EXHIBIT 4.2
SHAREHOLDERS AGREEMENT
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THIS SHAREHOLDERS AGREEMENT (this "Agreement") is made and entered into as
of June 1, 1998, by and among Interactive Coupon Marketing Group, Inc., a
Michigan corporation (the "Corporation"), and the shareholders of the
Corporation that execute this Agreement on or prior to July 15, 1998 (each of
whom is referred to herein individually as a "Shareholder" and collectively as
the "Shareholders"). An Index of defined terms and list of exhibits is attached
hereto as Exhibit A.
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RECITALS
This Agreement is entered into on the basis of the following facts,
understandings and intentions of the parties:
A. The Corporation and Lend Lease International Pty. Limited, a company
organized under the laws of Australia ("LLI"), have entered into that certain
Investment Agreement, dated of even date herewith (the "Investment Agreement"),
providing, among other things, for the purchase by LLI of shares of the
Corporation's Common Stock.
B. As of the date of this Agreement, the Corporation's authorized capital
stock consists of 60,000 shares of common stock, without par value, (the "Common
Stock") of which there are 19,430.79 shares issued and outstanding (including
the shares issued to LLI as of the date of this Agreement, pursuant to Section
1.2 of the Investment Agreement). In addition, 2277.38 shares of Common Stock
(the "Option Shares") are issuable upon exercise of, or pursuant to, all
outstanding rights, options, warrants, preemptive rights, conversion rights or
agreements for the purchase, acquisition or receipt from the Corporation of any
shares of its Common Stock. Except as set forth in the Articles of
Incorporation, the shares of Common Stock have all of the rights, preferences
and limitations of shares of common stock stated in the Michigan Business
Corporation Act, as amended (the "Michigan Act").
C. Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxx,
Xxxxx Sugar, and Xxxxxx X. Xxxxx are all of the current directors of the
Corporation (collectively, the "Directors"). Each of the Directors is also a
Shareholder and joins this Agreement in both the capacity of a Director and a
Shareholder. All Shareholders other than LLI and LLI's Permitted Transferees (as
defined below), are referred to herein as the "ICMG Shareholders".
D. In connection with the transactions contemplated by the Investment
Agreement, the Shareholders, the Directors and the Corporation have agreed to
certain provisions regarding the election of directors and rights and
restrictions of shareholders with respect to the Common Stock, as set forth in
this Agreement.
NOW THEREFORE, for and in consideration of the foregoing Recitals, the
mutual covenants and agreements contained in this Agreement and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged
by the parties to this Agreement, the Corporation, the Directors and each of the
Shareholders agree as follows:
Section 1. Directors, Officers and Voting.
1.1 Appointment and Nomination of Directors. The Bylaws of the
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Corporation provide that the Board of Directors shall be comprised of not fewer
than five (5) but no more than seven (7) directors. Currently, the Board is
comprised of six (6) directors. Each of the Shareholders agrees that at all
times until this Agreement is terminated or expires, he will in his capacity as
a shareholder vote to maintain the size of the Board of Directors at seven (7),
except as provided in Section 1.3 below. Each of the Directors agrees that,
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concurrently with the execution of this Agreement, he shall resign from the
Board. Each Shareholder agrees that, concurrently with the execution of this
Agreement, and at all times until this Agreement is terminated or expires,
except as provided in Section 1.3 below, he will in his capacity as a
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shareholder:
(a) initially vote to nominate and elect three (3) directors when
and as nominated by LLI (the "LLI Directors"), and thereafter, upon any
vacancy from among the three (3) LLI Directors, vote to nominate and elect
a replacement when and as nominated by the LLI Directors (except when the
Corporation exercises its rights under Sections 1.3.1(a), 1.3.2(a),
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1.3.3(a), 1.3.4(a) or 1.3.5(a), in which event, he will vote to nominate
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and elect a replacement as set forth in such Sections);
(b) initially vote to nominate and elect Xxxxxxx X. Xxxxx, Xxxxxxx
X. Xxxxxx and Xxxxxx Xxxxxx to serve as the first three (3) directors for
the ICMG Shareholders (the "ICMG Directors"), and thereafter, upon any
vacancy from among the three (3) ICMG Directors, vote to nominate and elect
a replacement when and as nominated by the ICMG Directors and vote to elect
one of the ICMG Directors as Chairman of the Board (except when the
Corporation exercises its rights under Sections 1.3.1(a), 1.3.2(a),
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1.3.3(a), 1.3.4(a) or 1.3.5(a), in which event, he will vote to nominate
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and elect a replacement as set forth in such Sections);
(c) vote to nominate and elect one (1) director who shall be an
independent third party (the "Independent Director") (as defined below)
when and as nominated in accordance with Section 1.2 below; and
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(d) take all action necessary from time to time (including, without
limitation, the execution of written consents, the calling of special
meetings, the filling of vacancies, and the waiving of notice and
attendance at meetings) to accomplish the appointments and nominations
described in this Section 1.1.
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1.2 Independent Director. The LLI Directors and the ICMG Directors shall
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mutually nominate the Independent Director contemporaneous with the execution of
this Agreement. Thereafter, except as provided below, upon the occurrence of any
vacancy in the position of the Independent Director (a "Vacancy"), the LLI
Directors and the ICMG Directors shall in good faith mutually nominate the
Independent Director within thirty (30) business days after the
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occurrence of a Vacancy (the "Vacancy Period"). If the LLI Directors and the
ICMG Directors cannot mutually agree within the Vacancy Period on the person to
nominate to become the Independent Director, or if at any time during the
Vacancy Period a meeting of the Board of Directors is held where the Board is
unable to act without the Independent Director due to a deadlock (a "Deadlock"),
the Independent Director shall be nominated as follows:
(a) Within five (5) business days after the earlier of a Deadlock
or the expiration of the Vacancy Period, the ICMG Directors shall provide
the LLI Directors with a list of five (5) persons, accompanied by resumes
and at least two references each (the "Slate"), each of whom qualify as an
Independent Director as defined in this Section 1.2, and the LLI Directors
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shall select the Independent Director from among the Slate within five (5)
business days after receipt of the Slate. The person selected by the LLI
Directors from the Slate shall be nominated and appointed to serve as the
Independent Director. If the LLI Directors fail to provide written notice
to the Corporation of the selection from the Slate within five (5) business
days after receipt of the Slate, the ICMG Directors shall be entitled to
nominate the Independent Director from the Slate.
(b) Independent Director means a director who meets all of the
following requirements:
(i) Has at least ten (10) years of business or financial
experience, or other equivalent experience. For purposes of this Section
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1.2(b), "experience" shall mean experience as a senior executive, director,
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or other equivalent experience;
(ii) Is not and during the five (5) years prior to being
designated as an Independent Director has not been any of the following:
(A) An officer or employee of the Corporation or LLI or
any Affiliate, as defined, of the Corporation or LLI.
(B) Engaged in any business transaction for profit or
series of transactions for profit, including without limitation
banking, legal or consulting services, involving more than
$25,000.00, with the Corporation or any Affiliate of the Corporation.
(C) An Affiliate, executive officer, general partner,
or member of the immediate family of any person that had the status
or engaged in a transaction described in subparagraphs (B) or (C).
(D) An officer or employee of an Affiliate of a past or
present ICMG Director or LLI Director, or of a Shareholder owning
ten percent (10%) or more of the issued and outstanding Common
Stock.
(iii) Does not propose or intend to enter into a relationship
or transaction described in subsections (ii)(A) through (ii)(C); and
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(iv) Has not previously served as a director of the
Corporation, other than as the Independent Director.
1.3 Reduction in Number of Directors.
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1.3.1 Notwithstanding anything to the contrary in Section 1.1(a),
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if the Corporation fails to achieve the Milestone for Phase Two, and LLI
elects in its sole discretion not to invest in Phase Two, in accordance
with Section 1.3(c) of the Investment Agreement (as such terms are defined
therein), upon completion of the issuance of any debt or equity in
accordance with Section 1.3(c)(i) of the Investment Agreement:
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(a) The Corporation shall be entitled to reduce the number of LLI
Directors to one (1), and the Board of Directors (with the
LLI Directors prohibited from voting) shall be entitled to
terminate two (2) of the LLI Directors if the resignations of
two (2) of the LLI Directors have not been received by the
Corporation within fifteen (15) days after written demand
therefor to LLI. The vacancies created by such terminations
or resignations shall be filled by directors nominated by the
ICMG Directors; and
(b) The ICMG Directors may, in their sole discretion, take any
and all actions permitted to be taken by directors under the
Corporation's Bylaws to effectuate the foregoing.
1.3.2 Notwithstanding anything to the contrary in Section 1.1(a),
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if the Corporation achieves the Milestone for Phase Two and LLI elects in its
sole discretion not to exercise its option for Phase Two, or elects to invest in
Phase Two but it fails to pay the purchase price on or before the Phase Two Due
Date, in accordance with Section 1.3(d) of the Investment Agreement (as such
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terms are defined therein):
(a) The Corporation shall be entitled to reduce the number of LLI
Directors to one (1), and the Board of Directors of the
Corporation (with the LLI Directors prohibited from voting)
shall be entitled to terminate two (2) of the LLI Directors
if the resignations of two (2) of the LLI Directors have not
been received by the Corporation within fifteen (15) days
after written demand therefor to the LLI Directors. The
vacancies created by such terminations or resignations shall
be filled by directors nominated by the ICMG Directors;
(b) The Corporation shall be entitled to terminate the
Shareholders Agreement; and
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(c) The ICMG Directors may, in their sole discretion, take any
and all actions permitted to be taken by directors under the
Corporation's Bylaws to effectuate the foregoing.
(d) If the Corporation elects the 80% Call Notice (as defined in
the Investment Agreement), but fails to deliver the purchase
price to LLI within the applicable time period, in accordance
with Section 1.3(d)(v) of the Investment Agreement (as such
terms are defined therein), any action taken by the
Corporation under Section 1.3.2(a), (b) or (c) of this
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Agreement shall be deemed void and of no effect.
1.3.3 Notwithstanding anything to the contrary in Section 1.1(a),
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in the event the Corporation fails to achieve the Milestone for Phase Three
or Phase Four and LLI elects in its sole discretion not to invest in the
applicable Phase, in accordance with Section 1.3(e) of the Investment
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Agreement (as such terms are defined therein), upon completion of the
issuance of equity in accordance with Section 1.3(e)(i) of the Investment
Agreement and in the event that the provider of equity requires
representation on the Board of Directors in connection with its investment:
(a) The Corporation, the Directors and the Shareholders shall be
entitled to take whatever action is necessary to reconfigure
the composition of the Board to accommodate the addition of
the new investor, including but not limited to, increasing
the size of the Board, filling vacancies and reducing the
number of LLI Directors, provided that at all times the
number of LLI Directors shall not be less than one (1), and
provided that, excluding the Independent Director, the ICMG
Directors at all times shall comprise not less than fifty
percent (50%) of the Board. In the event the Corporation
determines to reduce the number of the LLI Directors, the
Board (with the LLI Directors prohibited from voting) shall
be entitled to terminate the desired number of LLI Directors
if the resignations of such number of LLI Directors have not
been received by the Corporation within fifteen (15) days of
written demand therefor to LLI. The vacancies created by such
terminations or resignations shall be filled by directors
nominated by the ICMG Directors; and
(b) The ICMG Directors may, in their sole discretion, take any
and all actions permitted to be taken by directors under the
Corporation's Bylaws to effectuate the foregoing.
1.3.4 Notwithstanding anything to the contrary in Section 1.1(a),
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in the event the Corporation achieves the Milestone for Phase Three or
Four, and LLI elects not to invest in the applicable Phase, in accordance
with Section 1.3(f) of the Investment Agreement (as such terms are defined
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therein):
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(a) The Corporation shall be entitled to reduce the number of LLI
Directors to one (1), and the Board of Directors (with the LLI
Directors prohibited from voting) shall be entitled to
terminate two (2) of the LLI Directors if the resignations of
two (2) of the LLI Directors have not been received by the
Corporation within fifteen (15) days of written demand therefor
to LLI. The vacancies created by such terminations or
resignations shall be filled by directors nominated by the ICMG
Directors; and
(b) The ICMG Directors may, in their sole discretion, take any and
all actions permitted to be taken by directors under the
Corporation's Bylaws to effectuate the foregoing.
1.3.5 Notwithstanding anything to the contrary in Section 1.1(a), in
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the event LLI elects to invest in Phase Three or Four but it fails to pay
the purchase price for that Phase within the Phase Three or Phase Four
Grace Period, in accordance with Section 1.3(g) of the Investment Agreement
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(as such terms are defined therein):
(a) The Corporation shall be entitled to reduce the number of LLI
Directors to one (1), and the Board of Directors (with the LLI
Directors prohibited from voting) shall be entitled to
terminate two (2) of the LLI Directors if the resignations of
two (2) of the LLI Directors have not been received by the
Corporation within fifteen (15) days of written demand therefor
to LLI. The vacancies created by such terminations or
resignations shall be filled by directors nominated by the ICMG
Directors;
(b) The Corporation shall be entitled to terminate this Agreement;
and
(c) The ICMG Directors may, in their sole discretion, take any and
all actions permitted to be taken by directors under the
Corporation's Bylaws to effectuate the foregoing.
1.4 Voting Agreement. Each of the Shareholders agrees that, until this
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Agreement is terminated or expires, he, she or it shall take all action
necessary from time to time (including, without limitation, the voting of
securities of the Corporation, the execution of written consents, the calling
of, and voting at in person or by proxy, special meetings, the removal of
directors, the filling of vacant directorships, voting to increase or decrease
the size of the Board, the waiving of notice and attendance at meetings) to
elect or re-elect those directors nominated or appointed in accordance with
Sections 1.1, 1.2 and 1.3.
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1.5 LLI Directors.Notwithstanding anything to the contrary in this
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Section 1, at no time shall there be more than one (1) director appointed to the
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Board of Directors of ICMG who is also a manager of one or more Affiliate
investment funds created by LLI or an Affiliate (the "Investment Funds").
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1.6 Additional Voting Restrictions. Notwithstanding anything to the
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contrary in this Agreement, or in the Bylaws, or as might be customary or
permitted by the laws of the State of Michigan, the Shareholders covenant and
agree that they will not vote to approve, and their shares cannot be voted to
approve, any of the following items, unless the exact item has been previously
approved by a majority of the Board of Directors:
(a) Any change in the number of directors;
(b) Any amendment, modification, termination or supplement to the
Articles of Incorporation or Bylaws of the Corporation;
(c) Any increase in the authorized number of shares of the
Corporation or the creation of any other classes of stock or shares in the
Corporation;
(d) Sale of all or substantially all of the assets of the
Corporation;
(e) Merger with any other business entity or sale of the Corporation
by merger or any other means.
Section 2.First Offer and Tag-Along Rights.
2.1 Transfer. Except for an Exempt Transfer (as defined in Section 2.2),
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a Shareholder shall not Transfer (as such term is defined herein) any shares of
Common Stock owned by such Shareholder, whether owned on the date of this
Agreement or acquired subsequently: (i) without first satisfying the applicable
terms of this Section 2; (ii) where such Transfer would result in a Person and
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its Affiliates owning on a cumulative basis in the aggregate 10 percent or more
of the then issued and outstanding Common Stock; and (iii) where such Transfer
to one or more Investment Funds would result in the Investment Funds owning more
than twenty five percent (25%) in the aggregate, of the total ownership interest
in the Common Stock of LLI, the Investment Funds and LLI's Permitted Transferees
combined . A "Transfer" under this Section 2 shall mean a sale assignment,
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contribution, pledge or hypothecation of Common Stock to be consummated in a
single transfer or a series of transfers, to a single purchaser or a group of
purchasers, as part of a single transaction or group of transactions. For
purposes of this Section 2, the following shall be deemed to be a single
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purchaser: (a) relatives of a Person or the Person's spouse living in the same
household, (b) trusts or estates in which any one Person has a 10 percent or
greater interest or of which he or she is trustee, executor or administrator,
and (c) any corporation, partnership, limited liability company or other entity
in which any one Person holds a 10 percent or greater beneficial interest. A
Person shall mean an individual, a corporation, a partnership, an association, a
joint stock company, a trust, any unincorporated organization, or a government
or political subdivision thereof.
2.2 Exempt Transfer. The following transactions shall constitute "Exempt
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Transfers" as that term is used in this Section 2: (i) a Transfer to the
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Corporation; (ii) a Transfer entirely
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between or among any of the ICMG Shareholders and their Permitted Transferees
(as defined below) (the "ICMG Group"); (iii) a Transfer entirely between or
among LLI and its Permitted Transferees (the "LLI Group"); (iv) a Transfer by
will or intestate succession to a Shareholder's executors, administrators,
testamentary trustees, legatees or beneficiaries; (v) a Transfer to a
Shareholder's immediate family members or to a revocable inter-vivos trust, of
which a Shareholder is the grantor, or another entity controlled by such
Shareholder formed primarily for estate planning purposes; (vi) a Transfer to an
Affiliate, as defined, other than the Investment Funds; or (vii) a Transfer in a
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), or pursuant to Rule 144
promulgated thereunder; provided that for any Transfer under subsections (ii)
through (vi) of this Section 2.2, such Transfer shall be an Exempt Transfer only
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if the Common Stock transferred therein remains subject to this Agreement and if
the transferee agrees in writing to be bound by this Agreement to the extent of
such transferred shares. An Affiliate is a Person that directly or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified (the parties identified in (iv), (v)
and (vi), or any one of them are hereinafter collectively referred to as
"Permitted Transferees").
2.3 Proposed Transfer by Shareholders in ICMG Group
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2.3.1 Proposed Transfer and ICMG First Offer Right. If one or more
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of the ICMG Group (for purposes of this Section 2.3, the person(s) making
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such proposal being the "Selling Group" and the remaining ICMG Shareholders
being the "First Offer Group") proposes a Transfer comprising ten percent
(10%) or more of the then issued and outstanding Common Stock, and provided
that the Transfer is not an Exempt Transfer, then the First Offer Group
shall have the right (for purposes of this Section 2.3, the "First Offer
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Right") to acquire from the Selling Group all, but not less than all, of
the Common Stock proposed to be transferred at the same price and upon the
same terms and conditions as the proposed Transfer (for purposes of this
Section 2.3, the "Transfer Terms").
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2.3.2 First Offer Notice. The Shareholders in the Selling Group
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proposing the Transfer giving rise to the First Offer Right shall deliver
written notice to the Corporation, and for information purposes, to LLI,
setting forth the Transfer Terms, the identity of the proposed transferee
and a copy of any related written offer or agreement. The Corporation shall
within ten (10) business days of receipt of such notice, notify each
Shareholder in the First Offer Group of the proposed Transfer and of his
First Offer Rights and obligations under this Agreement, including the
Transfer Terms, the identity of the proposed transferee and the number of
shares of Common Stock such Shareholder is entitled to purchase as his pro
rata share of the proposed Transfer. Each Shareholder in the First Offer
Group who wishes to exercise his First Offer Right shall notify the
Corporation, in writing, within thirty (30) days after the date of the
notice of such First Offer Right from the Corporation, of his desire to
exercise the First Offer Right and indicate the number of shares the
Shareholder wishes to purchase. If the Corporation has not received notices
exercising First Offer Rights for all of the shares in the proposed
Transfer within the thirty (30) day period, the Corporation shall have
twenty-one (21)
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days to communicate with those Shareholders who timely exercised their
First Offer Right to advise them of the number of additional shares they
are entitled to purchase pursuant to Section 2.3.3. The Corporation may
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continue to communicate with the Shareholders who exercised their First
Offer Right until the First Offer Rights for all of the shares in the
proposed Transfer have been exercised or rejected by the Shareholders of
the First Offer Group, or the twenty-one (21) day period has expired,
whichever occurs first. The exercise of the First Offer Rights shall not be
valid and binding upon the Selling Group unless the Selling Group is
notified in writing of the exercise of the First Offer Rights for all of
the shares in the proposed Transfer (the "First Offer Notice") within sixty
(60) days from the date the Corporation received notice of the proposed
Transfer from the Selling Group (the "First Offer Period"). Unless First
Offer Rights for shares in the proposed Transfer are duly exercised within
the time periods prescribed for such exercise, the First Offer Rights of
the First Offer Group shall expire with respect to the proposed Transfer
and the proposed Transfer shall become subject to Section 2.3.4 below. The
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First Offer Notice shall identify each Shareholder wishing to purchase
shares pursuant to the First Offer Right and the number of shares each
Shareholder wishes to purchase, the total of which shall equal the number
of shares proposed to be transferred.
2.3.3 Number of Shares to be Purchased under ICMG First Offer Right.
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Each Shareholder in the First Offer Group which has elected to purchase
shares pursuant to the First Offer Right shall be entitled and obligated to
purchase from the Selling Group, in accordance with this Section 2.3, the
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number of shares proposed to be transferred by the Selling Group,
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock held by such Shareholder and the denominator of which is the
aggregate number of shares of issued and outstanding Common Stock on the
date of the First Offer Notice held by all of the Shareholders in the First
Offer Group who exercised their First Offer Right, provided that the
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Shareholders in the First Offer Group may assign to one another any rights
under this Section 2.3.3. If any Shareholders in the First Offer Group do
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not elect to purchase all of the shares which they are entitled to purchase
as set forth herein, the balance of such shares may be purchased by each
other Shareholder in the First Offer Group who has elected to purchase all
of the shares available to him pursuant to his First Offer Right (each a
"Secondary Purchaser"), on a pro rata basis, determined by multiplying the
total remaining available shares by a fraction, the numerator of which is
the number of shares of Common Stock held by such Secondary Purchaser and
the denominator of which is the aggregate number of shares of issued and
outstanding Common Stock on the date of the First Offer Notice held by the
Shareholders in the First Offer Group who elected to purchase all of the
shares available to them under their First Offer Right.
2.3.4 Triggering of LLI First Offer and Tag Along Rights. If the
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Selling Group does not receive the First Offer Notice before the expiration
of the First Offer Period, then LLI shall have the right (the "LLI First
Offer Right") to (i) purchase and, upon valid exercise by the LLI First
Offer Right, the Selling Group shall be obligated to sell to LLI, all, but
not less than all, of the shares proposed to be transferred on the same
Transfer
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Terms; or (ii) require the proposed purchaser(s) to purchase from the LLI
Group, on the same Transfer Terms, a portion of the shares of Common Stock
owned by the LLI Group, up to but in no event more than that number of
shares derived by multiplying the total number of shares of Common Stock to
be purchased by the proposed purchaser(s) by a fraction, the numerator of
which is the total number of shares of Common Stock owned by the LLI Group,
and the denominator of which is the total number of shares of issued and
outstanding Common Stock on the date of the First Offer Notice (the "LLI
Tag-Along Right"). The Corporation shall notify LLI within ten (10)
business days (the "LLI Rights Notice") of the proposed Transfer, the LLI
First Offer Right and LLI Tag-Along Right and the respective rights and
obligations of each, including the Transfer Terms, the number of shares of
Common Stock LLI is entitled to purchase if it elects to exercise the LLI
First Offer Right, and the number of shares of Common Stock the LLI Group
is entitled to sell if LLI elects to exercise the LLI Tag-Along Right.
2.3.5 Exercise of LLI First Offer Right or LLI Tag-Along Right. LLI
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may exercise either the LLI First Offer Right or the LLI Tag-Along Right,
but not both, by delivering written notice to the Corporation, with a copy
to each Shareholder in the Selling Group, of its election and the number of
shares of Common Stock to be purchased or sold (in accordance with Section
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2.3.4 above) within thirty (30) days after LLI's receipt of the LLI Rights
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Notice. If LLI elects to exercise the LLI First Offer Right, LLI shall
purchase the shares at a time mutually agreed by the LLI and the Selling
Group, but not later than forty-five (45) days after LLI's receipt of the
LLI Rights Notice, unless a later date is mutually agreed upon between LLI
and the Selling Group. Unless the LLI Tag-Along Right or the LLI First
Offer Right are duly exercised within the time periods prescribed for the
exercise of such rights, the LLI Tag-Along Right and the LLI First Offer
Right shall expire with respect to the proposed Transfer.
2.4 Proposed Transfer by Shareholders in LLI Group
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2.4.1 Proposed Transfer. If one or more of the LLI Group (for
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purposes of this Section 2.4, the person(s) making such proposal being the
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"LLI Selling Group") proposes a Transfer comprising ten percent (10%) or
more of the then issued and outstanding Common Stock, and provided that the
Transfer is not an Exempt Transfer, then the Shareholders in the ICMG Group
shall have the right (for purposes of this Section 2.4, the "ICMG First
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Offer Right") to acquire from the LLI Selling Group all, but not less than
all, of the Common Stock proposed to be transferred at the same price and
upon the same terms and conditions as the proposed Transfer (for purposes
of this Section 2.4, the "Transfer Terms").
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2.4.2 First Offer Notice. The Shareholders in the LLI Selling Group
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proposing the Transfer giving rise to an ICMG First Offer Right under this
Section 2.4 shall deliver written notice to the Corporation setting forth
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the Transfer Terms, the identity of the proposed transferee and a copy of
any related written offer or agreement. The Corporation shall within ten
(10) business days of such notice, notify each Shareholder in the ICMG
Group of the proposed Transfer and his ICMG First Offer Rights and
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obligations under this Agreement, including the Transfer Terms and the
number of shares of Common Stock such Shareholder is entitled to purchase
as his pro rata share of the proposed Transfer. Each Shareholder in the
ICMG Group who wishes to exercise his ICMG First Offer Right shall notify
the Corporation, in writing, within thirty (30) days after the date of the
notice of such ICMG First Offer Right from the Corporation, of his desire
to exercise the ICMG First Offer Right and indicate the number of shares
the Shareholder wishes to purchase. If the Corporation has not received
notices exercising ICMG First Offer Rights for all of the shares in the
proposed Transfer within the thirty (30) day period, the Corporation shall
have twenty-one (21) days to communicate with those Shareholders who timely
exercised their ICMG First Offer Right to advise them of the number of
additional shares they are entitled to purchase pursuant to Section 2.4.3.
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The Corporation may continue to communicate with the Shareholders who
exercised their ICMG First Offer Right until the ICMG First Offer Rights
for all of the shares in the proposed Transfer have been exercised or
rejected by the Shareholders in the ICMG Group, or the twenty-one (21) day
period has expired, whichever occurs first. The exercise of the ICMG First
Offer Rights shall not be valid and binding upon the LLI Selling Group
unless the LLI Selling Group is notified in writing of the exercise of the
ICMG First Offer Rights for all of the shares in the proposed Transfer (for
purposes of this Section 2.4, the "ICMG First Offer Notice") within sixty
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(60) days from the date the Corporation received notice of the proposed
Transfer from the Selling Group (for purposes of this Section 2.4, the
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"ICMG First Offer Period"). Unless ICMG First Offer Rights for shares in
the proposed Transfer are duly exercised within the time periods prescribed
for such exercise, the ICMG First Offer Rights shall expire with respect
to the proposed Transfer and the proposed Transfer shall become subject to
Section 2.4.5 below. The ICMG First Offer Notice shall identify each
-------------
Shareholder in the ICMG Group wishing to purchase shares pursuant to the
ICMG First Offer Right and the number of shares which each such Shareholder
wishes to purchase, the total of which shall equal the number of shares
proposed to be transferred.
2.4.3 Number of Shares to be Purchased. Each member of the ICMG
--------------------------------
Group which has elected to purchase shares pursuant to the ICMG First Offer
Right shall be entitled and obligated to purchase from the LLI Selling
Group, in accordance with this Section 2.4, the number of shares proposed
-----------
to be transferred by the LLI Selling Group, multiplied by a fraction, the
numerator of which is the number of shares of Common Stock held by such
Shareholder in the ICMG Group and the denominator of which is the aggregate
number of shares of issued and outstanding Common Stock on the date of the
ICMG First Offer Notice held by all of the members of the ICMG Group who
exercised their ICMG First Offer Right, provided that the members of the
--------
ICMG Group may assign to one another any rights under this Section 2.4.3.
-------------
If any members of the ICMG Group do not elect to purchase all of the shares
which they are entitled to purchase as set forth herein, the balance of
such shares may be purchased by each other member of the ICMG Group who has
elected to purchase all of the shares available to him pursuant to his ICMG
First Offer Right (each a "Secondary Purchaser" for purposes of this
Section 2.4), on a pro rata basis, determined by multiplying the total
----------
remaining available shares by a fraction, the numerator of which is the
number of shares of Common Stock held by
11
such Secondary Purchaser and the denominator of which is the aggregate
number of shares of issued and outstanding Common Stock on the date of the
ICMG First Offer Notice held by the members of the ICMG Group who elected
to purchase all of the shares available to them under their ICMG First
Offer Right.
2.4.4 Closing of Purchase under ICMG First Offer Right. The sale of
-------------------------------------------
shares pursuant to the ICMG First Offer Right under this Section 2.4 shall
-----------
occur at a time mutually agreed by the Corporation and the LLI Selling
Group, but not later than ninety (90) days after the date of the first
notice to the Corporation of the proposed Transfer from the LLI Selling
Group under this Section 2.4, unless a later date is mutually agreed upon
------------
between the Corporation and the LLI Selling Group.
2.4.5 Triggering of ICMG Tag-Along Rights. If the Selling Group does
-----------------------------------
not receive the ICMG First Offer Notice before the expiration of the ICMG
First Offer Period in accordance with this Section 2.4, then each of the
-----------
Shareholders in the ICMG Group (each a "Tag-Along Shareholder") shall have
the right (the "Tag-Along Right") to require the proposed purchaser(s) to
purchase from such Tag-Along Shareholder a portion of the shares of Common
Stock owned by such Shareholder, up to but in no event more than, that
number of shares derived by multiplying the total number of shares of
Common Stock to be purchased by the proposed purchaser(s) by a fraction,
the numerator of which is the total number of shares of Common Stock owned
by such Tag-Along Shareholder, and the denominator of which is the total
number of shares of issued and outstanding Common Stock on the date of the
ICMG First Offer Notice. Any shares purchased from Tag-Along Shareholders
pursuant to this Section shall be transferred under the same Transfer Terms
as in the proposed Transfer.
2.4.6 Tag-Along Notice. Following the receipt by the LLI Selling
----------------
Group of a notice from the Corporation notifying the LLI Selling Group of
the ICMG Group's rejection or deemed rejection of the ICMG First Offer
Right under this Section 2.4, or on the next business day following the
-----------
expiration of the First Offer Period under this Section 2.4, whichever
-----------
occurs first, the LLI Selling Group shall deliver a written notice to the
Corporation, with a copy to each Tag-Along Shareholder, stating that the
ICMG First Offer Right has been rejected, or deemed rejected, or has lapsed
and that the Tag-Along Right is available to such Tag-Along Shareholder.
The Tag-Along Right may be exercised by any Tag-Along Shareholder by
delivery of a written notice to the LLI Selling Group (the "Tag-Along
Notice"), with a copy to the Corporation, within thirty (30) days following
such Tag-Along Shareholder's receipt of such notice from the LLI Selling
Group. The Tag-Along Notice shall state the number of shares of Common
Stock that such Tag-Along Shareholder proposes to include in the Transfer
to the proposed purchaser (not to exceed the number determined in
accordance with Section 2.4.5 above). Unless the Tag-Along Rights for
-------------
shares in the proposed Transfer are duly exercised within the time periods
prescribed for such exercise, the Tag-Along Rights of the Tag-Along
Shareholders shall expire with respect to the proposed Transfer.
12
2.5 Closing. At the closing of any Transfer or sale pursuant to this
--------
Section 2, the purchaser(s) shall remit to each selling Shareholder the
---------
consideration for the total sales price of the Common Stock of such Shareholder
sold pursuant hereto, upon delivery by such Shareholder of certificate(s) for
such shares duly endorsed in blank for transfer or accompanied by stock power(s)
duly executed in blank and such other transfer documentation, including but not
limited to representations and warranties of title, as shall be reasonably
required by the purchaser(s) or counsel thereto.
2.6 Renewal of Rights under Section 2. Notwithstanding anything to the
---------------------------------
contrary in this Section 2, if any proposed Transfer (except an Exempt Transfer)
---------
which triggers any of the rights set forth in this Section 2 is not fully
---------
consummated within 180 days after the Corporation receives notice of such
proposed Transfer, the proposed Transfer may not thereafter be consummated
unless all of the rights and obligations of this Section 2 are undertaken again
---------
as if all prior elections and notices were void and the proposed Transfer were a
newly proposed Transfer.
Section 3. Registration Rights.
--------------------
The Corporation covenants and agrees as follows:
3.l Definitions. For purposes of this Section 3:
------------ ---------
(a) The terms "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended
(the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means Common Stock of the
Corporation, including Common Stock issued and outstanding at any time
while this Agreement is in effect and Common Stock issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of
any preferred stock or Common Stock; provided, however, that Common Stock
or other securities shall only be treated as Registrable Securities if and
so long as (1) they have not been sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction,
and (2) they have not been sold in a transaction exempt from the
registration and prospectus delivery requirements of the Act under Section
4(1) thereof so that all transfer restrictions and restrictive legends with
respect thereto are removed upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock outstanding
which are Registrable Securities;
13
(d) The term "Holder" means any Shareholder who is a party to this
Agreement and who is the record owner of Registrable Securities, or any
assignee thereof in accordance with Section 3.11 hereof;
------------
(e) The term "SEC" means the Securities and Exchange Commission or
any other federal agency at the time administering the Act;
(f) The Corporation's "I.P.O." means the initial public offering and
sale of the Corporation's Common Stock, pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
3.2 Corporation Registration. If (but without any obligation to do so)
-------------------------
the Corporation proposes to register any of its stock or other securities under
the Act in connection with the public offering of such securities solely for
cash (other than a registration relating solely to the sale of securities to
participants in a Corporation stock plan, or a registration on any form which
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities or a SEC Rule 145 transaction), the Corporation shall, at such time,
promptly give each Holder written notice of such registration. Upon the written
request of each Holder given within fifteen (15) days after mailing of such
notice by the Corporation in accordance with Section 5.6, the Corporation shall,
-----------
subject to the provisions of Sections 3.4, 3.5, 3.6 and 3.7, cause to be
------------------------------
registered under the Act all of the Registrable Securities that each such Holder
has requested to be registered. Notwithstanding the foregoing, after the
Corporation's I.P.O., the Corporation will not be required to give notice to the
Holders of Registrable Securities if the underwriters managing the proposed
offering have advised the Corporation in writing that in their judgment market
conditions will not allow the inclusion of any secondary shares in such
offering. In the event the managing underwriters and the Corporation
subsequently determine to add any secondary shares in the offering, such notice
shall be provided, and each Holder shall have the registration rights provided
in this Section 3.
---------
3.3 Form S-3 Registration. In case the Corporation shall receive from any
----------------------
Holder or Holders of the Registrable Securities then outstanding a written
request or requests that the Corporation effect a registration on Form S-3 for a
public offering the aggregate offering price of which would exceed $1,000,000,
the Corporation will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such
written notice from the Corporation; provided, however, that the
Corporation shall not
14
be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 3.3: (i) if Form S-3 is not available for such
-----------
offering by the Holders; (ii) if the Corporation shall furnish to the
Holders a certificate signed by the President of the Corporation stating
that in the good faith judgment of the board of directors of the
Corporation it would be detrimental to the Corporation and its stockholders
for such Form S-3 Registration to be effected at such time, in which event
the Corporation shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 3.3;
-----------
(iii) if the Corporation has, within the six (6) month period preceding the
date of such request, already effected a registration for the Holders
pursuant to this Section 3.3; (iv) if the Corporation has, at any time,
-----------
already effected two (2) registrations for the Holders pursuant to this
Section 3.3; or (v) in any particular jurisdiction in which the Corporation
-----------
would be required to qualify to do business or to execute a general consent
to service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Corporation shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holders.
3.4 Obligations of the Corporation. Whenever required under Section 3.2
------------------------------- -----------
or 3.3 to effect the registration of any Registrable Securities, the Corporation
------
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts and take
all steps necessary to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for up to 90 days or until all of the securities
registered thereunder are sold, whichever occurs sooner.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Furnish to the counsel of any Holder, a copy of the registration
statement five (5) days prior to the filing of such registration statement.
15
(e) Use its best efforts to register and qualify the securities
covered by such registration statement for listing on the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") or
another similar exchange.
(f) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or state
securities laws of such jurisdictions as shall be reasonably requested by
the Holders, provided that the Corporation shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(g) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each
Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(h) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing.
3.5 Furnish Information. It shall be a condition precedent to the
--------------------
obligations of the Corporation to take any action pursuant to this Section 3
---------
with respect to the Registrable Securities of any selling Holder, that such
Holder furnish to the Corporation such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder's
Registrable Securities.
3.6 Underwriting Requirements. In connection with any offering involving
--------------------------
an underwriting of shares of the Corporation's capital stock, the Corporation
shall not be required under Section 3.2 or 3.3 to include any of the Holders'
------------------
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Corporation and the underwriters selected by the
persons entitled to select the underwriters, and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Corporation. If the total amount of securities,
including Registrable Securities, requested by Holders to be included in such
offering exceeds the amount of securities sold other than by the Corporation
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Corporation shall be required to include in
the offering only that number of such securities, including Registrable
Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among all selling stockholders according to the total
amount of securities owned by each selling stockholder or
16
in such other proportions as shall mutually be agreed to by such selling
stockholder). For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder which is a Holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder" and
any pro rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
3.7 Delay of Registration. No Holder shall have any right to obtain or
----------------------
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
---------
3.8 Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Section 3:
---------
(a) To the extent permitted by law, the Corporation will indemnify,
defend, protect and hold harmless each Holder, any underwriter (as defined
in the Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, or the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Corporation of the Act, the 1934 Act, any state securities law or any rule
or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Corporation will pay to each such Holder,
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by one law firm retained by them (or such additional
law firms retained by a Holder or Holders if such Holder or Holders
reasonably believe there exists a conflict of interest among them) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 3.8(a) shall not apply to amounts paid in
--------------
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Corporation (which
consent shall not be unreasonably withheld), nor shall the Corporation be
liable in any such case for any loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information furnished
expressly for use
17
in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify, defend, protect and hold harmless the Corporation, each of its
directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Corporation within the meaning of the
Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter
or other Holder, against any losses, claims, damages or liabilities (joint
or several) to which any of the foregoing persons may become subject, under
the Act, or the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this Section 3.8(b), in connection
--------------
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 3.8(b) shall not apply to amounts paid in settlement of any such
--------------
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, the obligation to indemnify will be several, not
joint and several, among such sellers of Registrable Securities, and in no
event shall any indemnity under this Section 3.8(b) exceed the net proceeds
--------------
from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
-------
3.8 of notice of the commencement of any action (including any governmental
---
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying xxxxx under this Section 3.8, deliver to
-----------
the indemnifying party a written notice of the commencement thereof (and a
copy of the claim or action) and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party (together with all
other indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential conflicting interests
between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under
this Section 3.8, but the failure to
-----------
18
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under
this Section 3.8.
-----------
(d) If the indemnification provided for this Section 3.8 is held by a
-----------
court of competent jurisdiction, by a final non-appealable judgment, to be
unavailable to an indemnified party with respect to any loss, liability,
claim, damage or expense referred to herein, then the indemnifying party,
in lieu of indemnifying such indemnified party hereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such
statements or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in any underwriting agreement
entered into in connection with any underwritten public offering are in
conflict with the foregoing provisions of this Section 3.8, the provisions
-----------
in the underwriting agreement shall control with respect to the Registrable
Securities covered thereby.
(e) The obligations of the Corporation and Holders under this Section
-------
3.8 shall survive (i) the expiration or termination of this Agreement and
--
(ii) completion of any offering of Registrable Securities in a registration
statement under this Section 3, and otherwise.
---------
3.9 Reports Under Securities Exchange Act of 1934. With a view to making
----------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Corporation to the public without registration, the
Corporation agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Corporation for the offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Corporation under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the
Corporation that it has
19
complied with the reporting requirements of SEC Rule 144 (at any time after
ninety (90) days after the effective date of the first registration
statement filed by the Corporation), the Act and the 1934 Act (at any time
after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Corporation and such
other reports and documents so filed by the Corporation, and (iii) such
other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
3.10 Expenses of Registration. The Corporation shall bear and pay all
-------------------------
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities, whether pursuant to Section 3.2, 3.3 or a combination
----------------
thereof, including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
selected by them (which the Corporation may request be the Corporation's counsel
if such counsel is reasonably acceptable to such selling Holders), but excluding
underwriting discounts and commissions and stock transfer taxes relating to
Registrable Securities.
3.11 Assignment of Registration Rights. The rights to cause the
----------------------------------
Corporation to register Registrable Securities pursuant to this Section 3 may
---------
only be assigned to a purchaser, assignee or transferee of the underlying
Registrable Securities.
3.12 "Market Stand-Off" Agreement. Each Holder hereby agrees that for a
---------------------------
period of 180 days following the effective date of the first registration
statement of the Corporation covering Common Stock filed on Form S-l under the
Act and for any registration effected pursuant to Sections 3.2 or 3.3, provided
-------------------
the Holders are given written notice of the offering at least fifteen (15) days
prior to the Corporation's filing with the SEC of a registration statement
relating thereto, it shall not, unless otherwise agreed by the Corporation and
the managing underwriters, directly or indirectly sell, offer to sell, contract
to sell (including, without limitation, any short sale), grant any option to
purchase or otherwise transfer or dispose of (other than to donees who agree to
be similarly bound) any securities of the Corporation held by it at any time
during such period except Common Stock included in such registration; provided,
however, that all officers and directors of the Corporation and all other
persons with registration rights (whether or not pursuant to this Agreement)
enter into similar agreements. In order to enforce the foregoing covenant, the
Corporation may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such period.
3.13 Limitations on Subsequent Registration Rights. From and after the
----------------------------------------------
date of this Agreement, the Corporation shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Corporation which would allow such holder or prospective holder to
include such securities in any registration filed under Section 3.2 or 3.3
------------------
hereof, unless under the terms of such agreement, such holder or prospective
holder may
20
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders which is included.
3.14 Termination. The rights provided in this Section 3 shall terminate
----------- ---------
on the fifth anniversary of the closing of the Corporation's I.P.O.
Section 4. Stock Certificate Legend.
------------------------
4.1 Required Legend. Simultaneously with the execution of this Agreement,
---------------
each Shareholder shall surrender all certificates of stock, except those
certificates representing shares which are or were acquired through ordinary
brokerage transactions and not pursuant to this Agreement, to the Corporation
for endorsement with the following legend, which shall be conspicuously placed
on such certificates (in addition to any legends then appearing on such
certificates):
The sale, transfer, assignment, pledge, hypothecation or other
disposition of the shares represented by this certificate is
restricted by the provisions of the Shareholders Agreement, dated
as of June 1, 1998 (as it may be amended from time to time), to
which the Corporation and the holder of this certificate, among
others, are parties, a copy of which may be inspected at the
principal office of the Corporation. The provisions of such
agreement are incorporated herein by reference.
All certificates of stock issued to or acquired by any such Shareholder
after the date of this Agreement, except certificates representing shares which
are or were acquired through ordinary brokerage transactions and not pursuant to
this Agreement, shall also bear the foregoing legend; provided, however, that
the Corporation shall remove the required legend from any shares transferred to
a third party (i.e., a party other than a Shareholder or Permitted Transferee)
as permitted in this Agreement, so that such transferee shall not be subject to
the requirements contained in this Agreement.
4.2 Effect of Missing Legend. Section 4.1 above notwithstanding, the fact
------------------------ -----------
that such legend has not been placed on a given certificate of Stock held by any
Shareholder shall not affect the rights of the parties to this Agreement in any
way, and all certificates of stock on which such legend has not been placed,
except those certificates representing shares which are or were acquired through
ordinary brokerage transactions and not pursuant to this Agreement or as part of
a public offering registered under the Securities Act of 1933 or Rule 144
promulgated thereunder, shall be deemed to have had that legend placed on them
for the purposes of this Agreement.
4.3 Availability of Agreement. The Corporation shall maintain a copy of
-------------------------
this Agreement at its principal place of business and shall make such copies
available for review to any person who shall inquire about the Agreement.
21
Section 5. Miscellaneous.
5.1 Waivers and Amendments. With the written consent of the holders of
-----------------------
the shares of Common Stock held by the LLI Group and the holders of more than 66
2/3% of the shares of Common Stock held by the ICMG Shareholders, each voting as
a separate class, the obligations of the Corporation and the rights of the
holders of the Common Stock under this Agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively and either
for a specified period of time or indefinitely), and with the same consent, the
Corporation, when authorized by resolution of its board of directors, may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such waiver or supplemental agreement shall reduce
the aforesaid percentage of ICMG Shareholders and of the LLI Group which is
required to consent to any waiver or supplemental agreement, without the
unanimous consent of the Shareholders. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Corporation
promptly shall give written notice thereof to the record holders of the Common
Stock. This Agreement or any provision hereof may not be changed, waived,
discharged or terminated orally, but only by a statement in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, except to the extent provided in this Section 5.1.
-----------
5.2 Termination. Except with respect to the rights provided in Section 3
----------- ---------
(which terminate in accordance with Section 3.14), the rights and obligations in
------------
this Agreement shall terminate upon the earliest of: (i) the consummation of the
Corporation's I.P.O., as defined in Section 3.1; (ii) the consummation of a sale
-----------
which has been subject to, and has complied with, the First Offer Rights or the
Tag-Along Rights as set forth in Section 2 above (but only to the extent of the
---------
shares of Common Stock included in such sale); (iii) at the election of the
Corporation, in accordance with Sections 1.3.2 or 1.3.5; or (iv) the dissolution
-----------------------
or liquidation of the Corporation. If not sooner terminated, all First Offer
Rights and Tag-Along Rights (under Section 2) shall be permanently terminated
---------
when the Shareholders, as a group, hold less than ten percent (10%) of the
issued and outstanding Common Stock of the Corporation.
5.3 Governing Law, Jurisdiction and Venue. This Agreement shall be
--------------------------------------
governed in all respects by the laws of the State of Michigan and the United
States of America, without giving effect to principles of conflicts-of-laws.
Each undersigned party hereby consents to the personal and subject-matter
jurisdiction of the courts of the State of Michigan and the United States of
America over all matters arising from or in connection with the making and
operation of this Agreement and the entire relationship of the parties. Each
undersigned party further agrees that any dispute or action among any of the
parties hereto with respect to the making or operation of this Agreement or any
matter concerning the Corporation shall be brought exclusively in the Federal
court for the Eastern District of Michigan, except that in the event that the
Federal court for the Eastern District of Michigan does not have jurisdiction
over any dispute or action among any of the parties hereto, such dispute or
action shall be tried in the Michigan Circuit Court for the County of Oakland.
This Section 5.3 shall survive the termination or expiration of this Agreement.
-----------
22
5.4 Performance. The Corporation and LLI acknowledge that in the event of
------------
a breach of Section 1 of this Agreement, monetary damages may not be an adequate
---------
remedy. Notwithstanding anything to the contrary in this Agreement, in the
event of a breach of Section 1, such provision shall be enforceable by the
---------
Corporation or the Investor as the case may be, in a court of equity by a decree
of specific performance, including but not limited to a temporary restraining
order or injunctive relief.
5.5 Successors and Assigns. Except as otherwise expressly provided herein,
-----------------------
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
5.6 Entire Agreement. This Agreement and the other documents delivered
-----------------
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, sets forth
the sole and complete standards pursuant to which their obligations are to be
judged and their performance measured, and supersedes any previous agreements
between the parties pertaining to such matters.
5.7 Standard of Performance. Whenever a party has been specifically
------------------------
granted a right to exercise its business judgment, or act, in a subjective
manner, with respect to any matter, or the right to act in its sole and absolute
discretion or sole judgment, or the right to make a subjective judgment under
any provision of this Agreement, whether or not "objectively" reasonable under
the circumstances, any such exercise shall not be deemed inconsistent with any
covenant of good faith and fair dealing otherwise implied by law to be part of
this Agreement.
5.8 Notices, Etc. All notices and other communications required or
-------------
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon actual delivery following mailing by overnight
courier or certified mail, postage prepaid, or facsimile addressed (a) if to the
Shareholders, as indicated on Exhibit 5.8 attached hereto, or at such other
-----------
address as it shall have furnished to the Corporation, (b) if to the
Corporation, to Interactive Coupon Marketing Group, Inc., 0000 Xxxx Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 or via facsimile at (000) 000-0000 and
addressed to the attention of the corporate secretary, or at such other address
or facsimile number as the Corporation shall have furnished to the Shareholders,
or (c) if to any other holder of Common Stock at such address as such holder
shall have furnished to the Corporation in writing, or, until such holder so
furnishes an address to the Corporation, then to and at the address of the last
holder of such Common Stock, who so furnished an address to the Corporation.
For purposes of giving notice under this Agreement, "business day" shall mean a
business day where the recipient of the notice is located.
5.9 Delays or Omissions. No delay or omission to exercise any right, power
-------------------
or remedy accruing to any holder of any securities issued or sold or to be
issued or sold hereunder, upon any breach or default of the Corporation under
this Agreement shall impair any such right, power or remedy of such holder nor
shall it be construed to be a waiver of any
23
such breach or default, or an acquiescence therein, or in any similar breach or
default thereafter occurring, nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
5.10 Severability. In case any provision of this Agreement shall be
------------
invalid, illegal or unenforceable, it shall be modified in such manner as to be
valid, legal, and enforceable but so as to most nearly retain the intent of the
parties, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
5.11 Headings and Construction. The titles and subtitles of this Agreement
--------------------------
are intended for reference and shall not by themselves determine the
construction or interpretation of this Agreement. Use in this Agreement of the
words "including", "such as", or words of similar import, when following any
general term, statement or matter, shall not be construed to limit such
statement, term or matter to the specific items or matter, whether or not the
language of non-limitation such as "without limitation" or "but not limited to",
or words of similar import, are used with reference thereto, but rather shall
refer to all other terms or matters that could reasonably fall within the
broadest possible scope of such statement, term or matter. Unless otherwise
stated, all references to "Sections" and "Exhibits" are references to Sections
and Exhibits of this Agreement.
5.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Photostatic or facsimile
reproductions of this Agreement may be made and relied upon to the same extent
as the originals.
5.13 Expenses. The Corporation and each Shareholder shall pay its own
--------
costs and expenses in connection with the negotiation, execution, delivery and
performance of this Agreement.
5.14 Attorneys Fees. If any arbitration, litigation or similar
--------------
proceedings are brought by any party to enforce any obligation or to pursue any
remedy under this Agreement, the party prevailing in any such arbitration,
litigation or similar proceedings will be entitled to costs of collection, if
any, and reasonable attorneys fees incurred in connection with such proceedings
and in collecting or enforcing any award granted therein.
5.15 Exhibits. The Exhibits, to which reference is made in this
--------
Agreement, are deemed incorporated in this Agreement in their entirety.
24
IN WITNESS WHEREOF, the parties have caused this Shareholders Agreement to
be executed by themselves or by their respective representatives thereunto duly
authorized as of the day and year first above written. The undersigned
Shareholders execute this Agreement with respect to all shares of capital stock
of the Corporation currently owned and hereafter acquired, to the extent
provided herein.
The "Corporation"
Interactive Coupon Marketing Group, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: Chairman/CEO
--------------------------------
[Shareholder signatures appear on following page]
25
EXHIBIT 5.8
-----------
INVESTOR ADDRESS
Investor: Lend Lease International Pty. Limited
Level 00 Xxxxxxxxx Xxxxxx
Xxxxxx
XXX 0000
Xxxxxxxxx
Attn: Xxxxxxx Xxxxx
Fax: (000) 0000-0000
with copies to: Xxxxxxx X. Xxxxxxx, Esp.
Cassidy, Cheatham, Xxxxxx & Xxxxxx
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
and
Xxxxx & Bird, LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxx
Fax: (000) 000-0000
Exhibit A
---------
Index of Defined Terms and List of Schedules
--------------------------------------------
Term Section Defined in
---- ------------------
1934 Act Section 3.8(a)
Act Section 2.2
Affiliate Section 2.2
Agreement Cover; Introduction
Common Stock Cover; Recital B
Corporation Cover; Introduction
Directors Cover; Recital C
First Offer Group Section 2.3.1
First Offer Notice Section 2.3.2
First Offer Period Section 2.3.2
First Offer Right Section 2.3.1
Holder Section 3.1(d)
I.P.O. Section 3.1(f)
ICMG Directors Section 1.1(b)
ICMG First Offer Notice Section 2.4.2
ICMG First Offer Period Section 2.4.2
ICMG First Offer Right Section 2.4.1
ICMG Group Section 2.2
ICMG Shareholders Cover; Recital C
Independent Director Section 1.2
Investment Agreement Cover; Recital A
Investment Funds Section 1.5
LLI Cover; Recital A
LLI Directors Section 1.1(a)
LLI First Offer Right Section 2.3.4
LLI Group Section 2.2
LLI Rights Notice Section 2.3.4
LLI Selling Group Section 2.4.1
LLI Tag-Along Right Section 2.3.4
Michigan Act Cover; Recital B
NASDAQ Section 3.4(e)
Option Shares Cover; Recital B
Permitted Transferees Section 2.2
Person Section 2.1
Register, registered, and registration Section 3.1(a)
Registrable Securities Section 3.1(b)
Registrable Securities then outstanding Section 3.1(c)
Schedule I Section 5.7
28
Term Section Defined in
---- ------------------
SEC Section 3.1(e)
Secondary Purchaser Section 2.3.3
Selling Group Section 2.3.1
Selling Stockholder Section 3.6
Shareholder(s) Cover; Introduction
Slate Section 1.2
Tag-Along Notice Section 2.4.6
Tag-Along Right Section 2.4.5
Tag-Along Shareholder Section 2.4.5
Transfer Section 2.1
Transfer Terms for Section 2.3 Section 2.3.1
Transfer Terms for Section 2.4 Section 2.4.1
Vacancy Section 1.2
Violation Section 3.8(a)
Exhibits
--------
Exhibit A Introduction
Exhibit 5.8 Section 5.8
29
