[FORM OF
SUBSCRIPTION AGREEMENT]
SUBSCRIPTION AGREEMENT (hereinafter called this "Agreement"),
dated as of September __, 1996, between Antigua Acquisition Corporation, a
Delaware corporation ("Merger Sub"), and _______________ (the "Purchaser").
RECITALS
WHEREAS, Merger Sub has entered into an Agreement and Plan of
Merger, dated as of June 5, 1996, as amended (the "Merger Agreement"), among
AT&T Capital Corporation, a Delaware corporation (the "Company"), AT&T Corp., a
New York corporation, Hercules Limited, a Cayman Islands company ("Holdings"),
and Merger Sub, which is a wholly-owned subsidiary of Holdings, providing for
the merger (the "Merger") of Merger Sub with and into the Company, after which
the Company will continue its corporate existence as the surviving corporation
(the "Surviving Corporation");
WHEREAS, Merger Sub was recently incorporated for the
purpose of merging with and into the Company;
WHEREAS, in connection with the Merger, Merger Sub proposes to
agree to sell to a limited number of management investors in accordance with the
terms hereof the following:
(i) immediately prior to the Merger, in exchange for certain
shares of the Company presently held by such management investors,
shares of its Common Stock, par value $.01 per share ("Merger Sub Common
Stock"), each of which will be converted at the effective time of the
Merger (the "Effective Time") pursuant to the Merger Agreement into one
share of Common Stock, par value $.01 per share, of the Surviving
Corporation ("Surviving Corporation Common Stock") and
(ii) following the Merger, for cash (which, upon consent, may be
withheld from certain payments otherwise due to such management
investors upon the cash-out of certain options to purchase Company stock
presently held by such management investors), additional shares of
Surviving Corporation Common Stock;
WHEREAS, Merger Sub also intends to grant following the Merger
certain options to purchase shares of Surviving Corporation Common Stock, upon
certain terms and subject to certain conditions, to such management investors;
and
WHEREAS, this Agreement is one of several agreements (such
agreements other than this Agreement being herein referred
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to collectively as "Other Purchasers' Agreements") which have been, or which in
the future will be, entered into between the Company and other individuals who
are or will be key employees of the Company or one of its subsidiaries
(collectively, the "Other Purchasers").
NOW, THEREFORE, to implement the foregoing and in consideration
of the premises and of the mutual agreements contained herein, the parties
hereto agree as follows:
1. Pre-Merger Exchange of Stock.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase from Merger Sub, and Merger Sub agrees to sell to
the Purchaser at the First Closing described in Section 1(b) hereof, ______
shares (the "Merger Sub Shares") (which number of shares equals the product of
4.5 and the number of Pre-Merger Shares set forth below) of Merger Sub Common
Stock, for a purchase price of $10.00 per share, payable by the delivery to
Merger Sub of [(i)] ______ shares (the "Pre-Merger Shares") of Common Stock, par
value $.01 per share, of the Company purchased by the Purchaser pursuant to the
AT&T Capital Corporation 1993 Leveraged Stock Purchase Plan and/or the AT&T
Capital Corporation 1993 Long Term Incentive Plan (the "Stock Purchase Plans")
[and (ii) $5.00 in cash]. [NOTE - THE ADDITIONAL $5 IN CASH WILL BE NECESSARY TO
ROUND UP TO THE NEXT WHOLE MERGER SUB SHARE IN THE CASE OF PURCHASERS WHO
CURRENTLY HOLD AN ODD NUMBER OF PRE-MERGER SHARES]
(b) The closing of the purchase and sale of the Merger Sub Shares
(the "First Closing") shall take place on the Closing Date (as defined in the
Merger Agreement) immediately prior to the Effective Time and in the same
location as the Closing (as defined under the Merger Agreement). At the First
Closing, (i) the Purchaser will deliver to Merger Sub [(1)] the certificate or
certificates representing the Pre-Merger Shares, duly endorsed in blank or
accompanied by stock powers executed in blank with the Purchaser's signature
guaranteed by a member of the Medallion Signature Guarantee Program, and with
all necessary stock transfer stamps affixed [and (2) $5.00 in cash or by
certified check, bank cashier's check or bank money order payable to the order
of Merger Sub], representing payment in full for the Merger Sub Shares and (ii)
Merger Sub will deliver to the Purchaser a duly executed and issued stock
certificate, registered in the Purchaser's name and representing the Merger Sub
Shares.
(c) Upon the First Closing, the Pre-Merger Shares exchanged
pursuant hereto shall be deemed to be owned by the Parent Companies (as defined
in the Merger Agreement) and, as contemplated by Section 4.1(c) of the Merger
Agreement, at the Effective Time shall cease to be outstanding, be cancelled and
retired without payment of any consideration therefor and shall cease to exist.
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(d) The shares of Surviving Corporation Common Stock into which
the Merger Sub Shares will be converted at the Effective Time pursuant to the
Merger Agreement [and the Optional Shares (as hereinafter defined)] are
sometimes hereinafter [collectively] referred to as the "Investment Shares."
2. Conditions to the Obligations of the Parties at the
First Closing.
The obligations of the parties hereto to consummate the purchase
and sale contemplated by Section 1 hereof shall be subject to the condition
that, at or prior to the First Closing:
(i) The Company and the Purchaser shall have, to the extent
necessary, amended the terms of the stock purchase agreement under the
applicable Stock Purchase Plan pursuant to which the Purchaser purchased
the Pre-Merger Shares from the Company to permit the transfer of the
Pre-Merger Shares contemplated by Section 1 hereof;
(ii) The Company and the Purchaser shall have amended the terms
of the pledge agreement providing for the pledge of the Pre-Merger
Shares substantially in the form of the amendment attached hereto as
Exhibit E, and have made mutually satisfactory arrangements, to permit
the release of the Pre-Merger Shares for the purpose of the exchange
contemplated by Section 1 hereof and to permit the substitution of the
Merger Sub Shares as "Pledged Property" under the terms of such pledge
agreement; and
(iii) To the extent necessary, the Company shall have agreed that
the release of the Pre-Merger Shares and the substitution of the Merger
Sub Shares as pledged property therefor shall not require any prepayment
under the Purchaser's promissory note issued pursuant to the relevant
Stock Purchase Plan (the "Promissory Note").
3. [Optional Purchase of Shares of Stock;] Issuance
of Options.
[NOTE - THE PROVISIONS REGARDING THE SECOND CLOSING ARE ONLY REQUIRED FOR THOSE
PURCHASERS WHO ALSO ELECT TO INVEST SOME OR ALL OF 55% OF THE PRE-TAX GROSS
PROCEEDS OF THE CASH-OUT OF THEIR OPTIONS]
[(a) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase from the Surviving Corporation, and Merger Sub
agrees to sell to the Purchaser at the Second Closing described in Section 3(b)
hereof, ______ shares (the "Optional Shares") of Surviving Corporation Common
Stock, for a purchase price of $10.00 per share (for an aggregate purchase price
of $_________), payable in cash.
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(b) The closing of the purchase and sale of the Optional Shares
(the "Second Closing") shall take place as promptly as practical following the
Effective Time. At the Second Closing, the Surviving Corporation will deliver to
the Purchaser a duly executed and issued stock certificate, registered in the
Purchaser's name and representing the Optional Shares, against payment of the
purchase price therefor, at the option of the Purchaser, either (i) in cash or
by certified check, bank cashier's check or bank money order payable to the
order of the Surviving Corporation, representing payment in full therefor or
(ii) by way of set-off against the right of the Purchaser to receive cash as a
result of the conversion of the Purchaser's stock options pursuant to Section
4.1(b) of the Merger Agreement.]
[(c)] Subject to the terms and conditions of this Agreement, as
promptly as practical following the Effective Time the Surviving Corporation
shall grant to the Purchaser an option or options to purchase Surviving
Corporation Common Stock (the "Options") at an exercise price of $10.00 per
share pursuant to, in accordance with, and subject to the terms and conditions
contained in, the AT&T Capital Corporation 1996 Long Term Incentive Plan (the
"LTIP") and the Stock Option Agreement attached hereto as Exhibit A (the "Stock
Option Agreement").
[(d)] The Surviving Corporation and the Purchaser shall execute
and deliver to each other copies of the Stock Option Agreement concurrently with
the issuance of the Options.
4. Restriction on Transfer.
(a) Except for transfers permitted by clauses (y) and (z) of
Section 5(a) hereof or a sale of shares of Stock (as hereinafter defined)
pursuant to an effective registration statement under the Act filed by the
Surviving Corporation or pursuant to the Stock Purchase Agreement or the Sale
Participation Agreement (each as hereinafter defined), the Purchaser agrees that
he or she will not transfer, sell, assign, pledge, hypothecate or otherwise
dispose of any shares of Stock at any time prior to the tenth anniversary of the
date of the Effective Time, other than in connection with a sale in the public
market (subject to the provisions of Rule 144 where applicable) from and after a
sale of shares of Surviving Corporation Common Stock to the public pursuant to a
registration statement under the Act that has been declared effective by the SEC
(other than a registration statement on Form S-4 or Form S-8, or any successor
or other forms promulgated for similar purposes, or a registration statement in
connection with an offering to employees of the Surviving Corporation and its
subsidiaries) that results in an active trading market in the Surviving
Corporation Common Stock (the "QPO"), provided that such sale in the public
market shall be subject to such black-out period and/or other restrictions on
such sale as shall be reasonably requested by any underwriters in offerings of
the securities of the Surviving
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Corporation in order to insure the success of such offerings and provided
further that the number of shares that may be sold in each one-year period
following the QPO will be limited to the greater of (i) 25% of the total number
of shares of Stock, on a fully diluted basis, held by the Purchaser immediately
following the initial QPO and (ii) that number of shares of Surviving
Corporation Common Stock underlying the Options or any other stock options
issued by the Surviving Corporation held by the Purchaser as to which (A)
pursuant to the terms of such options, the Purchaser's right to purchase such
stock would expire during such one-year period and (B) such options are actually
exercised by the Purchaser.
(b) In addition to the foregoing Section 4(a) and notwithstanding
the exceptions thereto, the Purchaser further agrees that he or she will not at
any time transfer, sell, assign, pledge, hypothecate or otherwise dispose of any
shares of Stock at any time, directly or indirectly, to any competitor or
prospective competitor of the Company or to any affiliate of such a person,
other than:
(i) in connection with a sale to a third party pursuant to the
Stock Purchase Agreement or the Sale Participation Agreement;
(ii) in an underwritten public offering upon the exercise of the
rights provided for under the Registration Rights Agreement (as
hereinafter defined); or
(iii) pursuant to a sale effected (when otherwise permitted under
this Agreement) through an open market, nondirected broker's transaction
in which the Purchaser as seller does not know the buyer is a competitor
or prospective competitor.
(c) No transfer of any such shares in violation hereof shall be
made or recorded on the books of the Company and any such attempted transfer
shall be void and of no effect.
(d) Notwithstanding the foregoing or the terms of the Stock
Purchase Agreement or the Sale Participation Agreement, if (i) at any time, the
Purchaser experiences an unexpected personal hardship or (ii) following the
fifth anniversary of the Effective Time, the Purchaser desires liquidity for his
or her Investment Shares for any personal reason, the Purchaser may deliver a
written request to the Compensation Committee of the Board of Directors of the
Surviving Corporation (directed to the attention of the Secretary of the
Corporation) that the Purchaser be permitted to sell some or all of his or her
Investment Shares. Although it is Merger Sub's present intention to make
reasonable efforts to provide liquidity to the Purchaser in such circumstances,
nothing contained in this Agreement should be construed as establishing any
obligation on the Surviving Corporation or any of its Affiliates to purchase any
Investment
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Shares from the Purchaser, other than the Purchaser's rights pursuant to the
Stock Purchase Agreement entered into with Nomura International plc, a public
limited company incorporated under the laws of England and Wales ("NIplc"). Any
decision to purchase, or to arrange a purchase of, Surviving Corporation Common
Stock from the Purchaser under such circumstances will be made in the sole
discretion of the Surviving Corporation and its Affiliates on a case-by-case
basis, based upon the facts and circumstances that exist at the time of the
Purchaser's request.
(e) If on or before the tenth anniversary of the Effective Time
there has been neither a Change of Control (as defined in the Stock Option
Agreement) nor sales to the public constituting a QPO (as defined in the Stock
Option Agreement) representing aggregate Offering Percentages (as defined in the
Stock Option Agreement) of at least 50%, the Surviving Corporation will use its
best efforts to arrange, at its election, either a Proposed Sale (as defined in
the Sale Participation Agreement) that will constitute a Change of Control (in
connection with which, under the Sale Participation Agreement, the Purchaser and
certain other persons will be entitled to certain sale participation rights with
respect to all Investment Shares then held) or an offering or offerings of
shares of Surviving Corporation Common Stock such that a QPO has occurred and
the aggregate Offering Percentages represented by sales to the public of
Surviving Corporation Common Stock is at least 50%, in either case within six
months of the tenth anniversary of the Effective Time. The six-month period set
forth in the preceding sentence may be extended by the Surviving Corporation,
with the consent of the holders of at least 60% of the aggregate of the
Investment Shares and the Investment Shares (as defined in the Other Purchasers'
Agreements) then outstanding (without regard to the ability of stockholders to
direct the vote of the trustee under the Voting Trust Agreement (as hereinafter
defined)); provided that any such extension or series of extensions shall not
exceed a period of two years in the aggregate.
5. Purchaser's Representations, Warranties and
Agreements.
(a) The Purchaser hereby represents and warrants that he is
acquiring the Merger Sub Shares [and the Optional Shares] and, at the time of
exercise, the Surviving Corporation Common Stock issuable upon exercise of the
Options (collectively, the "Stock") for investment for his or her own account
and not with a view to, or for resale in connection with, the distribution or
other disposition thereof. The Purchaser agrees and acknowledges that he or she
will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of ("Transfer") any shares of the Stock unless
such Transfer complies with Section 4 of this Agreement and (i) such Transfer is
pursuant to an effective registration statement under the Securities Act of
1933, as amended, or the rules and regulations
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in effect thereunder (the "Act") or (ii) counsel for the Purchaser (which shall
be reasonably satisfactory to the Company) shall have furnished the Company with
an opinion, satisfactory in form and substance to the Company, that no such
registration is required because of the availability of an exemption from
registration under the Act. Notwithstanding the foregoing, Merger Sub
acknowledges and agrees that any of the following transfers are deemed to be in
compliance with the Act and this Agreement and no opinion of counsel is required
in connection therewith: (x) a transfer made pursuant to Section 4 hereof, (y) a
transfer upon the death of the Purchaser to his or her executors,
administrators, testamentary trustees, legatees or beneficiaries (the
"Purchaser's Estate") or a transfer to the executors, administrators,
testamentary trustees, legatees or beneficiaries of a person who has become a
holder of Stock in accordance with the terms of this Agreement, provided that it
is expressly understood that any such transferee shall be bound by the
provisions of this Agreement and (z) a transfer made after the date of the
purchase of the Stock in compliance with the federal securities laws to a trust
or custodianship the beneficiaries of which may include only the Purchaser, his
or her spouse or the Purchaser's lineal descendants (a "Purchaser's Trust") or a
transfer made to such a trust by a person who has become a holder of Stock in
accordance with the terms of this Agreement, provided, in each such case under
clause (z), that such transfer is made expressly subject to this Agreement and
that the transferee agrees in writing to be bound by the terms and conditions
hereof.
(b) The certificate (or certificates) representing the
Stock shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS
OF THE SUBSCRIPTION AGREEMENT DATED AS OF SEPTEMBER __, 1996
BETWEEN AT&T CAPITAL CORPORATION, AS SUCCESSOR BY MERGER TO
ANTIGUA ACQUISITION CORPORATION (THE "CORPORATION"), AND THE
PURCHASER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE CORPORATION). EXCEPT AS OTHERWISE
PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR (B) IF (I) THE CORPORATION
HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE
HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS
OF
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SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS IN EFFECT
THEREUNDER, AND IN COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE
SECURITIES LAWS, AND (II) IF THE HOLDER IS A CITIZEN OR RESIDENT
OF ANY COUNTRY OTHER THAN THE UNITED STATES, OR THE HOLDER
DESIRES TO EFFECT ANY SUCH TRANSACTION IN ANY SUCH COUNTRY, THE
CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OR
OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT SUCH TRANSACTION WILL
NOT VIOLATE THE LAWS OF SUCH COUNTRY."
(c) The Purchaser acknowledges that he or she has been advised
that (i) the Stock has not been registered under the Act, (ii) except as set
forth herein and in the Stock Purchase Agreement and the Sale Participation
Agreement, the Stock must be held indefinitely and the Purchaser must continue
to bear the economic risk of the investment in the Stock unless it is
subsequently registered under the Act or an exemption from such registration is
available, (iii) it is not anticipated that there will be any public market for
the Stock, (iv) Rule 144 promulgated under the Act is not currently available
with respect to the sales of any securities of the Company, and the Company has
made no covenant to make such Rule available (except as provided in Section 7(b)
hereof), (v) when and if shares of the Stock may be disposed of without
registration in reliance on Rule 144, such disposition can be made only in
limited amounts in accordance with the terms and conditions of such Rule, (vi)
if the Rule 144 exemption is not available, public sale without registration
will require compliance with Regulation A or some other exemption under the Act,
(vii) a restrictive legend in the form heretofore set forth shall be placed on
the certificates representing the Stock and (viii) a notation shall be made in
the appropriate records of the Company indicating that the Stock is subject to
restriction on Transfer and, if the Company should at some time in the future
engage the services of a stock transfer agent, appropriate stop transfer
restrictions will be issued to such transfer agent with respect to the Stock.
(d) If any shares of the Stock are to be disposed of in
accordance with Rule 144 under the Act or otherwise, the Purchaser shall
promptly notify the Company of such intended disposition and shall deliver to
the Company at or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed
copy of any notice on Form 144 required to be filed with the Securities and
Exchange Commission (the "SEC").
(e) The Purchaser agrees that, if any shares of the capital stock
of the Company are offered to the public pursuant to an effective registration
statement under the Act, the Purchaser will not effect any public sale or
distribution of any shares of the Stock not covered by such registration
statement
9
within 7 days prior to, or within 180 days after, the effective date of such
registration statement (or such lesser period as the managing underwriter of any
such offering may permit), unless otherwise agreed to in writing by the Company.
(f) The Purchaser represents and warrants that (i) he or she has
received and reviewed a Private Placement Memorandum (the "Private Placement
Memorandum") relating to the Stock and the documents referred to therein,
certain of which documents set forth the rights, preferences and restrictions
relating to the Stock, (ii) he or she has been given the opportunity to obtain
any additional information or documents, to consult with his or her legal,
financial and other advisors and to ask questions and receive answers about such
documents, Merger Sub, the Company and the business and prospects of the Company
and the Surviving Corporation that he or she deems necessary to evaluate the
merits and risks related to his or her investment in the Stock and to verify the
information contained in the Private Placement Memorandum, and he or she has
relied solely on the information contained in the Private Placement Memorandum
and (iii) he or she acknowledges and agrees that neither Merger Sub nor the
Company, nor any other person, makes any representation or warranty with respect
to any such information other than as, and solely to the extent, expressly set
forth in this Agreement.
(g) The Purchaser further represents and warrants that (i) his or
her financial condition is such that he or she can afford to bear the economic
risk of holding the Stock for an indefinite period of time and has adequate
means for providing for his or her current needs and personal contingencies,
(ii) he or she can afford to suffer a complete loss of his or her investment in
the Stock, (iii) all information which he or she has provided to Merger Sub or
the Company concerning himself or herself and his or her financial position is
correct and complete as of the date of this Agreement, (iv) he or she
understands and has taken cognizance of all risk factors related to the purchase
of the Stock, including those set forth in the Private Placement Memorandum
referred to above, and (v) his or her knowledge and experience in financial and
business matters are such that he or she is capable of evaluating the merits and
risks of his or her purchase of the Stock as contemplated by this Agreement.
6. Stock Issued to the Purchaser Upon Exercise of
Stock Options.
The Surviving Corporation may from time to time grant to the
Purchaser, in addition to the Options, options to purchase additional shares of
Surviving Corporation Common Stock at $10.00 per share or at a different option
exercise price under the LTIP or another stock option or incentive plan, or
shares of stock under the LTIP or another incentive plan or otherwise. The term
"Stock" as used in this Agreement shall include all shares of Surviving
Corporation Common Stock purchased by the Purchaser pursuant to this Agreement
or issued to the Purchaser by the
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Surviving Corporation upon exercise of the Options and of any other stock
options held by the Purchaser and any other Surviving Corporation Common Stock
otherwise acquired by the Purchaser at any time when this Agreement is in
effect.
7. Merger Sub's Representations, Warranties and
Agreements.
(a) Merger Sub represents and warrants to the Purchaser that (i)
this Agreement has been duly authorized, executed and delivered by Merger Sub
and (ii) the Stock, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Surviving Corporation shall have engaged in a QPO, (i)
the Surviving Corporation will file the reports required to be filed by it under
the Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations adopted by the SEC thereunder, to the
extent required from time to time to enable the Purchaser to sell shares of
Stock, to the extent otherwise permitted under this Agreement, within the
limitations of the exemptions provided by (A) Rule 144 under the Act, as such
Rule may be amended from time to time, or (B) any similar rule or regulation
hereafter adopted by the SEC and (ii) the Surviving Corporation shall use
reasonable efforts to register such shares of Stock, to the extent not
previously registered under the Act and to the extent required from time to time
to enable the Purchaser to sell shares of Stock, to the extent otherwise
permitted under this Agreement, without being subject to any minimum holding
period for such Stock under (x) Rule 144 under the Act, as such Rule may be
amended from time to time, or (y) any similar rule or regulation hereafter
adopted by the SEC. Notwithstanding anything contained in this Section 7(b), the
Company may deregister Stock under Section 12 of the Exchange Act if it is then
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder. Nothing in this Section 7(b) shall be deemed to limit in any manner
the restrictions on sales of Stock contained in this Agreement.
8. "Piggyback" Registration Rights.
(a) For so long as any of the shares of Stock held by the
Purchaser, the Purchaser's Trust or the Purchaser's Estate remain unregistered,
the Purchaser hereby agrees to be bound by all of the terms, conditions and
obligations of the Registration Rights Agreement of even date herewith (the
"Registration Rights Agreement") among the Company, Holdings and the other
persons who become parties thereto and, subject to the limitations set forth in
this Section 8, shall have all of the rights and privileges of the Registration
Rights Agreement, in each case as if the Purchaser were an original party (other
than Merger Sub); provided, however, that the Purchaser shall not have any
rights to request registration under Sections 3 or 4 of the Registration
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Rights Agreement; provided further, that the Purchaser shall have no rights to
request registration under the Registration Rights Agreement to the extent that
the Purchaser would be able to sell, to the extent otherwise permitted under
this Agreement, shares of Stock pursuant to Rule 144 under the Act or another
available exception to registration; and provided further, that the Purchaser
shall not be bound by any amendments to the Registration Rights Agreement unless
the Purchaser consents thereto. Notwithstanding anything to the contrary
contained in the Registration Rights Agreement, the Purchaser's rights and
obligations under the Registration Rights Agreement shall be subject to the
limitations and additional obligations set forth in this Section 8, including,
without limitation, the limitations on registration set forth in Section 8(c)
hereof. All shares of Stock held by the Purchaser, the Purchaser's Trust or the
Purchaser's Estate shall be deemed to be "Registrable Securities" as defined in
the Registration Rights Agreement.
(b) The Surviving Corporation will promptly notify the Purchaser
in writing (a "Notice") upon the Surviving Corporation's receipt of a written
request ("Holdings' Request") from Holdings requesting that the Surviving
Corporation effect the registration under the Act of all or part of Holdings'
Registrable Securities (as defined in the Registration Rights Agreement)
("Holdings' Requested Registration") pursuant to Section 4(a) of the
Registration Rights Agreement. If within 15 days of the receipt by the Purchaser
of such Notice, the Surviving Corporation receives from the Purchaser, the
Purchaser's Trust or the Purchaser's Estate a written request (a "Purchaser's
Request") (which request will be irrevocable unless otherwise mutually agreed to
in writing by the Purchaser and the Surviving Corporation) that the Surviving
Corporation effect the registration under the Act of all or part of the
Registrable Securities (as defined in the Registration Rights Agreement) held by
the Purchaser, the Purchaser's Trust or the Purchaser's Estate, as the case may
be, and specifying the amount and intended method of disposition thereof (the
"Purchaser's Requested Registration"), the Surviving Corporation will, as
expeditiously as possible, use reasonable efforts to effect the registration
under the Act of the Purchaser's Requested Registration so as to permit the
disposition (in accordance with the intended method thereof as aforesaid) of the
Purchaser's Registrable Securities so to be registered; provided, however, that
the Company shall have no obligation to register the Purchaser's Registrable
Securities pursuant to this Section 8(b) unless the Surviving Corporation has
effected Holdings' Requested Registration in response to the Holdings' Request
in accordance with Section 4(d) of the Registration Rights Agreement; and
provided further that for each such registration, only one Purchaser's Request,
which shall be executed by the Purchaser, the Purchaser's Trust or the
Purchaser's Estate, as the case may be, may be submitted for all of the
Purchaser's Registrable Securities.
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(c) The maximum number of the Purchaser's shares of Stock that
the Surviving Corporation will be required to register under the Act pursuant to
a Purchaser's Request will be the lowest of (i) that number of shares of Stock
equal to the product of the total number of all Investment Shares purchased by
the Purchaser under this Agreement multiplied by a fraction, the numerator of
which is the number of shares of Surviving Corporation Common Stock to be
registered in such registration on behalf of Holdings and the denominator of
which is the total number of shares of Surviving Corporation Common Stock held
by Holdings immediately following the Effective Time, (ii) 25% of the total
number of Investment Shares purchased by the Purchaser under this Agreement and
(iii) the Purchaser's share (pro rata based upon the aggregate number of
Registrable Securities which the Purchaser and all other persons having
registration rights under the Registration Rights Agreement (other than
Holdings) have requested to be registered) of the maximum number of Registrable
Securities which the Surviving Corporation can register pursuant to this Section
8 and Section 4 of the Registration Rights Agreement without, in the good faith
view of the underwriters, adverse effect on the offering. The maximum number of
shares of Stock that the Surviving Corporation will be required to register
under the Act pursuant to all Purchaser's Requests in the aggregate will be that
number that equals 25% of the total number of Investment Shares purchased by the
Purchaser under this Agreement.
(e) Upon delivering a Purchaser's Request the Purchaser will, if
requested by the Surviving Corporation, execute and deliver a custody agreement
and power of attorney in form and substance satisfactory to the Surviving
Corporation with respect to the shares of Stock to be registered pursuant to
this Section 8 (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Purchaser will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Stock (duly endorsed in blank by the registered owner or owners
thereof or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as the Purchaser's agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on the Purchaser's behalf with respect to the
matters specified therein.
(f) The Purchaser agrees that he will execute such other
agreements as the Surviving Corporation may reasonably request to further
evidence the provisions of this Section 8.
9. Rights to Negotiate Repurchase Price.
Nothing in this Agreement, the Stock Purchase Agreement or the
Sale Participation Agreement shall be deemed to restrict or prohibit the
Surviving Corporation from purchasing shares of
13
Stock or options from the Purchaser, at any time, upon such terms and
conditions, and for such price, as may be mutually agreed upon between the
parties hereto, (i) whether or not at the time of such purchase circumstances
exist which specifically grant any persons the right to purchase, or the
Purchaser the right to sell, such shares and (ii) notwithstanding the fact that
none of this Agreement, the Stock Purchase Agreement or the Sale Participation
Agreement provide the Surviving Corporation or the Purchaser with any rights
with respect to the repurchase by the Surviving Corporation of options.
10. Covenant Regarding 83(b) Election.
Except as the Surviving Corporation may otherwise agree in
writing, the Purchaser hereby covenants and agrees that he or she will make an
election provided pursuant to Treasury Regulation 1.83-2 with respect to the
Investment Shares; and the Purchaser further covenants and agrees that he or she
will furnish the Surviving Corporation with copies of the forms of election the
Purchaser files within 30 days after the date hereof.
11. Notice of Change of Beneficiary.
Immediately prior to any Transfer of Stock to a Purchaser's
Trust, the Purchaser shall provide the Surviving Corporation with a copy of the
instruments creating the Purchaser's Trust and with the identity of the
beneficiaries of the Purchaser's Trust. The Purchaser shall notify the Surviving
Corporation immediately prior to any change in the identity of any beneficiary
of the Purchaser's Trust.
12. Recapitalizations, etc.
The provisions of this Agreement shall apply, to the full extent
set forth herein with respect to the Stock or the Options, to any and all shares
of capital stock of the Surviving Corporation or any capital stock, partnership
units or any other security evidencing ownership interests in any successor or
assign of the Surviving Corporation (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or
substitution of the Stock or the Options, by reason of any stock dividend,
split, reverse split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
13. Purchaser's Employment by the Surviving
Corporation.
Nothing contained in this Agreement or in any other agreement
entered into by Merger Sub or any other person and the Purchaser
contemporaneously with the execution of this Agreement (i) obligates the
Surviving Corporation or any subsidiary of the Surviving Corporation to employ
the Purchaser in any capacity
14
whatsoever or (ii) prohibits or restricts the Surviving Corporation (or any such
subsidiary) from terminating the employment, if any, of the Purchaser at any
time or for any reason whatsoever, with or without cause, and the Purchaser
hereby acknowledges and agrees that, except to the extent that certain
information, if any, with respect to his or her employment has been delivered to
the Purchaser in writing, neither Merger Sub nor the Company, nor any other
person, has made any representations or promises whatsoever to the Purchaser
concerning the Purchaser's employment or continued employment by the Surviving
Corporation or any of the terms and conditions of such employment.
14. State and Foreign Securities Laws.
Merger Sub hereby agrees to use its best efforts to comply with
all state securities or "blue sky" laws and all foreign securities laws which
might be applicable to the sale of the Stock and the issuance of the Options to
the Purchaser.
15. Agreement to Extend Promissory Notes of
the Purchaser.
Merger Sub and the Purchaser hereby agree that, as promptly as
practicable following, and effective as of, the Effective Time, the Surviving
Corporation and the Purchaser shall amend the Promissory Note substantially in
the form of the amendment attached hereto as Exhibit F. Merger Sub also agrees
to extend further the Maturity Date (as defined in the Promissory Note) to the
extent that, at the time that such Maturity Date would otherwise occur, the then
existing restrictions on transferability under this Agreement would not permit
the sale of that number of shares of Stock such that the proceeds from such sale
are an amount at least equal to the remaining principal balance and accrued
interest on the Promissory Note; provided that the Surviving Corporation shall
not be obligated to extend such Maturity Date at any time that there are no
restrictions on the number of shares of Stock that may be sold.
16. Other Agreements.
Contemporaneously with the execution of this Agreement, the
Purchaser is entering into (i) the Stock Purchase Agreement in the form attached
hereto as Exhibit B (the "Stock Purchase Agreement") with Merger Sub and NIplc,
(ii) the Sale Participation Agreement in the form attached hereto as Exhibit C
(the "Sale Participation Agreement") with NIplc and (iii) the Voting Trust
Agreement in the form attached hereto as Exhibit D (the "Voting Trust
Agreement") with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, not individually but solely in his capacity
as trustee under the Voting Trust Agreement, Merger Sub and the Other
Purchasers.
15
17. Binding Effect.
The provisions of this Agreement shall be binding upon and accrue
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 5(a) hereof, such transferee shall be deemed the Purchaser
hereunder; provided, however, that no transferee (including without limitation,
transferees referred to in Section 5(a) hereof) shall derive any rights under
this Agreement unless and until such transferee has delivered to the Surviving
Corporation a valid undertaking and becomes bound by the terms of this
Agreement.
18. Amendment.
This Agreement may be amended only by a written instrument signed
by the parties hereto.
19. Applicable Law.
The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding against the Purchaser, with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of New Jersey, as
the Surviving Corporation may elect in its sole discretion, and the Purchaser
hereby submits to the non-exclusive jurisdiction of such courts for the purpose
of any such suit, action, proceeding or judgment. By the execution and delivery
of this Agreement, the Purchaser appoints the Secretary of the Surviving
Corporation, at the executive offices of the Surviving Corporation in
Morristown, New Jersey (or such other place within the State of New Jersey as
may be designated for such purpose), as his or her agent upon which process may
be served in any such suit, action or proceeding. Service of process upon such
agent, together with notice of such service given to the Purchaser in the manner
provided in Section 21 hereof, shall be deemed in every respect effective
service of process upon the Purchaser in any suit, action or proceeding. Nothing
herein shall in any way be deemed to limit the ability of the Surviving
Corporation to serve any such writs, process or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over the Purchaser, in
such other jurisdictions and in such manner, as may be permitted by applicable
law. The Purchaser hereby irrevocably waives any objections which he or she may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New Jersey, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum. No suit, action or
proceeding against the Surviving Corporation with respect to this Agreement may
be
16
brought in any court, domestic or foreign, or before any similar domestic or
foreign authority other than in a court of competent jurisdiction in the State
of New Jersey, and the Purchaser hereby irrevocably waives any right which he or
she may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. Merger Sub, on
behalf of itself and the Surviving Corporation, hereby submits to the
jurisdiction of such courts for the purpose of any such suit, action or
proceeding.
20. Miscellaneous.
In this Agreement (i) all references to "dollars" or "$" are to
United States dollars and (ii) the word "or" is not exclusive. If any provision
of this Agreement shall be declared illegal, void or unenforceable by any court
of competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.
21. Notices.
All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the party to whom it is
directed:
(i) If to Merger Sub or the Surviving Corporation, to it at the
following address:
Antigua Acquisition Corporation
c/o AT&T Capital Corporation
or
AT&T Capital Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Human Resources
with a copy to:
AT&T Capital Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(ii) If to the Purchaser, to him at the address set forth below
under his signature;
or at such other address as either party shall have specified by notice
in writing to the other.
Any notice which is required to be given to the Purchaser shall, if the
Purchaser is then deceased, be given to the Purchaser's
17
personal representative if such representative has previously informed the
Surviving Corporation of his or her status and address by written notice under
this Section 21.
22. Confidential Information.
(a) The Purchaser will not disclose or use at any time, any
Confidential Information (as hereinafter defined) of which the Purchaser is or
becomes aware, whether or not such information is developed by the Purchaser,
except to the extent that such disclosure or use is directly related to and
required by the Purchaser's performance of duties, if any, assigned to the
Purchaser by the Surviving Corporation. As used in this Agreement, the term
"Confidential Information" means information that is not generally known to the
public and that is used, developed or obtained by the Surviving Corporation or
its subsidiaries in connection with its business, including but not limited to
(i) products or services, (ii) fees, costs and pricing structures, (iii)
information regarding business and strategic plans, including, without
limitation, any potential corporate or business transactions or other corporate
developments, (iv) computer software, including operating systems, applications
and program listings, (v) flow charts, manuals and documentation, (vi) data
bases, (vii) accounting and business methods, (viii) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (ix) customers and clients and customer or
client lists, (x) other copyrightable works, (xi) all technology and trade
secrets, and (xii) all similar and related information in whatever form.
Confidential Information will not include any information that has been
generally available to the public prior to the date the Purchaser discloses or
uses such information. The Purchaser acknowledges and agrees that all
copyrights, works, inventions, innovations, improvements, developments, patents,
trademarks and all similar or related rights and information which relate to the
actual or anticipated business of the Surviving Corporation and its subsidiaries
(including its predecessors) and conceived, developed or made by the Purchaser
while employed by the Company, the Surviving Corporation or their subsidiaries
belong to the Surviving Corporation. The Purchaser will perform all actions
reasonably requested by the Surviving Corporation (whether during or after the
Purchaser's employment by the Surviving Corporation or any of its subsidiaries)
to establish and confirm such ownership at the Surviving Corporation's expense
(including without limitation assignments, consents, powers of attorney and
other instruments).
(b) In the event that the Purchaser is requested or legally
required (by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Confidential Information, the Purchaser
shall provide the Surviving Corporation with prompt notice of any such request
or requirement so that the Surviving Corporation may seek a
18
protective order or other appropriate remedy and/or waive compliance with the
provisions of Section 22(a) hereof. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the Surviving Corporation, the
Purchaser is nonetheless, in the opinion of counsel, required to disclose
Confidential Information, the Purchaser may, without liability hereunder,
disclose only that portion of the Confidential Information that in the opinion
of his or her counsel is legally required to be disclosed; provided that the
Purchaser attempts to preserve the confidentiality of the Confidential
Information, including, without limitation, by cooperating with the Surviving
Corporation to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the Confidential
Information.
(c) Notwithstanding Section 22(a) hereof, if at any time a court
holds that the restrictions stated in such Section 22(a) are unreasonable or
otherwise unenforceable under circumstances then existing, the parties hereto
agree that the maximum period or scope determined to be reasonable under such
circumstances by such court will be substituted for the stated period or scope.
Because the Purchaser's services are unique and because the Purchaser has had
access to Confidential Information, the parties hereto agree that money damages
will be an inadequate remedy for any breach of this Agreement. In the event of a
breach or threatened breach of this Agreement, the Surviving Corporation or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce, or prevent any
violations of, the provisions hereof (without the posting of a bond or other
security).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ANTIGUA ACQUISITION CORPORATION
By:
-----------------------------
Name:
Title:
-----------------------------
Purchaser
-----------------------------
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Address of Purchaser