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EXHIBIT 4.3
FORM OF
STOCKHOLDERS' AGREEMENT
by and among
ZILOG, INC.,
TPG PARTNERS II, L.P.,
TPG INVESTORS II, L.P.,
TPG PARALLEL II, L.P.,
WARBURG, XXXXXX CAPITAL COMPANY, L.P.
and
CERTAIN OTHER STOCKHOLDERS of ZILOG, INC.
dated as of ----------, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I....................................................................................1
SECTION 1.01 Definitions.....................................................1
SECTION 1.02 Interpretation..................................................5
ARTICLE II...................................................................................5
SECTION 2.01 General Prohibition on Transfers of Securities..................5
SECTION 2.02 Permitted Transfers by TPG......................................6
SECTION 2.03 Permitted Transfers by Retaining Stockholders...................6
SECTION 2.04 Tag-Along Rights................................................7
SECTION 2.05 Drag-Along Rights...............................................9
SECTION 2.06 Transfer Costs; Closing....................................... 10
SECTION 2.07 Restrictive Legend............................................ 10
ARTICLE III................................................................................ 11
SECTION 3.01 Piggy Back Registration....................................... 11
SECTION 3.02 Registration Procedures....................................... 13
SECTION 3.03 Indemnification; Contribution................................. 15
ARTICLE IV................................................................................. 17
SECTION 4.01 Transactions with Affiliates; Disposition of Warburg
Shares........................................................ 17
SECTION 4.02 Conflict with Certificate and/or Bylaws....................... 18
SECTION 4.03 Amendment..................................................... 18
SECTION 4.04 Specific Performance.......................................... 18
SECTION 4.05 Successors and Assigns........................................ 18
SECTION 4.06 Shares Subject to this Agreement.............................. 19
SECTION 4.07 Notices....................................................... 19
SECTION 4.08 Complete Agreement; Counterparts.............................. 20
SECTION 4.09 Term of the Agreement......................................... 20
SECTION 4.10 Headings...................................................... 20
SECTION 4.11 Choice of Law................................................. 20
SECTION 4.12 Consent by TPG and by the Retaining Stockholders.............. 21
SECTION 4.13 Effectiveness of Agreement.................................... 00
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THIS STOCKHOLDERS' AGREEMENT (the "Agreement"), dated as of ,
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1998, by and among ZILOG, INC. (the "Company"), TPG PARTNERS II, L.P. ("TPG
Partners"), TPG INVESTORS II, L.P., TPG PARALLEL II, L.P. (TPG Investors II,
L.P., TPG Parallel II, L.P. and TPG Partners, each a "member" of, and
collectively referred to as, "TPG"), WARBURG, XXXXXX CAPITAL COMPANY, L.P.
("Warburg") and each of the individuals or entities that are (or are deemed to
be) or become signatories hereto (Warburg and each of such other individuals or
entities are collectively referred to herein as the "Retaining Stockholders").
TPG and the Retaining Stockholders are referred to herein collectively as the
"Stockholders" and individually as a "Stockholder".
WHEREAS, TPG Partners and the Company have entered into an Agreement and
Plan of Merger dated as of July 20, 1997 (as the same may be amended or
supplemented, the "Merger Agreement") providing for the merger (the "Merger") of
TPG Zeus Acquisition Corporation, a subsidiary of TPG Partners, with and into
the Company with the Company being the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"), upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, following the consummation of the Merger, the Stockholders will
own all of the issued and outstanding shares of voting common stock of the
Company; and
WHEREAS, the parties hereto desire to enter into this Agreement for the
purpose of agreeing to certain aspects of their continuing relationship as
Stockholders after the consummation of the Merger;
WHEREAS, this Agreement is not effective unless and until the Closing has
occurred;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the conditions hereof, the parties hereto agree as follows:
ARTICLE I
SECTION 1.01 Definitions. In addition to the terms defined herein, for
purposes of this Agreement, the following terms shall have the meanings
specified below. Capitalized terms used but not defined herein having the
meanings set forth in the Merger Agreement.
"100% Affiliate" shall mean (i) when used with reference to any entity,
(A) any partnership of which one hundred percent (100%) of either the capital or
profit interests of such partnership is directly or indirectly owned or
controlled by such entity or (B) any corporation or limited liability company of
which one hundred percent (100%) of the
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outstanding voting securities or member interests of such corporation is,
directly or indirectly, owned or controlled by such entity; and (ii) when used
with respect to any natural person, any trust created for the benefit of such
person and/or members of such person's family.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person; "control" when used with respect to any Person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities or by contract or otherwise; and the term "voting securities" means
securities or interests entitling the holder thereof to vote or designate
directors or individuals performing a similar function.
"Agreement" has the meaning ascribed to it in the preamble hereto.
"Applicable Amount" has the meaning ascribed to it in Section 2.04(a)
hereof.
"Board" means the Board of Directors of the Company.
"Bona Fide Offer" means with respect to an offer from a Person pursuant to
Section 2.03(c) or 2.05, an offer (i) from a Person who (A) makes such offer in
good faith, (B) is not an Affiliate of the Person receiving the offer and (C)
has the financial capability to purchase the Shares pursuant to the offer and
(ii) whose terms do not conflict with the provisions of this Agreement.
"Certificate" shall mean the certificate of incorporation of the Company
as amended in accordance with the Merger Agreement and in effect immediately
following the Effective Time.
"Closing" means the consummation of the Merger.
"Closing Date" means the date on which the Closing occurs.
"Common Stock" shall mean the voting common stock, par value $.01 per
share, of the Company.
"Company" has the meaning ascribed to it in the preamble hereto.
"Drag-Along Notice" means a written notice delivered to the Retaining
Stockholders by TPG pursuant to Section 2.05 hereof pursuant to which each of
the Retaining Stockholders shall transfer all of its respective Shares to a
Person making a Bona Fide Offer. Such notice
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shall include, without limitation, the identity of such Person, the price and
other material terms and conditions of the proposed transfer, the closing date
of the proposed transfer and, if applicable, TPG's valuation of any non-cash
consideration to be received by TPG and the Retaining Stockholders pursuant to
such proposed transfer.
"Electing Stockholder" means, depending upon the context used, a Retaining
Stockholder who has delivered an Election Notice pursuant to Section 2.04(a)
hereof or a Retaining Stockholder who has sold its Shares to a Prospective
Purchaser pursuant to Section 2.04(b) hereof.
"Election Notice" has the meaning ascribed to it in Section 2.04(a)
hereof.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Initial Public Offering" has the meaning ascribed to it in Section
2.04(a) hereof.
"Merger" has the meaning ascribed to it in the recitals.
"NASDAQ" has the meaning ascribed to it in Section 3.02(a)(ix) hereof.
"Notice Date" has the meaning ascribed to it in Section 2.03(c) hereof.
"Notice of Offer" has the meaning ascribed to it in Section 2.03(c)
hereof.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or any other entity
or any government or political subdivision or an agency, department or
instrumentality thereof.
"Prospective Purchaser" has the meaning ascribed to it in Section 2.04(a)
hereof.
"Registrable Securities" means (i) the Shares and (ii) any shares of
common stock of the Company issued or issuable by way of stock dividend or other
distribution or stock split or in connection with a combination, exchange or
replacement of Shares, recapitalization, merger, consolidation or other
reorganization or otherwise with respect to Registrable Securities. Registrable
Securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the 1933 Act and such securities shall have been disposed of in
accordance with such registration statement, (ii) such securities shall have
been distributed by a Person pursuant to a Rule 144 Sale or Rule 144(k) Sale or
(iii) such securities shall have been otherwise transferred and new certificates
therefor not bearing a legend restricting further transfer shall have been
delivered by the Company.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Article III including, without limitation, all
registration and filing fees, all fees and expenses of complying with securities
or blue sky laws, all printing expenses, the
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reasonable fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits
required by or incident to such performance and compliance, but excluding (i)
any allocation of salaries of personnel of the Stockholders on whose behalf
Registrable Securities are being registered or other general overhead expenses
of such Stockholders or other expenses for the preparation of financial
statements or other data prepared by such Stockholders, (ii) any fees or
expenses of legal counsel (other than the reasonable and documented fees and
expenses of one special counsel for all of the Stockholders requesting
Registrable Securities to be included in each registration statement pursuant to
Section 3.01 hereof), financial advisors, accountants or other consultants or
advisors engaged by the Stockholders on whose behalf Registrable Securities are
being registered, and (iii) underwriting fees, discounts and commissions and
applicable transfer taxes, if any, applicable to the sale of Registrable
Securities which shall be borne in all cases by the Stockholder or Stockholders
on whose behalf Registrable Securities are being sold.
"Retaining Affiliate" has the meaning ascribed to it in Section 2.03(a)
hereof.
"Retaining Stockholders" has the meaning ascribed to it in the preamble
hereto.
"Rule 144 Sale" means a sale (other than a Rule 144(k) Sale) pursuant to,
and in compliance with, Rule 144 of the 1933 Act, as such rule may be amended
from time to time or any similar rule or regulation enacted after the date of
this Agreement.
"Rule 144(k) Sale" means a sale pursuant to, and in compliance with, Rule
144(k) of the 1933 Act, as such rule may be amended from time to time, or any
similar provision, rule or regulation enacted after the date of this Agreement
which, upon compliance with its non-affiliate and holding period requirements,
terminates the volume, manner or other restrictions set forth in Rule 144 of the
1933 Act.
"SEC" means the Securities and Exchange Commission.
"Shares" means all of the issued and outstanding shares of Common Stock
and Class A non-voting common stock, par value $.01 per share, of the Company.
"Stockholder" has the meaning ascribed to it in the preamble hereto.
"Subsidiary" means, with respect to any Person, any other Person of which
a majority of the outstanding voting securities or ownership interests is owned,
directly or indirectly, by such Person.
"Tag-Along Notice" has the meaning ascribed to it in Section 2.04(a)
hereof.
"Tag-Along Rights" means the rights of the Retaining Stockholders pursuant
to Section 2.04.
"TPG" has the meaning ascribed to it in the preamble hereto.
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"TPG Partners" has the meaning ascribed to it in the preamble hereto.
"Warburg" has the meaning ascribed to it in the preamble hereto.
SECTION 1.02 Interpretation. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires:
(a) the terms defined in this Article I or elsewhere in this Agreement
have the meanings assigned to them in this Article I or elsewhere in this
Agreement and include the plural as well as the singular and vice-versa;
(b) words importing neuter or gender include all genders;
(c) any reference to an "Article", a "Section", an "Exhibit" or a
"Schedule" refers to an Article, a Section, an Exhibit or a Schedule, as the
case may be, of this Agreement;
(d) all references to this Agreement and the words "herein", "hereof",
"hereto", and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section, Exhibit,
Schedule or other subdivision;
(e) any references to agreements or contracts, including this Agreement,
shall mean such agreements or contracts together with all exhibits, schedules,
appendices and attachments thereto and as such agreements or contracts may be
amended, restated, supplemented or otherwise modified from time to time; and
(f) the determination of whether a Person is a "beneficial owner," has
"beneficial ownership" or "beneficially owns" Shares or any other securities
shall be made in accordance with Rule 13d-3 of the 1934 Act.
ARTICLE II
TRANSFER RESTRICTIONS
SECTION 2.01 General Prohibition on Transfers of Securities. No Retaining
Stockholder shall, directly or indirectly, sell, assign, pledge, hypothecate,
encumber or otherwise dispose (voluntarily or involuntarily) of any Shares or
any interest therein beneficially owned by it (all of which acts shall be deemed
included in the term "transfer" as used in this Agreement) unless (i) such
transfer is expressly permitted by, and made in compliance with, the terms of
Sections 2.03, 2.04, 2.05 or 3.01, or (ii) such transfer is made to a member of
TPG or one or more of TPG's Affiliates. Any transfer in violation of such
restrictions shall be void and ineffectual and shall not operate to transfer any
interest of title in the Shares so transferred to the proposed transferee. If,
notwithstanding the immediately preceding sentence, any such transfer is held by
a court of competent jurisdiction to be effective, then the provisions of this
Agreement shall apply to the transferee and to any subsequent transferee as
fully as if such transferee were a party hereto.
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SECTION 2.02 Permitted Transfers by TPG. Each member of TPG may, at any
time and from time to time after the Closing Date, transfer (voluntarily or
involuntarily) any Shares or any interest therein beneficially owned by it to
any Person (including any of its Affiliates) free and clear of any restrictions
set forth in this Agreement, subject only to the obligations of such member of
TPG under the second sentence of this Section 2.02 and under Section 2.04 of
this Agreement. In the event any member of TPG transfers any Shares or any
interest therein beneficially owned by it to an Affiliate of TPG (a "TPG
Transferee"), then such member of TPG shall remain liable for such TPG
Transferee's failure to perform its obligations under this Agreement with
respect to such transferred Shares, such TPG Transferee shall take such Shares
subject to all the provisions of this Agreement, and prior to such transfer,
such TPG Transferee shall (a) execute and deliver to the Company (i) a written
agreement, satisfactory in substance and form to the Company, assuming all of
the obligations (including, without limitation, the obligations set forth in
Section 2.04) of such member of TPG under this Agreement with respect to such
transferred Shares and (ii) such other documents as may be reasonably necessary,
in the opinion of the Company, to assume such obligations, and (b) agree that it
will not cease to be an Affiliate of TPG unless prior to the time such TPG
Transferee ceases to be an Affiliate of TPG, such TPG Transferee transfers to
such member of TPG all Shares owned by such TPG Transferee.
SECTION 2.03 Permitted Transfers by Retaining Stockholders.
Notwithstanding the provisions of Section 2.01 and without first offering its
Shares to TPG as contemplated by Section 2.03(c), any Retaining Stockholder may
transfer the Shares beneficially owned by it to a 100% Affiliate of such
Retaining Stockholder (a "Retaining Affiliate"); provided, that such Retaining
Stockholder shall remain liable for such Retaining Affiliate's failure to
perform its obligations under this Agreement with respect to such transferred
Shares, such Retaining Affiliate shall take such Shares subject to all the
provisions of this Agreement, and prior to such transfer such Retaining
Affiliate shall (i) execute and deliver to the Company and TPG (x) a written
agreement, satisfactory in substance and form to TPG, assuming all of the
obligations (including, without limitation, the obligations set forth in Section
2.05) of such Retaining Stockholder under this Agreement with respect to such
transferred Shares and (y) such other documents as may be reasonably necessary,
in the opinion of TPG, to assume such obligations, and (ii) agree that it will
not cease to be a 100% Affiliate of such Retaining Stockholder unless prior to
the time such Retaining Affiliate ceases to be a 100% Affiliate of such
Retaining Stockholder, such Retaining Affiliate transfers to such Retaining
Stockholder all Shares owned by such Retaining Affiliate.
Notwithstanding the provisions of Section 2.01 and without first offering
its Shares to TPG as contemplated by Section 2.03(c), any Retaining Stockholder
may, at any time after the Closing Date, pledge, hypothecate or encumber any
Shares beneficially owned by it to a financial institution; provided that the
pledgee (and any subsequent transferee) agrees in writing to execute and deliver
to the Company and TPG (i) a written agreement, satisfactory in substance and
form to TPG, assuming all of the obligations (including, without limitation, the
obligations set forth in Section 2.05) of such Stockholder under this Agreement
with respect to such Shares and (ii) such other documents as may be reasonably
necessary, in the opinion of TPG, to assume such obligations.
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Notwithstanding the provisions of Section 2.01 but on the terms and
subject to the conditions set forth below in this Section 2.03(c) (including the
last sentence of this Section 2.03(c)), each Retaining Stockholder may transfer
all or a portion of its Shares to a third party pursuant to a Bona Fide Offer.
If at any time after the Closing Date, a Retaining Stockholder desires to
transfer all or a portion of the Shares owned by it to a third party, such
Retaining Stockholder shall give prompt written notice (a "Notice of Offer") to
the Company and TPG, which notice shall contain the proposed purchase price for
the Shares being offered, the proposed closing date for such transfer, the
number of Shares which the Retaining Stockholder proposes to transfer and any
other material term or condition of the transfer. If a Retaining Stockholder has
received any written offer to purchase all or a portion of the Shares owned by
it, the Notice of Offer shall also contain a true and complete copy of such
offer. The date on which such notice is actually received by the Company and TPG
is referred to hereinafter as the "Notice Date." The Notice of Offer shall be
deemed an irrevocable offer to sell to TPG (or any Person designated by TPG)
such Shares on the terms and conditions set forth in the Notice of Offer. TPG
shall have 20 days following the Notice Date to notify in writing the Retaining
Stockholder of its election to purchase such Shares (or to have such Shares
purchased by its designee). If TPG notifies the Retaining Stockholder of its
election to purchase such Shares, the closing for such transaction shall take
place in accordance with the terms of Section 2.06 but in any event no earlier
than 45 days from the date of the Notice of Offer, provided that if the proposed
transfer by the Retaining Stockholder to the third party provides for the
payment of non-cash consideration, TPG may in its discretion, in lieu thereof,
pay the Retaining Stockholder in cash the fair market value of such non-cash
consideration (which fair market value shall be determined by TPG if such
Retaining Stockholder, in its sole discretion, agrees with such determination
or, in the absence of such agreement, by an independent investment bank selected
jointly by TPG and such Retaining Stockholder (or if there is no agreement as to
the selection of the independent investment bank, by an independent investment
bank selected by lot from among six such investment banks selected by TPG)). If
the Retaining Stockholder does not receive such written notice from TPG within
the 20 day period, TPG shall be deemed to have declined to purchase such Shares
and the Retaining Stockholder may transfer all, but not less than all, of the
Shares indicated in the Notice of Offer upon the terms and conditions set forth
therein; provided that as a condition to such transfer, the transferee shall
execute and deliver to the Company and TPG (i) a written agreement, satisfactory
in substance and form to TPG, assuming all of the obligations (including,
without limitation, the obligations set forth in Section 2.05) of such Retaining
Stockholder under this Agreement with respect to such transferred Shares and
(ii) such other documents as may be reasonably necessary, in the opinion of TPG,
to assume such obligations; provided further that, if the Retaining Stockholder
does not complete the contemplated sale within 90 days of the Notice Date, the
provisions of this Section 2.03(c) shall again apply, and no transfer of Shares
shall be made otherwise than in accordance with this Agreement. Notwithstanding
anything herein to the contrary, the terms and conditions of this Section
2.03(c) do not apply to transfers by any Retaining Stockholder pursuant to
Section 2.03(a), Section 2.03(b), 2.04, 2.05, Section 3.01 or in connection with
any merger or business combination of the Company approved by the Board.
SECTION 2.04 Tag-Along Rights. Notwithstanding the provisions of Section
2.01 and without first offering its Shares to TPG as contemplated by Section
2.03(c), in the event
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that at any time after the Closing Date and prior to the completion of an
initial public offering of any of the Shares (the "Initial Public Offering") TPG
reaches a binding agreement with a Person to sell all or a portion of its Shares
that would result in any Person (together with its Affiliates) unaffiliated with
TPG holding 40% or more of the voting power of the Company, TPG shall cause the
prospective purchaser ("Prospective Purchaser"), subject to the terms and
conditions set forth in this Section 2.04 and subject further to the terms and
conditions set forth in Section 2.05, which terms and conditions shall control
in the event that TPG is proposing to sell all of its shares of Common Stock, to
purchase from each Electing Stockholder (in lieu of purchasing from TPG) that
number of shares of Common Stock then owned by such Electing Stockholder that
equals the product of (1) the number of shares of Common Stock then owned by
such Electing Stockholder multiplied by (2) a fraction, the numerator of which
equals the number of shares of Common Stock to be purchased by the Prospective
Purchaser from TPG and the denominator of which equals the total number of
shares of Common Stock then owned by TPG (the "Applicable Amount"). TPG shall
notify promptly each of the Retaining Stockholders in writing of any such
binding agreement, indicating the price and other material terms and conditions
of the proposed sale, the identity of the Prospective Purchaser, the intended
closing date of such sale, the percentage of issued and outstanding shares of
Common Stock being sold by TPG and the Applicable Amount of shares of Common
Stock of each Retaining Stockholder that may be sold by such Retaining
Stockholder pursuant to this Section 2.04(a) (the "Tag-Along Notice") and shall
provide a copy of such binding agreement to each of the Retaining Stockholders.
Any purchase by the Prospective Purchaser of the Applicable Amount of shares of
Common Stock of any Electing Stockholder shall be at the same consideration per
share of Common Stock and on the same terms and conditions as are applicable to
TPG in such transaction. Each of the Retaining Stockholders will have 20 days
from receipt of the Tag-Along Notice (or any amendment or supplement thereto) to
notify TPG in writing of its election to exercise its Tag-Along Rights (an
"Election Notice") and to exercise its Tag-Along Rights pursuant to this Section
2.04. In the event that a Retaining Stockholder notifies TPG in writing of its
election to exercise Tag- Along Rights within 20 days of the receipt of a
Tag-Along Notice and such Retaining Stockholder subsequently receives an
amendment or supplement to such Tag-Along Notice from TPG, such Retaining
Stockholder shall be able to withdraw its previously given election to exercise
Tag-Along Rights by giving written notice to TPG within 20 days of the receipt
of such amendment or supplement. In the event TPG does not receive an Election
Notice from any of the Retaining Stockholders within 20 days of receipt of the
Tag-Along Notice (or any amendment or supplement thereto), such Person shall be
deemed to have elected not to exercise its Tag-Along Rights hereunder.
Notwithstanding anything to the contrary contained herein, (i) TPG shall not be
obligated to cause a Prospective Purchaser to purchase any Retaining
Stockholders' shares of Common Stock hereunder if at the time of such sale (but
prior to giving effect thereto) TPG beneficially owns less than 40% of the
voting power of the Company and (ii) TPG shall not be obligated to consummate
the transfer of shares of Common Stock contemplated by an agreement between TPG
and a Prospective Purchaser if, pursuant to the terms and conditions of such
agreement, TPG is not obligated to do so and, in the event TPG elects not to
consummate a transfer which it is not obligated to consummate as provided in
this clause (ii), TPG shall have no liability to any Retaining Stockholder
(which term includes, without limitation, any Electing Stockholder).
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The closing of the sale of TPG's shares of Common Stock to the Prospective
Purchaser hereunder shall be conditioned on the simultaneous purchase by the
Prospective Purchaser of the Applicable Amount of shares of Common Stock from
each Electing Stockholder. Notwithstanding the foregoing, in the event any
Electing Stockholder breaches any obligation it may have under this Section 2.04
or, in the event that any representation and warranty of any Electing
Stockholder contained in the purchase agreement with the Prospective Purchaser
is not true and correct as of the date made or as of the proposed closing date
or the Electing Stockholder shall fail to perform any covenant or agreement
contained in such agreement or the Electing Stockholder shall otherwise breach
its obligations under such agreement and, in each case, such misrepresentation,
breach or failure to perform such covenant or agreement results in the
nonsatisfaction of a condition precedent to such agreement (and the Prospective
Purchaser does not waive such condition precedent), TPG shall be free to sell
its Shares to the Prospective Purchaser without liability to the Electing
Stockholder under this Agreement and such sale shall not limit or waive in any
respect any claim, right or cause of action that TPG may have against such
Electing Stockholder in respect of such breach.
SECTION 2.05 Drag-Along Rights. Notwithstanding the provisions of Section
2.01 and without first offering its shares of Common Stock to TPG as
contemplated by Section 2.03(c), if TPG executes a binding agreement to transfer
all of its shares of Common Stock to a Person making a Bona Fide Offer, then
each of the Retaining Stockholders shall transfer, subject to the terms and
conditions set forth below, at the sole election of TPG (exercisable by delivery
to each of the Retaining Stockholders of a copy of such binding agreement and a
Drag-Along Notice at least 20 days prior to the closing date specified in such
Notice), all of its shares of Common Stock to such Person; provided that (i)
each of the Retaining Stockholders shall receive from such Person the same per
share consideration to be paid to TPG in such transaction, (ii) the
consideration received in such transaction shall be the same as the
consideration to be paid to TPG in such transaction and (iii) the closing of any
transaction effected pursuant to this Section 2.05 shall be conditioned on the
simultaneous purchase of TPG's shares of Common Stock; and provided, further,
that the Retaining Stockholders shall not be obligated to transfer their shares
of Common Stock pursuant to this Section 2.05 if at the time of TPG's transfer
pursuant to such agreement (prior to giving effect thereto) TPG beneficially
owns less than 40% of the voting power of the Company. Notwithstanding the
foregoing, in the event any Retaining Stockholder breaches its obligations under
this Section 2.05 or, in the event that any representation and warranty of such
Retaining Stockholder contained in the purchase agreement with the Person making
the Bona Fide Offer is not true and correct as of the date made or as of the
proposed closing date or such Retaining Stockholder shall fail to perform any
covenant or agreement contained in such agreement or such Retaining Stockholder
shall otherwise breach its obligations under such agreement and, in each case,
such misrepresentation, breach or failure to perform such covenant or agreement
results in the nonsatisfaction of a condition precedent to such agreement (and
the Person making the Bona Fide Offer does not waive such condition precedent),
TPG shall be free to sell its shares of Common Stock to such Person without
liability to any Retaining Stockholder under this Agreement and such sale shall
not limit or waive in any respect any claim, right or cause of action that TPG
may have against such Retaining Stockholder in respect of such breach.
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SECTION 2.06 Transfer Costs; Closing.
(a) In the event the Retaining Stockholders receive a Tag-Along Notice
or Drag- Along Notice pursuant to Section 2.04 or 2.05, as the case may be, each
Electing Stockholder (with respect to a Tag-Along Notice) or Retaining
Stockholder (with respect to a Drag-Along Notice), as the case may be, agrees to
use its commercially reasonable efforts, in good faith and in a timely matter,
to take, or cause to be taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable, under applicable laws and
regulations (including, without limitation, to ensure that all appropriate legal
and other requirements are met and all consents of third Persons are obtained,
in each case, with respect to the transfer by such Electing Stockholder or
Retaining Stockholder, as the case may be), to consummate the proposed
transactions contemplated by Section 2.04 or 2.05, as the case may be. All
reasonable costs and expenses incurred by Electing Stockholders or Retaining
Stockholders, as the case may be, in connection with a transfer made pursuant to
Section 2.04 or 2.05 (including, without limitation, all costs and
disbursements, finders' fees or brokerage commissions but excluding the fees and
disbursements of counsel which shall be borne independently by each Electing
Stockholder or Retaining Stockholder, as the case may be), or to be paid by
Electing Stockholders or Retaining Stockholders as provided for in the relevant
purchase agreement, shall be allocated pro rata among the Electing Stockholders
or the Retaining Stockholders, as the case may be, based upon the number of
Shares sold by each Electing Stockholder or Retaining Stockholder.
(b) The closing of any transfer of Shares pursuant to Section 2.03(c),
2.04 or 2.05 shall take place at the offices of the Company (or at such other
place as the participants shall mutually agree upon) not later than 90 days from
the receipt by TPG of a Notice of Offer or from the receipt by the Retaining
Stockholders of the Tag-Along Notice or the Drag-Along Notice, as the case may
be (subject to the expiration of any waiting period under the HSR Act and the
other terms and conditions provided in the underlying purchase agreement). At
such closing, the purchaser shall pay the purchase price for such Shares, in the
form and in the manner provided for in the underlying purchase agreement,
against delivery by the transferors of the Shares to be transferred, free and
clear of all liens, security interests or adverse claims of any kind and nature
except as otherwise provided for in this Agreement, duly endorsed or accompanied
by duly executed documents of transfer, in each case with signatures guaranteed
by a signature guarantor reasonably acceptable to the purchaser, and with any
required stock transfer tax stamp affixed.
SECTION 2.07 Restrictive Legend. Each certificate evidencing Shares shall
contain the following restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A STOCKHOLDERS' AGREEMENT DATED AS OF , 1998 AND MAY BE
----------
VOTED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE WITH
SUCH AGREEMENT.
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ARTICLE III
PIGGY BACK REGISTRATION
SECTION 3.01 Piggy Back Registration.
(a) If the Company, at any time, proposes to register any of its equity
securities (or securities convertible into equity securities) under the 1933 Act
(other than by registration on a Form S-4 or Form S-8 or any successor or
similar form then in effect), whether or not for sale for its own account, on a
form and in a manner which would permit registration of Registrable Securities
for sale, each such time it shall give prompt written notice to all Stockholders
owning Registrable Securities of its intention to do so, describing such
securities and specifying the form and manner and the other relevant facts
involved in such proposed registration, and upon the written request of any such
Stockholder delivered to the Company within 30 days after the giving of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Stockholder and the intended method of disposition thereof),
the Company shall use its reasonable best efforts to effect the registration
under the 1933 Act of all Registrable Securities which the Company has been so
requested to register by such Stockholders, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered, provided that:
(i) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the effective
date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register
or delay the registration of such securities, the Company may, at its
election, give written notice of such determination to each Stockholder
owning Registrable Securities and thereupon, (A) in the case of a
determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration,
and (B) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities for the same
period as the delay in registering such other securities.
(ii) if (A) the registration so proposed by the Company involves an
underwritten offering of the securities so being registered, whether or
not for sale for the account of the Company, to be distributed (on a firm
commitment basis) by or through one or more underwriters under
underwriting terms appropriate for such a transaction and (B) the managing
underwriter of such underwritten offering shall advise the Company, and/or
the party on whose behalf the securities are being registered, that, in
its opinion, the distribution of all or a specified portion of such
Registrable Securities concurrently with the securities being distributed
by such underwriters will adversely affect the distribution of such
securities by such underwriters, then the Company shall promptly furnish
each such holder of Registrable Securities with a copy of such opinion and
may deny, by written notice to each such Stockholder
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accompanying such opinion, the registration of all or a specified portion
of such Registrable Securities (in case of a denial as to a portion of
such Registrable Securities, such portion to be allocated among such
Stockholders in proportion to the respective number of Shares requested to
be included therein by such Stockholder); and
(iii) each Stockholder requesting registration of Registrable
Securities pursuant to this Section 3.01 shall be permitted to withdraw
all or part of such Stockholder's Registrable Securities at any time prior
to the effective date of such registration; provided that in the event of
a withdrawal from a registration, any fees and disbursements incurred by
Stockholders requesting withdrawal in connection with such registration
shall be paid by such Stockholders.
(iv) the Company shall not be obligated to effect any registration
of Registrable Securities under this Section 3.01, (A) in connection with
any merger, acquisition, exchange offer, recapitalization, or
consolidation of the Company or any of its Subsidiaries or the adoption or
implementation of any dividend reinvestment plan, stock option or other
employee benefit plan or (B) in connection with an Initial Public Offering
unless the Company permits any Stockholder to participate in such Initial
Public Offering, in which case, then all other Stockholders shall be
allowed to participate in such offering, and the Company shall be
obligated to give prompt written notice to all Stockholders owning
Registrable Securities of their right to do so.
(v) the Retaining Stockholders will, if requested by the
underwriters for an underwritten public offering of equity securities of
the Company, agree not to sell or transfer any equity securities of the
Company (other than equity securities, if any, included in such offering),
without the consent of the underwriters, for a period of not more than 180
days following effectiveness of the registration statement relating to
such public offering
(b) In connection with the preparation and filing of each registration
statement under the 1933 Act pursuant to which Registrable Securities will be
registered, the Company will give (i) Warburg, provided that Warburg owns at
least 100,000 shares of Common Stock immediately following consummation of the
Merger and Warburg and its Affiliates own at least 1.25% of the shares of Common
Stock issued and outstanding at the time the access and opportunities to discuss
referred to below are to be given to Warburg, (ii) each holder of Registrable
Securities, who beneficially owns in excess of 5% of the shares of Common Stock
then outstanding, to be registered under such registration statement, (iii)
their underwriters, if any, and (iv) their respective counsel and accountants
such reasonable access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the 1933 Act.
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(c) Subject to Section 3.01(a)(iii), the Company shall pay all
Registration Expenses in connection with each registration of Registrable
Securities requested to be registered pursuant to this Section 3.01 (including
Registration Expenses incurred in connection with registration efforts which are
terminated in accordance with Section 3.01(a)(1) hereof). All other costs and
expenses shall be borne by the party bearing such costs or expenses.
SECTION 3.02 Registration Procedures.
(a) In connection with the registration of any Registrable Securities
under the 1933 Act as provided in Section 3.01, the Company shall as soon as
practicable:
(i) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the 1933 Act with respect
to the disposition of all Registrable Securities covered by such
registration statement until the earlier of such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller, or sellers, thereof set
forth in such registration statement or the expiration of six (6) months
after such registration statement becomes effective;
(iii) furnish to each seller of such Registrable Securities such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the 1933 Act, such
documents incorporated by reference in such registration statement or
prospectus, and such other documents, as such seller may reasonably
request in order to facilitate the disposition of the Registrable
Securities being sold by such seller;
(iv) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of its Registrable
Securities covered by such registration statement, except that the Company
shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in any such jurisdiction, or
to consent to general service of process in any such jurisdiction;
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(v) use its best efforts to furnish to (i) Warburg upon its
request, provided that Warburg owns at least 100,000 shares of Common
Stock immediately following consummation of the Merger and Warburg and its
Affiliates own at least 1.25% of the shares of Common Stock issued and
outstanding at the time of such request, and (ii) each holder of at least
twenty-five percent (25%) of the Registrable Securities covered by the
registration statement, upon such holder's request, a signed counterpart,
addressed to such holder, of an opinion of counsel for the Company, dated
the effective date of such registration statement (or, if such
registration includes an underwritten public offering, dated the date of
the closing under the underwriting agreement speaking both as of the
effective date of the registration statement and the date of the closing
under the underwriting agreement) covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel;
(vi) use its reasonable best efforts to obtain a "cold comfort"
letter from the Company's independent public accountant in customary form
and covering such matters of the type customarily covered by "cold
comfort" letters as the holders of a majority of the Registrable
Securities covered by the registration statement may request;
(vii) promptly notify each holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, of the happening
of any event known to the Company as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any 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 at the
request of any such holder or holders prepare and furnish to such holder
or holders a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such 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;
(viii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and generally make available
to its securities holders an earnings statement satisfying the provisions
of Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act not later
than eighteen (18) months after the effective date of such registration;
and
(ix) use its reasonable best efforts to (A) list the Registrable
Securities covered by such registration statement on any securities
exchange on which any of the Shares is then listed, if any, or (B) have
authorized for quotation
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and/or listing, as applicable, on the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") or the National Market System
of NASDAQ if the Registrable Securities so qualify; in each case subject
to the applicable listing requirements of the respective securities
exchange or NASDAQ.
The Company may require, as a condition to each holder's participation in the
registration, each holder of Registrable Securities as to which any registration
is being effected (i) to furnish the Company with such information regarding
such holder and the distribution of such Registrable Securities as the Company
may from time to time reasonably request or as shall be required by law
(including, without limitation, any applicable state securities law) or by the
SEC in connection therewith and (ii) to enter into a holdback agreement on
customary terms and conditions.
(b) If the securities proposed to be registered are to be distributed by
or through one or more underwriters, the managing underwriter shall be selected
by the Company or the Person (other than the Retaining Stockholders) on whose
behalf the securities were initially requested to be registered.
SECTION 3.03 Indemnification; Contribution.
(a) In the event of any registration of any Registrable Securities under
the 1933 Act, the Company shall indemnify and hold harmless (i) in the case of
any registration statement (including any related notification or document
incident to such registration statement) filed pursuant to Section 3.01, the
seller of any Registrable Securities covered by such registration statement, its
directors and officers, each officer and director of each underwriter, each
other Person who participates as an underwriter in the offering or sale of such
Registrable Securities and each other Person, if any, who controls such seller
or any such underwriter, within the meaning of the 1933 Act, against any losses,
claims, damages, liabilities and expenses (including reasonable fees and
expenses incurred in connection with enforcing the provisions of this Section
3.03(a)), joint or several, to which any such indemnified party may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions or proceedings in respect thereof)
arise out of or are based upon (x) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Registrable Securities were registered under the 1933 Act, any
preliminary prospectus (unless any such statement is corrected in a subsequent
prospectus and the underwriters are given the opportunity to circulate the
corrected prospectus to all persons receiving the preliminary prospectus), final
prospectus or summary prospectus included therein, or any amendment or
supplement thereto, or any document incorporated by reference therein, or (y)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such indemnified parties for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided that
the Company shall not be liable in any such case and shall not indemnify any
Person to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon
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an untrue statement or alleged untrue statement or omission or alleged omission
made in any such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement or document incorporated
by reference based upon written information furnished by such Person to the
Company for use in the preparation thereof. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified parties and shall survive the transfer of such securities by such
seller. The Company shall agree to provide for contribution relating to such
indemnity pursuant to Section 3.03(b) below.
(b) If for any reason the foregoing indemnity and reimbursement is
unavailable or is insufficient to hold harmless an indemnified party under
Section 3.03(a), then the Company shall contribute to the amount paid or payable
by such indemnified party as a result of any loss, claim, damage or liability
(as actions or proceedings, whether commenced or threatened, in respect
thereof), including, without limitation, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the Company on the other. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. If,
however, the allocation provided in the second preceding sentence is not
permitted by applicable law, the Company shall contribute to the amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative fault but also the relative benefits to the
Company and the indemnified party as well as any other relevant equitable
considerations. The parties agree that it would not be just and equitable if
contributions pursuant to this Section 3.03(b) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the preceding sentences of this
Section 3.03(b). Notwithstanding anything in this Section 3.03(b) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 3.03(b) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(c) The Company may require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to Section 3.02(a), that
the Company shall have received an undertaking satisfactory to it from each of
the prospective sellers of such securities and their underwriters, to indemnify
and hold harmless, and to provide for contribution (in the same manner and to
the same extent as set forth in subdivisions (a) and (b) of this Section 3.03),
the Company, each director of the Company, each officer of the Company who shall
sign such registration statement and each other Person, if any, who controls the
Company within the meaning of the 1933 Act, with respect to any untrue
statement, or alleged untrue statement, or omission, or alleged omission, made
in such
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registration statement, any preliminary prospectus, final prospectus or summary
prospectus included therein, or any amendment or supplement thereto, or any
document incorporated by reference therein, if such untrue statement, or alleged
untrue statement, or omission, or alleged omission, was based upon written
information furnished by any such prospective sellers or their underwriters to
the Company for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement or document incorporated by reference. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling Person and shall
survive the transfer of such securities by such seller.
(d) Promptly after receipt by an indemnified party of written notice of
the commencement of any action or proceeding involving a claim referred to in
the preceding subdivisions of this Section 3.03, such indemnified party shall,
if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 3.03 except to the extent that the indemnifying
party's liabilities and obligations under this Section 3.03 are prejudiced as a
result of such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof unless (i) the indemnifying party shall have
failed to retain counsel for the indemnified party as aforesaid, (ii) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (iii) representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interest between such indemnified party and any
other Person represented by such counsel in such proceeding. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.01 Transactions with Affiliates; Disposition of Warburg Shares.
All transactions between the Company and any member of TPG or any Affiliate of
TPG shall require the prior approval of the holders of a majority of the Common
Stock (excluding stock held by TPG and its Affiliates) other than agreements or
transactions which are on arms-length terms or consulting fees with terms which
are customary as between TPG and its
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portfolio companies. If (a) an institutional private placement or an offering
pursuant to Rule 144A of the 1933 Act of shares of Common Stock with or without
registration rights in which Warburg is afforded an opportunity to participate
with respect to all of its then-owned shares of Common Stock or (b) the Initial
Public Offering shall have not occurred within five years of the Closing of the
Merger, the Company will reimburse Warburg for the cost of investment banking
fees, in an amount not to exceed $50,000, in connection with an analysis of
Warburg's ownership position and disposition strategies.
SECTION 4.02 Conflict with Certificate and/or Bylaws. The parties hereto
intend that in the event of any conflict or inconsistency between this Agreement
and the Certificate or Bylaws of the Company, the provisions of this Agreement
shall control, and therefore in the event that any term or provision of this
Agreement is rendered invalid, illegal or unenforceable by the Certificate or
Bylaws, the parties agree to take all action, including voting their Shares, to
amend the Certificate or Bylaws (as the case may be) so as to render such term
or provision valid, legal and enforceable, if and to the extent legally
permitted.
SECTION 4.03 Amendment. If Warburg owns at least 100,000 shares of Common
Stock immediately following consummation of the Merger and Warburg and its
Affiliates own at least 1.25% of the shares of Common Stock issued and
outstanding at the time consent to alter or amend this Agreement is to be
obtained, this Agreement may be altered or amended only with the written consent
of the Company, TPG, Warburg and the collective consent of the Retaining
Stockholders (other than Warburg). In all other circumstances, this Agreement
may be altered or amended only with the written consent of the Company, TPG and
the collective consent of the Retaining Stockholders. Any provision of this
Agreement which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without affecting the validity or
enforceability of the remaining provisions hereof.
SECTION 4.04 Specific Performance. The parties hereto agree that the
obligations imposed on them in this Agreement are special, unique and of an
extraordinary character, and that in the event of breach by any party damages
would not be an adequate remedy, and each of the other parties shall be entitled
to specific performance and injunctive and other equitable relief in addition to
any other remedy to which it may be entitled, at law or in equity; and the
parties hereto further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such injunctive or
other equitable relief.
SECTION 4.05 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assignees of the parties hereto; provided that except
as expressly permitted or required elsewhere in this Agreement, the rights and
obligations of the parties hereto may not be assigned without the prior written
consent of all of the other parties. Notwithstanding the foregoing, TPG may
assign its rights under this Agreement to any transferee of its Shares other
than a transferee pursuant to Article III or pursuant to a Rule 144 or Rule
144(k) Sale and (ii) any Retaining Stockholder may assign any of its rights
hereunder to any transferee of its Shares pursuant to Section 2.03. Any party
to, or Person who is subject to, this Agreement, upon ceasing to own Shares or
any interest therein, shall thereupon cease to be a
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party to, or Person who is subject to, this Agreement and shall thereafter have
no rights or obligations hereunder except as expressly provided for elsewhere in
this Agreement, including, without limitation, Section 2.03(a) and Section 3.03.
SECTION 4.06 Shares Subject to this Agreement. All Shares of the Company
(or any successor thereto) beneficially owned or hereafter acquired by the
Stockholders or their Affiliates shall be subject to the terms of this
Agreement. Any Shares acquired in the open market or pursuant to a public
offering or a Rule 144 or Rule 144(k) Sale shall not be subject to this
Agreement.
SECTION 4.07 Notices. All notices, statements, instructions or other
documents provided for herein shall be in writing and shall be delivered either
personally or by mailing the same in a sealed envelope, first-class mail,
postage prepaid and either certified or registered, return receipt requested or
by mailing (as set forth above) and transmitting by facsimile a copy of such
writing, addressed as follows:
(a) if to TPG, to:
TPG Partners II, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to the Company, to:
Zilog, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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with a copy to:
Pillsbury Madison & Sutro LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(c) if to the Retaining Stockholders, to their respective addresses and
facsimile numbers set forth on Schedule I hereto.
Each party, by written notice given to the other parties in accordance with this
Section 4.07, may change the address to which notices, statements, instructions
or other documents are to be sent to such party. Except as otherwise provided
herein, all notices, statements, instructions and other documents hereunder
shall be deemed to have been given on the earlier of the date of actual delivery
and 3 days after the date of mailing, except that notice of a change of address
shall be effective only upon actual delivery.
SECTION 4.08 Complete Agreement; Counterparts. This Agreement constitutes
the entire agreement among the parties hereto or any of them with respect to the
matters referred to herein as they relate to the parties hereto. This Agreement
may be executed by the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all of which shall together
constitute one and the same instrument.
SECTION 4.09 Term of the Agreement. Unless this Section 4.09 is amended in
accordance with the provisions of Section 4.03 hereof, this Agreement shall
expire on the eighth anniversary of the Closing; provided that the provisions of
Article II of this Agreement shall expire upon the earlier of the eighth (8th)
anniversary of the Closing and the completion of the Initial Public Offering;
provided further that the provisions of Article III of this Agreement shall
expire on the fifteenth (15th) anniversary of the Closing.
SECTION 4.10 Headings. The section headings herein are for convenience of
reference only and in no way define, limit or extend the scope or intent of this
Agreement or any provisions hereof.
SECTION 4.11 Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of law). The parties agree that any service of
process to be made hereunder may be made by certified mail, return receipt
requested, addressed to the party at the address appearing in Section 4.07
together with a copy to be delivered to such party's attorneys as provided in
Section 4.07. The parties consent and agree that the state or federal courts
located in Delaware shall have jurisdiction to hear and determine any claims or
disputes pertaining to this Agreement or to any matter arising out of or related
to this Agreement and each party waives any objection that it may have based
upon lack of personal jurisdiction, improper venue or forum non conveniens and
hereby consents to the granting of such legal or equitable relief as is deemed
appropriate by such court.
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SECTION 4.12 Consent by TPG and by the Retaining Stockholders.
(a) Any provision of this Agreement that requires any consent,
agreement, waiver, designation or other determination or decision of TPG shall
require, and shall be deemed to have been given or made upon, the consent,
agreement, waiver, designation or other determination or decision of TPG
Partners.
(b) Any provision of this Agreement that requires any collective
consent, agreement, waiver, designation or other determination or decision of
the Retaining Stockholders, or the Retaining Stockholders other than Warburg,
shall require, and shall be deemed to have been given or made upon, the consent,
agreement, waiver, designation or other determination or decision of holders of
a majority of the Shares held by the Retaining Stockholders, or the Retaining
Stockholders other than Warburg, as the case may be, as of the date such
collective consent, agreement, waiver, designation or other determination or
decision is required.
SECTION 4.13 Effectiveness of Agreement. This Agreement shall not be
effective unless and until the Closing has occurred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
TPG PARTNERS II, L.P.
By TPG GenPar II, L.P., General Partner
By TPG Advisors II, Inc., General Partner
By
------------------------------------------
Title
---------------------------------------
TPG INVESTORS II, L.P.
By TPG GenPar II, L.P., General Partner
By TPG Advisors II, Inc., General Partner
By
-------------------------------------------
Title
----------------------------------------
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TPG PARALLEL II, L.P.
By TPG GenPar II, L.P., General Partner
By TPG Advisors II, Inc., General Partner
By
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Title
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ZILOG, INC.
By
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Title
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RETAINING STOCKHOLDERS
WARBURG, XXXXXX CAPITAL COMPANY, L.P.
By Warburg, Xxxxxx & Co., General Partner
By
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Title
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[Signature page to be completed with the names
of the additional Retaining Stockholders]
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