AMENDED AND RESTATED
SHAREHOLDERS’ AGREEMENT
RHJ INTERNATIONAL
SA
ASAHI TEC
CORPORATION
The PRINCIPAL COMPANY
SHAREHOLDERS Listed on Schedule I hereto
Dated as of November 21,
2006
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Page
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Definitions
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3
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Board of
Directors
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6
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Proxy
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8
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Transfers
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8
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Offering
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10
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Demand
Offering
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16
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Informational
Rights
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17
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Further
Assurances
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18
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Amendments
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18
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Binding
Agreement
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18
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Conflicts
— Articles
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18
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Entire
Agreement
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18
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Severability
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19
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Benefits of
Agreement: Third-Party Rights
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19
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Governing
Law
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19
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No Waiver of
Rights
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19
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Submission to
Jurisdiction
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Specific
Performance
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20
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Costs
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20
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Notices
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20
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Confidentiality
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21
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Definitions
Generally
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English Version
Authoritative
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AMENDED AND
RESTATED SHAREHOLDERS’ AGREEMENT dated as of
November 27, 2006, amoag the Persons listed on Schedule I
hereto, RHJ International SA, a societe anonyms organized
under the laws of Belgium, and Asahi Tec Corporation, a Japanese
corporation (“Argon’’ or the
“Company”).
WHEREAS,
Argon, RHJI and the Principal Company Shareholders entered into a
Shareholders’ Agreement dated as August 31, 2006 (the
“Original Agreement”), and wish to amend and restate
the Original Agreement as set forth herein:
WHEREAS,
Argon, Argon Acquisition Corp., a Delaware corporation
(“Acquisition Sub”) and a wholly owned subsidiary of
Argon, and Metaldyne Corporation, a Delaware corporation, have
entered into an amended and restated Agreement and Plan of Merger
dated as of the date hereof (as such agreement may be amended,
supplemented or otherwise modified from time to time, the
“Merger Agreement”), whereby (i) Acquisition Sub
will merge (the “Merger”) with and into Mercury, (ii)
Mercury will become a wholly owned subsidiary of Argon and
(iii) each issued share of Mercury common stock not owned by
Argon, Acquisition Sub or Mercury shall be converted into the right
to receive the applicable Merger Consideration (as defined in the
Merger Agreement) set forth in Section 2.0 l(c) of the Merger
Agreement;
WHEREAS,
Argon and the Principal Company Shareholders have entered into an
amended and restated stock purchase agreement (the “
Parent Stock Purchase Agreement”) dated as of the date
hereof whereby the Principal Company Shareholders will acquire an
aggregate of 36,017,697 newly issued Shares concurrently with the
consummation of the Merger;
WHEREAS,
the Company and HIP, as the holder of the Series B Mercury
Preferred Stock (the “Mercury Preferred Stock”), have
entered into an amended and restated agreement (the
*’HIP_Stock Purchase Agreement ” and, together
with the Parent Stock Purchase Agreement, the “ Stock
Purchase Agreements”) dated as of the date of this
Agreement, whereby HIP shall acquire for cash (1) 9,490,893
newly issued Shares in exchange for the Merger Consideration (as
defined in the Merger Agreement) received by HIP as consideration
for such Mercury Preferred Stock and (ii) 8,534,345 newly
issued Shares in exchange for $15 million;
WHEREAS,
RHJI and the Principal Company Shareholders wish to agree upon
certain matters with respect to Argon.
3
NOW,
THEREFORE, in consideration of the agreements and obligations set
forth herein and intending to be legally bound hereby, RHJI and the
Principal Company Shareholders hereby agree as follows:
1.
Definitions When used herein, the following terms have the
following meanings:
“
Affiliate ” means, with respect to any Person, any
other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such Person, For purposes of this definition,
“control” (including, with correlative meanings, the
terms “controlled by” and “under common control
with”), as used with respect to any Person, means the direct
or indirect possession of the power to direct or cause the
direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
“
Agreement ” means this Agreement, as amended or
restated from time to time.
“
Argon ” has the meaning set forth in the preamble to
this Agreement.
“
Articles ” means the articles of incorporation of
Argon, as amended or restated from time to time.
“
Board of Directors ” has the meaning set forth in
Section 2 of this Agreement.
“
Business Day ” means any day other than a Saturday or
Sunday, on which banks located in Tokyo or New York are not
required or authorized by law to remain closed.
“
Closing Date ” means the date of consummation of the
transactions described in the Stock Purchase Agreements.
“
Company ” has the meaning set forth in the preamble to
this Agreement.
“
CSFB ” means Credit Suisse First Boston Equity
Partners, L.P., Credit Suisse First Boston Equity Partners
(Bermuda), L.P., Credit Suisse First Boston U.S. Executive
Advisors, L.P., EMA Partners Fund 2000, L.P., EMA Private Equity
Fund 2000, L.P., and its Permitted Transferees.
“
Deferral Period ” has the meaning set forth in Section
6(e) of this Agreement.
“
Demand Notice ” has the meaning set forth in Section
6(a) of this Agreement.
“Demand
Offering” has the meaning set forth in Section 6(a) of this
Agreement.
4
“
Demand Offering Expenses ” means all expenses incident
to the Company’s performance of or compliance with
Section 6, including all fees and expenses of compliance by
the Company with securities laws, printing expenses, messenger and
delivery expenses, fees and disbursements of counsel for Argon and
of the independent certified public accountants of Argon (including
the expenses of any annual audit, special audit and “cold
comfort” letters required by or incident to such performance
and compliance), the reasonable fees and expenses of any special
experts retained by Argon in connection with such registration, and
fees and expenses of other Persons retained by Argon (but not
including any underwriting discounts or commissions or transfer
taxes, if any, attributable to the sale of Shares by holders of
such Shares or any expenses incurred by the Principal Company
Shareholders).
“
Designator ” has the meaning set forth in
Section 2(a){i) of this Agreement.
“
Director ” has the meaning set forth in Section 2
of this Agreement.
“
HIP ” means HIP means Heartland Industrial Partners,
L.P., HIP Side-By-Side Partners, L.P., Heartland Industrial
Partners (FF), L.P., Heartland Industrial Partners (C1), L.P,
Metaldyne Investment Fund I, LLC and Metaldyne Investment Fund II,
LLC and each of their respective Permitted Transferees.
“
Inspector ” has the meaning set forth in
Section 6(c)(iii).
“
Institutional Offering ” means one private placement
by Argon to institutional investors (with gross proceeds in an
aggregate amount of at least $50,000,000) of capital shares of
Argon or any successor in interest of Argon after the Closing Date,
other than the Offering.
“
Lead Principal Company Shareholder ” means HIP until
the date upon which HIP ceases to own any Shares and thereafter,
the Principal Company Shareholder that, together with its
Affiliates, owns in the aggregate the largest number of
Shares.
“
Offering ” means the first primary public offering by
Argon (with gross proceeds in an aggregate amount of at least
$75,000,000) of capital shares of Argon or any successor in
interest of Argon after the Closing Date, other than tie
Institutional Offering.
“
Permitted Transferee ” means, (i) with respect to
RHJI, any Affiliate of RHJI, (ii) with respect to each Principal
Company Shareholder, any Affiliate of such Principal Company
Shareholder and (iii) with respect to any Principal Company
Shareholder that is a natural Person, the estate or administrators
of such Person to whom powers over such Person’s properties
pass upon death or incapacity, and the testamentary or intestate
beneficiaries of such Person under applicable estate
laws.
“
Person ” means any individual, corporation,
partnership, trust, association, limited liability company, limited
company, joint venture, joint-stock company or any other entity or
organization, including a government or governmental
agency.
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“
Principal Company Shareholders ” means the Persons
listed on Schedule I hereto and any of their Permitted
Transferees to which a Principal Company Shareholder has
Transferred Shares in accordance with Section 4.
“
Receiving Party ” has the meaning set forth in
Section 24.
“
Records ” has the meaning set forth in
Section 6(c)(iii).
“Restricted
Period” has the meaning set forth in
Section 4(b).
“RHJI”
means RHJ International SA and its Permitted
Transferees.
“
SEL ” means the Japanese Securities and Exchange Law
(Law No. 25 of 1948, as amended)
“
Shareholder ” means any of the Principal Company
Shareholders or RHJ.
“Shares”
means the common shares of Argon.
“
Specified Shares ” means Shares acquired by a
Principal Company Shareholder pursuanno a Stock Purchase Agreement
and any such Shares Transferred by a Principal Company Shareholder
to a Permitted Transferee so long as such Transfer complied with
Section 4.
“
Subsidiary ” means any Person (i) in which Argon,
one or more Subsidiaries of Argon and one or more Subsidiaries owns
capitai stock representing 50% or more of the capital stock of such
Person or (ii) of which Argon or a Subsidiary of Argon is the
general partner, manager or managing member or holds a similar
management position,
“
Transfer ” means any direct or indirect transfer,
sale, conveyance, assignment, gift, pledge or other disposition of
Shares, including any direct or indirect transfer, sale,
conveyance, assignment, gift, pledge or other disposition, whether
voluntary or by operation of law (including any disposition by
means of a merger, consolidation or similar transaction), of the
stock, partnership interests, membership interests or any other
ownership interests in Argon or any entity that is a direct or
indirect beneficial or record owner of any Shares, or any other
transaction that has the economic effect of Transferring Shares;
provided that neither (i) the Transfer of bona fide
publicly traded shares of any holder of Shares (or of the ultimate
parent company of any holder of Shares) nor (ii) the bona fide
Transfer by a limited partner of its limited partnership interests
in Heartland Industrial Partners, L.P., HIP Side-By-Side Partners,
L.P., Heartland Industrial Partners (FF), L.P., Heartland
Industrial Partners (C l), L.P., Credit Suisse First Boston Equity
Partners, L.P., Credit Suisse First Boston Equity Partners
(Bermuda), L.P., Credit Suisse First Boston Fund Investments VI
Holdings, LLC, Credit Suisse First Boston Fund Investments VI-B
(Bermuda), L.P., Credit Suisse First Boston U.S. Executive
Advisors, L.P., Masco Corporation, Richard and Jane Manoogian
Foundation, First Union Capital Partners, LLC, BancBoston Capital
Inc., Metropolitan Life Insurance Company, Equity Asset Investment
Trust, Annex Holdings I LP Annex
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Capital Farmers
LLC, LongPoint Capita] Fund L.P., LongPoint Capital Partners LLC.,
EMA Partners Fund 2000, L.P., EMA Private Equity Fund 2000, L.P.,
75 Wall Street Associates LLC, Graham Partners Investments, L.P.,
Graham Partners Investments (A), L.P., Graham Partners Investments
(B), L.P., Private Equity Portfolio Fund II, LLC, CRM 1999
Enterprise Fund, LLC and DairoterChryster AG shall be a Transfer
for the purposes of this Agreement,
“
Transferee ” means the transferee in a
Transfer.
“
Transferor ” means the transferor in a
Transfer.
“
TSE ” means the Tokyo Stock Exchange.
The
Shareholders have agreed to exercise their voting rights with
respect to the board of directors (the “Board of
Directors” and each director thereof, a
“Director”) in accordance with the provisions of this
Section 2, which they consider to be in the best interests of
Argon.
(a)
RHJI, HIP and CSFB (each a “Designator” for the
purposes of this Section 2), each shall be entitled la propose
to nominate the following number of Directors:
(i)
for so long as the Principal Company Shareholders collectively own
at least 10% or more of the outstanding number of Shares, HIP and
CSFB each shall have the right to nominate one (1)
Director;
(ii)
for so long as the Principal Company Shareholders collectively own
at least 5% but less than 10% of the outstanding number of Shares,
HIP shall have the right to nominate one (1) Director;
and
(iii)
RHJI shall have the right to nominate all other Directors nominated
by the Shareholders;
which Directors
in each case shall be proposed for appointment or removal, as
applicable, at an annual or special meeting of the shareholders of
Argon (and its nomination committee meeting to be held prior to
such meeting of shareholders) promptly following the proposal of
the applicable Designator.
(b)
If a Designator wishes to propose, in accordance with its rights
pursuant to Section 2(a) above, that any Person shall be appointed
a Director, it shall submit a letter to the other Shareholders
setting out such proposal. Each other Shareholders shall
(A) cause any member of the nomination committee of Argon who
is a Director nominated by such Shareholder to vote in favor of
such nomination of the proposed Person as a Director and (B)(x) if
any annual or special meeting of the shareholders of
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Argon is held,
appear at such meeting or otherwise cause its Shares to be counted
as present thereat for purposes of establishing a quorum, and vote
or (y) act by written consent with respect to (or cause to be
voted or acted upon by written consent) all its Shares in favor of
such appointment.
(c)
If a Designator wishes to remove a Director appointed following its
proposal from the Board of Directors, it shall submit a letter to
the other Shareholders proposing that such Director shall be
removed. Each other Shareholders shall (A) cause any member of
the nomination committee of Argon who is a Director nominated by
such Shareholder to vote in favor of such removal and (B)(x) if any
annual or special meeting of the shareholders of Argon is held,
appear at such meeting or otherwise cause its Shares to be counted
as present thereat for purposes of establishing a quorum, and vote
or (y) act by written consent with respect to (or cause to be voted
or acted upon by written consent) all its Shares in favor of such
removal. Subject to Sections 2(d) and 2(e) below, the Shareholders
shall not vote in favor of the removal of a Director, unless the
Designator who proposed such Director votes in favor of the
removal.
(d)
If a Director ceases to be a Director for whatever cause (including
resignation or removal), the Designator upon the proposal of which
the relevant Director had been appointed shall be entitled to
propose the appointment of a new Director in accordance with, and
subject to the provisions of, this Section 2, so long as such
Designator continues to be entitled to propose the appointment of
such Director under Section 2(a),
(e)
The Company has duly called, given notice of, convened and held on
November 16, 2006, a Company Stockholders Meeting (as defined
in the Merger Agreement) and has elected as directors to the
Company Board the persons designated by HIP and CSFB, each of which
are effective only so long as the Closing occurs on or prior to
January 16, 2007. Subject to the other provisions of this
Section 2 , in the event that the Closing Date does not
occur on or prior to January 16, 2007, each of the
Shareholders undertakes to vote all shares then held by it in favor
of the appointment of the Person nominated by HIP and the Person
nominated by CSFB, in each case nominated promptly following
January- 16, 2007, as Directors at a Company Stockholders Meeting
to be held as soon as practicable following such date;
provided that the appointment of such Persons shall not
become effective until the consummation of the transactions
described in the Stock Purchase Agreement. The Shareholders
undertake to use commercially reasonable efforts to procure that,
until replaced or removed in accordance with this Section 2,
such Persons shall be the Directors designated HIP and
CSFB,
(f)
For so long as either of HIP or CSFB has the right to propose to
nominate a Director pursuant to Section 2(a) above, and subject to
applicable law (including the rules and regulations of the TSE), it
shall have the right to appoint one Director to each committee of
or under the Board of Directors, including the audit, nomination
and compensation committees thereof.
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Any Director
designated by either of HIP or CSFB shall be promptly reimbursed
for all costs and expenses, including travel and lodging expenses,
incurred by such Director for attending Board of Directors and
committee meetings,
(g)
A Designator may irrevocably waive at any time its
rights under this Section 2 by providing written notice of
such waiver to the other Designators.
3.
Proxy. In order to secure RHJI’s rights to vole the
Shares of the Principal Company Shareholders, for so long as this
Agreement shall remain in full force and effect, each Principal
Company Shareholder hereby appoints RHJI, as its true and lawful
proxy and attorney-in-fact, with full power of substitution, to
vote all of the Shares owned by such Principal Company Shareholder
solely for the purpose of electing Directors pursuant to the
provisions of Section 2 of the Agreement, and in any event,
subject to, and consistent with, the provisions of Section 2
of the Agreement, it being understood that such proxy extends only
to the election of Directors pursuant to the provisions of
Section 2 of the Agreement and in no event shall such proxy
extend to any other matter that may be acted upon at any annual or
special meeting of the shareholders of Argon. RHJI may exercise the
irrevocable proxy granted to it hereunder at any time and from time
to time. The proxies and powers granted by each Principal Company
Shareholder pursuant to this Section 3 are coupled with an
interest and are given to secure the performance of the obligations
of the Principal Company Shareholders under Section 2 of this
Agreement. Such proxies and powers given by any Principal Company
Shareholder will be irrevocable until the earliest of (i) the
termination of this Agreement and (ii) the sale of the Shares
by such Principal Company Shareholder in compliance with this
Agreement (other than to a Permitted Transferee).
(a)
Generally. A Principal Company Shareholder may Transfer all or any
portion of its Shares so long as (i) such Transfer is not
restricted by Section 4(b), (ii) if such Transfer is
during a Restricted Period only, the Transferor gives Argon and
RHJI not less than ten (10) Business Days prior notice of such
Transfer, and if such Transfer is not during a Restricted Period,
the Transferor gives Argon and RHJI notice of such Transfer
reasonably promptly after such Transfer, (iii) the Transferee,
if it is a Permitted Transferee of the Transferor, executes and
delivers to RHJI a counterpart of the signature page of this
Agreement (or other appropriate assumption agreement) and any other
agreements, documents or instruments as RHJI may reasonably require
and (iv) the Transfer complies with applicable securities laws
(including rules of the stock exchange on which any shares of Argon
are listed). Any Transfer made in violation of this Section 4
shall be null and void.
(b)
Transfer Restrictions, (i) During the period from the Closing
Date until the consummation of the Institutional Offering (the
“Initial Restricted Period”), a Principal Company
Shareholder may not Transfer any Shares except with the written
consent of RHJI provided that the transfer restriction imposed by
this Section (4)(b)(i) shall expire if the Institutional
9
Offering has
not been consummated within 90 days following the Closing
Date. For the avoidance of doubt, the Initial Restricted Period
shall not extend beyond the 90 th day from the Closing Date.
(ii)
If required by the underwriters of the Institutional Offering or
the Offering, and for so long as the Principal Company Shareholders
collectively own at least 5% or more of the outstanding Shares (or
10% or more of the Shares if both HIP and CSFB have irrevocably
waived their right to nominate Directors pursuant to
Section 2(g)), a Principal Company Shareholder may not
transfer any Shares for a period (an “ Offering Restricted
Period ” and, together with the Initial Restricted
Period, each, a “Restricted Period”) of 180 days
after the closing of each of (a) the Institutional Offering
and (b) the Offering (or for such shorter lock-up period as
the underwriters of the Institutional Offering or the Offering, as
applicable, require of RHJI or the Principal Company Shareholders);
provided that no Restricted Period shall extend beyond 24
months from the Closing Date.
(iii)
Each Shareholder shall have the right to Transfer at any time, all
or any portion of its Shares to its Permitted Transferees without
the prior consent of any other Shareholder and without having such
Transfer subject to Section 4(b){i) or 4(b)(ii); provided such
Transfers otherwise still shall be subject to
Section 4(a).
(c)
For the avoidance of doubt, nothing in this Agreement shall
restrict an Affiliate of a Principal Company Shareholder from
making a market in securities of Argon or from otherwise trading in
securities of Argon; provided that (i) such Affiliate
is an entity that is itself not a Principal Company Shareholder and
(ii) such Principal Company Shareholder has in place
“Chinese wall” policies and procedures reasonably
adequate to ensure that any such market making or trading by any
such Affiliate shall not be effected in connection with or in
coordination with a Principal Company Shareholder or the trading of
any Shares held by a Principal Company Shareholder.
(d)
If a Transferor has Transferred all its Shares pursuant to this
Section 4, immediately following such Transfer, such
Transferor shall cease to be a party to this Agreement.
(e)
RHJI and the Principal Company Shareholders each shall notify Argon
promptly of any acquisition or Transfer of Shares by it or any of
its Affiliates and Argon shall notify the other parties to this
Agreement promptly of such acquisition or Transfer, in each case
with information with respect thereto sufficient to permit the
parties to this Agreement to determine the aggregate number of
Shares held by each party hereto and its respective Affiliates in
order to comply with their respective reporting and filing
requirements regarding share ownership under Japanese law and the
rules and regulations of the TSE,
10
(a) The
Board of Directors shall determine the timing, scope and other
terms and conditions of the Offering.
(b) In
connection with such Offering:
(i) the
Shareholders, if requested by the applicable underwriters, will
enter into a customary “lockup” agreement with the
underwriters of the Offering for such period as Argon and
Argon’s underwriters may agree in connection with such
Offering, provided that such period shall not exceed the Offering
Restricted Period; and
(ii) Argon and the
Shareholders will covenant to reasonably cooperate with each other
in complying with all applicable public reporting requirements and
all other applicable securities laws (including rules of the stock
exchange on which any shares of Argon arc listed); provided that
the Principal Company Shareholders shall in no event be liable for
any action or failure 10 act by the Company or any other
Shareholder in performance of this
Section 5(b)(ii).
To the extent
the underwriters of the Offering exercise an over-allotment option,
if any, and all or any portion of such over-allotment option is
made available as a secondary offering of Shares, the Principal
Company Shareholders shall have the right to participate pro rata
in such secondary offering with the other shareholders of the
Company participating in such secondary offering,
(c) In
the event that the Company is notified either orally or in writing
that the Tokyo Stock Exchange (the “TSE”) has commenced
or intends to commence a proceeding to delist the Shares from the
TSE as a result of the Transactions (as defined in the Merger
Agreement), the Company shall use its reasonable best efforts to
prevent the delisting of the Shares by the TSE or, alternatively,
to list the Shares on another stock exchange or cause the Shares to
be authorized for quotation on an automated quotation
system.
(i) Following the
earlier of (x) the expiration of the Offering Restricted
Period following the Offering or (y) 24 months following
the Closing Date, upon the written request of the Lead Principal
Company Shareholder (a “Demand Not ice”) (a copy of
which shall be provided by tie Lead Principal Company Shareholder
to each other Principal Company Shareholder), Argon shall cooperate
to effect one secondary offering of Specified Shares held by
Principal Company Shareholders (a “Demand Offering”) as
to the number of Specified Shares specified in such request. Such
request for a Demand Offering shall specify the number of
Specified
11
Shares proposed
to be offered for sale (the “Demand Offering
Shares’’) and shall also specify the intended method of
distribution thereof. The Lead Principal Company Shareholder shall
have the right to designate any of the following international or
Japanese banks as lead underwriters in a Demand Offering: Citigroup,
Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Lazard,
Lehman Brothers, Merrill Lynch, Mizuho, Morgan. Stanley, Nikko Citi
and Nomura or their successors.
(ii) Argon shall
use reasonable efforts to prepare and file offering materials,
including a statutory prospectus, for any Demand Offering as
promptly as reasonably practicable following delivery of the Demand
Notice, and shall use reasonable efforts to make such offering
materials effective with the applicable regulatory authorities and
under applicable law and shall make any other filings required
under applicable Jaws and regulations to be made by the Company in
connection with the Demand Offering, including the filing of
securities notices, Argon shall supplement or make amendments to
such offering materials as may be necessary to correct any material
misstaternent or omission contained therein, until such time
as the Demand Offering is completed. Argon shall furnish to the
Principal Company Shareholders copies of any such supplement or
amendment prior to its being used,
(iii) Any
Principal Company Shareholder that elects to participate in a
Demand Offering (including any Demand Offering exercised pursuant
to Sec
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