Exhibit 10.1
TRANSACTION
AGREEMENT
by and among
SOTHEBY’S HOLDINGS,
INC.,
a Michigan
corporation
and
THE INVESTORS LISTED ON EXHIBIT
A
Dated as of September 7,
2005
CONTENTS
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Section
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Page
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1.
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Definitions
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1
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2.
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Conversion; Purchase and
Sale
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4
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2.1
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Voluntary Conversion and Purchase of
Shares
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4
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2.2
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Automatic Conversion
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4
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2.3
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Closing; Closing
Deliveries
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4
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3.
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Representations and Warranties of
the Investors
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5
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3.1
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Organization
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5
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3.2
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Authority Relative to this
Agreement
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5
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3.3
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No Conflict; Required Filings and
Consents
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6
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3.4
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No Commissions
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6
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3.5
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Title to Shares
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6
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3.6
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Litigation
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6
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3.7
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No Agreements or
Understandings
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6
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3.8
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Private Placement
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7
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4.
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Representations and Warranties of
the Company
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7
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4.1
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Organization
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7
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4.2
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Authority Relative to this
Agreement
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8
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4.3
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No Conflict; Required Filings and
Consents
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8
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4.4
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Authorization of Conversion
Shares
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8
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4.5
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No Commissions
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8
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4.6
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Litigation
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8
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4.7
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Board Actions; Fairness
Opinion
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9
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4.8
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Listing of Shares
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9
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5.
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Additional Agreements
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9
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5.1
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Further Assurances
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9
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5.2
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Press Releases
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9
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5.3
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Standstill
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9
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5.4
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Restrictions on Transfer
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11
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5.5
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Composition of Board of Directors
and Committees
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11
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5.6
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Reporting
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12
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6.
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Registration Rights
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12
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6.1
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Demand Registration
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12
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6.2
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Piggyback Registrations
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13
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6.3
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Allocation of Shares to be
Registered
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14
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6.4
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Registration Procedures
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14
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6.5
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Indemnification;
Contribution
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17
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6.6
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Registration Expenses
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19
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7.
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Miscellaneous
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20
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7.1
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Notices
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20
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7.2
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Assignment; Binding Effect; No
Third-Party Rights
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21
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7.3
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Entire Agreement
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21
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7.4
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Expenses
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21
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7.5
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Waivers; Amendments
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21
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7.6
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Reformation and
Severability
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21
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7.7
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Governing Law
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22
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7.8
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Consent to Jurisdiction
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22
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7.9
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Waiver of Jury Trial
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22
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7.10
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Counterparts
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23
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7.11
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Construction
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23
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7.12
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Specific Performance
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23
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7.13
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Survival of Representations and
Warranties
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23
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Exhibits
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Exhibit A
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Investors
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Annexes
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Annex I
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Form of Conversion
Notice
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TRANSACTION
AGREEMENT
THIS TRANSACTION
AGREEMENT is made and
entered into as of September 7, 2005, by and among:
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(1)
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SOTHEBY’S HOLDINGS, INC.
, a corporation organized under the
laws of Michigan (the Company ); and
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(2)
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those investors set forth on Exhibit A (each an
Investor , with each of A. Alfred Taubman and Robert S.
Taubman also being deemed an Investor (but it being
understood and agreed that neither A. Alfred Taubman nor Robert S.
Taubman owns any shares of Class B Stock or is exchanging any
shares), and collectively, the Investors ).
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RECITALS:
WHEREAS, the Investors collectively own beneficially and
of record an aggregate of 14,034,158 shares (the Shares ) of
Class B Common Stock, par value $0.10 per share, of the Company (
Class B Stock ), each of which is convertible at the option
of the holder thereof into one share of Class A Limited Voting
Common Stock, par value $0.10 per share, of the Company ( Class
A Stock );
WHEREAS, the Company and the Investors desire to engage
in a transaction in which the Company and the Investors will
exchange all Shares for a combination of (1) 7,100,000 shares of
Class A Stock and (2) U.S.$168,409,896 (the Transaction
);
WHEREAS, the Transaction shall be effected by means of
(1) the conversion by each Investor of a portion of the Shares held
by such Investor into shares of Class A Stock on a one-for-one
basis in accordance with the terms of Article III(2)(D) of the
Company’s Third Amended and Restated Articles of
Incorporation (the Articles ) and (2) the acquisition by the
Company from each Investor of the remainder of the Shares held by
such Investor for cash, in each case, on the terms and subject to
the conditions set forth in this Agreement; and
WHEREAS , immediately following the completion of the
Transaction, the outstanding shares of Class B Stock will
constitute less than fifty percent (50%) of the aggregate voting
power of all of the issued and outstanding shares of Class A Stock
and Class B Stock, and, as a result thereof, each then outstanding
share of Class B Stock will be automatically converted into one
share of Class A Stock without any action of the holder thereof
pursuant to Article III(2)(D) of the Articles.
NOW, THEREFORE
, in consideration of and subject to
the premises and the mutual agreements, terms and conditions
contained in this Agreement, the benefits to be derived therefrom
and other good and valuable consideration, the receipt and the
sufficiency of which are hereby acknowledged, the parties agree as
follows:
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1.1
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As used in this Agreement, the following terms
used are defined as follows, except where the context of this
Agreement clearly indicates otherwise:
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Affiliate of any Person means any other Person that (a) is
controlled by such first Person; (b) is controlled by another
Person that also controls such first Person; (c) controls such
first Person; (d)
1
in the case of an individual, is
such Person’s spouse, parent or child; or (e) is a trust of
which such first Person or such first Person’s immediate
family member(s) is a beneficiary. For purposes hereof, the terms
“control” and “controlled” mean direct or
indirect ownership of more than fifty percent (50%) of the votes
entitled to be cast in the election of directors or managers or the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.
Agreement means this Transaction Agreement, by and among
the Company and the Investors, including the attached Exhibits and
Annexes, as the same may, from time to time, be modified,
supplemented and amended.
Articles has the meaning ascribed to it in the third
recital.
Blackout Period
has the meaning ascribed to it in
Section 6.1(b) .
Claims has the meaning ascribed to it in Section
6.5(a) .
Class A Stock
has the meaning ascribed to it in
the first recital.
Class B Stock
has the meaning ascribed to it in
the first recital.
Closing means the completion of the
Transaction.
Closing Date
means the date on which the Closing
shall occur.
Code has the meaning ascribed to it in Section
5.6 .
Company has the meaning ascribed to it in the
preamble.
Consent means any approval, consent, authorization,
waiver, notice, filing or exemption to, from, or with respect to a
specified action.
Conversion Notice
has the meaning ascribed to it in
Section 2.1 .
Conversion Shares
has the meaning ascribed to it in
Section 2.1 .
Converted Shares
has the meaning ascribed to it in
Section 2.1 .
Demand Request
has the meaning ascribed to it in
Section 6.1 (a) .
Effective Period
has the meaning ascribed to it in
Section 6.4(a)(iii) .
Exchange Act
has the meaning ascribed to it in
Section 5.3 .
Governmental Authority
means any court, government or
political subdivision or department thereof, any governmental or
regulatory body, board, bureau, arbitrator or alternative dispute
resolution body, administrative agency or commission, securities
exchange or other governmental agency or instrumentality of
competent jurisdiction.
Governmental Consent
means a Consent of any Governmental
Authority.
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Investor and Investors have the meanings ascribed
to them in the preamble.
Law means any applicable international, foreign,
national, provincial, state or local (or other political
subdivision) statute, law (including common law), ordinance, order,
rule, regulation or binding requirement of a Governmental
Authority.
Maximum Number
has the meaning ascribed to it in
Section 6.3 .
Notice has the meaning ascribed to it in Section
7.1 .
Participating Investor
has the meaning ascribed to it in
Section 6.4(a)(ii) .
parties means the Company and the Investors, each of
which being a party .
Person means any individual, firm, corporation,
partnership, trust, joint venture, Governmental Authority or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
Piggy-Back
Registration has the
meaning ascribed to it in Section 6.2 .
Piggy-Back Request
has the meaning ascribed to it in
Section 6.2 .
Proceeding
means any action, arbitration,
audit, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) commenced,
brought, conducted, or heard by or before, or otherwise involving,
any Governmental Authority or arbitrator.
Purchased Shares
has the meaning ascribed to it in
Section 2.1 .
Registrable Shares
has the meaning ascribed to it in
Section 6.1 (a) .
Representatives
means, with respect to any Person,
any of such Person’s officers, directors, employees, agents,
attorneys, accountants, consultants, equity partners or financial
advisors or other Persons acting on behalf of such
Person.
SEC has the meaning ascribed to in Section
5.3 .
Securities
Act means the U.S. Securities
Act of 1933, as amended.
Shares has the meaning ascribed to it in the first
recital.
Transaction
has the meaning ascribed to it in
the second recital.
U.S.$ or U.S. Dollars means United States
dollars.
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(a)
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words denoting persons shall include
bodies corporate and unincorporated associations of
persons;
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(b)
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subject to Section 7.2 ,
references to a party include references to the successors or
assigns (immediate or otherwise) of that party.
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3
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2.
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C ONVERSION;
PURCHASE AND SALE
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2.1
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V oluntary Conversion
and Purchase of Shares
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On the terms and subject to
conditions of this Agreement, at the Closing, each Investor shall
(i) voluntarily convert that number of Shares set forth opposite
the name of such Investor on Exhibit A under the heading
“Converted Shares” (the Converted Shares ) into
shares of Class A Stock on a. one-for-one basis pursuant to Article
III(2)(D) of the Articles (the shares of Class A Stock issued upon
such conversion, Conversion Shares ) by surrender at the
Closing of certificates representing the Shares to be so converted,
if such Shares are certificated, and a notice of conversion in the
form of Annex I duly executed by such Investor (a
Conversion Notice ) and (ii) sell, assign, transfer and
deliver to the Company, and the Company shall acquire from such
Investor, that number of Shares set forth opposite the name of such
Investor on Exhibit A under the heading “Purchased
Shares” (the Purchased Shares ), in exchange for cash
in an amount equal to that amount set forth opposite the name of
such Investor on Exhibit A under the heading “Purchase
Amount.”
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2.2
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A utomatic
Conversion
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Each of the parties acknowledges and
agrees that the Transaction will result in the automatic conversion
of each share of Class B Stock outstanding immediately after the
Closing into one share of Class A Stock, without any action by the
holder thereof, pursuant to Article III(2)(D) of the
Articles.
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2.3
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C losing; Closing
Deliveries
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(a)
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The Closing shall take place on the date of this
Agreement at a time mutually agreed by the parties at the offices
of Allen & Overy LLP, 1221 Avenue of the Americas, New York,
New York 10020.
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(i)
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the Company shall deliver to each
Investor:
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(A)
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one of more certificates representing the
Conversion Shares into which such Investor has converted Shares,
which certificates shall be in definitive form and registered in
the name of such Investor as set forth on Exhibit A , and
shall bear a legend substantially in the following form:
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THE SECURITIES REPRESENTED BY THIS
CERTIFICATE WERE ACQUIRED IN A TRANSACTION THAT WAS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
OR LAWS AND (2) IN COMPLIANCE WITH THE PROVISIONS OF THE
TRANSACTION AGREEMENT, DATED AS OF SEPTEMBER 7, 2005, BY AND AMONG
SOTHEBY’S HOLDINGS, INC. (THE COMPANY ) AND THE
INVESTORS
4
LISTED ON EXHBIT A THERETO (A COPY
OF WHICH IS ON FILE WITH THE COMPANY).
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(B)
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by wire transfer to the bank account(s) set
forth opposite of name of such Investor on Exhibit A ,
immediately available funds in U.S. dollars in an amount equal to
that amount set forth opposite the name of such Investor on
Exhibit A under the heading “Purchase Amount;”
and
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(ii)
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each Investor shall deliver to the Company one
or more certificates representing the number of Shares set forth
opposite the name of such Investor on Exhibit A , if such
Shares are so certificated, together with a duly executed
Conversion Notice with respect to such Investor’s Converted
Shares, and, if applicable, duly executed stock powers, endorsed in
blank, with appropriate transfer tax stamps, if any, affixed, with
respect to such Investor’s Purchased Shares.
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3.
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R
EPRESENTATIONS AND WARRANTIES OF THE INVESTORS
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Each Investor, severally and not
jointly, hereby represents and warrants to the Company that the
representations and warranties set forth in this Article 3
are true and correct on the date of this Agreement.
Such Investor (other than any
Investor who is a natural person) is duly organized, validly
existing and (if the concept is applicable) in good standing under
the laws of its jurisdiction of organization, has the requisite
power and authority to own, operate and lease its properties and to
carry on its business as it is now being conducted. Such Investor
(other than any Investor who is a natural person) is duly qualified
to do business in each jurisdiction in which the nature of its
business or the properties owned, operated or leased by it makes
such qualification necessary, except where the failure to be so
qualified would not adversely affect the ability of such Investor
to consummate the Transaction or result in material
penalties.
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3.2
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A uthority Relative
to this Agreement
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Such Investor has all necessary
power and authority to enter into this Agreement and to carry out
its obligations under this Agreement. The execution and delivery by
such Investor (other than any Investor who is a natural person) of
this Agreement and the consummation of the Transaction have been
duly authorized and all other proceedings on the part of such
Investor necessary to authorize this Agreement and the Transaction
have been taken. This Agreement has been duly executed and
delivered by such Investor, and assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid
and binding obligation of such Investor, enforceable in accordance
with its terms. If such Investor is married and such
Investor’s Shares constitute community property, or spousal
or other approval is otherwise required for this Agreement to be
legal, valid and binding, this Agreement has been authorized,
executed and delivered by, and constitutes a legal, valid and
binding obligation of, such Investor’s spouse. No trust of
which such Investor is trustee requires the consent of any
beneficiary thereof to the execution and delivery of this
Agreement.
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3.3
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N o Conflict; Required
Filings and Consents
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(a)
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The execution, delivery and performance of this
Agreement by such Investor do not (i) conflict with or violate the
charter or other organizational document of such Investor (other
than any Investor who is a natural person), (ii) conflict with or
violate any Law or order applicable to such Investor or (iii)
breach or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any material benefit
under, or the creation of a lien on any of such Investor’s
assets pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, permit or other instrument or obligation to which
such Investor is a party, except in the case of clause (iii) as
would not adversely affect the ability of such Investor to
consummate the Transaction or result in material
penalties.
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(b)
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The execution, delivery and performance by such
investor of this Agreement do not require any
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Governmental Consent to be obtained
by such Investor.
Other than Goldman, Sachs & Co.,
the fees of which shall be paid by the Investors, no Person has or
will have, as a result of the Transaction, any right, interest or
valid claim against or upon any party for any commission, fee or
other compensation as a finder or broker because of any act or
omission by such Investor or any of its Representatives.
Such Investor is the record and
beneficial owner of, or is the trustee of a trust that is the
record holder of, and the beneficiaries of which are the beneficial
owners of, and has good and marketable title to, that number of
Shares set forth opposite the name of such Investor on Exhibit
A . Such Investor does not own, beneficially or of record, any
securities of the Company ether than such Shares or as set forth on
Schedule 3.5 . The Transaction will not constitute a
violation of any preemptive, preferential or first refusal rights
enforceable against such Investor. Upon delivery to the Company at
Closing of certificates, if such Purchased Shares are certificated,
representing such Investor’s Purchased Shares, duly endorsed
by such Investor for transfer to the Company, and upon such
Investor’s receipt of the applicable purchase price therefor,
the Company will acquire all of such Investor’s rights and
interests in such Investor’s Purchased Shares, free of any
adverse claim on title to such Shares.
There are not any (i) Proceedings
pending or, to the knowledge of such Investor, threatened against
or affecting such Investor or any of its Affiliates or (ii)
investigations by any Governmental Authority that are pending or,
to the knowledge of such Investor, threatened against or affecting
such Investor or any of its Affiliates that, in either case, would,
individually or in the aggregate, adversely affect the ability of
such Investor to consummate the Transaction.
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3.7
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No Agreements or
Understandings
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Such Investor is not a party to any
contract, arrangement, understanding or relationship (legal or
otherwise) with any other Person (including any other Investor)
with respect to any securities of the Company, including but not
limited to transfer or voting of any securities of the
Company,
6
finder’s fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss or the giving or withholding of
proxies, or the proceeds and Conversion Shares to be received
pursuant to the Articles and this Agreement.
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(a)
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Such Investor is acquiring the Conversion Shares
for its own account, for investment and not with a view to the
resale or distribution thereof in violation of any applicable
Law.
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(b)
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Such Investor understands that the Conversion
Shares will be issued in a transaction exempt from the registration
or qualification requirements of the Securities Act and any
applicable state securities Laws, and that the Conversion Shares
must be held indefinitely unless a subsequent disposition thereof
is registered or qualified under the Securities Act and such Laws
or is exempt from such registration or qualification.
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(i)
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has been furnished with or has had full access
to all the information that it considers necessary or appropriate
to make an informed investment decision with respect to the
Conversion Shares and the Transaction and that it has requested
from the Company;
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(ii)
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has had an opportunity to discuss with the
management of the Company the intended business and financial
affairs of the Company and to obtain information (to the extent the
Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information
furnished to it or to which it had access;
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(iii)
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can bear the economic risk of an investment in
the Conversion Shares indefinitely and a total loss in respect of
such investment, and has such knowledge and experience in business
and financial matters so as to enable it to understand and evaluate
the risks of and form an investment decision with respect to its
investment in the Company and to protect its interests in
connection with such investment; and
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(iv)
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has made the decision to engage in the
Transaction based on its review of all information that it deems
relevant and has not relied on any advice, recommendation or
information provided by the Company’s financial advisor or
that of the Special Committee of the Company’s Board of
Directors.
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4
.
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REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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The Company hereby represents and
warrants to each Investor that the representations and warranties
set forth in this Article 4 are true and correct on the date
of this Agreement.
The Company is a corporation duly
organized, validly existing and in good standing under the 1aws of
Michigan and has the requisite corporate power and authority to
own, operate and lease its properties and to carry on its business
as it is now being conducted. The Company is duly qualified to do
business in each jurisdiction in which the nature of its business
or the properties owned, operated or leased by it makes such
qualification necessary, except where the failure to be
7
so qualified would not adversely
affect the ability of the Company to consummate the Transaction or
result in material penalties.
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4.2
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A uthority Relative
to this Agreement
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The Company has all necessary
corporate power and authority to enter into this Agreement and to
carry out its obligations under this Agreement. The execution and
delivery by the Company of this Agreement and the consummation of
the Transaction have been duly authorized and all other corporate
proceedings on the part of the Company necessary to authorize this
Agreement and the Transaction have been taken. This Agreement has
been duly executed and delivered by the Company, and, with respect
to each Investor, assuming the due authorization, execution and
delivery by such Investor, constitutes a legal, valid and binding
obligation of the Company, enforceable by such Investor in
accordance with its terms.
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4.3
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N o Conflict; Required
Filings and Consents
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(a)
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The execution, delivery and performance of this
Agreement by the Company do not (i) conflict with or violate the
charter or other organizational document of the Company, (ii)
conflict with or violate any Law or order applicable to the Company
or (iii) breach or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, or result in any loss of any material benefit
under, or the creation of a lien on any of the Company’s
assets pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, permit or other instrument or obligation to which
the Company is a party, except in the case of clause (iii) as would
not adversely affect the ability of the Company to consummate the
Transaction or result in material penalties.
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(b)
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The execution, delivery and performance by the
Company of this Agreement do not require any Governmental Consent
to be obtained by the Company.
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4.4
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A uthorization of
Conversion Shares
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The Conversion Shares have been duly
authorized for issuance and when issued and delivered by the
Company in accordance with the terms of this Agreement will be
validly issued and fully paid and nonassessable. Such issuance will
not constitute a violation of any preemptive, preferential or first
refusal rights enforceable against the Company.
Other than Banc of America
Securities LLC and Bear, Stearns & Co., Inc. (in the case of
Bear, Stearns & Co., Inc., on behalf of the Special Committee
of the Board of Directors), the fees of which shall be paid by the
Company, no Person has or will have, as a result of the
Transaction, any right, interest or valid claim against or upon any
party for any commission, fee or other compensation as a finder, or
broker because of any act or omission by the Company, its Board of
Directors or any committee thereof or any of their respective
Representatives.
There are not any (a) Proceedings
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Affiliates or (b)
investigations by any
8
Governmental Authority that are
pending or threatened against or affecting the Company or any of
its Affiliates that, in either case, would, individually or in the
aggregate, adversely affect the ability of the Company to
consummate the Transaction.
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4.7
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B oard
Actions; Fairness Opinion
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The Board of Directors of the
Company, at a meeting duly called and held and at which a quorum
was present throughout, upon the recommendation of a Special
Committee of the Board of Directors (which Special Committee
included only directors who were not Investors or Affiliates of
Investors), has adopted a resolution approving and adopting this
Transaction Agreement and the transactions contemplated thereby,
including the Transaction. The Special Committee of the Board of
Directors of the Company has received the opinion of Bear, Stearns
& Co., Inc., dated the date hereof, to the effect that the
aggregate Purchase Amount and the aggregate Conversion Shares taken
together to be paid and issued to the Investors is fair, from a
financial point of view, to the holders of Class A Stock
immediately before and immediately after consummation of the
transactions contemplated by the Agreement and to the Company
(excluding, in all cases the Investors). The Board of Directors has
taken all such steps as required to cause the transactions
contemplated hereby, including the Transaction with respect to each
Person that is or will be subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to the Company to be
exempt under Rule 16b-3 promulgated under the Exchange
Act.
The Conversion Shares are listed for
trading on the New York Stock Exchange.
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5.
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AD
DITIONAL AGREEMENTS
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5.1
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F urther
Assurances
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Each party shall do and perform or
cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party reasonably may request
in order to carry out the intents and accomplish the purposes of
this Agreement and the consummation of the Transaction.
The initial press release announcing
the Transaction shall be in the form mutually agreed by the Company
and the Investors (acting jointly through Robert S. Taubman), and
the Company and the Investors (acting jointly through Robert S.
Taubman) shall use reasonable efforts to coordinate and agree,
prior to the issuance or release thereof, upon any additional
public announcement relating to the Transaction, except to the
extent such announcement is, based on the advice of counsel,
required by Law or stock exchange regulation, and in all cases any
such announcement shall be consistent with the reporting provided
for in Section 5.6 .
Each Investor agrees that until the
earlier of the (a) fourth anniversary of the date of this Agreement
or (b) 30 days after the date on which (i) the Investors, together
with their Affiliates, own (beneficially and of record), in the
aggregate, securities representing less than ten percent (10%) of
the total voting power of all issued and outstanding securities of
the Company and (ii)
9
no Affiliate of any Investor is a
member of the board of directors of the Company ( provided ,
however , that if such 30 th day would otherwise
occur on or before the second anniversary of the date of this
Agreement, such 30 th day referred to this clause (b)
shall not be deemed to occur until such second anniversary),
neither such Investor nor any of its controlled Affiliates
(including all Affiliates of such Investor who are natural persons)
shall, unless requested to do so by the Company in writing, (A) in
any manner acquire, agree to acquire or make any proposal to
acquire, directly or indirectly, alone or in concert with others,
ownership (beneficial or otherwise) of, or the ability to control
or vote, any securities (other than those acquired in consideration
of service as a directors of the Company) or property of the
Company or any of its subsidiaries not otherwise owned or
controlled as of the consummation of the Transaction
(provided , however , that the foregoing shall not
prohibit such Persons from acquiring an aggregate of less than one
percent (1%) of the then outstanding shares of Class A Stock by
means of open market purchases in any 360 day period;
provided , further , that in no event shall the
Investors acquire any additional shares of Class A Stock if, after
giving effect to such acquisition, such Persons’ aggregate
holdings of shares of Class A Stock would exceed fifteen percent
(15%) of the then outstanding shares of Class A Stock), (B) propose
to enter into, or seek to effect, directly or indirectly, alone or
in concert with others, any merger, consolidation,
recapitalization, reorganization or business combination involving
the Company or any of its subsidiaries or to purchase, directly or
indirectly, alone or in concert with others, a material portion of
the business or assets of the Company or any of its subsidiaries,
(C) make, or in any way participate, directly or indirectly, in any
“solicitation” of “proxies” (as such terms
are used in the proxy rules of the Securities and Exchange
Commission ( SEC )) to vote or written consents, or seek to
advise or influence (except in the capacity of a member of the
Board of Directors of the Company or any committee thereof) any
person with respect to the voting of, or the execution of a written
consent in respect of any voting securities of the Company or any
of its subsidiaries, (D) grant a proxy with respect to any voting
securities of the Company to any Person other than an officer or
agent of the Company or execute any written consent in lieu of a
meeting of the holders of voting securities of the Company, (E)
form, join or in any way participate in a “group”
(within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the Exchange Act )) with
respect to any voting securities of the Company or any of its
subsidiaries except as may currently be the case, (F) except as
contemplated hereby, initiate or propose any security holder
proposal, or seek election to or seek to place a Representative or
other Affiliate or nominee on the Board of Directors of the Company
or seek the removal of any member of the Board of Directors of the
Company, (G) otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or
business, operations or policies of the Company (other than solely
by virtue of representation on the Board of Directors of the
Company or the exercise of voting rights of any Class A Shares in
accordance with this Agreement), (H) disclose any intention, plan
or arrangement inconsistent with the foregoing or (I) advise,
assist or encourage any other persons in connection with any of the
foregoing, including by publicly disclosing a willingness or desire
to have any other Person engage in any of the transactions or
actions described in this Section 5.3 . Each Investor also
agrees (on behalf of itself and its controlled Affiliates) during
such period not to (x) request the Company (or its directors,
officers, employees or agents), directly or indirectly, to amend or
waive any provisions of this Section 5.3 (including this
sentence), or (y) take any action that would reasonably be expected
to require the Company to make a public announcement regarding the
possibility of any of the transactions of t he Company or actions
described in this Section 5.3 .
10
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5.4
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R estrictions on
Transfer
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Prior to the second anniversary of
the date of this Agreement, no Investor shall, except as may be
permitted pursuant to the last sentence of this Section 5.4
, (a) directly or indirectly offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale
of, lend or otherwise dispose of or transfer, by gift or otherwise,
or in any way encumber any shares of the capital stock of the
Company owned or controlled by it or its controlled Affiliates
(including all Affiliates of such Investor who are natural persons)
(or securities issued in respect thereof) or securities convertible
or exchangeable or exercisable for or repayable with such capital
stock (or securities issued in respect thereof), except to an
Affiliate or family member of such Investor in connection with tax-
or estate-planning ( provided that promptly following any
such permitted transfer, the transferee shall execute and
deliver
