1
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
dated August 6, 1997
between
Xxxxx Xxxxxx Group Inc.,
General Electric Company,
General Electric Capital Corporation,
General Electric Capital Services, Inc. and
Xxxxxx, Peabody Group Inc.
2
TABLE OF CONTENTS
---------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties..................................4
ARTICLE 3
STANDSTILL AND VOTING PROVISIONS
SECTION 3.01. Restrictions of Certain Actions by Shareholder..................4
SECTION 3.02. Board Representation............................................6
SECTION 3.03. Voting..........................................................6
ARTICLE 4
TRANSFER RESTRICTIONS
SECTION 4.01. Restrictions of Transfer........................................7
SECTION 4.02. Permitted Transfers.............................................7
SECTION 4.03. Company Call Right..............................................8
SECTION 4.04. Right of First Refusal.........................................10
SECTION 4.05. Assignment.....................................................11
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Registration upon Request......................................11
SECTION 5.02. Incidental Registration Rights.................................13
SECTION 5.03. Broad Public Distribution; Lead Manager........................14
SECTION 5.04. Registration Mechanics.........................................14
SECTION 5.05. Expenses.......................................................17
SECTION 5.06. Indemnification and Contribution...............................17
SECTION 5.07. Underwriting Agreement.........................................20
3
PAGE
----
ARTICLE 6
SHAREHOLDER PURCHASE RIGHTS
SECTION 6.01. Shareholder Purchase Rights....................................21
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Termination....................................................22
SECTION 7.02. Financial Services Group.......................................22
SECTION 7.03. Legend.........................................................22
SECTION 7.04. Specific Performance...........................................23
SECTION 7.05. Entire Agreement...............................................24
SECTION 7.06. Severability...................................................24
SECTION 7.07. Headings.......................................................24
SECTION 7.08. Counterparts...................................................24
SECTION 7.09. Notices........................................................24
SECTION 7.10. Successors and Assigns.........................................26
SECTION 7.11. Governing Law..................................................26
SECTION 7.12. Compliance by Affiliates.......................................26
SECTION 7.13. Reports........................................................26
SECTION 7.14. Fair Market Value Determination................................26
SECTION 7.15. Aggregation; Definition of Shareholder.........................27
SECTION 7.16. Effectiveness..................................................27
ii
4
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement"), dated
August 6, 1997, is between Xxxxx Xxxxxx Group Inc., a Delaware corporation (the
"Company"), General Electric Company, a New York corporation ("Parent"), Xxxxxx,
Peabody Group Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of Parent ("Group"), General Electric Capital Services, Inc., a
Delaware corporation ("GECS") and General Electric Capital Corporation, a New
York corporation (together with GECS, the "Shareholder", which term shall
include Parent and any subsidiary (as defined below) of Parent to the extent
Voting Securities (as defined below) have been transferred to Parent or such
subsidiary pursuant to Section 4.02(a)(i)).
WHEREAS, the Company, Parent and Group (i) have previously entered into a
Stockholders Agreement dated December 16, 1994 and (ii) desire to amend and
restate such Stockholders Agreement, effective upon consummation of the sale of
the capital stock of Xxxxxx, Xxxxxxx & Co. Incorporated pursuant to a Share
Purchase Agreement (the "Share Purchase Agreement") dated the date hereof among
the Company, Parent and GECS; and
WHEREAS, Shareholder currently holds 1,000,000 shares of the Company's 6%
Cumulative Convertible Redeemable Preferred Stock, Series A, stated value $100
per share, and 2,500,000 shares of the Company's 9% Cumulative Redeemable
Preferred Stock, Series C, stated value $100 per share, and, upon consummation
of the sale of the capital stock of Xxxxxx, Peabody & Co. Incorporated pursuant
to the Share Purchase Agreement, is acquiring 15,500,000 shares of the Company's
Common Stock, par value $1.00 per share;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
5
"Asset Purchase Agreement" means the Asset Purchase Agreement dated as of
October 17, 1994 between the Company, Parent and Group, as amended and
supplemented.
"Broad Public Distribution" means an underwritten distribution registered
under the 1933 Act or a distribution exempt from registration thereunder in
which Shareholder uses its best efforts to cause the underwriters expressly to
agree in writing for the benefit of the Company that they collectively will not
sell Voting Securities to any "person" within the meaning of Section 13(d)(3) of
the 1934 Act who, to the best of such underwriters' knowledge after inquiry,
would own, immediately after such distribution, Voting Securities having
aggregate voting power of more than 3% of the voting power of all the then
outstanding Voting Securities.
"Common Stock" means the common stock, par value $1.00 per share, of the
Company.
"Convertible Preferred Stock" means the 6% Cumulative Convertible
Redeemable Preferred Stock, Series A, stated value $100 per share, of the
Company.
"Equity Treatment Percentage" means the lesser of (i) 20% and (ii) the
minimum percentage of Common Stock required to be owned to permit Parent to
account for its beneficial ownership of Voting Securities in accordance with the
"equity" method of accounting.
"Fair Market Value" of the Common Stock as of any day shall mean the
average daily closing sales price of the Common Stock for the ten consecutive
trading days preceding such day. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the Common Stock is listed and admitted to trading, or if not listed and
admitted to trading on any such exchange, on the NASDAQ National Market System,
or if not quoted on the National Market System, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected from time to time by the Company for that
purpose.
"Financial Services Group" means General Electric Capital Services, Inc.
and its subsidiaries (including, without limitation, Xxxxxx, Xxxxxxx Group Inc.
and General Electric Capital Corporation), General Electric Investment
Corporation, General Electric Investment Management Incorporated or any other
Affiliate of Parent engaged in the financial services business.
2
6
"Preferred Stock" means, collectively, the Convertible Preferred Stock and
the Redeemable Preferred Stock.
"Redeemable Preferred Stock" means the 9% Cumulative Redeemable Preferred
Stock, Series C, stated value $100 per share, of the Company.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), (i) any corporation of which securities representing more than
50% of the equity and more than 50% of the ordinary voting power are, at the
time any determination is being made, owned by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent or (ii) any entity (other than a corporation) controlled by the parent of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions and representing more than 50% of the equity are, at the time any
determination is being made, owned by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Third Party Account" means any account managed for the benefit of another
person (other than Parent or any Affiliate of Parent) by any member of the
Financial Services Group.
"Total Voting Power" means the aggregate number of votes which may be cast
by holders of outstanding Voting Securities.
"Voting Securities" means any securities of the Company entitled to vote
generally in the election of directors of the Company or any direct or indirect
rights or options to acquire any such securities or any securities convertible
or exercisable into or exchangeable for such securities.
(b) Except as otherwise specified herein, terms used in this Agreement
shall have the respective meanings assigned to such terms in the Asset Purchase
Agreement. The rules of interpretation specified in Section 1.02 of the Asset
Purchase Agreement shall be applicable to this Agreement. Unless otherwise
specified all references to "days" shall be deemed to be references to calendar
days.
3
7
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties. Each of Parent and
Shareholder represents and warrants to the Company that (i) each Shareholder
entity is a wholly-owned indirect subsidiary of Parent; and (ii)(a) Shareholder
"beneficially owns" (as such term is defined in Rule 13d-3 under the 0000 Xxx)
2,500,000 shares of Redeemable Preferred Stock, 1,000,000 shares of Convertible
Preferred Stock and 15,500,000 shares of Common Stock, (b) the Financial
Services Group (which includes Shareholder) does not beneficially own any other
Voting Securities except for any Voting Securities held in any Third Party
Account and (c) to the best knowledge of Parent, neither it nor any of its
Affiliates beneficially owns any other Voting Securities, except for any Voting
Securities held in any Third Party Account.
ARTICLE 3
STANDSTILL AND VOTING PROVISIONS
SECTION 3.01. Restrictions of Certain Actions by Shareholder. Parent will
not, and will cause each of its Affiliates not to, singly or as part of a
partnership, limited partnership, syndicate or other group (as those terms are
defined in Section 13(d)(3) of the 1934 Act), directly or indirectly:
(a) except as permitted under Section 6.01, acquire, offer to acquire, or
agree to acquire, by purchase, gift or otherwise, any Voting Securities, except
pursuant to a stock split, stock dividend, rights offering, recapitalization,
reclassification or similar transaction;
(b) make, or in any way participate in any "solicitation" of "proxies" to
vote (as such terms are defined in Rule 14a-1 under the 1934 Act), solicit any
consent or communicate with or seek to advise or influence any person or entity
with respect to the voting of any Voting Securities or become a "participant" in
any "election contest" (as such terms are defined or used in Rule 14a-11 under
the 0000 Xxx) with respect to the Company;
(c) form, join, encourage or in any way participate in the formation of,
any "person" within the meaning of Section 13(d)(3) of the 1934 Act with respect
to any Voting Securities; provided that this Section 3.01(c) shall not prohibit
any such arrangement solely among Parent and any of its wholly-owned
subsidiaries;
4
8
(d) deposit any Voting Securities into a voting trust or subject any such
Voting Securities to any arrangement or agreement with respect to the voting
thereof; provided that this Section 3.01(d) shall not prohibit any such
arrangement solely among Parent and any of its wholly-owned subsidiaries;
(e) initiate, propose or otherwise solicit stockholders for the approval
of one or more stockholder proposals with respect to the Company as described in
Rule 14a-8 under the 1934 Act, or induce or attempt to induce any other person
to initiate any stockholder proposal;
(f) except in accordance with and pursuant to Section 3.02, seek election
to or seek to place a representative on the Board of Directors of the Company
or, except with the approval of management of the Company, seek the removal of
any member of the Board of Directors of the Company;
(g) except with the approval of management of the Company, call or seek to
have called any meeting of the stockholders of the Company;
(h) except through its representative on the Board of Directors of the
Company, otherwise act to seek to control, disrupt or influence the management,
business, operations, policies or affairs of the Company except with the
approval of management of the Company;
(i) (A) solicit, seek to effect, negotiate with or provide any information
to any other party with respect to, (B) make any statement or proposal, whether
written or oral, to the Board of Directors of the Company or any director or
officer of the Company with respect to, or (C) otherwise make any public
announcement or proposal whatsoever with respect to, any form of business
combination transaction involving the Company, including, without limitation, a
merger, exchange offer or liquidation of the Company's assets, or any
restructuring, recapitalization or similar transaction with respect to the
Company; provided that the foregoing shall not (x) apply to discussions between
officers, employees or agents of Parent or Shareholder and the representative of
Shareholder on the Board of Directors of the Company or (y) in the case of
clause (B) above, be interpreted to limit the ability of such representative to
make any such statement or proposal or to discuss any such proposal with any
officer, director or advisor to the Company or the Board of Directors of the
Company in connection with the performance by such representative of his duty as
a director;
(j) disclose or announce any intention, plan or arrangement inconsistent
with the foregoing; or
5
9
(k) advise, assist, instigate or encourage any third party to do any of
the foregoing (except, for purposes of clause (a) above, in connection with any
transfer of Voting Securities permitted under Section 4.02).
If Parent or any of its Affiliates owns or acquires any Voting Securities
in violation of this Agreement, such Voting Securities shall immediately be
disposed of to persons who are not Affiliates thereof but only in compliance
with the provisions of this Agreement; provided that the Company may also pursue
any other available remedy to which it may be entitled as a result of such
violation.
SECTION 3.02. Board Representation.The Company will cause one person
mutually agreed upon by Parent and the Company to be elected to the Company's
Board of Directors concurrently with the execution hereof.
(b) Thereafter, so long as Shareholder owns Voting Securities representing
at least 10% of Total Voting Power (calculated on a fully diluted basis assuming
conversion or exchange of all outstanding securities of the Company convertible
into or exchangeable for Voting Securities and the exercise of all rights or
options to acquire Voting Securities), subject to the further provisions of this
Section 3.02, the Company's Nominating Committee (or any other committee
exercising a similar function) (the "Nominating Committee") shall recommend to
the Board of Directors of the Company that such person (or any successor
designated by Parent and approved by the Nominating Committee) be included in
the slate of nominees recommended by the Board of Directors of the Company to
shareholders for election as directors at each annual meeting of shareholders of
the Company at which such person's term expires.
(c) In the event that the designee of Shareholder shall cease to serve as
a director for any reason, the vacancy resulting thereby shall be filled by a
person designated by Parent and approved by the Nominating Committee.
(d) In the event that at any time Shareholder shall own Voting Securities
representing less than 10% of Total Voting Power (calculated as provided in
Section 3.02(b)), Shareholder shall have no further rights under this Section
3.02 and shall promptly cause to resign, and take all other action reasonably
necessary to cause the prompt removal of, its designee to the Board of Directors
of the Company.
SECTION 3.03. Voting. Whenever Shareholder shall have the right to vote
any Voting Securities, Shareholder shall (i) be present, in person or
represented by proxy, at all stockholder meetings of the Company so that all
Voting Securities beneficially owned by it shall be counted for the purpose of
determining the presence of a quorum at such meetings, and (ii) subject to
6
10
Section 3.03(b) below, vote or cause to be voted, or consent with respect to,
all Voting Securities beneficially owned by it in the manner recommended by the
Company's Board of Directors, except that during any period or at any time when
there shall be in full force and effect a valid order or judgment of a court of
competent jurisdiction or a ruling, pronouncement or requirement of the New York
Stock Exchange, Inc. ("NYSE") to the effect that the foregoing provision of this
Section 3.03 is invalid, void, unenforceable or not in accordance with NYSE
policy, then Shareholder will, if so requested by the Board of Directors of the
Company, vote or cause to be voted all Voting Securities beneficially owned by
it in the same proportion as the votes cast by or on behalf of the other holders
of Voting Securities.
(b) Notwithstanding anything to the contrary contained in Section 3.03(a)
above, Shareholder shall have the right to vote freely, without regard to any
request or recommendation of the Board of Directors of the Company, with respect
to (i) all matters specified in paragraph (8) of the Certificate of Designation
of Rights and Preferences for the Convertible Preferred Stock and paragraph (7)
of the Certificate of Designation of Rights and Preferences for the Redeemable
Preferred Stock and (ii) any "Rule 13e-3 transaction" (as defined in Rule
13e-3(a)(3) under the 1934 Act as in effect on the date hereof) unless such
transaction has been approved by a majority of the disinterested directors of
the Board of Directors of the Company.
ARTICLE 4
TRANSFER RESTRICTIONS
SECTION 4.01. Restrictions of Transfer. Except as otherwise expressly
permitted in this Agreement, Parent will not, and will not permit its Affiliates
to, directly or indirectly, transfer, sell, assign, pledge, convey, hypothecate
or otherwise encumber or dispose of ("transfer") any Voting Securities.
SECTION 4.02. Permitted Transfers. (a) Notwithstanding the provisions of
Section 4.01, Parent and its Affiliates shall be permitted to transfer any
portion of or all their shares of Voting Securities or Redeemable Preferred
Stock under the following circumstances:
(i) transfers to any subsidiary of Parent, but only if such
transferee agrees in writing to be bound by the terms of this Agreement,
provided that such subsidiary shall be permitted to own such Voting
Securities only so long as such subsidiary shall remain a subsidiary of
7
11
Parent and provided further that no such transfer shall relieve Parent or
Shareholder of their obligations under this Agreement;
(ii) subject to the Company's rights under Section 4.04, in the case
of shares of Common Stock (including Common Stock issuable upon conversion
or redemption of the Convertible Preferred Stock), transfers made pursuant
to (A) a Broad Public Distribution or (B) Rule 144 under the 1933 Act,
provided that any such sale pursuant to Rule 144 shall be subject to the
volume and manner of sale limitations set forth in such Rule whether or
not legally required;
(iii) subject to the Company's rights under Section 4.04, in the
case of shares of Convertible Preferred Stock, after December 16, 1999,
transfers made pursuant to a demand registration under Section 5.01(a);
(iv) pursuant to a tender offer or exchange offer or acquisition of
control of the Company or similar transaction, at any time following the
time at which the Company shall publicly announce or otherwise disclose to
Shareholder that the Board of Directors of the Company does not oppose
such transaction; or
(v) transfers of any portion of or all its shares of Redeemable
Preferred Stock to any person, provided that (A) Parent shall give not
less than 45 days prior written notice to the Company of its intention to
transfer such shares and (B) such person agrees in writing to be bound by
the terms of this Section 4.02(a)(v). Such notice shall specify the number
of shares of Redeemable Preferred Stock proposed to be transferred and the
date of the proposed transfer of such shares.
(b) Notwithstanding anything to the contrary in this Agreement, Voting
Securities shall not be transferred by Parent or any of its Affiliates to any
person (i) pursuant to a tender offer or exchange offer or acquisition of
control of the Company or similar transaction which is opposed by the Company's
Board of Directors or (ii) during the 12 months following the date of
effectiveness of this Agreement other than transfers permitted pursuant to
Section 4.02(a)(i) or Section 4.02(a)(iv).
SECTION 4.03. Company Call Right. (a) The Company shall have the right
(the "Call Right"), exercisable at any time or from time to time, upon written
notice to Shareholder (the "Call Notice"), to elect to purchase a portion (to
the extent provided below) of or all the shares of Common Stock then held by
Shareholder, at a purchase price per share payable in cash (the "Call Price")
equal to the greater of (x) the Fair Market Value of the Common Stock as of the
date of
8
12
delivery of the Call Notice and (y) $23.95634. Delivery of any Call Notice by
the Company to Shareholder shall be irrevocable.
(b) Notwithstanding the provisions of Section 4.03(a), if the Company
exercises its Call Right for less than all of the Common Stock then held by
Shareholder, (i) if immediately prior to such exercise, Parent beneficially owns
not less than the Equity Treatment Percentage of outstanding Common Stock and,
at such time, Parent accounts for such ownership of Common Stock in accordance
with the equity method of accounting, then the Company shall be permitted to
exercise its Call Right in part only to the extent that such exercise would not
reduce the percentage of outstanding Common Stock beneficially owned by Parent
below the Equity Treatment Percentage and (ii) if immediately prior to such
exercise, the Company is a 20-percent owned corporation within the meaning of
Section 243(c)(2) of the Code as in effect on the date hereof (a "20-percent
owned corporation") of the Shareholder, then the Company shall be permitted to
exercise its Call Right in part only to the extent that such exercise would not
result in the Company ceasing to be a 20-percent owned corporation of the
Shareholder. For purposes of clause (ii) of this paragraph (b), (A) the term
"stock" shall have the same meaning as in Section 243(c)(2) of the Code as in
effect on the date hereof and (B) all shares of stock of the Company held by
Shareholder or any Affiliate of Shareholder shall be treated as if they were
held by a single legal entity. Nothing in this Section 4.03(b) shall be
construed to limit the Company's right to exercise its Call Right at any time in
respect of all the Common Stock held by Shareholder at such time.
(c) Notwithstanding the provisions of Section 4.03(a), the Call Right
shall be suspended and shall not be exercisable by the Company during the
pendency of any transaction described in Section 4.02(a)(iv) following the time
at which the Company shall publicly announce or otherwise disclose to
Shareholder that the Board of Directors of the Company does not oppose such
transaction.
(d) Any purchase of Common Stock by the Company pursuant to this Section
4.03 shall be on a mutually determined closing date which shall not be more than
30 days after delivery of the Call Notice. The closing shall be held at 10:00
a.m., local time, at the principal office of the Company, or at such other time
or place as the parties mutually agree.
(e) On the closing date, Shareholder shall deliver (i) certificates
representing the shares of Common Stock being sold, free and clear of any lien,
claim or encumbrance, and (ii) such other documents, including evidence of
ownership and authority, as the Company may reasonably request. The Call Price
shall be paid by wire transfer of immediately available funds no later than 2:00
p.m., local time, on the closing date.
9
13
SECTION 4.04. Right of First Refusal. (a) If Shareholder desires to
transfer any shares of Common Stock (including Common Stock issuable upon
conversion or redemption of the Convertible Preferred Stock) pursuant to Section
4.02(a)(ii) or shares of Convertible Preferred Stock pursuant to Section
4.02(a)(iii), Shareholder shall give prompt written notice (the "Transfer
Notice") to the Company of such intention, specifying the number of shares of
Common Stock or Convertible Preferred Stock proposed to be transferred (the
"Offered Shares"). The Transfer Notice shall constitute an irrevocable offer
(the "Offer") by Shareholder to sell to the Company the Offered Shares at a
price (the "Offer Price") equal to (x) in the case of the Convertible Preferred
Stock, the aggregate price specified by Shareholder in the Transfer Notice and
(y) in the case of the Common Stock, the aggregate Fair Market Value of such
Offered Shares on the date of delivery of the Transfer Notice. The Company shall
have the right, exercisable by written notice given by the Company to
Shareholder within 30 days after receipt of such Transfer Notice, to purchase
(or to cause a person or group designated by the Company to purchase) all, but
not a part of, the Offered Shares specified in such Transfer Notice for cash at
the Offer Price by delivery of a notice (the "Exercise Notice") to Shareholder
stating the Company's irrevocable acceptance of the Offer.
(b) If the Company elects to purchase the Offered Shares, the closing of
the purchase of the Offered Shares shall take place on a mutually acceptable
closing date which shall be not more than 30 days after delivery of the Exercise
Notice. The closing shall be held at 10:00 a.m., local time, at the principal
office of the Company or at such other time or place as the parties mutually
agree.
(c) On the closing date, Shareholder shall deliver (or cause to be
delivered) (i) certificates representing the Offered Shares, free and clear of
any lien, claim or encumbrance, and (ii) such other documents, including
evidence of ownership and authority, as the Company may reasonably request. The
Offer Price shall be paid by wire transfer of immediately available funds no
later than 2:00 p.m., local time, on the closing date.
(d) If the Company fails to elect to purchase the Offered Shares within
the period specified in Section 4.03(a), (i) Shareholder shall be free, during
the period of 90 days following the expiration of such period, to transfer any
portion of or all the Offered Shares pursuant to Section 4.02(a)(ii) or
4.02(a)(iii), as the case may be, and (ii) the Company shall not be entitled to
exercise its Call Right with respect to the Offered Shares during the period
from the date of the Transfer Notice to the end of such 90-day period. Offered
Shares not so transferred within such 90-day period shall again become subject
to the procedures provided for in this Section 4.04 and to the Call Right.
Notwithstanding the foregoing, in the case
10
14
of any proposed transfer of any portion or all of the Offered Shares pursuant to
Section 4.02(a)(ii)(B) under Rule 144 at a price (the "Reduced Offer Price")
less than 95% of the Offer Price, Shareholder shall first offer such Offered
Shares to the Company by notice (oral or written) to the Senior Vice President
and Senior Associate General Counsel of PaineWebber Incorporated made during
regular business hours. The Company shall have the right, exercisable by the
close of business on the immediately following Business Day after receipt of
such notice from Shareholder, to purchase all, but not a part of, such Offered
Shares at the Reduced Offer Price. If the Company does not elect to purchase
such Offered Shares, Shareholder may transfer such Offered Shares under Rule 144
pursuant to Section 4.02(a)(ii)(B) at a price equal to or above the Reduced
Offer Price, provided that any Offered Shares not so transferred within ten
Business Days shall again become subject to the procedures provided for in this
Section 4.04(d).
SECTION 4.05. Assignment. The Company may assign any of its rights under
Section 4.03 or 4.04 to any person without the consent of Shareholder; provided
that no such assignment shall relieve the Company of any of its obligations
pursuant to Section 4.03 or 4.04. In the event that the Company elects to
exercise a right under Section 4.03 or 4.04, the Company may specify in its Call
Notice or Exercise Notice, as applicable, or thereafter prior to purchase,
another such person as its designee to purchase the Offered Shares to which such
Call Notice or Exercise Notice, as applicable, relates.
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Registration upon Request. (a) From and after the first
anniversary of the date of effectiveness of this Agreement, Parent shall have
the right to make written demand upon the Company, on not more than five
separate occasions (subject to the provisions of this Section 5.01), to register
under the 1933 Act (i) shares of Redeemable Preferred Stock, (ii) shares of
Common Stock issued to Shareholder pursuant to the Share Purchase Agreement,
acquired upon conversion of the Convertible Preferred Stock, or acquired in
accordance with Section 6.01 of this Agreement or (iii) at any time after
December 16, 1999, shares of Convertible Preferred Stock (the shares subject to
such demand hereunder being referred to as the "Subject Stock"), and the Company
shall use its best efforts to cause such shares to be registered under the 1933
Act as soon as reasonably practicable so as to permit the sale thereof promptly;
provided that each such demand shall cover at least (A) $50,000,000 liquidation
preference of Redeemable Preferred Stock, (B) $100,000,000 liquidation
preference of
11
15
Convertible Preferred Stock or (C) 5,000,000 shares of Common Stock, in the case
of the first such demand relating to Common Stock, or 2,500,000 shares of Common
Stock in any subsequent demand relating to Common Stock (subject in each case to
adjustment for stock splits, reverse stock splits, stock dividends and similar
events after the date hereof), as the case may be. In connection therewith, the
Company shall as promptly as practicable prepare, file (on Form S-3 if permitted
or otherwise on the appropriate form) and use its best efforts to cause to
become effective a registration statement under the 1933 Act to effect such
registration. Parent and Shareholder agree to provide all such information and
materials and to take all such action as may be reasonably required in order to
permit the Company to comply with all applicable requirements of the 1933 Act
and the Commission and to obtain any desired acceleration of the effective date
of such registration statement.
(b) Notwithstanding the provisions of Section 5.01(a) and 5.01(c), the
Company (i) shall not be obligated to prepare or file more than one registration
statement pursuant to this Section 5.01 during any 12-month period and (ii)
shall be entitled to postpone the filing of any registration statement otherwise
required to be prepared and filed by the Company pursuant to Section 5.01(a) (A)
for a period of up to 60 days following completion of any underwritten public
offering of securities contemplated by the Company prior to receipt of a demand
for registration hereunder, provided that the Company is advised by its managing
underwriter or underwriters in writing (with a copy to Shareholder), that the
price at which securities would be offered in such offering would, in its or
their opinion, be materially adversely affected by the registration so
requested, or (B) for a period of up to 135 days if the Company determines in
its reasonable judgment and in good faith that the registration and distribution
of the shares of Subject Stock would impair or interfere with in any material
respect any contemplated material financing, acquisition, disposition, corporate
reorganization or other similar transaction or other material corporate
development involving the Company or any of its subsidiaries or Affiliates or
would require premature disclosure thereof, and such disclosure is not
practicable in the Company's reasonable judgment in light of the facts and
circumstances then existing or would impair or interfere with in any material
respect such transaction or would otherwise materially adversely affect the
Company. In the event of such postponement, Parent shall have the right to
withdraw the request for registration by giving written notice to the Company
within 20 days after receipt of notice of postponement and, in the event of such
withdrawal, such request shall not be counted for purposes of determining the
number of registrations to which Parent is entitled pursuant to this Section
5.01.
(c) In addition to the rights of Parent set forth in Section 5.01(a), if
at any time the Company shall exercise its right pursuant to paragraph (5)(d) of
the
12
16
Certificate of Designation of Rights and Preferences for the Convertible
Preferred Stock to deliver shares of Common Stock in lieu of cash in payment of
the redemption price for any shares of Convertible Preferred Stock, Parent shall
have the right, exercisable within 30 days following receipt of notice of such
redemption for Common Stock, to make an additional written demand upon the
Company to register under the 1933 Act any or all shares of Common Stock
received in connection with such redemption, and the Company shall use its best
efforts to cause such shares to be registered under the 1933 Act as soon as
reasonably practicable so as to permit the sale thereof promptly, subject to the
provisions of Section 5.01(b).
(d) Except in accordance with the provisions of the Amended and Restated
Investment Agreement (the "Yasuda Agreement") dated as of November 5, 1992,
between the Company and The Yasuda Mutual Life Insurance Company ("Yasuda"), the
Company shall not grant to any other holder of its securities, whether currently
outstanding or issued in the future, any incidental or piggyback registration
rights with respect to any registration statement filed pursuant to a demand
registration under this Section 5.01 and, except as aforesaid with respect to
the rights of Yasuda, without the prior consent of Parent, the Company will not
permit any holder of its securities other than Yasuda to participate in any
offering made pursuant to a demand registration under this Section 5.01.
SECTION 5.02. Incidental Registration Rights. If the Company proposes to
register any of its Common Stock under the 1933 Act (other than (i) pursuant to
Section 5.01 hereof, (ii) securities to be issued pursuant to a stock option or
other employee benefit or similar plan, or (iii) securities proposed to be
issued in exchange for securities or assets of, or in connection with a merger
or consolidation with, another corporation) the Company shall, as promptly as
practicable, give written notice to Parent of the Company's intention to effect
such registration. If, within 15 days after receipt of such notice, Parent
submits a written request to the Company specifying the amount of Common Stock
that it proposes to sell or otherwise dispose of in accordance with this Section
5.02, the Company shall use its best efforts to include the shares specified in
Parent's request in such registration. If in a registration other than pursuant
to Section 2.3 of the Yasuda Agreement, the managing underwriters reasonably
determine in good faith and advise Shareholder in writing that the inclusion in
the registration statement of all the Common Stock proposed to be included would
interfere with the successful marketing and sale of the securities proposed to
be registered, then the amount of Common Stock to be registered by Parent
pursuant to this Section 5.02 shall be reduced to the amount, if any, determined
by the managing underwriters in good faith that would not interfere with such
marketing and sale, provided that if securities are being offered for the
account of any Person other
13
17
than the Company, then the amount of securities of such other Person and
Shareholder shall be reduced proportionately based on the number of securities
each such Person requested to be included in the offering. If in a registration
pursuant to Section 2.3 of the Yasuda Agreement, Yasuda advises the Company that
in Yasuda's reasonable judgment registration of the Shareholder's shares of
Common Stock would adversely affect the offering and sale of its securities
under the Yasuda Agreement, then the number of Shareholder's shares of Common
Stock to be included in such offering shall be reduced to the amount, if any,
determined by Yasuda in its reasonable judgment, that would not adversely affect
such offering and sale. No registration effected under this Section 5.02 shall
relieve the Company of its obligation to effect any registration upon request
under Section 5.01. If Shareholder has been permitted to participate in a
proposed offering pursuant to this Section 5.02, the Company thereafter may
determine either not to file a registration statement relating thereto, or to
withdraw such registration statement, or otherwise not to consummate such
offering, without any liability hereunder.
SECTION 5.03. Broad Public Distribution; Lead Manager. (a) The Company
shall be required to register Subject Stock that is Common Stock pursuant to
this Article V only if such Common Stock is to be offered and sold in a Broad
Public Distribution.
(b) The Company shall be required to register Subject Stock pursuant to
this Article V only if such Subject Stock is to be offered and sold in an
underwritten distribution lead-managed by the Company's principal broker-dealer
subsidiary, provided that, in the reasonable judgment of Parent, the proposed
terms of offering by such subsidiary are customary and reasonably competitive
and provided further that Parent in all cases shall have the right to designate
a non-book-running co-lead manager for any such offering.
SECTION 5.04. Registration Mechanics. (a) In connection with any offering
of shares of Subject Stock registered pursuant to Section 5.01 or 5.02 herein,
the Company shall (i) furnish to Shareholder such number of copies of any
prospectus (including preliminary and summary prospectuses) and conformed copies
of the registration statement (including amendments or supplements thereto and,
in each case, all exhibits) and such other documents as it may reasonably
request, but only while the Company shall be required under the provisions
hereof to cause the registration statement to remain current; (ii) (A) use its
best efforts to register or qualify the Subject Stock covered by such
registration statement under such blue sky or other state securities laws for
offer and sale as Shareholder shall reasonably request and (B) keep such
registration or qualification in effect for so long as the registration
statement remains in effect; provided that the Company shall not be obligated to
qualify to do business as a foreign corporation under the
14
18
laws of any jurisdiction in which it shall not then be qualified or to file any
general consent to service of process in any jurisdiction in which such a
consent has not been previously filed or subject itself to taxation in any
jurisdiction wherein it would not otherwise be subject to tax but for the
requirements of this Section 5.04; (iii) use its best efforts to cause all
shares of Subject Stock covered by such registration statement to be registered
with or approved by such other federal or state government agencies or
authorities as may be necessary in the opinion of counsel to the Company to
enable Shareholder to consummate the disposition of such shares of Subject
Stock; (iv) notify Shareholder any time when a prospectus relating thereto is
required to be delivered under the 1933 Act upon discovery that, or upon the
happening of any event 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 under which they were made, and (subject to the good faith
determination of the Company's Board of Directors as to whether to permit sales
under such registration statement), at the request of Shareholder promptly
prepare and furnish to it 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 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 under which they were made; (v)
otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC; (vi) use its best efforts to list, if required by the
rules of the applicable securities exchange or, if securities of the same class
are then so listed, the Subject Stock covered by such registration statement on
the NYSE or on any other securities exchange on which Subject Stock is then
listed; (vii) before filing any registration statement or any amendment or
supplement thereto, and as far in advance as is reasonably practicable, furnish
to Shareholder and its counsel copies of such documents; and (viii) furnish to
Shareholder, addressed to it, an opinion of counsel for the Company, dated the
date of the closing under the underwriting agreement relating to any
underwritten offering covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) as are
customarily covered in opinions of counsel delivered to underwriters in
underwritten public offerings of securities.
(b) In connection with any offering of Subject Stock registered pursuant
to Section 5.01 or 5.02, the Company shall (x) furnish to the underwriter, if
any, unlegended certificates representing ownership of the Subject Stock being
sold in such denominations as requested and (y) instruct any transfer agent and
registrar of the Subject Stock to release any stop transfer orders with respect
to such Subject Stock.
15
19
(c) At any time that Parent shall not be entitled to designate a nominee
for election to the Board of Directors pursuant to Section 3.02, in connection
with the preparation and filing of each registration statement registering
Subject Stock under the 1933 Act, the Company will give Shareholder and the
underwriters, if any, and their respective counsel and accountants
(collectively, the "Inspectors"), such reasonable and customary access to its
books and records (collectively, the "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 Shareholder and such underwriters or their respective counsel,
to conduct a reasonable investigation within the meaning of the 1933 Act.
Records which the Company reasonably determines to be confidential and which it
notifies the Inspectors in writing are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary or
appropriate to avoid or correct a misstatement or omission in the registration
statement, (ii) the portion of the Records to be disclosed has otherwise become
publicly known, (iii) the information in such Records is to be used in
connection with any litigation or governmental investigation or hearing relating
to any registration statement or (iv) the release of such Records is ordered
pursuant to a subpoena or other order. Shareholder agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company.
(d) Upon any registration becoming effective pursuant to Section 5.01, the
Company shall use its best efforts to keep such registration statement current
for a period of 90 days or such shorter period as shall be necessary to effect
the distribution of the Subject Stock.
(e) Shareholder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in clause (iv) of Section
5.04(a), it will forthwith discontinue its disposition of Subject Stock pursuant
to the registration statement relating to such Subject Stock until its receipt
of the copies of the supplemented or amended prospectus contemplated by clause
(iv) of Section 5.03(a) and, if so directed by the Company, will deliver to the
Company all copies then in its possession of the prospectus relating to such
Subject Stock current at the time of receipt of such notice. If Shareholder's
disposition of Subject Stock is discontinued pursuant to the foregoing sentence,
unless the Company thereafter extends the effectiveness of the registration
statement to permit dispositions of Subject Stock by Shareholder for an
aggregate of 90 days, whether or not consecutive, the registration statement
shall not be counted for purposes of determining the number of registrations to
which Shareholder is entitled pursuant to Section 5.01.
16
20
SECTION 5.05. Expenses. In connection with any registration pursuant to
this Article V (i) Shareholder shall pay all agent fees and commissions and
underwriting discounts and commissions related to shares of Subject Stock being
sold by Shareholder and the fees and disbursements of its counsel and
accountants and (ii) the Company shall pay all fees and disbursements of its
counsel and accountants and the expenses (including the fees of any separate
counsel) of any "qualified independent underwriter" required in accordance with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. All other fees and expenses in connection with any registration statement
(including, without limitation, all registration and filing fees, all printing
costs, all fees and expenses of complying with securities or blue sky laws)
shall (i) in the case of a registration pursuant to Section 5.01, be borne by
Shareholder and (ii) in the case of a registration pursuant to Section 5.02, be
shared pro rata based upon the respective market values of the securities to be
sold by the Company, Shareholder and any other holders participating in such
offering; provided that Shareholder shall not pay any expenses relating to work
that would otherwise be incurred by the Company including, but not limited to,
the preparation and filing of periodic reports with the Commission.
SECTION 5.06. Indemnification and Contribution. In the case of any
offering registered pursuant to this Article V, the Company agrees to indemnify
and hold Shareholder, each underwriter, if any, of the Subject Stock under such
registration and each person who controls any of the foregoing within the
meaning of Section 15 of the 1933 Act, and any officer, employee or partner of
the foregoing, harmless against any and all losses, claims, damages, or
liabilities (including reasonable legal fees and other reasonable expenses
incurred in the investigation and defense thereof) to which they or any of them
may become subject under the 1933 Act or otherwise (collectively "Losses"),
insofar as any such Losses shall arise out of or shall be based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement relating to the sale of such Subject Stock (as amended if
the Company shall have filed with the SEC any amendment thereof), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the prospectus relating to the sale of such Subject Stock (as
amended or supplemented if the Company shall have filed with the SEC any
amendment thereof or supplement thereto), or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided that the indemnification contained in this Section 5.06 shall not apply
to such Losses which shall arise out of or shall be based upon any such untrue
statement or alleged untrue statement, or any such omission or alleged omission,
which shall have been made in reliance upon and in conformity with
17
21
information furnished in writing to the Company by Shareholder or any such
underwriter, as the case may be, specifically for use in connection with the
preparation of the registration statement or prospectus contained in the
registration statement or any such amendment thereof or supplement therein.
Notwithstanding the foregoing provisions of this Section 5.06, the Company
will not be liable to Shareholder, any person who participates as an underwriter
in the offering or sale of Subject Stock or any other person, if any, who
controls Shareholder or any underwriter (within the meaning of the 1933 Act),
under the indemnity agreement in this Section 5.06 for any such Losses that
arise out of Shareholder or other person's failure to send or give a copy of the
final prospectus to the person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of the Subject Stock to such person if such statement
or omission was corrected in such final prospectus and the Company has
previously furnished copies thereof in accordance with this Agreement.
In the case of each offering registered pursuant to this Article V, Parent
shall, or shall cause General Electric Capital Services, Inc. or another member
of the Financial Services Group, reasonably satisfactory to the Company (the
"Parent Indemnitor") to, agree and each underwriter, if any, participating
therein shall agree, substantially in the same manner and to the same extent as
set forth in the preceding paragraph, severally to indemnify and hold harmless
the Company and each person who controls the Company within the meaning of
Section 15 of the 1933 Act, and any director, officer, employee or partner of
the Company, with respect to any statement in or omission from such registration
statement or prospectus contained in such registration statement (as amended or
as supplemented, if amended or supplemented as aforesaid) if such statement or
omission shall have been made in reliance upon and in conformity with
information furnished in writing to the Company by Parent, Shareholder or such
underwriter, as the case may be, specifically for use in connection with the
preparation of such registration statement or prospectus contained in such
registration statement or any such amendment thereof or supplement thereto.
Each party indemnified under this Section 5.06 shall, promptly after
receipt of notice of the commencement of any claim against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The failure of any
indemnified party to so notify an indemnifying party shall not relieve the
indemnifying party from any liability in respect of such action which it may
have to such indemnified party on account of the indemnity contained in this
Section 5.06, unless (and only to the extent) the indemnifying party was
prejudiced by such failure, and in no event shall such failure relieve the
indemnifying party from
18
22
any other liability which it may have to such indemnified party. In case any
action in respect of which indemnification may be sought hereunder shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, jointly with any
other indemnifying party similarly notified, to assume the defense thereof
through counsel reasonably satisfactory to the indemnified party, and 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 under this Section 5.06 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation (unless (i) such
indemnified party reasonably objects to such assumption on the grounds that
there may be defenses available to it which are different from or in addition to
those available to such indemnifying party, (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel or
(iii) in the reasonable opinion of such indemnified party representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding, in which case the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in connection with
retaining separate legal counsel). No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such claim or proceeding.
If the indemnification provided for in this Section 5.06 is unavailable to
an indemnified party or is insufficient to hold such indemnified party harmless
from any Losses in respect of which this Section 5.06 would otherwise apply by
its terms (other than by reason of exceptions provided herein), then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall have a joint and several obligation to contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative benefits received by and fault of the
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the offering to which such contribution relates as well
as any other relevant equitable considerations. The relative benefit shall be
determined by reference to, among other things, the amount of proceeds received
by each party from the offering to which such contribution relates. The relative
fault shall be determined by reference to, among other things, each party's
relative knowledge and access to
19
23
information concerning the matter with respect to which the claim was asserted,
and the opportunity to correct and prevent any statement or omission. The amount
paid or payable by a party as a result of any Losses shall be deemed to include
any legal or other fees or expenses incurred by such party in connection with
any investigation or proceeding, to the extent such party would have been
indemnified for such expenses if the indemnification provided for in this
Section 5.06 was available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.06 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
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.
SECTION 5.07. Underwriting Agreement. (a) In connection with any
underwritten offering of Subject Stock pursuant to a registration requested
under Section 5.01, the Company, the Parent Indemnitor and Shareholder will
enter into an underwriting agreement with the underwriters for such offering,
such agreement to contain such representations and warranties by the Company,
the Parent Indemnitor and Shareholder and such other terms and provisions as are
customarily contained in the underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 5.06 (and customary provisions
with respect to indemnities and contribution by such underwriters).
(b) In connection with any underwritten offering of Subject Stock pursuant
to a registration requested under Section 5.02, the Company may require the
Common Stock requested to be registered pursuant to Section 5.02 to be included
in such underwriting on the same terms and conditions as shall be applicable to
Common Stock being sold by the Company through underwriters under such
registration. In such case, the Parent Indemnitor and Shareholder shall be a
party to any such underwriting agreement. Such agreement shall contain such
representations, warranties and covenants by the Parent Indemnitor and
Shareholder and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Section 5.06 (and customary provisions with respect to indemnities
and contribution by such underwriters).
20
24
ARTICLE 6
SHAREHOLDER PURCHASE RIGHTS
SECTION 6.01. Shareholder Purchase Rights. (a) If, immediately after
giving effect to and as a result of any issuance of Voting Securities by the
Company, Parent shall beneficially own Common Stock representing less than the
Equity Treatment Percentage of the total number of shares of Common Stock then
outstanding (it being understood for all purposes of this Agreement that any
shares of Common Stock beneficially owned by Xxxxxx, Xxxxxxx & Co. Incorporated
shall not be considered to be outstanding so long as it is a subsidiary of the
Company) and, at such time, Parent accounts for such ownership of Common Stock
in accordance with the equity method of accounting, Parent shall have the right
to acquire, at any time or from time to time thereafter, in the open market or
in private transactions, a number of shares of Common Stock in the aggregate
equal to the excess of (x) the number of shares representing the Equity
Treatment Percentage of the then outstanding Common Stock over (y) the number of
shares of Common Stock then beneficially owned by Parent (including any shares
of Common Stock acquired by Shareholder pursuant to Section 6.01(b)).
(b) If, immediately after giving effect to and as a result of any issuance
of stock by the Company after the date hereof, the Company shall not be a 20-
percent owned corporation of the Shareholder and immediately prior thereto the
Company was a 20-percent owned corporation of the Shareholder, Shareholder shall
have the right to acquire at any time or from time to time thereafter, in the
open market or in private transactions, a number of shares of Common Stock
sufficient (together with any shares acquired pursuant to Section 6.01(a)) to
enable Shareholder to treat the Company as a 20-percent owned corporation. For
purposes of this paragraph (b), (i) the term "stock" shall have the same meaning
as in Section 243(c)(2) of the Code as in effect on the date hereof, and (ii)
all shares of stock of the Company held by Shareholder or any Affiliate of
Shareholder shall be treated as if they were held by a single legal entity.
ARTICLE 7
MISCELLANEOUS
SECTION 7.01. Termination. This Agreement shall terminate upon (a) the
written agreement of the Company, Shareholder and Parent to terminate this
Agreement; or (b) the earlier of (i) December 16, 2009 and (ii) the third
anniversary of the date on which Parent and its Affiliates shall no longer
beneficially own any Voting Securities. The provisions of Articles 3 and 4 of
this
21
25
Agreement shall terminate upon any failure by the Company to observe and perform
its obligations under Section 3.02.
SECTION 7.02. Financial Services Group. Notwithstanding any other
provision of this Agreement, nothing contained herein shall apply to any Voting
Securities held in any Third Party Account, and any such Voting Securities shall
not be counted for purposes of this Agreement as being owned by Parent or any of
its Affiliates.
SECTION 7.03. Legend. (a) All certificates representing Common Stock
subject to this Agreement shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND NEITHER THE SHARES NOR ANY
INTEREST THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT DATED AUGUST 6, 1997 (A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDES,
AMONG OTHER THINGS, FOR CERTAIN RIGHTS OF PURCHASE OF SUCH SHARES BY
THE COMPANY AND CERTAIN RESTRICTIONS ON TRANSFER THEREOF. ANY SALE
OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT SHALL BE
VOID."
(b) All certificates representing Preferred Stock subject to this
Agreement shall bear the following legend, in addition to the legend (with the
date appropriately completed) which such certificates currently bear (and, on
such date as this Agreement shall become effective, Shareholder will submit such
certificates to the Company to be so legended):
"THE STOCKHOLDERS AGREEMENT DATED AS OF DECEMBER 16, 1994 HAS BEEN
AMENDED AND RESTATED EFFECTIVE AUGUST __, 1997. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT DATED AUGUST 6, 1997 (A COPY OF
WHICH
22
26
IS ON FILE WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDES, AMONG
OTHER THINGS, FOR CERTAIN RIGHTS OF PURCHASE OF SUCH SHARES BY THE
COMPANY AND CERTAIN RESTRICTIONS ON TRANSFER THEREOF. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT SHALL BE VOID."
SECTION 7.04. Specific Performance. (a) Parent and Shareholder, on the one
hand, and the Company, on the other, acknowledge and agree that irreparable
damage would occur if any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. Accordingly,
the parties will be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically its provisions in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they may be entitled at law or in equity.
(b) Parent and Shareholder, on the one part, and the Company, on the other
part, each irrevocably agrees that any legal action or proceeding against it
with respect to this Agreement and any transaction contemplated by this
Agreement may be brought in the courts of the State of New York, or of the
United States of America for the Southern District of New York, and by execution
and delivery of this Agreement Shareholder, Parent and the Company each
irrevocably submits to the jurisdiction of such court and irrevocably
designates, appoints and empowers the Secretary of State of the State of New
York to receive for and on its behalf service of process in the State of New
York and further irrevocably consents to the service or process outside of the
territorial jurisdiction of such courts by mailing copies by registered United
States mail, postage prepaid, to its address specified in this Agreement.
SECTION 7.05. Entire Agreement. The Transaction Documents (other than the
Stockholders Agreement) and the documents referred to therein, the Share
Purchase Agreement and the documents referred to therein and this Agreement
constitute the entire agreement and understanding of the parties with respect to
the transactions contemplated by such parties. This Agreement may be amended
only by an agreement in writing executed by the Company and Parent.
SECTION 7.06. Severability. If any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable, the remaining provisions
shall remain in full force and effect. It is declared to be the intention of the
parties that they would have executed the remaining provisions without including
any that may be declared unenforceable.
23
27
SECTION 7.07. Headings. Descriptive headings are for convenience only and
will not control or affect the meaning or construction of any provision of this
Agreement.
SECTION 7.08. Counterparts. For the convenience of the parties, any number
of counterparts of this Agreement may be executed by the parties, and each such
executed counterpart will be an original instrument.
SECTION 7.09. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier or air courier
guaranteeing overnight delivery:
(a) If to the Company, to:
Xxxxx Xxxxxx Group Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
(with copies to):
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 212-474-3700
(b) If to Shareholder (including any other subsidiary of Parent to which
shares of Common Stock or Preferred Stock are transferred pursuant to Section
4.02(a)(i)) or Group, to:
General Electric Capital Services, Inc.
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
(with copies to):
Parent
24
28
(c) If to Parent, to:
General Electric Company
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Senior Counsel for Transactions
Telecopy: 000-000-0000
(with copies to):
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
or to such other person or address as any party shall furnish to each
other party hereto in writing.
All such notices, requests, demands and other communications shall be
deemed to have been duly given: at the time of delivery by hand, if personally
delivered; five business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
SECTION 7.10. Successors and Assigns. This Agreement shall bind the
successors and assigns of the parties, and inure to the benefit of any successor
or assign of any of the parties; provided that, except as provided in Section
4.05, no party may assign this Agreement without the other party's prior written
consent.
SECTION 7.11. Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without giving effect to the conflict of laws principles thereof.
SECTION 7.12. Compliance by Affiliates. Subject to Section 7.02, Parent
shall, and shall cause its Affiliates to, observe and perform all covenants and
agreements of Parent and Shareholder set forth in this Agreement as if such
covenants and agreements were directly applicable to Parent and such Affiliates.
SECTION 7.13. Reports. So long as Shareholder shall own any Voting
Securities, the Company will furnish Shareholder with the quarterly and annual
financial reports that the Company is required to file with the Commission
25
29
pursuant to Section 13 or Section 15(d) of the 1934 Act or, in the event the
Company is not required to file such reports, reports containing the same
information as would be required in such reports.
SECTION 7.14. Fair Market Value Determination. So long as Shareholder
shall own any Convertible Preferred Stock, if Parent shall object to any
determination of the fair market value of noncash consideration made by the
Board of Directors of the Company in accordance with paragraph (7)(g)(ii) of the
Certificate of Designation of Rights and Preferences for such Convertible
Preferred Stock, the parties shall negotiate in good faith in order to agree on
such fair market value. If the parties are unable to agree on such fair market
value within 30 days, the Board of Directors of the Company shall retain a
nationally recognized investment banking firm reasonably satisfactory to Parent
to determine such fair market value. The fees and expenses of such investment
banking firm shall be shared equally by Parent and the Company. Parent shall be
notified promptly of any consideration other than cash subject to any such
determination and furnished with a description of the consideration and the fair
market value thereof, as determined by the Board of Directors of the Company.
SECTION 7.15. Aggregation; Definition of Shareholder. For purposes of this
Agreement, all shares of Voting Securities and Redeemable Preferred Stock held
by each Shareholder shall be treated as if they were held by a single legal
entity. Each reference to Shareholder, where the context so requires, shall be
deemed to be a reference to Parent or the relevant subsidiary or subsidiaries of
Parent which holds Voting Securities.
SECTION 7.16. Effectiveness. This Agreement shall become effective
immediately upon consummation of the sale of the capital stock of Xxxxxx,
Xxxxxxx & Co. Incorporated pursuant to the Share Purchase Agreement, without any
further action by any of the parties hereto, and shall be of no force or effect
until such time.
26
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized on the date
first above written.
XXXXX XXXXXX GROUP INC.
By: /s/ F. Xxxxxx Xxxxxxx
-----------------------------------------
Name: F. Xxxxxx Xxxxxxx
Title: Senior Vice President and
Senior Associate General Counsel
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President and Senior
Counsel for Transactions
GENERAL ELECTRIC CAPITAL
SERVICES, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: Vice President and Controller
GENERAL ELECTRIC
CAPITAL CORPORATION
By: /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: Vice President and Controller
XXXXXX, PEABODY GROUP INC.
By: /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
