WESTWIND CAPITAL CORPORATION SHAREHOLDERS’ EQUITY AGREEMENT dated as of September 30, 2007
WESTWIND
CAPITAL CORPORATION
dated
as of September 30, 2007
by
and among
XXXXXX
XXXXXX PARTNERS GROUP, INC.
and
CERTAIN
FORMER SHAREHOLDERS OF WESTWIND CAPITAL
CORPORATION
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Page
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ARTICLE
I
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RESTRICTIONS
ON TRANSFER
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Section
1.01
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General
Restrictions on Transfer
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2
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Section
1.02
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Legends
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2
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Section
1.03
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Permitted
Transferees
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3
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Section
1.04
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Restrictions
on Transfers by Shareholders
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3
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ARTICLE
II
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REGISTRATION
RIGHTS
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Section
2.01
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Demand
Registration
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5
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Section
2.02
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Piggyback
Registration
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8
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Section
2.03
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Lock-Up
Agreements
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9
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Section
2.04
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Registration
Procedures
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9
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Section
2.05
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Indemnification
by the Company
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13
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Section
2.06
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Indemnification
by Participating Shareholders
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14
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Section
2.07
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Conduct
of Indemnification Proceedings
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14
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Section
2.08
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Contribution
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15
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Section
2.09
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Participation
in Public Offering
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16
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Section
2.10
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Other
Indemnification
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16
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Section
2.11
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Cooperation
by the Company
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16
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Section
2.12
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No
Transfer of Registration Rights
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16
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Section
2.13
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Underwritten
Offering Committee
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17
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Section
2.14
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Term
of Registration Rights
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17
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Section
2.15
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Other
Agreements
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17
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ARTICLE
III
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SHAREHOLDER
COVENANTS
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Section
3.01
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Confidential
Information
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18
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Section
3.02
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Noncompetition
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18
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Section
3.03
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Nonsolicitation
of Clients
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20
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Section
3.04
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Nonsolicitation
of Employees
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21
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Section
3.05
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Transfer
of Client Relationships
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21
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Section
3.06
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Prior
Notice Required
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21
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Section
3.07
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Shareholder
Covenants Generally
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21
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Section
3.08
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Damages
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22
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Section
3.09
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Arbitration
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24
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i
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Page
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ARTICLE
IV
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MISCELLANEOUS
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Section
4.01
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Binding
Effect; Assignability; Benefit
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24
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Section
4.02
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Notices
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24
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Section
4.03
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Waiver;
Amendment; Termination
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25
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Section
4.04
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Fees
and Expenses
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25
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Section
4.05
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Governing
Law
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26
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Section
4.06
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Jurisdiction
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26
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Section
4.07
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WAIVER
OF JURY TRIAL
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26
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Section
4.08
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Specific
Enforcement
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26
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Section
4.09
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Counterparts;
Effectiveness
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26
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Section
4.10
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Entire
Agreement
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26
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Section
4.11
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Captions
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26
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Section
4.12
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Severability
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27
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ARTICLE
V
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DEFINITIONS
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Section
5.01
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Definitions
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27
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Exhibit
A:
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Joinder
Agreement to Westwind Capital Corporation Shareholders’ Equity Agreement
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Schedule
I
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Managing
Directors with Xxxxx 0 Xxxxxx
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Xxxxxxxx
II
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Managing
Directors with Level 2 Equity
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Schedule
III
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Certain
Employees
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Section
IV
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Affiliates
of Westwind
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ii
WESTWIND
CAPITAL CORPORATION SHAREHOLDERS’ EQUITY
AGREEMENT
This
WESTWIND CAPITAL CORPORATION SHAREHOLDERS’ EQUITY AGREEMENT (this “Agreement”),
dated
as of September 30, 2007 is entered into by and between Xxxxxx Xxxxxx Partners
Group, Inc., a Delaware corporation (the “Company”)
and
the persons listed on the signature page hereof (each, a “Shareholder”).
For
the purposes of this Agreement, (i) “Shareholder” shall mean, if such person
shall have “Transferred” any of his or her “Company Securities” to any of his or
her respective “Permitted Transferees” (as such terms are defined below), such
person and such Permitted Transferees, taken together, and any right, obligation
or action that may be exercised or taken at the election of such person may
be
taken at the election of such person and such Permitted Transferees, and (ii)
where any Shareholder is a corporation controlled by an individual that is
employed by the Firm or a trust created for the benefit of such individual
and/or his or her Family Member (as defined below), “Shareholder” shall also
include such individual. Capitalized terms used have the meanings set forth
in
Article V.
RECITALS
WHEREAS,
pursuant to the Arrangement Agreement (the “Arrangement
Agreement”),
dated
as of September 30, 2007, by and among the Company, TWP Acquisition Company
(Canada), Inc., a corporation organized under the Ontario Business Corporations
Act and a wholly-owned subsidiary of the Company, Westwind Capital Corporation,
a corporation organized under the Ontario Business Corporations Act
(“Westwind”)
and
Xxxxxx Xxxxxxxx, as Shareholders’ Representative, the Company has agreed to
indirectly acquire all of the outstanding shares of Westwind pursuant to the
Plan of Arrangement (as defined in the Arrangement Agreement).
WHEREAS,
upon the completion of the Arrangement and subject to the terms and conditions
set out in the Arrangement Agreement and the Plan of Arrangement, the
Shareholders will receive cash, Common Shares and/or Exchangeable Shares.
WHEREAS,
the parties hereto acknowledge that each Shareholder, as a result of his, her
or
its relationship with the Company and Westwind, has obtained knowledge of the
Confidential Information (as defined below), and that the Company’s future
businesses rely, to a significant extent, upon such Confidential Information
and
the goodwill of the Company and Westwind in general.
WHEREAS,
the parties hereto acknowledge that, upon the completion of the Arrangement,
the
Shareholders may sell or dispose of their Company Securities (as defined below),
subject to the terms and conditions set out in this Agreement, and receive
substantial benefits as a result of the transactions contemplated by the
Arrangement Agreement.
WHEREAS,
the parties hereto desire to enter into this Agreement to govern certain of
their rights, duties and obligations after consummation of the transactions
contemplated by the Arrangement Agreement.
NOW,
THEREFORE, in consideration of the covenants and agreements contained herein
and
in the Arrangement Agreement, the parties hereto agree as follows:
ARTICLE
I
RESTRICTIONS
ON TRANSFER
Section
1.01 General
Restrictions on Transfer.
(a)
Each Shareholder understands and agrees that the Company Securities received
by
such Shareholder upon consummation of the transactions contemplated by the
Arrangement Agreement have been issued or delivered by Canadian Sub pursuant
to
exemptions from the registration and prospectus requirements of applicable
securities legislation in Canada and the United States. Accordingly, such
Company Securities have not been registered under the Securities Act and may
be
subject to transfer restrictions under the Securities Act and the rules and
regulations promulgated thereunder. Each Shareholder agrees that he, she or
it
shall not Transfer any Company Securities (or solicit any offers in respect
of
any Transfer of any Company Securities), except in compliance with the
Securities Act, any other applicable securities or “blue sky” laws, and the
terms and conditions of this Agreement.
(b)
Any
attempt to Transfer any Company Securities otherwise than in compliance with
this Agreement shall be null and void, and the Company shall not, and shall
cause any transfer agent not to, give any effect in the Company’s or Canadian
Sub’s stock records to such attempted Transfer.
Section
1.02 Legends.
(a) In
addition to any other legend that may be required under the Arrangement
Agreement or otherwise, each certificate for Company Securities issued to the
Shareholders shall bear a legend in substantially the following form (it being
understood that the first sentence of the following legend shall only be set
forth on certificates for Company Securities issued to Shareholders listed
on
Schedule
V1):
THE
SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH
RULE 145 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES. THIS SECURITY
IS
ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE WESTWIND
CAPITAL CORPORATION SHAREHOLDERS’ EQUITY AGREEMENT, DATED AS OF SEPTEMBER 30,
2007, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM XXXXXX XXXXXX PARTNERS
GROUP, INC. OR ANY SUCCESSOR THERETO.
1 Schedule
V to identify affiliates of Westwind and affiliates of Xxxxxx Xxxxxx Partners
Group, Inc.
-2-
(b)
If
any Company Securities shall cease to be Registrable Securities under clause
(i)
or clause (ii) of the definition thereof, the Company, upon the written request
of the holder thereof, shall issue to such holder a new certificate evidencing
such Company Securities without the first sentence of the legend required by
Section
1.02(a)
endorsed
thereon. If any Company Securities cease to be subject to any and all
restrictions on Transfer set forth in this Agreement, the Company, upon the
written request of the holder thereof, shall issue, or cause to be issued,
to
such holder a new certificate evidencing such Company Securities without the
last sentence of the legend required by Section
1.02(a)
endorsed
thereon.
Section
1.03 Permitted
Transferees.
Notwithstanding anything to the contrary in this Agreement, a Shareholder may
at
any time Transfer any or all of his, her or its Company Securities to one or
more of his or her Permitted Transferees without the consent of the Company
so
long as (a) such Permitted Transferee has agreed in writing to be bound by
the
terms of this Agreement pursuant to a Joinder Agreement in the form of Exhibit
A
attached hereto, and (b) the Transfer to such Permitted Transferee is in
compliance with the Securities Act and any other applicable securities or “blue
sky” laws.
Section
1.04 Restrictions
on Transfers by Shareholders.
(a)
Subject to Sections
1.04(b),
1.04(c)
and
1.04(d),
a
Shareholder shall not Transfer any of his or her Company Securities until after
February 7, 2011, except to one or more of his or her Permitted Transferees
in
accordance with Section
1.03.
(b)
Notwithstanding the provisions of Section
1.04(a),
a
Shareholder may Transfer any of his or her Company Securities as follows:
(i)
in a
Public Offering in connection with the exercise of his, her or its rights under
Section
2.01
or
Section
2.02,
subject
to the limitations set forth therein and subject to the restriction that no
more
than twenty (20)
percent of the Company Securities that such Shareholder received in exchange
for
such Shareholder’s shares of Westwind pursuant to the transactions contemplated
by the Arrangement Agreement may be Transferred during the twelve month period
following the Closing Date; or
(ii)
following the termination of the employment of such Shareholder by the Company
due to the Shareholder’s death or disability, in a Transfer that complies with
applicable securities laws; or
-3-
(iii)
subject to the approval of the Underwritten Offering Committee (not to be
unreasonably withheld or delayed), in a Transfer with or without
consideration of any kind (A) to a spouse, sibling and/or parent of the
Shareholder and/or any parent or lineal descendant of any of the foregoing
or of
the Shareholder and/or any spouse of any of the foregoing (each, a “Family
Member”),
(B) a
trust that is for the exclusive benefit of such Shareholder and/or one or more
Family Members and/or any institution qualified as tax exempt under Section
501(c)(3) of the Code or that is a “registered charity” within the meaning of
the Tax Act (“Charitable
Organization”)
or a
corporation that is for the exclusive benefit of such Shareholder and/or one
or
more Family Members or (C)
any
Charitable Organization; provided,
however,
that in
each case any such transferee shall have agreed in writing to be bound by the
terms of this Agreement pursuant to a Joinder Agreement in the form of Exhibit
A
attached hereto, and such Transfer is in compliance with the Securities Act
and
any other applicable securities or “blue sky” laws.
(c)
The
restrictions on Transfers set forth in Section
1.04(a)shall
not
terminate with respect to any Company Securities that have been pledged to
the
Company as security in connection with the Shareholder Covenants until such
time
as the Shareholder Covenants shall have expired.
(d)
The
restrictions on Transfers set forth in Section
1.04(a)shall
terminate automatically upon a Change of Control.
ARTICLE
II
REGISTRATION
RIGHTS
The
Company shall use its reasonable best efforts to (i) effect the registration
under the Securities Act of the Common Shares delivered upon exchange of the
Exchangeable Shares, (ii) register or qualify for sale such Common Shares under
such other securities or "blue sky" laws of each jurisdiction in the United
States or Canada for which such registration or qualification is necessary,
(iii) list such Common Shares on the principal national securities exchange
on
which the Common Stock is then listed or traded and (iv) maintain such
registration, qualification or listing effective for the period that the
Exchangeable Shares remain outstanding (other than with respect to Exchangeable
Shares held by the Company or its Affiliates). In furtherance of the foregoing,
on or before the later of (x) 45 days following the Closing Date or (y) 10
Business Days following the date the Company files its Annual Report on Form
10-K (or a successor form) for the year ended December 31, 2007, the Company
shall file a registration statement on Form S-3 (or other applicable form as
determined by the Company) under the Securities Act (the “Exchangeable
Share Registration Statement”)
covering the Common Shares delivered upon exchange of the Exchangeable Shares,
provided that the Company may defer the filing of a registration statement
pursuant to this paragraph for a reasonable period of time not exceeding 60
days
if at the time the Company would be obligated to so file, there is material
non-public information regarding the Company which, in the judgment of the
Board, is not in the Company’s best interest to disclose and which the Company
is not otherwise required to disclose or there is a significant business
opportunity (including, but not limited to, the acquisition or disposition
of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which, in the judgment of the Board, is not in the Company’s best
interest to disclose. Each Shareholder acknowledges that it shall be entitled
to
exercise its exchange, redemption or similar rights with respect to any
Exchangeable Shares held by such Shareholder only at a time in which the
Exchangeable Share Registration Statement is effective; provided that the
Company agrees that it will maintain the Exchangeable Share Registration
Statement effective for a minimum of at least 180 days in each annual period
beginning February 7, 2009. The Company shall prepare and file with the SEC
such
renewals, amendments and supplements to such registration statement, including
any prospectus used in connection therewith, as may be necessary to keep such
registration statement effective until the date as of which there are no
Exchangeable Shares outstanding.
-4-
Section
2.01 Demand
Registration.
(a) If
at any time following February 7, 2009, the Company shall receive a request
from
a Shareholder (the “Requesting
Shareholder”)
that
the Company effect the registration under the Securities Act of all or any
portion of such Requesting Shareholder’s Registrable Securities, and specifying
the intended method of disposition thereof, then the Company shall promptly
give
notice of such requested registration (each such request shall be referred
to
herein as a “Demand
Registration”)
to the
Other Shareholders. The Company shall use its commercially reasonable efforts
to
effect, subject to the provisions of Section
2.01(f),
the
registration under the Securities Act of the Registrable Securities for which
the Requesting Shareholders have requested registration under this Section
2.01
and all
other Registrable Securities of the same class as those requested to be
registered by the Requesting Shareholders that any Other Shareholders with
rights to request registration under Section
2.02
(all
such Other Shareholders, together with the Requesting Shareholders, the
“Registering
Shareholders”)
have
requested the Company to register by request received by the Company within
five
(5) Business Days after such Other Shareholders receive the Company’s notice of
the Demand Registration, all to the extent necessary to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities so to be registered, provided
that,
(i)
subject to Section
2.01(d),
the
Company shall not be obligated to effect more than three Demand Registrations
in
any twelve-month period,
(ii) the
Company shall not be obligated to effect a Demand Registration unless the
aggregate number of shares of the Registrable Securities requested to be
included in such Demand Registration equals or exceeds 15% of the aggregate
Common Shares (including Common Shares issuable upon exchange of Exchangeable
Shares) issued in connection with the transactions contemplated by the
Arrangement Agreement,
-5-
(iii) the
Company shall not be obligated to include in such registration a number of
Registrable Securities of the Shareholder which exceeds such Shareholder’s Pro
Rata Portion (unless any Other Shareholder who is an Eligible Shareholder shall
choose not to participate in such registration up to the full amount of such
Other Shareholder’s Pro Rata Portion, in which case each Registering Shareholder
may choose to increase the number of Registrable Securities to be included
in
such registration by his or her Pro Rata Portion of the Shortfall subject to
the
provisions of Section 2.01(e)) (the limitation in clause (ii) and (iii) of
this
Section
2.01(a),
the
“Public
Offering Limitation”),
(iv) in
no event shall the Company be required to effect a Demand Registration from
any
Registering Shareholder unless such Registering Shareholder at the time the
request is made (x) continues to be actively engaged in the businesses of the
Firm (in the reasonable judgment of the Underwritten Offering Committee), (y)
has suffered a termination of employment by the Firm without Cause or resulting
from a disability or (z) is a Permitted Transferee (a Shareholder who fulfills
the criteria in clauses (x)-(z) of this Section
2.01(a)(iii),
an
“Eligible
Shareholder”),
and
(v) The
Company shall not be required to effect a Demand Registration within 120 days
of
a Piggyback Registration effected pursuant to Section
2.02
or a
demand registration effected pursuant to the Partners’ Equity Agreement.
(b)
Promptly after the expiration of the five (5) Business-Day period referred
to in
Section
2.01(a),
the
Company will notify all Registering Shareholders of the identities of the other
Registering Shareholders and the number of shares of Registrable Securities
requested to be included therein. At any time prior to the effective date of
the
registration statement relating to such registration, the Requesting Shareholder
may revoke such request, without liability to any of the other Registering
Shareholders, by providing a notice to the Company revoking such request. A
request, so revoked, shall be considered to be a Demand Registration unless
(i)
such revocation arose out of the fault of the Company (in which case the Company
shall be obligated to pay all Registration Expenses in connection with such
revoked request) or (ii) the Requesting Shareholder reimburses the Company
for
all Registration Expenses in connection with such revoked request.
(c)
The
Company shall be liable for and pay all Registration Expenses in connection
with
any Demand Registration, regardless of whether such Registration is effected,
except as set forth in Section
2.01(b).
(d)
A
Demand Registration shall not be deemed to have occurred:
-6-
(i)
unless the registration statement relating thereto has become effective under
the Securities Act; provided
that
such registration statement shall not be considered a Demand Registration if,
after such registration statement becomes effective, such registration statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court; or
(ii)
if
the Maximum Offering Size is reduced in accordance with Section
2.01(e)
such
that less than 66 2/3% of the Registrable Securities of the Registering
Shareholders sought to be included in such registration are included.
(e)
If a
Demand Registration involves an underwritten Public Offering and the managing
underwriter advises the Company and the Registering Shareholders that, in its
view, the number of shares of Registrable Securities requested to be included
in
such registration (including any securities that the Company proposes to be
included or are otherwise contractually required to be included that are not
Registrable Securities under this Agreement) exceeds the largest number of
shares that can be sold without having an adverse effect on such offering,
including the price at which such shares can be sold (the “Maximum
Offering Size”),
the
Company shall include in such registration, in the priority listed below, up
to
the Maximum Offering Size:
(i)
first, so much of the Company Securities proposed to be registered for the
account of the Company as would not cause the offering to exceed the Maximum
Offering Size,
(ii)
second, all Registrable Securities requested to be included in such registration
by the Registering Shareholders who are Eligible Shareholders and all Company
Securities contractually required to be registered for the account of any other
Persons (allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Holders and such other Persons on the basis
of the relative number of Registrable Securities or such other Company
Securities so requested to be included in such registration by each such
Registering Shareholder and such other Person), and
(iii)
third, any Company Securities proposed, but not contractually required, to
be
registered for the account of any other Persons with such priorities among
them
as the Company may determine.
(f)
Upon
notice to each Requesting Shareholder, the Company may defer the filing of
a
registration statement pursuant to this Section
2.01
for a
reasonable period of time not exceeding 90 days if (i) at the time the Company
receives the request for such Demand Registration, there is (A) material
non-public information regarding the Company which, in the judgment of the
Board, is not in the Company’s best interest to disclose and which the Company
is not otherwise required to disclose or (B)
there
is a significant business opportunity (including, but not limited to, the
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other similar
transaction) available to the Company which, in the judgment of the Board,
is
not in the Company’s best interest to disclose; or (ii)
prior to receiving the request for such Demand Registration, the Company has
determined to effect an offering in connection with which equity securities
of
the Company are sold to an underwriter or underwriters for reoffering to the
public pursuant to an effective registration statement under the Securities
Act,
and the Company has determined to proceed with such offering.
-7-
Section
2.02 Piggyback
Registration.
(a) If
the Company proposes to register any of the equity securities issued by it
under
the Securities Act (other than a registration relating to Common Shares issuable
upon exercise of employee stock options or in connection with any employee
benefit or similar plan of the Company or in connection with a direct or
indirect acquisition by the Company of another Person on Form S-8 or S-4, or
any
successor or similar forms or pursuant to the Exchangeable Share Registration
Statement), whether or not for sale for its own account, the Company shall
each
such time give notice at least ten (10) Business Days prior to the anticipated
filing date of the registration statement relating to such registration to
each
Shareholder (so long as such Shareholder is then an Eligible Shareholder),
which
notice shall set forth such Shareholder’s rights under this Section
2.02
and
shall offer such Shareholder the opportunity to include in such registration
statement the number of Registrable Securities of the same class or series
as
those proposed to be registered as such Shareholder may request (a “Piggyback
Registration”),
subject to the provisions of Section
2.02(b)
and the
Public Offering Limitation. Upon the request of such Shareholder (if such
Shareholder is then an Eligible Shareholder) made within five (5) Business
Days
after the receipt of notice from the Company (which request shall specify the
number of Registrable Securities intended to be registered by such Shareholder),
the Company shall use its commercially reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been so requested to register by all such other Shareholders, to
the
extent necessary to permit the disposition of the Registrable Securities so
to
be registered, provided
that (i)
if such registration involves an underwritten public offering, all such
Shareholders requesting to be included in the Company’s registration must sell
their Registrable Securities to the underwriters selected by the Company on
the
same terms and conditions as apply to the Company or the other selling
shareholders, as applicable, and (ii) if, at any time after giving notice of
its
intention to register any Company Securities pursuant to this Section
2.02(a)
and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such securities, the Company shall give notice to all such Shareholders
and, thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. No registration effected under
this Section
2.02
shall
relieve the Company of its obligations to effect a Demand Registration to the
extent required by Section
2.01.
The
Company shall pay all Registration Expenses in connection with each Piggyback
Registration.
-8-
(b)
If a
Piggyback Registration involves an underwritten Public Offering (other than
any
Demand Registration, in which case the provisions with respect to priority
of
inclusion in such offering set forth in Section
2.01(e)
shall
apply) and the managing underwriter advises the Company that, in its view,
the
number of Company Securities that the Company and such Shareholders and all
other shareholders of the Company intend to include in such registration exceeds
the Maximum Offering Size, the Company shall include in such registration,
in
the following priority, up to the Maximum Offering Size:
(i)
first, so much of the Company Securities proposed to be registered for the
account of the Company as would not cause the offering to exceed the Maximum
Offering Size, and
(ii)
second, all Registrable Securities requested to be included in such registration
by any Shareholders who are Eligible Shareholders pursuant to Section
2.02
and all
securities contractually required to be registered for the account of any other
Persons (allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Shareholders and such other Persons on the
basis of the relative number of Registrable Securities or such other Company
Securities so requested to be included in such registration by each such
Shareholder and such other Person), and
(iii)
third, any Company Securities proposed, but not contractually required, to
be
registered for the account of any other Persons with such priorities among
them
as the Company shall determine.
Section
2.03 Lock-Up
Agreements.
If any
registration of Registrable Securities shall be effected in connection with
a
Public Offering, each Shareholder shall not offer to sell, contract to sell,
or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
any
Common Shares, any options or warrants to purchase any Common Shares, or any
securities convertible into or exchangeable for any Common Shares now owned
or
hereafter acquired directly by such Shareholder or with respect to which such
Shareholder has or hereafter acquires the power of disposition (except as part
of such Public Offering) during the period beginning on the effective date
of
the applicable registration statement until the earlier of (i) such time as
the
Company and the managing underwriter shall agree and (ii) 215 days (such period,
the “Lock-Up
Period”
for
the
applicable registration statement).
Section
2.04 Registration
Procedures.
Whenever a Shareholder requests that any Registrable Securities be registered
pursuant to Section
2.01
or
2.02,
subject
to the provisions of such Sections, the Company shall use its commercially
reasonable efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable and, in connection with any such request:
-9-
(a)
The
Company shall prepare and file with the SEC a registration statement on any
form
for which the Company then qualifies or that counsel for the Company shall
deem
appropriate and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method
of
distribution thereof, and use its commercially reasonable efforts to cause
such
filed registration statement to become and remain effective for a period of
not
less than 180 days (or such shorter period in which all of the Registrable
Securities of the Registering Shareholders included in such registration
statement shall have actually been sold thereunder).
(b)
Prior
to filing a registration statement or prospectus or any amendment or supplement
thereto, the Company shall, if requested, furnish to each participating
Shareholder and each underwriter, if any, of the Registrable Securities covered
by such registration statement copies of such registration statement as proposed
to be filed, and thereafter, to the extent such documents are not publicly
available on the SEC’s XXXXX website, the Company shall furnish to such
Shareholder and each underwriter, without charge, at least one conformed copy
of
each registration statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested
by
such Shareholder (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the SEC. The
Shareholder shall have the right to request that the Company modify any
information contained in such registration statement, amendment and supplement
thereto pertaining to such Shareholder and the Company shall use its
commercially reasonable efforts to comply with such request; provided,
however,
that
the Company shall not have any obligation so to modify any information if the
Company reasonably expects that doing so would cause the prospectus to 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 not
misleading.
(c)
After
the filing of the registration statement, the Company shall (i) cause the
related prospectus to be supplemented by any required prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the Securities
Act, (ii) comply with the provisions of the Securities Act with respect to
the
disposition of all Registrable Securities covered by such registration statement
during the applicable period in accordance with the intended methods of
disposition by the Registering Shareholders thereof set forth in such
registration statement or supplement to such prospectus and (iii) promptly
notify each Registering Shareholder holding Registrable Securities covered
by
such registration statement of any stop order issued or threatened by the SEC
or
any state securities commission and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
-10-
(d)
The
Company shall use its commercially reasonable efforts to (i) register or qualify
the Registrable Securities covered by such registration statement under such
other securities or “blue sky” laws of such jurisdictions in the United States
as any
Registering Shareholder holding such Registrable Securities reasonably (in
light
of such Shareholder’s intended plan of distribution) requests (ii) obtain all
necessary exemptions under applicable securities laws of any jurisdictions
of
Canada as may be required for the resale of such Registrable Securities without
qualification with or approval of or the filing of any other any prospectus,
offering memorandum or similar document, or the taking of any proceeding with,
or the obtaining of any further order, ruling or consent from, any securities
regulatory authorities in such jurisdictions (other than with respect to such
first resale, any restrictions on transfer by reason of a holder being a
“control person” of the Company for purposes of such securities laws) and
(iii)
cause such Registrable Securities 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 and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Shareholder to
consummate the disposition of the Registrable Securities owned by such
Shareholder; provided
that the
Company shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section
2.04(d),
(B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e)
The
Company shall immediately notify each Registering Shareholder holding such
Registrable Securities covered by such registration statement, at any time
when
a prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of 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 not misleading and
promptly prepare and make available to each such Shareholder and file with
the
SEC any such supplement or amendment.
(f)
The
Company shall select an underwriter or underwriters in connection with any
Public Offering. In connection with any Public Offering, the Company shall
enter
into customary agreements (including an underwriting agreement in customary
form) and take such all other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities in any
such Public Offering, including the engagement of a “qualified independent
underwriter” in connection with the qualification of the underwriting
arrangements with the NASD.
-11-
(g)
Upon
execution of confidentiality agreements in form and substance reasonably
satisfactory to the Company, the Company shall make available for inspection
by
any Registering Shareholder and any underwriter participating in any disposition
pursuant to a registration statement being filed by the Company pursuant to
this
Section
2.04
and any
attorney, accountant or other professional retained by any such Shareholder
or
underwriter (collectively, the “Inspectors”),
all
financial and other records, pertinent corporate documents and properties of
the
Company (collectively, the “Records”)
as
shall be reasonably necessary or desirable to enable them to exercise their
due
diligence responsibility, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any Inspectors
in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless
(i)
disclosure of such information is required by court or administrative order
or
is necessary to respond to inquiries of regulatory authorities; (ii) disclosure
of such information, in the opinion of counsel to such Person, is required
by
law; (iii) such information becomes generally available to the public other
than
as a result of a disclosure or failure to safeguard by such Person or (iv)
such
information becomes available to such Person from a source other than the
Company and such source is not known by such Person to be bound by a
confidentiality agreement with the Company. The Shareholder agrees that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it or its Affiliates as the basis for
any
market transactions in the Company Securities unless and until such information
is made generally available to the public. The Shareholder further agrees that,
upon learning that disclosure of such Records is required by court or
administrative order or necessary to respond to inquiries of regulatory
authorities, it shall give prompt notice to the Company in advance of such
disclosure and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(h)
The
Company shall furnish to each Registering Shareholder and to each such
underwriter, if any, a signed counterpart, addressed to such Shareholder or
underwriter, of a comfort letter or comfort letters from the Company’s
independent public accountants, in form and substance as are customary in
connection with underwritten public offerings.
(i)
The
Company may require each such Registering Shareholder promptly to furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
(j)
The
Shareholder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section
2.04(e),
such
Shareholder shall forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Shareholder’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section
2.04(e),
and, if
so directed by the Company, such Shareholder shall deliver to the Company all
copies, other than any permanent file copies then in such Shareholder’s
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. If the Company shall give such notice,
the Company shall extend the period during which such registration statement
shall be maintained effective (including the period referred to in Section
2.04(a))
by the
number of days during the period from and including the date of the giving
of
notice pursuant to Section
2.04(e)
to the
date when the Company shall make available to such Shareholder a prospectus
supplemented or amended to conform with the requirements of Section
2.04(e).
-12-
(k)
The
Company shall use its commercially reasonable efforts to list all Registrable
Securities covered by such registration statement on any securities exchange
or
quotation system on which any of the Registrable Securities are then listed
or
traded.
(l)
The
Company shall have appropriate officers of the Company (i) prepare and make
presentations at any “road shows” and before analysts and rating agencies, as
the case may be, (ii) take other actions to obtain ratings for any Registrable
Securities and (iii) otherwise use their commercially reasonable efforts to
cooperate as reasonably requested by the underwriters in the offering, marketing
or selling of the Registrable Securities.
Section
2.05 Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless each Registering Shareholder
holding Registrable Securities covered by a registration statement, its
officers, directors, employees, partners and agents, and each Person, if any,
who controls such Shareholder (within the meaning of Section 15 of the
Securities Act) from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable expenses of investigation and
reasonable attorneys’ fees and expenses) (“Damages”)
arising out of or relating to any untrue statement or alleged untrue statement
of a material fact contained in any registration statement or prospectus
relating to the Registrable Securities (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such
Damages are caused by or related to any such untrue statement or omission or
alleged untrue statement or omission so made based upon information furnished
in
writing to the Company by such Shareholder or on such Shareholder’s behalf
expressly for use therein; provided
that,
with respect to any untrue statement or omission or alleged untrue statement
or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply
to
the extent that any Damages result from the fact that a current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
was
not sent or given to the Person asserting any such Damages at or prior to the
time of the sale of the Registrable Securities concerned to such Person if
it is
determined that the Company has provided such prospectus to such Shareholder
and
it was the responsibility of such Shareholder to provide such Person with a
current copy of the prospectus (or such amended or supplemented prospectus,
as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such Damages. The Company also agrees to indemnify any underwriters
of
the Registrable Securities, their officers and directors and each Person who
controls such underwriters (within the meaning of Section 15 of the Securities
Act) on substantially the same basis as that of the indemnification of the
Shareholders provided in this Section
2.05.
-13-
Section
2.06 Indemnification
by Participating Shareholders.
Each
Shareholder holding Registrable Securities included in any registration
statement agrees to indemnify and hold harmless the Company, its officers,
directors, agents and employees and each Person who controls the Company (within
the meaning of Section 15 of the Securities Act) to the same extent as the
foregoing indemnity from the Company to such Shareholder, but only (i) with
respect to information furnished in writing by such Shareholder or on such
Shareholder’s behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that
any
Damages result from the fact that a current copy of the prospectus (or such
amended or supplemented prospectus, as the case may be) was not sent or given
to
the Person asserting any such Damages at or prior to the time of the sale of
the
Registrable Securities concerned to such Person if it is determined that it
was
the responsibility of such Shareholder to provide such Person with a current
copy of the prospectus (or such amended or supplemented prospectus, as the
case
may be) and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to
such
loss, claim, damage, liability or expense. The Shareholder also agrees to
indemnify and hold harmless underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters (within
the meaning of Section 15 of the Securities Act) on substantially the same
basis
as that of the indemnification of the Company provided in this Section
2.06.
As a
condition to including Registrable Securities in any registration statement
filed in accordance with Article
II,
the
Company may require that it shall have received an undertaking reasonably
satisfactory to it from any underwriter to indemnify and hold it harmless to
the
extent customarily provided by underwriters with respect to similar securities.
Section
2.07 Conduct
of Indemnification Proceedings.
If any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
this Article
II,
such
Person (an “Indemnified
Party”)
shall
promptly notify the Person against whom such indemnity may be sought (the
“Indemnifying
Party”)
in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party,
and
shall assume the payment of all fees and expenses, provided
that the
failure of any Indemnified Party so to notify the Indemnifying Party shall
not
relieve the Indemnifying Party of its obligations hereunder except to the extent
that the Indemnifying Party is materially prejudiced by such failure to notify.
In any such proceeding, any Indemnified Party shall have the right to retain
its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in
the
reasonable judgment of such Indemnified Party representation of both parties
by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that, in connection with any proceeding
or related proceedings in the same jurisdiction, the Indemnifying Party shall
not be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed
as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or
if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. Without the prior written consent of the Indemnified Party, no
Indemnifying Party shall effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been
a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such proceeding.
-14-
Section
2.08 Contribution.
If the
indemnification provided for in this Article
II
is
unavailable to the Indemnified Parties in respect of any Damages, then each
such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Damages (i)
as
between the Company and the Registering Shareholder holding Registrable
Securities covered by a registration statement, on the one hand, and the
underwriters, on the other, in such proportion as is appropriate to reflect
the
relative benefits received by the Company and such Shareholder on the one hand
and the underwriters on the other, from the offering of the Registrable
Securities or, if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but
also
the relative fault of the Company and such Shareholder, on the one hand, and
of
such underwriters, on the other, in connection with the statements or omissions
that resulted in such Damages, as well as any other relevant equitable
considerations and (ii)
as
between the Company, on the one hand, and such Shareholder, on the other, in
such proportion as is appropriate to reflect the relative fault of the Company
and of such Shareholder in connection with such statements or omissions, as
well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Shareholder, on the one hand, and such underwriters,
on
the other, shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Shareholder bear to the
total underwriting discounts and commissions received by such underwriters,
in
each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Shareholder, on the one hand, and of
such
underwriters, on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the
omission or alleged omission to state a material fact relates to information
supplied by the Company
and such Shareholder or by such underwriters. The relative fault of the Company,
on the one hand, and of such Shareholder, on the other, shall be determined
by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by such party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
-15-
The
Company and each Shareholder agree that it would not be just and equitable
if
contribution pursuant to this Section
2.08
were
determined by pro rata allocation (even if the underwriters were treated as
one
entity for such purpose) or by any other method of allocation that does not
take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the
Damages referred to in the immediately preceding paragraph shall be deemed
to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The contribution agreement contained in this
Section 2.08 is in addition to any liability that the Indemnifying Parties
may
have to the Indemnified Parties.
Section
2.09 Participation
in Public Offering.
No
Person may participate in any Public Offering hereunder unless such Person
(i)
agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers
of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and the provisions
of
this Agreement in respect of registration rights.
Section
2.10 Other
Indemnification.
Indemnification similar to that specified herein (with appropriate
modifications) shall be given by the Company and each Registering Shareholder
participating therein with respect to any required registration or other
qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.
Section
2.11 Cooperation
by the Company.
If a
Shareholder shall transfer any Registrable Securities pursuant to Rule 144
or
Rule 145 or pursuant to an exemption from the prospectus and registration
requirements under applicable Canadian securities laws, the Company shall
cooperate, to the extent commercially reasonable, with such Shareholder and
shall provide to such Shareholder such information as such Shareholder shall
reasonably request.
Section
2.12 No
Transfer of Registration Rights.
None of
the rights of a Shareholder under this Article
II
shall be
assignable by such Shareholder to any Person acquiring Securities in any Public
Offering or pursuant to Rule 144 or Rule 145 or pursuant to an exemption from
the prospectus and registration requirements under applicable Canadian
securities laws.
-16-
Section
2.13 Underwritten
Offering Committee.
The
Shareholder acknowledges that the Board has the power, at any time, to alter
the
composition, mandate and authority of the Underwritten Offering Committee;
provided that immediately following the Closing and until such time as
Shareholders hold not less than 15% of the Company Securities issued in
connection with the Arrangement, the Shareholders' Representative (as defined
in
the Arrangement Agreement) shall be a member of the Underwritten Offering
Committee. The Shareholder has been informed by the Company that the
Underwritten Offering Committee (i) shall initially include Xxxxxx X. Xxxxxx,
who will chair the committee, and (ii) shall act with the unanimous approval
of
the members of the committee.
Section
2.14 Term
of Registration Rights.
The
Company agrees that, subject to Section
4.03(b),
the
rights of a Shareholder with respect to the registration rights granted pursuant
to this Agreement shall remain in effect, subject to the terms and conditions
hereof, so long as there are Registrable Securities issued and outstanding.
Section
2.15 Other
Agreements.
Following the Closing Date, the Company agrees that:
(a)
it
will file the reports required to be filed by the Company under the Exchange
Act, so as to enable a Shareholder to sell Registrable Securities pursuant
to
Rule 144 or Rule 145;
(b)
it
shall cooperate with such Shareholder in connection with any sale or other
disposition by such Shareholder of any Registrable Securities pursuant to Rule
144 or Rule 145 or pursuant to an exemption from the prospectus and registration
requirements of applicable Canadian securities laws;
(c)
it
will take such action as such Shareholder may reasonably request, to the extent
required from time to time to enable such Shareholder to sell its Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 or pursuant to the resale limitations
set
forth in Rule 145, if applicable, and pursuant to an exemption from the
prospectus and registration requirements of applicable Canadian securities
laws,
including providing any legal opinions; and
(d)
upon
the request of such Shareholder, it shall deliver to such Shareholder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
-17-
ARTICLE
III
SHAREHOLDER
COVENANTS
Section
3.01 Confidential
Information.
In the
course of involvement in the Firm’s activities or otherwise, each Shareholder
has obtained or may obtain confidential information concerning the Firm’s
businesses, strategies, operations, financial affairs, organizational and
personnel matters (including information regarding any aspect of the
Shareholder’s tenure as an employee of the Company or Westwind or of the
termination of such employment), policies, procedures and other non-public
matters, or concerning those of third parties. Such information (“Confidential
Information”)
may
have been or be provided in written or electronic form or orally. In
consideration of, and as a condition to, continued access to Confidential
Information, and without prejudice to or limitation on any other confidentiality
obligations imposed by agreement or by law, each Shareholder hereby undertakes
to use and protect Confidential Information in accordance with any restrictions
placed on its use or disclosure. Without limiting the foregoing, except as
authorized by the Firm or as required by law, each Shareholder may not disclose
or allow disclosure of any Confidential Information, or of any information
derived therefrom, in whatever form, to any person unless such person is a
director, officer, partner, employee, attorney or agent of the Firm and, in
such
Shareholder’s reasonable good faith judgment, has a need to know the
Confidential Information or information derived therefrom in furtherance of
the
business of the Firm. The foregoing obligations will survive, and remain binding
and enforceable notwithstanding, any termination of a Shareholder’s employment
and any settlement of the financial rights and obligations arising from a
Shareholder’s employment. Without limiting the foregoing, the existence of, and
any information concerning, any dispute between a Shareholder and the Firm
shall
constitute Confidential Information except that a Shareholder may disclose
information concerning such dispute to the arbitrator that is considering such
dispute, or to such Shareholder’s legal counsel (provided that such counsel
agrees not to disclose any such information other than as necessary to the
prosecution or defense of the dispute).
Section
3.02 Noncompetition.
(a) In
view of his or her importance to the Firm, each Shareholder hereby agrees that
the Firm would likely suffer significant harm from such Shareholder’s competing
with the Firm during such Shareholder’s Employment Period and for some period of
time thereafter. Accordingly, each Shareholder hereby agrees that such
Shareholder will not, without the written consent of the Company, during the
Employment Period and for the applicable Post-Termination Non-Compete and
Non-Solicit Period:
(i)
form,
or acquire a 5% or greater equity ownership, voting or profit participation
interest in, any Competitive Enterprise; or
(ii)
associate (including, but not limited to, association as an officer, employee,
partner, director, consultant, agent or advisor) with any Competitive
Enterprise and in connection with such association engage in, or directly or
indirectly manage or supervise personnel engaged in, any activity
-18-
(1)
which
is similar or substantially related to any activity in which such Shareholder
was engaged, in whole or in part, at the Firm,
(2)
for
which such Shareholder had direct or indirect managerial or supervisory
responsibility at the Firm, or
(3)
which
calls for the application of the same or similar specialized knowledge or skills
as those utilized by such Shareholder in such Shareholder’s activities at the
Firm,
at
any
time during the one-year period immediately prior to the Date of Termination
(or, in the case of an action taken during the Employment Period, during the
one-year period immediately prior to such action), and, in any such case,
irrespective of the purpose of the activity or whether the activity is or was
in
furtherance of advisory, agency, proprietary or fiduciary business of either
the
Firm or the Competitive Enterprise.
(By
way
of example only, this provision precludes an “advisory” investment banker from
joining a leveraged-buyout firm or a research analyst from becoming a
proprietary trader or joining a hedge fund, in each case without the written
consent of the Company)
(b)
For
purposes of the Shareholder Covenants, a “Competitive
Enterprise”
is
a
business enterprise that engages in, or owns or controls a significant interest
in any entity that engages in financial services such as investment banking,
public or private finance, financial advisory services, private investing (for
anyone other than such Shareholder and members of such Shareholder’s family),
merchant banking, asset or hedge fund management, securities brokerage, sales,
lending, custody, clearance, settlement or trading.
(c)
For
purposes of the Shareholder Covenants, “Date
of Termination”
means
the date on which notice of such Shareholder’s termination of employment is
delivered to or by the Firm, and if such Shareholder is listed on Schedule
I or
II,
“Date
of Termination”
means
(i) if the Shareholder’s employment is terminated by the Firm, the date of the
Firm’s delivery of notice of termination and (ii) if the Shareholder’s
employment is terminated by such Shareholder, the date that is 90 days after
the
delivery of notice of termination by such Shareholder to the Firm.
-19-
(d)
For
purposes of the Shareholder Covenants, “Employment
Period”
means
the period of such Shareholder’s employment with the Firm commencing on the
Closing Date and ending on such Shareholder’s Date of Termination.
(e)
For
purposes of the Shareholder Covenants, “Post-Termination
Non-Compete and Non-Solicit Period”
means,
(x) in the case of the Shareholders listed on Schedule
I,
(i) 36
months following the Date of Termination if such Date of Termination occurs
during the 12 months following the Closing Date; (ii) 24 months following the
Date of Termination if such Date of Termination occurs during the 12 month
period following the 12 months following the Closing Date; and (iii) 12 months
following the Date of Termination if such Date of Termination occurs during
the
12 month period following the 24 months following the Closing Date; (y) in
the
case of the Shareholders listed on Schedule
II,
(i) 24
months following the Date of Termination if such Date of Termination occurs
during the 12 months following the Closing Date and (ii)
12
months following the Date of Termination if such Date of Termination occurs
during the 12 month period following the 12 months following the Closing Date,
and (z) in the case of the Shareholders listed on Schedule
III,
12
months following the Date of Termination.
(f)
In
the event that the Firm terminates a Shareholder’s employment without Cause, the
Firm will pay such Shareholder, in a lump sum, an amount equal to the excess,
if
any of (A) the product of (x) the amount of base salary and bonus paid to such
Shareholder for the twelve months ending before the date the Firm delivers
to
such Shareholder written notice of such Shareholder’s termination and (y) the
number of years comprising the then-applicable Post-Termination Non-Compete
and
Non-Solicit Period and (z) 0.5 over (B) any severance amounts to which such
Shareholder is otherwise entitled, and which are paid by the Firm, whether
under
such Shareholder’s Employment Agreement, if any or pursuant to any Firm policy
or applicable law. For purposes of this Section 3.02, “Cause”
shall
have the meaning set forth in such Shareholder’s Employment Agreement,
provided,
that if
such Shareholder is not party to an Employment Agreement, then “Cause” means (i)
such Shareholder’s breach of this Agreement, the Pledge Agreement, the
Arrangement Agreement or any other written agreement between such Shareholder
and the Firm, (ii) such Shareholder’s willful and continued failure to
substantially perform his or her employment responsibilities; (iii) such
Shareholder’s violation of any Firm policy (including in respect of xxxxxxx
xxxxxxx, hedging or confidential information) as in effect from time to time
or
(iv)
such
Shareholder’s disqualification or bar by any governmental or self-regulatory
authority from serving in the capacity contemplated by such Shareholder’s
employment or the Shareholder’s loss of any governmental or self-regulatory
license that is reasonably necessary for such Shareholder to perform his or
her
responsibilities to the Firm.
Section
3.03 Nonsolicitation
of Clients.
(a)
Each Shareholder hereby agrees that during the Employment Period and for the
applicable Post-Termination Non-Compete and Non-Solicit Period, such Shareholder
will not, in any manner, directly or indirectly, (1) Solicit a Client to
transact business with a Competitive Enterprise or to reduce or refrain from
doing any business with the Firm or (2) interfere with or damage (or attempt
to
interfere with or damage) any relationship between the Firm and a Client.
-20-
(b)
For
purposes of the Shareholder Covenants, the term “Solicit”
means
any direct or indirect communication of any kind whatsoever, regardless of
by
whom initiated, inviting, advising, encouraging or requesting any person or
entity, in any manner, to take or refrain from taking any action.
(c)
For
purposes of the Shareholder Covenants, the term “Client”
means
any client or prospective client of the Firm to whom such Shareholder provided
services, or for whom such Shareholder transacted business, or whose identity
became known to such Shareholder in connection with such Shareholder’s
relationship with or employment by the Firm.
Section
3.04 Nonsolicitation
of Employees.
Each
Shareholder hereby agrees that during the Employment Period and for the
applicable Post-Termination Non-Compete and Non-Solicit Period, such Shareholder
will not, in any manner, directly or indirectly, Solicit any person who is
an
Employee to resign from the Firm or to apply for or accept employment with
any
Competitive Enterprise.
Section
3.05 Transfer
of Client Relationships.
(a)
During the Coverage Period, each Shareholder hereby agrees to take all actions
and do all such things as may be reasonably requested by the Firm from time
to
time to maintain for the Firm the business, goodwill, and business relationships
with any of the Firm’s Clients with whom such Shareholder worked during the term
of such Shareholder’s employment.
(b)
For
purposes of Section
3.05,
the
term “Coverage
Period”
means
the 90-day period beginning on the date on which notice of such Shareholder’s
termination of employment is delivered to or by the Firm, or with respect to
Shareholders party to Employment Agreements, in the case of termination for
Cause or on account of Extended Absence (each as defined in the Employment
Agreement), the 90-day period beginning on the Date of Termination.
Section
3.06 Prior
Notice Required.
Each
Shareholder hereby agrees that prior to accepting employment with any other
person or entity during the Employment Period or during the applicable
Post-Termination Non-Compete and Non-Solicit Period, such Shareholder will
provide such prospective employer with written notice of the provisions of
this
Agreement, with a copy of such notice delivered simultaneously to the General
Counsel of the Company.
Section
3.07 Shareholder
Covenants Generally.
(a)
Each Shareholder’s covenants as set forth in Sections
3.01
through
3.06
of this
Agreement are from time to time referred to herein as the “Shareholder
Covenants.”
If
any
of the Shareholder Covenants is finally held to be invalid, illegal or
unenforceable (whether in whole or in part), such Shareholder Covenant shall
be
deemed modified to the extent, but only to the extent, of such invalidity,
illegality or unenforceability and the remaining Shareholder Covenants shall
not
be affected thereby; provided,
however,
that if
any of the Shareholder Covenants is finally held to be invalid, illegal or
unenforceable because it exceeds the maximum scope determined to be acceptable
to permit such provision to be enforceable, such Shareholder Covenant will
be
deemed to be modified to the minimum extent necessary to modify such scope
in
order to make such provision enforceable hereunder.
-21-
(b)
Each
Shareholder understands that the Shareholder Covenants may limit such
Shareholder’s ability to earn a livelihood in a business similar to the business
of the Firm.
(c)
Each
Shareholder acknowledges that a violation on such Shareholder’s part of any of
the Shareholder Covenants would cause irreparable damage to the Firm.
Accordingly, each Shareholder agrees that, subject to Section 3.08(b), the
Firm
will be entitled to injunctive relief for any actual or threatened violation
of
any of the Shareholder Covenants.
Section
3.08 Remedies.
(a)
Each Shareholder acknowledges that such Shareholder’s compliance with the
Shareholder Covenants is an important factor to the continued success of the
Firm’s operations and its future prospects. Each Shareholder and the Company
agree that if at any time such Shareholder were to breach any of the Shareholder
Covenants, the damages to the Firm would be material, but that the amount of
such damages would be uncertain and not readily ascertainable. Accordingly,
each
Shareholder and the Company agree that if such Shareholder breaches any of
the
Shareholder Covenants at any time, such Shareholder shall forfeit to the Company
that number of his or her Company Securities that remain subject to the
restrictions on Transfer under Section
1.04(a)
of this
Agreement at such time (it being understood that, (x)
for
purposes of this Section
3.08,
any
Transfers otherwise permitted under Section
1.04(b)
at such
time shall be prohibited with respect to the Shareholder and (y) no Company
Securities not then subject to such Shareholder’s Pledge Agreement shall be
forfeited until such time as all of the Pledged Securities (as defined in such
Pledge Agreement) have been forfeited to the Company or there otherwise are
no
Pledged Securities then subject to such Pledge Agreement), with a Fair Market
Value at such time equal to the dollar amount (the “Initial
Liquidated Damages”)
communicated to each Shareholder by the Company on or prior to the Closing
(as
defined in the Arrangement Agreement) representing 50% of the Arrangement
Consideration (as defined in the Arrangement Agreement) received by such
Shareholder less the amount of Acquiror Losses (as defined in the Arrangement
Agreement) for which such Shareholder has indemnified the Parent Indemnified
Parties (as defined in the Arrangement Agreement) other than Excluded Losses
(as
defined in the Arrangement Agreement) (the “Liquidated
Damages”)
and,
if the Fair Market Value of his or her Company Securities that remain subject
to
the restrictions on Transfer under Section
1.04(a)
of this
Agreement at such time is less than the Liquidated Damages, a cash payment
by
such Shareholder to the Company equal to such difference. For purposes of
clarity, in the event a Shareholder breaches
the Shareholder Covenants, the Company shall first seek recourse under such
Shareholder’s Pledge Agreement with respect to those Company Securities (and any
other Pledged Securities (as defined in such Pledge Agreement)) that remain
subject to such Shareholder’s Pledge Agreement. For purposes of calculating the
amount of Arrangement Consideration received by a Shareholder, the value
ascribed to any shares of Common Stock or Exchangeable Shares received by such
Shareholder shall be the Fair Market Value of such shares of Common Stock or
Exchangeable Shares, measured as of the Closing Date.
-22-
(b)
Each
Shareholder and the Company agree that the Initial Liquidated Damages are
reasonable in proportion to the probable damages likely to be sustained by
the
Firm if such Shareholder breaches at any time any of the Shareholder Covenants,
that the amount of actual damages to be sustained by the Firm in the event
of
such breach is incapable of precise estimation and that such forfeiture is
not
intended to constitute a penalty or punitive damages for any purposes. The
forfeiture by such Shareholder of his or her Company Securities or any cash
payment by such Shareholder as the Liquidated Damages will preclude the Company
from seeking injunctive relief for any breach of the Shareholder Covenants
by
any Shareholder that willfully or intentionally violates the Shareholder
Covenants in a manner that causes material harm to the Company.
(c)
Each
Shareholder acknowledges and agrees that such Shareholder’s obligations under
this Section
3.08
will be
full recourse obligations and will be secured pursuant to the Pledge Agreement.
(d)
Each
Shareholder acknowledges and agrees that the Liquidated Damages pursuant to
this
Section
3.08
shall be
in addition to, and not in lieu of, any required forfeitures of awards that
may
be granted to such Shareholder on or after the Closing Date under one or more
of
the Company’s compensation and benefit plans under the terms of such award,
including as a result of termination or violation of the Shareholder Covenants.
(e)
The
remedies of the Company contemplated by this Section 3.08
are
the sole and exclusive remedies of the Firm in respect of the breach or
violation of the Shareholder Covenants. Each Shareholder agrees to, and
acknowledges and agrees that it is bound by, the provisions of Article IX of
the
Arrangement Agreement. Without limiting the foregoing in any way, each
Shareholder hereby irrevocably appoints Xxxxxx Xxxxxxxx, or any successor
appointed pursuant to Section 9.9 of the Arrangement Agreement, as Shareholders’
Representative under the Arrangement Agreement, with all the powers set forth
therein, including the power to enter into written settlement agreements with
the Company regarding Claims (as defined in the Arrangement Agreement), other
than claims in respect of a Shareholder Breach (as defined in the Arrangement
Agreement), which written settlement agreements shall be binding upon such
Shareholder.
-23-
Section
3.09 Arbitration.
Any
dispute, controversy or claim between a Shareholder and the Firm arising out
of
or relating to or concerning the provisions of the Shareholder Covenants, the
Pledge Agreement, any agreement between a Shareholder and the Company relating
to or arising out of such Shareholder’s employment with the Firm or otherwise
concerning any rights, obligations or other aspects of such Shareholder’s
employment relationship in respect of the Firm (“Employment
Related Matters”)
shall
be finally settled by arbitration in New York City before, and in accordance
with the rules then obtaining of, FINRA or, if FINRA declines to arbitrate
the
matter, the AAA in accordance with the commercial arbitration rules of the
AAA.
ARTICLE
IV
MISCELLANEOUS
Section
4.01 Binding
Effect; Assignability; Benefit.
(a)
This Agreement shall become effective on the Closing Date and thereafter inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, successors, legal representatives and permitted assigns. A Shareholder
shall cease to be bound by the terms hereof if the Arrangement Agreement is
terminated pursuant to Article VIII thereof or when such Shareholder ceases
to
own beneficially any Company Securities (other than (i)
the
provisions of Sections
2.05,
2.06,
2.07,
2.08
and
2.10
applicable
to such Shareholder with respect to any offering of Registrable Securities
completed before the date such Shareholder ceased to own any Company Securities;
(ii) Article
III and
(iii)
Sections
4.02,
4.04,
4.05,
4.06,
4.07
and
4.08).
(b)
Neither this Agreement nor any right, remedy, obligation or liability arising
hereunder or by reason hereof shall be assignable by any party hereto pursuant
to any Transfer of Company Securities or otherwise, except that any Permitted
Transferee acquiring Company Securities shall (unless already bound hereby)
execute and deliver to the Company an agreement to be bound by this Agreement
in
the form of Exhibit
A
hereto
and shall thenceforth be a “Shareholder”.
(c)
Nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than the parties hereto, and their respective heirs, successors,
legal representatives and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
Section
4.02 Notices.
All
notices, requests and other communications to any party shall be in writing
and
shall be delivered in person, mailed by certified or registered mail, return
receipt requested, or sent by facsimile transmission,
-24-
if
to the
Company to:
Xxxxxx
Xxxxxx Partners Group, Inc.
Xxx
Xxxxxxxxxx Xxxxxx
Xxx
Xxxxxxxxx, XX 00000
Attention:
General Counsel
fax:
(000) 000-0000
with
a
copy to:
Xxxxxxxx
& Xxxxxxxx LLP
0000
Xxxxxxxxxxx Xxxx
Xxxx
Xxxx, XX 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
fax:
(000) 000-0000
if
to a
Shareholder, to the last known address of such Shareholder set forth in the
records maintained by the Company.
Any
and
all notices or other communications or deliveries required or permitted to
be
provided pursuant to this Agreement shall be in writing and shall be deemed
to
have been effectively given (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the party to be notified or, if not, then on the next Business
Day, (c) five Business Days after having been sent by registered or certified
mail, return receipt requested, postage prepaid or (d) one Business Day after
deposit with a nationally recognized overnight courier, specifying next Business
Day delivery, with written verification of receipt.
Any
Person that becomes a Shareholder shall provide its address and fax number
to
the Company.
Section
4.03 Waiver;
Amendment; Termination.
(a) No
provision of this Agreement may be waived except by an instrument in writing
executed by the party against whom the waiver is to be effective. No provision
of this Agreement may be amended or otherwise modified except by an instrument
in writing executed by the Company with approval of the Board.
(b)
This
Agreement shall terminate on the later of (i) the fifth anniversary of the
date
hereof and (ii) the day that is six months following the date on which all
of
the Exchangeable Shares have been exchanged for Common Stock.
Section
4.04 Fees
and Expenses.
Except
as otherwise provided in this Agreement, each party hereto shall pay its own
fees and expenses incurred in connection with the preparation of this Agreement,
or any amendment or waiver hereof, and the transactions contemplated hereby
and
all matters related hereto.
-25-
Section
4.05 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York.
Section
4.06 Jurisdiction.
Except
as otherwise provided in this Agreement, each party hereto irrevocably submits
to the non exclusive jurisdiction of any state or Federal court located within
The City of New York for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby, and agrees
to commence any such action, suit or proceeding only in such courts. Each party
further agrees that service of any process, summons, notice or document by
registered mail to such party’s respective address set forth herein shall be
effective service of process for any such action, suit or proceeding. Each
party
irrevocably and unconditionally waives any objection to the laying of venue
of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in such courts, and hereby irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.
Section
4.07 WAIVER
OF JURY TRIAL.
EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section
4.08 Specific
Enforcement.
Each
party hereto acknowledges that the remedies at law of the other parties for
a
breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any party to this Agreement, without posting any
bond,
and in addition to all other remedies that may be available, but subject to
Section 3.08(b), shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy that may then be available.
Section
4.09 Counterparts;
Effectiveness.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, with the same effect as if the signatures thereto
and
hereto were upon the same instrument. This Agreement shall become effective
when
each party hereto shall have received counterparts hereof signed by all of
the
other parties hereto.
Section
4.10 Entire
Agreement.
This
Agreement and the other Transaction Agreements constitute the entire agreement
among the parties hereto and supersede all prior and contemporaneous agreements
and understandings, both oral and written, among the parties hereto with respect
to the subject matter hereof and thereof.
Section
4.11 Captions.
The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.
-26-
Section
4.12 Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
ARTICLE
V
DEFINITIONS
Section
5.01 Definitions.
The
following terms, as used herein, have the following meanings:
“AAA”
means
the American Arbitration Association.
“Affiliate”
means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such Person, provided
that
no
securityholder of the Company shall be deemed an Affiliate of any other
securityholder solely by reason of any investment in the Company. For the
purpose of this definition, the term “control” (including, with correlative
meanings, the terms “controlling”, “controlled by” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
“Agreement”
has
the
meaning set forth in the preamble.
“Arrangement
Agreement”
has
the
meaning set forth in the recitals.
“Board”
means
the board of directors of the Company.
“Business
Day”
means
any day except a Saturday, Sunday or other day on which banks in New York City,
New York, San Francisco, California or Xxxxxxx, Xxxxxxx, Xxxxxx are required
or
permitted by law to close.
“By-laws”
means
the By-laws of the Company, as amended from time to time.
“Canadian
Sub”
means
TWP Acquisition Company (Canada), Inc., a corporation organized under the
Ontario Business Corporations Act.
“Change
of Control”
means
(A) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company or the sale or
other
disposition of all or substantially all of the assets of the Company to an
entity that is not an Affiliate or that, in each case, requires shareholder
approval under the laws of the Company’s jurisdiction of organization, unless
immediately following such transaction, either: (i) at least 50% of the total
voting power of the surviving entity or its parent entity, if applicable, is
represented by securities of the Company that were outstanding immediately
prior
to the transaction (or securities into which the Company’s securities were
converted or exchanged in such transaction); or (ii)
at
least 50% of the members of the board of directors (including directors whose
election or nomination was approved by the incumbent directors of the Board)
of
the company resulting from the transaction were members of the Board at the
time
of the Board’s approval of the execution of the initial agreement providing for
the transaction or (B)
the
filing by any “person” or “group” (in each case within the meaning of Section
13(d)(3) of the Exchange Act), other than the Company, of a Schedule TO or
any
other schedule, form or report under the Exchange Act, disclosing that such
person or group has become the direct or indirect “beneficial owner,” as defined
in Rule 13d-3 under the Exchange Act, of Company Securities representing more
than 50% of the total voting power of the Company.
-27-
“Charitable
Organization”
has
the
meaning set forth in Section
1.04(b)(iii)
of this
Agreement.
“Charter”
means
the Certificate of Incorporation of the Company, as amended from time to time.
“Client”
has
the
meaning set forth in Section
3.03(c)
of this
Agreement.
“Closing
Date”
has
the
meaning given to such term in the Arrangement Agreement.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Common
Shares”
means
shares of Common Stock.
“Common
Stock”
means
the common stock, par value $0.01 per share, of the Company and any stock into
which such Common Stock may thereafter be converted or changed.
“Company”
has
the
meaning set forth in the preamble.
“Company
Securities”
means,
with respect to a Shareholder, (i) the Common Stock, (ii) Exchangeable Shares
or
other securities convertible into or exchangeable for Common Stock, (iii) any
other equity or equity-linked security issued by the Company and (iv) options,
warrants or other rights to acquire Common Stock or any other equity or
equity-linked security issued by the Company, in each case, beneficially owned
by the Shareholder as of the Closing Date and (v) the Common Stock issued upon
exchange, conversion or exercise of any of the foregoing securities.
“Competitive
Enterprise”
has
the
meaning set forth in Section
3.02(b)
of this
Agreement.
-28-
“Confidential
Information”
has
the
meaning set forth in Section
3.01
of this
Agreement.
“Coverage
Period”
has
the
meaning set forth in Section
3.05(b)
of this
Agreement.
“Damages”
has
the
meaning set forth in Section
2.05
of this
Agreement.
“Date
of Termination”
has
the
meaning set forth in Section
3.02(c)
of this
Agreement.
“Demand
Registration”
has
the
meaning set forth in Section
2.01(a)
of this
Agreement.
“Eligible
Shareholder”
has
the
meaning set forth in Section
2.01(a)(iii)
of this
Agreement.
“Employee”
means
any person employed by the Firm who receives compensation, other than a person
receiving compensation in the nature of a consulting fee, a pension or a
retainer.
“Employment
Agreement”
means,
if applicable, the employment agreement between a Shareholder and the Firm
as in
effect from time to time.
“Employment
Period”
has
the
meaning set forth in Section
3.02(d)
of this
Agreement.
“Employment
Related Matters”
has
the
meaning set forth in Section
3.09
of this
Agreement.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Exchangeable
Share Registration Statement”
has
the
meaning set forth in Article
II
of this
Agreement.
“Exchangeable
Shares”
means
the non-voting exchangeable shares in the capital stock of Canadian Sub.
“Fair
Market Value”
means,
as of any date, (1) in the case of a Common Share or an Exchangeable Share,
the
average of the daily closing prices for a Common Share on the principal
securities exchange or market on which the Common Stock is traded for the 10
consecutive Business Days (or, if such trading has commenced less than 10
Business Days prior to the date in question, the actual number of Business
Days
elapsed since the commencement of such trading) before the date in question,
and
(2) otherwise, the fair market value thereof as determined in good faith by
the
Company. Any
good
faith determination by the Company of the Fair Market Value under this Agreement
will be binding on the Shareholders.
-29-
“Family
Member”
has
the
meaning set forth in Section
1.04(b)(iii)
of this
Agreement.
“FINRA”
means
the Financial Industry Regulatory Authority.
“Firm”
means
the Company, together with its Subsidiaries.
“Indemnified
Party”
has
the
meaning set forth in Section
2.07
of this
Agreement.
“Indemnifying
Party”
has
the
meaning set forth in Section
2.07
of this
Agreement.
“Initial
Liquidated Damages”
has
the
meaning set forth in Section
3.08(a)
of this
Agreement.
“Initial
Ownership”
means,
with respect to a Shareholder at any time, the fraction, the numerator of which
is the number of Common Shares and, without duplication, Exchangeable Shares,
beneficially owned (as such term is defined in Rule 13d-3 under the Exchange
Act) by such Shareholder as of the Closing Date and the denominator of which
is
the number of Common Shares and, without duplication, Exchangeable Shares,
beneficially owned by the Shareholder and all Other Shareholders who are then
Eligible Shareholders.
“Inspectors”
has
the
meaning set forth in Section
2.04(g)
of this
Agreement.
“Liquidated
Damages”
has
the
meaning set forth in Section
3.08(a)
of this
Agreement.
“Lock-Up
Period”
has
the
meaning set forth in Section
2.03 of
this
Agreement.
“Maximum
Offering Size”
has
the
meaning set forth in Section
2.01(e)
of this
Agreement.
“Maximum
Share Number”
means,
with respect to (i) the Anniversary Period from February 7, 2009 until February
7, 2010 (the “First Annual Period”), 1,401,822 Common Shares; and (ii) the
Anniversary Period from February 7, 2010 until February 7, 2011, 1,401,822
Common Shares less the aggregate amount of shares sold by the Shareholders
in
the First Annual Period.
“NASD”
means
the National Association of Securities Dealers, Inc.
-30-
“Other
Shareholder”
means
any other shareholder of the Company or Canadian Sub (other than the Company
or
any of its affiliates) who is party to this Agreement. For purposes of this
definition, “affiliate” means any Person, any other Person directly or
indirectly controlled by or under common control with such Person, and for
purposes of this definition, “control” has the meaning set forth in the
definition of “Affiliate” above.
“Partners’
Equity Agreement”
means
the Partners’ Equity Agreement, dated as of February 7, 2006, by and between the
Company and the shareholders listed on the signature pages thereto.
“Permitted
Transferee”
means
a
Person to whom Company Securities are Transferred (A) pursuant to Section
1.04(b)(ii)
or (B)
by will or the laws of descent and distribution.
“Person”
means
an individual, corporation, limited liability company, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
“Piggyback
Registration”
has
the
meaning set forth in Section
2.02(a)
of this
Agreement.
“Pledge
Agreement”
means
the pledge agreement entered into between the Shareholder and the Company of
even date herewith.
“Post-Termination
Non-Compete and Non-Solicit Period”
has
the
meaning set forth in Section
3.02(e)
of this
Agreement.
“Pro
Rata Portion”
means,
with respect to a Shareholder, that portion of the Maximum Share Number
calculated by multiplying the Maximum Share Number by such Shareholder’s Initial
Ownership.
“Public
Offering”
means
an underwritten public offering of Registrable Securities of the Company
pursuant to an effective registration statement under the Securities Act, other
than pursuant to a registration statement on Form S-4 or Form S-8 or any similar
or successor form.
“Public
Offering Limitation”
has
the
meaning set forth in Section
2.01(a)(ii)
of this
Agreement.
“Records”
has
the
meaning set forth in Section
2.04(g)
of this
Agreement.
“Registering
Shareholders”
has
the
meaning set forth in Section
2.01(a) of
this
Agreement.
-31-
“Registrable
Securities”
means,
with respect to a Shareholder, any Common Shares and any securities issued
or
issuable in respect of such shares by way of conversion, exchange, stock
dividend, split or combination, recapitalization, merger, consolidation, other
reorganization or otherwise; provided,
however,
that
such Registrable Securities shall cease to be Registrable Securities at any
time
when (i) a registration statement covering such shares has been declared
effective by the SEC and such shares have been disposed of pursuant to such
effective registration statement,
(ii)
such
shares are sold under circumstances in which all of the applicable conditions
of
Rule 144 or Rule 145 are met or such securities may be sold pursuant to Rule
144(k) or Rule 145(d)(3) or in either case any successor provision thereto
or
(iii) such shares are otherwise Transferred, the Company has delivered a new
certificate or other evidence of ownership for such shares not bearing the
legend required pursuant to this Agreement and such shares may be resold without
subsequent registration under the Securities Act.
“Registration
Expenses”
means
any and all expenses incident to the performance of or compliance with any
registration or marketing of securities, including all (i) registration and
filing fees, and all other fees and expenses payable in connection with the
listing of securities on any securities exchange or automated interdealer
quotation system, (ii) fees and expenses of compliance with any securities
or
“blue sky” laws (including reasonable fees and disbursements of counsel in
connection with “blue sky” qualifications of the securities registered), (iii)
expenses in connection with the preparation, printing, mailing and delivery
of
any registration statements, prospectuses and other documents in connection
therewith and any amendments or supplements thereto, (iv) security engraving
and
printing expenses, (v) internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (vi) reasonable fees and disbursements of counsel
for the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses relating to any
comfort letters or costs associated with the delivery by independent certified
public accountants of any comfort letters requested pursuant to Section
2.04(h)),
(vii)
reasonable fees and expenses of any special experts retained by the Company
in
connection with such registration, (viii) reasonable fees, out-of-pocket costs
and expenses of the Shareholders, including one counsel for all of the
Shareholders participating in the offering selected by the Shareholders holding
the majority of the Registrable Securities to be sold for the account of all
Shareholders in the offering, (ix) fees and expenses in connection with any
review by the NASD of the underwriting arrangements or other terms of the
offering, and all fees and expenses of any “qualified independent underwriter,”
including the fees and expenses of any counsel thereto, (x) fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities, (xi) costs of printing
and
producing any agreements among underwriters, underwriting agreements, any “blue
sky” or legal investment memoranda and any selling agreements and other
documents in connection with the offering, sale or delivery of the Registrable
Securities, (xii) transfer agents’ and registrars’ fees and expenses and the
fees and expenses of any other agent or trustee appointed in connection with
such offering, (xiii) expenses relating to any analyst or investor presentations
or any “road shows” undertaken in connection with the registration, marketing or
selling of the Registrable Securities, (xiv) fees and expenses payable in
connection with any ratings of the Registrable Securities, including expenses
relating to any presentations to rating agencies and (xv) all out-of pocket
costs and expenses incurred by the Company or its appropriate officers in
connection with their compliance with Section
2.04(l).
-32-
“Requesting
Shareholder”
has
the
meaning set forth in Section
2.01(a)
of this
Agreement.
“Rule
144”
means
Rule 144 promulgated by the SEC pursuant to the Securities Act, as amended
from
time to time, or any similar rule or regulation hereafter adopted by the SEC
having substantially the same effect as such rule.
“Rule
145”
means
Rule 145 promulgated by the SEC pursuant to the Securities Act, as amended
from
time to time, or any similar rule or regulation hereafter adopted by the SEC
having substantially the same effect as such rule.
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shareholder”
has
the
meaning set forth in the preamble.
“Shareholder
Covenants”
means
the provisions contained in Sections
3.01
through
3.06
of this
Agreement.
“Shortfall”
means,
in respect of any registration, the difference between the Maximum Share Number
and the number of Common Shares requested to be included in that registration
by
each Shareholder who is an Eligible Shareholder.
“Solicit”
has
the
meaning set forth in Section
3.03(b)
of this
Agreement.
“Subsidiary”
means,
with respect to any Person, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
“Transfer”
means,
with respect to any Company Securities, (i) when used as a verb, to sell,
assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise
transfer such Company Securities or any participation or interest therein,
whether directly or indirectly, or agree or commit to do any of the foregoing
and (ii)
when
used as a noun, a direct or indirect sale, assignment, disposition, exchange,
pledge, encumbrance, hypothecation, or other transfer of such Company Securities
or any participation or interest therein or any agreement or commitment to
do
any of the foregoing, in each case of (i) and (ii), other than a pledge by
the
Shareholder of his or her Company Securities as collateral pursuant to the
Pledge Agreement or an exchange of Exchangeable Shares for Common Shares.
-33-
“Underwritten
Offering Committee”
means
the committee designated by the Board and to which committee the Board has
delegated the power to approve Transfers in accordance with Section
1.04.
“Westwind”
has
the
meaning set forth in the recitals.
-34-
EXHIBIT
A
JOINDER
AGREEMENT TO WESTWIND SHAREHOLDERS’ EQUITY
AGREEMENT
This
Joinder Agreement (this “Joinder
Agreement”)
is
made as of the date written below by the undersigned (the “Joining Party”) in
accordance with the Westwind Capital Corporation Shareholders’ Equity Agreement,
dated as of September 30, 2007 (the “Westwind
Shareholders’ Equity Agreement”)
by and
between Xxxxxx Xxxxxx Partners Group, Inc. and the individuals listed on the
signature page thereto, as the same may be amended from time to time.
Capitalized terms used but not defined herein shall have the meaning ascribed
to
such terms in the Westwind Shareholders’ Equity Agreement.
The
Joining Party hereby acknowledges, agrees and confirms that, by its, his or
her
execution of this Joinder Agreement, the Joining Party shall be deemed to be
a
party to the Westwind Shareholders’ Equity Agreement as of the date hereof and
shall have all of the rights and obligations of a “Shareholder” thereunder as if
it, he or she had executed the Westwind Shareholders’ Equity Agreement. The
Joining Party hereby ratifies, as of the date hereof, and agrees to be bound
by,
all of the terms, provisions and conditions contained in the Westwind
Shareholders’ Equity Agreement.
IN
WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
the
date and year written below.
|
Date:
, 20
|
[NAME OF JOINING PARTY] | |
| By: | ||
| Name: | ||
| Title: | ||
| Address for Notices: | ||
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date and year first above written.
|
XXXXXX
XXXXXX PARTNERS GROUP, INC.
|
||
| |
|
|
| By: |
/s/
Xxxx X. Xxxxxx
|
|
|
Name:
Xxxx
X. Xxxxxx
|
||
|
Title:
General
Counsel
|
||
|
[SHAREHOLDERS]
|
||
|
/s/
[Shareholder signatures]
|
||
[Signature
Page to Westwind Capital Corporation Shareholders’ Equity
Agreement]
