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Exhibit 10.76
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of February 24, 2005, by and
among
SELECT MEDICAL HOLDINGS CORPORATION, a Delaware corporation f/k/a
EGL Holding
Company (the "Company"), WELSH, CARSON, ANDERSON & STOWE IX,
L.P., a Delaware
limited partnership ("WCAS IX"), WCAS CAPITAL PARTNERS IV, L.P., a
Delaware
limited partnership ("WCAS CP IV"), and each of the other
individuals and
entities from time to time named on Schedule I hereto (together
with WCAS IX and
WCAS CP IV, each a "Stockholder" and collectively, the
"Stockholders").
RECITALS:
WHEREAS, on October 17, 2004, the Company, EGL Acquisition Corp.,
a
Delaware corporation and wholly owned subsidiary of the Company
("Acquisition"),
and Select Medical Corporation, a Delaware corporation ("SEM"),
entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to
which, upon
the terms and subject to the conditions set forth therein, at the
effective time
of the Merger, (i) Acquisition will merge with and into SEM (the
"Merger") with
SEM continuing as the surviving corporation (the "Surviving
Corporation"), (ii)
each share of Common Stock, par value $0.01 per share, of SEM ("SEM
Common
Stock") that is outstanding immediately prior to the Merger (other
than (x)
shares of SEM Common Stock owned by SEM, the Company or Acquisition
and (y)
shares held by SEM stockholders who have validly exercised
appraisal rights
under Section 262 of the Delaware General Corporation Law) will be
converted
into the right to receive $18.00 per share in cash, without
interest, and (iii)
each outstanding share of Common Stock, par value $0.01 per share,
of
Acquisition will be converted into one share of Common Stock, par
value $0.01
per share, of the Surviving Corporation;
WHEREAS, the Company, WCAS IX and certain other Stockholders
have
entered into a Stock Subscription and Exchange Agreement, dated as
of February
22, 2005 (the "Stock Subscription Agreement"), pursuant to which
the Company has
agreed to sell to such Stockholders (i) an aggregate 21,471,876.75
shares of
Participating Preferred Stock, par value $0.001 per share, of the
Company (the
"Company Preferred Stock"), and (ii) an aggregate 144,398,369.00
shares of
Common Stock, par value $0.001 per share, of the Company (the
"Company Common
Stock" and, together with the Company Preferred Stock, the "Company
Capital
Stock");
WHEREAS, on the closing date of the Merger, the Company and WCAS CP
IV
and certain other Stockholders will enter into a Securities
Purchase Agreement
(the "Securities Purchase Agreement") pursuant to which WCAS CP IV
and such
other Investors will acquire $150,000,000 aggregate principal
amount of senior
subordinated notes of the Company due 2015, 573,171.25 shares of
Company
Preferred Stock and 3,854,577.00 shares of Company Common
Stock;
WHEREAS, the Company and the Stockholders desire to provide for
certain
matters relating to the Company Capital Stock and any securities
directly or
indirectly
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convertible into or exercisable or exchangeable for Company Common
Stock
("Options or Convertible Securities");
NOW, THEREFORE, in consideration of the premises and of the
mutual
covenants and agreements herein contained, the parties hereto
hereby agree as
follows:
ARTICLE I.
INTRODUCTORY MATTERS
SECTION 1.01. Defined Terms. In addition to the terms defined
elsewhere
herein, the following terms have the following meanings when used
herein with
initial capital letters:
"Affiliate" means, with respect to any specified Person, a Person
that
directly, or indirectly through one or more intermediaries,
Controls, is
Controlled by or is under common Control with, the specified
Person, including
without limitation, any investment partnership or limited liability
company now
or hereafter existing which is Controlled by or under common
Control with such
Person; provided, that officers, directors or employees of the
Company or SEM
will not be deemed to be Affiliates of a stockholder of the Company
for purposes
hereof solely by reason of being officers, directors or employees
of the Company
or SEM; provided, further, that, for purposes of the definition of
Third Party
contained in Section 4.01, no portfolio company of WCAS IX (or of
any other
investment partnership or limited liability company under common
Control with
WCAS IX) shall be deemed to be an Affiliate of the Company or WCAS
IX unless a
majority of the outstanding voting securities of such portfolio
company are
owned by WCAS IX and/or such other investment partnership or
limited liability
company.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with the
terms hereof.
"Assumption Agreement" means a writing reasonably satisfactory in
form
and substance to the Company and WCAS IX whereby a Permitted
Transferee of
Company Equity Securities becomes a party to, and agrees to be
bound (to the
same extent as its transferor) by, the terms of this Agreement as
a
"Stockholder" hereunder.
"Board" means the Board of Directors of the Company.
"Business Day" means a day other than a day on which commercial
banks
in New York, New York are authorized or required by law to
close.
"Commission" means the Securities and Exchange Commission, or any
other
federal agency at the time administering the Securities Act.
"Company Equity Securities" means all shares of Company Capital
Stock
now or hereafter issued and all Options or Convertible Securities
now or
hereafter issued.
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"Company Stock Plans" means all stock option plans, restricted
stock
purchase plans and other stock-based plans and agreements approved
by the Board.
"Control" (including the terms "Controlling", "Controlled by"
and
"under common Control with") means the possession, direct or
indirect, of the
power to direct or cause the direction of the management and
policies of a
Person, whether through the ownership of voting securities, by
contract or
otherwise.
"Designated Affiliate" means (i) in the case of any Stockholder
that is
not a natural person, any Affiliate of such Stockholder, (ii) in
the case of a
Stockholder who is a natural person, such Stockholder's parents,
spouse and
lineal descendants and the lineal descendants of such Stockholder's
spouse, or
trusts for the benefit of, or corporations, limited liability
companies or
partnerships, the stockholders, members or general and/or limited
partners of
which include, only such Stockholder and/or Stockholder's parents,
spouse or
lineal descendants or the lineal descendants of such Stockholder's
spouse, (iii)
in the case of WCAS IX or WCAS CP IV and each of their Designated
Affiliates
under this clause (iii), WCAS IX, WCAS CP IV and each general
partner, manager,
member, officer, director or employee of any of the foregoing; and
(iv) in the
case of TCEP and each of its Designated Affiliates under this
clause (iv), TCEP
and each general partner, manager, member, officer, director or
employee of any
of the foregoing. For purposes of the foregoing, lineal descendants
shall be
deemed to include children by adoption.
"Exchange Act" means the Securities Exchange Act of 1934, or
any
successor federal statute, and the rules and regulations of the
Commission
thereunder, as the same may be amended from time to time.
"Fully Diluted Basis" means, with respect to any determination of
the
number of shares of Company Common Stock outstanding or held by one
or more
Persons, the number of shares of Company Common Stock outstanding
or held by
such Persons (excluding any unvested shares of restricted Company
Common Stock
issued under Company Stock Plans) assuming (i) the conversion of
each
outstanding share of Company Preferred Stock into that number of
shares of
Company Common Stock equal to the Conversion Constant (as defined
in Section I
of Article FOURTH of the Restated Certificate of Incorporation of
the Company)
as in effect at the time of such determination and (ii) the full
conversion,
exercise and exchange of all other Options or Convertible
Securities for Company
Common Stock (excluding options and other rights issued under
Company Stock
Plans); provided, however, that in connection with a Proposed Sale
(as defined
in Section 3.01(a)), unvested shares of restricted Company Common
Stock issued
under Company Stock Plans which would vest at or before the
consummation of such
Proposed Sale shall not be excluded from the determination of the
number of
shares of Company Common Stock held by a Tagging Stockholder.
"Permitted Transferee" means any Person to whom Company Equity
Securities are Transferred in a Transfer in accordance with Section
2.02 and
otherwise not in violation of this Agreement and who is required
to, and does,
enter into an Assumption Agreement, it being understood that
neither the Company
nor any of its subsidiaries shall be considered to be Permitted
Transferees.
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"Person" means any natural person, corporation, limited
liability
company, partnership, trust, joint stock company, business trust,
unincorporated
association, joint venture, governmental authority or other legal
entity of any
nature whatsoever.
"Public Offering" means the sale of shares of Company Common Stock
to
the public pursuant to an effective registration statement (other
than a
registration statement on Form S-4, Form S-8 or any similar or
successor form)
filed under the Securities Act.
"Qualified
Purchaser" means any Schedule III Purchaser or Schedule IV
Purchaser, each under and as defined in the Stock Subscription
Agreement, so
long as such Stockholder was not an employee of the Company or any
of its
subsidiaries on the date hereof and such Stockholder continues to
own,
collectively with its Permitted Transferees, at least 50% of the
shares of
Company Common Stock and 50% of the shares of Company Preferred
Stock owned by
it on the date hereof after giving effect to the transactions
contemplated by
the Stock Subscription Agreement.
"Qualified Stockholder" means any Stockholder who (individually
or
together with its Designated Affiliates), at the time of
determination, holds on
a Fully Diluted Basis not less than 200,000 shares (as adjusted for
any stock
splits, stock dividends, stock combinations and similar events
occurring after
the date hereof) of Company Common Stock.
"Securities Act" means the Securities Act of 1933, or any
successor
federal statute, and the rules and regulations of the Commission
thereunder, as
the same may be amended from time to time.
"TCEP" means Thoma Cressey Fund VI, L.P., a Delaware limited
partnership.
"Transfer" means a transfer, sale, assignment, pledge,
hypothecation or
other disposition (including by operation of law), whether directly
or
indirectly pursuant to the creation of a derivative security, the
grant of an
option or other right or the imposition of a restriction on
disposition or
voting.
"Voting Proxy" means any irrevocable proxy granted to WCAS IX by
a
Stockholder and shall include each "Voting Proxy" referred to in
the Stock
Subscription Agreement.
SECTION 1.02. Construction. (a) The parties hereto have
participated
jointly in the negotiation and drafting of this Agreement. In the
event an
ambiguity or question of intent or interpretation arises, this
Agreement shall
be construed as if drafted jointly by the parties and no
presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of
the
authorship of any provisions of this Agreement. Unless the context
otherwise
requires: (i) "or" is disjunctive but not exclusive, (ii) words in
the singular
include the plural, and in the plural include the singular, (iii)
the words
"hereof", "herein", and "hereunder" and words of similar import
when used in
this Agreement refer to this Agreement as a whole and not to any
particular
provision of this Agreement, (iv) the headings contained in this
Agreement are
for reference purposes only and shall not affect in any way the
meaning or
interpretation of this Agreement,
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(v) the words "Article" and "Section" are references to the
articles and
sections of this Agreement unless otherwise specified and (vi)
whenever the
words "include", "includes" or "including" are used in this
Agreement they shall
be deemed to be followed by the words "without limitation".
(b) References herein to WCAS IX, to the extent such entity shall
have
transferred any of its shares of Company Common Stock to one or
more Permitted
Transferees, shall mean WCAS IX and such Permitted Transferees,
taken together,
and any right or action that may be taken at the election of WCAS
IX may be
taken at the election of WCAS IX and such Permitted Transferees to
the extent
WCAS IX has agreed in writing to transfer such rights to any such
Permitted
Transferee.
ARTICLE II.
TRANSFERS
SECTION 2.01. Transfers. (a) No Stockholder may Transfer any
Company
Equity Securities other than (i) with respect to Transfers by
Stockholders other
than by WCAS IX, Transfers made with the written consent of WCAS IX
and (ii)
Transfers made in accordance with Section 2.02, Article III
(including any
Excluded Transactions (as defined in Section 3.01(a)) or Article
IV; provided,
that, notwithstanding the foregoing, any employee, officer or
director of the
Company or any of its subsidiaries may Transfer Company Equity
Securities to the
Company or any of its subsidiaries. Any attempted Transfer of
Company Equity
Securities in violation of the provisions of this Agreement shall
be null and
void ab initio and of no effect.
(b) Each certificate representing Company Equity Securities that
is
held by a Stockholder will bear a legend substantially to the
following effect
with such additions thereto or changes therein as the Company may
be advised by
counsel are required by law or necessary to give full effect to
this Agreement
(the "Stockholders Agreement Legend"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A
STOCKHOLDERS AGREEMENT, DATED AS OF FEBRUARY 24, 2005, AMONG
THE
COMPANY AND THE OTHER PARTIES THERETO, AS AMENDED, A COPY OF WHICH
IS
ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
IN
ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.
THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS
AGREEMENT."
The Stockholders Agreement Legend will be removed by the Company by
the delivery
of substitute certificates without such Stockholders Agreement
Legend in the
event of (i) a Transfer permitted by this Agreement in which the
Transferee is
not required to enter into an Assumption Agreement or (ii) the
termination of
this Agreement in accordance with Section 9.07.
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(c) The Company shall not give effect to any attempted Transfer
of
Company Equity Securities made in violation of the terms of any
Voting Proxy,
and any attempted Transfer in violation of the terms thereof shall
be null and
void ab initio and of no effect. At all times prior to the
expiration of any
Voting Proxy, the Company shall use its best efforts to comply with
the
provisions of such Voting Proxies relating to the placing of
legends on Company
Equity Securities, and each Stockholder granting any such Voting
Proxy hereby
consents to the placing of such legends on such certificates.
SECTION 2.02. Transfers to Permitted Transferees. Any Stockholder
may,
at any time, Transfer any or all of the Company Equity Securities
held by such
Stockholder to any one or more Designated Affiliates of such
Stockholder so long
as each such Designated Affiliate duly executes and delivers an
Assumption
Agreement (such Transfer to be effective only upon the delivery of
such
Assumption Agreement to the Company and WCAS IX); provided, that
(A) if the
Company so requests promptly following (and, in any event, within
five (5)
Business Days after) its receipt of such Assumption Agreement, such
Assumption
Agreement shall not be effective unless and until the Company has
been furnished
with an opinion in form and substance reasonably satisfactory to
the Company of
counsel reasonably satisfactory to the Company (which may include
internal
counsel of such Stockholder) that such Transfer is exempt from or
not subject to
the provisions of Section 5 of the Securities Act and any other
applicable
securities laws and (B) no Transfer under this Section 2.02 shall
be permitted
if such Transfer would require the Company to register a class of
equity
securities under Section 12 of the Exchange Act under circumstances
where the
Company does not then have securities of any class registered under
Section 12
of the Exchange Act. Notwithstanding the foregoing, no party hereto
shall avoid
the provisions of this Agreement by making one or more Transfers to
one or more
Permitted Transferees and then disposing of all or any portion of
such party's
interest in any such Permitted Transferee.
SECTION 2.03. Securities Law Compliance. (a) Each Stockholder
agrees
that it will not effect any Transfer of Company Equity Securities
unless such
Transfer is made pursuant to an effective registration statement
under the
Securities Act or pursuant to an exemption from, or in a
transaction not subject
to, the registration requirements of the Securities Act and, in
either case, in
compliance with all applicable state securities laws. The Company
agrees, and
each Stockholder understands and consents, that the Company will
not cause or
permit the Transfer of any Company Equity Securities to be made on
its books (or
on any register of securities maintained on its behalf) unless the
Transfer is
permitted by, and has been made in accordance with the terms of
this Agreement
and all applicable federal and state securities laws. Any attempted
Transfer in
violation of the terms hereof shall be null and void ab initio and
of no effect.
Each Stockholder agrees that in connection with any Transfer of
Company Equity
Securities that is not made pursuant to a registered public
offering, the
Company may, in its sole discretion, request an opinion in form and
substance
reasonably satisfactory to the Company of counsel reasonably
satisfactory to the
Company (which may include internal counsel of such Stockholder)
stating that
such transaction is exempt from registration under the Securities
Act and in
compliance with applicable state securities laws.
(b) From and after the date hereof, and until such time as such
securities (i) have been sold to the public pursuant to an
effective
registration statement under the Securities Act or pursuant to an
exemption from
such registration, or (ii) are eligible to be sold pursuant to
clause
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(k) of Rule 144 (or any successor clause or Rule) under the
Securities Act, and,
in each case, the holder of such securities shall have requested
the issuance of
new certificates in writing and, if requested by the Company,
delivered to the
Company an opinion in form and substance reasonably satisfactory to
the Company
of counsel reasonably satisfactory to the Company (which may
include internal
counsel of such Stockholder) to such effect, all certificates
representing
Company Equity Securities that are held by any Stockholder shall
bear a legend
which shall state the following:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND NO INTEREST
HEREIN
MAY BE SOLD, OFFERED, ASSIGNED, DISTRIBUTED, PLEDGED OR
OTHERWISE
TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT
UNDER SUCH ACT COVERING ANY SUCH TRANSACTION OR (B) THE COMPANY
RECEIVES AN
OPINION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
STATING
THAT SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS OR (C) THE
COMPANY
AND ITS COUNSEL ARE OTHERWISE SATISFIED THAT SUCH TRANSACTION IS
EXEMPT
FROM SUCH REGISTRATION AND IN COMPLIANCE WITH ALL STATE
SECURITIES
LAWS."
ARTICLE III.
TAG-ALONG RIGHTS
SECTION 3.01. Tag-Along Rights. (a) With respect to any
proposed
Transfer by WCAS IX and/or any of its Permitted Transferees
(collectively, the
"Selling Stockholder") of shares of Company Capital Stock to any
Person who is
not a Designated Affiliate of the Selling Stockholder other than
(i) pursuant to
any agreement or plan of merger or combination, including any
tender or exchange
offer in respect thereof, that is approved by the Board (provided
that such plan
of merger or combination provides that each Stockholder is eligible
to receive
the same form of consideration received by WCAS IX and/or its
Permitted
Transferees in exchange for the same kind of securities) or (ii)
any transaction
or transactions occurring after the date hereof that (when
aggregated with all
shares sold in connection with prior Transfers that were deemed to
be Excluded
Transactions under this clause (ii)) result in the Transfer by the
Selling
Stockholder of (x) less than an aggregate 1,250,000 (as adjusted
for any stock
splits, stock dividends, stock combinations and similar events
occurring after
the date hereof) shares of Company Preferred Stock and/or (y) less
than an
aggregate 8,250,000 shares (as adjusted for any stock splits, stock
dividends,
stock combinations and similar events occurring after the date
hereof) of
Company Common Stock (any such transaction referred to in clause
(i) or (ii)
above, an "Excluded Transaction", and any such transaction not
excluded under
clause (i) or (ii) above, a "Proposed Sale"), each Stockholder
(other than the
Selling Stockholder) who exercises its rights under this Section
3.01(a) in
accordance with this Section 3.01 (each a "Tagging Stockholder")
will have the
right to include the following in the proposed sale to the
proposed
transferee(s) of shares (the "Proposed Transferee") or sell the
following to the
Selling Stockholder (if such Proposed
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Transferee will not agree to purchase shares directly from such
Tagging
Stockholder, and in such case the Selling Stockholder shall be
obligated to
purchase from such Stockholder the following): (1) if the Selling
Stockholder
proposes to Transfer shares of Company Preferred Stock in such
Proposed Sale, a
number of shares of Company Preferred Stock up to the product
(rounded down to
the nearest whole number) of (i) the quotient determined by
dividing (A) the
aggregate number of shares of Company Preferred Stock owned by such
Tagging
Stockholder by (B) the aggregate number of shares of Company
Preferred Stock
then outstanding and (ii) the total number of shares of Company
Preferred Stock
proposed to be Transferred to the Proposed Transferee(s) and/or (2)
if the
Selling Stockholder proposes to Transfer shares of Company Common
Stock in such
Proposed Sale, a number of shares of Company Common Stock up to the
product
(rounded down to the nearest whole number) of (i) the quotient
determined by
dividing (A) the aggregate number of shares of Company Common Stock
owned by
such Tagging Stockholder on a Fully Diluted Basis by (B) the
aggregate number of
shares of Company Common Stock then outstanding on a Fully Diluted
Basis and
(ii) the total number of shares of Company Common Stock proposed to
be
Transferred to the Proposed Transferee(s), at the same price(s) per
share of
Company Preferred Stock and/or Company Capital Stock, as the case
may be, and
upon the same terms and conditions (including time of payment, form
of
consideration and adjustments to purchase price) as the Selling
Stockholder;
provided, that in order to be entitled to exercise its right to
sell shares of
Company Capital Stock to the Proposed Transferee pursuant to this
Section 3.01,
each Tagging Stockholder, if requested by such Proposed Transferee,
(x) shall
agree to the same covenants as the Selling Stockholder agrees to in
connection
with the Proposed Sale, (y) shall be obligated to join on a pro
rata basis
(based on the proceeds received by such Tagging Stockholder in
connection with
the Proposed Sale) in any indemnification that the Selling
Stockholder agrees to
provide in connection with the Proposed Sale (other than in
connection with
obligations that relate to a particular Stockholder such as
representations and
warranties concerning itself for which each Stockholder shall agree
to be solely
responsible, and provided that the liability for any
indemnification to be
provided by such Tagging Stockholder with respect to any
representations and
warranties made by such Tagging Stockholder shall not exceed the
total
consideration received by such Tagging Stockholder for its Company
Equity
Securities in respect of such Proposed Sale), and (z) shall make
such
representations and warranties concerning itself and the shares of
Company
Capital Stock to be sold by it in connection with such Transfer as
the Selling
Stockholder makes with respect to itself and its shares.
(b) Each Tagging Stockholder will be responsible for funding
its proportionate share of any adjustment in purchase price or
escrow
arrangements in connection with the Proposed Sale and for its
proportionate
share of any withdrawals from any such escrow, including any such
withdrawals
that are made with respect to claims arising out of agreements,
covenants,
representations, warranties or other provisions relating to the
Proposed Sale.
(c) Each Tagging Stockholder will be responsible for its
proportionate share of the fees, commissions and other
out-of-pocket expenses
(collectively, "Costs") of the Proposed Sale to the extent not paid
or
reimbursed by the Company, the Proposed Transferee or another
Person (other than
the Selling Stockholder); provided, that the liability for such
Costs shall not
exceed the total purchase price received by such Stockholder for
such shares (or
if such Proposed Sale does not occur, such proposed purchase
price). The Selling
Stockholder shall be entitled to estimate in its reasonable, good
faith judgment
each Tagging Stockholder's proportionate share
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of such Costs and to withhold such amounts from payments to be made
to each
Tagging Stockholder at the time of closing of such Proposed Sale;
provided, that
(i) such estimate shall not preclude the Selling Stockholder from
recovering
additional amounts from the Tagging Stockholders in respect of each
such Tagging
Stockholder's proportionate share of such Costs and (ii) the
Selling Stockholder
shall reimburse each Tagging Stockholder to the extent actual
amounts are
ultimately less than the estimated amounts or any such amounts are
paid by the
Company, the Proposed Transferee or another Person (other than the
Selling
Stockholder).
SECTION 3.02. Exercise of Tag-Along Rights; Notices. The
Selling
Stockholder will give the Company prior written notice of each
Proposed Sale,
setting forth the number and type of shares of Company Capital
Stock proposed to
be so Transferred, the name and address of the Proposed Transferee,
the proposed
amount and form of consideration and other material terms and
conditions of
payment offered by the Proposed Transferee. In the event that any
of the
material terms or conditions set forth in the notice are thereafter
amended in
any material respect, the Selling Stockholder shall also give
written notice of
the amended terms and conditions of the Proposed Sale to the
Company. Upon its
receipt of any such notice or amended notice, the Company shall
promptly, but in
all events within two (2) Business Days of its receipt thereof,
forward copies
thereof to each of the Stockholders other than the Selling
Stockholder (such
initial notice, the "Tag-Along Opportunity Notice" and any amended
notice, an
"Amended Tag-Along Opportunity Notice"). In order to exercise the
tag-along
rights provided by this Article III a Stockholder must send a
written notice to
the Company and the Selling Stockholder indicating its desire to
exercise its
rights and specifying the number and type of shares of Company
Capital Stock it
desires to sell (the "Tag-Along Exercise Notice") within ten (10)
Business Days
following the giving of the Tag-Along Opportunity Notice to such
Stockholder (or
if an Amended Tag-Along Opportunity Notice is given to the
Stockholders, within
ten (10) Business Days following the giving of such Amended
Tag-Along
Opportunity Notice). Upon the giving of an Amended Tag-Along
Opportunity Notice
to a Stockholder that had previously provided a Tag-Along Exercise
Notice, such
Tagging Stockholder shall be permitted to cancel its exercise of
its rights
under this Article III upon delivery of written notice to the
Selling
Stockholder and the Company to such effect and shall be released
from its
obligation hereunder. There shall be no liability on the part of
the Selling
Stockholder to any Tagging Stockholder if the sale of shares of
Company Capital
Stock pursuant to this Article III is not consummated for whatever
reason.
Whether or not to effect a sale of shares of Company Capital Stock
pursuant to
this Article III shall be within in the sole and absolute
discretion of the
Selling Stockholder.
SECTION 3.03. Closing of Proposed Sale. (a) Each Tagging
Stockholder
shall deliver to the Company, as agent for such Tagging
Stockholder, for
transfer to the Proposed Transferee one or more certificates,
properly endorsed
for transfer and with all stock transfer taxes paid and stamps
affixed, which
represent the shares of Company Capital Stock that such Tagging
Stockholder is
permitted to dispose of pursuant to this Article III. The
consummation of such
Proposed Sale shall be subject to the sole discretion of the
Selling
Stockholder, who shall have no liability or obligation whatsoever
to any Tagging
Stockholder participating therein other than to obtain for such
Tagging
Stockholder the same terms and conditions as those of the Selling
Stockholder.
In connection with the consummation of any such Proposed Sale, the
Company (i)
shall transfer to the Proposed Transferee at the closing of such
Proposed Sale a
stock certificate or certificates representing the shares of
Company Capital
Stock to be disposed of by any Tagging Stockholders and (ii) shall
promptly
thereafter remit to each Tagging
9
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Stockholder (x) that portion of the proceeds of the disposition to
which such
Tagging Stockholder is entitled by reason of such participation
(after giving
effect to Section 3.01(b) and/or 3.01(c)) and (y) a stock
certificate or
certificates representing any balance of shares of Company Capital
Stock that
were not so disposed of (or all shares of Company Capital Stock, in
the event
the proposed disposition is not consummated).
(b) If any Tagging Stockholder exercises its rights under this
Article
III, the closing of the purchase of the Company Capital Stock with
respect to
which such rights have been exercised will take place concurrently
with the
closing of the sale of the Selling Stockholder's Company Capital
Stock to the
Proposed Transferee. If by the end of ninety (90) days following
the date of
delivery of the Tag-Along Opportunity Notice (or, following the
delivery of the
last Amended Tag-Along Opportunity Notice, if applicable), the
Selling
Stockholder and the Proposed Transferee have not completed the
Proposed Sale,
each Tagging Stockholder shall be released from its obligations
under this
Article III, and the Tag-Along Exercise Notices shall be null and
void, and it
shall be necessary for the terms of this Article III to be
separately complied
with in order to consummate such Proposed Sale pursuant to this
Article III.
SECTION 3.04. Tag-Along Power of Attorney. Upon delivering a Tag
Along
Exercise Notice, each Tagging Stockholder will, if requested by the
Selling
Stockholder, execute and deliver a power of attorney in form and
substance
reasonably satisfactory to the Selling Stockholder and such Tagging
Stockholder
with respect to the shares of Company Capital Stock that are to be
sold by such
Tagging Stockholder pursuant hereto (a "Tag-Along Power of
Attorney"); it being
understood that the Tag-Along Power of At
