Item 4 — Purpose of Transaction
Shareholders Agreement On the Closing Date, the Issuer, LNH and, solely for purposes of the standstill provisions set forth therein, FGI, entered into a shareholders' agreement (the "Shareholders Agreement"). Under the Shareholders Agreement, LNH and its affiliates are subject to a lock-up period with respect to the Consideration Shares, with 50% of such shares released from the lock-up on the 12-month anniversary of the Closing Date and the remaining 50% of such shares released from the lock-up on the 24-month anniversary of the Closing. The Shareholders Agreement further provides that the Board of Directors of the Issuer (the "Board") will take such actions as are necessary to increase the size of the Board by one director, and LNH will have the right to designate one director to the Board and to designate one non-voting Board observer. These designation rights are subject to graduated reduction and termination based on LNH's beneficial ownership of Common Stock: LNH may designate one director and one observer for so long as it beneficially owns at least 7,102,033 shares of Common Stock; this right is reduced to one director if such ownership falls below 7,102,033 shares of Common Stock but remains at or above 5,326,525 shares of Common Stock; and all designation and observer rights terminate if such ownership falls below 5,326,525 shares of Common Stock. Furthermore, subject to certain exceptions, in the event LNH and its affiliates fail to vote all shares of Common Stock beneficially owned by them in accordance with the recommendation of the Board (subject to certain exceptions) and in favor of persons nominated and recommended to serve as directors by the Board, all of LNH's designation rights will terminate. In addition, FGI and LNH and their affiliates have agreed to be subject to a customary standstill obligation, including a restriction on acquiring shares in excess of 12,783,660 shares of Common Stock, which will be effective until the earlier of (a) 15 months after the date on which both (i) no LNH designee sits on the Board and (ii) LNH has irrevocably waived or no longer has any right to designate a director or observer and (b) the date on which LNH holds fewer than 5,326,525 shares of Common Stock. Registration Rights Agreement On the Closing Date, the Issuer and LNH entered into a customary registration rights agreement (the "Registration Rights Agreement") in respect of the Consideration Shares. The Registration Rights Agreement provides for certain shelf, demand and piggyback registration rights for LNH, subject to minimum offering sizes in certain cases, customary underwriter cutbacks, Issuer blackout/suspension rights, and mutual indemnification rights and other customary requirements and conditions. The foregoing descriptions of the Shareholders Agreement and Registration Rights Agreement are not complete and are qualified in their entirety by the full text of such agreements, each of which is filed as an exhibit to this Schedule 13D and incorporated herein by reference. General The Reporting Persons acquired the securities described in this Schedule 13D in connection with the Transaction, and they intend to review their investments in the Issuer on a continuing basis. Any actions the Reporting Persons might undertake will be dependent upon the Reporting Persons' review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer's business, financial condition, operations and prospects; price levels of the Issuer's securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments. Subject to the provisions of the Shareholders Agreement, the Reporting Persons may acquire additional securities of the Issuer, or retain or sell all or a portion of the securities then held, in the open market or in privately negotiated transactions. In addition, the Reporting Persons and/or their designees to the Issuer's Board may engage in discussions with management, the Issuer's Board, other securityholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore extraordinary corporate transactions, such as: a merger, reorganization or take-private transaction that could result in the de-listing or de-registration of the Common Stock; security offerings and/or stock repurchases by the Issuer; sales or acquisitions of assets or businesses; changes to the capitalization or dividend policy of the Issuer; or other material changes to the Issuer's business or corporate structure, including changes in management or the composition of the Board. To facilitate their consideration of such matters, the Reporting Persons may retain consultants and advisors and may enter into discussions with potential sources of capital and other third parties. The Reporting Persons may exchange information with any such persons