EXHIBIT 99.2
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AGREEMENT
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This Agreement (this "Agreement"), dated as of December 19, 2003, is
between IMC Global Inc., a Delaware corporation ("Parent"), and Keystone, Inc.,
a Texas corporation, Alpine Capital, L.P., a Texas limited partnership, and The
Xxxx X. and Xxxxxx X. Xxxx Foundation, a Texas non-profit corporation (each a
"Selling Unitholder" and collectively, "Selling Unitholders").
WHEREAS, Selling Unitholders are the beneficial owners of an aggregate
of 30,732,100 units representing limited partner interests (each, a "Partnership
Unit" and collectively, the "Partnership Units") of Phosphate Resource Partners
Limited Partnership, a Delaware limited partnership (the "Partnership"); and
WHEREAS, Parent intends to propose to the Partnership a transaction
pursuant to which an affiliate of Parent would be merged with the Partnership
(such transaction, or another transaction, in each case whereby the Selling
Unitholders would receive the Merger Consideration Amount contemplated hereby)
(the "Transaction") pursuant to an agreement (the "Transaction Agreement") and
each Partnership Unit would be converted into a right to receive consideration
in the merger of not less than 0.2 of a share of common stock, par value $1.00
per share, of Parent ("Parent Shares").
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
SECTION 1. RIGHT.
(a) Each Selling Unitholder hereby grants to Parent
during the term of this Agreement an irrevocable right (the "Right") to purchase
all (but not less than all) Partnership Units owned beneficially by each Selling
Unitholder (the "Owned Units") for the Merger Consideration Amount (as
hereinafter defined) for each of its Owned Units as set forth on Annex A. The
"Merger Consideration Amount" per Partnership Unit shall be equal to the greater
of (i) 0.2 Parent Shares or (ii) the number of Parent Shares to be issued in
exchange for each Partnership Unit in connection with the consummation of the
Transaction as provided in the Transaction Agreement, subject to anti-dilution
adjustments provided in the Transaction Agreement.
(b) Parent may exercise the Right, in whole and not in
part, at any time after the date hereof and prior to the termination of this
Agreement pursuant to Section 10. The Right may only be exercised substantially
contemporaneously with the consummation of the Transaction and shall be effected
in a manner such that the issuance of Parent Shares as contemplated by Section
1(a) would be included in the registration statement associated with the
Transaction so that upon receipt by the Selling Unitholder the Parent Shares
will be freely tradable.
(c) If Parent desires to exercise the Right, it shall do
so by giving each Selling Unitholder written notice to such effect, specifying
the place and the closing date not earlier than one business day nor later than
ten (10) business days from the date of such notice. At any closing under the
Right, Parent shall issue to each Selling Unitholder the Parent Shares (which
shall be in uncertificated book-entry form) to be issued to Selling Unitholder,
registered in the name of Selling Unitholder or its designee, and each Selling
Unitholder shall deliver to Parent (or to Parent's affiliated designee) its
Owned Units (which shall be in uncertificated book-entry form), endorsed in the
name of Parent or its designee.
(d) Each Selling Unitholder agrees that following the
exercise of the Right, during the period from the date of exercise of the Right
to the date which is 90 days thereafter, it shall not, and it shall cause its
affiliates not to, directly or indirectly, offer, sell, contract to sell,
pledge, grant any option to purchase, make any short sale or otherwise dispose
of any Parent Shares or any options or warrants to purchase Parent Shares,
whether now owned or thereinafter acquired, without the prior written permission
of Parent, except that Alpine Capital, L.P. may continue to pledge the Parent
Shares under existing margin account agreements governing the Partnership Units
(the "Alpine Pledge") and the lenders a party thereto may exercise their rights
thereunder.
(e) If, prior to exercising the Right, Parent (i)
declares a stock dividend or other distribution payable in Parent Shares or
securities convertible or exchangeable into Parent Shares or (ii) effects a
stock split (including a reverse stock split), reclassification, combination or
other similar change with respect to Parent Shares or any other transaction for
which anti-dilution adjustments are typically made, then the Merger
Consideration Amount shall be equitably adjusted, in the reasonable judgment of
the board of directors of Parent, to eliminate the dilutive effects of that
stock dividend, distribution, stock split, reclassification, combination or
other change.
SECTION 2. NON-COMPLETION FEE. Subject to Section 10(b) hereof, upon the
earliest to occur of (i) March 25, 2004, if the Transaction Agreement has not
been executed and delivered on or before such date, (ii) June 25, 2004, if a
definitive proxy statement / prospectus, tender offer or other applicable
disclosure document relating to the Transaction (the "Transaction Disclosure
Document") has not been mailed to the unitholders of the Partnership, (iii)
termination of the Transaction Agreement or (iv) September 30, 2004, (such
earliest date, the "Non-Completion Fee Date"), Parent shall promptly (but in no
event later than five (5) business days thereafter), elect, in its sole
discretion, either (a) to pay to the Selling Unitholders an aggregate sum of
$500,000 in cash, if permissible under applicable law and Parent's credit
agreements, or (b) to purchase from the Selling Unitholders such number of
Partnership Units having an aggregate market value on the Non-Completion Fee
Date of $100.00, in exchange for the issuance by Parent to the Selling
Unitholders of the greater of (x) 61,300 Parent Shares or (y) such number of
Parent Shares equal to $600,100, determined by dividing $600,100 by the Volume
Weighted Average Price per Parent Share for the five trading days ending on and
including the trading day prior to the Non-Completion Fee Date, which Parent
Shares shall be allocated among the Selling Unitholders pro rata (and rounded to
the nearest whole number of Parent Shares) based on each Selling Unitholder's
Owned Units, and in connection with any such issuance such Selling Unitholders
agree to execute customary private placement representation letters at such time
(the cash payment and the issuance of Parent Shares referred to in clauses (a)
and (b) are herein referred to as the "Non-Completion Fee").
SECTION 3. PROXY. Each Selling Unitholder hereby irrevocably grants to
and appoints Parent and any of its designees, and each of them individually, as
Selling Unitholder's proxy and attorney-in-fact (with full power of
substitution) for and in the name, place and stead of Selling
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Unitholder, to vote the Owned Units or execute one or more written consents or
approvals in respect of the Owned Units:
(a) in favor of adoption of the Transaction and approval
of the terms thereof and any transactions contemplated thereby;
(b) against any action or agreement that is or would be
reasonably likely to result in a breach in any material respect of Parent's or
Partnership's obligations under the Transaction Agreement; and
(c) against any other action or agreement that is
intended, or would reasonably be expected, to impede, interfere with, delay or
postpone the Transaction or the transactions contemplated thereby or change in
any manner the voting rights of the Partnership Units.
SECTION 4. STANDSTILL. Each Selling Unitholder agrees not to, and shall
cause any person or entity affiliated with such Selling Unitholder not to,
directly or indirectly, without the express written consent of Parent (which may
be withheld in its sole discretion), purchase, sell or otherwise trade, or make
offers with respect to, any debt or equity securities of Parent, Partnership or
any of their affiliates (collectively, "Parent Securities") (including
purchases, sales, offers or other trading in derivative instruments related to
such Parent Securities) until the earlier of (a) the termination of this
Agreement pursuant to Section 10, or (b) a period of nine months from the date
of execution of this Agreement. In addition, each Selling Unitholder
acknowledges that it is aware and will advise its representatives that the
United States securities laws prohibit any person or entity that has material,
non-public information concerning Parent, Partnership or any affiliate thereof
from purchasing or selling securities of such entities (and options, warrants
and rights relating thereto) and from communicating such information to any
other person or entity under circumstances in which it is reasonably foreseeable
that such person or entity (including, without limitation, any of such Selling
Unitholder's representatives) is likely to purchase or sell.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLING UNITHOLDER. Each
Selling Unitholder severally, and not jointly, represents and warrants to
Parent, as of the date hereof, as follows:
5.01 TITLE TO OWNED UNITS. Selling Unitholder is the beneficial
owner of, and has the right to convey good and marketable title, free of all
liens and encumbrances, except such Partnership Units subject to the Alpine
Pledge, to its respective Owned Units, as set forth on Annex A as of the date
hereof. Selling Unitholder does not own directly or indirectly any other rights
or interests in the Partnership Units. Selling Unitholder has the exclusive
power to grant or cause the grant of the proxy referred to above with respect to
the Owned Units. Selling Unitholder does not have any rights of any nature to
acquire any additional Partnership Units.
5.02 ORGANIZATION. Selling Unitholder is duly organized, validly
existing, and in good standing under the laws of the state of its incorporation,
formation or organization.
5.03 AUTHORITY RELATIVE TO THIS AGREEMENT. Selling Unitholder has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this
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Agreement by Selling Unitholder and the consummation by Selling Unitholder of
the transactions contemplated hereby have been duly and validly authorized by
all necessary action on the part of Selling Unitholder. This Agreement has been
duly and validly executed and delivered by Selling Unitholder and, assuming due
authorization, execution and delivery by Parent, constitutes a legal, valid and
binding obligation of Selling Unitholder, enforceable against Selling Unitholder
in accordance with its terms, (i) except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, and (ii) subject to general
principles of equity.
5.04 NO CONFLICT. The execution and delivery of this Agreement by
Selling Unitholder does not, and the performance of this Agreement by the
Selling Unitholder will not, (a) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental authority or of
any other person; (b) conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision of, the
certificate of incorporation, the bylaws or analogous documents of Selling
Unitholder or any other agreements to which Selling Unitholder is a party,
including any voting agreement, stockholders agreement, voting trust, trust
agreement, pledge agreement, loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license; or (c) conflict with or violate any judgment, order, notice, decree,
statute, law, ordinance, rule or regulation applicable to Selling Unitholder or
its property or assets.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents
and warrants to Selling Unitholder, as of the date hereof, as follows:
6.01 AUTHORIZED SHARES. The Parent Shares, when issued in
accordance with the terms hereof, will be duly authorized, validly issued, free
and clear of all encumbrances, fully paid and non-assessable, and will be listed
for trading.
6.02 ORGANIZATION. Parent is duly organized, validly existing, and
in good standing under the laws of the state of its incorporation.
6.03 AUTHORITY RELATIVE TO THIS AGREEMENT. Parent has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and the consummation by
Parent of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly and validly executed and delivered by Parent and,
assuming due authorization, execution and delivery by each Selling Unitholder,
constitutes a legal, valid and binding obligation of Parent, enforceable against
Parent in accordance with its terms, (i) except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, and (ii) subject to general
principles of equity.
6.04 NO CONFLICT. The execution and delivery of this Agreement by
Parent does not, and the performance of this Agreement by Parent will not, (a)
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental authority or of any other person other than
Parent; (b) conflict with, or result in any violation of, or default (with or
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without notice or lapse of time or both) under any provision of, the certificate
of incorporation, the by-laws or analogous documents of Parent or any other
agreements to which Parent is a party, including any voting agreement,
stockholders agreement, voting trust, trust agreement, pledge agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license; or (c) conflict with or
violate any judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to Parent or its property or assets.
6.05 SEC REPORTS. Parent has timely filed with the Securities and
Exchange Commission (the "SEC") all forms, reports, schedules, statements and
other documents required to be filed by the Parent with the SEC since December
31, 2000 (collectively, the "SEC Reports"). When filed with the SEC (and at the
time of mailing to the unitholders and at the time of closing of the Transaction
in the case of the Transaction Disclosure Document), the SEC Reports conformed
in all material respects to the requirements of the Exchange Act. When filed
with the SEC, the SEC Reports did not, and the Transaction Disclosure Document
will not, contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.06 FINANCIAL STATEMENTS. The financial statements, and the
related notes thereto, included or incorporated by reference in the SEC Reports:
(a) present fairly the consolidated financial position of
the Parent as of the dates indicated and the consolidated results of its
operations and changes in cash flows and stockholders' equity for the periods
specified (subject, in the case of any unaudited interim financial statements,
to normal year-end adjustments); and
(b) were prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes to those financial statements).
SECTION 7. XXXX-XXXXX-XXXXXX. Parent and the Selling Unitholders agree to
make, and to cause the other affiliates and representatives to make, all
necessary filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000
(xxx "XXX Xxx") in connection with the exercise of the Right.
SECTION 8. CONDITIONS TO RIGHT EXERCISE CONSUMMATION. The respective
obligations of the parties pursuant to Section 1 are subject to the satisfaction
or waiver on or prior to Parent's exercise of the Right of each of the following
conditions:
(a) The waiting period, if any, applicable to the
exercise of the Right under the HSR Act shall have expired or been terminated.
(b) No governmental entity shall have enacted, issued,
promulgated, enforced or entered any laws or orders (whether temporary,
preliminary or permanent) that restrain, enjoin or otherwise prohibit the
exercise of the Right.
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(c) In the case of Parent, the representations and
warranties of the Selling Unitholders as set forth in Section 5 are true and
correct in all material respects, as though made on and as of the date of
Parent's exercise of the Right; and in the case of the Selling Unitholders the
representations and warranties of Parent as set forth in Section 6 are true and
correct in all material respects, as though made on and as of the date of
Parent's exercise of the Right.
(d) In the case of Parent, the Selling Unitholders shall
have performed in all material respects the obligations required to be performed
by them under this Agreement at or prior to the date of Parent's exercise of the
Right; and in the case of the Selling Unitholders, Parent shall have performed
in all material respects the obligations required to be performed by it under
this Agreement at or prior to the date of Parent's exercise of the Right.
SECTION 9. PUBLIC STATEMENTS. Parent agrees that it shall not, and shall
cause each of its affiliates and representatives not to, issue any press release
or make any public statements with respect to this Agreement or the identities
of the Selling Unitholders without the prior written consent of each of the
Selling Unitholders unless otherwise required by applicable law or exchange
requirements.
SECTION 10. TERMINATION.
(a) Except as set forth in Section 1(d) above, this
Agreement, and all rights and obligations of the parties hereunder, shall
automatically terminate immediately following the first to occur of (i) the
issuance of the Parent Shares in connection with the exercise of the Right and
(ii) the occurrence of any Non-Completion Fee Date; provided, that the
termination of this Agreement pursuant to clause (ii) shall not relieve Parent
of its obligations to pay or issue, as applicable, the Non-Completion Fee.
(b) In the event that prior to an applicable
Non-Completion Fee Date, the lenders exercise any foreclosure or comparable
rights pursuant to the Alpine Pledge, this Agreement, and all rights and
obligations of the parties hereunder, shall automatically terminate immediately
upon notice of such exercise and no Non-Completion Fee shall be paid or issued.
SECTION 11. REGISTRATION RIGHTS. In connection with the exercise of the
Right, Parent and the Selling Unitholders agree to negotiate, in good faith, a
customary registration rights agreement embodying the terms set forth in Annex B
attached hereto with a view to executing such registration rights agreement by
January 31, 2004. Such registration rights agreement shall provide for the
registration under the federal securities laws, if necessary, of the Parent
Shares received by the Selling Unitholders so that such Parent Shares are freely
tradable under the federal securities laws.
SECTION 12. FURTHER ASSURANCES. Selling Unitholders shall, upon request of
Parent, execute and deliver any additional documents and take such further
actions as may reasonably be deemed by Parent to be necessary or desirable to
carry out the provisions hereof.
SECTION 13. EXPENSES. Except as otherwise expressly provided herein, all
costs and expenses incurred by any of the parties hereto will be borne by the
party incurring such costs and expenses.
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SECTION 14. ENFORCEMENT OF THE AGREEMENT. Each Selling Unitholder
acknowledges that irreparable damage would occur and that Parent would not have
an 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 Parent shall be entitled to an
injunction to prevent breaches by each Selling Unitholder of this Agreement and
to enforce specifically the terms and provisions of this Agreement.
SECTION 15. MISCELLANEOUS.
(a) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the addresses listed on Schedule 1 attached hereto.
(b) The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) This Agreement constitutes the entire agreement,
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof (PROVIDED, however, that
the letter agreement among Parent, Partnership and Keystone, Inc. dated November
19, 2003 and the letter agreement among Parent, Partnership and Alpine Capital,
L.P. dated December 19, 2003 shall remain in full force and effect).
(d) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts or laws thereof.
(e) All covenants and other agreements contained in this
Agreement by or on behalf of the parties hereto bind and inure to the benefit of
their respective successors and assigns whether so expressed or not.
(f) If any term, provision, covenant or restriction
herein, or the application thereof to any circumstances, shall, to any extent,
be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions herein and the application thereof to any other circumstances,
shall remain in full force and effect, shall not in any way be affected,
impaired or invalidated, and shall be enforced to the fullest extent permitted
by law.
(g) No amendment, modification or waiver in respect of
this Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, Parent and each of the Selling Unitholders have
caused this Agreement to be duly executed and delivered as of the date first
written above.
IMC GLOBAL INC.
By: /s/ J. Xxxx Xxxxxx
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Name: J. Xxxx Xxxxxx
Title: Executive Vice President,
Chief Financial Officer
KEYSTONE, INC.
By: /s/ Xxxxxxxx X. Xxxxx III
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Name: Xxxxxxxx X. Xxxxx III
Title: Chief Financial Officer
ALPINE CAPITAL, L.P.
By: Algenpar, Inc., General Partner
By: /s/ X. Xxxxxx Xxxxxxxx
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Name: X. Xxxxxx Xxxxxxxx
Title: President
THE XXXX X. AND XXXXXX X. XXXX
FOUNDATION
By: /s/ X. Xxxxxx Xxxxxxxx
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Name: X. Xxxxxx Xxxxxxxx
Title: Treasurer
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ANNEX A
NAME OWNED UNITS
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Keystone, Inc. 2,616,800
Alpine Capital, L.P. 26,672,900
The Xxxx X. and Xxxxxx X. Xxxx 1,442,400
Foundation -----------
TOTAL 30,732,100
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ANNEX B
TERMS OF REGISTRATION RIGHTS ON PARENT SHARES
REGISTRATION
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1.1 If the Selling Unitholders receive Parent Shares pursuant to the
Agreement or the Transaction Agreement then to the extent such Parent Shares are
not freely tradable, Parent shall prepare and file with the SEC, as soon as
practicable after receipt of a written request (the "Selling Unitholders
Notice") by all of the Selling Unitholders, which request may be given at any
time after the Closing Date, one Registration Statement on Form S-3 or such
other appropriate form under the Securities Act providing for the registration
(the "REGISTRATION") of the offer and sale by the Selling Unitholders of all or
a majority of the Parent Shares received by the Selling Unitholders pursuant to
the Agreement or upon consummation of the Transaction. To the extent the Selling
Unitholders Notice includes less than all of such Parent Shares, Parent shall
grant the Selling Unitholders customary piggyback registration rights for the
remaining Parent Shares held by them.
1.2 Parent agrees to use its commercially reasonable efforts to cause the
Registration Statement to be promptly declared effective under the Securities
Act, but in no event later than the 120th day following receipt by the Parent of
the Selling Unitholders Notice.
1.3 In connection with the Registration, Parent shall provide to the
Selling Unitholders copies of the Prospectus forming part of the Registration
Statement in sufficient quantities to enable the Selling Unitholders to resell
the Parent Shares pursuant to the Registration Statement.
1.4 Parent shall use its commercially reasonable efforts to keep the
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be used by all persons
subject to the prospectus delivery requirements of the Securities Act for such
period of time as such persons must comply with such requirements in order to
resell the Parent Shares, but in no event for more than one year after the
Closing Date.
1.5 Parent will ensure that (i) any Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations of the SEC thereunder, (ii) any Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statement therein not misleading and
(iii) any Prospectus forming part of any Registration Statement, and any
supplement to such Prospectus, does not, as of the effective date of the
Registration Statement, include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
1.6 Parent shall use its commercially reasonable efforts to take all other
customary steps reasonably necessary to effect the Registration covered by the
Registration Statement.
1.7 Any offering and sale of Parent Shares pursuant to the Registration
Statement shall be pursuant to either a firm commitment underwritten offering or
through broker transactions as
described more completely in the Plan of Distribution section in the
Registration Statement. To the extent the offer and sale is made pursuant to a
firm commitment underwritten offering, the managing underwriter(s) for any such
offering and sale shall be selected by the Parent, subject to the consent of the
Selling Unitholders (which may not be unreasonably withheld).
CONDITIONS AND LIMITATIONS
--------------------------
2.1 Parent's obligations under Section 1 shall be subject to the following
limitations:
(a) if, at any time, the Board of Directors of Parent determines
in its good faith judgment that the Registration or the continued effectiveness
of the Registration Statement or usability of the related Prospectus would
reasonably be expected to have a material adverse effect on any existing
proposal or plans by Parent or any of its subsidiaries to engage in any material
acquisition, merger, consolidation, tender offer, other business combination,
reorganization, securities offering, financing or other transaction, Parent may
postpone for up to 60 days the filing, effectiveness or usability thereof, once
in any 12-month period; and
(b) if the offer and sale is made through a firm commitment
underwritten offering and if the managing underwriters advise Parent and the
Selling Shareholders in writing that in their opinion the number of Parent
Shares to be included in such offering exceeds the number of securities that can
be sold in an orderly manner in such offering, Parent shall include in such
registration the number of Parent Shares that in the opinion of such
underwriters can be sold in an orderly manner; and
(c) the Selling Unitholders shall be entitled to make customary
requests for take-downs under the Registration Statement; provided, if there is
a cut-back pursuant to Section 2.1(b) above, the Selling Unitholders shall have
the right to request an additional take-down to effect the offer and sale of the
Parent Shares so cut-back pursuant to Section 2.1(b).
LIQUIDATED DAMAGES
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3.1 The parties hereto agree that the Selling Unitholders will suffer
damages if the Parent fails to fulfill its obligations to the Selling
Unitholders under Section 1. Accordingly, if the Registration Statement is not
declared effective on or prior to the Consummation Date (a "REGISTRATION
DEFAULT") (except to the extent that such failure to be declared effective is as
a consequence of the determination of the Board of Directors as contemplated by
ss.2.1(a) hereof, Parent agrees to pay to the Selling Unitholders liquidated
damages in an amount equal to $.05 per week per outstanding Parent Share held by
the Selling Unitholders and not theretofore registered under the Securities Act
for each week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such Registration
Default and the amount of the liquidated damages shall increase by an additional
$.05 per week per such Parent Share with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of liquidated damages of $0.20 per week per such Parent Share.
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REGISTRATION EXPENSES
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4.1 All fees and expenses, and transfer taxes, if any, owed upon Parent's
transfer of Parent Shares to the Selling Unitholders, incident to the
performance of or compliance with this Annex A by Parent shall be borne by
Parent, whether or not a Registration Statement is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of compliance with state securities or
Blue Sky laws (including, without limitation, reasonable fees and disbursements
(in no event to exceed $100,000) of one counsel for the Selling Unitholders,
(ii) printing expenses, (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of Parent's independent certified public accountants, and
(v) fees and expenses of all other persons retained by Parent in connection with
the Registration.
INDEMNIFICATION
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5.1 Parent agrees to indemnify and hold harmless the Selling Unitholders,
the officers, directors and partners of each such person, and each person, if
any, who controls such person within the meaning of either Section 15 or Section
20 of the Exchange Act (each, a "PARTICIPANT"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement or any related Prospectus or any
related preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by, arise out of, or are based upon
any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in substantial conformity with information relating to any
Participant furnished to Parent or the underwriters in writing by such
Participant expressly for use therein.
5.2 Selling Unitholder agrees (i) to indemnify and hold harmless Parent,
the officers, directors and partners of such person, and each person, if any,
who controls such person within the meaning of either Section 15 or Section 20
of the Exchange Act (each, a "PARTICIPANT"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement or any related Prospectus or any
related preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein, in the light of the circumstances
under which they were made, not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
Parent by Selling Unitholder expressly for use therein; provided however, that
Selling Unitholder shall not be required to undertake liability to any person
under this Section 5.2 for any amounts in excess of the dollar amount of the
proceeds to be received by Selling Unitholder from the sale of such Parent
Shares pursuant to such registration.
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5.3 If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to Section 5.1
or , such person (the "INDEMNIFIED PERSON") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in
writing, and the Indemnifying Person may, in its sole discretion, retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others the Indemnifying Person may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses actually incurred by
such counsel related to such proceeding; PROVIDED, HOWEVER, that the failure to
so notify the Indemnifying Person shall not relieve it of any obligation or
liability which it may have hereunder or otherwise (unless and only to the
extent that such failure directly results in an actual loss or compromise of any
material rights or defenses by the Indemnifying Person). In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would, in the
reasonable judgment of the Indemnified Person, be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed at least
quarterly. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with such consent or if there be a final,
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
5.4 The parties shall agree to customary provisions relating to
contribution.
DEFINITIONS
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As used in this Annex A, capitalized terms not found below are defined
elsewhere in this Annex A or as set forth in the attached Agreement but the
following capitalized terms shall have the following meanings:
AFFILIATE: As defined in Rule 144 of the Act.
CLOSING DATE: The date Selling Unitholder receives the Parent Shares
pursuant to the Agreement.
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CONSUMMATION DATE: The consummation date means the date that is 120
days after receipt by the Parent of the Selling Unitholders Notice.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the registration of the
Parent Shares, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
REGISTRATION STATEMENT: Any registration statement filed or required to
be filed with the SEC pursuant to the Agreement and the provisions of Annex A,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended.
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