EXHIBIT 10.3
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
among
LHS GROUP HOLDING CORPORATION,
GENERAL ATLANTIC PARTNERS 23, L.P.
GENERAL ATLANTIC PARTNERS 31, L.P.,
GAP COINVESTMENT PARTNERS, L.P.
and
THE STOCKHOLDERS NAMED HEREIN
Dated: July 15, 1996
TABLE OF CONTENTS
Page
1. Definitions............................................................................ 1
2. Restrictions on Transfer of Shares..................................................... 6
2.1 Limitation on Transfer............................................................ 6
2.2 Permitted Transfers............................................................... 6
2.3 Permitted Transfer Procedures..................................................... 7
2.4 Transfers in Compliance with Law; Substitution of Transferee...................... 7
3. Right of First Offer and Co-Sale Right................................................. 7
3.1 Proposed Voluntary Transfer by Major Stockholder or General Atlantic Stockholder.. 7
3.2 Involuntary Transfers............................................................. 10
4. Future Issuance of Shares; Preemptive Rights........................................... 13
4.1 Offering Notice................................................................... 13
4.2 Major Stockholder and General Atlantic Stockholder Option......................... 13
4.3 Exercise of Options............................................................... 14
4.4 Closing........................................................................... 14
4.5 Sale to Subject Purchaser......................................................... 14
4.6 After-Acquired Securities......................................................... 15
4.7 Agreement to be Bound............................................................. 15
5. Corporate Governance................................................................... 15
5.1 General........................................................................... 15
5.2 Stockholders Actions.............................................................. 15
5.3 Election of Directors; Number and Composition..................................... 16
5.4 Removal and Replacement of Directors.............................................. 16
5.5 Termination of Sections 5.3 and 5.4............................................... 17
5.6 Actions of the Board of Directors; Extraordinary Events........................... 17
6. Stock Certificate Legend............................................................... 18
7. Miscellaneous.......................................................................... 19
7.1 Notices........................................................................... 19
7.2 Amendment and Waiver.............................................................. 21
7.3 Specific Performance.............................................................. 21
7.4 Headings.......................................................................... 21
7.5 Severability...................................................................... 21
7.6 Entire Agreement.................................................................. 22
7.7 Term of Agreement................................................................. 22
7.8 Variations in Pronouns............................................................ 22
7.9 GOVERNING LAW..................................................................... 22
7.10 Further Assurances................................................................ 22
7.11 Successors and Assigns............................................................ 22
7.12 Counterparts...................................................................... 22
EXHIBITS
A Certificate of Incorporation of the Company
B By-laws of the Company
C-1 Form of Transfer Agreement (Previously issued shares)
C-2 Form of Transfer Agreement (Newly issued shares)
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
AGREEMENT, dated July 15, 1996 (this "Agreement"), among LHS Group Holding
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Corporation, a Delaware corporation (the "Company"), General Atlantic Partners
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23, L.P., a Delaware limited partnership ("GAP 23"), General Atlantic Partners
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31, L.P., a Delaware limited partnership ("GAP 31"), and GAP Coinvestment
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Partners, L.P., a New York limited partnership ("GAP Coinvestment"), and the
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stockholders listed on Schedule 1 hereto (the "Major Stockholders").
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WHEREAS, pursuant to the Stockholders Agreement, dated December 22, 1995
(the "Original Stockholders Agreement"), the Company, GAP 21, GAP Coinvestment
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and certain stockholders of the Company named therein entered into certain
agreements with respect to the holdings by GAP 21, GAP Coinvestment, such
stockholders and their respective Permitted Transferees (as hereinafter defined)
of Shares (as hereinafter defined) in the Company and future issuances of
capital stock by the Company;
WHEREAS, on the date hereof, (a) GAP 23 and GAP Coinvestment own all of the
issued and outstanding shares, par value $.01 per share, of Series A Convertible
Preferred Stock of the Company (the "Preferred Stock") and (b) the Company, GAP
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31 and GAP Coinvestment are entering into the Stock Purchase Agreement, dated
the date hereof (the "Stock Purchase Agreement"), pursuant to which the Company
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is, among other things, selling to (i)GAP 31, 80,096 shares, par value, $.01 per
share, of Common Stock of the Company (the "Common Stock") and (ii) GAP
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Coinvestment, 12,982 shares of Common Stock; and
WHEREAS, the Company, GAP 23, GAP 31 and the Major Stockholders wish to (a)
enter into this Agreement in order to amend and restate the Original
Stockholders Agreement in its entirety and (b) enter into the Registration
Rights Agreement, dated the date hereof (the "Registration Rights Agreement"),
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containing, among other things, the terms and conditions of the registration
rights granted by the Company in Section 6 of the Original Stockholders
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
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have the meanings set forth below:
"Affiliate" shall mean any Person who is an "affiliate" as defined in Rule
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12b-2 of the General Rules and Regulations under the Exchange Act. GAP 23, GAP
31 and GAP Coinvestment shall be deemed to be Affiliates of one another. In
addition, Affiliates of GAP 23 or GAP 31 shall be deemed to include GAP LLC and
the members of the GAP LLC.
"Board of Directors" means the Board of Directors of the Company.
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"Business Day" means any day other than a Saturday, Sunday or other day on
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which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"Charter Documents" means the Certificate of Incorporation and the By-laws
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of the Company as in effect on the date hereof, as the same may be amended from
time to time in accordance with the terms hereof and thereof, copies of which
are attached hereto as Exhibits A and B, respectively.
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"Commission" means the Securities and Exchange Commission or any similar
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agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the Common Stock, par value $.01 per share, of the
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Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Common Stock Equivalents" means any security or obligation which is by its
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terms convertible into shares of Common Stock, including, without limitation,
the Preferred Stock, and any option, warrant or other subscription or purchase
right with respect to Common Stock.
"Company Option Period" has the meaning set forth in Section 3.1.2 of this
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Agreement.
"Excess New Securities" has the meaning set forth in Section 4.2 of this
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Agreement.
"Excess Offered Securities" has the meaning set forth in Section 3.1.3(a)
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of this Agreement.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
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amended, and the rules and regulations of the Commission thereunder.
"GAP Coinvestment" has the meaning assigned to such term in the recital to
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this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
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liability company and the general partner of GAP 23 and GAP 31.
"GAP 31" has the meaning assigned to such term in the recital to this
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Agreement.
"GAP 23" has the meaning assigned to such term in the recital to this
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Agreement.
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"General Atlantic Directors" has the meaning set forth in Section 5.3 of
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this Agreement.
"General Atlantic Stockholders" means GAP 23, GAP 31, GAP Coinvestment and
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any Permitted Transferee of either of them to which Shares are transferred, and
the term "General Atlantic Stockholder" shall mean any such Person.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
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as amended.
"Initial Public Offering" means the Company's initial Public Offering.
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"Involuntary Transfer" means any transfer, proceeding or action by or in
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which a Stockholder shall be deprived or divested of any right, title or
interest in or to any of the Shares, including, without limitation, any seizure
under levy of attachment or execution, any transfer in connection with
bankruptcy (whether pursuant to the filing of a voluntary or an involuntary
petition under the United States Bankruptcy Code of 1978, or any modifications
or revisions thereto) or other court proceeding to a debtor in possession,
trustee in bankruptcy or receiver or other officer or agency, any transfer to a
state or to a public officer or agency pursuant to any statute pertaining to
escheat or abandoned property and any transfer pursuant to a divorce or
separation agreement or a final decree of a court in a divorce action.
"Involuntary Transferee" has the meaning assigned such term in Section
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3.2.1 of this Agreement.
"IPO Effectiveness Date" means the date upon which the Company commences an
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Initial Public Offering.
"Liens" has the meaning set forth in Section 3.1.5 of this Agreement.
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"Major Stockholders" means the stockholders listed on Schedule 1 hereto and
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any Permitted Transferee of any of them to which Shares are transferred, and the
term "Major Stockholder" shall mean any such Person.
"Major Stockholder Directors" has the meaning set forth in Section 5.3 of
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this Agreement.
"New Issuance Closing Date" has the meaning set forth in Section 4.1 of
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this Agreement.
"New Issuance Notice" has the meaning set forth in Section 4.1 of this
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Agreement.
"New Securities" has the meaning set forth in Section 4.1 of this
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Agreement.
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"Offered Securities" has the meaning set forth in Section 3.1.1 of this
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Agreement.
"Offering Notice" has the meaning set forth in Section 3.1.1 of this
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Agreement.
"Offer Price" has the meaning set forth in Section 3.1.1 of this Agreement.
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"Option Period" has the meaning set forth in Section 3.1.3(a) of this
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Agreement.
"Original Stockholders Agreement" has the meaning assigned to such term in
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the recital to this Agreement.
"Other Stockholder" means (a) any transferee of a Major Stockholder or a
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General Atlantic Stockholder (i) who is not a Permitted Transferee and has
agreed to be bound by the terms and conditions of this Agreement in accordance
with Section 2.4 and (ii) to whom Shares have been transferred in accordance
with Section 3 and (b) any Person other than a Major Stockholder or a General
Atlantic Stockholder who has agreed to be bound by the terms and conditions of
this Agreement in accordance with Section 4.7.
"Permitted Transferee" has the meaning set forth in Section 2.2 of this
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Agreement.
"Person" means any individual, corporation, partnership, firm, joint
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venture, association, joint stock company, trust, unincorporated organization,
governmental body or other entity.
"Preemptive Rightholder" has the meaning set forth in Section 4.2 of this
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Agreement.
"Preferred Stock" has the meaning assigned to such term in the recital to
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this Agreement.
"Proportionate Percentage" has the meaning set forth in Section 4.2 of this
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Agreement.
"Proposed Price" has the meaning set forth in Section 4.1 of this
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Agreement.
"Public Offering" means any offer for sale of shares of Common Stock
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pursuant to an effective Registration Statement filed under the Securities Act.
"Registration Rights Agreement" has the meaning assigned to such term in
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the recital to this Agreement.
"Rightholder" has the meaning set forth in Section 3.1.3(a) of this
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Agreement.
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"Securities Act" means the United States Securities Act of 1933, as
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amended, and the rules and regulations promulgated thereunder.
"Selling Stockholder" has the meaning set fort in Section 3.1.1 of this
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Agreement.
"Shares" means, with respect to each Stockholder, all shares, whether now
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owned or hereafter acquired, of Common Stock and Preferred Stock owned thereby;
provided, however, for the purposes of any computation of the number of Shares
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either outstanding or held by any Stockholder or otherwise to be determined
pursuant to Sections 1, 2, 3, 4, 5 and 7.2(b), the shares of Common Stock
issuable upon conversion, exercise or exchange of all Common Stock Equivalents
shall be deemed outstanding whether or not such conversion, exercise or exchange
has actually been effected.
"Stock Purchase Agreement" has the meaning assigned to such term in the
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recital to this Agreement.
"Stockholders" means the Major Stockholders, the General Atlantic
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Stockholders and any Other Stockholder, and the term "Stockholder" shall mean
any such Person.
"Stockholders Meeting" has the meaning set forth in Section 5.1 of this
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Agreement.
"Subject Purchaser" has the meaning set forth in Section 4.1 of this
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Agreement.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
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liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors (or Persons performing similar functions) of such corporation,
partnership, limited liability company or other entity are at the time owned, or
the management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.
"Transfer" has the meaning set forth in Section 2.1 of this Agreement.
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"Transferred Shares" has the meaning set forth in Section 3.2.1 of this
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Agreement.
"Third Party Purchaser" has the meaning set forth in Section 3.1.1 of this
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Agreement.
"Written Consent" has the meaning set forth in Section 5.1 of this
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Agreement.
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2. Restrictions on Transfer of Shares.
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2.1 Limitation on Transfer. No Stockholder shall sell, give, assign,
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hypothecate, pledge, encumber, grant a security interest in or otherwise dispose
of (whether by operation of law or otherwise) (each a "transfer") any Shares or
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any right, title or interest therein or thereto, except in accordance with the
provisions of this Agreement; provided, however, that any transferee obtaining
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any beneficial interest or right to vote such Shares hereunder shall agree to be
bound by this Agreement and shall comply with Section 2.4. Any attempt to
transfer any Shares or any rights thereunder in violation of the preceding
sentence shall be null and void ab initio and the Company shall not register any
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such transfer.
2.2 Permitted Transfers. At any time, any Stockholder may, subject to
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this Section 2.2 and Sections 2.3 and 2.4, transfer Shares to (a), with respect
to a Stockholder who is an individual, a member of such Stockholder's immediate
family, which shall include his parents, spouse, siblings, children or
grandchildren ("Family Members"), or a trust, corporation, partnership or
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limited liability company, all of the beneficial interests in which shall be
held by such Stockholder or one or more Family Members of such Stockholder or
which would otherwise be an Affiliate of such individual; provided, however,
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that during the period any such trust, corporation, partnership or limited
liability company holds any right, title or interest in any Shares, no Person
other than such Stockholder or one or more Family Members of such Stockholder
may be or become beneficiaries, stockholders, limited or general partners or
members thereof; and (b) with respect to a Stockholder that is not an
individual, any Affiliate of such Stockholder (the Persons referred to in the
preceding clauses (a) and (b) are herein each called a "Permitted Transferee").
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2.3 Permitted Transfer Procedures. If any Stockholder wishes to transfer
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Shares to a Permitted Transferee under this Section 2, such Stockholder shall
give notice to the Company of its intention to make any transfer permitted under
this Section 2 not less than ten (10) days prior to effecting such transfer,
which notice shall state the name and address of each Permitted Transferee to
whom such transfer is proposed and the number of Shares proposed to be
transferred to such Permitted Transferee.
2.4 Transfers in Compliance with Law; Substitution of Transferee.
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Notwithstanding any other provision of this Agreement, no transfer may be made
pursuant to this Section 2 or Section 3 unless (a) the Permitted Transferee has
agreed in writing to be bound by the terms and conditions of this Agreement
pursuant to an instrument substantially in the form attached hereto as Exhibit
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C-1, (b) the transfer complies in all respects with the applicable provisions of
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this Agreement and (c) the transfer complies in all respects with applicable
United States federal and state securities laws, including, without limitation,
the Securities Act. If any transfer is made which is not pursuant to an
effective Registration Statement, then an opinion of counsel to such
transferring Stockholder shall be supplied to the Company at such transferring
Stockholder's expense, to the effect that such transfer complies with the
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applicable federal and state securities laws and such opinion shall be
reasonably satisfactory to the Company. Upon becoming a party to this
Agreement, the Permitted Transferee of a Stockholder shall be substituted for,
and shall enjoy the same rights and be subject to the same obligations as, the
transferring Stockholder hereunder.
3. Right of First Offer and Co-Sale Right.
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3.1 Proposed Voluntary Transfer by Major Stockholder or General
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Atlantic Stockholder.
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3.1.1 Offering Notice. If any Major Stockholder, any General
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Atlantic Stockholder or any Other Stockholder (a "Selling Stockholder") wishes
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to sell or otherwise transfer all or any portion of its or his Shares to any
Person (other than to a Permitted Transferee) (a "Third Party Purchaser"), such
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Selling Stockholder shall offer such Shares first to the Company by sending
written notice (the "Offering Notice") to the Company and the other Stockholders
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which shall state (a) the number of Shares proposed to be sold or otherwise
transferred (the "Offered Securities") and (b) the proposed purchase price per
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Share which the Selling Stockholder is willing to accept from the Third Party
Purchaser (the "Offer Price"). Upon delivery of the Offering Notice, such offer
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shall be irrevocable unless and until the rights of first offer provided for
herein shall have been waived or shall have expired.
3.1.2 Company Option. For a period of fifteen (15) days after the
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giving of the Offering Notice pursuant to Section 3.1.1 (the "Company Option
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Period"), the Company or any of the Subsidiaries shall have the irrevocable
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right to purchase any or all of the Offered Securities at a purchase price equal
to the Offer Price and upon the terms and conditions set forth in the Offering
Notice.
3.1.3 Major Stockholder and General Atlantic Stockholder Option.
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(a) If the Company does not elect to purchase all of the
Offered Securities pursuant to Section 3.1.2, then for a period of thirty (30)
days after the earlier to occur of (i) the expiration of the Company Option
Period pursuant to Section 3.1.2 and (ii) the date upon which the Selling
Stockholder shall have received written notice from the Company stating that the
Company and the Subsidiaries do not intend to exercise their option to purchase
any or all of the Offered Securities (the "Option Period"), the Major
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Stockholders and the General Atlantic Stockholders (each, a "Rightholder") shall
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have the irrevocable right to purchase any or all of the remaining Offered
Securities at a purchase price equal to the Offer Price and upon the terms and
conditions set forth in the Offering Notice. Each such Rightholder shall have
the right to purchase that percentage of the Offered Securities determined by
dividing (i) the total number of Shares then owned by such Rightholder by (ii)
the total number of Shares then owned by all such Rightholders, other than the
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Offered Securities. If any Rightholder does not fully subscribe for the number
or amount of Offered Securities that it or he is entitled to purchase, then each
other participating Rightholder shall have the right to purchase that percentage
of the Offered Securities not so subscribed for (for the purposes of this
Section 3.1.3, the "Excess Offered Securities") determined by dividing (x) the
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total number of Shares then owned by such fully participating Rightholder by (y)
the total number of Shares then owned by all fully participating Rightholders
who elected to purchase Offered Securities. The procedure described in the
preceding sentence shall be repeated until there are no remaining Excess Offered
Securities or there are no Rightholders who wish to purchase any additional
Excess Offered Securities.
(b) If a Major Stockholder is selling Offered Securities
and any of the General Atlantic Stockholders do not elect to purchase such
Offered Securities pursuant to subsection (a) of this Section 3.1.3, then each
of such non-electing General Atlantic Stockholders shall have the right to sell,
if such Major Stockholder sells such Offered Securities to a Person other than
the Company or any other Major Stockholder, upon the terms set forth in the
Offering Notice, that number of Shares held by each of such General Atlantic
Stockholders equal to that percentage of the Offered Securities determined by
dividing (i) the total number of Shares then owned by each of such selling
General Atlantic Stockholders by (ii) the total number of outstanding Shares,
other than the Offering Securities. The Selling Stockholder and the electing
General Atlantic Stockholder(s) shall effect the sale of the Offered Securities
and such General Atlantic Stockholder(s) shall sell the number of Offered
Securities required to be sold pursuant to this Section 3.1.3(b), and the number
of Offered Securities to be sold to the Third Party Purchaser by the Selling
Stockholder shall be reduced accordingly.
(c) Notwithstanding the foregoing, the provisions of
Section 3.1.3(b) do not apply with respect to any transfer of Shares to a
Permitted Transferee.
(d) in order to be entitled to exercise its right to sell
Shares to a Third Party Purchaser pursuant to Section 3.1.3(b), a General
Atlantic Stockholder who wishes to sell its Shares must agree to make
substantially the same representations, warranties, covenants and indemnities
and other similar agreements as the Major Stockholder agrees to make in
connection with the proposed sale by it of Offered Securities to a Third Party
Purchaser. Any Major Stockholder shall give notice to all General Atlantic
Stockholders of each proposed sale by it of Offered Securities which gives rise
to the rights of the General Atlantic Stockholders set forth in Section
3.1.3(b), at least thirty (30) days prior to the proposed consummation of such
sale, setting forth the name of the Major Stockholder, the number of Offered
Securities, the name and address of the proposed Third Party Purchaser, the
proposed amount and form of consideration and terms and conditions of payment
offered by the proposed Third Party Purchaser, the percent of Shares that each
General Atlantic Stockholder may sell to such proposed Third Party Purchaser
(determined in accordance with Section 3.1.3(b)), and a representation that the
proposed Third Party Purchaser has been informed of the "tag-along" rights
provided for in Section 3.1.3(b) and has agreed to purchase Shares in accordance
with the terms hereof. The tag-along rights provided by Section 3.1.3(b) must
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be exercised by a General Atlantic Stockholder wishing to sell its Shares within
fifteen (15) days following receipt of the notice required by the preceding
sentence, by delivery of a written notice to the Major Stockholder indicating
such General Atlantic Stockholder's wish to exercise its rights and specifying
the number of Shares (up to the maximum number of Shares owned by such General
Atlantic Stockholder required to be purchased by the proposed Third Party
Purchaser) it wishes to sell. If the proposed Third Party Purchaser fails to
purchase Shares from any General Atlantic Stockholder that has properly
exercised its tag-along rights pursuant to Section 3.1.3(b), then the Major
Stockholder shall not be permitted to consummate the proposed sale of the
Offered Securities, and any such attempted sale shall be void and of no effect.
3.1.4 Exercise of Options.
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(a) The right of the Company to purchase the Offered
Securities under Section 3.1.2 shall be exercisable by delivering written notice
of the exercise thereof, prior to the expiration of the 15-day period referred
to in Section 3.1.2, to the Selling Stockholder with a copy to the other
Stockholders. The failure of the Company to respond within such 15-day period
shall be deemed to be a waiver of the Company's rights under Section 3.1.
(b) The right of each Rightholder under Section 3.1.3
shall be exercisable by delivering written notice of the exercise thereof, prior
to the expiration of the 30-day period referred to in Section 3.1.3, to the
Selling Stockholder with a copy to the Company and the other Stockholders. Each
such notice shall state (i) the number of Shares held by such Rightholder and
(ii) the number of Shares that such Rightholder is willing to purchase pursuant
to Section 3.1.3. The failure of a Rightholder to respond within such 30-day
period to the Selling Stockholder shall be deemed to be a waiver of such
Rightholder's rights under Section 3.1.
3.1.5 Closing. The closing of the purchases of Offered Securities
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subscribed for by the Company under Section 3.1.2 or the Rightholders under
Section 3.1.3 shall be held at the principal office of the Company at 11:00 a.m.
local time on the 45th day after the giving of the offering Notice pursuant to
Section 3.1.1 or at such other time and place as the parties to the transaction
may agree. At such closing, the Selling Stockholder shall deliver certificates
representing the Offered Securities, duly endorsed for transfer and accompanied
by all requisite transfer taxes, if any, and such Offered Securities shall be
free and clear of any liens, claims, options, charges, encumbrances or rights
("Liens") (other than those arising hereunder and those attributable to actions
by the purchasers) and the Selling Stockholder shall so represent and warrant,
and further represent and warrant that it is the sole beneficial and record
owner of such Offered Securities. The Company or each Rightholder, as the case
may be, purchasing Offered Securities shall deliver at the closing payment in
full in immediately available funds for the Offered Securities purchased by it
or him. At such closing, all of the parties to the transaction shall execute
such additional documents as are otherwise necessary or appropriate.
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3.1.6 Sale to Third Party Purchaser. Unless the Company or the
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Rightholders elect to purchase all, but not less than all, of the Offered
Securities under Sections 3.1.2 and 3.1.3, the Selling Stockholder may sell the
remaining Offered Securities to the Third Party Purchaser on the terms and
conditions set forth in the Offering Notice; provided, however, that such sale
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is bona fide and made pursuant to a contract entered into within sixty (60) days
of the earlier of the waiver by the Company and the Rightholders of their
options to purchase the offered Securities and the expiration of the Option
Period (the earlier of such dates being offered herein as the "Contract Date");
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and provided further, that such sale shall not be consummated unless and until
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all of the following conditions are met.
(a) Prior to the purchase by the Third Party Purchaser of any of
such Offered Securities, the Third Party Purchaser shall become a
party to this Agreement and agree to be bound by the terms and
conditions hereof in accordance with Section 2.4 hereof.
(b) The consummation of such sale to the Third Party Purchaser
shall not be subject to any conditions (other than necessary
filings under the HSR Act), except that it may be conditioned
upon the truth as of the closing of the proposed purchase of
customary representations and warranties and the delivery of
stock certificates and a customary legal opinion.
(c) The Third Party Purchaser shall have furnished evidence
satisfactory to the Company, in its reasonable judgment, as to
the financial ability of such Third Party Purchaser to consummate
the proposed purchase.
If such sale is not consummated within forty-five (45) days of the Contract Date
for any reason, then the restrictions provided for herein shall again become
effective, and no transfer of such Offered Securities may be made thereafter by
the Selling Stockholder without again offering the same to the Company, the
Major Stockholders and the General Atlantic Stockholders in accordance with this
Section 3.1.
3.2 Involuntary Transfers.
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3.2.1 Rights of First Offer upon Involuntary Transfer. If an
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Involuntary Transfer of any Shares (the "Transferred Shares") owned by any
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Stockholder shall occur, then the Company, the Major Stockholders and the
General Atlantic Stockholders shall have the same rights as specified in
Sections 3.1.2 and 3.1.3, respectively, with respect to such Transferred Shares
as if the Involuntary Transfer had been a proposed voluntary transfer by a
Selling Stockholder and shall be governed by Section 3.1 except that (a) the
time periods shall run from the date of receipt by the Company and the
Rightholders of notice of the Involuntary Transfer, (b) such rights shall be
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exercised by notice to the transferee of such Transferred Shares (the
"Involuntary Transferee") rather than to the Stockholder who suffered or will
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suffer the Involuntary Transfer and (c) the purchase price per Transferred Share
shall be agreed upon by the Involuntary Transferee and the Company or the
purchasing Rightholders, as the case may be; provided, however, that if such
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parties fail to agree as to such purchase price, the purchase price shall be the
Fair Value thereof as determined in accordance with Section 3.2.2.
3.2.2 Fair Value. If the parties fail to agree upon the purchase
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price of the Transferred Shares in accordance with Section 3.2.1 hereof, then
the Company or the Rightholders, as the case may be, shall purchase the
Transferred Shares at a purchase price equal to the Fair Value (as hereinafter
defined) thereof. The Fair Value of the Transferred Shares shall be determined
by a panel of three independent appraisers, which shall be nationally recognized
investment banking firms or nationally recognized experts experienced in the
valuation of corporations. Within five (5) Business Days after the notice to the
Involuntary Transferee with respect to the exercise of the right to purchase the
Transferred Shares, the Involuntary Transferee and the Board of Directors shall
each designate one such appraiser that is willing and able to conduct such
determination. If either the Involuntary Transferee or the Board of Directors
fails to make such designation within such period, then other party that has
made the designation shall have the right to make the designation on its behalf.
The two appraisers designated shall, within a period of five (5) Business Days
after the designation of the second appraiser, agree to designate a third
appraiser. The three appraisers shall conduct their determination as promptly as
practicable, and the Fair Value of the Transferred Shares shall be the average
of the determination of the two appraisers that are closer to each other than to
the determination of the third appraiser, which third determination shall be
discarded; provided, however, that if the determination of two appraisers are
-------- -------
equally close to the determination of the third appraiser, then the Fair Value
of the Transferred Shares shall be the average of the determination of all three
appraisers. Such determination shall be final and binding on the Involuntary
Transferee, the Company and the Rightholders. The Involuntary Transferee shall
be responsible for the fees and expenses of the appraiser designated by or on
behalf of it, and the Company for the fees and expenses of the appraiser
designated by or on behalf of the Board of Directors. The Involuntary Transferee
and the Company shall each share half the fees and expenses of the appraiser
designated by the appraisers. For purposes of this Section 3.2.2, the "Fair
Value" of the Transferred Shares means the fair market value of such Transferred
Shares determined in accordance with this Section 3.2.2 based upon all
considerations that the appraisers determine to be relevant.
3.2.3 Closing. The closing of any purchase under this Section 3.2
-------
shall be held at the principal office of the Company at 11:00 a.m. local time on
the earlier to occur of (a) the fifth Business Day after delivery of written
notice to the Involuntary Transferee by the Company or the Rightholders, as the
case may be, in accordance with Section 3.2.1(b) or (b) the fifth Business Day
after the determination of the Fair Value of the Transferred Shares in
-11-
accordance with Section 3.2.2, or at such other time and place as the parties to
the transaction may agree. At such closing, the Involuntary Transferee shall
deliver certificates, if applicable, or other instruments or documents
representing the Transferred Shares being purchased under this section 3.2, duly
endorsed with a signature guarantee for transfer and accompanied by all
requisite transfer taxes, if any, and such Transferred Shares shall be free and
clear of any Liens (other than those arising hereunder) arising through the
action or inaction of the Involuntary Transferee and the Involuntary Transferee
shall so represent and warrant, and further represent and warrant that it is the
beneficial owner of such Transferred Shares. The Company or each Rightholder, as
the case may be, purchasing such Transferred Shares shall deliver at closing
payment in full in immediately available funds for such Transferred Shares. At
such closing, all parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
3.2.4 General. In the event that the provisions of this Section
-------
3.2 shall be held to be unenforceable with respect to any particular Involuntary
Transfer, the Company and the Rightholders shall have the rights specified in
Sections 3.1.2 and 3.1.3, respectively, with respect to any transfer by an
Involuntary Transferee of such Shares, and each Rightholder agrees that any
Involuntary Transfer shall be subject to such rights, in which case the
Involuntary Transferee shall be deemed to be the Selling Stockholder for
purposes of Section 3.1 of this Agreement and shall be bound by the provisions
of Section 3.1 and other related provisions of this Agreement.
4. Future Issuance of Shares; Preemptive Rights.
--------------------------------------------
4.1 Offering Notice. Except for capital stock which may be issued to
---------------
employees of the Company pursuant to a stock option plan or other employee
benefit arrangement approved by the Board of Directors, if the Company wishes to
issue and sell any shares of capital stock or any shares of capital stock or any
security convertible into or exchangeable for capital stock (the "New
---
Securities") to any Person (a "Subject Purchaser"), then the Company shall offer
-----------------
such New Securities first to the Major Stockholders and the General Atlantic
Stockholders by sending written notice (the "New Issuance Notice") to the Major
-------------------
Stockholders and the General Atlantic Stockholders at least fifteen (15) days
prior to the issuance and sale of the New Securities, which shall state (a) the
number of shares of New Securities proposed to be issued and sold, (b) the
proposed purchase price per share of the New Securities that the Company is
willing to accept (the "Proposed Price") and (c) the date on which the New
--------------
Securities will be sold to accepting Major Stockholders and General Atlantic
Stockholders (the "New Issuance Closing Date"). Upon delivery of the New
-------------------------
Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in Section 4.2 shall have been waived or shall have expired.
4.2 Major Stockholder and General Atlantic Stockholder Option. For a
---------------------------------------------------------
period of fifteen (15) days after the giving of the New Issuance Notice pursuant
to Section 4.1, the Major Stockholders and the General Atlantic Stockholders
(each, a "Preemptive Rightholder") shall have the right to purchase any or all
----------------------
-12-
of its Proportionate Percentage (as hereinafter defined) of the New Securities
at a purchase price equal to the Proposed Price and upon the terms and
conditions set forth in the New Issuance Notice. Each such Preemptive
Rightholder shall have the right to purchase that percentage of the New
Securities determined by dividing (a) the total number of Shares then owned by
such Preemptive Rightholder by (b) the total number of then outstanding Shares
(the "Proportionate Percentage"). If any Major Stockholder does not fully
------------------------
subscribe for the number or amount of New Securities that he is entitled to
purchase pursuant to the preceding sentence, then each General Atlantic
Stockholder shall have the right to purchase any or all of the remaining New
Securities not so subscribed for by any such Major Stockholder. To the extent
that the General Atlantic Stockholders do not subscribe for any or all of such
remaining New Securities not so subscribed for by any such Major Stockholder,
each other Major Stockholder who elected to purchase New Securities shall have
the right to purchase that percentage of the remaining New Securities not so
subscribed for by the General Atlantic Stockholders (for the purposes of this
Section 4.2, the "Excess New Securities") determined by dividing (x) the total
---------------------
number of Shares then owned by such fully participating Major Stockholder by (y)
the total number of Shares then owned by all fully participating Major
Stockholders who elected to purchase New Securities.
4.3 Exercise of Options. The right of each Preemptive Rightholder to
-------------------
purchase the New Securities under Section 4.2 shall be exercisable by delivering
written notice of the exercise thereof, prior to the expiration of the 15-day
period referred to in Section 4.2, to the Company, which notice shall state the
amount of New Securities that such Preemptive Rightholder elects to purchase.
The failure of a Preemptive Rightholder to respond within such 15-day period
shall be deemed to be a waiver of such Preemptive Rightholder's rights under
Section 4.2.
4.4 Closing. The closing of the purchase of New Securities
-------
subscribed for by the Preemptive Rightholders under Section 4.3 shall be held at
the principal office of the Company at 11:00 a.m. local time on the New Issuance
Closing Date or at such other time and place as the parties to the transaction
may agree. At such closing, the Company shall deliver certificates representing
the New Securities, and the New Securities shall be issued free and clear of all
Liens and the Company shall so represent and warrant, and further represent and
warrant that such New Securities shall be, upon issuance thereof to the
subscribing Preemptive Rightholders and after payment therefor, duly authorized,
validly issued, fully paid and nonassessable. Each Preemptive Rightholder
purchasing the New Securities shall deliver at the closing payment in full in
immediately available funds for the New Securities purchased by him or it. At
such closing, all of the parties to the transaction shall execute such
additional documents as are otherwise necessary or appropriate.
4.5 Sale to Subject Purchaser. Unless the Major Stockholders and the
-------------------------
General Atlantic Stockholders elect to purchase all of the New Securities
pursuant to Section 4.2, the Company may sell to the Subject Purchaser all of
the New Securities not so purchased pursuant to Section 4.2 on terms and
-13-
conditions that are no more favorable to the Subject Purchaser than those set
forth in the New Issuance Notice; provided, however, that such sale is bona fide
-------- -------
and made pursuant to a contract entered into within six (6) months of the
earlier to occur of (a) the waiver by the Major Stockholders and the General
Atlantic Stockholders of their option to purchase the New Securities and (b) the
expiration of the 15-day period referred to in Section 4.2. If such sale is not
consummated within such six (6) month period for any reason, then the
restrictions provided for herein shall again become effective, and no issuance
and sale of New Securities may be made thereafter by the Company without again
offering the same to the Major Stockholders and the General Atlantic
Stockholders in accordance with this Section 4. The closing of any issue and
purchase pursuant to this Section 4.5 shall be held at the time and place as the
parties to the transaction may agree.
4.6 After-Acquired Securities. All of the provisions of this
-------------------------
Agreement shall apply to all of the Shares now owned or which may be issued or
transferred hereafter to a Stockholder in consequence of any additional
issuance, purchase, exchange or reclassification of any of the Shares, corporate
reorganization, or any other form of recapitalization, consolidation, merger,
share split or share dividend, or which are acquired by a Stockholder in any
other manner.
4.7 Agreement to be Bound. The Company shall not issue any Shares or
---------------------
any Common Stock Equivalents to any Person not a party to this Agreement, unless
such Person has agreed in writing to be bound by the terms and conditions of
this Agreement pursuant to an instrument substantially in the form attached
hereto as Exhibit C-2. Upon becoming a party to this Agreement, such Person
-----------
shall be deemed to be, and shall be subject to the same obligations as a
Stockholder hereunder. Any issuance of Shares or any Common Stock Equivalents
by the Company in violation of this Section 4.7 shall be null and void ab
--
initio. Notwithstanding the foregoing, the provisions of this Section 4.7 shall
------
not be applicable to issuances of capital stock upon exercise of options granted
to employees of the Company pursuant to an employee benefit plan approved by the
Board of Directors.
5. Corporate Governance.
--------------------
5.1 General. From and after the execution of this Agreement, each
-------
Stockholder shall vote its or his Shares at any regular or special meeting of
stockholders of the Company (a "Stockholders Meeting") or in any written consent
--------------------
executed in lieu of such a meeting of stockholders (a "Written Consent"), and
---------------
shall take all other actions necessary to ensure that the Charter Documents do
not, at any time hereafter, conflict in any respect with the provisions of this
Agreement.
5.2 Stockholders Actions. In order to effectuate the provisions of
--------------------
this Section 5, each Stockholder (a) hereby agrees that when any action or vote
is required to be taken by such Stockholder pursuant to this Agreement, such
Stockholder shall use its best efforts to call, or cause the appropriate officer
and directors of the Company to call, a Stockholders Meeting or to execute or
-14-
cause to be executed a Written Consent to effectuate such stockholder action,
(b) shall use its best efforts to cause the Board of Directors to adopt, either
at a meeting of the Board of Directors or by unanimous written consent of the
Board of Directors, all the resolutions necessary to effectuate the provisions
of this Agreement and (c) shall use its best efforts to cause the Board of
Directors to cause the Secretary of the Company, of if there be no secretary,
such other officer of the Company as the Board of Directors may appoint to
fulfill the duties of Secretary, not to record any vote or consent contrary to
the terms of this Section 5.
5.3 Election of Directors; Number and Composition. Each Stockholder
---------------------------------------------
shall vote its or his Shares at any Stockholders Meeting, or act by Written
Consent with respect to such Shares, and take all other actions necessary to
ensure that the number of directors constituting the entire Board of Directors
shall be not less than four (4) nor greater than five (5); provided, however,
-------- -------
that each Stockholder shall vote its or his Shares at any Stockholders Meeting,
or act by Written Consent with respect to such Shares, and take all other
actions necessary to ensure that such number shall be increased to not less than
seven (7) as soon as possible after the IPO Effectiveness Date. Each
Stockholder shall vote its or his shares at any Stockholders Meeting called for
the purpose of filling the positions on the Board of Directors, or in any
Written Consent executed for such purpose, and to take all other actions
necessary to ensure the election to the Board of Directors of (a) two (2)
individuals designated by the Major Stockholders (who initially shall be ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇) (collectively, the "Major Stockholder Directors") and
---------------------------
(b) two (2) individuals designated by the General Atlantic Stockholders (who
initially shall be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇) (collectively, the
"General Atlantic Directors"); provided, however, that upon the request of the
--------------------------- -------- -------
Major Stockholders holding a majority of the Shares then held by all Major
Stockholders, each Stockholder shall vote its or his Shares at any Stockholders
Meeting, or act by Written Consent with respect to such Shares, and take all
other actions necessary, as soon as possible after receipt of such request, to
increase the number of Major Stockholder Directors to three (3).
5.4 Removal and Replacement of Directors.
------------------------------------
5.4.1 Removal of General Atlantic Directors. If at any time the
-------------------------------------
General Atlantic Stockholders notify the other Stockholders of their wish to
remove at any time and for any reason (or no reason) any General Atlantic
Director, then each Stockholder shall vote all of his Shares so as to remove
such General Atlantic Director.
5.4.2 Replacement of Directors.
------------------------
(a) If at any time, a vacancy is created on the Board of
Directors by reason of the death, removal or resignation of a General Atlantic
Director, then the General Atlantic Stockholders shall designate a nominee to be
elected to fill such vacancy until the next Stockholders Meeting.
(b) if at any time, a vacancy is created on the Board of
Directors by reason of the death, removal or resignation of a Major Stockholder
-15-
Director, then the Major Stockholders shall designate a nominee to be elected to
fill such vacancy until the next Stockholders Meeting.
(c) Upon receipt of notice of the designation of a nominee
pursuant to subsection (a) or (b) above, each Stockholder shall, as soon as
practicable after the date of such notice, take action, including the voting of
its Shares, to elect the director designated by the General Atlantic
Stockholders or the Major Stockholders, as the case may be, to fill such
vacancy.
5.5 Termination of Sections 5.3 and 5.4. Notwithstanding anything to
-----------------------------------
the contrary contained in this Agreement, (a) from and after the date that the
General Atlantic Stockholders own shares of Preferred Stock and/or Common Stock
and/or other securities of the Company convertible into or exchangeable for
voting capital stock of the Company that in the aggregate represent (after
giving effect to any adjustments) greater than 5% but less than or equal to 10%
of the total number of shares of Common Stock outstanding (on an as converted
basis), then (i) at the request of the Chairman of the Company, one General
Atlantic Director designated by the General Atlantic Stockholders in accordance
with Section 5.3 hereof shall immediately resign from the Board of Directors and
the rights of the General Atlantic Stockholders under Section 5.4.2 with respect
to the replacement of such General Atlantic Director shall terminate and (ii)
the General Atlantic Stockholders shall be entitled thereafter to designate one
(1) General Atlantic Director for election or removal pursuant to Section 5.3 or
Section 5.4.1 hereof and (b) from and after the date that the General Atlantic
Stockholders own shares of Preferred Stock and/or Common Stock and/or other
securities of the Company convertible into or exchangeable for voting capital
stock of the Company that in the aggregate represent (after giving effect to any
adjustments) 5% or less of the total number of shares of Common Stock
outstanding (on an as converted basis), then (i) at the request of the Chairman
of the Company, any General Atlantic Director designated by the General Atlantic
Stockholders in accordance with Section 5.3 hereof shall immediately resign from
the Board of Directors and the rights of the General Atlantic Stockholders under
Section 5.4.2 with respect to the replacement of such General Atlantic Director
shall terminate and (ii) the General Atlantic Stockholders shall not be entitled
to designate any General Atlantic Directors for election or removal pursuant to
Section 5.3 or Section 5.4.1 hereof.
5.6 Actions of the Board of Directors; Extraordinary Events.
-------------------------------------------------------
Notwithstanding anything to the contrary contained in this Agreement, the Board
of Directors shall not take, approve or otherwise ratify any of the following
actions except with the consent of at least a majority of the directors
constituting the entire Board of Directors, which majority shall include,
without limitation, at least one General Atlantic Director:
(a) any transaction of merger, consolidation,
amalgamation, recapitalization or other form of business combination with
respect to the Company or any of the Subsidiaries;
-16-
(b) any sale, conveyance, lease, transfer or other
disposition of all or substantially all of the consolidated assets of the
Company or any of the Subsidiaries (other than the sale of software products by
the Company or any of the Subsidiaries in the ordinary course of business);
(c) institution of any voluntary bankruptcy or other
liquidation or dissolution proceedings by the Company or any of the
Subsidiaries;
(d) any issuance of or agreement to issue any shares of
capital stock of the Company or any of the Subsidiaries or rights of any kind
convertible into or exchangeable for, any shares of capital stock of the Company
or any of the Subsidiaries, or any option, warrant or other subscription or
purchase right with respect to shares of capital stock;
(e) any declaration or making of dividend payments or
other payment or distribution on account of the Shares;
(f) any changes in accounting principles of the Company or
any of the Subsidiaries, including any change in the criteria for evaluating the
Company's or any of the Subsidiaries' financial conditions and results of
operations, and any changes in the Company's or any of the Subsidiaries'
auditors; and
(g) any material amendment, modification or restatement of
the Charter Documents or any material amendment or modification of this Section
5.6.
6. Stock Certificate Legend. A copy of this Agreement shall be filed
------------------------
with the Secretary of the Company and kept with the records of the Company.
Each certificate representing Shares now held or hereafter acquired by any
Stockholder shall for as long as this Agreement is effective bear legends
substantially in the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED AND SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS OR PURSUANT TO
A WRITTEN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
-17-
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE AMENDED
AND RESTATED STOCKHOLDERS AGREEMENT, DATED JULY 15, 1996, AMONG LHS GROUP
HOLDING CORPORATION, GENERAL ATLANTIC PARTNERS 23, L.P., GENERAL ATLANTIC
PARTNERS 31, L.P., GAP COINVESTMENT PARTNERS, L.P., AND THE STOCKHOLDERS
NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL
OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON
THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN
COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS AGREEMENT.
7. Miscellaneous.
-------------
7.1 Notices. All notices, demands or other communications provided
-------
for or permitted hereunder shall be made in writing and shall be by registered
or certified first class mail, return receipt requested, telecopier, courier
service, overnight mail or personal delivery:
(a) if the Company:
LHS Group Holding Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to any of the General Atlantic Stockholders:
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-18-
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Major Stockholders:
c/o LHS Group Holding Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
LHS Specifications KG
▇▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇ ▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇▇-▇▇▇-▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to any other Stockholder, at its address as it appears
on the record books of the Company.
Any party may by notice given in accordance with this Section 7.1 designate
another address or person for receipt of notices hereunder. All such notices
and communications shall be deemed to have been duly given when delivered by
hand, if personally delivered; when delivered by courier or overnight mail, if
delivered by commercial courier service or overnight mail; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is mechanically acknowledged, if telecopied.
-19-
7.2 Amendment and Waiver.
--------------------
(a) No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties
hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by the Stockholders holding 60% of the Shares hereunder and (ii) only
in the specific instance and for the specific purpose for which made or given;
provided, however, that any such amendment, supplement or modification to this
-------- -------
Agreement shall not be effective to withdraw, deny or adversely affect the
rights of any Stockholder who has not consented in writing to such amendment,
supplement or modification; and provided, further, that any amendment which
-------- -------
adversely affects the Company or imposes an additional obligation thereon must
be approved in writing by the Company.
7.3 Specific Performance. The parties hereto intend that each of the
--------------------
parties have the right to seek damages or specific performance in the event that
any other party hereto fails to perform such party's obligations hereunder.
Therefore, if any party shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an
adequate remedy at law.
7.4 Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
7.5 Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
7.6 Entire Agreement. This Agreement, together with the exhibits and
----------------
schedules hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein or therein.
This Agreement, together with the exhibits hereto, supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
-20-
7.7 Term of Agreement. Subject to the following proviso, this
-----------------
Agreement shall become effective upon the execution hereof and shall terminate
upon the IPO Effectiveness Date.
7.8 Variations in Pronouns. All pronouns and any variations thereof
----------------------
to the masculine, feminine or neuter, singular or plural, as the context may
require.
7.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF, EXCEPT FOR MATTERS DIRECTLY IN THE PURVIEW OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE (THE "DGCL"), WHICH MATTERS
SHALL BE GOVERNED BY THE DGCL.
7.10 Further Assurances. Each of the parties shall, and shall cause
------------------
their respective Affiliates to, execute such instruments and take such action as
may be reasonably required or desirable to carry out the provisions hereof and
the transactions contemplated hereby.
7.11 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their respective successors, heirs,
legatees and legal representatives. This Agreement is not assignable except in
connection with a transfer of Shares in accordance with this Agreement.
7.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
7.13 General Partner's Certificate. The respective obligations of the
-----------------------------
Company and the Major Stockholders to enter into this Agreement and the
Registration Rights Agreement are subject to the receipt by such parties of a
certificate from the general partner of GAP 23, in form and substance
satisfactory to the Company, dated the date hereof and signed by such general
partner, certifying (a) as to the incumbency and specimen signature of each
individual executing this Agreement and the Registration Rights Agreement; (b)
that GAP 23 is a partnership duly organized and validly existing under the laws
of the jurisdiction of its formation and has the requisite power and authority
to execute, deliver and perform its Obligations under this Agreement and the
Registration Rights Agreement; (c) that the execution, delivery and performance
by GAP 23 of this Agreement (i) have been duly authorized by all necessary
partnership action and (ii) do not contravene the terms of GAP 23's
organizational documents, or any amendment thereof; and (d) that this Agreement
and the Registration Rights Agreement have been duly executed and delivered and
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constitute the legal, valid and binding obligations of GAP 23, enforceable
against it in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement on the date first written above.
LHS GROUP HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: CEO
GENERAL ATLANTIC PARTNERS 23, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: A Managing Member
GENERAL ATLANTIC PARTNERS 31, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: A Managing Member
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GAP COINVESTMENT PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: A General Partner
MAJOR STOCKHOLDERS
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ Eberhard Czernpiel
----------------------
Eberhard Czernpiel
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------
▇▇▇▇▇▇▇ ▇▇▇▇
/s/ Wolf ▇▇▇▇▇
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Wolf ▇▇▇▇▇
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