EXHIBIT 99.1
EXECUTION COPY
STOCKHOLDERS AGREEMENT
DATED _____________, 2005
AMONG
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND
THE OTHER PARTIES HERETO
TABLE OF CONTENTS
PAGE
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ARTICLE I REPRESENTATIONS AND WARRANTIES OF THE PARTIES............................................ 1
1.1 Representations and Warranties of the Company and Parent.................................... 1
1.2 Representations and Warranties of the Stockholders.......................................... 2
ARTICLE II VOTING AGREEMENTS AND COVENANTS.......................................................... 2
2.1 Election of Directors; Committees........................................................... 2
2.2 Voting Required for Action.................................................................. 4
2.3 Selection Criteria.......................................................................... 6
2.4 Sponsor Veto................................................................................ 6
2.5 Independent Company Management Terms........................................................ 6
2.6 Parent Board Representation................................................................. 7
ARTICLE III TRANSFERS OF SHARES...................................................................... 7
3.1 Restrictions on Transfer of Shares.......................................................... 7
3.2 Tag-Along Rights............................................................................ 7
3.3 Excluded Shares............................................................................. 9
3.4 Transfers in Violation of Agreement......................................................... 9
ARTICLE IV RIGHT OF FIRST OFFER; RIGHTS TO COMPEL SALE.............................................. 9
4.1 Right of First Offer........................................................................ 9
4.2 Exchange Rights............................................................................. 11
ARTICLE V REDEMPTION RIGHTS........................................................................ 12
5.1 Redemption of Sponsor Shares................................................................ 12
5.2 Redemption Closing.......................................................................... 13
5.3 Failure to Redeem........................................................................... 13
ARTICLE VI PRE-EMPTIVE RIGHTS....................................................................... 13
6.1 Issuance of New Shares...................................................................... 13
ARTICLE VII BOARD OBSERVERS AND ACCESS............................................................... 14
7.1 Board Representation and Access............................................................. 14
7.2 Information Rights.......................................................................... 16
ARTICLE VIII AMENDMENT AND TERMINATION................................................................ 16
8.1 Amendment and Waiver........................................................................ 17
8.2 Termination of Agreement.................................................................... 17
8.3 Termination as to a Party................................................................... 17
ARTICLE IX MISCELLANEOUS............................................................................ 17
9.1 Certain Defined Terms....................................................................... 17
9.2 Legends..................................................................................... 21
9.3 Severability................................................................................ 22
9.4 Entire Agreement............................................................................ 22
9.5 Successors and Assigns...................................................................... 22
9.6 Counterparts................................................................................ 22
9.7 Remedies.................................................................................... 22
9.8 Notices..................................................................................... 23
9.9 Governing Law............................................................................... 24
9.10 Descriptive Headings........................................................................ 24
9.11 Tax-Free Reorganization..................................................................... 24
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STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into as of
_______________, 2005 by and among (i) Fidelity National Information Services,
Inc., a Delaware corporation (the "Company"), (ii) Xxxxxx X. Xxx Equity Fund V,
L.P., Xxxxxx X. Xxx Parallel Fund V, L.P., Xxxxxx X. Xxx Cayman Fund V, L.P.,
Xxxxxx X. Xxx Investors Limited Partnership, Xxxxxx Investments Holdings, LLC,
Xxxxxx Investments Employees' Securities Company I, LLC, and Xxxxxx Investments
Employees' Securities Company II, LLC (each a "THL Holder," collectively,
"THL"), (iii) TPG Partners III, L.P., TPG Parallel III, L.P., TPG Investors III,
L.P., FOF Partners III, L.P., FOF Partners III-B, L.P., TPG Dutch Parallel III,
C.V. and TPG Partners IV, L.P. (each a "TPG Holder," collectively "TPG"), and
(iii) Fidelity National Financial, Inc. (the "Parent"). Each THL Holder and TPG
Holder is referred to herein as a "Sponsor," and collectively, the "Sponsors."
The Sponsors, the Parent, and each other Person that is or may become a party to
this Agreement as contemplated hereby are sometimes referred to herein
collectively as the "Stockholders" and individually as a "Stockholder." Certain
capitalized terms used herein are defined in Section 9.1.
The parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
1.1 Representations and Warranties of the Company and Parent.
Each of the Company and Parent hereby represent and warrant to each Stockholder
(other than Parent) that as of the date of this Agreement:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, it has full power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby, and the execution, delivery and performance by
it of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action;
(b) this Agreement has been duly and validly executed and
delivered by it and constitutes a legal and binding obligation of the Company or
Parent, as the case may be, enforceable against it in accordance with its terms;
and
(c) the execution, delivery and performance by the Company and
Parent of this Agreement and the consummation by the Company and Parent of the
transactions contemplated hereby will not, with or without the giving of notice
or lapse of time, or both, (i) violate any provision of law, statute, rule or
regulation to which the Company or Parent is subject, (ii) violate any order,
judgment or decree applicable to the Company or Parent or (iii) conflict with,
or result in a breach or default under, any term or condition of the Company's
or Parent's organizational documents or any agreement or instrument to which the
Company or Parent is a party or by which it is bound.
1.2 Representations and Warranties of the Stockholders. Each
Stockholder other than Parent (as to himself or itself only) represents and
warrants to the Company and Parent that, as of the time such Stockholder becomes
a party to this Agreement:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the State of its state of incorporation, or
it is a limited partnership or a limited liability company duly formed, validly
existing, and in good standing under the Laws of the State of its state of
formation, as the case may be, it has full power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby, and the execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate, partnership or limited liability
company action.
(b) this Agreement (or the separate joinder agreement executed
by such Stockholder) has been duly and validly executed and delivered by such
Stockholder, and this Agreement constitutes a legal and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its
terms; and
(c) the execution, delivery and performance by such
Stockholder of this Agreement (or any joinder to this Agreement, if applicable)
and the consummation by such Stockholder of the transactions contemplated hereby
(and thereby, if applicable) will not, with or without the giving of notice or
lapse of time, or both, (i) violate any provision of law, statute, rule or
regulation to which such Stockholder is subject, (ii) violate any order,
judgment or decree applicable to such Stockholder or (iii) conflict with, or
result in a breach or default under, any term or condition of any agreement or
other instrument to which such Stockholder is a party or by which such
Stockholder is bound.
ARTICLE II
VOTING AGREEMENTS AND COVENANTS
2.1 Election of Directors; Committees.
(a) Each Person, other than the Company, that is a party to
this Agreement hereby agrees that such Person will vote, or cause to be voted,
all voting Shares of the Company over which such Person has the power to vote or
direct the voting, and will take all other necessary or desirable actions within
such Person's control, and the Company will take all necessary or desirable
actions within its control, to cause the authorized number of directors to be
established at up to sixteen (16) directors, and to elect or appoint or cause to
be elected or appointed to the board of directors of the Company (the "Board")
and cause to be continued in office, the following individuals, in each case
subject to the provisions of subparagraph (b) below:
(i) one (1) director designated by Xxxxxx X. Xxx Equity
Fund V, L.P. and one (1) director designated by
Xxxxxx X. Xxx Parallel Fund V, L.P. (collectively,
the "THL Directors"), who shall initially be Xxxxxx
X. Xxxxxxx and Xxxx Xxxxx and who shall be such
directors so long as they
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are principals of THL (or equivalent or higher
ranking employees of THL), provided that any
directors replacing the initial THL Directors shall
always be individuals who are principals of THL (or
equivalent or higher ranking employees of THL);
(ii) two (2) directors designated by TPG Partners IV, L.P.
(the "TPG Directors"), who shall initially be
Xxxxxxxx Xxxxxx and Xxxxxxxx Xxxxxx and who shall be
such directors so long as they are principals of TPG
(or equivalent or higher ranking employees of TPG),
provided that any directors replacing the initial TPG
Directors shall always be individuals who are
principals of TPG (or equivalent or higher ranking
employees of TPG) ; and
(iii) up to twelve (12) directors designated by Parent
representing the proportional amount of Shares held
by Parent at the relevant time (the "Parent
Directors"); provided that, it is acknowledged that
any number of the director seats to be filled by the
Parent at any time may remain vacant until such time
as the Parent elects to fill such seats.
(b) If at any time THL or TPG ceases to own at least 50% of
the Shares held by it as of the date hereof (subject to adjustment for stock
splits, combinations and similar events), the number of directors THL or TPG, as
the case may be, is entitled to designate shall be decreased by one. In the
event such decrease results in an undesignated Board seat, the remaining Board
members may designate, by majority vote, a successor director to fill the
vacancy created thereby or decrease the size of the Board by such seats.
(c) The chairman of the Board (the "Chairman") shall be
elected by a majority vote of the Board; provided, however, that Xxxxxxx X.
Xxxxx, XX shall serve as the Chairman for an initial period of three (3) years
provided he continues to be employed by the Company as Chief Executive Officer.
(d) The Board shall hold no less than one (1) meeting per
fiscal quarter. At each meeting of the Board (or committee thereof) at which a
quorum is present, each director shall be entitled to one vote on each matter to
be voted on at such meeting. A majority of the Board shall constitute a quorum.
(e) If at any time any director ceases to serve on the Board
(whether due to resignation, removal or otherwise), the Stockholders shall elect
a successor to fill the vacancy created thereby on the terms and subject to the
conditions of paragraphs (a) and (b) above. Each Person that is a party hereto
agrees to vote, or cause to be voted, all voting Shares of the Company over
which such Person has the power to vote or direct the voting, and shall take all
such other actions as shall be necessary or desirable to cause the designated
successor to be elected to fill such vacancy.
(f) Nothing in this Agreement shall be construed to impair any
rights that the stockholders of the Company may have to remove any director for
cause under applicable law,
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the certificate of incorporation of the Company, or the by-laws of the Company,
as the case may be. No such removal of an individual designated pursuant to this
Section 2.1 for cause shall affect any of the Stockholders' rights to designate
a different individual pursuant to this Section 2.1 to fill the position from
which such individual was removed.
(g) Each member of the Board shall be entitled to
reimbursement from the Company for his or her reasonable out-of-pocket expenses
(including travel) incurred in attending any Board meeting.
(h) For so long as a Sponsor has any designees on the Board,
the Company shall obtain and maintain directors and officers liability insurance
with coverage of at least $50,000,000 and of a scope that is customary for
companies equivalent to the Company in terms of size and industry. The Company
shall indemnify the directors designated by the Sponsors in accordance with the
Company's certificate of incorporation and each indemnification agreement
entered into by the Company and such director.
(i) There shall be established at all times during the term of
this Agreement a Compensation Committee of the Board (the "Compensation
Committee") which shall be comprised of up to five (5) directors as follows: one
(1) of whom shall be one of the THL Directors, one (1) of whom shall be one of
the TPG Directors and three (3) of whom shall be Parent Directors, provided
that, one (1) of the Parent Directors shall be an independent director selected
by Parent who shall not be an employee of Parent. The Compensation Committee
will (i) determine the compensation of all senior employees and consultants of
the Company (including salary, bonus, equity participation and benefits)
consistent with compensation of companies similar to the Company and (ii)
approve the grants of any options under, or amendments to or replacement of, the
Company's 2005 Equity Incentive Plan; provided that no member of the
Compensation Committee may vote on his own compensation or option grant. The
initial members of the Compensation Committee shall be Xxxxxxx X. Xxxxx, XX,
Xxxxxx X. Xxxxxxx and Xxxxxxxx Xxxxxx and two other individuals designated by
Parent in accordance with the provisions in this clause (i).
(j) There shall be established at all times during the term of
this Agreement an Audit Committee of the Board (the "Audit Committee") which
shall be comprised of THL Directors, TPG Directors and Parent Directors
representing the proportional amount of Shares held by THL, TPG and Parent,
respectively. The Audit Committee shall determine the Company's audit policies,
review audit reports and recommendations made by the Company's internal audit
staff and its independent auditors, meet with the Company's independent
auditors, oversee the independent auditors, and recommend the Company's
engagement of independent auditors.
(k) All other committees that may be established by the Board
from time to time shall be comprised of up to five (5) directors as follows: one
(1) of whom shall be one of the THL Directors, one (1) of whom shall be one of
the TPG Directors and three (3) of whom shall be Parent Directors, provided
that, one (1) of the Parent Directors shall be an independent director selected
by Parent who shall not be an employee of Parent.
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2.2 Voting Required for Action.
(a) At any time prior to a Public Offering, the following
actions by the Company or any of its Subsidiaries shall require the approval of
(X) the holders of at least a majority of the Shares then held by THL and its
Transferees, and (Y) the holders of at least a majority of the Shares then held
by TPG and its Transferees:
(i) the approval of any modification or deviation in
excess of (A) 20% with respect to the capital
expenditure line item of the annual operating budget
and capital expenditure budget of the Company and its
Subsidiaries from the amounts included in the three
(3) year projections attached hereto as Schedule 1
(unless such increase relates to an acquisition
permitted or approved under Section 2.2(a)(ii)), and
(B) 20% of the aggregate amounts set forth in the
annual operating budget and capital expenditure
budget approved by the Board on an annual basis,
(ii) acquisition, by merger or consolidation, or by
purchase of, or investments in, all or substantially
all of the assets or stock of, any business or any
corporation, partnership, joint venture, limited
liability company, association or other business
organization or division thereof, in excess of
$50,000,000 per transaction or series of related
transactions, or in excess of $100,000,000 in the
aggregate in any fiscal year,
(iii) amendments to the certificate of incorporation or
bylaws of the Company or any of its Subsidiaries in a
manner which disproportionately and adversely affects
the rights of the Sponsors or which adversely affect
the indemnification or exculpation of any director of
the Company,
(iv) subject to the rights of the Sponsors in Section 4.1,
any (A) sale of all or substantially all of the
assets of, or liquidation, dissolution or
recapitalization of, the Company or any of its
Material Subsidiaries, or (B) change of control of
the Company or a Material Subsidiary, whether through
merger or sale of stock or otherwise, the result of
which is Persons owning voting stock of the Company
or such Material Subsidiary, as the case may be,
prior to such transaction do not hold more than 50%
of the voting stock of the Company after giving
effect to such transaction,
(v) the incurrence of any indebtedness for borrowed money
by the Company or any of its Subsidiaries in excess
of $100,000,000 in the aggregate or the granting of
any lien or encumbrance on the assets or pledge of
the capital stock of the Company or its Subsidiaries
(other than those imposed in connection with the
Financing),
(vi) the authorization or issuance, or committing to
authorize or issue, any equity securities of the
Company or its Subsidiaries senior to the Shares
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(or any replacement securities) held by the Sponsors
as to liquidation preference, redemption rights or
dividend rights,
(vii) any increase in the authorized number of shares of
Common Stock or Common Stock Equivalents issued or to
be issued to employees, officers or directors of, or
consultants or advisors to the Company, pursuant to
the 2005 Equity Incentive Plan or adoption of any
similar incentive or option plan,
(viii) entering into any contract or transaction (other than
an Exempted Arrangement) which involves payments by
any party of more than $500,000 annually in the
aggregate, between the Company and any of its
Subsidiaries on the one hand and any Stockholder or
its Affiliates or any Related Parties on the other,
(ix) any Public Offering that is not a Qualified Public
Offering, or
(x) any (A) commencement of a case, proceeding or other
action (1) under any existing or future law of any
jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect
to it or its debts, or (2) seeking appointment of a
receiver, trustee, custodian or other similar
official for it or for all or any substantial part of
its assets, or (B) making of a general assignment for
the benefit of its creditors.
2.3 Selection Criteria. In the event that the Board determines
to appoint a new Chief Executive Officer, Chief Financial Officer or Chief
Operating Officer (or equivalent position) at any time or times, the Company
shall select persons for such positions who meet criteria agreed to in advance
by the Board in consultation with the Sponsors.
2.4 Sponsor Veto.
(a) Each time the Board proposes to replace the Chief
Executive Officer, Chief Financial Officer or Chief Operating Officer, the
Sponsor Group, for bona fide, good faith reasons, communicated in writing in
reasonable detail by the Sponsor Group within a reasonable time after the
Company notifies the Sponsors of the identity of a proposed replacement
candidate, shall have the right to veto the selection of two such proposed
candidates for Chief Executive Officer, two such proposed candidates for Chief
Financial Officer and two such proposed candidates for Chief Operating Officer
of the Company (each such candidate, a "Candidate").
(b) In the event the Sponsor Group has already vetoed two
Candidates for any of such positions, the Sponsor Group will have the right to
veto a third Candidate for such position so long as the Sponsor Group withdraws
its veto and waives its veto rights with respect
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to one of the previously vetoed Candidates, and the Company will have the right
to appoint to such position the Candidate for whom the veto was withdrawn.
(c) Notwithstanding anything in this Section 2.4 to the
contrary:
(i) a simple majority of the Board may appoint an interim
Chief Executive Officer, Chief Financial Officer or
Chief Operating Officer to serve for a term not to
exceed (unless otherwise agreed in writing by THL &
TPG) 120 calendar days (the "Interim Term"); and
(ii) a simple majority of the Board may extend the Interim
Term by successive increments of 60 calendar days
until a Chief Executive Officer, Chief Financial
Officer or Chief Operating Officer is appointed, so
long as the Company is proceeding in good faith with
the process set forth in this Section 2.4.
2.5 Independent Company Management Terms. The Company will use
reasonable best efforts to put in place within a reasonable time after the date
hereof a senior management team at the Company (including a chief legal officer
and chief operating officer) composed of managers who are not employed by, or
serve as directors of, Parent (other than Xxxxxxx X. Xxxxx, XX and Xxxxx Xxxxxxx
who will be employed by both Parent and the Company).
2.6 Parent Board Representation. Parent will use reasonable
best efforts to have Xxxxxx X. Xxxxxxx nominated and elected to Parent's Board
of Directors.
ARTICLE III
TRANSFERS OF SHARES
3.1 Restrictions on Transfer of Shares.
(a) Prior to the completion of the Company's first Public
Offering, no Stockholder may Transfer any Shares, except in an Exempt Transfer
or otherwise in accordance with the applicable terms of this Agreement.
(b) No Transfer of any Shares by any Stockholder shall become
effective unless and until the Transferee (unless such Transferee already is
party to this Agreement) executes and delivers to the Company a counterpart to
this Agreement, agreeing to be treated in the same manner as the transferring
Stockholder. Upon such Transfer and such execution and delivery, the Transferee
acquiring Transferred Shares shall be bound by, and entitled to the benefits of,
this Agreement in the same manner as the transferring Stockholder; provided that
no Transferee of a Sponsor (other than pursuant to the second sentence of the
definition of an Exempt Transfer) shall be entitled to any of the rights of the
Sponsor set forth in this Agreement (or the benefits hereunder) other than
Section 3.2, Article V, Article VI, Section 7.2, Article VIII and Article IX
hereof. Any attempted Transfer of Shares by any Stockholder not in accordance
with this Section 3.1 shall not be effective and shall be void.
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(c) No Shares may be transferred by a Stockholder (other than
pursuant to an effective registration statement under the Securities Act) unless
such Stockholder first delivers to the Company an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to the Company, to the
effect that such Transfer is not required to be registered under the Securities
Act.
3.2 Tag-Along Rights.
(a) At any time after the date of this Agreement, if any
Sponsor or Parent (the "Selling Holder") proposes to Transfer any such Shares to
a third party, the Selling Holder shall, before such Transfer:
(i) Deliver to the Company and to the other Stockholders
(the "Other Holders") at least thirty (30) days prior
written notice of such proposed Transfer (the "Sale
Notice") and the terms of such Transfer, including
(A) the number of shares of Common Stock to which the
Transfer relates (the "Offered Shares"), (B) the name
and address of the proposed Transferee, (C) the
proposed amount and type of consideration (including,
if the consideration consists in whole or in part of
non-cash consideration, such information available to
the Selling Holder as may be reasonably necessary for
the other Stockholders to properly analyze the
economic value and investment risk of such non-cash
consideration) and the terms and conditions of
payment proposed by the Selling Holder.
(ii) Any of the Other Holders may, within twenty-five (25)
days of the receipt of the Sale Notice, give written
notice (each, a "Tag-Along Notice") to the Selling
Holder that such Other Holder wishes to participate
in such proposed Transfer upon the terms and
conditions set forth in the Sale Notice, which
Tag-Along Notice shall specify the Shares such Other
Holder desires to include in such proposed Transfer;
provided, however, that (1) each Other Holder shall
be required, as a condition to being permitted to
sell Shares pursuant to this Section 3.2(a) in
connection with a Transfer of Offered Shares, to sell
a number of shares equal to the product of its Pro
Rata Amount and the number of Offered Shares, (2) to
exercise its tag-along rights hereunder, each Other
Holder must agree to make to the Transferee on behalf
of itself the same representations, warranties,
covenants, indemnities and agreements as the Selling
Holder agrees to make in connection with the Transfer
of the Offered Shares (except that in the case of
representations and warranties pertaining
specifically to, or covenants made specifically by,
the Selling Holder, the Other Holders shall make
comparable representations and warranties pertaining
specifically to (and, as applicable, covenants by)
themselves), and must agree to bear its ratable share
(which shall be proportionate based on the value of
Shares that are Transferred) of all liabilities to
the Transferees arising out of representations,
warranties (other than those representations,
warranties and covenants that pertain specifically to
a
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given Stockholder), covenants, indemnities or other
agreements made in connection with the Transfer. Each
Stockholder will bear (x) its own costs of any sale
of Shares pursuant to this Section 3.2(a) and (y) its
pro-rata share (based upon the relative amount of
Shares sold) of any of the other costs of any
reasonable and customary sale of Shares pursuant to
this Section 3.2(a) to the extent such costs are
incurred for the benefit of all Stockholders and are
not otherwise paid by the Transferee.
(b) If none of the Other Holders gives the Selling Holder a
Tag-Along Notice prior to the expiration of the 25-day period for giving
Tag-Along Notices with respect to the Transfer proposed in the Sale Notice, then
(notwithstanding the first sentence of this Section 3.2(a)) the Selling Holder
may Transfer such Offered Shares on the terms and conditions set forth, and to
or among any of the Transferees identified (or Affiliates of Transferees
identified), in the Sale Notice at any time within ninety (90) days after
expiration of the 25-day period for giving Tag-Along Notices with respect to
such Transfer. Any such Offered Shares not Transferred by the Selling Holder
during such 90-day period will again be subject to the provisions of this
Section 3.2(a) upon subsequent Transfer. If one or more Other Holders give the
Selling Holder a timely Tag-Along Notice, then the Selling Holder shall use all
reasonable efforts to obtain the agreement of the prospective Transferee(s) to
the participation of the Other Holders in any contemplated Transfer, on the same
terms and conditions as are applicable to the Offered Shares, and no Selling
Holder shall transfer any of its shares to any prospective Transferee if such
prospective Transferee(s) declines to allow the participation of the Other
Holders.
(c) The rights and restrictions contained in Section 3.2(a)
shall not apply with respect to any Exempt Transfer.
3.3 Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Shares in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Shares as the owner of such Shares for
any purpose.
ARTICLE IV
LIQUIDTY RIGHTS
4.1 Duty to Negotiate; Appraisal.
(a) If the Sponsors shall have cooperated with the Company in
its efforts to consummate a Qualified Public Offering but the Company has not
consummated a Qualified Public Offering prior to the second anniversary of the
Closing Date, then, at any time thereafter, Sponsors holding at least 75% of the
Sponsor Shares (the "Sponsor Group") may give notice (the "Transfer Notice") to
Parent that the Sponsor Group desires to sell their Shares to Parent. For a
period of 30 days from the date of the Transfer Notice, each party will
negotiate in good faith regarding a sale of all the Sponsor Shares to the Parent
or the Company. If the parties are unable to agree upon the terms of a sale of
the Sponsor Shares to the Parent or the Company within such
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30-day period, then the Sponsors may elect to initiate the Appraisal Process to
determine the Appraisal Price (the "Election"). Any Appraisal Process shall be
initiated by the Sponsor Group by delivering to Parent and the Company the
report of the first appraiser.
(b) If, following the first Appraisal Process, the Sponsor
Group is not satisfied in its sole discretion, with the Appraisal Price (which
determination it shall make within fifteen (15) days of completion of the
Appraisal Process), then it may elect (the "Second Election") to initiate the
Appraisal Process a second time; provided that the Sponsor Group may not make a
Second Election within 12 months of the Election. If, following the second
Appraisal Process, the Sponsor Group is not satisfied in its sole discretion,
with the Appraisal Price (which determination it shall make within fifteen (15)
days of completion of the Appraisal Process), then it may elect to initiate the
Appraisal Process a third time (the "Third Election"), provided that, the
Sponsor Group may not make a Third Election within 12 months of the Second
Election. The Sponsors may not initiate the Appraisal Process more than three
times.
(c) If, following any Appraisal Process, the Sponsor Group is
satisfied, in its sole discretion, with the Appraisal Price, the Sponsor Group
shall so notify the Parent and the Company and the Parent or the Company may
elect, within fifteen (15) days of receipt of notice of the Sponsor Group's
approval of the Appraisal Price, in its sole discretion, to purchase for cash
all of the Sponsor Shares from the Sponsors at the Appraisal Price by sending
written notice to the Sponsors, and, in such event, the Sponsors shall sell all
the Sponsor Shares to the Company and/or Parent. The closing of the purchase of
the Shares from the Sponsors by the Company and/or Parent pursuant to this
Section 4.1(c) shall occur no later than 30 days after notice of the Company or
Parent's election to purchase.
(d) If the Sponsor Group, in its sole discretion, has approved
an Appraisal Price, but the Company and Parent elect not to purchase the
Sponsors' Shares or fail to make an election within the 15-day time period
referenced in clause (c) above, then the Sponsors shall have the right to compel
a Sale of the Company pursuant to Section 4.1(e) (the "Sale Process").
(e) In accordance with Section 4.1(d) above, the Sponsor Group
may elect to compel a Sale of the Company in accordance with the provisions of
this Section 4.1(e) by providing written notice thereof to the Company.
(i) The Stockholders and the Company promptly after
receiving such notice will take, under the direction
of the Sponsor Group, all actions reasonably
necessary or desirable and will use their reasonable
best efforts to cause the consummation of such Sale
of the Company at the highest value reasonably
available. Without limiting the foregoing, (i) each
of Parent and the Company shall provide the Sponsors
with prompt notice regarding any and all approvals,
consents, notifications, waivers and other legal
requirements applicable to it and necessary for the
consummation of the proposed Sale of the Company, and
shall use its reasonable best efforts to obtain all
such approvals, consents, notifications and waivers,
and comply with all such other legal requirements in
a timely fashion, (ii) the Company shall hire an
investment bank (chosen by the Sponsor Group,
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but reasonably acceptable to the Company) to identify
potential buyers, conduct an auction process and
otherwise facilitate a Sale of the Company, (iii) if
the proposed Sale of the Company is structured as a
sale of assets or a merger or consolidation, or
otherwise requires equityholder approval, subject to
the approval of the terms of such proposed Sale of
the Company by the Sponsor Group, in its sole
discretion, the Stockholders and the Company will
vote or cause to be voted all Shares that they hold
or with respect to which such Stockholder has the
power to direct the voting and which are entitled to
vote on such transaction in favor of such transaction
and will waive any appraisal rights which they may
have in connection therewith, and (iv) subject to the
provisions of 4.1(e)(iii) and to the approval of the
Sale of the Company by the Sponsor Group, in its sole
discretion, if the proposed Sale of the Company is
structured as or involves a sale or redemption of
Shares, the Stockholders will agree to sell their
pro-rata share of the Shares being sold in such Sale
of the Company on the terms and conditions approved
by such Sponsor Group, and the Stockholders and the
Company will execute any merger, asset purchase,
security purchase, recapitalization or other sale
agreement approved by such Sponsor Group (the
"Definitive Sale Agreements"), and will make to the
buyer the same representations, warranties,
covenants, indemnities and agreements (other than
non-competition agreements) as the Sponsor Group
makes in connection with such Sale of the Company
(except that in the case of representations and
warranties pertaining specifically to, or covenants
made specifically by, the Sponsor Group, the other
Stockholders shall make comparable representations
and warranties pertaining specifically to (and, as
applicable, covenants by) themselves), and must agree
to bear its ratable share (which shall be
proportionate based on the value of Shares that are
being sold in such Sale of the Company) of all
liabilities of the Stockholders arising out of
representations, warranties (other than those
representations, warranties and covenants that
pertain specifically to a given Stockholder),
covenants, indemnities or other agreements made in
the Definitive Sale Agreements.
(ii) The obligations of the Stockholders with respect to
the Sale of the Company are subject to the
satisfaction of the following conditions: (A) upon
the consummation of the Sale of the Company, all of
the holders of a particular class or series of Shares
shall receive the same form and amount of
consideration per share, or amount of Shares, or if
any holders of a particular class or series of Shares
are given an option as to the form and amount of
consideration to be received, all holders of such
class or series will be given the same option, and
(B) all holders of vested and exercisable rights to
acquire a particular class or series of Shares will
be given an opportunity to either (1) exercise such
rights prior to the consummation of the Sale of the
Company and participate in such sale as holders of
such Shares or (2) upon the consummation of the Sale
of the Company, receive in exchange for such rights
consideration equal to the
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amount determined by multiplying (x) the same amount
of consideration per share, or amount of Shares
received by the holders of such type and class of
Shares in connection with the Sale of the Company
less the exercise price per share, or amount of such
rights to acquire such Shares by (y) the number of
shares, or aggregate amount of Shares represented by
such rights.
(iii) Each Stockholder will bear its or his pro-rata share
(based upon the relative amount of Shares sold) of
the reasonable and customary costs of any Sale of the
Company to the extent such costs are incurred for the
benefit of all Stockholders and are not otherwise
paid by the Company or the acquiring party.
(iv) In no event will the auction process take more than
180 days (the "Auction Period"), unless Definitive
Sale Agreements have been entered into prior to the
end of the Auction Period. Unless Definitive Sale
Agreements have previously been executed, the Sponsor
Group shall have the right to terminate the Sale
Process at any time during the Auction Period in its
sole discretion (the "Sale Termination Right"). If
(i) the Sponsor Group exercises the Sale Termination
Right, or (ii) the Sale of the Company as
contemplated by the Definitive Sale Agreements is not
consummated (unless the failure to consummate is the
result of a breach of the Definitive Agreements by a
member of the Sponsor Group), then, at any time on or
after 6 months after the date on which the Sponsor
Group exercised the Sale Termination Date or the
Definitive Sale Agreements terminated in accordance
with their terms, as the case may be, the Sponsor
Group may, again initiate their liquidity rights
under this Article IV (commencing with Section
4.1(a)), subject to the terms of Section 4.1(b). If,
(i) at the end of the Auction Period, there is no
good faith, bona fide offer to acquire the Company,
or (ii) the shareholders of Parent have the right to
approve the Sale of the Company and vote against such
transaction, then , the Sponsor Group may, in its
sole discretion, either (i) exercise the exchange
rights described in Section 4.2, or (ii) again and at
any time initiate their liquidity rights under this
Article IV (commencing with Section 4.1(a)), subject
to the terms of Section 4.1(b).
4.2 Exchange Rights.
If a Sale of the Company does not occur in accordance with the
provisions of Section 4.1(c), then the Sponsor Group may elect to exchange all,
but not less than all, of the Sponsor Shares for shares of common stock of
Parent based upon the Appraisal Price of the Sponsor shares pursuant to a new
Appraisal Process initiated at the time the Sponsor Group elects to exercise
their exchange rights hereunder and the fair market value of the Parent's common
stock determined by the average closing price of the Parent's common stock for
the 45-day trading period immediately prior to the date of the exchange for
Parent common stock (the "Exchange"). To the extent the number of shares to be
received by Purchasers at the Appraisal Price constitutes
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more than 19.9% of the outstanding capital stock of Parent (as determined
pursuant to the rules of the New York Stock Exchange), then Purchasers will
receive the balance in cash as a pro rata portion of the Appraisal Price. Upon
written notice to Parent and the Company of the Sponsor Group's election to
consummate such Exchange (the "Exchange Notice"), each of Parent and the Company
shall (i) provide the Sponsors with prompt notice regarding any and all
approvals, consents, notifications, waivers, filings, amendments and other legal
requirements applicable to it and necessary for the consummation of the proposed
Exchange, and shall use their reasonable best efforts to obtain all such
approvals, consents, notifications, waivers, filings and amendments and shall
comply with all such other legal requirements in a timely fashion, and (ii) take
all other actions reasonably necessary or desirable and use their reasonable
best efforts to cause the consummation of the Exchange.
ARTICLE V
REDEMPTION RIGHTS
5.1 Redemption of Sponsor Shares. At any time prior to a
Public Offering becoming effective:
(a) Parent shall provide the Sponsors with no less than thirty
(30) days prior written notice of any event that will constitute a Parent Change
of Control. If the Sponsor Group gives notice of its election (such election to
be called the "Redemption Notice") within twenty (20) days after receipt of such
notice from the Parent, to have the Company redeem its Shares, then, upon
consummation of such Parent Change of Control (the "Redemption Date"), the
Company shall be required to redeem, at the Redemption Price (as defined below),
all of the Shares then held by the Sponsors (the "Redemption Shares"). The
Redemption Notice must request redemption of all, and not less than all, of the
Shares held by the Sponsors.
(b) For purposes of this provision, a "Parent Change of
Control" shall be deemed to have occurred when there has occurred (i) an
acquisition by any "person" (as that term is used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act, as amended (the "Exchange Act") (or any
successor item, regulation or act to the same effect)) of beneficial ownership,
directly or indirectly, of securities of Parent representing more than fifty
percent (50%) of the combined voting power of Parent's then outstanding
securities; (ii) an acquisition by any "person" (as that term is used in
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act, as amended (the
"Exchange Act") (or any successor item, regulation or act to the same effect))
of the right to appoint a majority of Parent's board of directors; or (iii) the
sale of all or substantially all of the assets of Parent.
(c) The redemption price for each Redemption Share (the
"Redemption Price") shall be the Appraisal Price of each share of the Company's
Common Stock on the date that the applicable Redemption Notice is first given
under Section 5.1 (the "Determination Date").
(d) In consideration of the redemption of the Redemption
Shares hereunder, the Company shall deliver to the Sponsors on the Redemption
Date, the Redemption Price, in cash by certified check or by wire transfer of
immediately available funds.
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5.2 Redemption Closing. The closing of the redemption of the
Redemption Shares being redeemed by the Sponsors (the "Redemption Closing")
shall take place at 10:00 a.m. at the offices of Weil, Gotshal & Xxxxxx LLP, 000
Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 on the applicable Redemption Date, or at such
other time and place as the Sponsors and the Company may agree. The Sponsors
shall deliver to the Company at the Closing a certificate or certificates
evidencing the Shares redeemed hereunder together with executed stock powers.
5.3 Failure to Redeem. If the Company fails to redeem all of
the Redemption Shares on the Redemption Date, then the Company shall be deemed
to have breached Section 5.1 hereof. If the Company's breach is due to
insufficient funds, then those funds which are available to the Company will be
used to redeem, pro rata, based on the aggregate Redemption Price, the maximum
possible number of Redemption Shares. In the event of such a breach, in addition
to any other remedies available to the Sponsors at law or in equity, between the
Redemption Date and such time as the redemption is completed, the Redemption
Price shall bear interest at the rate of twelve percent (12%) per annum,
compounded annually; provided that such rate shall increase by 2% on the date
that is six (6) months after the Redemption Date, and subject to applicable law,
shall further increase by an additional 2% on the last day of every quarter
thereafter, until such Redemption Shares are fully redeemed. If the Company
redeems fewer than all of the Redemption Shares offered for redemption, the
holders of the Shares not redeemed shall continue to receive the benefit of the
rights and privileges afforded the Shares hereunder.
ARTICLE VI
PRE-EMPTIVE RIGHTS
6.1 Issuance of New Shares.
i. Purchase Rights. If at any time after the
date of this Agreement the Company proposes to issue
or sell any Common Stock, Common Stock Equivalents or
securities convertible into equity securities of the
Company (collectively, "New Shares"), the Company
shall first offer to sell to each Stockholder a
portion of each type of such New Shares equal to the
quotient determined by dividing (x) the number of
Shares held, beneficially owned by such Stockholder,
by (y) the total number of Shares outstanding
immediately prior to such issuance or sale. A
Stockholder shall be entitled to purchase all or any
portion of their respective portions (as determined
in the immediately preceding sentence) of such New
Shares at the most favorable price and on the most
favorable terms as such New Shares are to be offered.
The holders of Shares shall further have a right of
over-allotment such that to the extent a Stockholder
(a "Rejecting Holder") does not does not exercise its
right to purchase any of the New Shares, or exercises
its rights for less than all of its pro rata share of
the New Shares (as determined above), then each other
Stockholder may elect to purchase its pro rata share
(as determined above) of such New Shares which the
Rejecting Holder does not elect to purchase.
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ii. Offer Period. In order to exercise its
purchase rights hereunder, each Stockholder must,
within 30 days after receipt of written notice from
the Company describing in reasonable detail the New
Shares being offered, the purchase price thereof, the
payment terms, the percentage of the New Shares
initially available to such holder pursuant to
Section 5.1(a) and the over-allotment right available
in connection therewith, deliver a written notice to
the Company describing its election to exercise its
purchase rights hereunder.
iii. Expiration of Offer Period. Upon the
expiration of the offering periods described above,
the Company shall be entitled to sell such New Shares
which the Stockholders have not elected to purchase
during the 180 days following such expiration on
terms and conditions no more favorable to the
purchasers thereof than those offered to the
Stockholders of Stock. Any New Shares to be sold by
the Company after such 180-day period must be
reoffered to the Stockholders pursuant to the terms
of this Section 6.1.
iv. Exceptions to Purchase Rights. The
provisions of this Section 6.1 will not apply to the
following issuances of New Shares:
1. Common Stock or Common Stock Equivalents issued or
to be issued to employees, officers or directors of,
or consultants or advisors to the Company, pursuant
to the 2005 Equity Incentive Plan,
2. Equity Securities issued in respect of or in
exchange for Shares by way of a stock dividend, stock
split or similar transaction, and
3. Equity Securities issued in the first Public
Offering approved by the Board in accordance with the
terms hereof.
ARTICLE VII
BOARD OBSERVERS AND ACCESS
7.1 Board Representation and Access. The Company agrees that,
at any time prior to a Public Offering, in the event that any Sponsor loses its
right to designate all of its directors pursuant to Section 2.1(b):
(a) such Sponsor (an "Affected Sponsor") shall have the right
to designate an employee of such Sponsor or its Affiliates as a non-voting
observer (a "Non-Voting Observer") to the Board and who shall be such Sponsor's
initial designee as a director of the Company so long as they are principals of
such Sponsor, and any replacement shall be a principals of such Sponsor. The
Non-Voting Observer attending a meeting of the Board shall be entitled to
reimbursement from the Company for his or her reasonable out-of-pocket expenses
(including travel) incurred in attending such meeting.
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(b) The Non-Voting Observer shall be entitled to be present at
all meetings of the Board and of each committee of the Board and such observer
shall be notified of any meeting of the Board or committee, including such
meeting's time and place, in the same manner as Board members and shall have the
same access to information (including any copies of all materials distributed to
members of the Board or a committee thereof) concerning the business and
operations of the Company and at the same time as Board members and shall be
entitled to participate in discussions and consult with, and make proposals and
furnish advice to, the Board or committee without voting; provided, however,
that the Company shall not be under any obligation to take any action with
respect to any proposals made or advice furnished by the Non-Voting Observer,
and nothing herein shall prevent the Board (or any committee thereof) from
acting by written instrument to the extent permitted by applicable law. The
Non-Voting Observer shall have a duty of confidentiality to the Company
comparable to the duty of confidentiality of a director of the Company.
(c) Notwithstanding the foregoing, if an issue is to be
discussed or otherwise arises at any meeting of the Board or any committee of
the Board which, in the reasonable judgment of the Board or a majority of the
members of such committee, based on advice of legal counsel, cannot be discussed
in the presence of the Non-Voting Observer in order to avoid a conflict of
interest on the part of the Non-Voting Observer or to preserve an
attorney-client or accountant-client or any other available privilege, then such
issue may be discussed without the Non-Voting Observer being present and may be
deleted from any materials being distributed in connection with any meeting at
which such issues are to be discussed, so long as the Non-Voting Observer is
given notice of the occurrence of such meeting and the deletion of such
materials.
(d) The Company will, and will cause its Subsidiaries to, upon
reasonable notice at reasonable times from time to time, at the sole expense of
the Affected Sponsor, provide the Affected Sponsor (and any other parent company
of the Affected Sponsor that is a venture capital operating company) reasonable
opportunities to routinely consult with and advise the management of the Company
and its subsidiaries on all matters relating to the operation of the Company and
each such Subsidiary. The Company shall, and shall cause its subsidiaries to
give, subject to compliance with applicable laws and confidentiality obligations
to third parties, the Affected Sponsor (and any other parent company of the
Affected Sponsor that is a venture capital operating company) and their
authorized representatives reasonable access during normal business hours to all
books of account, facilities and properties of the Company and its subsidiaries
and permit the Affected Sponsor (and any parent company of the Affected Sponsor
that is a venture capital operating company) to make such copies and inspections
thereof as any such Person may reasonably request and discuss the affairs,
finances and accounts with the officers thereof; provided that the Affected
Sponsor shall not exercise such rights more often than two times during any
calendar year, and such additional times as may be reasonably required in order
to qualify any of the Shares as a venture capital investment (as defined in the
Department of Labor Regulation Sction. 2510.3-101). Any such visit will be at
the expense of the Affected Sponsor (or such other parent company of the
Affected Sponsor that is a venture capital operating company).
(e) If (i) reasonably required, in order to qualify any of the
Shares as a venture capital investment (as defined in the Department of Labor
Regulation Section 2510.3-101) or (ii) the
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Affected Sponsor is unable for any reason to appoint a Non-Voting Observer to
the Board (and each of the committees, except the compensation committee,
thereof), then the Company shall promptly provide true and correct copies of all
documents, reports, financial data, and such additional financial and other
information with respect to the Company, and its subsidiaries as the Affected
Sponsor (and any other parent company of the Affected Sponsor that is a venture
capital operating company) may from time to time reasonably request.
7.2 Information Rights. Prior to the consummation of the first
Public Offering, the Company shall provide to each of the Sponsors the following
information:
(a) Within ninety (90) days after the end of each fiscal year,
an audited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal year, and an audited consolidated statement of income and
statement of cashflows of the Company and its Subsidiaries for such year, in
each case prepared in accordance with generally accepted accounting principles
and setting froth in comparative form the figures for the previous fiscal year,
all in reasonable detail, and audited by the Company's independent public
accountants.
(b) Within forty five (45) days after the end of each of the
first three fiscal quarters of each fiscal year, unaudited consolidated balance
sheets of the Company and its Subsidiaries as of the end of such fiscal quarter,
unaudited consolidated statements of income, and unaudited consolidated
statements of cash flows for such fiscal quarter and for the current fiscal year
to date. Such financial statements shall be prepared in accordance with
generally accepted accounting principles consistently applied (other than
omission of accompanying notes) and compared with both the actual results from
the corresponding quarter of the previous fiscal year and the budget for the
current fiscal year, all in reasonable detail and signed by the principal
financial or accounting officer of the Company.
(c) Within twenty (20) days after the end of each month of
each fiscal year, the Company's monthly reporting package, including unaudited
consolidated statements of income. Such financial statements shall be prepared
in accordance with generally accepted accounting principles consistently applied
(other than omission of accompanying notes) and compared with both the actual
results from the corresponding month of the previous fiscal year and the budget
(including any reforecasts) for the current fiscal year, all in reasonable
detail and signed by the principal financial or accounting officer of the
Company.
(d) As soon as reasonably practicable and in accordance with
Company's past practice (but in no extent later than the first day of such
fiscal year), a copy of an annual budget with line items compared to the
previous year's budget and an annual strategic plan for such fiscal year.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendment and Waiver. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in
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writing by the Company and (i) holders of a majority of the Shares held by THL,
(ii) holders of a majority of the Shares held by TPG, and (iii) the Parent. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
8.2 Termination of Agreement. This Agreement will terminate in
respect of all Stockholders (a) with the written consent of the Company and (i)
holders of a majority of the Shares held by THL, (ii) holders of a majority of
the Shares held by TPG, and (iii) the Parent; (b) upon the dissolution,
liquidation or winding-up of the Company; (c) upon the consummation of a Sale of
the Company; or (d) upon a Public Offering.
8.3 Termination as to a Party. Any Person who ceases to hold
any Shares shall cease to be a Stockholder and shall have no further rights or
obligations under this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"Affiliate" of any particular Person means any other Person
Controlling, Controlled by or under common Control with such particular Person
or, in the case of a natural Person, any other member of such Person's Family
Group.
"Agreement" has the meaning set forth in the preamble.
"Appraisal Price" means the "fair market value" of each Share
determined in accordance with this definition by one or more of the following
independent investment banking firms (the "Firms") acting as an appraiser (an
"Appraiser"): Bank of America Securities, LLC, Bear, Xxxxxxx & Co. Inc.,
Citigroup Global Markets Inc., Credit Suisse First Boston LLC, Deutsche Bank AG,
Xxxxxxx Sachs Group, Inc., X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx,
provided that if all such Firms have been exhausted by either having already
rendered a valuation or the Sponsor Group or Parent has approached such Firms to
engage them and such Firms have declined such engagement, then the parties will
cooperate and use their reasonable best efforts to mutually agree upon another
independent, nationally recognized investment banking firm. Each party who
selects an Appraiser must make such selection within fifteen (15) days of the
event triggering the Appraisal. Each party selecting an Appraiser hereunder
shall direct the Appraiser to deliver its valuation within thirty (30) days of
being retained, and such party shall cooperate with the Appraiser and use its
reasonable best efforts to cause such valuation to be delivered within such time
frame. The expenses of any Appraiser engaged in connection with the Appraisal
Process shall be divided evenly among the parties. The Appraisal Price shall be
determined as follows:
(a) Each Appraiser retained hereunder shall determine the
fair market per share value of the Sponsor Shares
assuming the sale of the entire equity interest of
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the Company to an independent willing buyer in an
arms'-length transaction under then current
prevailing market conditions for the sale of all of
the stock of comparable business enterprises intended
for continued use as part of a going concern. Each
Appraiser shall assume that in any such transaction
each shareholder of the Company would receive the
same per share consideration, and the Appraiser shall
not apply any discount for minority interest or
illiquidity of the Sponsor Shares, nor any control
premium.
(b) The initial Appraiser shall be selected by the
Sponsor Group (the "Sponsor Appraiser"). If the
Parent does not accept the per share valuation
arrived at by the Sponsor Appraiser, then the Parent
shall promptly notify THL and TPG thereof and Parent
shall retain one of the Firms as a second Appraiser
(the "Parent Appraiser").
(c) If a valuation is delivered by the Parent Appraiser
in accordance with paragraph (b), and the Parent
Appraiser and the Sponsor Appraiser arrive at per
share valuations (the "Initial Valuations") within
ten percent (10%) of each other, the mathematical
mean of the Initial Valuations shall be deemed to be
the Appraisal Price. If such Appraisers shall arrive
at Initial Valuations that are not within ten percent
(10%) of each other but are within twenty percent
(20%) of each other, then the Parent Appraiser and
the Sponsor Appraiser, as soon as reasonably
practicable, shall jointly retain a Firm to act as a
third Appraiser (the "Third Appraiser") on reasonable
terms agreed to by the Sponsor Group and Parent in
good faith. In the event the valuation of the Third
Appraiser is greater than the higher of the Initial
Valuations, then the Appraisal Price shall be the
higher of the Initial Valuations. In the event the
valuation of the Third Appraiser is less than the
lower of the Initial Valuations, the Appraisal Price
shall be the lower of the Initial Valuations. If the
valuation of the Third Appraiser is not greater than
the higher of the Initial Valuations or lower than
the lower of the Initial Valuations, the Appraisal
Price shall be the mathematical mean of (i) the per
share valuation arrived at by the Third Appraiser,
and (ii) the Initial Valuation that is closest to
that of the per share valuation arrived at by the
Third Appraiser.
(d) If the Initial Valuations are not within twenty
percent (20%) of each other, then neither valuation
shall be used and the Sponsor Group will retain a new
Firm to act as Sponsor Appraiser (the "Second Sponsor
Appraiser") and Parent shall retain a new Firm to act
as Parent Appraiser (the "Second Parent Appraiser").
If the per share valuations arrived at by the Second
Sponsor Appraiser and Second Parent Appraiser (the
"Second Valuations") are within twenty percent (20%)
of each other, then the Appraisal Price shall be
determined as set forth in paragraph (c) above. If
the Second Valuations are not within twenty percent
(20%) of each other, then the Second Valuations shall
not be used and the Second Parent Appraiser and the
Second Sponsor Appraiser, as soon as reasonably
practicable, shall jointly select a Firm to act as a
final Appraiser (the "Final Appraiser") on reasonable
terms agreed to by
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the Sponsor Group and Parent in good faith. So long
as the valuation of the Final Appraiser is not higher
than the higher of the Second Valuations or lower
than the lower of the Second Valuations, the
valuation arrived at by the Final Appraiser shall be
deemed to be the Appraisal Price. In the event the
valuation of the Final Appraiser is greater than the
higher of the Second Valuations, then the Appraisal
Price shall be the higher of the Second Valuations.
In the event the valuation of the Final Appraiser is
less than the lower of the Second Valuations, the
Appraisal Price shall be the lower of the Second
Valuations.
"Appraisal Process" shall mean the process described in the
definition of Appraisal Price in order to arrive at the Appraisal Price.
"Closing Date" has the meaning ascribed thereto in the Stock
Purchase Agreement between Fidelity National Information Services, Inc.,
Fidelity National Financial, Inc. and the Purchasers named therein.
"Common Stock" means, collectively the common shares of the
Company and any other class or series of authorized capital stock of the Company
which is not limited to a fixed sum or percentage of par or stated value in
respect to the rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or winding up of
the successor to the Company.
"Common Stock Equivalents" means (without duplication with any
Common Stock or other Common Stock Equivalents) rights, warrants, options,
convertible Shares, or exchangeable Shares or indebtedness, or other rights,
exercisable for or convertible or exchangeable into, directly or indirectly,
Common Stock or securities exercisable for or convertible or exchangeable into
Common Stock, as the case may be, whether at the time of issuance or upon the
passage of time or the occurrence of some future event.
"Company" has the meaning set forth in the preamble.
"Control" (including, with correlative meaning, all
conjugations thereof) means with respect to any Person, the ability of another
Person to control or direct the actions or policies of such first Person,
whether by ownership of voting Shares, by contract or otherwise.
"Excluded Shares" has the meaning set forth in Section 3.4.
"Exempted Arrangements" means the arrangements provided in (i)
the Management Agreement by and between the Company and THL Advisors V, LLC of
even date herewith, (ii) the Management Agreement by and between the Company and
TPG GenPar IV, L.P. of even date herewith, (iii) the intercompany agreements
listed on Schedule 1 hereto, and (iv) any contracts or transactions involving
the Parent or one of its Subsidiaries (other than the Company or its
Subsidiaries) on the one hand, and the Company or one of its Subsidiaries on the
other hand, involving payments of less than $500,000 annually in the aggregate
by either party and which do not restrict the ability of the Company and its
Subsidiaries to engage in any activities.
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"Exempt Transfer" means a Transfer of Shares (a) pursuant to
Section 3.2 hereof, (b) pursuant to Section 4.1 hereof, (c) upon the death of
the holder pursuant to the applicable laws of descent and distribution, or (d)
solely to or among such Person's Family Group, (d) incidental to the exercise,
conversion or exchange of such Shares in accordance with their terms, any
combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, the Company. Solely with respect to Sponsor Shares, an
Exempt Transfer shall also include a Transfer of Sponsor Shares (a) to and among
the Affiliates of the Sponsors, partners of the Sponsors and the partners
(including, without limitation, any Limited Partner of such Sponsor),
Stockholders, employees and Affiliates of such partners or Affiliates, and (b)
pursuant to a pledge of such Sponsor Shares to an unaffiliated financial
institution.
"Family Group" means, with respect to any individual, such
individual's spouse and descendants (whether natural or adopted) and any trust,
partnership, limited liability company or similar vehicle established and
maintained solely for the benefit of (or the sole members or partners of which
are) such individual, such individual's spouse and/or such individual's
descendants.
"Financing" has the meaning ascribed thereto in the Stock
Purchase Agreement between Fidelity National Information Services, Inc.,
Fidelity National Financial, Inc. and the Purchasers named therein.
"Material Subsidiary" means a direct or indirect Subsidiary of
the Company which represents 10% or more of the assets or revenues of the
Company and its Subsidiaries, taken together as a whole.
"Other Holder" has the meaning given such term in Section
3.2(a).
"Ownership Percentage" means, for each Stockholder and with
respect to a type and class of security, the percentage obtained by dividing the
number of shares of such security held by such Stockholder by the total number
of shares of such security (other than Excluded Shares) outstanding.
"Person" means an individual, a partnership, a joint venture,
a corporation, an association, a joint stock company, a limited liability
company, a trust, an unincorporated organization or a government or any
department or agency or political subdivision thereof.
"Pro Rata Amount" means, with respect to any Stockholder, the
quotient obtained by dividing (i) the sum of the aggregate number of shares of
Common Stock held by such Stockholder by (ii) the aggregate number of issued and
outstanding shares of Common Stock held by all Stockholders.
"Public Offering" means an offering and sale to the public of
any shares or equity securities of the Company or any of its subsidiaries
pursuant to a registration statement in the United States.
-21-
"Qualified Public Offering" means a Public Offering whereby
the offered shares trade on a national securities exchange or NASDAQ, and in
which, at the election of the Company, either one of the following criteria is
fulfilled: (A) (i) the price per share paid by the public in such offering is at
least $15.00 and less than $17.50, and (ii) the gross proceeds to the Company
would at least equal an amount obtained by multiplying the per share price in
(A)(i) above by that number of shares (the "1.5 Cap") equal to 15% of the
outstanding shares of the Company after giving effect to the offering, or (B)
(i) the price per share paid by the public in such offering is at least $17.50,
and (ii) the gross proceeds to the Company would at least equal an amount
obtained by multiplying the per share price in (B)(i) above by that number of
shares (the "1.75 Cap") equal to 12.5% of the outstanding shares of the Company
after giving effect to the offering. Any per share price contained in this
definition shall be subject to adjustment for stock splits, combinations and
similar events.
"quorum" means, with respect to any meeting of directors of
the Board of the Company, a group of directors present at any meeting that
includes a number of directors designated by Parent that constitutes a majority
of directors present at any such meeting.
"Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of Persons on an arm's-length basis
other than an Affiliate of any Sponsor, pursuant to which such party or parties
(a) acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) more than
50% of the voting stock of the Company or (b) acquire assets constituting all or
substantially all of the assets of the Company and its Subsidiaries on a
consolidated basis; provided, however, that in no event shall a Sale of the
Company be deemed to include any transaction effected for the purpose of (i)
changing, directly or indirectly, the form of organization or the organizational
structure of the Company or any of its Subsidiaries or (ii) contributing stock
to entities controlled by the Company.
"Sale Notice" has the meaning given such term in Section
3.2(a).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933 and the
rules and regulation promulgated thereunder, all as the same have been or may be
amended from time to time.
"Selling Holder" has the meaning given such term in Section
3.2(a).
"Shares" means, collectively, the shares of Common Stock or
other equity securities of the Company held by the Stockholders.
"Sponsor Group" has the meaning given such term in Section
4.1(a).
"Sponsor Shares" means Shares held by the Sponsors.
"Stockholder(s)" has the meaning given such term in the
preamble.
-22-
"Subsidiary" means any corporation with respect to which
another specified corporation has the power to vote or direct the voting of
sufficient Shares to elect directors having a majority of the voting power of
the board of directors of such corporation.
"Tag-Along Notice" has the meaning given such term in Section
3.2(a).
"Transfer" means (in either the noun or the verb form,
including with respect to the verb form, all conjugations thereof within their
correlative meanings) with respect to any security, the gift, sale, assignment,
transfer, pledge, hypothecation or other disposition (whether for or without
consideration, whether directly or indirectly, and whether voluntary,
involuntary or by operation of law) of such security or any interest therein.
"Transferee" means any Person to whom a Stockholder may
Transfer Shares.
9.2 Legends.
v. Each certificate or instrument evidencing
Shares and each certificate or instrument issued in
exchange for or upon the Transfer of any such Shares
(if such Shares remain subject to this Agreement
after such Transfer) shall be stamped or otherwise
imprinted with a legend (as appropriately completed
under the circumstances) in substantially the
following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE CONSTITUTE SHARES
UNDER A CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF [ ], 2005
AMONG THE ISSUER OF SUCH SHARES (THE "COMPANY") AND CERTAIN OF
THE COMPANY'S STOCKHOLDERS AND, AS SUCH, ARE SUBJECT TO
CERTAIN VOTING PROVISIONS, PURCHASE RIGHTS AND RESTRICTIONS ON
TRANSFER SET FORTH IN THE STOCKHOLDERS AGREEMENT. A COPY OF
SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
vi. Each instrument or certificate
evidencing Shares and each instrument or certificate
issued in exchange or upon the Transfer of any Shares
shall be stamped or otherwise imprinted with a legend
substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED OR SOLD UNLESS IT HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE (AND, IN SUCH CASE, AN
-23-
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
SHALL HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT
SUCH OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE
SECURITIES ACT)."
vii. Whenever in the opinion of the Company
and counsel reasonably satisfactory to the Company
(which opinion shall be delivered to the Company in
writing) the restrictions described in any legend set
forth above cease to be applicable to any Shares, the
holder thereof shall be entitled to receive from the
Company, without expense to the holder, a new
instrument or certificate not bearing a legend
stating such restriction.
9.3 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
9.4 Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
9.5 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Shares and the respective successors and assigns of each
of them, so long as they hold Shares.
9.6 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages) each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.
9.7 Remedies. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement (including
costs of enforcement) and to exercise all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Stockholder may in its or his sole discretion apply to any court
of law or equity of competent jurisdiction for specific performance or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
-24-
9.8 Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the Company's records, or at such address
or to the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices will be deemed to have been
given hereunder when sent by facsimile (receipt confirmed) delivered personally,
5 days after deposit in the U.S. mail and one day after deposit with a reputable
overnight courier service. Notices to the Company will be sent to:
Fidelity National Information Services, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Senior Vice President
- Mergers and Acquisitions Counsel
Facsimile: (000) 000-0000
with copies to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx and Xxxx Xxxxx
Facsimile: (000) 000-0000
Texas Pacific Group
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx and Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
-25-
Notices to any Stockholder will be sent to the address set
forth opposite such Stockholder's name on Exhibit A attached hereto, with a copy
to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
and, if such Stockholder is a TPG Holder, with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
9.9 Governing Law. The Delaware General Corporation Laws shall
govern all questions arising under this Agreement concerning the relative rights
of the Company and its stockholders. All other questions concerning the
construction, validity and interpretation of this Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Delaware
applicable to contracts made and to be performed in the State of Delaware. The
parties hereto hereby irrevocably and unconditionally submit to the exclusive
jurisdiction of any State or Federal court sitting in New York, NY over any
suit, action or proceeding arising out of or relating to this Agreement. The
parties hereby agree that service of any process, summons, notice or document by
U.S. registered mail addressed to any such party shall be effective service of
process for any action, suit or proceeding brought against a party in any such
court. The parties hereto hereby irrevocably and unconditionally waive any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. The parties hereto
agree that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon any party and may be
enforced in any other courts to whose jurisdiction any party is or may be
subject, by suit upon such judgment.
9.10 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
9.11 Tax-Free Reorganization Parent may propose and the
Sponsors shall consider, at their sole and absolute discretion, transactions by
and between the Company and Parent that would allow Parent to consummate a tax
free spin off of its shares in the Company on such terms as may be mutually
agreeable to the Sponsors and FNF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
-26-
COUNTERPART SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement on the day and year first above written.
FIDELITY NATIONAL FINANCIAL, INC.
By: _________________________________________________
Name:
Title:
FIDELITY NATIONAL INFORMATION SERVICES, INC.
By: _________________________________________________
Name:
Title:
XXXXXX X. XXX EQUITY FUND V, L.P.
By: THL Equity Advisors V, LLC, its general partners
By: Xxxxxx X. Xxx Partners, L.P., its sole member
By: Xxxxxx X. Xxx Advisors LLC, its general partner
By: _________________________________________________
Name:
Title: Managing Director
COUNTERPART SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
XXXXXX X. XXX PARALLEL FUND V, L.P.
By: THL Equity Advisors V, LLC, its general partner
By: Xxxxxx X. Xxx Partners, L.P., its sole member
By: Xxxxxx X. Xxx Advisors LLC, its general partner
By: _________________________________________________
Name:
Title: Managing Director
XXXXXX X. XXX CAYMAN FUND V, L.P.
By: THL Equity Advisors V, LLC, its general partner
By: Xxxxxx X. Xxx Partners, L.P., its sole member
By: Xxxxxx X. Xxx Advisors LLC, its general partner
By: _________________________________________________
Name:
Title: Managing Director
XXXXXX X. XXX INVESTORS LIMITED PARTNERSHIP
By: THL Investment Management Corp., its general
partner
By: _________________________________________________
Name: Xxxxxx X. Xxx
Title: Chief Executive Officer
COUNTERPART SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES COMPANY I LLC
By: Xxxxxx Investments Holdings, LLC, its managing
member
By: Xxxxxx Investments, LLC, its managing member
By: _________________________________________________
Name:
Title:
XXXXXX INVESTMENTS EMPLOYEES' SECURITIES COMPANY II LLC
By: Xxxxxx Investments Holdings, LLC, its managing
member
By: Xxxxxx Investments, LLC, its managing member
By: _________________________________________________
Name:
Title:
XXXXXX INVESTMENTS HOLDINGS, LLC
By: Xxxxxx Investments, LLC, its managing member
By: _________________________________________________
Name:
Title:
COUNTERPART SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
TPG PARTNERS IV, L.P.
By: TPG GenPar IV, L.P., its general partner
By: TPG Advisors IV, Inc., its general partner
By: _________________________________________________
Name:
Title:
TPG PARTNERS III, L.P.
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
TPG PARALLEL III, L.P.
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
TPG INVESTORS III, L.P.
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
COUNTERPART SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
FOF PARTNERS III, L.P.
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
FOF PARTNERS III-B, L.P.
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
TPG DUTCH PARALLEL III, C.V.
By: TPG GenPar Dutch, L.L.C., its general partner
By: TPG GenPar III, L.P., its general partner
By: TPG Advisors III, Inc., its general partner
By: _________________________________________________
Name:
Title:
SCHEDULE 1
CAPITAL EXPENDITURES
FY 2005 FY 2006 FY 2007
------- ------- -------
171,290 152,413 137,901
