Exhibit 10.1
IMATION CORP.
INVESTOR RIGHTS AGREEMENT
This INVESTOR RIGHTS AGREEMENT (this
“ Agreement ”) is made as of July 31, 2007,
by and between Imation Corp., a Delaware corporation (the “
Company ”), and TDK Corporation, a Japanese
corporation (the “ Investor ”).
RECITALS
WHEREAS , the Investor and
the Company are parties to an Acquisition Agreement, dated as of
April 19, 2007 (the “ Acquisition Agreement
”), providing for the issuance and sale of certain shares of
common stock of the Company, par value $.01 per share (“
Common Stock ”), in consideration of the
Investor’s transfer to the Company of certain assets relating
to the sale, service and support of optical, magnetic tape and
flash memory recordable media products, as more fully described in
the Acquisition Agreement;
WHEREAS , the obligations of
the Company and the Investor under the Acquisition Agreement are
conditioned, among other things, upon the execution and delivery of
this Agreement by the Investor and the Company;
NOW , THEREFORE , in
consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
ARTICLE I
BOARD REPRESENTATION
1.1 Investor Nominee Appointment
Right . Until such time as ninety (90) days have elapsed
after the occurrence of a Nomination Forfeiture Event without cure
by the Investor of such event (the “ Forfeiture Date
”), the Investor shall have the right to designate one
employee or director of TDK or any Affiliate of TDK as a nominee to
stand for election as a director of the Company (the “
Investor Nominee ”). Promptly after TDK has designated
an Investor Nominee and the Investor Nominee has been approved by
the Company’s board of directors (the “ Board
”) as provided below, the Company shall increase the size of
the Board by one member and fill the resulting vacancy in
accordance with the Company’s bylaws by designating the
Investor Nominee as a director of the Class whose term will expire
at the next annual meeting of stockholders. Thereafter, the Board
shall recommend to the Company’s stockholders to vote to
elect the Investor Nominee at the next stockholders’ meeting
and at each subsequent stockholders’ meeting at which
directors of that Class are elected. The foregoing nomination right
will be subject to the Company’s generally applicable
policies with respect to the qualification of Board nominees under
the Company’s Corporate Governance Guidelines, as may be
amended from time to time (the “ Board Qualifications
”); provided , that (i) in the event that a
proposed Investor Nominee is rejected by the Board’s
Nominating and Governance Committee, (A) the Board will not
nominate any person not designated by the Investor to stand for
election in place of the rejected Investor Nominee and (B) the
Investor shall have the right to nominate a replacement candidate,
until such time as an Investor Nominee that meets the Board
Qualifications is put forward by the Investor, and (ii) the
Company shall not revise or amend the Board Qualifications or the
qualifications and procedures set forth in the Company’s
Corporate Governance Guidelines in a manner that has the intent or
effect of materially adversely affecting the Investor’s
ability to designate the Investor Nominee (by for instance, adding
requirements that all directors meet citizenship or independence
requirements that would disqualify the Investor’s most
probable nominees). Any Investor Nominee included within the slate
of director nominees presented to the stockholders for election
shall remain subject to the required affirmative vote of the
Company’s stockholders in accordance with the Company’s
bylaws, as may be amended from time to time.
1.2 Responsibilities of Investor
Nominee . Any Investor Nominee duly elected to the Board shall
be subject to the Company’s bylaws, charters, guidelines,
codes of conduct, policies and procedures and the laws of the State
of Delaware governing the fiduciary responsibilities of directors
to the same degree as other members of the Board, and may be
removed for cause under applicable law. Any Investor Nominee duly
elected to the Board shall be treated the same as an
“employee director” for purposes of director
compensation.
1.3 Vacancies . At any time
prior to a Nomination Forfeiture Event, if an Investor Nominee who
has been duly elected to the Board resigns from the Board, is
removed for cause under applicable law, dies or otherwise cannot or
is not willing to stand for reelection or to continue to serve as a
member of the Board, the remaining members of the Board shall take
all commercially reasonable actions to cause the vacancy to be
filled, prior to or concurrent with any further meeting or action
by the Board, by a new Investor Nominee.
1.4 Nomination Forfeiture
Event . A “ Nomination Forfeiture Event ”
shall occur when:
(a) as
a result of voluntary sales of Common Stock by the Investor, the
number of shares of Common Stock held by the Investor drops below
seventy-five percent (75%) of the Initial Share Number;
(b) as
a result of the Investor’s failure to exercise its Preemptive
Rights and any voluntary sales by the Investor of Common Stock, the
number of Issued Shares held by the Investor drops below ten
percent (10%) of the total number of issued and outstanding shares
of Common Stock;
(c) that
certain Trademark License Agreement, dated as of the date hereof
between the Company and the Investor (the “ Trademark
License ”), is terminated for any reason; or
(d) as
a result of a breach by Investor of Section 4.3 or
4.4 of this Agreement; provided , that a breach of
Section 4. 3 of this Agreement shall not constitute a
Nomination Forfeiture Event unless either (i) the Investor
shall have affirmatively voted its voting Securities in
contravention of the provisions of that Section or (ii) the
Investor, having been given express written notice by the Company
in the form of attached Exhibit B (an “
Express Notice ”) and in accordance with the
applicable terms of Section 6.19 , shall have failed to
vote its voting Securities with respect to a proposal as to which
it is required to vote under Section 4.3 and, in the
case of a proposal described in Section 4.3(a) but not
otherwise, such failure to vote shall have adversely affected the
outcome of the stockholder vote on such proposal from the
Company’s perspective (i.e., caused a proposal as to which
the Board recommended a vote “against” to succeed, or a
proposal as to which the Board recommended a vote “for”
to fail).
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Notwithstanding anything to the contrary in Section 1.1
, if a Nomination Forfeiture Event occurs as a result of clause
(c) or (d) above, Investor’s right to nominate an
Investor Nominee shall terminate immediately, and Investor shall
cause any Investor Nominee who has been duly elected and is then
serving as a director of the Company to submit his resignation as a
director of the Company with immediate effect. For purposes of this
Section 1.4, the number of Shares of Common Stock held by the
Investor shall include all shares of Common Stock issued to the
Investor and its Affiliates at Closing.
1.5 Information Rights
.
(a) For
so long as the Investor has a duly elected representative serving
on the Board, the Company shall be required to provide such
director with all information made available to other Board
members, as and when it is made available to other Board members;
provided, however , the Company shall not be obligated to
provide such director with information that is only made available
to members of a duly constituted committee of the Board of which
such director is not a member.
(b) Notwithstanding
the occurrence of an uncured Nomination Forfeiture Event other than
pursuant to Section 1.4(d) , for so long as the
Trademark License remains in effect, and subject to the provisions
of Section 6.3 of this Agreement, the Company shall
provide the Investor (i) reasonable notice of, and reasonably
detailed information regarding, any discussions, negotiations, or
correspondence regarding any proposed transaction that could be
expected to result in a Change of Control of the Company (a “
Proposed Transaction ”), including any material
changes to terms previously notified to Investor, and (ii) a
reasonable opportunity to propose alternatives thereto to the Board
for the Board’s consideration. In addition, in the event that
the Company or its advisors conducts (i) any form of
“market check” process in connection with exploration
of or discussion, negotiations or correspondence regarding a
Proposed Transaction, or (ii) any form of formal or informal
auction process, then, in either case, the Company agrees that the
Investor will be one of the parties contacted in the first
instance. The rights of the Investor under this
Section 1.5(b) shall terminate immediately in the event
of a Nomination Forfeiture Event described in
Section 1.4(d) .
(c) For
the purposes of Section 1.5(b) , a “ Change of
Control ” with respect to the Company means any of the
following transactions as a result of which the Company is under
the direct or indirect control of any Person, whether singly or as
a part of a 13D Group:
(i) the
acquisition by any Person, as a result of one transaction or a
series of transactions over time, of voting Securities
representing, directly or indirectly, more than fifty percent (50%)
of the aggregate voting rights of the Company; or
(ii) the
Company’s consolidation with or merger with or into another
Person, whether or not the Company is the surviving entity in such
transaction, unless, immediately after such consolidation or
merger, shareholders of the Company prior to the transaction
continue to own voting securities representing, directly or
indirectly, more than fifty percent (50%) of the aggregate voting
rights of such new or surviving entity.
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ARTICLE II
PREEMPTIVE RIGHTS
2.1 Preemptive Rights .
(a) If
the Company proposes to sell any Common Stock or any other
Securities, however described or whether voting or non-voting,
other than Exempted Securities (“ Additional
Securities ”), whether in a private placement, a public
offering, or as part of an acquisition, share exchange or
otherwise, the Company shall, at least thirty (30) days prior
to issuing such Additional Securities, notify the Investor in
writing of such proposed issuance specifying, to the extent
practicable, the purchase price or a range for the purchase price,
if any, for, and the terms and conditions of, such Additional
Securities and shall offer to sell such Additional Securities to
the Investor in the amounts set forth in Section 2.1(c)
, upon the terms and conditions set forth in the notice and at the
Purchase Price as provided in Section 2.1(d) (the
“ Preemptive Rights ”); provided , that,
if the purchase price for, or any of the other material terms and
conditions of, the proposed issuance are not known at the time of
the initial written notice, the Company shall provide such notice
without specifying the price or other such terms and conditions,
and shall provide a supplemental notice, adding the missing terms,
to the Investor as soon as they are known to the Company, and in no
event later than ten (10) Business Days prior to such
issuance. For purposes of calculating the number of Additional
Securities issued pursuant to this Section 2.1(a) ,
such calculation shall include the maximum number of shares of
Common Stock and other Securities issuable upon the conversion or
exercise of any convertible or exchangeable Securities.
(b) If
the Investor wishes to subscribe for a number of Additional
Securities less than the number to which it is entitled under this
Section 2.1 , the Investor may do so and shall, in the
notice of exercise of the offer, specify the number of Additional
Securities that it wishes to purchase.
(c) The
Company shall offer the Investor all, or any portion specified by
the Investor in accordance with Section 2.1(b) , of an
amount of such Additional Securities such that, after giving effect
to the proposed issuance (including the issuance to the Investor
pursuant to the Preemptive Rights and including any related
issuance resulting from the exercise of preemptive or similar
rights by any unrelated Person with respect to the same issuance
that gave rise to the exercise of the Preemptive Rights by the
Investor), the Investor’s Equity Interest after such issuance
would equal the Investor’s Equity Interest immediately prior
to such issuance, such number of Additional Securities to
constitute the “ Preemptive Share Amount ”. If,
at the time of the determination of any Preemptive Share Amount
under this Section 2.1(c) , any other Person has
preemptive or other equity purchase rights similar to the
Preemptive Rights, such Preemptive Share Amount shall be
recalculated to take into account the amount of Additional
Securities such Persons have committed to purchase, rounding up
such Preemptive Share Amount to the nearest whole Additional
Security.
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(d) The
“ Purchase Price ” for the Additional Securities
to be issued pursuant to the exercise of Preemptive Rights shall be
payable only in cash (unless otherwise agreed by the Company and
the Investor) and, except as otherwise set forth below, shall equal
per Additional Security the per Security issuance price for the
Additional Securities giving rise to such Preemptive Right. In the
case of any issuance of Additional Securities other than solely for
cash, the Company and the Investor shall in good faith seek to
agree upon the value of the non-cash consideration; provided
, that the value of any publicly traded securities shall be deemed
to be the closing price of such securities on the applicable
national securities exchange as of the trading date immediately
prior to the consummation of such issuance. If the Company and the
Investor fail to agree on such value during the period contemplated
by the first sentence of Section 2.2 , then the Company
will refer the items in dispute to a nationally recognized
investment banking firm that is selected by the Board and
reasonably acceptable to the Investor and that shall be instructed
to make a final and binding determination of the fair market value
of such items within ten (10) Business Days. If such a
determination is required, the deadline for the Investor’s
exercise of its Preemptive Rights with respect to such issuance
pursuant to Section 2.1(b) shall be extended until the
fifth (5th) Business Day following the date of such determination.
Whichever of the Company or the Investor whose last estimate
differed the most from that finally determined by the investment
banking firm shall be responsible for and pay all of the fees and
expenses of such investment banking firm. All determinations made
by such investment banking firm shall be final and binding on the
Company and the Investor.
2.2 Exercise Period . The
Preemptive Rights set forth in Section 2.1 must be
exercised by acceptance in writing of an offer referred to in
Section 2.1(a) , (i) if not in connection with a
registered offering, within thirty (30) days of receiving
notice from the Company of its intention to sell Additional
Securities, or (ii) in connection with any registered
offering, at least five (5) Business Days prior to the
printing of the preliminary prospectus in connection with such
offering. The closing of any purchase of Additional Securities
pursuant to the exercise by the Investor of Preemptive Rights
hereunder shall occur on the later of (i) the closing of the
transaction triggering such Preemptive Rights, subject to the
receipt of any necessary Governmental Approvals to which the
issuance of Additional Securities is subject, and (ii) should
either the Company or the Investor so elect, an agreed date within
thirty (30) days after such closing.
2.3 Survival of Rights . The
Investor’s rights set forth in Section 2.1 shall
terminate when:
(a) as
a result of voluntary sales of Common Stock by the Investor, the
number of shares of Common Stock held by the Investor drops below
seventy-five percent (75%) of the Initial Share Number;
(b) as
a result of the Investor’s failure to exercise its Preemptive
Rights and any voluntary sales by the Investor of Common Stock, the
number of Issued Shares held by the Investor drops below ten
percent (10%) of the total number of issued and outstanding shares
of Common Stock; or
(c) the
Trademark License is terminated for any reason.
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ARTICLE III
REGISTRATION RIGHTS
3.1 Registration Rights
.
(a)
Demand Rights .
(i) At
any time after the end of the Lock-Up Period, the Investor shall
have the right to request the Company to file a registration
statement under the Securities Act for a public offering of all or
part of the Issued Shares and any additional shares of Common Stock
issued or distributed by way of a dividend, stock split or other
distribution, or acquired by way of any rights offering or similar
offering made, in respect of the Issued Shares (the “
Registrable Securities ”), by delivering written
notice thereof to the Company specifying (x) the number of
Registrable Securities to be included in such registration, and
(y) the intended method of distribution thereof (the “
Demand Registration Request ”). Thereupon the Company
shall, as expeditiously as possible, use its commercially
reasonable efforts to effect the registration under the Securities
Act of the Registrable Securities which the Company has been so
requested to register in the Demand Registration Request. The
Investor may require the Company to file such registration
statement with the SEC in accordance with and pursuant to
Rule 415 promulgated under the Securities Act (or any
successor rule then in effect) (a “ Shelf Registration
”). The demand registration rights granted in this
Section 3.1(a)(i) are subject to the following
limitations:
(1) The
aggregate offering price (net of known or estimated underwriting
discounts and commissions) for the shares of Registrable Securities
to be included in such registration shall be at least ten million
Dollars ($10,000,000) based on the current market price of the
Common Stock at the time of such initial filing;
(2) The
Company shall not be obligated to effect any registrations pursuant
to this Section 3.1(a)(i) within nine (9) months
of the effective date of any other registration under the
Securities Act, other than a registration on Form S-8 under the
Securities Act;
(3) The
Company shall not, under any circumstances, be obligated to effect
more than two (2) registrations pursuant to this
Section 3.1(a) , no more than one of which may be
exercised in any twelve (12)-month period; and
(4) The
Company may postpone for up to ninety (90) days the filing or
the effectiveness of a registration statement for a Demand
Registration Request if the Company furnishes to the Investor a
certificate signed by the Chief Financial Officer of the Company
stating that the disclosures that would be required in such
registration statement would reasonably be expected to have a
material adverse effect on, or require the public disclosure of,
any proposal or plan by the Company to engage in a significant
financing or acquisition of assets (other than in the ordinary
course of business), or any merger, consolidation, tender offer, or
reorganization; provided , that, in such event, the Investor
shall be entitled to withdraw such Demand Registration Request and,
if such request is withdrawn, such request shall not count as one
of the permitted Demand Registration Requests hereunder.
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(ii) If
the Investor intends to distribute the Registrable Securities
covered by the Demand Registration Request by means of an
underwriting, the Investor shall so advise the Company in the
Demand Registration Request, and in such event, the Investor shall
negotiate in good faith with an underwriter or underwriters
selected by the Company to act as the managing underwriter in
connection with such underwriting; provided, however, that
if the Investor has not agreed with such underwriter or
underwriters as to the terms and conditions of such underwriting
within twenty (20) days following commencement of such
negotiations, then the Company may select an underwriter or
underwriters of its choice to be the managing underwriter, which
choice shall be subject to the approval of the Investor (such
approval not to be unreasonably withheld or delayed). The Company
and the Investor shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for
such underwriting (it being understood that all indemnification
obligations which are customarily those of the issuer of securities
under such underwriting agreement shall be the obligations of the
Company).
(iii) If
the Investor intends to distribute the Registrable Securities
covered by the Demand Registration Request by means of an
underwriting and the managing underwriters advise the Company in
writing, with a copy to be delivered to the Investor, that, in
their opinion, the number of Registrable Securities requested to be
included in such offering exceeds the number of securities which
can be sold therein without materially adversely affecting the
marketability of the offering and within a price range acceptable
to the Investor, the Company shall include in such registration the
Registrable Securities requested to be included which in the
opinion of such underwriters can be sold without materially
adversely affecting the marketability of the offering;
provided , that, in the event that the number of Registrable
Securities included in such registration is so reduced, such
registration shall not count as one of the permitted Demand
Registration Requests hereunder.
(b) Piggyback Rights
.
(i) If
at any time and from time to time after the end of the Lock-Up
Period the Company proposes to effect a registration of any of its
securities under the Securities Act (other than any registration of
Securities on Forms S-4 or S-8 or any successor forms), for its own
account, or for the account of one or more shareholders (other than
pursuant to a Demand Registration Request) (the “ Proposed
Registration ”), the Company shall give prompt written
notice to the Investor of the Company’s intention to do so.
If the Investor’s Registrable Securities have not been
included in the Proposed Registration, and within thirty
(30) days of the receipt of any such notice, Investor delivers
to the Company a written notice requesting to have any or all of
the Registrable Securities included in the Proposed Registration
(such notice to include the number of Registrable Securities that
the Investor wishes to be included in the Proposed Registration),
the Company will use its commercially reasonable efforts to cause
such shares to be registered as requested in such notice.
Notwithstanding any other provision of this
Section 3.1(b) , if the Proposed Registration is an
underwritten registration and the managing underwriter determines
that marketing factors require a limitation of the number of shares
to be underwritten, the Company may limit the number of shares of
Registrable Securities to be included in the Proposed Registration
without requiring any limitation in the number of shares to be
registered on behalf of the Company; provided, however, that
the number of Registrable Securities included in the Proposed
Registration pursuant to this Section 3.1(b) may not be
reduced to less than thirty percent (30%) of the total amount of
shares subject to the offering; provided, further , that
nothing herein shall prevent the Company from canceling or
withdrawing any Proposed Registration prior to the filing or
effectiveness thereof.
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(ii) If
underwriters are appointed to conduct an offering of the
Company’s securities, including Registrable Securities, with
respect to the Proposed Registration, no Registrable Securities
shall be registered unless the Investor accepts the terms of the
underwriting as approved by the Company for the offering;
provided , that the Investor may independently negotiate
with the underwriters for the offering any representations and
warranties that the Investor will give to such underwriters in
connection with the offering. In the event that the Investor is
unable to agree with such underwriters on such representations and
warranties or does not accept the terms of such underwriting, then
the Company may proceed with the Proposed Registration without the
participation of the Investor or the inclusion of any Registrable
Securities; provided, further , that such non-participation
of the Investor shall not in any way affect its rights under this
Section 3.1 with respect to subsequent demands for
registration of any Registrable Securities.
3.2 Holdback Agreements .
Investor shall not effect any public sale or distribution
(including sales pursuant to Rule 144) of Securities of the
Company or engage in any hedging transactions relating to the same,
during the thirty (30) days prior to and the 90-day period
beginning on the effective date of any underwritten registration
pursuant to a Demand Registration Request or any underwritten
Proposed Registration, in each case pursuant to which
Investor’s Registrable Securities are included, unless the
underwriters managing the registered public offering agree
otherwise.
3.3 Effectiveness of Registration
Statement . The Company shall notify Investor of the
effectiveness of each registration statement filed hereunder and
prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not less than one hundred twenty
(120) days (or until the distribution described in the
registration statement has been completed) (or, in the case of a
Shelf Registration, a period ending on the earlier of (i) the
date on which all Registrable Securities have been sold pursuant to
the Shelf Registration or have otherwise ceased to be Registrable
Securities, and (ii) the 24-month anniversary of the effective
date of such Shelf Registration) and comply with the provisions of
the Securities Act with respect to the disposition of securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement; provided,
however , that at any time, upon written notice to Investor and
for a period not to exceed sixty (60) days thereafter (the
“ Suspension Period ”), the Company may suspend
the use or effectiveness of any registration statement (and the
Investor agrees not to offer or sell any Registrable Securities
pursuant to such registration statement during the Suspension
Period) if the Company reasonably believes that the Company may, in
the absence of such suspension hereunder, be required under state
or federal securities laws to disclose any corporate development
the disclosure of which could reasonably be expected to have a
material adverse effect upon the Company, its stockholders, a
potentially significant transaction or event involving the Company,
or any negotiations, discussions, or proposals directly relating
thereto. No more than two (2) such Suspension Periods shall
occur in any twelve (12) month period. In the event that the
Company shall exercise its rights hereunder, the applicable time
period during which the registration statement is to remain
effective shall be extended by a period of time equal to the
duration of the Suspension Period. The Company may extend the
Suspension Period for an additional consecutive thirty
(30) days with the written consent of the Investor. If so
directed by the Company, Investor shall use its commercially
reasonable efforts to deliver to the Company (at the
Company’s expense) all copies, other than permanent file
copies then in Investor’s possession, of the prospectus
relating to such Registrable Securities current at the time of
receipt of such notice. Investor agrees to comply with any
prospectus delivery and/or notice requirements under the Securities
Act then in effect, and agrees to not use any
“free-writing” prospectus in connection with the sale
of any Registrable Securities.
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3.4 Registration Expenses.
The Company shall pay the expenses associated with registrations
pursuant to this Article III (including all
registration, filing, qualification fees, printing expenses, fees
and expenses of the Company’s counsel and of one counsel to
the Investor and auditing expenses) and all related offering
expenses (including printing expenses, road show costs and other
marketing expenses). The Investor shall bear the cost of any
underwriting discounts or commissions for the offering and sale of
the Investor’s Registrable Securities.
3.5 Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the SEC which may at times permit the sale of
Registrable Securities to the public in the United States without
registration after the Lock-Up Period, the Company agrees to use
its commercially reasonable efforts to:
(a) Make
and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities
Act;
(b) File,
as and when applicable, with the SEC in a timely manner all reports
and other documents required of the Company under the Exchange Act;
and
(c) Furnish
to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of
Rule 144 and the Exchange Act, a copy of the most recent
annual or quarterly (or other periodic) report of the Company, and
such other reports of the Company as the Investor may reasonably
request in availing itself of any rule or regulation of the SEC
allowing the Investor to sell any such securities without
registration.
ARTICLE IV
OTHER AGREEMENTS
4.1 Standstill .
(a) From
the date hereof through the date when (i) as a result of
voluntary sales of Common Stock by the Investor, the number of
shares of Common Stock held by the Investor drops below
seventy-five percent (75%) of the Initial Share Number or
(ii) as a result of the Investor’s failure to exercise
its Preemptive Rights and any voluntary sales by the Investor of
Common Stock, the number of Issued Shares held by the Investor
drops below ten percent (10%) of the total number of issued and
outstanding shares of Common Stock (the “ Standstill
Period ”), the Investor agrees that it will not, without
the prior written consent of the Company, directly or indirectly,
alone or in concert with any other Person, acquire, offer to
acquire, or agree to acquire, by purchase, gift, business
combination or otherwise, beneficial ownership of any Common Stock
in excess of twenty-one percent (21%) (the “ Standstill
Threshold ”) of the Common Stock then outstanding;
provided, however , that the Company shall, as soon as
reasonably practicable, inform the Investor of any change in the
number of outstanding shares of Common Stock since the last Public
Disclosure of the total issued and outstanding Common Stock of the
Company in excess of one quarter of one percent (0.25%). .
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(b) Notwithstanding
any provision of Section 4.1(a) , the Investor shall
not be in breach of that section if, solely as a result of
repurchases by the Company of its outstanding Common Stock, the
Investor becomes the Beneficial Owner of shares of Common Stock in
excess of the Standstill Threshold, provided that it does not
retain beneficial ownership of shares representing in the aggregate
more than twenty-two percent (22%) of the Common Stock then
outstanding (the “ Investor Threshold ”).
(c) If
Investor should become the Beneficial Owner of Common Stock in
violation of either Section 4.1(a) or
Section 4.1(b) , Investor shall, as soon as it becomes
aware of any such violation, give prompt notice to the Company of
such violation. Immediately upon its giving of any such notice, or
upon its receipt of any notice of such violation from the Company,
the Investor shall, and shall cause its Affiliates to, refrain from
acquiring beneficial ownership of any additional shares of Common
Stock and within ten (10) Business Days after its giving or
receipt of such notice shall, and shall cause its Affiliates to,
dispose of Common Stock such that Investor shall not beneficially
own Common Stock in excess of the Standstill Threshold;
provided, however , that any sales required hereunder will
not be taken into account for a period of five (5) years
thereafter in determining whether a Nomination Forfeiture Event
shall have occurred.
(d) Prior
to the Closing of the transactions contemplated by the Acquisition
Agreement, the Company has amended Section 1(a) of the Rights
Agreement dated June 21, 2006 (the “ Share Rights
Plan ”) to read in its entirety as set out in the First
Amendment to Rights Agreement annexed as Schedule 3
hereto (the “ Rights Plan Amendment ”). The
Company agrees that changes effected by the Rights Plan Amendment
will be maintained in
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