SHAREHOLDERS' AGREEMENT

Exhibit 10.1

EXECUTION COPY

SHAREHOLDERS’ AGREEMENT

DATED AS OF MARCH 31, 2009

AMONG

POLARIS ACQUISITION CORP.

AND

THE PERSONS LISTED ON THE SCHEDULES HERETO

TABLE OF CONTENTS

 

 

i

 

ii

THIS SHAREHOLDERS’ AGREEMENT (this “ Agreement ”), dated as of March 31, 2009, among Polaris Acquisition Corp. (“ Parent ”), a Delaware corporation, and each of the Persons listed on Schedule I hereto (each, a “ Company Common Shareholder ” and, collectively, the “ Company Common Shareholders ”), the Persons listed on Schedule II hereto (each a “ Company Preferred Shareholder ” and, collectively, the “ Company Preferred Shareholders ”), and the Persons listed on Schedule III hereto (each, a “ Founder ” and, collectively, the “ Founders ”).

In consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . The following capitalized terms used herein have the following meanings:

“ Affiliate ” means, with respect to any Person, (a) any other Person which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and (b) any Person who shares a common investment advisor. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) as used with respect to any Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise.

“ Agreement ” means this Agreement, as amended, restated, supplemented or otherwise modified from time to time.

“ Apollo ” mean Communications Investors LLC.

“ Apollo Designee ” has the meaning set forth in Section 2.1(b).

“ Apollo Replacement Director ” has the meaning set forth in Section 2.3.

“ Apollo Voting Shares ” has the meaning set forth in Section 2.4.

“ Appraisal Procedure ” means the following procedure to determine the Fair Market Value of the Common Stock (the “ Valuation Amount ”). The Valuation Amount shall be determined in good faith by the Board with written notice thereof to the Company Preferred Shareholders describing in reasonable detail the methodology used by the Board in making the determination; provided , however , that if any Required Holders shall object to the Valuation Amount in writing within fifteen (15) days of receipt of notice of the Valuation Amount, the Valuation Amount shall be determined by an investment banking firm of national reputation, which firm shall be reasonably acceptable to the Board and the Required Holders. If the Board and the Required Holders are unable to agree upon an acceptable investment banking firm within ten (10) days after the date either party proposed that one be selected, the investment banking

firm will be selected by an arbitrator located in New York City, New York, selected by the American Arbitration Association (or if such organization ceases to exist, the arbitrator shall be chosen by a court of competent jurisdiction). The arbitrator shall select the investment banking firm (within ten (10) days of his appointment) from a list, jointly prepared by the Board and the Required Holders, of not more than six (6) investment banking firms of national reputation in the United States, of which no more than three (3) may be named by the Board and no more than three (3) may be named by the Required Holders. The arbitrator may consider, within the ten (10) day period allotted, arguments from the parties regarding which investment banking firm to choose, but the selection by the arbitrator shall be made in its sole discretion from the list of six (6). The Board and the Required Holders shall submit their respective valuations and other relevant data to the investment banking firm, and the investment banking firm shall, within thirty (30) days of its appointment, make its own determination of the Valuation Amount. The determination of the final Valuation Amount by such investment banking firm shall be final and binding upon the parties. Parent shall bear all of the fees and expenses of the investment banking firm and arbitrator (if any) used to determine the Valuation Amount unless the final Valuation Amount is within 5% of the Valuation Amount determined by the Board and set forth in the initial notice thereof, in which case, Parent shall bear one-half of such fees and expenses, and the Company Preferred Shareholders requesting such appraisal procedure shall bear one-half of such fees and expenses (on a Pro Rata basis among such Company Preferred Shareholders based on their relative levels of ownership of Common Stock (excluding shares of Common Stock owned beneficially or of record prior to the Closing)). If required by any such investment banking firm or arbitrator, Parent shall execute a retainer and engagement letter containing reasonable terms and conditions, including, without limitation, customary provisions concerning the rights of indemnification and contribution by Parent in favor of such investment banking firm or arbitrator and its officers, directors, partners, employees, agents and Affiliates.

“ Blackout Period ” has the meaning set forth in Section 5.1(c).

“ Board ” means the board of directors of Parent.

“ Business Day ” means any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York.

“ Change of Control or Reorganization Event ” has the meaning set forth in Exhibit A to the Merger Agreement.

“ Closing ” the closing of the Merger.

“ Closing Date ” means March 31, 2009.

“ Commission ” means the Securities and Exchange Commission, or any other federal agency then administering the Securities Act or the Exchange Act.

“ Common Escrowed Earnout Shares ” has the meaning set forth in Exhibit A to the Merger Agreement.

 

2

“ Common Stock ” means the common stock, par value $0.0001 per share, of Parent and any other capital stock of any class or series of Parent and any shares of capital stock issuable upon the conversion, exercise or exchange of securities of Parent convertible into, or exercisable or exchangeable for, any such common stock or other capital stock of Parent.

“ Common Transaction Shares ” has the meaning set forth in Section 2.6(c) of the Merger Agreement.

“ Company ” means Hughes Telematics, Inc., a Delaware corporation.

“ Company Common Shareholder ” has the meaning set forth in the preamble to this Agreement.

“ Company Common Shareholder Demand Registration ” has the meaning set forth in Section 4.1(a).

“ Company Common Shareholder Demand Participant ” has the meaning set forth in Section 4.1(a).

“ Company Preferred Shareholder ” has the meaning set forth in the preamble to this Agreement.

“ Company Preferred Shareholder Demand Registration ” has the meaning set forth in Section 4.1(b).

“ Company Preferred Shareholder Demand Participant ” has the meaning set forth in Section 4.1(b).

“ Converted Options ” has the meaning set forth in Section 2.6(g) of the Merger Agreement.

“ Converted Options Shares ” has the meaning set forth in Section 2.6(g) of the Merger Agreement.

“ Converting Party ” has the meaning set forth in Section 4.1(f)(ii).

“ Co-Sale Agreement ” means the Amended and Restated Co-Sale and Stock Restriction Agreement, dated as of March 12, 2009, by and among the Company, Apollo, the Company Preferred Shareholders and certain other securityholders of the Company.

“ Delay Period ” has the meaning set forth in Section 5.1(a).

“ Demand Registration ” means either (i) a Company Common Shareholder Demand Registration, (ii) a Company Preferred Shareholder Demand Registration or (iii) a Founder Demand Registration, as the case may be.

“ Demand Participant ” means (i) the Company Common Shareholder Demand Participants if a Company Common Shareholder Demand Registration is demanded pursuant to Section 4.1(a), (ii) the Company Preferred Shareholder Demand Participant if a Company Preferred Shareholder Demand Registration is demanded pursuant to Section 4.1(b), or (iii) a Company Founder Demand Participant if a Founder Demand Registration is demanded pursuant to Section 4.1(c).

 

3

“ Demanding Party ” means (i) the Majority-in-interest of the Company Common Shareholders if a Company Common Shareholder Demand Registration is demanded pursuant to Section 4.1(a), (ii) the Required Holders if a Company Preferred Shareholder Demand Registration is demanded pursuant to Section 4.1(b), or (iii) a Majority-in-interest of the Founders if a Founder Demand Registration is demanded pursuant to Section 4.1(c).

“ Earnout Options ” has the meaning set forth in Section 2.6(g) of the Merger Agreement.

“ Effectiveness Deadline ” has the meaning set forth in Section 4.3(c)(i).

“ Effectiveness Failure ” has the meaning set forth in Section 4.3(c)(ii).

“ Effectiveness Period ” has the meaning set forth in Section 5.1(c).

“ Escrow Agreement ” means the Escrow Agreement, dated as of the date hereof, between Parent, Communications Investors LLC, as escrow representative, and Continental Stock Transfer & Trust Company, as escrow agent.

“ Escrowed Earnout Shares ” has the meaning set forth in Exhibit A to the Merger Agreement.

“ Escrowed Indemnity Shares ” has the meaning set forth in Section 2.10 of the Merger Agreement.

“ Escrowed Sponsor Earnout Shares ” has the meaning set forth in Section 2.8(b) of the Merger Agreement.

“ Escrow Period ” means the period of time up until no Escrowed Earnout Shares or Escrowed Indemnity Shares remain in escrow pursuant to the Escrow Agreement.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

“ Fair Market Value ” means $10 (subject to adjustments for stock dividends, stock splits, reverse stock splits, combinations and similar events); provided , however , that to the extent that Parent elects to pay any portion of the penalty set forth in Section 4.3(c)(ii) in additional shares of Common Stock, then for purposes of determining the number of shares to be so issued as payment “Fair Market Value” shall mean the average closing price of a share of the Common Stock as reported on the principal exchange, electronic trading network or recognized quotation system on which the Common Stock is then listed or quoted over the ten (10) trading days ending on, as the case may be, the six (6) month anniversary of the Closing, the last Business Day of each thirty (30) day period thereafter, or the date a Registration Statement is declared effective; provided , further , that, in the event the shares are not listed for trading on an

 

4

exchange or quoted on an electronic trading network or recognized quotation system, the Fair Market Value shall be determined in accordance with the Appraisal Procedure; provided , further , that if, on the first date of any Effectiveness Failure and at any time thereafter, the number of shares of Common Stock outstanding immediately following the consummation of the Merger has been or is increased or decreased by stock dividends, stock splits, reverse splits, combinations or similar transactions, then, following the record date or effective date to determine shares affected by such a transaction, the portion of the penalty to be paid in shares of Common Stock shall be appropriately decreased or increased by multiplying the amount of shares specified by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately prior to such change and the denominator of which is the number of shares of Common Stock outstanding immediately after such change.

“ First Target ” has the meaning set forth in Section 2.8(c) of the Merger Agreement.

“ Form S-3 ” means Form S-3 or any similar short-form registration which may be available at such time.

“ Founder ” has the meaning set forth in the preamble to this Agreement.

“ Founder Demand Registration ” has the meaning set forth in Section 4.1(c).

“ Founder Demand Participant ” has the meaning set forth in Section 4.1(c).

“ Founder Replacement Director ” has the meaning set forth in Section 2.2.

“ Founder Shares ” means the shares of Common Stock owned or held by the Founders, including shares of Common Stock issued to the Founders upon exercise of the Founder Warrants.

“ Founder Warrants ” means the warrants purchased privately by certain of the Founders simultaneously with the consummation of Parent’s initial public offering.

“ Full Cooperation ” means, in connection with any underwritten offering, where, in addition to the cooperation otherwise required by this Agreement, (a) members of senior management of Parent (including the chief executive officer and chief financial officer) fully cooperate with the underwriter(s) in connection therewith and make themselves available to participate in “due diligence” sessions and “road-show” and other customary marketing activities in such locations (domestic and foreign) as recommended by the underwriter(s), including conference calls and one-on-one meetings with prospective purchasers of the Registrable Securities, and (b) Parent prepares preliminary and final prospectuses for use in connection therewith containing such additional information as reasonably requested by the underwriter(s) (in addition to the minimum amount of information required by law, rule or regulation).

“ Fully Marketed Underwritten Offering ” means an underwritten offering in which there is Full Cooperation.

 

5

“ Governmental Authority ” means any federal, state, local or foreign government, executive official thereof, governmental or regulatory authority, agency or commission, including courts of competent jurisdiction, domestic or foreign.

“ Indemnified Party ” has the meaning set forth in Section 6.3.

“ Indemnifying Party ” has the meaning set forth in Section 6.3.

“ Lock-up Agreement ” has the meaning set forth in Section 4.1(e)(i).

“ Majority-in-interest ” means, as to any group of Persons from time to time, the owners of greater than fifty percent (50%) of the Common Stock held by such Persons on a fully-diluted basis.

“ Maximum Number of Shares ” has the meaning set forth in Section 4.1(f).

“ Merger ” means the transaction contemplated by the Second Amended and Restated Agreement and Plan of Merger, dated as of March 12, 2009 (as amended, restated, supplemented or otherwise modified, the “ Merger Agreement ”), by and between Parent and the Company.

“ Notices ” has the meaning set forth in Section 9.4.

“ Parent ” means Polaris Acquisition Corp., a Delaware corporation (as such entity will be renamed HUGHES Telematics, Inc. in the Merger).

“ Permitted Company Common Shareholder Transferees ” has the meaning set forth in Section 3.1(a).

“ Permitted Company Preferred Shareholder Transferees ” has the meaning set forth in Section 3.2(a).

“ Permitted Founder Transferees ” has the meaning set forth in Section 3.3(b).

“ Permitted Founder Earnout Shares Transferees ” has the meaning set forth in Section 3.3(a).

“ Permitted Founder Warrants Transferees ” has the meaning set forth in Section 3.3(b).

“ Permitted Transferees ” has the meaning set forth in Section 3.2(a).

“ Person ” means an individual, a partnership (general or limited), a corporation, a limited liability company, an association, a joint stock company, Governmental Authority, a business or other trust, a joint venture, any other business entity or an unincorporated organization.

“ Piggy-Back Registration ” has the meaning set forth in Section 4.2(a).

 

6

“ Pro Rata ” means as to a particular Person, pro rata in accordance with the number of shares of Common Stock that each such Person has requested be included in a respective Registration, regardless of the number of shares of Common Stock held by each such Person.

“ Register ,” “ Registered ” and “ Registration ” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

“ Registrable Securities ” means (i) all Common Stock owned or held by the Company Common Shareholders (and the Permitted Company Common Shareholder Transferees), (ii) all Common Stock owned or held by the Company Preferred Shareholders (and the Permitted Company Preferred Shareholder Transferees), other than any Common Stock owned or held by the Company Preferred Shareholders as a result of the units sold to the Company Preferred Shareholders under Parent’s Registration Statement on Form S-1 (File No. 333-145759), (iii) all Common Stock and Founder Warrants and shares of Common Stock underlying Founder Warrants owned or held by the Founders (and the Permitted Founder Transferees), together with any shares of Common Stock issued in respect of any of the foregoing upon a stock split, distribution or otherwise. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been Transferred in accordance with such Registration Statement; (b) such securities shall have been otherwise Transferred, new certificates for them not bearing a legend restricting further Transfer shall have been delivered by Parent and subsequent public distribution of them shall not require Registration under the Securities Act; (c) such securities shall have ceased to be outstanding; or (d) the Registrable Securities are saleable under Rule 144 and not subject to the volume restriction therein; provided , however , that if, within four (4) years after the date of this Agreement, any shares of Common Stock cease to be Registrable Securities by virtue of clause (d) above and Rule 144 subsequently becomes unavailable to permit the resale thereof, such shares shall once again be considered Registrable Securities; provided , further, if, four (4) years after the date of this Agreement, any shares of Common Stock cease to be Registrable Securities by virtue of clause (d) above and Rule 144 subsequently becomes unavailable to permit the sale thereof, such shares shall not be Registrable Securities. Notwithstanding anything herein to the contrary, for purposes of Sections 4.1, 4.2 and 4.3(a) and (b), the term “Registrable Securities” shall only include those Registrable Securities for which the Transfer restriction applicable to such Registrable Securities, as set forth in Section 3.1 hereof, has expired, and for purposes of Section 4.3(c), the term “Registrable Securities” shall mean all Registrable Securities irrespective of the Transfer restrctions set forth in Section 3.1.

“ Registrable Securityholders ” means, for so long as any such Person holds Registrable Securities, collectively, (i) the Founders, (ii) the Company Preferred Shareholders, (iii) the Company Common Shareholders, and (iv) Persons who or which have acquired shares of Registrable Securities from, and are Permitted Transferees of, any of the Persons referred to in clauses (i), (ii) and (iii) or their Permitted Transferees (or any combination of the foregoing).

 

7

“ Registrable Securityholders Indemnified Party ” has the meaning set forth in Section 6.1.

“ Registration Statement ” means a registration statement filed by Parent with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of Common Stock (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).

“ Required Holders ” means the Company Preferred Shareholders that own Common Stock with a RH Fair Market Value of at least $10,000,000, in the aggregate; provided , however , that, notwithstanding anything herein to the contrary, a majority-in-interest (based on the relative number of Registrable Securities held by each of them) of the Company Preferred Shareholders listed on Schedule IV hereto shall be entitled to at least one Company Preferred Shareholder Demand Registration pursuant to Section 4.1(b) hereof.

“ RH Fair Market Value ” means the average closing price of a share of the Common Stock as reported on the principal exchange, electronic trading network or recognized quotation system on which the Common Stock is then listed or quoted over the ten (10) most recent trading days; provided , that, in the event the shares are not listed for trading on an exchange or quoted on an electronic trading network or recognized quotation system, the RH Fair Market Value shall be determined in good faith by the Board, subject to reasonable and customary appraisal rights of the Company Preferred Shareholders.

“ Rule 144 ” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

“ Rule 415 ” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

“ Second Target ” has the meaning set forth in Section 2.8(d) of the Merger Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

“ Series B Purchase Agreement ” means the Stock Purchase Agreement dated as of March 12, 2009, by and among the Company and the Company Preferred Shareholders.

“ Stock Escrow Agreement ” means the Stock Escrow Agreement, dated as of January 11, 2008, by and among Parent, certain of the Founders and Continental Stock Transfer & Trust Company.

 

8

“ Subscription Agreement ” means the Subscription Agreements, in the form filed as an exhibit to Parent’s Registration Statement on Form S-1 (File No. 333-145759), among Polaris, Graubard Miller and each of the Founders.

“ Suspension Notice ” has the meaning set forth in Section 5.1(c).

“ Third Target ” has the meaning set forth in Section 2.8(e) of the Merger Agreement.

“ Trading Market ” shall mean whichever of the New York Stock Exchange, the New York Stock Exchange Alternext, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Bulletin Board, or in each case, any successor market, the Common Stock is listed or quoted on for trading on the date in question.

“ Transfer ” means to (a) directly or indirectly offer, sell, contract to sell, exchange, pledge or otherwise dispose of any Common Stock or other equity securities of Parent, (b) enter into any transaction which is designed to, or would reasonably be expected to, result in the disposition, whether by actual disposition or effective economic disposition due to cash settlement or otherwise, of Common Stock or other equity securities of Parent (including the filing or participation in the filing of a Registration Statement with the Commission), or (c) establish or increase a put equivalent position or liquidate or decrease a call equivalent position relating to Common Stock or other equity securities of Parent within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. “Transferred” and “Transferee” each have a correlative meaning.

“ Unaffiliated Directors ” means an “independent” director as defined in the applicable stock exchange rules who has not had, for the preceding two years, a material relationship with Apollo Global Management, LLC or its Affiliates.

“ Underwriter ” or “ Underwriters ” means a securities dealer or dealers who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s or dealers’ market-making activities.

“ Underwritten Offering ” means a sale of securities of Parent to an Underwriter or Underwriters for reoffering to the public.

“ Warrant Escrow Agreement ” means the Warrant Escrow Agreement, dated as of January 11, 2008, by and among Parent, certain of the Founders and Continental Stock Transfer & Trust Company.

 

9

ARTICLE II

BOARD RIGHTS; MANAGEMENT ARRANGEMENTS

Section 2.1 Board of Directors . Simultaneously with the Closing, Parent shall take all necessary actions within its control, in order to cause:

(a) Authorized Number . The number of directors serving on the Board to be nine (9).

(b) Members . The election to the Board of the following persons: (i) Jeffrey A. Leddy, Andrew D. Africk, Matthew H. Nord, Aaron Stone, Steven Martinez and Warren Lieberfarb, each of whom was designated by Apollo (each, an “ Apollo Designee ”), (ii) Marc V. Byron, who was designated by the Board, and (iii) Andrew P. Hines and Mark Van Stekelenburg, each of whom was mutually designated by the Board together with Apollo.

Section 2.2 Founder Replacement Director . In the event of the death, disability, disqualification, resignation or removal of Marc Byron or his failure to be elected prior to the expiration of the Escrow Period, Parent shall nominate for election to the Board a replacement (the “ Founder Replacement Director ”) identified by a Majority-in-interest of the Founders, who shall be entitled to serve until the expiration of the Escrow Period. In the event of the death, disability, disqualification, resignation or removal of the Founder Replacement Director prior to the expiration of the Escrow Period, a new Founder Replacement Director shall be identified by a Majority-in-interest of the Founders, who shall be entitled to serve until the expiration of the Escrow Period. Such Founder Replacement Director must meet all applicable requirements or qualifications under applicable law, stock exchange rules and Parent’s organizational documents to be a member of the Board. Nothing herein shall be deemed to require that any party hereto, or any Affiliate thereof, act or be in violation of any applicable provision of law, legal duty or requirement, or stock exchange or stock market rule.

Section 2.3 Apollo Replacement Director . In the event of the death, disability, disqualification, resignation or removal of any Apollo Designee or failure of any Apollo Designee to be elected prior to the expiration of the Escrow Period, Apollo shall nominate for election to the Board a replacement (the “ Apollo Replacement Director ”) identified by Apollo, who shall be entitled to serve until the expiration of the Escrow Period. In the event of the death, disability, disqualification, resignation or removal of the Apollo Replacement Director prior to the expiration of the Escrow Period, a new Apollo Replacement Director shall be identified by Apollo, who shall be entitled to serve until the expiration of the Escrow Period. Such Apollo Replacement Director shall meet any applicable requirements or qualifications under applicable law, stock exchange rules and Parent’s organizational documents to be a member of the Board. Nothing herein shall be deemed to require that any party hereto, or any Affiliate thereof, act or be in violation of any applicable provision of law, legal duty or requirement, or stock exchange or stock market rule.

Section 2.4 Termination of Director Appointment Right . Apollo shall vote all shares of Common Stock held of record or beneficially owned by Apollo, but only to the extent it exercises voting power with respect to such shares (the “ Apollo Voting Shares ”) in favor of Marc Byron or the Founder Replacement Director nominated by Parent until the earlier of (i) the termination of the Escrow Period and (ii) the date when the Founders hold less than fifty percent (50%) of the outstanding shares of Common Stock held by the Founders at the Closing.

Section 2.5 Unaffiliated Director . Apollo shall vote the Apollo Voting Shares such that, for the duration of the Escrow Period, the Board shall at all times include Marc Byron or the Founder Replacement Director or, if no such person is still a member of the Board, at least one Unaffiliated Director.

 

10

Section 2.6 Company Preferred Shareholders . The provisions of this Article II do not apply to the Company Preferred Shareholders, the Company Common Shareholders (other than Apollo) or the Founders, except with respect to the right of the Founders to identify Founder Replacement Directors pursuant to Section 2.2.

Section 2.7 Voting Rights . Notwithstanding anything herein to the contrary, the agreements, rights and obligations set forth in this Article II are between Parent and Apollo and, separately, between Parent and the Founders.

ARTICLE III

TRANSFER RESTRICTIONS

Section 3.1 Company Common Shareholders Transfer Restrictions .

(a) Each Company Common Shareholder agrees not to Transfer any Common Transaction Shares or Converted Option Shares underlying Converted Options, in each case for twenty-four (24) months following the Closing, except (i) by gift to a member of such Company Common Shareholder’s immediate family or to a trust, the beneficiary of which is such Company Common Shareholder or a member of such Company Common Shareholder’s immediate family, (ii) by virtue of the laws of descent and distribution upon death of such Company Common Shareholder, (iii) to an Affiliate or (iv) pursuant to a qualified relations order; provided , however , that such permissive transfers shall be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement in accordance with Section 9.9 hereof (the “ Permitted Company Common Shareholder Transferees ”).

(b) Each Company Common Shareholder agrees not to Transfer any Common Escrowed Earnout Shares or Converted Option Shares underlying Earnout Options until (i) with respect to such shares released from escrow upon, the achievement of the First Target between the first and second anniversaries (including on the second anniversary) of the Closing Date, twelve (12) months following the distribution to Company Common Shareholders of such shares from escrow and (ii) with respect to such shares released from escrow upon the achievement of the First Target after the second anniversary of the Closing Date, the Second Target and Third Target, the earlier of (x) six (6) months following the distribution to Company Common Shareholders of such shares from escrow or (y) the fifth anniversary of the Closing Date; provided , however , that, subject to compliance with Section 9.9 hereof, Company Common Shareholders may Transfer any Common Escrowed Earnout Shares or Converted Option Shares underlying Earnout Options to Permitted Company Common Shareholder Transferees without restriction at any time.

Section 3.2 Company Preferred Shareholders Transfer Restrictions .

(a) Subject to Section 3.2(b), each Company Preferred Shareholder agrees not to Transfer any Preferred Transaction Shares for six (6) months following the Closing,

 

11

except (i) by gift to a member of such Company Preferred Shareholder’s immediate family or to a trust, the beneficiary of which is such Company Preferred Shareholder or a member of such Company Preferred Shareholder’s immediate family, (ii) by virtue of the laws of descent and distribution upon death of such Company Preferred Shareholders, (iii) to an Affiliate or (iv) pursuant to a qualified relations order; provided , however , that such permissive transfers shall be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement in accordance with Section 9.9 hereof (the “ Permitted Company Preferred Shareholder Transferees ” and together with the Permitted Company Common Shareholder Transferees and Permitted Founder Transferees, the “ Permitted Transferees ”).

(b) Parent shall promptly provide notice to each Company Preferred Shareholder of any discretionary waiver or early termination of the Transfer restrictions of any Company Common Shareholder, Founder or officer or director of Parent and cause each Company Preferred Shareholder to receive, on a proportionate basis, the benefit of any such waiver or termination.

Section 3.3 Founder Transfer Restrictions .

(a) Each Founder agrees not to Transfer any Founder Shares for twelve (12) months following the Closing, except (i) by gift to a member of the Founder’s immediate family or to a trust, the beneficiary of which is a Founder or a member of a Founder immediate family, (ii) by virtue of the laws of descent and distribution upon death of any Founder, or (iii) pursuant to a qualified domestic relations order; provided , however , that such permissive transfers shall be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement, in accordance with Section 9.9 hereof, and the Stock Escrow Agreement (the “ Permitted Founder Earnout Shares Transferees ”).

(b) Each Founder agrees not to Transfer any Founder Warrant for forty-five (45) days following the Closing, except (i) upon the dissolution and liquidation of a Founder and the distribution of assets to its members; (ii) by gift to a immediate family member of a Founder’s members or to a trust, the beneficiary of which is a member of the Founder or a member of the immediate family of the Founder members, (iii) by virtue of the laws of descent and distribution upon death of any member of a Founder, or (iv) pursuant to a qualified domestic relations order; provided , however , that such permissive transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement, in accordance with Section 9.9 hereof, and of the Subscription Agreement signed by the Founder (the “ Permitted Founder Warrant Transferees ” and, together with the Permitted Founder Earnout Shares Transferees, the “ Permitted Founder Transferees ”).

(c) Each Founder agrees not to Transfer any Escrowed Sponsor Earnout Shares until (i) with respect to such shares released from escrow upon the achievement of the First Target between the first and second anniversaries (including the second anniversary) of the Closing Date, twelve (12) months following the distribution to the Founders of such shares from escrow and (ii) with respect to such shares released from escrow upon the achievement of the First Target after the second anniversary of the Closing Date, the earlier of (x) six (6) months following the distribution to the Founders of such shares from escrow or (y) the fifth anniversary

 

12

of the Closing Date; provided , however , that, subject to compliance with Section 9.9 hereof, Founders may Transfer any Escrowed Sponsor Earnout Shares to Permitted Founder Transferees without restriction at any time.

Section 3.4 Voting of Escrowed Shares .

(a) Voting of Escrowed Earnout Shares . For any matters brought to a vote of the stockholders of Parent during such time when any Escrowed Earnout Shares or Escrowed Sponsor Earnout Shares remain in escrow, each Company Common Shareholder, Company Preferred Shareholders and Founder shall be entitled to vote such Escrowed Earnout Shares without restriction (provided that the Apollo Voting Shares shall be subject to the voting provisions of Article II hereof).

(b) Voting of Escrowed Indemnity Shares . The Company Common Shareholders may vote the Escrowed Indemnity Shares without restriction.

ARTICLE IV

REGISTRATION RIGHTS

Section 4.1 Demand Registration .

(a) Request by the Company Common Shareholders . At any time following the expiration of the time period for the applicable Transfer restriction set forth in Section 3.1 hereof, but in no event less than 24 months from the Closing, a Majority-in-interest of the Company Common Shareholders (including any Permitted Company Common Shareholders Transferees) may make a written demand for Registration under the Securities Act of all or any portion of their Registrable Securities (a “ Company Common Shareholder Demand Registration ”). Any Company Common Shareholder Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Parent will notify all other Registrable Securityholders of the demand, and each Company Common Shareholder who wishes to include all or a portion of such holder’s Registrable Securities in the Company Common Shareholder Demand Registration (each such holder including shares of Registrable Securities in such Registration, a “ Company Common Shareholder Demand Participant ”) shall so notify Parent within fifteen (15) Business Days after the receipt by the Company Common Shareholders of the notice from Parent. Upon any such request, the Company Common Shareholder Demand Participants shall be entitled to have their Registrable Securities included in the Company Common Shareholder Demand Registration, subject to Section 4.1(f) and the provisos set forth in Section 5.1(a); provided , however , Parent shall not be obligated to effect (i) more than four (4) Company Common Shareholder Demand Registrations pursuant to this Section 4.1(a) or (ii) any Company Common Shareholder Demand Registration pursuant to this Section 4.1(a) if the value of the Registrable Securities that the Company Common Shareholders propose to sell in their demand for a Company Common Shareholder Demand Registration is less than $20,000,000; provided , further , that Registrable Securityholders may not demand that Parent include in any Company Common Shareholder Demand Registration any Registrable Securities that are Registered pursuant to an effective Registration Statement.

 

13

(b) Request by the Company Preferred Shareholders . At any time following the expiration of the time period for the applicable Transfer restriction set forth in Section 3.2 hereof, but in no event less than six (6) months from the Closing, the Required Holders may make a written demand for Registration under the Securities Act of all or any portion of their Registrable Securities (a “ Company Preferred Shareholder Demand Registration ”). Any Company Preferred Shareholder Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Parent will notify all other Company Preferred Shareholders of the demand, and each Company Preferred Shareholder who wishes to include all or a portion of such holder’s Registrable Securities in the Company Preferred Shareholder Demand Registration (each such holder including shares of Registrable Securities in such Registration, a “ Company Preferred Shareholder Demand Participant ”) shall so notify Parent within fifteen (15) Business Days after the receipt by the Company Preferred Shareholders of the notice from Parent. Upon any such request, the Company Preferred Shareholder Demand Participants shall be entitled to have their Registrable Securities included in the Company Preferred Shareholder Demand Registration, subject to Section 4.1(f) and the provisos set forth in Section 5.1(a); provided , however , Parent shall not be obligated to effect more than two (2) Company Preferred Shareholder Demand Registrations pursuant to this Section 4.1(b); provided , further , that Registrable Securityholders may not demand that Parent include in any Company Preferred Shareholder Demand Registration any Registrable Securities that are Registered pursuant to an effective Registration Statement.

(c) Request by the Founders . At any time following the expiration of the time period for the applicable Transfer restriction set forth in Section 3.3 hereof, a Majority-in-interest of the Founders (including Permitted Founder Transferees) may make a written demand for Registration under the Securities Act of all or any portion of their Registrable Securities that are not subject to the Transfer restrictions set forth in Section 3.3 hereof (a “ Founder Demand Registration ”). Any demand for a Founder Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Parent shall notify all other Founders of the demand, and each Founder who wishes to include all or a portion of such holder’s Registrable Securities in the Founder Demand Registration (each such holder including shares of Registrable Securities in such Registration, a “ Founder Demand Participant ”) shall so notify Parent within fifteen (15) Business Days after the receipt by the Founders of the notice from Parent. Upon any such request, the Founder Demand Participants shall be entitled to have their Registrable Securities included in the Founder Demand Registration, subject to Section 4.1(f) and the provisos set forth in Section 5.1(a); provided , however , Parent shall not be obligated to effect (i) more than two (2) Founder Demand Registrations pursuant to this Section 4.1(c) or (ii) any Founder Demand Registration pursuant to this Section 4.1(c) if the value of the Registrable Securities that the Founders propose to sell in their demand for a Founder Demand Registration is less than $2,000,000; provided , further , that Registrable Securityholders may not demand that Parent include in any Founder Demand Registration any Registrable Securities that are Registered pursuant to an effective Registration Statement.

(d) Effective Registration . A Registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and Parent has complied with all of its

 

14

obligations under this Agreement with respect thereto; provided , however , that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to such Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until (i) such stop order or injunction is removed, rescinded or otherwise terminated and (ii) Demanding Party thereafter elects to continue the offering; provided , further, that the Company shall not be obligated to file a second Registration Statement pursuant to this Section 4.1 until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

(e) Fully Marketed Underwritten Offering .

(i) Initiated by the Company Common Shareholders . If after twenty (24) months following the Closing Date, a Majority-in-interest of the Company Common Shareholders so elect, and such holders so advise Parent as part of a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of a Fully Marketed Underwritten Offering; provided , however , Parent shall not be obligated (x) to effect more than one (1) such Fully Marketed Underwritten Offering pursuant to this Section 4.1(e)(i) or (y) to effect such a Fully Marketed Underwritten Offering if the value of the Registrable Securities related to such Demand Registration is less than $20,000,000. If a Majority-in-interest of the Company Common Shareholders request a Fully Marketed Underwritten Offering, Parent shall cause there to occur Full Cooperation in connection therewith. Subject to Section 5.1(g), all Registrable Securityholders proposing to distribute their securities through such Fully Marketed Underwritten Offering shall (A) enter into an underwriting agreement in customary form with the Underwriter(s) selected for such underwriting by mutual agreement between a Majority-in-interest of the Company Common Shareholders and Parent, subject to such each parties acting reasonably, and (B) if requested by the lead managing underwriter, enter into a customary lock-up agreement not to exceed 90 days (a “ Lock-up Agreement ”), with respect to any Registrable Securities not included in the Fully Marketed Underwritten Offering. The right of any Registrable Securityholder to include its Registrable Securities in such Registration shall be conditioned upon such Registrable Securityholder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein.

(ii) Initiated by Founders . If after twenty (24) months following the Closing Date, a Majority-in-interest of the Founders so elect, and the Founders so advise Parent as part of a Founder Demand Registration, the offering of such Registrable Securities pursuant to such Founders Demand Registration shall be in the form of a Fully Marketed Underwritten Offering; provided , however , Parent shall not be obligated (x) to effect more than one (1) such Fully Marketed Underwritten Offering pursuant to this Section 4.1(e)(ii) or (y) to effect such a Fully Marketed Underwritten Offering if the value of the Registrable Securities related to such Founder Demand Registration is less than $20,000,000. If a Majority-in-interest of the Founders request a Fully Marketed

 

15

Underwritten Offering, Parent shall cause there to occur Full Cooperation in connection therewith. Subject to Section 5.1(g), all Registrable Securityholders proposing to distribute their securities through such Fully Marketed Underwritten Offering shall (A) enter into an underwriting agreement in customary form with the Underwriter(s) selected for such underwriting by mutual agreement between a Majority-in-interest of the Founders and Parent, subject to such each parties acting reasonably, and (B) if requested by the lead managing underwriter, enter into a Lock-up Agreement with respect to any Registrable Securities not included in the Fully Marketed Underwritten Offering. The right of any Registrable Securityholder to include its Registrable Securities in such Registration shall be conditioned upon such Registrable Securityholder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein.

(iii) Initiated by Company Preferred Shareholders . If after twelve (12) months following the Closing Date, the Required Holders so elect, and the Required Holders so advise Parent as part of a Company Preferred Shareholder Demand Registration, the offering of such Registrable Securities pursuant to such Company Preferred Shareholder Demand Registration shall be in the form of a Fully Marketed Underwritten Offering. If the Required Holders request a Fully Marketed Underwritten Offering, Parent shall cause there to occur Full Cooperation in connection therewith. Subject to Section 5.1(g), all Registrable Securityholders proposing to distribute their securities through such Fully Marketed Underwritten Offering shall (A) enter into an underwriting agreement in customary form with the Underwriter(s) selected for such underwriting by mutual agreement between the Required Holders participating in the Fully Marketed Underwritten Offering and Parent, subject to such each parties acting reasonably, and (B) if requested by the lead managing underwriter, enter into a Lock-up Agreement with respect to any Registrable Securities not included in the Fully Marketed Underwritten Offering. The right of any Registrable Securityholder to include its Registrable Securities in such Registration shall be conditioned upon such Registrable Securityholder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein.

(f) Reduction of Offering . If the managing Underwriter(s) for a Demand Registration that is to be an Underwritten Offering advises Parent and the Demanding Party in good faith and in writing that the dollar amount or number of shares of Registrable Securities that the Demanding Party desires to sell, taken together with all other shares of Common Stock or other equity securities that Parent desires to sell and the shares of Common Stock or other equity securities, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of Parent, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “ Maximum Number of Shares ”), then Parent shall include in such Registration, subject to Section 4.1(f)(ii), (u) first, the Registrable Securities as to which Demand

 

16

Registration has been requested by the Demanding Party, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; (v) then, if the Demand Registration has not been issued pursuant to 4.1(b), to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (u), the Registrable Securities, as to which Registration has be