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EXHIBIT K
SECOND AMENDED AND RESTATED GOVERNANCE AGREEMENT
This Second Amended and Restated Governance Agreement, dated as of
December 22, 1998, among Xxxx International Holdings, Inc., a Delaware
corporation (the "Company"), LIH Holdings, LLC, a Delaware limited liability
company ("LIH"), LIH Holdings II, LLC, a Delaware limited liability company
("LIH II"), and LIH Holdings III, LLC, a Delaware limited liability company
("LIH III"; LIH, LIH II and LIH III are referred to collectively herein as the
"LIH Entities");
WITNESSETH:
WHEREAS, Xxxxx X. Xxxx ("Xxxx") and LIH entered into a stock purchase
agreement (the "Stock Purchase Agreement"), dated September 9, 1997, pursuant to
which, among other things, subject to the terms and conditions contained in the
Stock Purchase Agreement, LIH acquired LIH from Xxxx, his family and certain
entities related thereto, at the closing of such purchase and sale (the
"Closing"), Beneficial Ownership of shares of common stock, par value $.10 per
share, of the Company ("Common Stock"), aggregating 1,686,893 shares of Common
Stock (the "Shares"), constituting approximately 38.4% of the Common Stock
outstanding as of the date thereof, and
WHEREAS, Xxxx and LIH received Board approval of the acquisition of Shares
for purposes of Section 203 of the Delaware General Corporation Law; and
WHEREAS, as a condition to such approval, a special committee formed by
the Board and the Board required that certain arrangements be put in place
relating to the acquisition and disposition of securities of the Company by LIH
and its Affiliates and
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related provisions concerning LIH's relationship with the Company, negotiated
the terms of that certain Governance Agreement, dated September 9, 1997 (the
"Initial Governance Agreement") and, subject to execution and delivery of the
Initial Governance Agreement, gave its approval under Section 203 of the
Delaware General Corporation Law and implemented the arrangements contemplated
by the Initial Governance Agreement; and
WHEREAS, the Company and LIH entered, executed and delivered the Initial
Governance Agreement and the Initial Governance Agreement has been in effect
since September 9, 1997 as amended, supplemented and modified to the date
hereof, and
WHEREAS, pursuant to the provisions of Section 1.01(a)(i) of the Initial
Governance Agreement, LIH or its Affiliates or Associates may acquire securities
from the Company, provided that such acquisition is approved by the affirmative
vote of a majority of the Independent Directors; and
WHEREAS, LIH II and the Company entered into an Investment Agreement,
dated November 25, 1997 (the "LIH II Investment Agreement"), providing for the
purchase from the Company by LIH II of 874,400 shares of Common Stock and
1,493,398 shares of the Company's Series A Preferred Stock, par value $.01 per
share (the "Preferred Shares"), which Preferred Shares were subsequently
converted into shares of the Company's Class B-1 Common Stock (the "Class B-1
Common Stock"; and such shares of Class B-I Common Stock together with 874,400
shares of Common Stock are collectively referred to as the "LIH II Shares"); and
WHEREAS, as a condition to approval of the LIH II Investment Agreement by
the Independent Directors, the Independent Directors approved the Amended and
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Restated Governance Agreement, dated November 25, 1997 (the "First Amendment"),
which was executed by the Company, LIH and LIH II; and
WHEREAS, (x) LIH III desires to purchase additional shares of capital
stock from the Company (the "LIH III Shares") as more fully set forth in (i)
that certain Investment Agreement, dated as of December 22, 1998, relating to
the acquisition of the Ventshade Holdings, Inc. (the "Auto Ventshade Investment
Agreement") and (ii) that certain Investment Agreement, dated as of December 22,
1998, relating to the acquisition of the Smittybilt, Inc. (the "Smittybilt
Investment Agreement;" and together with the Auto Ventshade Investment
Agreement, the "1998 Investment Agreements") and the Company desires to sell
such shares of capital stock to LIH III and, as a condition thereto, the
Company, LIH, LIH II and LIH III desire to enter into this Second Amended and
Restated Governance Agreement which amends and restates the First Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
Company, LIH, LIH II and LIH III hereby agree as follows:
ARTICLE I
STANDSTILL AND VOTING
Section 1.01. Acquisition of Voting Securities.
(a) Until the Standstill Termination Date, each of the LIH Entities
severally covenants and agrees that it will not take any action or omit to take
any action to allow the aggregate number of Voting Securities Beneficially Owned
by the LIH Entities and their respective Affiliates and Associates to exceed the
number of Permitted Shares,
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provided that, (i) this Agreement shall not restrict any acquisition of Voting
Securities in a transaction directly with the Company and approved in accordance
with the provisions of Section 2.03(b) hereof (including, without limitation,
the acquisition of Voting Securities by any LIH Director or any LIH II Director
by reason of the grant of stock options by the Company to all directors); and
(ii) if a bona fide tender or exchange offer is made by any Person (other than
the Company, any of the LIH Entities or an Affiliate or Associate of any of the
LIH Entities, or any Person acting in concert with any of the LIH Entities or
any of their respective Affiliates or Associates, and other than any acquisition
or proposed acquisition of Voting Securities that intentionally has been
induced, in whole or in part and directly or indirectly by any LIH Entity in
order to permit the acquisition by an LIH Entity or its Affiliates and
Associates of Voting Securities under this paragraph (a)) to purchase
outstanding shares of Voting Securities representing 50% or more of the Total
Voting Power and such offer is not withdrawn or terminated prior to any LIH
Entity commencing a tender offer or exchange offer, then any LIH Entity may
commencing a tender or exchange offer for all Voting Securities not owned by the
LIH Entities and their Affiliates and Associates, and this Agreement shall not
prohibit the acquisition of Voting Securities pursuant to such tender or
exchange offer.
(b) Subject to the proviso in Section 1.01(a) hereof and any waiver or
approval in accordance with the provisions of Section 5.02(a) hereof, if at any
time the LIH Entities and their Affiliates and Associates Beneficially Own more
than the Permitted Shares, inadvertently or otherwise, then each LIH Entity
shall promptly take all action necessary to reduce the amount of Voting
Securities Beneficially Owned by such
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Persons to an amount not greater than the Permitted Shares,
(c) No LIH Entity shall permit any of its Affiliates or Associates to
Beneficially Own any Voting Securities unless such Person becomes a signatory to
this Agreement and a party hereunder.
Section 1.02. Limited Restrictions on Transfer. Prior to the Standstill
Termination Date, no LIH Entity, nor any Affiliate or Associate thereof which
acquires Voting Securities in accordance with the terms of this Agreement, will
Transfer Beneficial Ownership of any Voting Securities to any of their
respective Affiliates or Associates unless each such Person becomes a signatory
to this Agreement and a party hereunder. Each LIH Entity agrees to inclusion of
the following legend on certificates representing the Shares, the LIH II Shares
and the LIH III Shares:
The shares represented by this certificate and any transfer thereof are
subject to a restriction on transfer to any Affiliate or Associate of the
holder hereof as set forth in a Second Amended and Restated Governance
Agreement between the holder and the Company dated as of December 22,
1998, a copy of which is on file at the principal executive office of the
Company.
Such legend shall be placed on all certificates held by the LIH Entities
during the continuance of this Agreement.
Section 1.03. Voting. Until the Standstill Termination Date, all Voting
Securities Beneficially Owned by the LIH Entities or any Affiliate or Associate
thereof shall be voted in the election of directors, (a) in the case of election
of Independent Directors at the option of any LIH Entity, either (1) for the
election of the Independent Directors proposed by the specified committees in
accordance with Article II, or (2) in the same
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proportion as the votes cast by other holders of Voting Securities, (b) in the
case of LIH, for the LIH Director, and (c) in the case of LIH II, for the LIH II
Director.
Section 1.04. Further Restrictions on Conduct.
(a) Unless waived or approved in advance in accordance with Section
5.02(b) hereof, each of the LIH Entities severally covenants and agrees that
until the Standstill Termination Date, neither it nor any of its Affiliates or
Associates shall:
(i) initiate, propose, make, or in any way participate in, directly
or indirectly, any "solicitation" of "proxies" to vote, or seek to influence any
Person with respect to the voting of, any Voting Securities, or become a
"participant" in a "solicitation" or "election contest" (as such terms are
defined or used in Regulation 14A under the Exchange Act, as in effect on the
date hereof), in any election contest with respect to the election or removal of
the Independent Directors proposed by the specified committees in accordance
with Article II;
(ii) other than as contemplated by Section 1.01(a) solicit, offer,
seek or propose to any other Person (including without limitation the Company)
any form of merger with, tender or exchange offer for securities of, sale or
liquidation of assets of, or similar business combination transaction with or
involving the Company or its Affiliates or Associates; provided, however, the
foregoing shall not restrict any such action relating to a merger or similar
business combination with the purpose and effect of the Company or its
Affiliates and Associates acquiring the business, voting securities or assets of
another Person; or
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(iii) take any other action inconsistent with the foregoing.
Section 1.05. Reports. Until the Standstill Termination Date, each of the
LIH Entities shall deliver to the Company, promptly after any acquisition or
Transfer of Voting Securities, an accurate written report specifying the amount
and class of Voting Securities acquired or Transferred in such transaction and
the amount of each class of Voting Securities owned by it or any of its
Affiliates or Associates after giving effect to such transaction; provided,
however, that no such report need be delivered with respect to any such
acquisition or Transfer of Voting Securities by the LIH Entities that is
reported in a statement on Schedule 13D filed with the Commission and delivered
to the Company by the LIH Entities or any of their respective Affiliates or
Associates in accordance with Section 13(d) of the Exchange Act and the rules
thereunder. The Company shall be entitled to rely on such reports and statements
on Schedule 13D for all purposes of this Agreement.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. Initial Composition of Board of Directors.
(a) The number of directors comprising the Board of Directors shall be
seven.
(b) As of the date hereof, the Board of Directors shall consist of the LIH
Director set forth on Exhibit 1 hereto, the LIH II Director set forth on Exhibit
I hereto and the Company Director, two Independent Directors, the Third
Independent Director and the Fourth Independent Director, all as set forth on
Exhibit 2 hereto.
Section 2.02. Proportional Representation.
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(a) Until the Standstill Termination Date, except as indicated in
paragraph (b) below, the Company and each LIH Entity shall use their respective
best efforts to cause the composition of the Board to continue to reflect, or to
fully implement, the proportionate representation of the LIH Director, the LIH
II Director, Company Director and Independent Directors set forth in Section
2.01. At each annual meeting of stockholders following the Closing at which the
term of any Independent Director is to expire, unless such annual meeting shall
be scheduled to occur after the Standstill Termination Date, or at any time
prior to the Standstill Termination Date that a vacancy of an Independent
Director on the Board of Directors is to be filled, the identity of such
Independent Director to stand for election to the Board of Directors or to fill
the vacancy on the Board, as the case may be, shall be determined in the
following manner:
(i) If the term of any Third Independent Director expires or such
position on the Board becomes vacant, the Third Independent Director Nominating
Committee shall propose to the Board of Directors a person to serve as the Third
Independent Director on the slate to be recommended by the Board of Directors or
to fill such vacancy.
(ii) If the term of any Independent Director (excluding the Fourth
Independent Director) expires or such position on the Board becomes vacant, the
Independent Director Nominating Committee shall propose to the Board of
Directors a person to serve as an Independent Director on the slate to be
recommended by the Board of Directors or to fill such vacancy.
(iii) If the term of the Fourth Independent Director expires or such
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position on the Board becomes vacant, the Fourth Independent Director Nominating
Committee shall propose to the Board of Directors a person to serve as the
Fourth Independent Director on the slate to be recommended by the Board of
Directors or to fill such vacancy.
(iv) The Board of Directors shall recommend to stockholders the
Independent Directors proposed in accordance with the foregoing provisions and
include such Independent Directors on their slate of directors or, in the case
of any vacancy elect such Independent Directors to the Board, unless the Board
determines that to do so would constitute a breach of its fiduciary obligations
to the Company's stockholders.
(b) All rights of LIH and obligations of the Company relative to LIH's
designation of representatives on the Board of Directors (including the LIH, LIH
II, Company and Independent Directors) shall terminate if, at the date of
determination, the aggregate number of shares of Common Stock Beneficially Owned
by the LIH Entities and any Affiliate or Associate thereof which is a signatory
to this Agreement is less than 50% of the number of Shares acquired by LIH at
the Closing pursuant to the Stock Purchase Agreement (as adjusted for stock
dividends, splits, recombinations and the like). All rights of the LIH Entities
and obligations of the Company relative to the designation of representatives on
the Board of Directors (including LIH, LIH II, Company and Independent
Directors) shall terminate if at any time Stockholder Voting Power shall be 5%
or less of Total Voting Power. In such event, references in Section 2.02(i) and
(iii) to the Third Independent Director Nominating Committee and Fourth
Independent Director Nominating Committee shall be deemed references to the
Independent Director
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Nominating Committee.
(c) Other than as set forth in paragraph (b) above, the Company shall
cause each of the LIH Director and the LIH II Director designated by LIH and LIH
II, respectively, to be included in the slate of nominees recommended by the
Board of Directors to the Company's stockholders for election as directors at
each annual meeting of the stockholders of the Company and shall use all
reasonable efforts to cause the election of each such LIH Director and LIH II
Director, including soliciting proxies in favor of the election of such persons,
or, in the case of any vacancy affecting any LIH Director or LIH II Director,
elect to the Board an LIH Director designated by LIH or an LIH II Director
designated by LIH II, unless the Board of Directors determines that to do so
would constitute a breach of its fiduciary obligations to the Company's
stockholders.
Section 2.03. Voting
(a) Until the first to occur of (i) the Standstill Termination Date, (ii)
the aggregate number of shares of Common Stock Beneficially Owned by the LIH
Entities and any Affiliate or Associate thereof which is a signatory to this
Agreement decreasing to less than 50% of the number of Permitted Shares, or
(iii) the Stockholder Voting Power decreasing to 5% or less of Total Voting
Power, except in the case of a Stockholder Interested Transaction (as defined
below), the Company shall not take any action described in Exhibit 3 hereto
without the affirmative vote of a majority of the entire Board of Directors,
which majority includes the LIH II Director.
(b) The Company shall not take any action relating to a Stockholder
Interested Transaction, unless such Stockholder Interested Transaction has been
approved by the
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affirmative vote of a majority of the Independent Directors. Each of LIH, LIH II
and LIH III severally agrees that it shall not, and shall not take any action
which would cause the Company or its Board of Directors to, enter into or
participate in any Stockholder Interested Transaction which has not been
approved by the affirmative vote of a majority of the Independent Directors. If
requested by a majority of the Independent Directors, each of LIH, LIH II and
LIH III severally agrees to cause the LIH Director or the LIH II Director, as
the case may be, not to vote upon or consent to any Stockholder Interested
Transaction, but such directors may be counted for purposes of any quorum
necessary to such action. "Stockholder Interested Transaction" shall mean any
transaction with or involving an LIH Entity, its respective Affiliates or
Associates or relating to this Agreement, including, without limitation, any
amendment, modification or waiver hereof or thereof.
Section 2.04. Assignment of Certain Rights. LIH II hereby assigns to
Harvest Partners III, L.P., a Delaware limited partnership ("HP III"), all of
its rights under this Agreement relative to (i) LIH II's designation of an LIH
II representative on the Board of Directors, and (ii) any management rights to
which it may be entitled pursuant to Section 2.05 below. The Company hereby
expressly consents to such assignment and agrees that all of its obligations
with respect to such designation and management rights shall be enforceable
against the Company by HP III, HP III hereby expressly agrees to be bound by the
provisions of this Agreement and that this Agreement is enforceable against it.
Section 2.05. Venture Capital Operating Company Status. In the event that
(i) at any time LIH II is not entitled to designate at least one member for
election to the Board
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of Directors, or (ii) the United States Department of Labor through formal or
informal rules, regulations or interpretations provides, or it is otherwise
established through governmental or court action, that such representation does
not constitute the exercise of management rights of the kind necessary to enable
HP III to continue to qualify as a "venture capital operating company" within
the meaning of Section 2510.3-101 of the plan asset regulations promulgated by
the United States Department of Labor (a VCOC"), then the Company shall, acting
through its Board of Directors in a manner consistent with its fiduciary
obligations and consistent with the terms hereof, grant to LIH II such
management rights as the Company shall determine, the exercise of which would
(after taking into account the assignment pursuant to Section 2.04 above), in
the opinion of counsel to the HP III, enable HP III to continue to qualify as a
VCOC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Company. The Company
represents and warrants to each LIH Entity that (a) the Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
state of Delaware and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or any of
the transactions contemplated hereby, and (c) this
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Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, and, assuming this Agreement
constitutes a valid and binding obligation of each LIH Entity, is enforceable
against the Company in accordance with its terms.
Section 3.02. Representations and Warranties of the LIH Entities. Each of
LIH, LIH II and LIH III severally represents and warrants to the Company that
(a) it is a limited liability company duly organized, validly existing and in
good standing under the laws of the state of Delaware and has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder, (b) the execution and delivery of this Agreement by such
LIH Entity and the consummation by such LIH Entity of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of such LIH Entity and no other corporate proceedings on the part of
such LIH Entity are necessary to authorize this Agreement or any of the
transactions contemplated hereby, and (c) this Agreement has been duly executed
and delivered by such LIH Entity and constitutes a valid and binding obligation
of such LIH Entity, and, assuming this Agreement constitutes a valid and binding
obligation of the Company, is enforceable against such LIH Entity in accordance
with its terms.
ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
Section 4.01. "Affiliate " or "Associate" shall mean an affiliate or
associate of a
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person, as such terms are defined in Section 203 of the Delaware General
Corporation Law; provided, however, that an LIH Entity shall not be deemed an
"Affiliate" of any other LIH Entity for the purposes of LIH, LIH II, or LIH III,
as the case may be, causing any of the "Affiliates" of the other LIH Entities
from taking, or refraining from taking, any action under this Agreement.
Section 4.02. "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule l3d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing.
Section 4.03. "Closing" shall have the meaning specified in the recitals
to this Agreement.
Section 4.04. "Commission" shall mean the Securities and Exchange
Commission.
Section 4.05. "Company Director" shall mean the Company's Chief Executive
Officer.
Section 4.06. "Exchange Act" shall mean the Securities Exchange Act of
1934.
Section 4.07. "Fourth Independent Director" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(iii).
Section 4.08. "Fourth Independent Director Nominating Committee" shall
mean a committee of three directors, comprised of two Independent Directors
other than the Third Independent Director and the LIH II Director. Any action of
the Fourth Independent Director Nominating Committee shall be unanimous.
Section 4.09. "Independent Director" shall mean any person who is a
director of
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the Company and who is independent of and otherwise unaffiliated with any of the
LIH Entities, the Company or their respective Affiliates or Associates (other
than as a director, or holder with Beneficial Ownership of less than 5% of the
Voting Securities, of the Company), and shall not be an officer or an employee,
agent, consultant or advisor (financial, legal or other) of any of the LIH
Entities, the Company or their respective Affiliates or Associates, or any
person who shall have served in any such capacity within the three-year period
immediately preceding the date such determination is made.
Section 4.10. "Independent Director Nominating Committee" shall mean a
committee composed of the Independent Directors, other than the Third
Independent Director.
Section 4.11. "Permitted Shares" shall mean 3,306,792 shares of Common
Stock, which number shall increase to include the number of shares of Common
Stock into which the Class B- I Common Stock and the Series B Preferred Stock is
convertible, once the Class B-I Common Stock and the Series B Preferred Stock is
converted (as adjusted for stock dividends, splits, recombinations and the
like); provided, however, until the Company consummates or if the Company does
not consummate the transactions contemplated by the Smittybilt Investment
Agreement, 3,306,792 shall be replaced by 3,149,080 in this Section 4.1
Section 4.12. "Person" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization, government or
department or agency of a government.
Section 4.13. "Standstill Termination Date" shall mean September 9, 2000.
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Section 4.14. "LIH Director" shall mean any person designated by LIH.
Section 4.15. "LIH II Director" shall mean any person designated by XXX
XX.
Section 4.16. "Stockholder Interested Transaction" shall have the meaning
set forth in Section 2.03(b).
Section 4.17. "Stockholder Voting Power" at any time shall mean the
aggregate voting power in the general election of directors of all Voting
Securities then Beneficially Owned by the LIH Entities and their respective
Affiliates and Associates which are signatories to this Agreement.
Section 4.18. "Subsidiary" shall mean, as to any Person, any corporation
at least a majority of the shares of stock of which having general voting power
under ordinary circumstances to elect a majority of the Board of Directors of
such corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency) is, at the time as of which the determination is
being made, owned by such Person, or one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries.
Section 4.19. "Third Independent Director" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(i).
Section 4.20. "Third Independent Director Nominating Committee" shall mean
a committee of three directors, comprised of the LIH Director, the LIH II
Director, and one Independent Director, other than the Third Independent
Director. Any action of the Third Independent Director Nominating Committee
shall be unanimous.
Section 4.21. "Total Voting Power" at any time shall mean the total
combined
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voting power in the general election of directors of all the Voting Securities
then outstanding.
Section 4.22. "Transfer" shall mean any sale, transfer, pledge,
encumbrance or other disposition, and to "Transfer" shall mean to sell,
transfer, pledge, encumber or otherwise dispose of
Section 4.23. "Voting Securities" shall mean at any time shares of any
class of capital stock of the Company which are then entitled to vote generally
in the election of directors.
ARTICLE V
MISCELLANEOUS
Section 5.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy) and shall be given,
if to LIH to:
LIH Holdings, LLC
c/o Harvest Partners, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Telecopier: 000-000-0000
Attention: Xxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxxxxxx Xxxxx, Esq.
if to LIH II or LIH III to:
LIH Holdings II, LLC
c/o Harvest Partners, Inc.
000 Xxxx Xxxxxx
00
00
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxx X. Xxxxxxxx
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
if to the Company, to:
Xxxx International Holdings, Inc.
000 Xxxx Xxxxxxxxx
Xxxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxxxxx Vollmershausen, Chief Executive Officer
with a copy to:
Xxxxxxx, Street and Deinard
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telecopier: 000-000-0000
Attention: Xxxx Xxxxx, Esq.
or such address or telecopy number as such party may hereafter specify for the
purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally, telegraphed or
telecopied, or, if mailed, five business days after the date of the mailing.
Section 5.02. Amendments, No Waivers.
(a) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by
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the LIH Entities and the Company, or in the case of a waiver, by the party
against whom the waiver is to be effective. No amendment or waiver by the
Company shall be effective unless approved by a majority of the Independent
Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 5.03. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that no party
may assign this Agreement without the other party's prior written consent of the
parties hereto.
Section 5.04. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware.
Section 5.05. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by the other party hereto.
Section 5.06. Specific Performance. The Company, LIH, LIH II and LIH III
each acknowledge and agree that the parties' respective remedies at law for a
breach or threatened breach of any of the provisions of this Agreement would be
inadequate and, in
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recognition of that fact, agrees that, in the event of a breach or threatened
breach by the Company or an LIH Entity of the provisions of this Agreement, in
addition to any remedies at law, each LIH Entity and the Company, respectively,
without posting any bond shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be available.
Section 5.07. Termination. This Agreement shall terminate on the
Standstill Termination Date.
Section 5.08. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, provided that
the parties hereto shall negotiate in good faith to attempt to place the parties
in the same position as they would have been in had such provision not been held
to be invalid, void or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
XXXX INTERNATIONAL HOLDINGS, INC.
By
/s/ Xxxxxx Vollmershausen
--------------------------------
LIH HOLDINGS, LLC
By
/s/ Xxx X. Xxxxxxxx
--------------------------------
LIH HOLDINGS II, LLC
By
/s/ Xxx X. Xxxxxxxx
--------------------------------
LIH HOLDINGS III, LLC
By
/s/ Xxx X. Xxxxxxxx
--------------------------------
ACCEPTED AND AGREED
(as to Sections 2.04 and 2.05)
HARVEST PARTNERS III, L.P.
By Harvest Associates III, LLC
By /s/ Xxx X. Xxxxxxxx
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Name: Xxx X. Xxxxxxxx
Authorized Person
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Exhibit 1
LIH DIRECTOR
Xxx Xxxxxxxx
LIH II DIRECTOR
Xxxxxx Xxxxxxxx
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Exhibit 2
INDEPENDENT DIRECTORS
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
THIRD INDEPENDENT DIRECTOR
Vacant
FOURTH INDEPENDENT DIRECTOR
Xxxxxxxx Xxx
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Exhibit 3
1. Any amendment to the Certificate of Incorporation or By-Laws of the Company;
2. any reclassification, combination, split, subdivision, redemption, purchase
or other acquisition, directly or indirectly, of any debt or equity security of
the Company or any Subsidiary;
3. any sale, lease, transfer or other disposition (other than in the ordinary
course of business and other than to the Company or another wholly owned
Subsidiary), in one or more related transactions, of the assets of the Company
or any Subsidiary the book value of which assets exceeds 2% of consolidated
assets of the Company and its Subsidiaries;
4. any merger, consolidation, liquidation or dissolution of the Company or any
Subsidiary, other than with or into the Company or another wholly owned
Subsidiary;
5. any acquisition of any other business;
6. any investment by the Company or any Subsidiary in or loans, advances or
extensions of credit by the Company or any Subsidiary to, any Person (other than
(i) the Company or a Subsidiary, (ii) short term investments in the ordinary
course of business, or (iii) loans, or advances to customers, officers,
employees and suppliers in the ordinary course of business (collectively the
"Excepted Investments and Loans")), which together with all such other
investments, loans and advances at the time owned by the Company and its
Subsidiaries (exclusive of the Excepted Investments and Loans) would exceed an
amount equal to 2% of consolidated assets;
7. any acquisition by the Company or any Subsidiary of assets, other than
investment or loan assets, not in the ordinary course of business;
8. issue or sell any capital stock of the Company or any Subsidiary, other than
(i) issuance of capital stock of the Company authorized for issuance pursuant to
stock plans or agreements in effect at the date hereof, and (ii) issuance of
shares of capital stock of the Company or any Subsidiary, in one or more related
transactions, the amount of which does not exceed at the date of issuance or
sale of such shares (or the date of issuance or grant of any related right to
acquire such shares) in excess of 2% of the outstanding shares of capital stock
of such class;
9. any declaration or payment of any dividend or distribution with respect to
shares of the Company's capital stock; and
10. any incurrence, assumption or issuance by the Company or its Subsidiaries
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of any indebtedness for money borrowed, not in the ordinary course of business,
if, immediately after giving effect thereto and the application of proceeds
therefrom the aggregate amount of such indebtedness of the Company and its
Subsidiaries would exceed $5,000,000.
11. establishment of, or continued existence of, any committee of the Board of
Directors with the power to approve any of the foregoing.
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