EXHIBIT 2.2
VOTING AGREEMENT dated as of May 7, 2002
(this "Agreement"), among XXXX CORPORATION, a
Virginia corporation ("Parent"), and the parties
listed on Schedule A attached hereto (each, a
"Stockholder" and, collectively, the
"Stockholders").
WHEREAS Parent, Plumber Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent ("Sub"), and Chase Industries Inc., a
Delaware corporation (the "Company"), propose to enter into an Agreement and
Plan of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement"; terms used but not defined herein shall
have the meanings set forth in the Merger Agreement) providing for, among
other things, the merger of Sub with and into the Company upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS each Stockholder owns (of record and beneficially) the
number of shares of Company Common Stock set forth opposite such Stockholder's
name on Schedule A hereto (such shares, together with any other shares of
capital stock of the Company or other voting securities or interests of the
Company acquired (of record and beneficially) by the Stockholders after the
date hereof and during the term of this Agreement (including through the
exercise of any Company Stock Options or any warrants, stock options or
similar instruments), being collectively referred to herein as the "Subject
Shares"); and
WHEREAS as a condition to its willingness to enter into the Merger
Agreement, Parent has required that each Stockholder enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
SECTION 1. Representations and Warranties of Each Stockholder. Each
Stockholder hereby represents and warrants to Parent as follows:
(a) Organization; Authority; Execution and Delivery; Enforceability.
If such Stockholder is a corporation, limited liability company, partnership
or other legal entity that is not an individual (a "Legal Entity"), such
Stockholder (i) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of
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organization and (ii) has the requisite corporate, company, partnership or other
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to comply with the terms hereof. If such
Stockholder is a Legal Entity, the execution and delivery of this Agreement by
such Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby and compliance by such Stockholder with the terms hereof
have been duly authorized by all necessary corporate, company, partnership or
other action on the part of such Stockholder and no other corporate, company,
partnership or other proceedings on the part of such Stockholder are necessary
to authorize this Agreement, to consummate the transactions contemplated hereby
or to comply with the provisions hereof. This Agreement has been duly executed
and delivered by such Stockholder and, assuming due execution by Parent,
constitutes a valid and binding obligation of such Stockholder enforceable
against such Stockholder in accordance with its terms. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and compliance with the provisions hereof do not and will not conflict
with, or result in any violation or breach of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of, or result
in, termination, cancelation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien in or upon any of
the properties or assets of such Stockholder under, or give rise to any
increased, additional, accelerated or guaranteed rights or entitlements under,
any provision of (i) if such Stockholder is a Legal Entity, its certificate of
incorporation or by-laws, partnership agreement or limited liability company
agreement (or similar organizational documents), (ii) any Contract to which such
Stockholder is a party or any of the properties or assets of such Stockholder is
subject or (iii) subject to the governmental filings and other matters referred
to in the following sentence, any (A) statute, law, ordinance, rule or
regulation or (B) judgment, order, writ, injunction, stipulation or decree, in
each case, applicable to such Stockholder or its properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
breaches, defaults, rights, losses, Liens or entitlements that individually or
in the aggregate could not reasonably be expected to impair in any material
respect the ability of such Stockholder to perform its obligations under this
Agreement or prevent or materially impede or delay the consummation of any of
the transactions contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to such
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Stockholder in connection with the execution and delivery of this Agreement by
such Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or the compliance by such Stockholder with the provisions
hereof, except for (1) filings under the HSR Act and any other applicable
competition, merger control, antitrust or similar law or regulation, (2) filings
with the SEC of such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby and (3)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made
individually or in the aggregate could not reasonably be expected to impair in
any material respect the ability of such Stockholder to perform its obligations
under this Agreement or prevent or materially impede or delay the consummation
of any of the transactions contemplated hereby.
(b) The Subject Shares. Such Stockholder is the record and beneficial
owner of, and has good and marketable title to, the shares of Company Common
Stock set forth opposite its name on Schedule A hereto, free and clear of any
Liens. As of the date hereof, other than as set forth opposite its name on
Schedule A hereto, such Stockholder does not own (of record or beneficially) any
shares of capital stock of, or any other voting securities or interests of, the
Company. Such Stockholder is the record and beneficial owner of the options,
warrants, rights or other similar instruments to acquire any capital stock of
the Company or other voting interests or securities of the Company set forth
opposite its name on Schedule A (the "Company Stock Options"). Except as set
forth on Schedule A, such Stockholder has the sole right to Transfer (as defined
in Section 3(c)) and vote the Subject Shares of such Stockholder, and none of
the Subject Shares are subject to any voting trust or other agreement,
arrangement or restriction with respect to the Transfer or the voting of such
Subject Shares, except as set forth in Section 3 of this Agreement.
SECTION 2. Representations and Warranties of Parent. Parent hereby
represents and warrants to each Stockholder as follows: Parent (i) is duly
incorporated, validly existing and in good standing under the laws of Virginia
and (ii) has all requisite corporate power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to comply
with the terms hereof. The execution and delivery of this Agreement by Parent,
the consummation by Parent of the transactions contemplated hereby and
compliance by Parent with the terms hereof have been duly authorized by all
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necessary corporate action on the part of Parent and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement, to
consummate the transactions contemplated hereby or to comply with the provisions
hereof. This Agreement has been duly executed and delivered by Parent and,
assuming due execution by each Stockholder, constitutes a valid and binding
obligation of Parent enforceable against Parent in accordance with its terms.
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and compliance with the provisions hereof do
not and will not conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of, or result in, termination, cancelation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of
any Lien in or upon any of the properties or assets of Parent under, or give
rise to any increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of (i) the Restated Articles of Incorporation
or the by-laws of Parent, (ii) any Contract to which Parent is a party or any of
its properties or assets is subject or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any (A) statute, law,
ordinance, rule or regulation or (B) judgment, order or decree, in each case,
applicable to Parent or its properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, breaches, defaults,
rights, losses, Liens or entitlements that individually or in the aggregate
could not reasonably be expected to impair in any material respect the ability
of Parent to perform its obligations under this Agreement or prevent or
materially delay the consummation of any of the transactions contemplated by
this Agreement. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Parent in connection with the execution and delivery of this
Agreement by Parent, the consummation by Parent of the transactions contemplated
hereby or compliance by Parent with the provisions hereof, except for (1)
filings under the HSR Act and any other applicable competition, merger control,
antitrust or similar law or regulation, (2) filings with the SEC of such reports
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby and (3) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made individually or in the aggregate could not
reasonably be expected to impair in any material respect the ability of Parent
to perform its obligations
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under this Agreement or prevent or materially delay the consummation of any of
the transactions contemplated hereby.
SECTION 3. Covenants of Each Stockholder. Each Stockholder covenants
and agrees as follows:
(a) At any meeting of the stockholders of the Company called to vote
upon the Merger Agreement, or at any adjournment or postponement thereof, or in
any other circumstances upon which a vote, consent, adoption or other approval
(including by written consent solicitation) with respect to the Merger Agreement
is sought, such Stockholder shall vote (or cause to be voted) all the Subject
Shares of such Stockholder (owned of record or beneficially) in favor of, and
shall consent to (or cause to be consented to), the adoption of the Merger
Agreement and the approval of the Merger.
(b) At any meeting of the stockholders of the Company, or at any
adjournment or postponement thereof, or in any other circumstances upon which a
vote, consent, adoption or other approval (including by written consent
solicitation) is sought, such Stockholder shall vote (or cause to be voted) all
the Subject Shares of such Stockholder (owned of record or beneficially)
against, and shall not consent to (and shall cause not to be consented to), any
of the following (or any agreement to enter into, effect, facilitate or support
any of the following): (i) any Company Takeover Proposal or any transaction or
occurrence that if proposed and offered to the Company or its stockholders (or
any of them) would constitute a Company Takeover Proposal (collectively,
"Alternative Transactions") or (ii) any amendment of the Company Certificate or
the by-laws of the Company or any other proposal, action or transaction
involving the Company or any of its Subsidiaries or any of its stockholders,
which amendment or other proposal, action or transaction could reasonably be
expected to prevent or materially impede or delay the consummation of the Merger
or the other transactions contemplated by the Merger Agreement or this Agreement
or to deprive Parent of any material portion of the benefits to be received from
the consummation of the Merger or the other transactions contemplated by the
Merger Agreement or this Agreement, or change in any manner the voting rights of
the Company Common Stock or any other capital stock or voting interests or
securities of the Company (collectively, "Frustrating Transactions").
(c) Other than pursuant to the Merger Agreement or this Agreement,
such Stockholder shall not (i) sell, transfer, pledge, assign, tender or
otherwise dispose of
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(including by gift) (collectively, "Transfer"), or consent to or permit any
Transfer of, any Subject Shares of such Stockholder or any interest therein, or
enter into any Contract, option or other arrangement (including any profit
sharing arrangement) with respect to the Transfer of, or the creation or offer
of any derivative security in respect of, any Subject Shares of such Stockholder
(or any interest therein), to or with any person other than, in the case of the
Primary Stockholder to Citigroup Inc. or any of its direct or indirect
subsidiaries which shall have agreed to be bound by this Agreement as a
Stockholder by a written agreement reasonably satisfactory to Parent that has
been delivered to Parent, or (ii) enter into any voting arrangement, whether by
proxy, voting agreement or otherwise, with respect to any Subject Shares of such
Stockholder, and shall not commit or agree to take any of the foregoing actions.
Such Stockholder shall not, nor shall such Stockholder permit any entity under
such Stockholder's control to, deposit any Subject Shares of such Stockholder in
a voting trust.
(d) Such Stockholder shall not, nor shall such Stockholder permit any
of its Subsidiaries to, nor shall it authorize or permit any director, officer
or employee of such Stockholder or any of its Subsidiaries or any Representative
of such Stockholder or any of its Subsidi aries to, directly or indirectly, (i)
solicit, initiate or encourage, or take any other action knowingly to
facilitate, any Alternative Transaction or Frustrating Transaction, (ii) enter
into any agreement with respect to any Alternative Transaction or Frustrating
Transaction or (iii) enter into, continue or otherwise participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or otherwise cooperate in any way with, or assist or
participate in any effort or attempt by any person with respect to, any
Alternative Transaction or Frustrating Transaction.
(e) Such Stockholder shall use its best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, and to assist and
cooperate with the other parties in doing all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Such Stockholder
shall not commit or agree to take any action inconsistent with the transactions
contemplated by this Agreement.
(f) Such Stockholder shall not, nor shall such Stockholder permit any
of its Subsidiaries to, nor shall it authorize or permit any director, officer
or employee of
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such Stockholder or any of its Subsidiaries or any Representative of such
Stockholder or any of its Subsidiaries to, directly or indirectly, issue any
press release or make any other public statement or announcement with respect to
the Merger Agreement, this Agreement, the Merger or any of the other
transactions contemplated by the Merger Agreement or this Agreement, without the
prior written consent of Parent, except as may be required by applicable law.
(g) Notwithstanding anything to the contrary contained herein, nothing
in this Section 3 shall prohibit any Stockholder from, in his capacity as an
officer and/or director of the Company, taking any actions, on behalf of the
Company, that the Board of Directors of the Company is permitted to take under
Section 4.02 of the Merger Agreement.
SECTION 4. Further Assurances. Each Stockholder shall from time to
time execute and deliver, or cause to be executed and delivered, such additional
or further consents, documents and other instruments as Parent may request for
the purpose of effectuating the matters covered by this Agreement.
SECTION 5. Certain Events. (a) Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Subject Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Subject Shares shall pass, whether by operation of
law or otherwise, including such Stockholder's heirs, guardians, administrators
or successors, and such Stockholder further agrees to take all actions necessary
to effectuate the foregoing. In the event of any stock split, stock dividend,
reclassification, merger, reorganization, recapitalization or other change in
the capital structure of the Company affecting the capital stock of the Company,
the number of shares of Company Common Stock listed on Schedule A hereto
opposite the name of each Stockholder shall be adjusted appropriately. In
addition, in the event that any Stockholder acquires any additional shares of
capital stock of the Company or other voting interests or securities of the
Company (including through the exercise of any Company Stock Options or any
other warrants, stock options or similar instruments), the number of shares of
Company Common Stock listed on Schedule A hereto opposite the name of such
Stockholder shall be adjusted appropriately. This Agreement and the
representations, warranties, covenants, agreements and obligations hereunder
shall attach to any additional shares of capital stock of the Company or other
voting interests or
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securities of the Company issued to or acquired by any Stockholder directly or
indirectly (including through the exercise of any Company Stock Options or any
similar rights or instruments).
(b) Each Stockholder shall cause a counterpart of this Agreement to be
deposited with the Company at its principal place of business or registered
office where it shall be subject to the same right of examination by a
Stockholder of the Company, in person or by agent or attorney, as are the books
and records of the Company.
SECTION 6. Registration of Parent Common Stock.
(a) Registration. Parent shall prepare and file with the Securities
and Exchange Commission (the "Commission") not later than 45 days following the
Closing Date a registration statement (the "Registration Statement") with
respect to the Registrable Securities (as defined below) and thereafter use its
reasonable best efforts to cause such registration statement to be declared
effective under the Securities Act not later than 120 days following the Closing
Date. For purposes of this Agreement, "Registrable Securities" shall mean the
shares of Parent Common Stock issued to the primary stockholder noted as such on
Schedule A (the "Primary Stockholder") pursuant to the Merger Agreement and any
shares of Parent Common Stock or other securities issued in respect of such
shares upon any stock split, stock dividend, merger, consolidation,
recapitalization or similar event. Such securities shall cease to be Registrable
Securities when (A) a registration statement registering such securities shall
have become effective under the Securities Act and such securities have been
sold pursuant thereto, (B) such securities shall have been sold under Rule 144
(or successor provision) under the Securities Act, (C) such securities shall
have been otherwise transferred to a party that is not an affiliate of the
Primary Stockholder and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by Parent or (D) such
securities shall have ceased to be outstanding.
(b) Certain Delay Rights. (i) If at any time Parent provides written
notice to the Primary Stockholder that the Board of Directors of Parent or any
duly authorized committee of that board (the "Board") has determined, in its
good faith reasonable business judgment, that it would be materially
disadvantageous to Parent (because Parent is in possession of material
non-public information the disclosure of which would adversely affect Parent or
such registration or sale of Registrable Securities would materially interfere
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with or otherwise adversely affect in any material respect any merger,
acquisition, disposition or other similar transaction that is material to Parent
(a "Disadvantageous Condition")) for the Registration Statement to be maintained
effective, or to be filed or to become effective, and setting forth in general
terms the reasons for such determination, Parent shall be entitled to cause the
Registration Statement to be withdrawn or the effectiveness of the Registration
Statement to be terminated, or, in the event the Registration Statement has not
yet been filed, Parent shall be entitled to not file the Registration Statement,
until such Disadvantageous Condition no longer exists (notice of which Parent
shall promptly deliver to the Primary Stockholder) but in no event shall such
delay be for a period of longer than 45 days from the date of the original
notice from Parent of the Disadvantages Condition.
(ii) Upon receipt by the Primary Stockholder of any notice from Parent
of a Disadvantageous Condition, the Primary Stockholder shall forthwith
discontinue use of the prospectus and any prospectus supplement under the
Registra tion Statement and shall suspend sales of Registrable Securities during
such delay period. In the event that Parent elects to exercise its delay rights
under this Section 6(b), the Primary Stockholder agrees to keep confidential the
fact of such election and any information provided by Parent in connection
therewith. Notwithstanding anything else contained in this Agreement, neither
the filing nor the effectiveness of the Registration Statement may be delayed
for more than a total of 45 days in any 90 day period or for more than a total
of 120 days in any 365 day period pursuant to this Section 6(b).
(c) Expenses. Except as otherwise provided in this Agreement, Parent
shall pay all out-of-pocket fees and expenses incurred by Parent in compliance
with its obligations under this Section 6, including all registration filing
fees, printing expenses, fees and disbursements of counsel for Parent, and the
fees and expenses of Parent's accountants and its expenses incurred in
connection with any "road show" presentations in which it may participate at the
request of the joint lead managing underwriters (collectively, "Registration
Expenses"). The Primary Stockholder shall pay (i) any transfer taxes relating to
the sale or disposition of the Registrable Securities and (ii) any underwriting
discounts or selling commissions applicable to the sale of Registrable
Securities.
(d) Registration Procedures. In connection with the filing of the
Registration Statement Parent will, subject to Section 6(b):
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(i) furnish the Primary Stockholder, as updated from time to time,
prior to the filing thereof with the Commission, a copy of the Registration
Statement (including any preliminary prospectus contained therein), and
each amendment thereto and each amendment or supplement, if any, to the
prospectus included therein and shall reflect in each such document, when
so filed with the Commission, such comments pertaining to the Primary
Stockholder as the Primary Stockholder may propose in writing;
(ii) prepare and file with the Commission such amendments and
supplements (including post-effective amendments and supplements) to the
Registration Statement and the prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of Registrable Securities covered by the
Registration Statement;
(iii) furnish such number of copies of the prospectus and other
documents incident thereto, including any amendment of or supplement
thereto (in each case including all exhibits), as the Primary Stockholder
from time to time may reasonably request in writing;
(iv) cause all Registrable Securities covered thereby to be listed on
each, if any, securities exchange on which similar securities issued by
Parent are then listed and use its reasonable best efforts to register or
qualify such Registrable Securities under such applicable state securities
or blue sky laws as the Primary Stockholder may reasonably request in
writing; provided, however, that Parent shall not be required for any such
purpose to (A) qualify generally to do business as a foreign company,
entity or a broker-dealer in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Agreement, (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction;
(v) provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number for all such Registrable Securities, in each
case not later than the effective date of such registration;
(vi) upon appropriate prior written notice by the Primary Stockholder,
make available for inspection by the Primary Stockholder, any underwriter
participating
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in any underwritten offering pursuant to Section 6(e), and any attorney or
accountant retained by the Primary Stockholder or any such underwriter, on
reasonable prior notice and during normal business hours, reasonable
financial and other records, pertinent corporate documents and properties
of Parent, and use its reasonable efforts to cause Parent's officers and
directors to supply all information reasonably requested in writing by the
Primary Stockholder or any such underwriter, attorney or accountant in
connection with the Registration Statement; provided, however, that the
Primary Stockholder and any such underwriter, attorney or accountant shall
have agreed to keep confidential all information so provided, except as
required by law or administrative process and except for information that
is available to the public other than as a result of a breach of such
confidentiality obligation;
(vii) furnish to the Primary Stockholder a copy of all material
documents filed with and all material correspondence from or to the
Commission relating to the Registration Statement;
(viii) immediately notify the Primary Stockholder, at any time when a
prospectus relating to the Registration Statement is required to be
delivered under the Securities Act, of Parent becoming aware that the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and within ten days prepare and furnish to the Primary
Stockholder a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;
(ix) otherwise comply with all applicable rules and regulations of the
Commission; and
(x) in connection with any underwritten offering pursuant to Section
6(e), to the extent applicable, furnish to the Primary Stockholder, a
signed counterpart, addressed to the Primary Stockholder, of
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an opinion of counsel for Parent, dated the effective date of the
Registration Statement, and "comfort" letters signed by Parent's
independent public accountants who have examined and reported on Parent's
financial statements included in the Registration Statement, to the extent
permitted by the standards of the AICPA or other relevant authorities,
covering substantially the same matters with respect to the Registration
Statement (and the prospectus included therein) and, in the case of the
accountants' "comfort" letters, with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities.
(e) Underwriting. (i) In the event that the Primary Stockholder
desires to sell Registrable Securities pursuant to the Registration Statement in
an underwritten offering, there shall be two joint lead managing underwriters
and book runners and each of Parent and the Primary Stockholder shall, in its
sole discretion, select and obtain one investment banking firm of national
reputation to be such two joint lead managing underwriters and book runners. If
requested by such underwriters for any underwritten offering of Registrable
Securities, Parent shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by Parent and such other terms and provisions as
are customarily contained in underwriting agreements with respect to secondary
distributions, including indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 6(f). Such
underwriting agreement shall also contain such representations and warranties by
the Primary Stockholder and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 6(f). If requested by such
underwriters, Parent shall make available, upon advance notice, such employees
as such underwriters may reasonably request to prepare for and participate in
any "road show" presentations, provided that such preparation or participation
does not materially interfere with the performance of such employees' duties.
(ii) If, in the written opinion of each of the joint lead managing
underwriters, the total amount of securities to be registered in such
registration, including
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Registrable Securities, will exceed the maximum amount of Parent's securities
that can be marketed either (A) at a price reasonably related to the then
current market value of such securities, or (B) without otherwise materially and
adversely affecting the entire offering, then Parent shall include in such
registration only such maximum number of securities which, in the reasonable
opinion of such underwriters, can be sold in the following order of priority:
(1) first, all the Registrable Securities requested to be included in such
registration by the Primary Stockholder, (2) second, all the Registrable
Securities requested to be included in such registration by any other
Stockholder and (3) third, all other shares of Parent Common Stock to be
included by Parent or any third party exercising rights similar to those granted
under this Agreement. To the extent that shares of Parent Common Stock to be
included in the Registration Statement must be allocated among the holders of
Parent Common Stock pursuant to clauses (1), (2) or (3) above, such shares shall
be allocated among the applicable holder(s) of Parent Common Stock based on the
number of shares of Parent Common Stock that such holder(s) shall have requested
to be included therein.
(f) Indemnification and Contribution. (i) Parent agrees to indemnify
and hold harmless, to the fullest extent permitted by law, the Primary
Stockholder, its officers, directors, agents, trustees, stockholders and each
person, if any, who controls the Primary Stockholder (within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act) from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and reasonable attorneys' fees,
disbursements and expenses) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or prospectus (as
amended or supplemented if Parent shall have furnished any amendment or
supplements thereto) relating to the Registrable Securities or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such untrue statement or
omission or alleged untrue statement or omission was made (x) in reliance upon
and in conformity with any information furnished to Parent in writing by the
Primary Stockholder expressly for use therein, (y) in any prospectus used after
such time as Parent advised the Primary Stockholder in writing that the filing
of a post-effective amendment or supplement thereto was required, other than
such prospectus as so amended or supplemented or
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(z) in any prospectus used after such time as the obligation of Parent to keep
such prospectus effective and current shall have expired.
(ii) In connection with the Registration Statement, the Primary
Stockholder shall furnish to Parent in writing such information with respect to
the Primary Stockholder as Parent may reasonably request for use in connection
with the Registration Statement or related prospectus and agrees to indemnify
and hold harmless Parent, its officers, directors, agents, trustees and
stockholders and each person, if any, that controls Parent (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and reasonable attorneys' fees,
disbursements and expenses) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or prospectus (as
amended or supplemented if Parent shall have furnished any amendment or
supplement thereto) relating to the Registrable Securities or any omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but only insofar as such losses, claims, damages,
liabilities and expenses are caused by information furnished in writing to
Parent by the Primary Stockholder expressly for use therein; provided, however,
that in no event shall the liability of the Primary Stockholder under this
Section 6(f)(ii) exceed the proceeds obtained by the sale of the Primary
Stockholder's Registrable Securities in any such registration.
(iii) Each party indemnified under subpara graph (i) or (ii) above
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in subparagraph (i) or (ii) above except to the extent that the
indemnifying party was actually prejudiced by such failure, and in no event
shall such failure relieve the indemnifying party from any other liability that
it may have to such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless based on the advice of counsel to such
indemnified party that a conflict of
15
interest under the applicable rules of professional conduct between such
indemnified party and indemnifying parties may exist in respect of such claim or
that there may be additional defenses available to the indemnified party, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action
and the prompt undertaking of such defense with counsel reasonably acceptable to
the indemnified party, the indemnifying party shall not be liable to the
indemnified party under this Section 6(f) for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof. Any indemnifying party against whom indemnity may be sought under this
Section 6(f) shall not be liable to indemnify an indemnified party if such
indemnified party settles such claim or action without the consent of the
indemnifying party (such consent not to be unreasonably withheld). The
indemnifying party may not agree to any settlement of any such claim or action,
other than solely for monetary damages for which the indemnifying party shall be
responsible hereunder, the result of which any remedy or relief shall be applied
to or against the indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld. In any
action hereunder as to which the indemnifying party has assumed the defense
thereof, the indemnified party shall continue to be entitled to participate in
the defense thereof, with counsel of its own choice, but the indemnifying party
shall not be obligated hereunder to reimburse the indemnified party for the
costs thereof unless (A) the indemnifying party agrees to pay such costs or (B)
the indemnifying party fails to promptly assume and continue the defense of such
claim or action with counsel reasonably satisfactory to the indemnified party.
(iv) If the indemnification provided for in this Section 6(f) from an
indemnifying party shall for any reason be unavailable to an indemnified party
(other than in accordance with the terms of this Agreement) in respect of any
loss, claim, damage, liability or expense referred to herein, then such
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of such indemnifying party on the one
hand and of such indemnified party on the other hand in connection with the
statements or omissions (or actions) that resulted in such
16
losses, claims, damages, liabilities or expenses as well as any other relevant
equitable considerations; provided, however, that in no event shall the
liability of the Primary Stockholder under this Section 6(f)(iv) exceed the
proceeds obtained by the sale of the Primary Stockholder's Registrable
Securities in any such registration. The relative fault of the indemnifying
party on the one hand and the indemnified party on the other hand 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 indemnifying party or
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage, liability or expense in respect thereof referred to above in this
subparagraph (iv), shall be deemed to include, for purposes of this subparagraph
(iv), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
(v) Parent and the Primary Stockholder agree that it would not be just
and equitable if contribution pursuant to Section 6(f)(iv) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subparagraph (iv) above.
Notwithstanding any other provision of this Section 6(f), the Primary
Stockholder shall not be required to contribute any amount in excess of the
amount by which the proceeds of the offering received by the Primary Stockholder
exceeds the amount of any damages which the Primary Stockholder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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.
(vi) The obligations of Parent and the Primary Stockholder under this
Section 6(f) shall be in addition to any liability that any party may otherwise
have to any other party.
(g) Stockholder Agreements. The Primary Stockholder hereby covenants
and agrees that:
(i) it will not sell any Registrable Securities under the Registration
Statement until it has received
17
notice from Parent that the Registration Statement and any post-effective
amendments thereto have become effective; provided that Parent shall notify
the Primary Stockholder promptly when the Registration Statement and any
post-effective amendments thereto have become effective;
(ii) it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with the sales of
Registrable Securities pursuant to the Registration Statement;
(iii) it shall promptly furnish to Parent such information regarding
the Primary Stockholder, the Registrable Securities held by it and the
distribution proposed by the Primary Stockholder as Parent may reasonably
request and shall otherwise cooperate with Parent to the extent such
information or cooperation is required in connection with any registration,
qualification or compliance referred to in this Agreement; and
(iv) it shall notify Parent as promptly as practicable of any
inaccuracy or change in information previously furnished to Parent or of
the happening of any event, in either case as a result of which any
prospectus relating to such registration contains an untrue statement of a
material fact regarding the Primary Stockholder or the distribution of the
Registrable Securities or omits to state any material fact regarding the
Primary Stockholder or the distribution of the Registrable Securities
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and to furnish to Parent promptly any additional information
required to correct and update any previously furnished information or
required such that such prospectus shall not contain, with respect to the
Primary Stockholder or the distribution of the Registrable Securities, an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(h) Shelf Registration. Notwithstanding anything to the contrary
contained herein, in the event that all of the Registrable Securities of the
Primary Stockholder have not been sold upon the consummation of the offering
contemplated by the Registration Statement, Parent shall
18
prepare and file or cause to be prepared and filed with the Commission as soon
as reasonably practicable after the consummation of such offering a registration
statement to be made on a delayed or continuous basis pursuant to Rule 415 of
the Securities Act registering the resale from time to time by the Primary
Stockholder of all of the Registrable Securities owned by the Primary
Stockholder (the "Shelf Registration Statement"). The Shelf Registration
Statement shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by the Primary
Stockholder in accordance with the methods of distribution set forth in the
Shelf Registration Statement (such methods of distribution to include
underwritten offerings). Parent shall not permit any securities other than
Registrable Securities owned by the Primary Stockholder to be included in the
Shelf Registration Statement. Parent shall use its reasonable best efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act as soon as reasonably practicable after such Shelf Registration
Statement is initially filed with the Commission, and Parent shall use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective under the Securities Act until the earlier of (i) the sale of all of
the Registrable Securities included in the Shelf Registration Statement or (ii)
the one-year anniversary of the date on which the Registration Statement
described in Section 6(a) becomes effective. Other than for purposes of this
Section 6(h) and Section 8(B), the Shelf Registration Statement shall be
considered to be a "Registration Statement" under the terms of this Agreement.
SECTION 7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, by any of the parties hereto without the
prior written consent of the other parties hereto, except that each of Parent
and the Primary Stockholder may, in their sole discretion assign, in whole or in
one or more parts, any or all of their rights, interests and obligations under
this Agreement to its successors or affiliates and to any person who acquires a
substantial portion of the stock or substantially all of the assets of Parent or
the Primary Stockholder, as applicable; provided that no such assignment shall
relieve Parent or the Primary Stockholder of any of their obligations under this
Agreement. Any purported assignment in violation of this Section 7 shall be
void. Subject to the preceding sentences of this Section 7, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by, the parties
hereto and their respective successors and assigns.
19
SECTION 8. Termination. Except for the provisions of Section 6, this
Agreement shall terminate upon the earlier of (a) the Effective Time, (b) the
termination of the Merger Agreement in accordance with its terms and (c) any
amendment of the Merger Agreement without the consent of the Primary Stockholder
that (i) decreases the Exchange Ratio, (ii) otherwise materially adversely
affects the economic benefits of the Merger to the Primary Stockholder or the
holders of Company Common Stock or treats any holder of Company Common Stock
differently from any other holder, (iii) extends the date referred to in Section
7.01(b)(i) of the Merger Agreement or (iv) creates any additional conditions to
the Merger; provided, however, that for purposes of this sentence, the term
"Merger Agreement" shall mean the Agreement and Plan of Merger by and among
Parent, Sub and the Company of even date herewith, as in effect on the date
hereof, and capitalized terms used in this sentence shall have the meaning given
such terms therein. The provisions of Section 6 shall terminate upon the earlier
of (A) the date on which there ceases to be any Registrable Securities and (B)
the one-year anniversary of the date on which the Registration Statement becomes
effective. In the event of the termination of this Agreement pursuant to this
Section 8, except as set forth herein, this Agreement shall forthwith become
null and void, there shall be no liability on the part of any of the parties,
and except as set forth in this Section 8 all rights and obligations of each
party hereto shall cease; provided that no such termination of this Agreement
shall relieve any party hereto from any liability for any willful and material
breach of any provision of this Agreement prior to termination.
SECTION 9. General Provisions. (a) Amendments. This Agreement may not
be amended except by an instrument in writing signed by all of the parties
hereto.
(b) Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (with confirmation) or sent by
overnight or same-day courier (providing proof of delivery) to Parent in
accordance with Section 8.02 of the Merger Agreement and to the Stockholders
(including the Representative, at their respective addresses set forth on
Schedule A hereto (or at such other address for a party as shall be specified by
like notice).
(c) Interpretation. When a reference is made in this Agreement to a
Section or a Schedule, such reference shall be to a Section of, or a Schedule
to, this Agreement unless otherwise indicated. The headings contained in this
20
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term "or" is not exclusive. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms. Any agreement or instrument defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement or
instrument as from time to time amended, modified or supplemented. References to
a person are also to its permitted successors and assigns. For purposes of this
Agreement, beneficial ownership shall be deemed not to include beneficial
ownership attributable to a Stockholder solely by reason of a Stockholder being
owned or controlled directly or indirectly by Citigroup Inc.
(d) Counterparts; Effectiveness. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other party. The
effectiveness of this Agreement shall be conditioned upon the execution and
delivery of the Merger Agreement by each of the parties thereto.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties hereto with respect to the subject matter of
this Agreement and (ii) is not intended to confer upon any person other than the
parties hereto (and the persons specified as indemnitees in Section 6(f)) any
rights or remedies.
(f) Governing Law. This agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to any
principles of conflicts of laws of such state.
(g) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid,
21
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner and to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
SECTION 10. Specific Enforcement; Jurisdiction. The parties agree that
irreparable damage would occur and that the parties will not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in any Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any court of the United States located in the State of
Delaware or of any Delaware state court in the event any dispute arises out of
this Agreement or the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request and (c) agrees that it will not bring any action relating to
this Agreement or the transactions contemplated by this Agreement in any court
other than a court of the United States located in the State of Delaware or a
Delaware state court.
SECTION 11. Agent for Service of Process. Each Stockholder hereby
appoints the Company, with offices on the date hereof as provided for in Section
8.02 of the Merger Agreement, as its authorized agent (the "Authorized Agent"),
upon whom process may be served in any suit, action or proceeding arising out of
or relating to this Agreement or any transaction contemplated by this Agreement
that may be instituted in any court described in Section 10. Each Stockholder
agrees to take any and all action, including the filing of any and all
documents, that may be necessary to establish and continue such appointment in
full force and effect as aforesaid. Each Stockholder agrees that service of
process upon the Authorized Agent shall be, in every respect, effective service
of process upon such Stockholder.
SECTION 12. Stockholder Capacity. No person executing this Agreement
who is or becomes during the term hereof a director or officer of the Company
makes any agreement or understanding herein in his or her capacity as
22
such director or officer. Each Stockholder signs solely in his or her capacity
as the record holder and beneficial owner of, or the trustee of a trust whose
beneficiaries are the beneficial owners of, such Stockholder's Subject Shares
and nothing herein shall limit or affect any actions taken by a Stockholder in
its capacity as an officer or director of the Company to the extent specifically
permitted by the Merger Agreement.
SECTION 13. Waiver of Jury Trial. Each party hereto hereby waives,
to the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect of any suit, action or other proceeding directly or
indirectly arising out of, under or in connection with this Agreement. Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such party would
not, in the event of any action, suit or proceeding, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement, by, among other things, the
mutual waiver and certifications in this Section 13.
SECTION 14. Indemnification. (a) General. Parent agrees that if the
Primary Stockholder is made a party or threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, to the extent arising out of or pertaining to the Primary
Stockholder in its capacity as a stockholder of the Company (in accordance with
Section 12) and arising out of or related to this Agreement or the transactions
contemplated hereby (a "Proceeding"), the Primary Stockholder shall be
indemnified and held harmless by Parent to the fullest extent authorized by
applicable law, as the same exists or may hereafter be amended, against all
Expenses (as hereinafter defined) incurred or suffered by the Primary
Stockholder that are directly related to such Proceeding. The foregoing
indemnity shall not apply to the extent that the claims in any Proceeding are
judicially determined to arise out of a breach of the Primary Stockholder's
representations, warranties or covenants contained in this Agreement.
(b) Expenses. As used in this Agreement, the term "Expenses" shall
include damages, losses, judgments, liabilities, fines, penalties, settlements,
costs, reasonable attorneys' fees and any other expenses reasonably incurred in
connection with a Proceeding.
(c) Notice of Claim. The Primary Stockholder shall promptly deliver to
Parent notice of any claim made
23
against it for which indemnification will or could be sought under this
Agreement, but the failure of the Primary Stockholder to deliver such notice
shall not relieve Parent of any liability Parent may have to the Primary
Stockholder except to the extent that Parent is actually prejudiced thereby. In
addition, each of the Primary Stockholder and Parent shall deliver to the other
party such information and cooperate with the other party as such other party
may reasonably require.
(d) Defense of Claim. With respect to any Proceeding as to which the
Primary Stockholder notifies Parent of the commencement thereof:
(i) Parent will be entitled to participate therein at its own expense.
(ii) To the extent that it may wish, Parent will be entitled to assume
the defense thereof, unless based on the advice of counsel to the Primary
Stockholder, a conflict of interest under the applicable rules of
professional conduct between the Primary Stockholder and Parent may exist
in respect of such claim or there may be additional defenses available to
the Primary Stockholder. In the event that Parent does not assume the
defense thereof, the reasonable fees and expenses of counsel to the Primary
Stockholder shall be at the expense of Parent. In any Proceeding as to
which Parent has assumed the defense thereof, the Primary Stockholder shall
continue to be entitled to participate in the defense thereof, with counsel
of its own choice, but Parent shall not be obligated hereunder to reimburse
the Primary Stockholder for the costs thereof unless (A) Parent agrees to
pay such costs or (B) Parent fails to promptly assume and continue the
defense of such Proceeding with counsel reasonably satisfactory to the
Primary Stockholder.
(iii) Parent shall not be liable to indemnify the Primary Stockholder
under this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent, such consent not be
unreasonably withheld. Parent may not agree to any settlement of any such
claim or action, other than solely for monetary damages for which Parent
shall be responsible hereunder, the result of which any remedy or relief
shall be applied to or against the Primary Stockholder or which requires
any admission of liability of the Primary Stockholder, without the prior
written consent of the Primary Stockholder, which consent shall not be
unreasonably withheld.
24
(e) Non-exclusivity. The right to indemnification and the payment of
Expenses incurred in defending a Proceeding conferred in this Section 14 shall
not be exclusive of any other right which the Primary Stockholder may otherwise
have.
25
IN WITNESS WHEREOF, Parent and Stockholders have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
XXXX CORPORATION,
by /s/ Xxxxxx X. Xxxx
--------------------------
Name: Xxxxxx X. Xxxx
Title: President and
Chief Executive Officer
COURT SQUARE CAPITAL LIMITED,
by /s/ Xxxxxx X. XxXxxxxxxx
--------------------------
Name: Xxxxxx X. XxXxxxxxxx
Title: Vice President and
Managing Director
