Exhibit 10.11
MANAGEMENT SHAREHOLDERS
AGREEMENT
OF
INTELSAT GLOBAL,
LTD.
This Management Shareholders
Agreement (“ Agreement ”), entered into on
May 6, 2009, and effective as of February 4, 2008 (the
“ Effective Date ”), by and among Intelsat
Global, Ltd. (formerly known as Serafina Holdings Limited), a
Bermuda exempted company (the “ Company ”), the
sponsor shareholders, as defined in Section 16 hereof
(the “ Sponsor Shareholders ”), and each of the
individual shareholders who become parties hereto from time to time
in accordance with the terms hereof (each individually, a “
Management Shareholder ,” and collectively, the
“ Management Shareholders, ” and together with
the Sponsor Shareholders, the “ Shareholders ”
and each a “ Shareholder ”). These parties are
sometimes referred to herein individually by name or as a “
Party ” and collectively as the “ Parties
.”
RECITALS
WHEREAS, each Management Shareholder
is an employee, consultant or director of the Company or one or
more subsidiaries of the Company;
WHEREAS, the Company has issued (or
may hereafter issue) Common Shares (as defined in Section 16)
to each Management Shareholder, as a result of (i) the
issuance of Class A Shares (“ Co-investment
Shares ”) pursuant to that certain Contribution and
Subscription Agreement, dated February 4, 2008 by and among
the Company and the investors named therein (the “
Contribution Agreement ”) or those certain
Subscription Agreements, dated as of May 6, 2009, by and among
the Company and the Investors named therein (the “
Subscription Agreements ”), (ii) the issuance of
Class A Restricted Shares (“ Class A Restricted
Shares ”), which Class A Restricted Shares were
granted or issued pursuant to the Contribution Agreement or may
hereafter be granted or issued pursuant to the Intelsat Global,
Ltd. 2008 Share Incentive Plan (the “ Share Incentive
Plan ”), (iii) the issuance of restricted Class B
Shares (“ Class B Restricted Shares ”), which
Class B Restricted Shares were granted or issued (or may hereafter
be granted or issued) pursuant to the Share Incentive Plan,
(iv) the exercise by Management Shareholders of vested options
to purchase Class A Shares (“ Vested Options
”), which Vested Options were granted or issued (or may
hereafter be granted or issued) to such Management Shareholder
pursuant to the Share Incentive Plan, or (v) any grant or
issuance pursuant to any option other equity compensation awards
granted under any other employee benefit, stock purchase or
compensation plan, arrangement, or agreement hereafter adopted by
the board of directors of the Company (the “ Board
”) or entered into by the Company, as the case may
be;
WHEREAS, the Company, the Sponsor
Shareholders and the Management Shareholders desire to enter into
this Agreement to provide for certain matters with respect to the
ownership and transfer by the Management Shareholders of all Common
Shares now or hereafter issued to or acquired by the Management
Shareholders (the “ Restricted Shares ”);
and
WHEREAS, capitalized terms used
herein without definition elsewhere in this Agreement are defined
in Section 16 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and the mutual agreements set forth herein, and other
good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the Parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1.
General . No Management
Shareholder shall directly or indirectly Transfer any Restricted
Shares or other securities of the Company, other than (a) with
the approval of the Board and, if applicable, in accordance with
Section 4, 5, 8 or 11 , (b) as a Tag-Along
Seller pursuant to Section 4 or as a Drag-Along Seller
(other than as a 60% Seller) pursuant to Section 5 or
(c) to any Permitted Transferee (clauses (a), (b) and
(c) together with the next following sentence, the “
Permitted Transfer Provisions ”) or following an
Initial Public Offering, Listing Event or applicable Termination of
Employment to the extent set forth in Section 13 . The
Company shall not record upon its books any Transfer of any
securities of the Company other than as permitted by and in
accordance with the Permitted Transfer Provisions, and any
purported Transfer in violation hereof shall be null and void and
of no effect.
Section 2.
Compliance . No Transfer of
any securities of the Company otherwise permitted under this
Agreement shall be made if such Transfer (a) is in violation
of this Agreement, the Securities Act, or the securities laws of
any state, (b) would cause the Company to become subject to
the registration requirements of the U.S. Investment Company Act of
1940, as amended from time to time or (c) would be a
non-exempt “prohibited transaction” under ERISA or the
Code or cause all or any portion of the assets of the Company to
constitute “plan assets” under ERISA or
Section 4975 of the Code.
Section 3.
Agreement to be Bound . No
Transfer of any securities of the Company otherwise permitted by
the Permitted Transfer Provisions shall be made or be effective
(and the Company shall not transfer on its books any securities)
unless (a) the certificates representing such securities
issued to the transferee bear the legend provided in
Section 15 hereof, if required by such
Section 15 , and (b) the transferee shall have
executed and delivered to the Company, as a condition precedent to
such Transfer, an instrument or instruments in form and substance
satisfactory to the Board confirming that the transferee agrees to
be bound by the terms of this Agreement and accepts the rights and
obligations set forth hereunder, except that, (i) in the case
of a Transfer to a Permitted Transferee, all provisions that relate
to Termination of Employment of a Management Shareholder and the
effects thereof shall continue to apply to such Management
Shareholder transferor and not to such Permitted Transferee and
(ii) in the case of a Transfer to a Person other than a
Permitted Transferee, Section 3 of this Agreement shall
cease to apply following such Transfer; provided, however, that the
terms and conditions of (x) Section 3(b) hereof
shall not apply to any Transfer of Restricted Shares pursuant to
Section 5 hereof except to the extent that the
agreement providing for such Transfer provides that the transferee
shall be bound by this Agreement as a Management Shareholder, and
(y) Sections 3(a) and (b) hereof shall
not apply to any Transfers pursuant to a Public Offering or Rule
144.
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Section 4.
Tag-Along Rights .
(a) Sale Notice . If, prior
to any Initial Public Offering a Shareholder (or group of
Shareholders) proposes to Transfer (other than a Transfer in a
Public Offering or under Rule 144 but including a Transfer to which
Section 5 would apply), in the aggregate, 10% or more
of the issued and outstanding Common Shares in a transaction or
series of related transactions (such shareholder referred to as the
“ 10% Seller ”), then the 10% Seller shall first
give written notice (the “ Sale Notice ”) to the
Management Shareholders (the “ Offeree Shareholders
”), stating that it desires to make such Transfer, referring
to this Section 4 , specifying the type(s) and number
of Common Shares proposed to be sold (the “ Offer
Shares ”), and specifying the price, the form of
consideration, name and description of the purchaser (including
controlling Persons) (the “ Proposed Transferee
”) and the material terms pursuant to which such Transfer is
proposed to be made.
(b) Tag-Along Election .
Within ten business days of the date of receipt of the Sale Notice,
each Offeree Shareholder shall deliver to the 10% Seller and to the
Company a written notice stating whether the Offeree Shareholder
elects to sell a pro rata portion of its Common Shares equal to the
lesser of (1)(i) the total number of Eligible Shares owned by
such Offeree Shareholder, multiplied by (ii) a fraction,
(a) the numerator of which is the number of Offer Shares and
(b) the denominator of which is the total number of Common
Shares owned by the 10% Seller) and (2) the Offeree
Shareholder’s Eligible Shares, to such Proposed Transferee on
the same terms, purchase price and conditions as the 10% Seller
(with respect to each Offeree Shareholder, its “ Tag-Along
Shares ”); provided that the purchase price for any
Tag-Along Shares that are Class B Shares shall equal the Fair
Market Value of each such Class B Share on the date of the Sale
Notice as determined by the Board prior to the consummation of the
sale contemplated by Section 4(a) . An election
pursuant to the first sentence of this Section 4(b)
shall constitute an irrevocable commitment by the Offeree
Shareholder making such election to sell such Tag-Along Shares to
the Proposed Transferee if the sale of Offer Shares to the Proposed
Transferee occurs on the terms contemplated thereby. Such terms may
include a maximum number of Common Shares such Proposed Transferee
is willing to purchase, and, in such case, the 10% Seller and the
Offeree Shareholders selling Common Shares pursuant hereto shall be
cut back pro rata based on the number of Common Shares each such
Shareholder is electing to sell. For the avoidance of doubt,
nothing in this Section 4 shall cause any unvested
Restricted Shares or unvested options to acquire Restricted Shares
to become vested or exercisable and any election by a Management
Shareholder to sell a pro rata portion of their Eligible Shares
according to this Section 4 shall apply only to fully
vested Eligible Shares.
(c) Third-Party Sale; Tag-Along
Buyer . A sale to a Proposed Transferee pursuant to this
Section 4 shall only be consummated if the Proposed
Transferee shall purchase, within ninety (90) days of the date
of the Sale Notice, concurrently with and on the same terms and
conditions and at the same price as the Offer Shares, all of each
Offeree Shareholder’s Tag-Along Shares with respect to such
sale, in accordance with their elections pursuant to this
Section 4(c) , and subject to the last sentence thereof
(the “ Tag-Along Right ”). Each Offeree
Shareholder electing to sell Tag-Along Shares (a “
Tag-Along Seller ”) agrees to cooperate in
consummating such a sale, including, without limitation, by
becoming
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a party to the sales agreement and
all other appropriate related agreements, delivering, at the
consummation of such sale, share certificates and other instruments
for such Common Shares duly endorsed for transfer, free and clear
of all liens and encumbrances, and voting or consenting in favor of
such transaction (to the extent a vote or consent is required) and
taking any other necessary or appropriate action in furtherance
thereof, including the execution and delivery of any other
appropriate agreements, certificates, instruments and other
documents (including, without limitation, making any
representations and warranties with respect to the Company or the
Company’s business to the same extent that the 10% Seller
does). In addition, each Tag-Along Seller shall, if and to the
extent requested by the 10% Seller, agree to be severally
responsible for its proportionate share of the third-party expenses
of sale incurred by the sellers in connection with such sale and
the monetary obligations and liabilities incurred by the sellers in
connection with such sale. Such monetary obligations and
liabilities shall include (to the extent such obligations are
incurred) obligations and liabilities for indemnification
(including for (i) breaches of representations and warranties
made in connection with such sale by the Company or any other
seller with respect to the Company or the Company’s business,
(ii) breaches of covenants in effect prior to closing and
(iii) other matters), and shall also include amounts paid into
escrow or subject to holdbacks, and amounts subject to post-closing
purchase price adjustments provided all such obligations are
equally applicable on a several and not joint basis to each
Tag-Along Seller based on the consideration received by such
Tag-Along Seller. The foregoing notwithstanding, (i) without
the written consent of a Tag-Along Seller, the amount of such
obligations and liabilities for which such Tag-Along Seller shall
be responsible shall not exceed the gross proceeds received by such
Tag-Along Seller in such sale, (ii) a Tag-Along Seller shall
not be obligated to enter into any non-compete or other
post-closing covenant that restricts its activities in any way and
(iii) a Tag-Along Seller shall not be responsible for the
fraud of any other seller or for any indemnification obligations
and liabilities for breaches of representations and warranties made
by any other seller with respect to such other seller’s
(A) ownership of and title to capital shares of the Company,
(B) organization, (C) authority and (D) conflicts
and consents.
Section 5.
Drag-Along Rights
.
(a) If, prior to any Initial Public
Offering, a Sponsor Shareholder (or group of Sponsor Shareholders)
(the “ 60% Seller ”) proposes to Transfer, in a
bona fide arm’s-length transaction or series of related
transactions, to a Person not affiliated with such Sponsor
Shareholder (or group of Sponsor Shareholders), at least 60% of the
voting power with respect to the election of directors of
then-outstanding Common Shares, including pursuant to a sale,
merger, business combination, recapitalization, consolidation,
reorganization, restructuring or similar transaction, the 60%
Seller shall have the option (a “ Drag-Along Right
”), exercisable upon ten (10) business days’ prior
written notice to the Management Shareholders, to require the
Management Shareholders to sell a number of their Common Shares
equal to (1) the total number of Common Shares, owned by such
Management Shareholder, multiplied by (2) a fraction
(i) the numerator of which is the number of Common Shares the
60% Seller proposes to Transfer to the Proposed Transferee and
(ii) the denominator of which is the total number of Common
Shares held by the 60% Seller; provided that the sale price of any
Class B Share that is required to be sold according
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to such Drag-Along Right shall equal
the Fair Market Value of each such Class B Share on the date of the
anticipated consummation of such sale contemplated in this
Section 5 as determined by the Board prior to such
sale. For the avoidance of doubt, nothing in this
Section 5 shall cause any unvested Restricted Shares or
unvested options to acquire Restricted Shares to become vested or
exercisable and any requirement by the 60% Seller for a Management
Shareholder to sell a number of their Common Shares shall apply
only to fully vested Common Shares.
(b) Each Management Shareholder
selling Common Shares pursuant to a transaction contemplated by
this Section 5 (a “ Drag-Along Seller
”) agrees to cooperate in consummating such a sale,
including, without limitation, by becoming a party to the sales
agreement and all other appropriate related agreements, delivering,
at the consummation of such sale, share certificates (if any) and
other instruments for such Common Shares duly endorsed for
transfer, free and clear of all liens and encumbrances, and voting
or consenting in favor of such transaction (to the extent a vote or
consent is required) and taking any other necessary or appropriate
action in furtherance thereof, including the execution and delivery
of any other appropriate agreements, certificates, instruments and
other documents (including, without limitation, making any
representations and warranties with respect to the Company or the
Company’s business to the same extent that the 60% Seller
does). In addition, each Drag-Along Seller shall, if and to the
extent requested by the 60% Seller, agree to be severally
responsible for its proportionate share (based on share of total
cash consideration received by all sellers in the transaction) of
the third-party expenses of sale incurred by the sellers in
connection with such sale and the monetary obligations and
liabilities incurred by the sellers in connection with such sale.
Such several monetary obligations and liabilities shall include (to
the extent such obligations are incurred) monetary obligations and
liabilities for indemnification (including for (a) breaches of
representations and warranties made in connection with such sale by
the Company or any other seller with respect to the Company or the
Company’s business and (b) breaches of covenants in
effect prior to closing, but only, the case of either (a) or
(b) to the extent such breaches or inaccuracies are of a type
for which insurance can be obtained on commercially reasonable
terms), and shall also include amounts paid into escrow or subject
to holdbacks, and amounts subject to post-closing purchase price
adjustments, provided that all such obligations are equally
applicable on a several and not joint basis to each Drag-Along
Seller based on the consideration received by such Drag-Along
Seller. The foregoing notwithstanding, (a) without the written
consent of a Drag-Along Seller, the amount of such obligations and
liabilities for which such Drag-Along Seller shall be responsible
shall not exceed the gross proceeds received by such Drag-Along
Seller in such sale, (b) the duration of a Drag-Along
Seller’s liability for indemnification with respect to a
Transfer under this Section 5 shall not exceed one year
from the date of such Transfer, (c) a Drag-Along Seller shall
not be obligated to enter into any additional non-compete or other
post-closing covenant that restricts its activities in any way and
(d) a Drag-Along Seller shall not be responsible for the fraud
of any other seller or any indemnification obligations and
liabilities for breaches of representations and warranties made by
any other seller with respect to such other seller’s
(i) ownership of and title to capital shares of the Company,
(ii) organization, (iii) authority and
(iv) conflicts and consents.
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Section 6.
Right of First Offer
.
(a) ROFO Notice . If
(x) a Management Shareholder (or group of Management
Shareholders) (the “ Initiating Seller ”)
proposes to Transfer any Common Shares and such Transfer has been
approved by the Board, then the Initiating Seller shall first give
written notice (the “ ROFO Notice ”) to the
Sponsor Shareholders (the “ ROFO Offeree Shareholders
”), stating that it desires to make such Transfer, referring
to this Section 6 , specifying the type(s) and number
of Common Shares proposed to be sold (the “ ROFO Offer
Shares ”), and specifying a cash price per Share the
Initiating Seller seeks to receive (as applicable, the “
Proposed Price ”). This Section 6 shall
not apply to shares sold by an Offeree Shareholder, Drag-Along
Seller or 60% Seller pursuant to Sections 4 and 5 ,
respectively.
(b) ROFO Election . Within
ten business days of the date of receipt of the ROFO Notice, each
ROFO Offeree Shareholder shall deliver to the Initiating Seller and
to the Company a written notice (the “ ROFO Election
”) stating whether the ROFO Offeree Shareholder elects to
purchase a portion of the ROFO Offer Shares and, if so, the number
(and, if relevant, the type) of Common Shares such Shareholder
elects to purchase. The number of Common Shares to be sold to a
ROFO Offeree Shareholder pursuant to the immediately preceding
sentence is referred to as the “ Allocated Shares
.” Within ten (10) business days of receipt of the last
ROFO Election, the Initiating Seller shall sell to each electing
ROFO Offeree Shareholder such Shareholder’s Common Shares at
the Proposed Price.
(c) In the event that the ROFO
Offeree Shareholders do not purchase all of the ROFO Offer Shares
pursuant to the foregoing Sections 6(b) and (c) , the
Initiating Seller may then Transfer any remaining portion of the
ROFO Offer Shares to any Person or Persons during a ninety- (90-)
day period that begins after the end of the ten (10) business
day period referred to in the first sentence of
Section 6(b) at a price or prices equal to or greater
than the Proposed Price. In the event that the Initiating Seller
does not so Transfer all of the ROFO Offer Shares by the end of
such 90-day period, the Initiating Seller may not Transfer or seek
to Transfer all or any portion of its Common Shares without
complying anew with this Section 6 .
(d) Any notices required to be given
by Section 4 may be given, and any time periods
referred to in Section 4 may run, concurrently with any
notices or time period under this Section 6 , and vice
versa.
Section 7.
Priority Subscription
Rights
(a) If at anytime after May 6,
2009, the Company proposes to issue new Common Shares or a new
series or class of shares of the Company, except for issuances
(i) personally and not directly or indirectly to the Sponsor
Shareholders, to any director, employee, or consultant of or to the
Company or any of its Subsidiaries pursuant to the Share Incentive
Plan or any other employee benefit, stock purchase or compensation
plan, arrangement, or agreement hereafter adopted by the Board or
entered into by the Company, (ii) issued pursuant to a stock
split, subdivision, or similar transaction or dividend
applicable
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to the outstanding equity interests
of the Company as a dividend or share split of any equity interests
then outstanding, (iii) pursuant to a public offering (to
persons other than Sponsor Shareholders or their Affiliates),
(iv) convertible debt securities or fixed rate preferred stock
sold in an underwritten offering to persons other than the Sponsor
Shareholders (or their Affiliates) or (v) issued as
consideration in any merger, acquisition or joint venture with
another business enterprise approved by the Board, each Management
Shareholder shall have the right (the “ Priority
Subscription Right ”) to elect to purchase for the same
price (net of any underwriting discounts or sales commissions), and
on the same terms as securities of the same type are proposed to be
offered to others, up to such Management Shareholder’s
Priority Subscription Amount. “ Priority Subscription
Amount ” means the maximum number of Common Shares
proposed to be issued in the relevant issuance multiplied by a
fraction, the numerator of which shall be the number of Eligible
Shares held by such Management Shareholder immediately prior to the
issuance and the denominator of which shall be the total number of
Common Shares issued and outstanding immediately prior to such
issuance.
(b) The Company shall cause to be
given to each Management Shareholder prior to the proposed issuance
a written notice setting forth the consideration that the Company
intends to receive and the terms and conditions upon which the
securities shall be issued (the “ Priority Subscription
Notice ”). After receiving a Priority Subscription
Notice, a Management Shareholder which desires to exercise its
Priority Subscription Right must give notice to the Company in
writing, within ten (10) business days after the date that
such Priority Subscription Notice is delivered, that such
Management Shareholder desires to purchase Common Shares of such
issuance (the “ Priority Subscription Reply ”).
The closing of the sale pursuant to a Priority Subscription Reply
shall occur concurrently with the closing of the issuance giving
rise to the Priority Subscription Right. After such ten
(10) business day period, any securities not subscribed for by
Management Shareholders submitting valid Priority Subscription
Replies may, during the period not exceeding ninety (90) days
following the expiration of such ten (10) business day period,
be issued on terms and conditions no less favorable and at a price
not less than the price set forth in the Priority Subscription
Notice. Any such securities not issued during such ninety
(90) day period shall thereafter again be subject to the
Priority Subscription Rights provided for in this
Section 7 . In the event that the consideration
received by the Company in connection with an issuance is property
other than cash, each Management Shareholder may, at its election,
pay the purchase price for such additional securities in such
property or solely in cash. In the event that any such Management
Shareholder elects to pay cash, the amount thereof shall be
determined based on the fair value of the consideration received or
to be received by the Company in connection with the issuance. Such
fair value shall be determined in good faith by the Board. Priority
Subscription Rights are not transferable, and do not transfer by
operation of law, this Management Shareholders Agreement or the
Amended and Restate Bye-Laws, in connection with any Transfer of
any Common Shares.
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Section 8.
Company Rights to Repurchase
Shares . With respect to all Restricted Shares held by any
Management Shareholder and his or her Permitted Transferees, the
terms and conditions of the Company’s right to repurchase
such Restricted Shares prior to any Initial Public Offering or
Listing Event (the “ Call Right ”) are provided
for by applicable individual grant or issuance agreements. The Call
Right shall be exercised by written notice to the Management
Shareholder (a “ Call Notice ”) given in
accordance with Section 15(f). The Company shall pay a
Management Shareholder cash for the repurchase of Restricted Shares
and shall not issue any notes to a Management Shareholder in
connection with the exercise of its Call Right.
Section 9.
Involuntary Transfers
.
(a) In the case of any transfer of
title or beneficial ownership of Restricted Shares upon default,
foreclosure, forfeit, divorce, court order or otherwise, other than
by a voluntary decision on the part of a Management Shareholder
(each, an “ Involuntary Transfer ”), the
Management Shareholder shall promptly (but in no event later than
two days after the Involuntary Transfer) furnish written notice
(the “ Involuntary Transfer Notice ”) to the
Company indicating that the Involuntary Transfer has occurred,
specifying the name of the person to whom the shares were
transferred (the “ Involuntary Transferee ”),
giving a detailed description of the circumstances giving rise to,
and stating the legal basis for, the Involuntary
Transfer.
(b) Upon the receipt of the
Involuntary Transfer Notice, and for sixty (60) days
thereafter, the Company shall have the right to repurchase, and the
Involuntary Transferee shall have the obligation to sell, all (but
not less than all) of the Restricted Shares acquired by the
Involuntary Transferee for a repurchase price equal to the Fair
Market Value of such Common Shares as of the date of the repurchase
(the “ Involuntary Transfer Repurchase Price ”
and such right, the “ Involuntary Transfer Repurchase
Right ”). The Involuntary Transfer Repurchase Right shall
be exercised by written notice (the “ Involuntary Transfer
Repurchase Notice ”) to the Involuntary Transferee given
in accordance with Section 15(f) of this Agreement on
or prior to the last date on which the Involuntary Transfer
Repurchase Right may be exercised by the Company.
(c) Subject to
Section 10 below, the repurchase of Restricted Shares
pursuant to the exercise of the Involuntary Transfer Repurchase
Right shall take place on a date specified by the Company, but in
no event following the later of the sixtieth (60
th
) day
following the date of the Involuntary Transfer Repurchase Notice or
the tenth (10 th ) day following the
receipt by the Company of all necessary governmental approvals. On
such date, the Involuntary Transferee shall transfer the Restricted
Shares subject to the Involuntary Transfer Repurchase Notice to the
Company, free and clear of all liens and encumbrances, by
delivering to the Company the certificates representing the
Restricted Shares to be purchased, duly endorsed for transfer to
the Company or accompanied by a stock power duly executed in blank,
and the Company shall pay to the Involuntary Transferee, the
Involuntary Transfer Repurchase Price. The Involuntary Transferee
shall use all commercially reasonable efforts to assist the Company
in order to expedite all proceedings described in this
Section 9 . If the Involuntary Transferee does transfer
the Restricted Shares to the Company as required, the Company will
cancel such Restricted Shares and deposit the funds in a
non-interest bearing account and make payment upon
delivery.
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Section 10.
Repurchase Disability
.
(a) Notwithstanding anything to the
contrary herein, the Company shall not be permitted to purchase any
Restricted Shares held by any Management Shareholder or Involuntary
Transferee upon exercise of the Call Right or the Involuntary
Transfer Repurchase Right if the Board determines that:
(i) the purchase of Restricted
Shares would render the Company or its Subsidiaries unable to meet
their obligations in the ordinary course of business taking into
account any pending or proposed transactions, capital expenditures
or other budgeted cash outlays by the Company, including, without
limitation, any proposed acquisition of any other entity by the
Company or any of its Subsidiaries;
(ii) the Company is prohibited from
purchasing the Restricted Shares by applicable law restricting the
purchase by a corporation of its own shares; or
(iii) the purchase of Restricted
Shares would constitute a breach of, default, or event of default
under, or is otherwise prohibited by, the terms of any loan
agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party (the “ Financing
Documents ”) or the Company is not able to obtain the
requisite consent of any of its senior lenders to the purchase of
the Restricted Shares.
The events described in
(i) through (iii) above each constitute a “
Repurchase Disability .”
(b) In the event of a Repurchase
Disability, the Company shall notify in writing the Management
Shareholder or Involuntary Transferee with respect to whom the Call
Right or the Involuntary Transfer Repurchase Right has been
exercised (a “ Disability Notice ”). The
Disability Notice shall specify the nature of the Repurchase
Disability. The Company shall thereafter repurchase the Restricted
Shares described in the Call Notice or Involuntary Transfer
Repurchase Notice as soon as reasonably practicable after all
Repurchase Disabilities cease to exist (or the Company may elect,
but shall have no obligation, to cause its nominee to repurchase
the Restricted Shares while any Repurchase Disabilities continue to
exist). In the event the Company suspends its obligations to
repurchase the Restricted Shares pursuant to a Repurchase
Disability, (i) the Company shall provide written notice to
each applicable Management Shareholder or Involuntary Transferee as
soon as practicable after all Repurchase Disabilities cease to
exist (the “ Reinstatement Notice ”);
(ii) the Fair Market Value of the Restricted Shares subject to
the Call Notice or Involuntary Transfer Repurchase Notice shall be
determined as of the date the Reinstatement Notice is delivered to
the Management Shareholder or Involuntary Transferee, which Fair
Market Value shall be used to determine the Repurchase Price or
Involuntary Transfer Repurchase Price in the manner described
above; and (iii) the repurchase shall occur on a date
specified by the Company within ten (10) days following the
determination of the Fair Market Value of the Restricted Shares to
be repurchased as provided in clause (ii) above.
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Section 11.
Shareholder Rights to Repurchase
Shares
(a) In the event that the Company
elects not to exercise its Call Right under Section 8 ,
its Involuntary Transfer Repurchase Right under
Section 9 , or is prevented from exercising such rights
under Section 10 , the Company shall provide written
notice to the Sponsor Shareholders (or, in their discretion, any
other Principal Shareholder(s) designated by the Sponsor
Shareholders) on or at any time prior to the Repurchase Deadline of
(A) its decision not to purchase all of the Restricted Shares
then held by a Management Shareholder or his or her Permitted
Transferees (the “ Call Right Eligible Shares
”), and (B) the number of such Call Right Eligible
Shares, and (C) the Sponsor Shareholders (or any other
applicable Principal Shareholder) shall have the option to purchase
all of such Call Right Eligible Shares on the same terms and
conditions (including, without limitation, the same price per
share) as the applicable Call Right or Involuntary Transfer
Repurchase Right (the “ Sponsor Shareholders Call
Right ”). The Sponsor Shareholders Call Right shall be
exercised by a Call Notice on or prior to the later of (x) the
thirtieth (30th) day following receipt by the Sponsor
Shareholders (or any other applicable Principal Shareholder) of the
written notice above, and (y) the applicable repurchase
deadline.
(b) The repurchase
of Restricted Shares pursuant to the exercise of a Sponsor
Shareholders Call Right shall take place on a date specified by the
Sponsor Shareholders (or any other applicable Principal
Shareholder), as applicable, but in no event following the later of
(i) the sixtieth (60 th ) day following the date of
the applicable Call Notice or Involuntary Transfer Repurchase
Notice; or, (ii) if applicable, the tenth (10
th
) day
following the receipt by the Company of all necessary governmental
approvals. On such date, the Management Shareholder or his or her
Permitted Transferees shall transfer the Restricted Shares subject
to the Call Notice or the Involuntary Transfer Repurchase
Notice to the Sponsor Shareholders (or any other applicable
Principal Shareholder), as applicable, free and clear of all liens
and encumbrances, by delivering the certificates representing the
Restricted Shares to be purchased, duly endorsed for transfer to
the Sponsor Shareholders (or any other applicable Principal
Shareholder), as applicable, or accompanied by a stock power duly
executed in blank. The Management Shareholder shall use all
commercially reasonable efforts to assist the Sponsor Shareholders
(or any other applicable Principal Shareholder), as applicable, in
order to expedite all proceedings described in this
Section 11 .
Section 12
. Termination . This
Agreement, except as otherwise provided in Section 13
and Section 14 hereof, shall terminate on the first to
occur of:
(a) the date described in clause
(x) of the first proviso of Section 13(b) or the
consummation of an event described in clause (y) of the first
proviso to Section 13(b);
(b) an Initial Public
Offering;
(c) the complete liquidation of the
Company or an agreement for the sale, lease or other disposition by
the Company of all or substantially all of the Company’s
assets; or
10
(d) the date established by a
resolution of the Board terminating this Agreement; provided
however that the Board may not terminate any rights of a Management
Shareholder under Section 4 without such Management
Shareholder’s prior written consent.
Section 13.
Initial Public Offering; Listing
Event.
(a) In the event the Company
determines to effect an Initial Public Offering or a Listing Event,
the Management Shareholders will take all reasonable, necessary and
desirable actions in connection with the consummation of the
Initial Public Offering or Listing Event. Prior to the consummation
of any Initial Public Offering or Listing Event, the Board (with,
in connection with an Initial Public Offering, the assistance of
the managing underwriters of the Initial Public Offering) shall
determine the Liquidation Value of each Common Share. The Company
and the Management Shareholders shall take all actions reasonably
necessary, including the voting of, or providing its written
consent with respect to, the Common Shares, to effect any
redemption, recapitalization or exchange of Common Shares
immediately prior to the date of, as applicable, any Initial Public
Offering or Listing Event as determined by the Board in order to
implement such Initial Public Offering or Listing Event; it being
understood that any such redemption, recapitalization or exchange
that may occur prior to the date of such Initial Public Offering or
Listing Event for the purpose of implementing such Initial Public
Offering or Listing Event shall be for the sole purpose of either
(a) converting all the outstanding Class A Shares and
Class B Shares into one single class of common stock with the
rights and preferences as determined by the Board in good faith or
(b) converting all the outstanding Class B Shares into
Class A Shares, provided , that in connection with any
redemption, recapitalization or exchange each Class A Share is
treated the same economically as each other Class A Share and
each Class B Share is treated the same economically as each other
Class B Share consistent with the Liquidation Value of such Class B
Share.
(b) Notwithstanding
Section 12(a) , if a Listing Event occurs before an
Initial Public Offering occurs, the restrictions on transfer set
forth in Section 1 (except for restrictions set forth
in Section 8) shall continue to apply with respect to that
number of Restricted Shares held by a Management S
