FORM OF
AMENDED AND RESTATED
GOVERNANCE AGREEMENT
This Amended and Restated Governance Agreement, dated as of November 25,
1997, among ▇▇▇▇ International Holdings, Inc., a Delaware corporation (the
"Company"), LIH Holdings, LLC, a Delaware limited liability company ("LIH"), and
LIH Holdings II, LLC, a Delaware limited liability company ("LIH II"; LIH and
LIH II are referred to collectively herein as the "LIH Entities");
WITNESSETH:
WHEREAS, ▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇") and LIH entered into a stock purchase
agreement (the "Stock Purchase Agreement"), dated September 9, 1997, pursuant to
which, among other things, subject to the terms and conditions to be contained
in the Stock Purchase Agreement, LIH acquired from ▇▇▇▇, his family and certain
entities related thereto, at the closing of such purchase and sale (the
"Closing"), Beneficial Ownership of shares of common stock, par value $.10 per
share, of the Company ("Common Stock"), aggregating 1,686,893 shares of Common
Stock (the "Shares"), constituting approximately 38.4% of the Common Stock
outstanding as of the date thereof; and
WHEREAS, ▇▇▇▇ and LIH received Board approval of the acquisition of Shares
for purposes of Section 203 of the Delaware General Corporation Law; and
WHEREAS, as a condition to such approval, a special committee formed by the
Board and the Board required that certain arrangements be put in place relating
to the acquisition and disposition of securities of the Company by LIH and
related provisions concerning LIH's relationship with the Company, negotiated
the terms of that certain Governance Agreement,
dated September 9, 1997 (the "Governance Agreement") and concluded that, subject
to execution and delivery of the Governance Agreement, would give its approval
under Section 203 of the Delaware General Corporation Law and implement the
arrangements contemplated by the Agreement; and
WHEREAS, the Company and LIH entered, executed and delivered the Governance
Agreement and the Governance Agreement has been in effect since September 9,
1997; and
WHEREAS, pursuant to the provisions of Section 1.01(a)(i) of the Governance
Agreement, LIH or its Affiliates or Associates may acquire securities from the
Company, provided that such acquisition is approved by the affirmative vote of a
majority of the Independent Directors; and
WHEREAS, LIH II and the Company have entered into an Investment Agreement
of even date herewith (the "LIH II Investment Agreement"), providing for the
purchase from the Company by LIH II of 874,400 of the Company's Common Stock,
par value $.10 per share and 1,493,398 shares of the Company's Series A
Preferred Stock, par value $.01 per share (the "Preferred Shares"), which
Preferred Shares are convertible into shares of the Company's Class B-1 Common
Stock (collectively, the "LIH II Shares"); and
WHEREAS, as a condition to approval of the LIH II Investment Agreement by
the Independent Directors, the Independent Directors have required that the
Governance Agreement be amended and restated as set forth herein and executed by
the Company, LIH and LIH II; and
WHEREAS, the Company, LIH and LIH II desire to enter into this Amended and
Restated Governance Agreement;
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
Company, LIH and LIH II hereby agree as follows:
ARTICLE I
STANDSTILL AND VOTING
Section 1.01. ACQUISITION OF VOTING SECURITIES.
(a) Until the Standstill Termination Date, each of LIH and LIH II
severally covenants and agrees that it will not take any action or omit to take
any action to allow the aggregate number of Voting Securities Beneficially Owned
by LIH, LIH II and their Affiliates and Associates to exceed the number of
Permitted Shares; PROVIDED that, (i) this Agreement shall not restrict any
acquisition of Voting Securities in a transaction directly with the Company and
approved in accordance with the provisions of Section 2.03(b) hereof (including,
without limitation, the acquisition of Voting Securities by any LIH Director or
any LIH II Director by reason of the grant of stock options by the Company to
all directors); and (ii) if a bona fide tender or exchange offer is made by any
Person (other than the Company, either of the LIH Entities or an Affiliate or
Associate of either of the LIH Entities, or any Person acting in concert with
either of the LIH Entities or any of their respective Affiliates or Associates,
and other than any acquisition or proposed acquisition of Voting Securities that
intentionally has been induced, in whole or in part and directly or indirectly
by an LIH Entity in order to permit the acquisition by an LIH Entity or its
Affiliates and Associates of Voting Securities under this paragraph (a)) to
purchase outstanding shares of Voting Securities representing 50% or more of the
Total Voting Power and such offer is not withdrawn or terminated prior to an LIH
Entity commencing a
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tender offer or exchange offer, then an LIH Entity may commence a tender or
exchange offer for all Voting Securities not owned by the LIH Entities or their
Affiliates and Associates, and this Agreement shall not prohibit the acquisition
of Voting Securities pursuant to such tender or exchange offer.
(b) Subject to the proviso in Section 1.01(a) hereof and any waiver or
approval in accordance with the provisions of Section 5.02(a) hereof, if at any
time the LIH Entities or their Affiliates and Associates Beneficially Own more
than the Permitted Shares, inadvertently or otherwise, then each LIH Entity
shall promptly take all action necessary to reduce the amount of Voting
Securities Beneficially Owned by such Persons to an amount not greater than the
Permitted Shares.
(c) Neither LIH Entity shall permit any of its Affiliates or Associates to
Beneficially Own any Voting Securities unless such Person becomes a signatory to
this Agreement and a party hereunder.
Section 1.02. LIMITED RESTRICTIONS ON TRANSFER. Prior to the Standstill
Termination Date, no LIH Entity, nor any Affiliate or Associate thereof which
acquires Voting Securities in accordance with the terms of this Agreement, will
Transfer Beneficial Ownership of any Voting Securities to any of their
respective Affiliates or Associates unless each such Person becomes a signatory
to this Agreement and a party hereunder. Each LIH Entity agrees to inclusion of
the following legend on certificates representing the Shares and the LIH II
Shares:
The shares represented by this certificate and any transfer
thereof are subject to a restriction on transfer to any Affiliate or
Associate of the holder hereof as set forth in a Amended and Restated
Governance Agreement between the holder and the Company dated as of
November 25, 1997, a copy of which is on file at the principal
executive office of the Company.
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Such legend shall be placed on all certificates held by the LIH Entities
during the continuance of this Agreement.
Section 1.03. VOTING. Until the Standstill Termination Date, all Voting
Securities Beneficially Owned by the LIH Entities or any Affiliate or Associate
thereof shall be voted in the election of directors, (a) in the case of election
of Independent Directors at the option of each LIH Entity, either (1) for the
election of the Independent Directors proposed by the specified committees in
accordance with Article II, or (2) in the same proportion as the votes cast by
other holders of Voting Securities, (b) in the case of LIH, for the LIH
Director, and (c) in the case of LIH II, for the LIH II Director.
Section 1.04. FURTHER RESTRICTIONS ON CONDUCT.
(a) Unless waived or approved in advance in accordance with Section
5.02(b) hereof, each of LIH and LIH II severally covenants and agrees that until
the Standstill Termination Date, neither it nor any of its Affiliates or
Associates shall:
(i) initiate, propose, make, or in any way participate in, directly
or indirectly, any "solicitation" of "proxies" to vote, or seek to
influence any Person with respect to the voting of, any Voting Securities,
or become a "participant" in a "solicitation" or "election contest" (as
such terms are defined or used in Regulation 14A under the Exchange Act, as
in effect on the date hereof), in any election contest with respect to the
election or removal of the Independent Directors proposed by the specified
committees in accordance with Article II;
(ii) other than as contemplated by Section 1.01(a) solicit, offer,
seek or propose to any other Person (including without limitation the
Company) any form of
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merger with, tender or exchange offer for securities of, sale or
liquidation of assets of, or similar business combination transaction with
or involving the Company or its Affiliates or Associates; provided.
however, the foregoing shall not restrict any such action relating to a
merger or similar business combination with the purpose and effect of the
Company or its Affiliates and Associates acquiring the business, voting
securities or assets of another Person; or
(iii) take any other action inconsistent with the foregoing.
Section 1.05. REPORTS. Until the Standstill Termination Date, each of
LIH and LIH II shall deliver to the Company, promptly after any acquisition or
Transfer of Voting Securities, an accurate written report specifying the amount
and class of Voting Securities acquired or Transferred in such transaction and
the amount of each class of Voting Securities owned by it or any of its
Affiliates or Associates after giving effect to such transaction, provided,
however, that no such report need be delivered with respect to any such
acquisition or Transfer of Voting Securities by LIH or LIH II that is reported
in a statement on Schedule 13D filed with the Commission and delivered to the
Company by LIH or LIH II or any of their respective Affiliates or Associates in
accordance with Section 13(d) of the Exchange Act and the rules thereunder. The
Company shall be entitled to rely on such reports and statements on Schedule 13D
for all purposes of this Agreement.
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ARTICLE II
BOARD OF DIRECTORS
Section 2.01. INITIAL COMPOSITION OF BOARD OF DIRECTORS.
(a) The number of directors comprising the Board of Directors shall be
seven.
(b) As of the date hereof, the Board of Directors shall consist of the LIH
Director set forth on Exhibit 1 hereto, the LIH II Director set forth on Exhibit
I hereto and the Company Director, two Independent Directors, the Third
Independent Director and the Fourth Independent Director, all as set forth on
Exhibit 2 hereto.
Section 2.02 PROPORTIONAL REPRESENTATION.
(a) Until the Standstill Termination Date, except as indicated in
paragraph (b) below, the Company and each LIH Entity shall use their respective
best efforts to cause the composition of the Board to continue to reflect, or to
fully implement, the proportionate representation of the LIH Director, the LIH
II Director, Company Director and Independent Directors set forth in Section
2.01. At each annual meeting of stockholders following the Closing at which the
term of any Independent Director is to expire, unless such annual meeting shall
be scheduled to occur after the Standstill Termination Date, or at any time that
a vacancy of an Independent Director on the Board of Directors is to be filled,
the identity of such Independent Director to stand for election to the Board of
Directors or to fill the vacancy on the Board, as the case may be, shall be
determined in the following manner:
(i) If the term of any Third Independent Director expires or such
position on the Board becomes vacant, the Third Independent Director
Nominating Committee shall
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propose to the Board of Directors a person to serve as the Third
Independent Director on the slate to be recommended by the Board of
Directors or to fill such vacancy.
(ii) If the term of any Independent Director (excluding the Fourth
Independent Director) expires or such position on the Board becomes vacant,
the Independent Director Nominating Committee shall propose to the Board of
Directors a person to serve as an Independent Director on the slate to be
recommended by the Board of Directors or to fill such vacancy.
(iii) If the term of the Fourth Independent Director expires or
such position on the Board becomes vacant, the Fourth Independent Director
Nominating Committee shall propose to the Board of Directors a person to
serve as the Fourth Independent Director on the slate to be recommended by
the Board of Directors or to fill such vacancy.
(iv) The Board of Directors shall recommend to stockholders the
Independent Directors proposed in accordance with the foregoing provisions
and include such Independent Directors on their slate of directors or, in
the case of any vacancy elect such Independent Directors to the Board,
unless the Board determines that to do so would constitute a breach of its
fiduciary obligations to the Company's stockholders.
(b) All rights of LIH and obligations of the Company relative to LIH's
designation of representatives on the Board of Directors (including the LIH, LIH
II, Company and Independent Directors) shall terminate if, at the date of
determination, the aggregate number of shares of Common Stock Beneficially Owned
by the LIH Entities and any Affiliate or Associate thereof which is a signatory
to this Agreement is less than 50% of the number of Shares acquired by LIH at
the Closing pursuant to the Stock Purchase Agreement (as adjusted for stock
dividends,
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splits, recombinations and the like). All rights of the LIH Entities and
obligations of the Company relative to the designation of representatives on the
Board of Directors (including LIH, LIH II, Company and Independent Directors)
shall terminate if at any time Stockholder Voting Power shall be 5% or less of
Total Voting Power. In such event, references in Section 2.02(i) and (iii) to
the Third Independent Director Nominating Committee and Fourth Independent
Director Nominating Committee shall be deemed references to the Independent
Director Nominating Committee.
(c) Other than as set forth in paragraph (b) above, the Company shall
cause each of the LIH Director and the LIH II Director designated by LIH and LIH
II, respectively, to be included in the slate of nominees recommended by the
Board of Directors to the Company's stockholders for election as directors at
each annual meeting of the stockholders of the Company and shall use all
reasonable efforts to cause the election of each such LIH Director and LIH II
Director, including soliciting proxies in favor of the election of such persons,
or, in the case of any vacancy affecting any LIH Director or LIH II Director,
elect to the Board an LIH Director designated by LIH or an LIH II Director
designated by LIH II, unless the Board of Directors determines that to do so
would constitute a breach of its fiduciary obligations to the Company's
stockholders.
Section 2.03. VOTING
(a) Until the first to occur of (i) the Standstill Termination Date, (ii)
the aggregate number of shares of Common Stock Beneficially Owned by the LIH
Entities and any Affiliate or Associate thereof which is a signatory to this
Agreement decreasing to less than 50% of the number of Permitted Shares, or
(iii) the Stockholder Voting Power decreasing to 5% or less of
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Total Voting Power, except in the case of a Stockholder Interested Transaction
(as defined below), the Company shall not take any action described in Exhibit 3
hereto without the affirmative vote of a majority of the entire Board of
Directors, which majority includes the LIH II Director.
(b) The Company shall not take any action relating to a Stockholder
Interested Transaction, unless such Stockholder Interested Transaction has been
approved by the affirmative vote of a majority of the Independent Directors.
Each of LIH and LIH II severally agrees that it shall not, and shall not take
any action which would cause the Company or its Board of Directors to, enter
into or participate in any Stockholder Interested Transaction which has not been
approved by the affirmative vote of a majority of the Independent Directors. If
requested by a majority of the Independent Directors, each of LIH and LIH II
severally agrees to cause the LIH Director or the LIH II Director, as the case
may be, not to vote upon or consent to any Stockholder Interested Transaction,
but such directors may be counted for purposes of any quorum necessary to such
action. "STOCKHOLDER INTERESTED TRANSACTION" shall mean any transaction with or
involving an LIH Entity, its respective Affiliates or Associates or relating to
this Agreement, including, without limitation, any amendment, modification or
waiver hereof or thereof.
Section 2.04 ASSIGNMENT OF CERTAIN RIGHTS. LIH II hereby assigns to
Harvest Partners III, L.P., a Delaware limited partnership ("HP III"), all of
its rights under this Agreement relative to (i) LIH II's designation of an LIH
II representative on the Board of Directors, and (ii) any management rights to
which it may be entitled pursuant to Section 2.05 below. The Company hereby
expressly consents to such assignment and agrees that all of its obligations
with
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respect to such designation and management rights shall be enforceable against
the Company by HP III. HP III hereby expressly agrees to be bound by the
provisions of this Agreement and that this Agreement is enforceable against it.
Section 2.05 VENTURE CAPITAL OPERATING COMPANY STATUS. In the event that
(i) at any time LIH II is not entitled to designate at least one member for
election to the Board of Directors, or (ii) the United States Department of
Labor through formal or informal rules, regulations or interpretations provides,
or it is otherwise established through governmental or court action, that such
representation does not constitute the exercise of management rights of the kind
necessary to enable HP III to continue to qualify as a "venture capital
operating company" within the meaning of Section 2510.3-101 of the plan asset
regulations promulgated by the United States Department of Labor (a "VCOC"),
then the Company shall, acting through its Board of Directors in a manner
consistent with its fiduciary obligations and consistent with the terms hereof,
grant to LIH II such management rights as the Company shall determine, the
exercise of which would (after taking into account the assignment pursuant to
Section 2.04 above), in the opinion of counsel to the HP III, enable HP III to
continue to qualify as a VCOC.
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ARTICLE III
REPRESENTATIONS AND WARRANTS
Section 3.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each LIH Entity that (a) the Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
state of Delaware and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or any of
the transactions contemplated hereby, and (c) this Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, and, assuming this Agreement constitutes a valid and
binding obligation of each LIH Entity, is enforceable against the Company in
accordance with its terms.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE LIH ENTITIES. Each of
LIH and LIH II severally represents and warrants to the Company that (a) it is a
limited liability company duly organized, validly existing and in good standing
under the laws of the state of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder, (b) the execution and delivery of this Agreement by such LIH Entity
and the consummation by such LIH Entity of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of such
LIH Entity and no other
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corporate proceedings on the part of such LIH Entity are necessary to authorize
this Agreement or any of the transactions contemplated hereby, and (c) this
Agreement has been duly executed and delivered by such LIH Entity and
constitutes a valid and binding obligation of such LIH Entity, and, assuming
this Agreement constitutes a valid and binding obligation of the Company, is
enforceable against such LIH Entity in accordance with its terms.
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ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
Section 4.01. "AFFILIATE" or "ASSOCIATE" shall mean an affiliate or
associate of a person, as such terms are defined in Section 203 of the Delaware
General Corporation Law; PROVIDED, HOWEVER, that LIH shall not be deemed an
"Affiliate" of LIH II and LIH II shall not be deemed an "Affiliate" of LIH for
the purposes of LIH or LIH II, as the case may be, causing any of the
"Affiliates" to take or refrain from taking any action under this Agreement.
Section 4.02. "BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing.
Section 4.03. "CLOSING" shall have the meaning specified in the recitals to
this Agreement.
Section 4.04. "Commission " shall mean the Securities and Exchange
Commission.
Section 4.05. "COMPANY DIRECTOR" shall mean the Company's Chief Executive
Officer.
Section 4.06. "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934.
Section 4.07. "FOURTH INDEPENDENT DIRECTOR" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(iii).
Section 4.08. "FOURTH INDEPENDENT DIRECTOR NOMINATING COMMITTEE" shall mean
a committee of three directors, comprised of two Independent Directors other
than the Third
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Independent Director and the LIH II Director. Any action of the Fourth
Independent Director Nominating Committee shall be unanimous.
Section 4.09. "INDEPENDENT DIRECTOR" shall mean any person who is a
director of the Company and who is independent of and otherwise unaffiliated
with either of the LIH Entities, the Company or their respective Affiliates or
Associates (other than as a director, or holder with Beneficial Ownership of
less than 5% of the Voting Securities, of the Company), and shall not be an
officer or an employee, agent, consultant or advisor (financial, legal or other)
of either of the LIH Entities, the Company or their respective Affiliates or
Associates, or any person who shall have served in any such capacity within the
three-year period immediately preceding the date such determination is made.
Section 4.10. "INDEPENDENT DIRECTOR NOMINATING COMMITTEE" shall mean a
committee composed of the Independent Directors, other than the Third
Independent Director.
Section 4.11. "PERMITTED SHARES" shall mean 2,561,293 shares of Voting
Common Stock of the Company which number shall increase to include the number of
shares of Common Stock into which the Class B-1 Common Stock is convertible,
once the Class B-1 Common Stock is converted (as adjusted for stock dividends,
splits, recombinations and the like).
Section 4.12. "PERSON" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization, government or
department or agency of a government.
Section 4.13. "STANDSTILL TERMINATION DATE" shall mean September 9, 2000.
Section 4.14. "LIH DIRECTOR" shall mean any person designated by LIH.
Section 4.15. "LIH II DIRECTOR" shall mean any person designated by ▇▇▇ ▇▇.
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Section 4.16. "STOCKHOLDER INTERESTED TRANSACTION" shall have the meaning
set forth in Section 2.03(b).
Section 4.17. "STOCKHOLDER VOTING POWER" at any time shall mean the
aggregate voting power in the general election of directors of all Voting
Securities then Beneficially Owned by the LIH Entities and their respective
Affiliates and Associates which are signatories to this Agreement.
Section 4.18. "SUBSIDIARY" shall mean, as to any Person, any corporation at
least a majority of the shares of stock of which having general voting power
under ordinary circumstances to elect a majority of the Board of Directors of
such corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency) is, at the time as of which the determination is
being made, owned by such Person, or one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries.
Section 4.19. "THIRD INDEPENDENT DIRECTOR" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(i).
Section 4.20. "THIRD INDEPENDENT DIRECTOR NOMINATING COMMITTEE" shall mean
a committee of three directors, comprised of the LIH Director, the LIH II
Director, and one Independent Director, other than the Third Independent
Director. Any action of the Third Independent Director Nominating Committee
shall be unanimous.
Section 4.21. "TOTAL VOTING POWER" at any time shall mean the total
combined voting power in the general election of directors of all the Voting
Securities then outstanding.
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Section 4.22. "TRANSFER" shall mean any sale, transfer, pledge, encumbrance
or other disposition, and to "TRANSFER" shall mean to self, transfer, pledge,
encumber or otherwise dispose of.
Section 4.23. "VOTING SECURITIES" shall mean at any time shares of any
class of capital stock of the Company which are then entitled to vote generally
in the election of directors.
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ARTICLE V
MISCELLANEOUS
Section 5.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy) and shall be given,
if to LIH to: LIH Holdings, LLC
c/o Harvest Partners, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
with a copy to: ▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
if to LIH II to: LIH Holdings II, LLC
c/o Harvest Partners, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
if to the Company, to: ▇▇▇▇ International Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer
with a copy to: ▇▇▇▇▇▇▇, Street and Deinard
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
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or such address or telecopy number as such party may hereafter specify for the
purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally, telegraphed or
telecopied, or, if mailed, five business days after the date of the mailing.
Section 5.02. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Stockholder and the Company, or in the case of a waiver, by
the party against whom the waiver is to be effective. No amendment or waiver by
the Company shall be effective unless approved by a majority of the Independent
Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 5.03. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that no party
may assign this Agreement without the other party's prior written consent.
Section 5.04. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware.
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Section 5.05. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by the other party hereto.
Section 5.06. SPECIFIC PERFORMANCE. The Company and LIH and LIH II each
acknowledge and agree that the parties' respective remedies at law for a breach
or threatened breach of any of the provisions of this Agreement would be
inadequate and, in recognition of that fact, agrees that, in the event of a
breach or threatened breach by the Company or an LIH Entity of the provisions of
this Agreement, in addition to any remedies at law, each LIH Entity and the
Company, respectively, without posting any bond shall be entitled to obtain
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available.
Section 5.07. TERMINATION. This Agreement shall terminate on the Standstill
Termination Date.
Section 5.08. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. provided that the parties hereto
shall negotiate in good faith to attempt to place the parties in the same
position as they would have been in had such provision not been held to be
invalid, void or unenforceable.
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
▇▇▇▇ INTERNATIONAL HOLDINGS, INC.
By
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Its President
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LIH HOLDINGS, LLC
By
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Its Manager
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LIH HOLDINGS II, LLC
By
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Its Manager
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ACCEPTED AND AGREED
(as to Sections 2.04 and 2.05)
HARVEST PARTNERS III, L.P.
By Harvest Associates III, LLC
By
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Authorized Person
Exhibit 1
LIH DIRECTOR
▇▇▇ ▇▇▇▇▇▇▇▇
LIH II DIRECTOR
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Exhibit 2
INDEPENDENT DIRECTORS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
THIRD INDEPENDENT DIRECTOR
▇▇▇▇▇▇ Vollmershausen
FOURTH INDEPENDENT DIRECTOR
▇▇▇▇▇▇▇▇ ▇▇▇
Exhibit 3
1. Any amendment to the Certificate of Incorporation or By-Laws of the
Company;
2. any reclassification, combination, split, subdivision, redemption, purchase
or other acquisition, directly or indirectly, of any debt or equity
security of the Company or any Subsidiary;
3. any sale, lease, transfer or other disposition (other than in the ordinary
course of business and other than to the Company or another wholly owned
Subsidiary), in one or more related transactions, of the assets of the
Company or any Subsidiary the book value of which assets exceeds 2% of
consolidated assets of the Company and its Subsidiaries;
4. any merger, consolidation, liquidation or dissolution of the Company or any
Subsidiary, other than with or into the Company or another wholly owned
Subsidiary;
5. any acquisition of any other business;
6. any investment by the Company or any Subsidiary in or loans, advances or
extensions of credit by the Company or any Subsidiary to, any Person (other
than (i) the Company or a Subsidiary, (ii) short term investments in the
ordinary course of business, or (iii) loans, or advances to customers,
officers, employees and suppliers in the ordinary course of business
(collectively the "EXCEPTED INVESTMENTS AND LOANS")), which together with
all such other investments, loans and advances at the time owned by the
Company and its Subsidiaries (exclusive of the Excepted Investments and
Loans) would exceed an amount equal to 2% of consolidated assets;
7. any acquisition by the Company or any Subsidiary of assets, other than
investment or loan assets, not in the ordinary course of business;
8. issue or sell any capital stock of the Company or any Subsidiary, other
than (i) issuance of capital stock of the Company authorized for issuance
pursuant to stock plans or agreements in effect at the date hereof, and
(ii) issuance of shares of capital stock of the Company or any Subsidiary,
in one or more related transactions, the amount of which does not exceed at
the date of issuance or sale of such shares (or the date of issuance or
grant of any related right to acquire such shares) in excess of 2% of the
outstanding shares of capital stock of such class;
9. any declaration or payment of any dividend or distribution with respect to
shares of the Company's capital stock; and
10. any incurrence, assumption or issuance by the Company or its Subsidiaries
of any indebtedness for money borrowed, not in the ordinary course of
business, if, immediately after giving effect thereto and the application
of proceeds therefrom the aggregate amount of such indebtedness of the
Company and its Subsidiaries would exceed $5,000,000.
11. establishment of, or continued existence of, any committee of the Board of
Directors with the power to approve any of the foregoing.
