2(a)(i)
New Board 3.2
New Member 3.2
Ninetieth Day 5.4.2(a)
Notice 5.3.1(a)(i)
Offer Price 4.6(a)
Offered Shares 4.6(a)
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Term Section
---- -------
Offeree 4.6
Offeree Option 4.6(b)
Offeree Option Period 4.6(b)
Offering Notice 4.6(a)
Permitted Transferee 5.1(c)
Prior Registration Delay 5.2(b)
Proxy Grantees 3.6
Proxy Grantors 3.6
Proxy Shares 3.6
Registrable Securities 5.1(b)
Registration Expenses 5.6
Relinquishing Date 3.4
Relinquishing Shareholder 3.4
Retaining Shareholder(s) 3.4
Rosegrove Preamble
Rosegrove Agreement Recitals
RRHL Preamble
Selling Shareholder 4.6
Shareholders Meeting 3.1
SIHL Agreement Recitals
SIIL Preamble
SIIL Agreement Recitals
SIIL Investors Preamble
SINC Preamble
Sixtieth Day 5.4.2(a)
Third Party Offer 4.6
Third Party Purchaser 4.6
Threshold Number 4.6
Transfer 4.1
Underwriter 5.2.3(a)
Unencumbered WLG Shares 4.4(a)
WLG Preamble
WLG Full Transfer Date 4.4(b)
Written Consent 3.1
ARTICLE II
BUSINESS COMBINATIONS; STANDSTILL
SECTION 2.1 Actions with Respect to Equity Securities. Subject
to Sections 2.2, 2.3, 2.4, 2.5, 2.6, 4.2(e), 4.3(d), 4.4(d) and 4.5(d), none of
WLG, Kersaf, Caledonia or CMS shall, and each shall cause its respective
Affiliates not to, directly or indirectly, at any time prior to the Standstill
Expiration Date, (a) purchase or otherwise acquire, or propose or offer to
purchase or acquire, or become the Beneficial Owner of,
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whether by tender offer, market purchase, privately negotiated purchase, merger
or otherwise, any Equity Securities of the Company, (b) request the Company (or
its directors, officers, employees or agents) to amend or waive any of the
provisions contained in Article II, or (c) propose, publicly disclose any
intention to disclose, vote for or otherwise consummate any Business Combination
or (d) take any other action which would reasonably be expected to require
pursuant to law the Company to make a public announcement regarding the
possibility of a Business Combination.
SECTION 2.2 Actions by the Board of Directors. Notwithstanding
any provision in this Article II to the contrary, the members of any Group may
make an Acquisition Proposal or a proposal for a Business Combination to the
Board of Directors if any other Person (other than any member of any Group in
violation or breach of its obligations under Article II) shall have made an
Acquisition Proposal or a proposal for a Business Combination and the Board of
Directors (with the concurrence of a majority of the Company's Independent
Directors) has determined to enter into discussions or negotiations with such
Person with respect to such Acquisition Proposal or Business Combination.
SECTION 2.3 Permitted Purchases by WLG. WLG and its Affiliates
shall be permitted to purchase or otherwise acquire Shares either (a) pursuant
to the Offeree Option, (b) if, after giving effect to any such purchase or
acquisition, the aggregate number of Shares owned by WLG and its Affiliates
shall not exceed five million nine hundred thousand (5,900,000) or (c) pursuant
to any of the Company's stock option plans.
SECTION 2.4 Permitted Actions by the Kersaf Group.
Notwithstanding anything to the contrary contained in this Agreement, at any
time and from time to time, the investment funds managed by Affiliates of Kersaf
(other than its Controlled Affiliates) (the "Exempt Kersaf Affiliates") may hold
and purchase Equity Securities of the Company; provided that any such Equity
Securities are acquired and held in the ordinary course of business and for
investment purposes only. In addition, Kersaf and its Affiliates shall not be in
breach of the provisions of this Article II by reason of any action or inaction
taken by any Exempt Kersaf Affiliate in the ordinary course of such Exempt
Kersaf Affiliate's business in connection with Equity Securities acquired or
held in accordance with this Section 2.4.
SECTION 2.5 Permitted Purchases by Caledonia.
(a) Notwithstanding Section 2.5(c), the Caledonia Group
may purchase Shares pursuant to the terms of the Offeree Option.
(b) At any time and from time to time, the investment
funds managed by Affiliates of Caledonia (other than its Controlled Affiliates)
(the "Exempt Caledonia Affiliate") may hold and purchase Equity Securities of
the Company; provided that any such Equity Securities are acquired and held in
the ordinary course of business and for investment purposes only. In addition,
Caledonia and its Affiliates shall not be in breach of the provisions of this
Article II by reason of any action or inaction taken by any
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Exempt Caledonia Affiliate in the ordinary course of such Exempt Caledonia
Affiliate's business in connection with Equity Securities acquired or held in
accordance with this Section 2.5(b).
(c) The Caledonia Group may purchase or acquire any other
Shares; provided, however, that, after giving effect to any such purchase or
acquisition, the Caledonia Group shall not Beneficially Own in excess of five
million nine hundred thousand (5,900,000) Shares in the aggregate. For the
avoidance of doubt, the 5,900,000 Share limitation may be exceeded to the extent
that after giving effect to any purchase by the Caledonia Group pursuant to the
Offeree Option, the Caledonia Group may Beneficially Own a number of Shares in
excess of 5,900,000.
SECTION 2.6 Permitted Purchases by CMS.
(a) The CMS Group may purchase or acquire any Shares;
provided, however, that, after giving effect to any such acquisition or
purchase, the CMS Group shall not Beneficially Own in excess of four million
(4,000,000) Shares in the aggregate.
(b) For the avoidance of doubt, the CMS Group may acquire
the CMS Shares pursuant to the exercise of the CMS Option or otherwise.
SECTION 2.7 Acquisition of Kersaf Group Shares. None of the
Company or WLG shall, and the Company shall cause its Controlled Affiliates and
WLG shall cause its Affiliates not to, directly or indirectly, at any time prior
to the Standstill Expiration Date, (a) purchase or otherwise acquire, or propose
or offer to purchase or acquire, or become the Beneficial Owner of, whether by
tender offer, market purchase, privately negotiated purchase, merger or
otherwise, any securities of Kersaf, (b) request Kersaf (or its directors,
officers, employees or agents) to amend or waive any of the provisions contained
in this Section 2.7, (c) propose, publicly disclose any intention to disclose,
vote for or otherwise consummate any Business Combination (as such term is
modified to apply to Kersaf) or (d) take any action which would reasonably be
expected to require pursuant to law Kersaf to make a public announcement
regarding the possibility of a Business Combination (as such term is modified to
apply to Kersaf).
SECTION 2.8 Beneficial Ownership. For purposes of ensuring
compliance with this Agreement, (a) each of WLG, Kersaf, Caledonia and CMS
represents and warrants severally and not jointly that the number of Shares
Beneficially Owned, as of the date hereof, by each of the WLG Group, the Kersaf
Group and the Caledonia Group is as set forth on Annex A hereto and (b) each of
the Company and WLG represents and warrants severally and not jointly that the
number of securities of Kersaf Beneficially Owned, as of the date hereof, by
each of the Company and the WLG Group is as set forth on Annex A.
SECTION 2.9 Enforcement and Waiver. Except with respect to
Sections 2.7 and 2.8(b), no member of the Kersaf Group or the CMS Group and, in
the event that the WLG Group or the Caledonia Group shall at any time
Beneficially Own
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less than two million five hundred thousand (2,500,000) Shares, respectively,
the WLG Group and the Caledonia Group, as the case may be, shall have any rights
or remedies for a breach or violation of, be entitled to enforce, nor shall a
waiver of such member be required in connection with the waiver of any of, the
provisions of this Article II.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 General. From and after the execution of this
Agreement, each of WLG, Caledonia and CMS shall, and in the case of WLG and
Caledonia, if applicable, shall cause each of its Controlled Affiliates to, vote
all Shares it Beneficially Owns (including any Proxy Shares) at any regular or
special meeting of the shareholders of the Company (each, a "Shareholders
Meeting") or in any written consent executed in lieu of such a meeting of
shareholders (a "Written Consent"), and shall take all other actions necessary,
to give effect to the provisions of this Agreement (including, without
limitation, Section 3.4) and to ensure that the Charter Documents do not, at any
time hereafter, conflict in any respect with the provisions of this Agreement.
In addition, each of WLG, Caledonia and CMS shall, and, in the case of WLG and
Caledonia, if applicable, shall cause each of its Controlled Affiliates to, vote
all Shares it Beneficially Owns (including any Proxy Shares) at any Shareholders
Meeting or act by Written Consent with respect to such Shares, upon any matter
submitted by the Board of Directors for action by the Company's shareholders or
with respect to which such Person may vote or act by Written Consent, in
conformity with the specific terms and provisions of this Agreement and the
Charter Documents.
SECTION 3.2 Kersaf Director. Effective as of the date hereof,
Kersaf shall remove Xx. Xxxxx Xxxxxx from, or cause Xx. Xxxxx Xxxxxx to resign,
his office as a director of the Company. Immediately following the removal or
resignation of Xx. Xxxxxx, the Board shall effect the appointment of Xx.
Xxxxxxxx von Rantzau or Xx. Xxxxxxxx xxx Xxxxxxx or, if neither is willing to
serve as a director, another individual jointly designated by WLG and Caledonia
as a director of the Company (the "New Member"). As a result of the foregoing,
as of the date hereof the Board of Directors of the Company shall consist of Xxx
Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx and the New Member (the "New
Board"). Following the date hereof, the Kersaf Group shall not have any right to
designate, nominate or otherwise appoint any individual to the Board of
Directors. In furtherance of the foregoing, Kersaf shall, and, if applicable,
shall cause each member of the Kersaf Group, to remove each of its nominees,
designees or appointees to any board of directors, committee or other body at
any of the Company or Sun Resorts Limited, a company incorporated under the laws
of Mauritius. If the New Member is an individual other than Xx. Xxxxxxxx von
Rantzau or Xx. Xxxxxxxx xxx Xxxxxxx, then immediately following the transfer of
at least one million (1,000,000) CMS Shares to a member of the CMS Group
pursuant to the CMS Option or otherwise, WLG and Caledonia shall remove the New
Member from, or cause the New Member to resign, his office as a director of the
Company. Thereafter, the Board shall effect the appointment of an individual
designated by CMS; provided, however, that
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WLG and Caledonia shall have first consented to the appointment of such
individual; provided, further, that WLG and Caledonia shall be deemed to have
consented to the designation of Xx. Xxxxxxxx xxx Xxxxxxx and Xx. Xxxxxxxx von
Rantzau.
SECTION 3.3 Amendment of Charter Documents. As soon as
practicable after the date hereof, (a) the Company shall (i) adopt, either at a
meeting of the Board or by unanimous written consent of the Board of Directors,
resolutions amending the Charter Documents of the Company to provide (A) that
the New Board shall remain in office until the Company's annual general
shareholders meeting in 2004, and (B) that the Charter Documents may thereafter
be amended by the Board of Directors (any such amendment shall not be
inconsistent with Section 3.1) and (ii) submit and recommend such amendments for
approval at a Shareholders Meeting or by Written Consent, and (b) each of WLG,
Caledonia and CMS shall, and, in the case of WLG and Caledonia shall cause, if
applicable, each member of its respective Group to vote its respective Shares
(and any Proxy Shares) to approve such amendments.
SECTION 3.4 Election of Directors; Number and Composition. The
Company agrees to include in the slate of directors submitted by the Company to
the shareholders for election (the "Company Slate") (a) one (1) individual
designated by WLG, (b) one (1) individual designated by Caledonia, and (c)
following the transfer of at least one million (1,000,000) CMS Shares to a
member of the CMS Group pursuant to the CMS Option or otherwise, one (1)
individual designated by CMS; provided, however, that WLG and Caledonia shall
have first consented to the appointment of such individual; provided, further,
that WLG and Caledonia shall be deemed to have consented to the designation of
Xxxxxxxx xxx Xxxxxxx and Eberhart von Rantzau. If, at any time, there shall have
occurred a WLG Relinquishing Event, a Caledonia Relinquishing Event or a CMS
Relinquishing Event, then, effective as of the applicable Relinquishment Date,
the Relinquishing Shareholder(s) shall no longer have the right to designate a
nominee to be included in the Company Slate and shall immediately cause its then
current nominee to resign as a member of the Board, effective as of the
Relinquishment Date. Following the Relinquishment Date(s), the Retaining
Shareholder(s) acting in good faith shall jointly designate the nominee(s) of
the Relinquishing Shareholder(s). At the point that there is no Retaining
Shareholder, the remaining Board shall replace the directors who resign or are
removed as a result of occurrence of a Relinquishment Date.
SECTION 3.5 Removal and Replacement of Directors. Each of WLG,
Caledonia and CMS shall have the exclusive right to remove any director
appointed by it and appoint another director in his or her place. Any such
removal or appointment shall take effect in each case on the giving of a notice
in writing signed by a director or the Secretary (or other authorized
representative) of WLG, Caledonia or CMS, as the case may be, giving the notice
to the Secretary of the Company at its registered office or at a meeting of the
Board. Each of WLG, Caledonia and CMS shall have the exclusive right to replace
any director appointed by it who ceases to be a director of the Company other
than by reason of his or her removal pursuant to this Section 3.5.
SECTION 3.6 Voting of Kersaf Group Shares. Effective as of the
date hereof, each of SIIL, Rosegrove, SINC and RRHL (collectively, the "Proxy
Grantors")
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shall grant an irrevocable proxy to each of WLG, Mangalitsa and CMS
(collectively, the "Proxy Grantees") pursuant to which each of WLG, Mangalitsa
and CMS shall hereinafter have the right to vote the Shares as set forth on
Annex B, in its sole and absolute discretion (the "Proxy Shares"). The voting
rights granted to WLG, Mangalitsa and CMS pursuant to this Section 3.6 shall
terminate with respect to any Shares sold by the Kersaf Group (or any permitted
transferee thereof), foreclosed upon or sold by the Company pursuant to the
Pledge Agreement or transferred to the CMS Group in accordance with the terms
hereof as of the date of the consummation of such sale or transfer and, (a) upon
the request of Kersaf's Authorized Representative, the Company shall remove any
restrictive legend from the Shares sold in such sale and amend any proxy in
respect of such Shares and (b) each of the Proxy Grantors and Proxy Grantees
shall amend each irrevocable proxy to ensure that (i) in the case of a sale of
Proxy Shares granted to WLG or Caledonia, the reduction in voting rights as a
result of such sale shall be effected on a pro rata basis and (ii) in the case
of a sale of Proxy Shares granted to CMS, the reduction in voting rights as a
result of such sale shall be solely as to CMS.
ARTICLE IV
RESTRICTIONS ON TRANSFER OF SHARES
SECTION 4.1 Restrictions on Transfer of Shares. Each of WLG,
Kersaf, Caledonia and CMS hereby agrees that it will, and, if applicable, shall
cause each member of its respective Group, except for transfers to any entity
that is, directly or indirectly, a wholly-owned Controlled Affiliate which
agrees in writing to be bound by the terms and provisions of this Agreement to
the same extent as the transferor party (an "Affiliated Transferee"), not, and
will not permit any Affiliated Transferee to, directly or indirectly, sell,
give, assign, hypothecate, pledge, encumber, grant a security interest in or
otherwise dispose of (whether by operation of law or otherwise) (each, a
"transfer") any Shares or any right, title or interest therein or thereto
(whether by operation of law or otherwise) except as provided in and in strict
accordance with this Article IV and Article V. Any attempt to transfer any
Shares or any rights thereunder in violation of the preceding sentence shall be
null and void ab initio; provided, however, that any member of a Group may
hypothecate, pledge, encumber or grant a security interest in the Shares to any
lending institution; provided, further, that any such hypothecation, pledge,
encumbrance or grant of a security interest by any such member shall be made
subject to all of the terms and conditions of this Agreement and that such
lending institution(s) shall acknowledge the same in a writing delivered to the
Company. For the avoidance of doubt, transfers in connection with the
Distribution or from RRHL to a member of the CMS Group pursuant to the exercise
of the CMS Option or otherwise and any transfer to an Affiliated Transferee
within such Affiliated Transferee's Group shall not be subject to this Article
IV.
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SECTION 4.2 Permitted Transfers by Kersaf.
(a) Minimum Year One Sale.
(i) No later than June 30, 2002 (the "Minimum Year
One Sale Date"), the Kersaf Group shall complete the sale of no less than two
million (2,000,000) Shares pursuant to an Underwritten Public Offering (the
"Minimum Year One Sale"). If the conditions giving rise to any Underwriter Out,
Company Event or Prior Registration Delay exist at any time after the tenth
(10th) month following the date hereof, the Minimum Year One Sale Date shall be
extended until such time as such conditions are no longer continuing plus the
lesser of (x) the number of days reasonably requested by the Underwriter to
consummate the Minimum Year One Sale and (y) forty-five (45) days; provided,
however, that with respect to an Underwriter Out such extension shall not
commence until such time as Kersaf shall deliver written notice thereof to the
Company stating that the conditions giving rise to an Underwriter Out exist.
Subject to Section 5.3.2(a), the Kersaf Group may, at its option, elect to
increase the number of Shares to be sold in such Minimum Year One Sale by up to
an additional two million (2,000,000) Shares (the "Additional Shares").
(ii) Upon the execution of this Agreement and as a
condition precedent to the effectiveness of the terms hereof, Kersaf shall, and
shall cause members of the Kersaf Group that are Controlled Affiliates, as
applicable, to authorize, execute and deliver to the Company a power of attorney
(together with stock powers) with full power of substitution authorizing the
Company, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind to, in the event that the Kersaf Group shall
have failed to complete the Minimum Year One Sale in accordance with Section
4.2(a)(i), take all reasonable measures to effect the Minimum Year One Sale as
soon as practicable (the "Company Kersaf Sale"). The Company shall deliver to
Kersaf all of the proceeds of the Company Kersaf Sale (net of any underwriters'
discounts and commissions, registration fees and the Company's documented and
reasonable out of pocket expenses incurred in connection with such Company
Kersaf Sale) as soon as practicable, and in any event, no more than five (5)
days thereafter. The Company Kersaf Sale shall be deemed to constitute the
Minimum Year One Sale for all purposes of this Agreement.
(iii) Kersaf hereby waives, and shall cause the
members of the Kersaf Group to waive, any and all claims of fiduciary duty or
other duty of loyalty or care on behalf of the Company, and no implied duties or
obligations shall be read into this Agreement against the Company, as a result
of any action or inaction by the Company in connection with a Company Kersaf
Sale; provided, however, that the Company shall use commercially reasonable
efforts to consummate the Company Kersaf Sale on commercially reasonable terms
(including price) as determined by the Company in good faith; provided, further,
that Kersaf agrees and acknowledges that the terms and conditions (including
price) may be less favorable than if such sale were not required to be
consummated as expeditiously as possible.
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(iv) In the event that prior to the date that is
forty five (45) days prior to the Minimum year One Sale Date (as extended
pursuant to and in accordance with the provisions of Section 4.2(a)), Kersaf
shall have not consummated the Minimum Year One Sale or otherwise shall not be
in a position whereby it would reasonably be expected to consummate the Minimum
Year One Sale prior to the Minimum Year One Sale Date (as so extended), Kersaf
covenants and agrees that it shall, and shall cause its Affiliate to, promptly
(and in any event no later than forty (40) days prior to the Minimum Year One
Sale Date (as so extended)) deposit two million (2,000,000) Shares with the
Company, which the Company may use to effect the Company Kersaf Sale.
(b) Additional Sales by the Kersaf Group. Subject to the
requirements of applicable law and any customary restrictions imposed by the
Underwriter, if applicable, the Kersaf Group may sell any unsold Additional
Shares and any other Shares owned by the Kersaf Group either (i) in one (1) or
more Underwritten Public Offerings of no fewer than one million (1,000,000)
Shares each or (ii) through the Company's Brokers in open market transactions
(each such sale, a "Broker Sale"); provided, however, that (A) prior to
commencing any Broker Sale, Kersaf shall, and shall cause each participating
member of the Kersaf Group, to enter into a brokerage agreement with such
Company's Broker (such agreement to be on commercially reasonable terms)
pursuant to which the Company's Broker shall serve as the Kersaf Group's agent,
(B) prior to the consummation of the Minimum Year One Sale, no more than three
hundred thousand (300,000) Shares shall be sold pursuant to Broker Sales in any
given ninety (90) day period and (C) following consummation of the Minimum Year
One Sale, no more than four hundred thousand (400,000) Shares shall be sold
pursuant to Broker Sales in any ninety (90) day period (the provisions set forth
in the foregoing clauses (A), (B) and (C), the "Broker Sale Requirements"). For
purposes of determining the number of Shares that may be sold pursuant to
Sections 4.2(b)(ii)(B) or 4.2(b)(ii)(C), the sale of any CMS Shares shall not be
included in the determination of such number of Shares. In the event that the
Kersaf Group sells more than four million (4,000,000) Shares (excluding the CMS
Shares) (such shares, the "Excess Shares" and each such sale an, "Excess Sale")
pursuant to one (1) or more Underwritten Public Offerings, Kersaf (or a member
of the Kersaf Group) shall pay to the Company (out of the aggregate proceeds of
any such Excess Sale, net of any underwriters' discounts and commissions,
registration fees and the documented and reasonable out-of-pocket expenses
incurred by the Kersaf Group in connection with such Underwritten Public
Offering), (x) if the price per Excess Share is less than or equal to twenty
seven United States Dollars ($27), five percent (5%) of such net proceeds; (y)
if the price per Excess Share is greater than twenty seven United States Dollars
($27) but less than thirty United States Dollars and thirty seven and one half
cents ($30.375), the amount required under clause (x) plus fifty percent (50%)
of the amount by which the price per Excess Share exceeds twenty seven United
States Dollars ($27), and (z) if the price per Excess Share is greater than
thirty United States Dollars and thirty seven and one half cents ($30.375), ten
percent (10%) of such net proceeds.
(c) CMS. RRHL may transfer to members of the CMS Group
the CMS Shares pursuant to the CMS Option or otherwise.
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(d) Pledge. RRHL shall pledge Shares having an aggregate
value, as of the date hereof, equal to twenty four million United States Dollar
($24,000,000), such pledge to be made pursuant to the Pledge Agreement.
Notwithstanding the foregoing, until such time as the CMS Shares are transferred
to a member of the CMS Group pursuant to the CMS Option or otherwise, RRHL shall
ensure that 1,686,984 Shares are not pledged by RRHL pursuant to the Pledge
Agreement. The Company shall be permitted to foreclose upon such pledge in
accordance with the terms and conditions of the Pledge Agreement and any such
foreclosure or sale of Shares by the Company shall not constitute a violation or
breach of this Article II.
(e) Unsolicited Tender Offer. The Kersaf Group may sell
or exchange any of its Shares pursuant to an Unsolicited Tender Offer.
SECTION 4.3 Permitted Transfers by Caledonia.
(a) Caledonia Tag Shares. Subject to Section
5.3.1(a)(ii), the Caledonia Group may, at its option, as part of the Minimum
Year One Sale, elect to sell up to two million (2,000,000) of its Shares (the
number of Shares to be sold by the Caledonia Group, the "Caledonia Tag Shares").
(b) Transfers Pursuant to Article V. Subject to the
conditions and limitations contained in Article V, the Caledonia Group may
transfer any of its Shares pursuant to any registration effected thereunder.
(c) Broker Sales by Caledonia. Subject to the
requirements of applicable law, the Caledonia Group may sell its Shares pursuant
to one (1) or more Broker Sales; provided, however, that prior to commencing any
Broker Sale, Caledonia shall, and shall cause each participating member of the
Caledonia Group to, enter into a brokerage agreement with such Company's Broker
(such agreement to be on commercially reasonable terms) pursuant to which the
Company's Broker shall serve as the Caledonia Group's agent.
(d) Unsolicited Tender Offer. The Caledonia Group may
sell or exchange any of its Shares pursuant to an Unsolicited Tender Offer.
SECTION 4.4 Permitted Transfers by WLG.
(a) First 500,000 Shares. Following June 30, 2003 (if the
WLG Full Transfer Date has not yet occurred), the WLG Group may sell up to five
hundred thousand (500,000) of its Shares (the "Unencumbered WLG Shares") in the
same manner as contemplated by clauses (A) and (B) of Section 4.4(b).
(b) Unrestricted WLG Sales. Immediately upon and
following the earlier (such date, the "WLG Full Transfer Date") of (i) June 30,
2004 and (ii) the date on which the Caledonia Group shall have disposed of an
aggregate of two million five hundred thousand (2,500,000) of its Shares, the
WLG Group may sell all or any part of its Shares pursuant to (A) any
registration of Shares effected under Article V, but subject to the conditions
and limitations set forth therein, or (B) subject to the
16
requirements of applicable law, pursuant to one or more Broker Sales; provided,
however, that prior to commencing any Broker Sale, WLG shall, and shall cause
each participating member of the WLG Group to, enter into a brokerage agreement
with such Company's Broker (such agreement to be on commercially reasonable
terms) pursuant to which the Company's Broker shall serve as the WLG Group's
agent.
(c) Stock Option Shares. The WLG Group may at any time
and from time to time transfer Shares purchased pursuant to the Company's stock
option plans.
(d) Unsolicited Tender Offer. The WLG Group may sell or
exchange any of its Shares pursuant to an Unsolicited Tender Offer.
SECTION 4.5 Permitted Transfers by CMS.
(a) CMS Tag Shares. Subject to Section 5.3.1(a)(ii), if
the CMS Shares are transferred to a member of the CMS Group pursuant to the CMS
Option or otherwise, the CMS Group may, at its option, as part of the Minimum
Year One Sale, elect to sell up to six hundred thousand (600,000) of its Shares
(the number of Shares to be sold by the CMS Group, the "CMS Tag Shares").
(b) Transfers Pursuant to Article V. Subject to the
conditions and limitations contained in Article V, the CMS Group may transfer
any of its Shares pursuant to any registration effected thereunder.
(c) Broker Sales by CMS. Subject to the requirements of
applicable law, the CMS Group may sell its Shares pursuant to one (1) or more
Broker Sales; provided, however, that prior to commencing any Broker Sale, CMS
shall, and shall cause each participating member of the CMS Group to, enter into
a brokerage agreement with such Company's Broker (such agreement to be on
commercially reasonable terms) pursuant to which the Company's Broker shall
serve as the CMS Group's agent.
(d) Unsolicited Tender Offer. The CMS Group may sell or
exchange any of its Shares pursuant to an Unsolicited Tender Offer.
SECTION 4.6 Bulk Transfers by WLG and Caledonia. Each of the
WLG Group, subject to compliance by the WLG Group with Section 4.4, or the
Caledonia Group (each, as the case may be, the "Selling Shareholder" and the
other, the "Offeree") may, upon receipt of a bona fide offer (a "Third Party
Offer") from a third party "person" or a "group" (as such terms are used for
purposes of Section 13(d) of the Securities Exchange Act) (a "Third Party
Purchaser") to purchase an aggregate number of Shares in excess of two million
and five hundred thousand (2,500,000) (the "Threshold Number") (for purposes of
this Section 4.6, transfers to a Third Party Purchaser within a twelve month
period shall be aggregated and this Section 4.6 shall apply (x) in the event of
an offer to purchase a number of Shares greater than or equal to the Threshold
Number, to all such Shares and (y) in the event of an offer for less than the
Threshold Number, which when aggregated with all prior transfers to such Third
Party Purchaser
17
during the preceding twelve (12) month period equals or exceeds the Threshold
Number, to any Shares proposed to be transferred in excess of the Threshold
Number (such Shares, the "Bulk Shares")), sell the Bulk Shares to such Third
Party Purchaser; provided, however, that prior to any such sale (other than to
the Underwriter in connection with an Underwritten Public Offering) the Selling
Shareholder shall have provided the Offeree with a right of first refusal in
accordance with the following procedures:
(a) Offering Notice. The Selling Shareholder shall offer
the Bulk Shares first to the Offeree, by sending written notice (an "Offering
Notice") to the Offeree, which shall state (a) the number of Bulk Shares
proposed to be transferred (the "Offered Shares"); (b) the proposed purchase
price per Offered Share (the "Offer Price"); and (c) the terms and conditions of
such sale, each as contained in the Third Party Offer. Upon delivery of the
Offering Notice, such offer shall be irrevocable unless and until the rights of
first refusal provided for herein shall have been waived or shall have expired.
(b) Offeree Option; Exercise. For a period of thirty (30)
business days after the giving of the Offering Notice (the "Offeree Option
Period"), the Offeree shall have the right (the "Offeree Option") but not the
obligation to purchase all but not less than all of the Offered Shares at a
purchase price equal to the Offer Price and upon the terms and conditions set
forth in the Offering Notice. The right of the Offeree to purchase the Offered
Shares under this Section 4.6 shall be exercisable by delivering written notice
of the exercise thereof, prior to the expiration of the Offeree Option Period,
to the Selling Shareholder. The failure of the Offeree to respond within the
Offeree Option Period shall be deemed to be a waiver of the Offeree Option,
provided that the Offeree may waive its rights under this Section 4.6 prior to
the expiration of the Offeree Option Period by giving written notice to the
Selling Shareholder.
(c) Closing. The closing of the purchase of Offered
Shares subscribed for by the Offeree under this Section 4.6 shall be held at the
executive office of the Company at 11:00 a.m., local time, on the sixtieth
(60th) day after the giving of the Offering Notice or at such other time and
place as the parties to the transaction may agree. At such closing, the Selling
Shareholder shall deliver certificates representing the Offered Shares, duly
endorsed for transfer and accompanied by all requisite transfer taxes, if any,
and such Offered Shares shall be free and clear of any liens or other
encumbrances and the Selling Shareholder shall so represent and warrant, and
shall further represent and warrant that it is the sole beneficial and record
owner of such Offered Shares. The Offeree shall deliver at the closing payment
in full in immediately available funds for the Offered Shares purchased. At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(d) Sale to a Third Party Purchaser. Unless the Offeree
elects to purchase all, but not less than all, of the Offered Shares, the
Selling Shareholder may sell all, but not less than all, of the Offered Shares
to a Third Party Purchaser on the terms and conditions contained in the Third
Party Offer as set forth in the Offering Notice and, subject to Section 5.1(c),
such Third Party Purchaser shall be entitled to the rights of the Selling
Shareholder as a Holder pursuant to Article V; provided, however, that such sale
18
is entered into within sixty (60) days after the earlier to occur of (i) the
waiver by the Offeree of its option to purchase the Offered Securities and (ii)
the expiration of the Offeree Option Period (the "Contract Date"); provided,
further, that such sale shall not be consummated unless and until (x) such Third
Party Purchaser shall represent in writing to the Company and the Offeree that
it is aware of the rights of first refusal of the Offeree contained in this
Agreement and of the other terms and conditions hereof and (y) prior to the
purchase by such Third Party Purchaser of any of such Offered Shares, such Third
Party Purchaser shall become a party to this Agreement and shall agree to be
bound by all the terms and conditions hereof applicable to the Selling
Shareholder; provided, however, that the rights of any party hereto as of the
date hereof to nominate a director to the Board is non-transferable. If such
sale is not consummated within thirty (30) days after the Contract Date for any
reason, then the restrictions provided for herein shall again become effective.
(e) Affiliate Transferees. For the avoidance of doubt,
the provisions of this Section 4.6 shall not apply to any transfers to
Affiliated Transferees.
SECTION 4.7 Conditions to Transfer. WLG, Kersaf, Caledonia
and, if applicable, CMS shall, and, if applicable, shall cause each of their
Controlled Affiliates to, (a) in connection with any transfer pursuant to
Sections 4.2, 4.3, 4.4, 4.5 and 4.6 that is not pursuant to a Broker Sale, an
Underwritten Public Offering, Unsolicited Tender Offer or in connection with the
Distribution or a transfer to an Affiliated Transferee, not make any transfer to
any Person who (together with such Person's Affiliates), after giving effect to
such transfer, would Beneficially Own more than fifteen percent (15%) of the
outstanding Equity Securities and (b) in connection with an Underwritten Public
Offering or a Broker Sale, direct the Underwriter or the Company's Broker(s), as
the case may be, to take reasonable steps to ensure a wide distribution of the
brokered or underwritten Shares in accordance with customary practices, and that
after giving effect to any such transfer no purchaser (together with its
Affiliates) would Beneficially Own fifteen percent (15%) or more of the
outstanding Shares of the Company as of such time.
SECTION 4.8 Permitted Transfers Generally. The restrictions
contained in this Article IV shall not apply to any transfer effected in
connection with the consummation of an Acquisition Proposal or Business
Combination which is supported by the Board of Directors (including the majority
of the Company's Independent Directors).
SECTION 4.9 Distribution. Each of the parties to the
Supplemental Agreement attached as Exhibit A hereto shall, and shall cause each
of its respective Affiliates, to perform the obligations set forth therein and
to consummate the Distribution and the other transactions contemplated thereby
as soon as possible.
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ARTICLE V
REGISTRATION RIGHTS
SECTION 5.1 General; Securities Subject to this Agreement.
(a) Grant of Rights. The Company hereby grants
registration rights to each Holder (as defined below) upon the terms and subject
to the conditions set forth in this Agreement.
(b) Registrable Securities. For the purposes of this
Agreement, "Registrable Securities" means any Shares owned by either the WLG
Group, the Kersaf Group, the Caledonia Group or the CMS Group as of the date
hereof or acquired prior to the Standstill Expiration Date by any such Group in
accordance with the terms hereof (including pursuant to the Distribution, the
exercise of the Offeree Option and the transfer of the CMS Shares to a member of
the CMS Group pursuant to the exercise of the CMS Option or otherwise);
provided, however, that Shares shall cease to be Registrable Securities for
purposes of this Agreement when a registration statement covering such
Registrable Securities has been declared effective under the Securities Act by
the Commission and all such Registrable Securities have been disposed of
pursuant to such effective registration statement.
(c) Holders of Registrable Securities. A Person shall be
a holder of Registrable Securities (each, a "Holder") whenever such Person is a
member of a Group (or a Person that has acquired Registrable Securities,
directly or indirectly, from a member of a Group in accordance with the terms
hereof (such Person, a "Permitted Transferee")), that (i) owns of record
Registrable Securities and (ii) agrees in writing to be bound by the terms of
this Article V applicable to the Group in which such Person is a member or of
which such Person is a transferee. For purposes of this Agreement, a Holder
shall be entitled to assign its rights hereunder to a Permitted Transferee and
such Permitted Transferee shall acquire such rights only if such Permitted
Transferee shall have acquired one million (1,000,000) or more Registrable
Securities pursuant to one (1) or more transfers made in accordance with the
terms and conditions set forth in this Agreement (including, without limitation,
pursuant to Section 4.6(d)) and, for the avoidance of doubt, shall include any
Person who shall have acquired one million (1,000,000) or more Registrable
Securities following the Standstill Expiration Date pursuant to any privately
negotiated purchase; provided, however, that the rights transferred to any
Permitted Transferee shall not include rights pursuant to Section
5.3.2(b)(second).
(d) If the Company receives conflicting instructions,
notices or elections from two (2) or more Persons with respect to the same
Registrable Securities, the Company may act upon the basis of the instructions,
notice or election received from the registered owner of such Registrable
Securities. With respect to each Group, the Company shall be entitled to rely
upon any instruction received from the authorized representative (each, an
"Authorized Representative") of each such Group appointed pursuant to Section
6.4. In furtherance of the foregoing, each of WLG, Kersaf, Caledonia
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and CMS hereby represents and warrants to the Company (severally and not
jointly) that the Authorized Representative, as appointed from time to time, has
and shall have the power and authority to make, execute, acknowledge and deliver
such notices, requests, instructions, certificates, stock powers and other
writing, and in general, to do any and all things and to take any and all
actions that such Authorized Representative, in its sole and absolute
discretion, may consider necessary, proper or convenient in connection with or
to carry out the activities described in this Article V as the agent and
attorney-if-fact of any Holder.
SECTION 5.2 Demand Registration Rights.
Section 5.2.1 Demand Registrations.
(a) Each Holder shall have the following rights to make
written requests (specifying the intended method of disposition) (such Holder,
the "Initiating Holder") for registration under the Securities Act (each, a
"Demand Registration") of all or part of the Shares which constitute such
Initiating Holder's Registrable Securities:
(i) with respect to Shares that as of the date hereof
are owned by any member of the Kersaf Group:
(A) no more than one (1) Demand Registration
covering any Shares transferable pursuant to Section 4.2(a); and
(B) following the Minimum Year One Sale, one (1)
or more Demand Registrations, each covering no less than one million (1,000,000)
Shares;
(ii) with respect to Shares that as of the date
hereof are owned, or thereafter acquired in accordance with the terms of this
Agreement, by any member of the Caledonia Group, following March 31, 2002, one
(1) or more Demand Registrations, each covering no less than one million
(1,000,000) Shares; and
(iii) with respect to Shares that as of the date
hereof are owned, or thereafter acquired in accordance with the terms of this
Agreement, by any member of the WLG Group:
(A) following June 30, 2003 (if the WLG Full
Transfer Date has not yet occurred), no more than one (1) Demand Registration,
covering no less than five hundred thousand (500,000) Shares; and
(B) following the WLG Full Transfer Date, one
(1) or more Demand Registrations, each covering no less than one million
(1,000,000) Shares; and
(iv) with respect to Shares that as of the date
hereof are owned, or thereafter acquired in accordance with the terms of this
Agreement, by any
21
member of the CMS Group, following March 31, 2002, one (1) or
more Demand Registrations, each covering no less than one million (1,000,000)
Shares.
(b) If at the time of any request to register Registrable
Securities pursuant to this Section 5.2.1, the Company is engaged in a
registered public offering, intends to file a registration statement solely with
respect to the sale of Shares by the Company within forty five (45) days of such
time or is engaged in any activity other than the filing of a registration
statement which, in the reasonable good faith determination of the Board of
Directors, after consultation with outside counsel, would be required to be
disclosed under applicable law as a result of such request and would be
materially and adversely affected by the requested registration (each, a
"Company Event"), then the Company may at its option, within five (5) business
days of such request, direct that such request be delayed, (A) in the case the
Company is engaged in a registered offering or intends to file such a
registration statement, for a reasonable period of time not in excess of the
lesser of (x) three (3) months from the date of such request or (y) forty five
(45) days from the effective date of such offering (provided, however, that
where such delay is requested by the Company as a result of its intention to
file a registration statement within forty five (45) days of such time, the
Company may exercise its rights hereunder only to the extent that such
registration statement is actually filed by the Company within such forty five
(45) day period) and (B) in the case of any other activity, for a reasonable
period of time not in excess of forty five (45) days from the date of such
direction by the Company, provided, however, that notwithstanding the foregoing
such forty five (45) day period may be extended to the extent that the failure
to file such registration statement is the result of the Company not having
available financial statements or other information required to be included in
such registration statement and the Company has used commercially reasonable
efforts to obtain such financial statements or other information as soon as
practicable. In the event any Initiating Holder(s) have made a written request
to the Company for a Demand Registration and the conditions described in the
immediately preceding sentence shall not exist as of the time of such request,
such Demand Registration may not be delayed except as a result of the Company
becoming involved in any activity other than the filing of a registration
statement which, in the reasonable good faith determination of the Board of
Directors, after consultation with outside counsel, would be required to be
disclosed under applicable law as a result of such Demand Registration and would
be materially and adversely affected by the requested registration (and such
circumstances shall be deemed to constitute a Company Event for all purposes of
this Agreement); provided, however, that such delay shall be made for a
reasonable period of time not in excess of forty five (45) days from the date of
such direction by the Company, provided, however, that notwithstanding the
foregoing such forty five (45) day period may be extended to the extent that the
failure to file such registration statement is the result of the Company not
having available the financial statements or other information required to be
included in such registration statement and the Company has used commercially
reasonable efforts to obtain such financial statements or other information as
soon as practicable. In addition, the Company shall not be required to file any
registration within six (6) months after the effective date of any other
registration statement of the Company (the "Prior Registration Delay").
Notwithstanding the foregoing, the Company shall, upon reasonable prior
22
written notice by any Holder, use its commercially reasonable efforts to be
prepared to file a registration upon the expiration of such six (6) months.
(c) The obligations of the Company to take the actions
contemplated by this Section 5.2.1 hereof with respect to an offering of Shares
shall be subject to the following conditions and limitations:
(i) Each participating Holder shall, and shall cause
each participating member of such Holder's Group to, conform to all applicable
requirements of the Securities Act and the Securities Exchange Act with respect
to the offering and sale of securities and advise each Underwriter, broker or
dealer through which any of the Registrable Securities are offered that the
Registrable Securities are part of a distribution that is subject to the
prospectus delivery requirements of the Securities Act.
(ii) Except if the Initiating Holder(s) pay any
incremental costs incurred by the Company, the fulfillment of the Company's
obligations in connection with such registration shall not require the Company
to prepare audited financial statements not required to be prepared for the
Company to comply with its obligations under the Securities Exchange Act as of
any date not coincident with the last day of any fiscal year of the Company.
(iii) As to the sale of any Additional Shares,
Caledonia Tag Shares or CMS Tag Shares and subject to Section 4.2(a)(i), the
Underwriter shall not be of the opinion that the sale of such Shares proposed to
be registered would have a material adverse effect on the market for the Shares
and, if applicable, any other securities issued by the Company.
Section 5.2.2 Effective Demand Registration. The Company shall
use reasonable commercial efforts to cause any Demand Registration to become
effective not later than ninety (90) days after it receives a request under
Section 5.2.1 hereof and to remain effective for the lesser of (i) the period
during which all Registrable Securities registered in the Demand Registration
are sold and (ii) one hundred and twenty (120) days; provided, however, that if
the Initiating Holder(s) requests the Company to withdraw such registration,
other than as the result of a breach by the Company, the Initiating Holder(s)
shall promptly pay all of the costs and expenses incurred by the Company in
connection with such registration.
Section 5.2.3 Underwriting Procedures.
(a) Selection of Underwriters. The offering of
Registrable Securities pursuant to a Demand Registration may be in the form of a
firm commitment underwritten offering and the managing underwriter selected for
such offering shall be an internationally recognized underwriter jointly
selected by, and engaged on terms and conditions mutually satisfactory to, the
Company and the Initiating Holder, each acting in good faith (having due regard
to the experience and relationship with the Company and the Initiating Holder(s)
of the managing underwriter) (the "Underwriter"). Each of the
23
parties agrees and acknowledges that any of Bear Xxxxxxx, Deutsche Bank and
Xxxxxxx Xxxxx shall, subject to the execution of customary underwriting
agreements on commercially reasonable terms therewith, be deemed to satisfy the
requirements of the immediately preceding sentence to serve as a managing
Underwriter or a member of an underwriting syndicate.
(b) Distribution by Underwriters. The managing
Underwriter selected for any offering shall enter into an agreement (containing
customary indemnification provisions and representations and warranties) with
the Company and the Holders whereby the Holders shall direct the underwriters to
take reasonable steps to ensure a wide distribution of the underwritten shares
in accordance with customary practices and that after giving effect to any such
sale, no purchaser (together with its Affiliates) would Beneficially Own fifteen
percent (15%) or more of the outstanding Shares of the Company as of such time.
SECTION 5.3 Incidental or "Piggy-Back" Registration Rights.
SECTION 5.3.1 Demand and Company Registrations.
(a) Demand Registrations.
(i) Within ten (10) days after receipt of a
request for a Demand Registration pursuant to Section 5.2.1, the Company shall
give written notice (the "Notice") of such request to all other Holders. Each of
the Holders other than the Initiating Holder(s) shall, subject to the other
provisions of this Section 5.3, upon receipt of written request therefor within
ten (10) days after the Notice is given (the "Election Period"), have the right
to include in such Demand Registration the number of Registrable Securities
registrable by such Holder pursuant to Section 5.2.1 as of the time such Notice
is made (the "Demand Piggyback Shares").
(ii) Registration of the Demand Piggyback Shares
requested to be registered by any Holder shall be subject to the following
conditions: (A) in the case of a request by Caledonia and/or CMS in respect of a
registration relating to the Minimum Year One Sale, the Underwriter being of the
opinion that the sale by the Caledonia Group and the CMS Group of up to two
million (2,000,000) Caledonia/CMS Tag Shares shall not have a material adverse
effect on the Kersaf Group's ability to complete the Minimum Year One Sale in
satisfaction of the terms hereof, (B) in respect of a registration relating to
the Minimum Year One Sale and any other Underwritten Public Offering, (x)
compliance with the "cutback" provisions contained in Section 5.3.2, (y)
acceptance by such Holder of the timing and terms and conditions of the subject
Underwritten Public Offering (as evidenced by each such Holder and, if
applicable, any participating member of such Holder's Group, becoming a party to
the applicable underwriting agreement) and (z) the Underwriter being of the
opinion that the sale of Shares by such Holder and, if applicable, any
participating member of such Holder's Group, would not have a material and
adverse effect on the market for the Shares and, if applicable, any other
securities issued by the Company. In the event that the Underwriter shall be of
the opinion that the sale of the Caledonia/CMS Tag Shares shall have a
24
material adverse effect on Kersaf's ability to complete the Minimum Year One
Sale, the number of Caledonia/CMS Tag Shares shall be reduced to the extent
recommended by such Underwriter.
(iii) In the event that the Initiating Holder(s)
requests the Company to withdraw a Demand Registration, Holders who shall have
elected to register Demand Piggyback Shares as of the date of such withdrawal
shall have the right, upon one (1) business day's prior written notice to the
Company, to pursue such registration; provided, however, that the requirements
of Section 5.2.1 shall otherwise be satisfied.
(iv) Subject to the foregoing and Section 5.3.2,
(A) the Company shall include in such registration all Registrable Securities
that the Company has received written requests for inclusion therein within the
Election Period and (B) thereafter, in the case of Demand Registration, the
Company may elect to include in such registration additional Shares issued by
the Company. All requests made pursuant to this Section 5.3.1 shall specify the
aggregate number of Registrable Securities to be registered.
(b) Company Registrations. If, at any time from time
to time, the Company shall determine to register any of its Shares for sale in
an Underwritten Public Offering for its own account (other than a registration
relating to (i) a registration of an employee compensation plan or arrangement
adopted in the ordinary course of business on Form S-8 (or any successor form)
or any dividend reinvestment plan or (ii) a registration of securities on Form
F-4 (or any successor form) including, without limitation, in connection with a
proposed issuance in exchange for securities or assets of, or in connection with
a merger or consolidation with another Person), the Company will promptly give
to the Holders written notice thereof, and include in such registration (subject
to Section 5.3.2) all the Registrable Securities specified in a written request
made by any one or more of the Holders within ten (10) days after such Holder's
receipt of such written notice from the Company ("Incidental Registration"). The
right of such Holder to have Registrable Securities included in a registration
pursuant to this Section 5.3.1 shall be conditioned upon such Holder and, if
applicable, any participating member of such Holder's Group accepting the timing
and terms and conditions of the subject Underwritten Public Offering (as
evidenced by each such Holder and, if applicable, any participating member of
such Holder's Group, becoming a party to the applicable underwriting agreement).
Section 5.3.2 Cutback.
(a) Minimum Year One Sale. The sale of Additional
Shares by the Kersaf Group as part of the Minimum Year One Sale shall be subject
to (i) the Underwriter being of the opinion that the sale of such Additional
Shares would not have a material adverse effect on the market for the Shares
and, if applicable, any other securities issued by the Company, and (ii) at the
direction of the Company, reduction by the number of Caledonia/CMS Tag Shares
elected to be sold pursuant to and subject to the terms and conditions set forth
in Sections 4.3(a) and 4.5(a), as the case may be, and available at the time of
such sale; provided, however, that the Company shall not effect
25
such a reduction of the Additional Shares if the Underwriter shall deliver to
the Company its opinion that the sale of the Caledonia/CMS Tag Shares shall not
have a material adverse effect on the market for the Company's Shares and, if
applicable, any other securities issued by the Company (i.e., in such case, the
Company shall register up to six million (6,000,000) Shares).
(b) Other Registrations. If the lead managing
Underwriter of an offering covered by Section 5.3.1 (other than in connection
with the Minimum Year One Sale) shall advise the Company on or before the date
five (5) days prior to the date then scheduled for such offering that, in its
view, the amount of Shares requested to be included in such registration exceeds
the amount which can be sold in such offering without having a material and
adverse effect on the market for the Shares and, if applicable, any other
securities issued by the Company, then the Company will include in such
registration: first, if the Company shall have initiated the registration, any
Shares proposed to be registered by the Company; second, (i) until the Caledonia
Group shall have sold two million (2,000,000) Caledonia Tag Shares (including
Caledonia Tag Shares sold pursuant to the Minimum Year One Sale) in the
aggregate (the "Caledonia Sale Trigger"), Registrable Securities requested to be
registered by the Caledonia Group, and (ii) until the CMS Group shall have sold
one million (1,000,000) CMS Tag Shares (including CMS Tag Shares sold pursuant
to the Minimum Year One Sale) in the aggregate (the "CMS Sale Trigger"),
Registrable Securities requested to be registered by the CMS Group, such
Caledonia Tag Shares and CMS Tag Shares to be allocated, if necessary, pro rata
among such Holders on the basis of the number of Shares proposed to be
registered at the time, and third, (i) prior to the Caledonia Sale Trigger and
the CMS Sale Trigger, each if applicable, Registrable Securities requested to be
registered by any other Holders, allocated, if necessary, pro rata among such
Holders on the basis of the number of the Shares proposed to be registered at
the time and (ii) following the Caledonia Sale Trigger and CMS Sale Trigger,
Registrable Securities requested to be registered by all Holders, allocated, if
necessary, pro rata among the Holders on the basis of the number of Shares
proposed to be registered at the time. Notwithstanding anything to the contrary
contained in this Agreement, the rights granted to the Caledonia Group and the
CMS Group pursuant to the clause "second" in the immediately preceding sentence
shall terminate no later than the Standstill Expiration Date.
Section 5.3.3 Right of Termination. The Company shall
have the right to terminate or withdraw any registration initiated by it under
Section 5.3.1(b) prior to the effectiveness of such registration whether or not
the Holders have elected to include Registrable Securities in such registration.
In the event that the Company provides the Holders who shall have elected to
participate in such Company registration, notice of its intention to withdraw or
terminate such registration, the Holders who shall have elected to register
Shares pursuant to the Incidental Registration, shall have the right, upon one
(1) business day's prior written notice to the Company, to pursue such
registration as a Demand Registration; provided, however, that the requirements
of Section 5.2.1 shall otherwise be satisfied.
26
SECTION 5.4 Provisions Applicable to Demand and Piggy-Back
Registrations.
Section 5.4.1 Expenses. The Company shall pay all
Registration Expenses (as defined in Section 5.6 hereof) incurred in connection
with any registration pursuant to Section 5.2 or 5.3, unless such registration
fails to become effective as a result of the fault of one or more Holders or any
member of such Holder's Group, in which case the Company will not be required to
pay the Registration Expenses incurred with respect to the offering of such
Holder's or Holders' Registrable Securities, in which case such Registration
Expenses shall be paid by the Holder or the member of such Holder's Group at
fault.
Section 5.4.2 Holdback Agreements.
(a) Each Holder agrees not to effect any sale or
distribution of any Registrable Securities, including a sale pursuant to Rule
144 under the Securities Act, during the twenty (20) days prior to and ninety
(90) day period beginning on the effective date of any Demand Registration or
Incidental Registration (except as part of such registration), if and to the
extent requested by the Company or any Holder participating in the offering, in
the case of a non-Underwritten Public Offering, or if and to the extent
requested by the Underwriter, in the case of an Underwritten Public Offering;
provided, however, that notwithstanding the foregoing, the Kersaf Group shall be
entitled to sell (x) beginning on the twentieth (20th) day following the
effective date of any such registration statement and ending on the sixtieth
(60th) day following the effective date of any such registration statement (the
"Sixtieth Day"), not more than an aggregate of one hundred and fifty thousand
(150,000) Shares; (provided, however, that the aggregate amount of Shares sold
during any trading day should not exceed ten thousand (10,000) and (y) beginning
on the Sixtieth Day and ending on the ninetieth day (90) day following the
effective date of any such registration statement (the "Ninetieth Day") not more
than an additional one hundred and fifty thousand (150,000) Shares (provided,
however, that the aggregate amount of Shares sold during any trading day
subsequent to the Sixtieth Day and prior to the Ninetieth Day shall not exceed
fifteen thousand (15,000).
(b) Restrictions on Public Sale by the Company. The
Company agrees not to file any registration statement with respect to any of its
Equity Securities (except pursuant to registrations on Form F-4 or S-8 or any
successor thereto), during the period beginning on the effective date of any
registration statement in which the Holders of Registrable Securities are
participating and ending on the earlier of (i) ninety (90) days after the
effective date of such registration statement and (ii) the number of days agreed
upon by the managing Underwriter of such registered offering which included such
Registrable Securities and the Company.
SECTION 5.5 Registration Procedures.
In connection with any registration statement filed pursuant
to this Agreement, the Company will, as expeditiously as possible:
27
(a) in connection with a request pursuant to this
Agreement, prepare and file with the Commission, after receipt of a request to
file a registration statement with respect to Registrable Securities, a
registration statement on any form for which the Company then qualifies (or
which counsel for the Company shall deem appropriate) and which form shall be
available for the sale of such Registrable Securities in accordance with the
intended method of distribution thereof, shall comply in all material respects
with the Securities Act and/or the Securities Exchange Act, as the case may be
and, if the offering is an Underwritten Public Offering, shall be reasonably
satisfactory to the managing Underwriter or Underwriters, and use its
commercially reasonable efforts to cause such registration statement to become
effective; provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall (i)
furnish to the counsel selected by the Initiating Holder(s), if any, copies of
all such documents proposed to be filed, and (ii) notify such counsel and each
participating Holder of any stop order issued or threatened by the Commission
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
(b) in connection with a registration pursuant to this
Agreement, (i) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not more than one hundred twenty (120) days (or such shorter period
that will terminate when all Registrable Securities covered by such registration
statement have been disposed of) and (ii) cause each registration filed with the
Commission, as amended or supplemented, to comply with the provisions of the
Securities Act, the Securities Exchange Act and the rules and regulations
thereunder applicable to it with respect to the disposition of all Shares
covered by each registration statement during the applicable period specified
herein in accordance with the intended method or methods of distribution;
(c) furnish to each participating Holder, without
charge, such number of copies of the registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto), the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as each seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder;
(d) use commercially reasonable efforts to register or
qualify such Registrable Securities under such other securities or "blue sky"
laws of such jurisdictions as any participating Holder or Underwriter reasonably
requests in writing and do any and all other acts and things that may be
reasonably necessary or advisable to register or qualify for sale in such
jurisdictions the Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified, (ii) subject
itself to taxation in any such jurisdiction, (iii) consent to general service of
process in any such jurisdiction or (iv) provide any undertaking required by
such other securities or "blue sky" laws or make any change in its charter
documents that the Board of Directors of the Company (including a majority of
the Company's Independent Directors)
28
determines in good faith to be contrary to the best interest of the Company and
its shareholders;
(e) use commercially reasonable efforts to cause the
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable the
participating Holder(s) or the Underwriters, if any, to consummate the
disposition of such Registrable Securities;
(f) notify each participating Holder at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement contains 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, in light of the circumstances under which they were
made, not misleading, and prepare and file with the Commission as soon
thereafter as practicable, after consultation with the Initiating Holder(s), a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an 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;
(g) enter into customary agreements (including an
underwriting agreement in customary form, if the offering is an Underwritten
Public Offering) (which shall include customary (i) indemnification and
contribution provisions and representations and warranties and (ii) conditions
precedents including the provision of comfort letters and legal opinion to the
underwriters) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities;
(h) otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission;
(i) use commercially reasonable efforts to cause all
Registrable Securities covered by the registration statement to be listed on
each securities exchange or market, if any, on which similar securities issued
by the Company are then listed, provided that the applicable listing
requirements are satisfied;
(j) subject to the payment of the incremental costs by
the Initiating Holder(s) in accordance with Section 5.2.1(c), make available to
its security holders an earnings statement covering at least 12 months which
shall satisfy the provisions of Sections 11(a) of the Securities Act and Rule
158 thereunder;
(k) cooperate and assist in any filings required to be
made with the New York Stock Exchange, including in order for the Registrable
Securities to be admitted to listing on the New York Stock Exchange;
29
(l) subject to the delivery of confidentiality
agreements satisfactory to the Company, make available for inspection by
representatives of any Underwriters participating in any disposition pursuant to
a registration statement (including any "qualified independent underwriter" that
is required to be retained in accordance with the rules and regulations of the
New York Stock Exchange) and any counsel or accountant retained thereby, all
financial and other records, pertinent corporate documents and properties of the
Company reasonably requested by any such Persons, and cause the respective
officers, directors, employees, and any other agents of the Company to supply
all information reasonably requested by any such Underwriter or counsel or
accountant in connection with a registration statement, and make such
representatives of the Company available for discussion of such documents as
shall be reasonably requested by the Underwriters or their counsel or accountant
upon prior reasonable prior written notice to the Company;
(m) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement;
(n) notify each participating Holder (i) when a
registration statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
Commission or any state securities authority for post-effective amendments and
supplements to a registration statement and prospectus or for additional
information after the registration statement has become effective, (iii) of the
issuance by the Commission or any state securities authority of any stop order
suspending the effectiveness of a registration statement or the initiation of
any proceedings for that purpose, (iv) in the case of a registration, if,
between the effective date of a registration statement and the closing of any
sale of Registrable Securities, the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to the offering cease to be true and
correct in all material respects; and
(o) in connection with an Underwritten Public Offering
in excess of two million (2,000,000) Shares, use commercially reasonable efforts
to commence a road show (and make commercially reasonable efforts to make Xxxxx
Xxxxxxx or his successor available to participate in such road show) upon notice
from the managing Underwriter that, in the opinion of such Underwriter, such
selling efforts are advisable.
The Company may require each participating Holder and each
participating member of such Holder's Group as to which any registration is
being effected to furnish to the Company such information regarding the
distribution of such securities and other matters as may be required to be
included in the registration statement.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in paragraph (f) of
this Section 5.5, such Holder shall, and shall cause each participating member
of such Holder's Group to, forthwith discontinue disposition of Registrable
Securities pursuant to the registration
30
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(f) of this Section 5.5 and, if so directed by the Company, such Holder shall,
and shall cause each participating member of such Holder's Group, to deliver to
the Company all copies, other than permanent file copies then in such Holder's
possession or copies delivered to prospective purchasers, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice, notwithstanding anything to
the contrary contained herein, the Company shall extend the period during which
such registration statement shall be maintained effective pursuant to this
Agreement (including the period referred to in paragraph (b) of this Section
5.5) by the number of days during the period from and including the date of the
giving of such notice pursuant to paragraph (f) of this Section 5.5 to and
including the date when each participating Holder covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by paragraph (f) of this Section 5.5. To the extent the
circumstances described in this paragraph are not the result of any action or
inaction by any member of the Kersaf Group, the Minimum Year One Sale Date shall
be extended by the number of days during which the discontinuance on the
disposition of Registrable Securities shall be in effect.
SECTION 5.6 Registration Expenses. The Company shall pay all
expenses incident to its performance of or compliance with the registration of
Registrable Securities to be sold in accordance with this Agreement; provided,
however, that the Company shall not pay the costs and expenses of any Holder and
each participating member of such Holder's Group relating to underwriters'
commissions and discounts and fees payable to the Commission relating to
Registrable Securities to be sold by such Holder and each participating member
of such Holder's Group, brokerage fees, transfer taxes or the fees or expenses
of any counsel, accountants or other representatives retained by such Holders
and each participating member of such Holder's Group, individually or in the
aggregate. All of the expenses described in this Section 5.6 that are to be paid
by the Company are herein called the "Registration Expenses."
SECTION 5.7 Indemnification; Contribution.
Section 5.7.1 Indemnification by the Company. The Company
agrees to indemnify to the fullest extent permitted by law, in the case of any
registration statement filed pursuant to this Agreement, each participating
Holder and each participating member of such Holder's Group covered by such
registration statement, each other Person who participates as an underwriter in
the offering or sale of such securities, and each Person, if any, who controls
such participating Holder or any such underwriter within the meaning of the
Securities Act (each an "Indemnified Party" and collectively, the "Indemnified
Parties") against any and all losses, claims, damages or liabilities to which
such Indemnified Party may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact or
any omission or alleged omission of a material fact to be stated in any
registration statement under which such securities were registered under the
Securities Act, prospectus or
31
preliminary prospectus filed by the Company or any amendment thereof or
supplement thereto or necessary to make the statements therein (in the case of a
prospectus in light of the circumstances under which they were made) not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company; provided, however, that the
Company shall not be liable to the extent that any loss, claim, or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Indemnified Party expressly for use in
the Registration Statement; provided, further, that the Company shall not be
liable to any participating Holder or to any participating member of such
Holder's Group (or to any Person who acts as an underwriter in such sale or who
controls such seller) to the extent that any loss, claim, or liability arises
out of an untrue statement, alleged untrue statement, omission, or alleged
omission made in any preliminary prospectus if either (a)(i) such participating
Holder failed to send or deliver a copy of the prospectus with or prior to
written confirmation of the sale by such participating Holder to the Person
asserting the claim, (ii) the prospectus would have corrected such untrue
statement, alleged untrue statement, omission or alleged omission and (iii) the
Company has furnished such Holder a sufficient number of copies of same in
accordance with Section 5.5(c); or (b)(x) such untrue statement, alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the prospectus and (y) having been furnished by or on behalf of
the Company with copies of the prospectus as so amended or supplemented, such
participating Holder fails to deliver such prospectus as so amended or
supplemented, with or prior to the written confirmation of the sale by such
participating Holder the Person asserting the claim.
Section 5.7.2 Indemnification by Holders. In connection
with any registration statement in which a Holder or any member of such Holder's
Group is participating, each such Holder shall furnish to the Company in writing
such information with respect to such Holder and any member of such Holder's
Group as is required to be included in such registration statement pursuant to
the rules and regulation under the Securities Act and each such Holder agrees to
indemnify, to the fullest extent permitted by law, the Company, its officers,
directors and agents and each Person, if any, who controls the Company (within
the meaning of the Securities Act) against any and all losses, claims, damages,
and liabilities resulting from any untrue or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in any registration statement, prospectus or preliminary prospectus
filed by the Company or any amendment thereof or supplement thereto or necessary
to make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, but only to the extent
that such untrue or alleged untrue statement or omission or alleged omission was
made in reliance upon and conforms with written information concerning such
Holder furnished by such Holder to the Company expressly for use in any such
prospectus or preliminary prospectus; provided, however, that the liability of
such Holder shall not exceed the net proceeds received by such Holder and the
participating members of such Holder's Group from the
32
sale of its Registrable Securities. Each Holder also shall indemnify any
underwriters of the Registrable Securities, their officers and directors and
each Person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the Company (but only to the extent that any untrue statement or omission or
alleged omission was made in reliance upon and conforms with written information
concerning such Holder furnished by such Holder to such underwriter expressly
for use in such prospectus or preliminary prospectus); provided, however, that
the indemnification of such Holder shall be limited to the net proceeds received
by such Holder and the participating members of such Holder's Group from the
sale of its Registrable Securities.
Section 5.7.3 Contribution. If the indemnification provided
for in this Section 5.7 is unavailable to any Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, to the extent such indemnification is
unavailable, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party (and, if the indemnifying
party is a Holder, aggregated with the relative fault of the participating
members of such Holder's Group) and Indemnified Parties in connection with the
actions that resulted in such losses, claims, damages, liabilities or expenses.
The relative fault of such indemnifying party or, if applicable, any
participating of such Holder's Group and Indemnified Parties shall be determined
by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or, if applicable, any participating of
such Holder's Group or Indemnified Parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.7.3 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. 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.
SECTION 5.8 Reporting Company Covenant. The Company covenants
and agrees that it shall use commercially reasonable efforts to satisfy the
listing requirements of the New York Stock Exchange and shall remain subject to
the reporting obligations of the Securities Exchange Act until consummation of
the Minimum Year One Sale; provided, however, that the foregoing covenant shall
terminate upon the consummation of any Business Combination.
33
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 No Liability. No party to this Agreement shall
have any liability for any action or inaction taken or omitted to be taken by
any other party or a member of such other party's Group.
SECTION 6.2 Legend. Each of the parties agrees to the
imprinting, so long as required by law, of a legend on certificates representing
all of its Shares, to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR
OTHER DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY
THE TERMS OF THE REGISTRATION RIGHTS AND GOVERNANCE AGREEMENT,
DATED JULY 3, 2001 (THE "GOVERNANCE AGREEMENT"), AMONG THE
CORPORATION AND THE STOCKHOLDERS NAMED THEREIN, A COPY OF
WHICH MAY BE INSPECTED AT THE CORPORATION'S PRINCIPAL OFFICE.
THE CORPORATION WILL NOT REGISTER THE TRANSFER OF SUCH
SECURITIES ON THE BOOKS OF THE CORPORATION UNLESS AND UNTIL
THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE
GOVERNANCE AGREEMENT.
SECTION 6.3 Adjustments. References to numbers of Shares and
to sums of money contained herein shall be adjusted to account for any
reclassification, exchange, combination, substitution, combination, stock split
or reverse stock split of the Shares, including in connection with any merger or
otherwise.
SECTION 6.4 Notices. All notices, requests and other
communications to any party hereunder shall be in writing and shall be given
(and shall be deemed to have been given upon receipt) if delivered in person or
sent by facsimile, telegram, telex, by registered or certified mail (postage
prepaid, return receipt requested) or by an internationally recognized overnight
courier to the respective parties at the
34
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 6.4):
if to the Company, to:
Sun International Hotels Limited
P.O. Box N-4777
Nassau, The Bahamas
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, XX 00000-0000
Xxxxxx Xxxxxx of America
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
if to WLG, to:
WORLD LEISURE GROUP LIMITED
c/o Trident Trust Company Limited
XX Xxx 000, Xxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Attention: The Company Secretary
Facsimile: 0101 809 494 3754
and its Authorized Representative:
Norton Xxxx
Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Xxxxxxxxxxx Xxxxxxx, Esq.
Facsimile: 011 4420 7283 6500
with a copy to:
Xxxxx, Xxxxxxxx & Flexner LLP
00 Xxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attention: Xxxxxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
35
if to Kersaf, to:
KERSAF INVESTMENTS LIMITED
0 Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxxxx xx Xxxxx Xxxxxx
Attention: The Company Secretary
Facsimile: 010 27 11 783 7446
and its Authorized Representative:
KERSAF INVESTMENTS LIMITED
0 Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxxxx xx Xxxxx Xxxxxx
Attention: Xxxxx Xxxxxx Xxxxxx
Facsimile: 010 27 11 783 7446
with a copy to:
x/x Xxxxxxxxx Xxxxx
Xxxxxx Xxxx
Xxxxxx-xx-Xxxxxx XX0 0XX
Xxxxxxx
Attention: The Company Secretary
Facsimile: 014 91 576526
if to Caledonia, to:
CALEDONIA INVESTMENTS PLC
Xxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0 0XX
England
Attention: The Company Secretary
Facsimile: 020 7488 0896
and its Authorized Representative:
Mangalitsa Limited
Xxxxxxxxxxx Xxxxx
00 Xxxxxxx Xxxxxx
P.O. Box N3247
Nassau, The Bahamas
Attention: Xxxxxxxx Deal
Facsimile: 000 000 0000
36
with a copy to:
Freshfields Bruckhaus Xxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Xxxxxxxx Xxxx
Facsimile: 0207 832 7001
if to CMS, to:
CEMENT MERCHANTS SA
X.X. Xxx 000
Xxxxxxxx 000
FL-9497 Triesenberg
Principality of Liechtenstein
Attention: The Company Secretary
Facsimile: (000) 000-0000
and its Authorized Representative:
CEMENT MERCHANTS SA
X.X. Xxx 000
Xxxxxxxx 000
FL-9497 Triesenberg
Principality of Liechtenstein
Attention: Xx. Xxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
CMS Xxxxxx Xxxxx Eschenlohr Xxxxxxx Xxxxxxx
Xxxxxxxxxxxxxxx 0-0
00000 Xxxxxxx
Xxxxxxx
Attention: Xx. Xxxxxxx Xxxxxxx
Facsimile: 011 49 40 3 76 30 300
SECTION 6.5 Amendments; No Waivers.
(a) Subject to Section 2.9, no provision of this
Agreement may be amended or waived unless such amendment or waiver is in writing
and signed by each of the Company, WLG, Kersaf, Caledonia and CMS, and, in the
case of a waiver, by the party against whom the waiver is to be effective;
provided that no such amendment or waiver shall be effective against the Company
without the prior approval of a majority of the Company's Independent Directors.
37
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 6.6 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. Except as expressly provided herein, no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement.
SECTION 6.7 Governing Law. This Agreement shall be construed
in accordance with and governed by the laws of the State of New York applicable
to agreements made and to be performed entirely within such State and, to the
extent applicable, the federal securities laws of the United States.
SECTION 6.8 JURISDICTION.
(a) ANY ACTION OR PROCEEDING AGAINST EITHER OF THE
PARTIES HERETO RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT OR ENFORCED
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE, LOCATED IN NEW YORK, NEW YORK, AND EACH OF
THE PARTIES HERETO IRREVOCABLY CONSENTS, AND SHALL CAUSE EACH OF ITS AFFILITAES
TO IRREVOCABLEY CONSENT, TO THE JURISDICTION OF EACH SUCH COURT IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING. EACH OF THE PARTIES HERETO FURTHER IRREVOCABLY
CONSENTS, AND SHALL CAUSE EACH OF ITS AFFILIATES TO IRREVOCABLY CONSENT, TO THE
SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT
REQUESTED, TO SUCH PARTY AT ITS ADDRESS AS PROVIDED FOR NOTICES HEREUNDER. THE
FOREGOING SHALL NOT LIMIT THE RIGHT OF ANY OF THE PARTIES HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING, OR TO OBTAIN EXECUTION OF ANY JUDGMENT, IN ANY OTHER JURISDICTION.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
AND SHALL CAUSE EACH OF ITS AFFILIATES TO IRREVOCABLY WAIVE, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING UNDER OR RELATING TO THIS AGREEMENT IN ANY COURT LOCATED IN NEW YORK,
NEW YORK, AND HEREBY FURTHER IRREVOCABLY WAIVES, AND SHALL CAUSE EACH OF ITS
AFFILITAES TO IRREVOCABLY WAIVE, ANY CLAIM THAT A COURT LOCATED IN NEW YORK, NEW
YORK, IS NOT A CONVENIENT FORUM FOR ANY SUCH ACTION OR PROCEEDING.
38
SECTION 6.9 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signature thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by the other party hereto.
SECTION 6.10 Specific Performance. The parties hereto (and any
Person who agrees to be bound hereby pursuant to the terms hereof) acknowledge
and agree, and shall cause each of its Affiliates to agree, that their
respective remedies at law for a breach or threatened breach of any of the
provisions of this Agreement would be inadequate and, in recognition of that
fact, agree that, in the event of a breach or threatened breach by any party (or
any of such Persons) of the provisions of this Agreement, in addition to any
remedies at law, they shall, respectively, without posting any bond, be entitled
to obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other equitable
remedy which may then be available.
SECTION 6.11 No Third Party Beneficiaries. Nothing contained
in this Agreement, express or implied, is intended to or shall confer upon
anyone other than the parties hereto (and their permitted successors and
assigns) any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
SECTION 6.12 Termination. The provisions of this Agreement
shall terminate as follows:
(a) Article II shall terminate as of the Standstill
Expiration Date;
(b) Article III shall continue in accordance with its
terms;
(c) Article V shall continue with respect to any
Registrable Securities registrable as of the Standstill Expiration Date;
(d) the remaining provisions of this Agreement (other
than Article VI) shall terminate upon the earlier of (i) the Standstill
Expiration Date or (ii) as to any of the WLG Group, the Kersaf Group, the
Caledonia Group or the CMS Group, upon the date such Group shall no longer
Beneficially Own any Shares; and
(e) Article VI shall continue with respect to any
provision until such provision is terminated or is no longer applicable pursuant
to this Section 6.12.
SECTION 6.13 Severability. If any provision of this Agreement
or the application of any provision hereof to any party hereto or set of
circumstances is held invalid, the remainder of this Agreement and the
application of such provision to the other parties hereto or sets of
circumstances shall not be affected, unless the provisions held invalid shall
substantially impair the benefits of the remaining portions of this Agreement.
[Signature pages follow]
39
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SUN INTERNATIONAL HOTELS LIMITED
By:
------------------------------
Name:
Title:
SUN INTERNATIONAL INVESTMENTS
LIMITED
By:
------------------------------
Name:
Title:
WORLD LEISURE GROUP LIMITED
By:
------------------------------
Name:
Title:
KERSAF INVESTMENTS LIMITED
By:
------------------------------
Name:
Title:
CALEDONIA INVESTMENTS PLC
By:
------------------------------
Name:
Title:
40
MANGALITSA LIMITED
By:
------------------------------
Name:
Title:
CEMENT MERCHANTS SA
By:
------------------------------
Name:
Title:
ROSEGROVE LIMITED
By:
------------------------------
Name:
Title:
ROYALE RESORTS HOLDINGS LIMITED
By:
------------------------------
Name:
Title:
SUN INTERNATIONAL INC.
By:
------------------------------
Name:
Title:
41
EXHIBIT C
EXECUTION COPY
Annex A
-------
Beneficial Ownership of the Company
-----------------------------------
WLG 4,637,379 (excludes stock option Shares)
Kersaf 5,733,309
Mangalitsa 5,808,293
CMS 1,686,984
Beneficial Ownership of Kersaf
------------------------------
SIHL None
WLG 50,500
EXHIBIT C
EXECUTION COPY
Annex B
-------
PROXY SCHEDULE
--------------
Existing SIHL Shareholders of Record
SIIL 13,487,380
Rosegrove 2,625,000
Sun International Inc. 1,100,000
Royale Resort Holdings Limited 510,000
Proxies to be Granted
---------------------
SIIL WLG 6,143,501.6
Mangalitsa 6,143,501.6
CMS 1,200,376.8
Rosegrove Mangalitsa 1,793,531
WLG 481,031
CMS 350,437
Sun International Inc. Mangalitsa 550,000
WLG 550,000
Royale Resorts Holdings Limited CMS 136,170
WLG 186,915
Mangalitsa 186,915
EXECUTION COPY
================================================================================
REGISTRATION RIGHTS
AND
GOVERNANCE AGREEMENT,
by and among,
SUN INTERNATIONAL HOTELS LIMITED,
SUN INTERNATIONAL INVESTMENTS LIMITED,
WORLD LEISURE GROUP LIMITED,
KERSAF INVESTMENTS LIMITED,
CALEDONIA INVESTMENTS PLC,
MANGALITSA LIMITED,
CEMENT MERCHANTS SA,
ROSEGROVE LIMITED,
ROYALE RESORTS HOLDINGS LIMITED
and
SUN INTERNATIONAL INC.
-------------
July 3, 2001
-------------
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINED TERMS.....................................................................................2
SECTION 1.1 Certain Definitions..................................................................2
SECTION 1.2 Other Definitions....................................................................6
ARTICLE II BUSINESS COMBINATIONS; STANDSTILL................................................................8
SECTION 2.1 Actions with Respect to Equity Securities............................................8
SECTION 2.2 Actions by the Board of Directors. .................................................9
SECTION 2.3 Permitted Purchases by WLG...........................................................9
SECTION 2.4 Permitted Actions by the Kersaf Group................................................9
SECTION 2.5 Permitted Purchases by Caledonia.....................................................9
SECTION 2.6 Permitted Purchases by CMS..........................................................10
SECTION 2.7 Acquisition of Kersaf Group Shares..................................................10
SECTION 2.8 Beneficial Ownership................................................................10
SECTION 2.9 Enforcement and Waiver..............................................................10
ARTICLE III BOARD OF DIRECTORS.............................................................................11
SECTION 3.1 General........................................................................... 11
SECTION 3.2 Kersaf Director.....................................................................11
SECTION 3.3 Amendment of Charter Documents......................................................12
SECTION 3.4 Election of Directors; Number and Composition.......................................12
SECTION 3.5 Removal and Replacement of Directors................................................12
SECTION 3.6 Voting of Kersaf Group Shares.......................................................12
ARTICLE IV RESTRICTIONS ON TRANSFER OF SHARES..............................................................13
SECTION 4.1 Restrictions on Transfer of Shares..................................................13
SECTION 4.2 Permitted Transfers by Kersaf.......................................................14
SECTION 4.3 Permitted Transfers by Caledonia....................................................16
SECTION 4.4 Permitted Transfers by WLG..........................................................16
SECTION 4.5 Permitted Transfers by CMS..........................................................17
SECTION 4.6 Bulk Transfers by WLG and Caledonia.................................................17
SECTION 4.7 Conditions to Transfer..............................................................19
SECTION 4.8 Permitted Transfers Generally.......................................................19
SECTION 4.9 Distribution........................................................................19
ARTICLE V REGISTRATION RIGHTS..............................................................................20
SECTION 5.1 General; Securities Subject to this Agreement.......................................20
SECTION 5.2 Demand Registration Rights..........................................................21
SECTION 5.3 Incidental or "Piggy-Back" Registration Rights......................................24
SECTION 5.4 Provisions Applicable to Demand and Piggy-Back Registrations........................27
SECTION 5.5 Registration Procedures.............................................................27
SECTION 5.6 Registration Expenses...............................................................31
SECTION 5.7 Indemnification; Contribution.......................................................31
SECTION 5.8 Reporting Company Covenant..........................................................33
i
ARTICLE VI MISCELLANEOUS...................................................................................34
SECTION 6.1 No Liability........................................................................34
SECTION 6.2 Legend..............................................................................34
SECTION 6.3 Adjustments.........................................................................34
SECTION 6.4 Notices.............................................................................34
SECTION 6.5 Amendments; No Waivers..............................................................37
SECTION 6.6 Successors and Assigns..............................................................38
SECTION 6.7 Governing Law.......................................................................38
SECTION 6.8 JURISDICTION........................................................................38
SECTION 6.9 Counterparts; Effectiveness.........................................................39
SECTION 6.10 Specific Performance................................................................39
SECTION 6.11 No Third Party Beneficiaries........................................................39
SECTION 6.12 Termination.........................................................................39
SECTION 6.13 Severability........................................................................39
ii
