Common use of First Refusal Clause in Contracts

First Refusal. (a) If prior to October 10, 2001, either Tracinda or Seven (as appropriate in this Article IV, the "Transferring Party"), desires to sell, ------------------ transfer, assign, pledge or otherwise dispose of (a "Transfer"), directly or -------- indirectly, in whole or part, all or any portion of the shares of capital stock of the Company beneficially owned by it, the Transferring Party shall provide the other party (the "Non-Transferring Party") with a written notice (the "First ---------------------- ----- Refusal Notice") (which First Refusal Notice may be sent concurrently with the -------------- Tag-Along Notice which may be required to be sent with respect to such transaction pursuant to Section 3.2 of the Shareholders Agreement) setting forth: (i) the number and class of shares of capital stock of the Company proposed to be Transferred; (ii) that the Transferring Party has received a bona fide written offer from a prospective purchaser of said shares of capital stock of the Company; (iii) the name and address of the prospective purchaser; (iv) the material terms and conditions of such proposed transaction; and (v) that the Transferring Party is offering to Transfer such shares of capital stock of the Company to the Non-Transferring Party on the same terms and conditions as contained in the bona fide offer. The Non-Transferring Party shall have 20 calendar days following the receipt of the First Refusal Notice to respond as to whether it desires to purchase the shares of capital stock of the Company specified in the First Refusal Notice. Such 20 calendar day period shall be referred to as the "Response Period." --------------- Within the Response Period, the Non-Transferring Party shall, by notice in writing to the Transferring Party, have the opportunity and right to purchase (on the terms and conditions specified in the First Refusal Notice) the shares of capital stock of the Company specified in the First Refusal Notice. If the Non-Transferring Party shall not respond within the Response Period, then such party shall be deemed to have waived its right to purchase the shares of capital stock of the Company specified in the First Refusal Notice. If the Non- Transferring Party fails to exercise or waives its right to purchase the shares of capital stock of the Company referred to in the First Refusal Notice, then the Transferring Party shall be free, for a six-month period, to enter into a definitive agreement to Transfer such shares of capital stock of the Company to such third party on terms equivalent to or better than the terms specified in the First Refusal Notice without restriction under this Agreement; it being understood, however, that if the Transferring Party does not enter into such definitive agreement within such six-month period, or such definitive agreement is subsequently terminated, the Transferring Party shall once again be subject to all the provisions of this Section 4.1. (b) Each acceptance made hereunder shall constitute a separate and binding contract obligating the Transferring Party to sell, and the Non- Transferring Party to purchase, the shares of capital stock of the Company accepted at the price and upon the terms and conditions as set forth in the First Refusal Notice. The parties agree to negotiate in good faith to consummate the transaction as soon as possible, but in no event later than the date 30 calendar days after the appropriate Response Period has elapsed (as such period may be extended up to a maximum period of two months (unless further extension is agreed to by the Transferring Party) by any applicable waiting period required under the HSR Act or any other applicable law). At the closing, the Transferring Party shall deliver the certificate or certificates representing the shares of capital stock of the Company to be sold, duly endorsed for transfer or accompanied by duly executed stock powers, against receipt from the Non-Transferring Party of the purchase price for such shares of capital stock of the Company, in cash by wire transfer of immediately available funds or certified check, at the option of the Transferring Party, all in accordance with the terms and conditions set forth in the First Refusal Notice. Notwithstanding any provision of this Agreement to the contrary, in the event of failure by the Non-Transferring Party to close said transaction within the required time periods, the Transferring Party shall be entitled, in addition to all other available remedies, to treat such failure as a waiver under Section 4.1(a) of this Agreement by the Non-Transferring Party, entitling the Transferring Party to take the action specified in Section 4.1(a) of this Agreement pursuant to such waiver. (c) If the purchase price specified in the First Refusal Notice includes any property other than cash, the First Refusal Notice shall state how the non-cash property was valued, unless the Transferring Party and the proposed transferee expressly agree otherwise as stated in the First Refusal Notice and, the Non-Transferring Party may pay cash in an amount equal to the fair market value of any non-cash property determined in the following manner: (i) The fair market value of securities which are publicly traded shall be deemed to be the average of the daily closing prices (or, if no closing price is available, the average of the last bid and ask prices) of such securities for the five consecutive trading days immediately prior to the date of the First Refusal Notice; and (ii) The fair market value of any other property shall be determined by the good faith agreement of the parties or, if the parties are unable to agree, by an appropriate expert mutually selected by the parties. (d) The provisions of this Section 4.1 shall terminate, with respect to such capital stock of the Company, upon the transfer, in compliance with this Section 4.1, by Tracinda or Seven of such capital stock to any Person other than Tracinda or Seven or their respective Affiliates. (e) Nothing contained in the provisions of this Section 4.1 shall affect the tag-along rights of any party pursuant to Section 3.2 of the Shareholders Agreement. (f) The provisions of this Section 4.1 shall not apply to any bona fide pledge to a bank or other institutional financial lender. (g) Notwithstanding anything contained herein to the contrary, the provisions of this Section 4.1 shall not apply to, in the case of each of Tracinda and Seven, (i) the transfer of, or the grant of options for the acquisition of, up to 7,500 shares of Common Stock (such number to be appropriately adjusted in the event that the Company should effect any stock dividend, stock split, reverse stock split, or any similar transaction after the date hereof) beneficially owned by it to officers, directors, employees, consultants and affiliates so long as such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (ii) the transfer and assignment of all or any portion of the capital stock of the Company beneficially owned by it to any direct or indirect wholly owned subsidiary of such entity so long as (y) such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (z) the transferor agrees to cause such direct or indirect wholly owned subsidiary to continue to be a direct or indirect wholly owned subsidiary of the transferor for so long as such direct or indirect wholly owned subsidiary beneficially owns any such capital stock of the Company.

First Refusal. (a) If prior the Company fails to October 10, 2001, either Tracinda or Seven exercise its right to ------------- purchase Shares under section 2.1 of the Continuing Shareholders Agreement within 20 days after an Offer Notice (as appropriate defined in this Article IV, the "Transferring Party"), desires to sell, ------------------ transfer, assign, pledge or otherwise dispose of (a "Transfer"), directly or -------- indirectly, in whole or part, all or any portion of the shares of capital stock of the Company beneficially owned by it, the Transferring Party shall provide the other party (the "Non-Transferring Party") with a written notice (the "First ---------------------- ----- Refusal Notice") (which First Refusal Notice may be sent concurrently with the -------------- Tag-Along Notice which may be required to be sent with respect to such transaction pursuant to Section 3.2 of the Continuing Shareholders Agreement) setting forth: (i) the number and class of shares of capital stock of the Company proposed to be Transferred; (ii) that the Transferring Party has received a bona fide written offer from a prospective purchaser of said shares of capital stock of is given, the Company; (iii) the name and address of the prospective purchaser; (iv) the material terms and conditions of such proposed transaction; and (v) that the Transferring Party is offering to Transfer such shares of capital stock of the Company to the Non-Transferring Party on the same terms and conditions as contained in the bona fide offer. The Non-Transferring Party shall have 20 calendar days following the receipt of the First Refusal Notice to respond as to whether it desires to purchase the shares of capital stock of the Company specified in the First Refusal Notice. Such 20 calendar day period shall be referred to as the "Response Period." --------------- Within the Response Period, the Non-Transferring Party shall, by notice in writing to the Transferring Party, have the opportunity and 's right to purchase (on the terms and conditions specified in the First Refusal Notice) the shares of capital stock of the Company specified in the First Refusal Notice. If the Non-Transferring Party shall not respond within the Response Period, then such party those Shares shall be deemed to be assigned to the New Shareholder. However, notwithstanding anything to the contrary in the Continuing Shareholders Agreement, in the case of any purchase by the New Shareholder under section 2.1 of the Continuing Shareholders Agreement by virtue of this section 4.4 after the Initial Public Offering Date, the New Shareholder shall have waived the right to purchase only the number of Shares that, when added to the number of Shares ▇▇▇▇▇ ▇▇ and Bayer's Controlled Subsidiaries then own, equals the New Percentage (as defined in section 5.1A) of the then outstanding Shares. In the event of a dispute concerning the purchase price of Shares acquired under section 2.1 of the Continuing Shareholders Agreement, the dispute shall be resolved between the New Shareholder and the Continuing Shareholders pursuant to the dispute resolution mechanisms set forth in section 2.2 of the Continuing Shareholders Agreement, in all respects as if the New Shareholder were the Company. In the case of any Shares as to which the Company shall have failed to exercise its right to purchase under section 2.1 of the Continuing Shareholders Agreement and the New Shareholder shall have failed to exercise its right to purchase the shares of capital stock of the Company specified in the First Refusal Notice. If the Non- Transferring Party fails to exercise or waives its right to purchase the shares of capital stock of the Company referred to in the First Refusal Notice, then the Transferring Party shall be free, for a six-month period, to enter into a definitive agreement to Transfer such shares of capital stock of the Company to such third party on terms equivalent to or better than the terms specified in the First Refusal Notice without restriction Shares under this Agreement; section 4.4, it being understood, however, is understood and agreed that if the Transferring Party does not enter into such definitive agreement within such six-month period, or such definitive agreement is subsequently terminated, Continuing Shareholder(s) may sell the Transferring Party shall once again be subject Shares to all the provisions of this Section 4.1. (b) Each acceptance made hereunder shall constitute a separate and binding contract obligating the Transferring Party to sell, and the Non- Transferring Party to purchase, the shares of capital stock of the Company accepted at the price and upon the terms and conditions as set forth in the First Refusal Notice. The parties agree to negotiate in good faith to consummate the transaction as soon as possible, but in no event later than the date 30 calendar days after the appropriate Response Period has elapsed (as such period may be extended up to a maximum period of two months (unless further extension is agreed to by the Transferring Party) by any applicable waiting period required under the HSR Act or any other applicable law). At the closing, the Transferring Party shall deliver the certificate or certificates representing the shares of capital stock of the Company to be sold, duly endorsed for transfer or accompanied by duly executed stock powers, against receipt from the Non-Transferring Party of the purchase price for such shares of capital stock of the Company, in cash by wire transfer of immediately available funds or certified check, at the option of the Transferring Party, all offeror in accordance with the terms and conditions of the Continuing Shareholders Agreement (subject to the limitation set forth in section 2.1 of the First Refusal Notice. Notwithstanding any provision of this Continuing Shareholders Agreement to the contraryeffect that, if the sale is not consummated within 75 days following the expiration of the 40-day period described in section 2.1 of the Continuing Shareholders Agreement, the Shares specified in the event Offer Notice shall again become subject to section 2.1 of failure by the Non-Transferring Party Continuing Shareholders Agreement). Notwithstanding anything to close said transaction within the required time periodscontrary in the Continuing Shareholders Agreement, if as a result of the New Shareholder's acquisition of any Shares in accordance with this section 4.4, ▇▇▇▇▇ ▇▇ and ▇▇▇▇▇'▇ Controlled Subsidiaries would beneficially own a majority of the Shares then outstanding, the Transferring Party New Shareholder shall be entitled, purchase those Shares at a price equal to the greater of (a) the price per Share determined in addition to all other available remedies, to treat such failure as a waiver under Section 4.1(aaccordance with section 2.1 of the Continuing Shareholders Agreement and (b) the acquisition value per Share determined in accordance with section 4.3(b) of this Agreement by agreement; however, in determining the Non-Transferring Party, entitling the Transferring Party to take the action specified in Section 4.1(a) of this Agreement pursuant to such waiver. (c) If the purchase price specified in the First Refusal Notice includes any property other than cashacquisition value per Share, the First Refusal Notice IB Firm shall state how take into consideration the non-cash property was valued, unless temporal limitations on the Transferring Party New Shareholder's rights to vote Shares being acquired by virtue of section 4.6 and the proposed transferee expressly agree otherwise as stated other considerations set forth in the First Refusal Notice and, the Non-Transferring Party may pay cash in an amount equal to the fair market value of any non-cash property determined in the following manner: (i) The fair market value of securities which are publicly traded shall be deemed to be the average of the daily closing prices (or, if no closing price is available, the average of the last bid and ask prices) of such securities for the five consecutive trading days immediately prior to the date of the First Refusal Notice; and (ii) The fair market value of any other property shall be determined by the good faith agreement of the parties or, if the parties are unable to agree, by an appropriate expert mutually selected by the partiessection 4.3(b). (d) The provisions of this Section 4.1 shall terminate, with respect to such capital stock of the Company, upon the transfer, in compliance with this Section 4.1, by Tracinda or Seven of such capital stock to any Person other than Tracinda or Seven or their respective Affiliates. (e) Nothing contained in the provisions of this Section 4.1 shall affect the tag-along rights of any party pursuant to Section 3.2 of the Shareholders Agreement. (f) The provisions of this Section 4.1 shall not apply to any bona fide pledge to a bank or other institutional financial lender. (g) Notwithstanding anything contained herein to the contrary, the provisions of this Section 4.1 shall not apply to, in the case of each of Tracinda and Seven, (i) the transfer of, or the grant of options for the acquisition of, up to 7,500 shares of Common Stock (such number to be appropriately adjusted in the event that the Company should effect any stock dividend, stock split, reverse stock split, or any similar transaction after the date hereof) beneficially owned by it to officers, directors, employees, consultants and affiliates so long as such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (ii) the transfer and assignment of all or any portion of the capital stock of the Company beneficially owned by it to any direct or indirect wholly owned subsidiary of such entity so long as (y) such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (z) the transferor agrees to cause such direct or indirect wholly owned subsidiary to continue to be a direct or indirect wholly owned subsidiary of the transferor for so long as such direct or indirect wholly owned subsidiary beneficially owns any such capital stock of the Company.

First Refusal. (a) If prior to October 10, 2001, either Tracinda or Seven (as appropriate in this Article IV, the "Transferring Party"), desires to sell, ------------------ transfer, assign, pledge or otherwise dispose of (a "Transfer"), directly or -------- indirectly, in whole or part, all or any portion of the shares of capital stock of the Company beneficially owned by it, the Transferring Party shall provide the other party (the "Non-Transferring Party") with a written notice (the "First ---------------------- ----- Refusal Notice") (which First Refusal Notice may be sent concurrently with the -------------- Tag-Along Notice which may be required to be sent with respect to such transaction pursuant to Section 3.2 of the Shareholders Agreement) setting forth: (i) The Company shall notify you and the number and class of shares of capital stock of the Company proposed to be Transferred; (ii) that the Transferring Party has received a bona fide written offer from a prospective purchaser of said shares of capital stock of the Company; (iii) the name and address of the prospective purchaser; (iv) the material terms and conditions of such proposed transaction; and (v) that the Transferring Party is offering to Transfer such shares of capital stock of the Company to the Non-Transferring Party on the same terms and conditions as contained Other Stockholders in the bona fide offer. The Non-Transferring Party shall have writing, within 20 calendar days following the after its receipt of the First Refusal Notice to respond as to Sale Notice, whether it desires to purchase any of the shares of capital stock of offered for sale in the Sale Notice (the "Offered Shares") and, if so, how many Offered Shares it desires to -------------- purchase (the "Company Notice"). Subject to -------------- subparagraph 14(b)(vii) below, the Company specified in the First Refusal Notice. Such 20 calendar day period shall be referred to as the "Response Period." --------------- Within the Response Period, the Non-Transferring Party shall, by notice in writing to the Transferring Party, have the opportunity and right to purchase (all the Offered Shares which it elects to purchase in the Company Notice, at the price and on the other terms and conditions specified (subject to subparagraph 14(b)(iii) below) set forth in the First Refusal Notice) the shares of capital stock of the Company specified in the First Refusal Sale Notice. If the Non-Transferring Party Company elects to purchase all of the Offered Shares, the Company Notice shall also set forth the time and place of the closing of such purchase (the "Closing"), which shall occur ------- not respond within more than 90 days after the Response Period, then such party Company's receipt of the Sale Notice. (ii) Each Other Stockholder shall be deemed to have waived its the right to purchase its pro rata portion (based upon the number of shares of capital stock Class A Common held by each Other Stockholder electing to purchase any of the Company specified in the First Refusal Notice. If the Non- Transferring Party fails to exercise or waives its right to purchase the shares of capital stock Offered Shares) of the Company referred to in the First Refusal Notice, then the Transferring Party shall be free, for a six-month period, to enter into a definitive agreement to Transfer such shares of capital stock of Offered Shares not purchased by the Company to such third party on terms equivalent to under subparagraph 14(b)(i) above or better than the terms specified in the First Refusal Notice without restriction by Other Stockholders under this Agreement; it being understoodsubparagraph 14(b)(ii), however, that if the Transferring Party does not enter into such definitive agreement within such six-month period, or such definitive agreement is subsequently terminated, the Transferring Party shall once again be subject to all the provisions of this Section 4.1. (b) Each acceptance made hereunder shall constitute a separate and binding contract obligating the Transferring Party to sell, and the Non- Transferring Party to purchase, the shares of capital stock of the Company accepted at the price and upon on the other terms and conditions as (subject to subparagraph 14(b)(iii) below) set forth in the First Refusal Sale Notice. The parties agree to negotiate , by so notifying the Company in good faith to consummate the transaction as soon as possible, but in no event later than the date 30 calendar writing 10 days after the appropriate Response Period has elapsed (as such period may be extended up to a maximum period of two months (unless further extension is agreed to by the Transferring Party) by any applicable waiting period required under the HSR Act or any other applicable law). At the closing, the Transferring Party shall deliver the certificate or certificates representing the shares of capital stock receipt of the Company Notice (each, a "Stockholder Notice"). Each ------------------ Stockholder Notice shall specify the maximum number of shares which the Other Stockholder sending such Stockholder Notice desires to be sold, duly endorsed for transfer or accompanied by duly executed stock powers, against receipt from the Non-Transferring Party of the purchase price for such shares of capital stock of the Company, in cash by wire transfer of immediately available funds or certified check, at the option of the Transferring Party, all in accordance with the terms and conditions set forth in the First Refusal Notice. Notwithstanding any provision of this Agreement to the contrary, in the event of failure by the Non-Transferring Party to close said transaction within the required time periods, the Transferring Party shall be entitled, in addition to all other available remedies, to treat such failure as a waiver under Section 4.1(a) of this Agreement by the Non-Transferring Party, entitling the Transferring Party to take the action specified in Section 4.1(a) of this Agreement pursuant to such waiverpurchase. (ciii) If the purchase price specified in the First Refusal Notice includes any property other than cash, the First Refusal Notice shall state how the non-cash property was valued, unless the Transferring Party and the proposed transferee expressly agree otherwise as stated in the First Refusal Notice and, the Non-Transferring Party may pay cash in an amount equal to the fair market value of any non-cash property determined in the following manner: (i) The fair market value of securities which are publicly traded shall be deemed to be the average of the daily closing prices (or, if no closing price is available, the average of the last bid and ask prices) of such securities for the five consecutive trading days immediately prior to the date of the First Refusal Notice; and (ii) The fair market value of Notwithstanding any other property shall be determined by the good faith agreement of the parties orprovision hereof, if the parties are unable to agree, by an appropriate expert mutually selected by the parties. (d) The provisions of this Section 4.1 shall terminate, with respect to such capital stock of the Company, upon the transfer, in compliance with this Section 4.1, by Tracinda or Seven of such capital stock to any Person other than Tracinda or Seven or their respective Affiliates. (e) Nothing contained in the provisions of this Section 4.1 shall affect the tag-along rights of any party pursuant to Section 3.2 of the Shareholders Agreement. (f) The provisions of this Section 4.1 shall not apply to any bona fide pledge to a bank or other institutional financial lender. (g) Notwithstanding anything contained herein to the contrary, the provisions of this Section 4.1 shall not apply to, in the case of each of Tracinda and Seven, (i) the transfer of, or the grant of options for the acquisition of, up to 7,500 shares of Common Stock (such number to be appropriately adjusted in the event that the Company should effect any stock dividend, stock split, reverse stock splitsale price, or any similar transaction portion thereof, for the Offered Shares described in the Sale Notice is not payable in the form of cash or simple promissory notes issued by the prospective purchaser described therein, the Company and any Other Stockholders electing to purchase Offered Shares pursuant to subparagraphs 14(b)(i) or (ii) above shall be required to pay only such portion, if any, of the sale price described in the Sale Notice as consists of cash and simple promissory notes (the latter to be issued by the Company or the Other Stockholder purchasing such shares, as applicable), and delivery of such consideration to you shall be payment in full for the Offered Shares. (iv) If the Company does not elect to purchase all of the Offered Shares, it shall notify all Other Stockholders in writing within 35 days after the date hereofCompany's receipt of the Sale Notice whether the Company and the Other Stockholders have elected, in the aggregate, to purchase all of the Offered Shares (the "Second Company Notice"). --------------------- (v) beneficially owned by it If the Company and the other Stockholders have elected pursuant to officerssubparagraph 14(b)(i) or (ii) above, directorsin the aggregate, employeesto purchase all Offered Shares, consultants and affiliates so long as such transferee the Second Company Notice shall agree in writing set forth the number of Offered Shares to be bound purchased by all the terms Company and by each Other Stockholder that elected to purchase Offered Shares and the time and place of this Agreement applicable the Closing, which shall occur not less than 60 nor more than 90 days after the Company's receipt of the Sale Notice. (vi) At the Closing, the Company (if it elected to its transferor as purchase any Offered Shares) and each Other Stockholder electing to purchase Offered Shares (if the transferee originally had been a party Company did not elect to this Agreement purchase all Offered Shares) shall deliver to you the cash and, if applicable, the promissory notes constituting the purchase price for the Offered Shares to be purchased by such purchaser, and the you will deliver to the Company and/or each purchasing Other Stockholder the certificate(s) representing the Offered Shares being purchased by such purchaser. (vii) If the Company and all Other Stockholders do not elect, in the aggregate, to purchase all Offered Shares pursuant to subparagraphs 14(b)(i) and (ii) above, all elections pursuant to subparagraphs 14(b)(i) or (ii) to purchase Offered Shares shall be null and void (which fact shall be stated in the transfer Second Company Notice), and assignment of all or any portion you shall have the right, subject to paragraph 14(c) below, to Transfer the Offered Shares to the transferee described in the Sale Notice at the price and on the other terms described therein, within 90 days after the date of the capital stock of Sale Notice. If after such 90-day period, the Company beneficially owned by it Offered Shares which you are entitled to any direct or indirect wholly owned subsidiary of such entity so long as (y) such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party transfer pursuant to this Agreement and subparagraph (zvii) the transferor agrees have not been so transferred, they shall thereafter again be subject to cause such direct or indirect wholly owned subsidiary to continue to be a direct or indirect wholly owned subsidiary of the transferor for so long as such direct or indirect wholly owned subsidiary beneficially owns any such capital stock of the Companythis paragraph 14(b).

First Refusal. (a) If prior to October 10, 2001, either Tracinda or Seven (as appropriate in this Article IV, the "Transferring Party"), desires to sell, ------------------ transfer, assign, pledge or otherwise dispose of (a "Transfer"), directly or -------- indirectly, in whole or part, all or any portion of the shares of capital stock of the Company beneficially owned by it, the Transferring Party shall provide the other party (the "Non-Transferring Party") with a written notice (the "First ---------------------- ----- Refusal Notice") (which First Refusal Notice may be sent concurrently with the -------------- Tag-Along Notice which may be required to be sent with respect to such transaction pursuant to Section 3.2 of the Shareholders Agreement) setting forth: (i) the number and class of shares of capital stock of the The Company proposed to be Transferred; (ii) that shall notify the Transferring Party has received a bona fide written offer from a prospective purchaser of said shares of capital stock of the Company; (iii) the name Stockholder and address of the prospective purchaser; (iv) the material terms and conditions of such proposed transaction; and (v) that the Transferring Party is offering to Transfer such shares of capital stock of the Company to the Non-Transferring Party on the same terms and conditions as contained each other Stockholder in the bona fide offer. The Non-Transferring Party shall have writing, within 20 calendar days following the after its receipt of the First Refusal Notice to respond as to Sale Notice, whether it desires to purchase any of the shares of capital stock of offered for sale in the Sale Notice (the "Offered Shares") and, if so, how many Offered -------------- Shares it desires to purchase (the "Company Notice"). Subject to -------------- subparagraph 4(b)(vii) below, the Company specified in the First Refusal Notice. Such 20 calendar day period shall be referred to as the "Response Period." --------------- Within the Response Period, the Non-Transferring Party shall, by notice in writing to the Transferring Party, have the opportunity and right to purchase (all the Offered Shares which it elects to purchase in the Company Notice, at the price and on the other terms and conditions specified (subject to subparagraph 4(b)(iii) below) set forth in the First Refusal Notice) the shares of capital stock of the Company specified in the First Refusal Sale Notice. If the Non-Transferring Party Company elects to purchase all of the Offered Shares, the Company Notice shall also set forth the time and place of the closing of such purchase (the "Closing"), which shall occur ------- not respond within more than 90 days after the Response Period, then such party Company's receipt of the Sale Notice. (ii) Each Stockholder shall be deemed to have waived its the right to purchase its pro rata portion (based upon the number of shares of capital stock Investor Stock held by each Stockholder electing to purchase any of the Company specified in the First Refusal Notice. If the Non- Transferring Party fails to exercise or waives its right to purchase the shares of capital stock Offered Shares) of the Company referred to in the First Refusal Notice, then the Transferring Party shall be free, for a six-month period, to enter into a definitive agreement to Transfer such shares of capital stock of Offered Shares not purchased by the Company to such third party on terms equivalent to under subparagraph 4(b)(i) above or better than the terms specified in the First Refusal Notice without restriction by other Stockholders under this Agreement; it being understoodsubparagraph 4(b)(ii), however, that if the Transferring Party does not enter into such definitive agreement within such six-month period, or such definitive agreement is subsequently terminated, the Transferring Party shall once again be subject to all the provisions of this Section 4.1. (b) Each acceptance made hereunder shall constitute a separate and binding contract obligating the Transferring Party to sell, and the Non- Transferring Party to purchase, the shares of capital stock of the Company accepted at the price and upon on the other terms and conditions as (subject to subparagraph 4(b)(iii) below) set forth in the First Refusal Sale Notice. The parties agree to negotiate , by so notifying the Company in good faith to consummate the transaction as soon as possible, but in no event later than the date 30 calendar writing 10 days after the appropriate Response Period has elapsed (as such period may be extended up to a maximum period of two months (unless further extension is agreed to by the Transferring Party) by any applicable waiting period required under the HSR Act or any other applicable law). At the closing, the Transferring Party shall deliver the certificate or certificates representing the shares of capital stock receipt of the Company Notice (each, a "Stockholder Notice"). Each ------------------ Stockholder Notice shall specify the maximum number of shares which the Stockholder sending such Stockholder Notice desires to be sold, duly endorsed for transfer or accompanied by duly executed stock powers, against receipt from the Non-Transferring Party of the purchase price for such shares of capital stock of the Company, in cash by wire transfer of immediately available funds or certified check, at the option of the Transferring Party, all in accordance with the terms and conditions set forth in the First Refusal Notice. Notwithstanding any provision of this Agreement to the contrary, in the event of failure by the Non-Transferring Party to close said transaction within the required time periods, the Transferring Party shall be entitled, in addition to all other available remedies, to treat such failure as a waiver under Section 4.1(a) of this Agreement by the Non-Transferring Party, entitling the Transferring Party to take the action specified in Section 4.1(a) of this Agreement pursuant to such waiverpurchase. (ciii) If the purchase price specified in the First Refusal Notice includes any property other than cash, the First Refusal Notice shall state how the non-cash property was valued, unless the Transferring Party and the proposed transferee expressly agree otherwise as stated in the First Refusal Notice and, the Non-Transferring Party may pay cash in an amount equal to the fair market value of any non-cash property determined in the following manner: (i) The fair market value of securities which are publicly traded shall be deemed to be the average of the daily closing prices (or, if no closing price is available, the average of the last bid and ask prices) of such securities for the five consecutive trading days immediately prior to the date of the First Refusal Notice; and (ii) The fair market value of Notwithstanding any other property shall be determined by the good faith agreement of the parties orprovision hereof, if the parties are unable to agree, by an appropriate expert mutually selected by the parties. (d) The provisions of this Section 4.1 shall terminate, with respect to such capital stock of the Company, upon the transfer, in compliance with this Section 4.1, by Tracinda or Seven of such capital stock to any Person other than Tracinda or Seven or their respective Affiliates. (e) Nothing contained in the provisions of this Section 4.1 shall affect the tag-along rights of any party pursuant to Section 3.2 of the Shareholders Agreement. (f) The provisions of this Section 4.1 shall not apply to any bona fide pledge to a bank or other institutional financial lender. (g) Notwithstanding anything contained herein to the contrary, the provisions of this Section 4.1 shall not apply to, in the case of each of Tracinda and Seven, (i) the transfer of, or the grant of options for the acquisition of, up to 7,500 shares of Common Stock (such number to be appropriately adjusted in the event that the Company should effect any stock dividend, stock split, reverse stock splitsale price, or any similar transaction portion thereof, for the Offered Shares described in the Sale Notice is not payable in the form of cash or simple promissory notes issued by the prospective purchaser described therein, the Company and any Stockholders electing to purchase Offered Shares pursuant to subparagraphs 4(b)(i) or (ii) above shall be required to pay only such portion, if any, of the sale price described in the Sale Notice as consists of cash and simple promissory notes (the latter to be issued by the Company or the Stockholder purchasing such shares, as applicable), and delivery of such consideration to the Transferring Stockholder shall be payment in full for the Offered Shares. (iv) If the Company does not elect to purchase all of the Offered Shares, it shall notify all Stockholders in writing within 35 days after the date hereofCompany's receipt of the Sale Notice whether the Company and the Stockholders have elected, in the aggregate, to purchase all of the Offered Shares (the "Second Company Notice"). --------------------- (v) beneficially owned by it If the Company and the other Stockholders have elected pursuant to officerssubparagraph 4(b)(i) or (ii) above, directorsin the aggregate, employeesto purchase all Offered Shares, consultants and affiliates so long as such transferee the Second Company Notice shall agree in writing set forth the number of Offered Shares to be bound purchased by all the terms Company and by each Stockholder that elected to purchase Offered Shares and the time and place of this Agreement applicable the Closing, which shall occur not less than 60 nor more than 90 days after the Company's receipt of the Sale Notice. (vi) At the Closing, the Company (if it elected to its transferor as purchase any Offered Shares) and each Stockholder electing to purchase Offered Shares (if the transferee originally had been a party Company did not elect to this Agreement purchase all Offered Shares) shall deliver to the Transferring Stockholder the cash and, if applicable, the promissory notes constituting the purchase price for the Offered Shares to be purchased by such purchaser, and the Transferring Stockholder shall deliver to the Company and/or each purchasing Stockholder the certificate(s) representing the Offered Shares being purchased by such purchaser. (vii) If the Company and all Stockholders do not elect, in the aggregate, to purchase all Offered Shares pursuant to subparagraphs 4(b)(i) and (ii) above, all elections pursuant to subparagraphs 4(b)(i) or (ii) to purchase Offered Shares shall be null and void (which fact shall be stated in the transfer Second Company Notice), and assignment of all or any portion the Transferring Stockholder shall have the right, subject to paragraph 4(c) below, to Transfer the Offered Shares to the transferee described in the Sale Notice at the price and on the other terms described therein, within 90 days after the date of the capital stock of Sale Notice. If after such 90-day period, the Company beneficially owned by it Offered Shares which the Transferring Shareholder is entitled to any direct or indirect wholly owned subsidiary of such entity so long as (y) such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party transfer pursuant to this Agreement and subparagraph (zvii) the transferor agrees have not been so transferred, they shall thereafter again be subject to cause such direct or indirect wholly owned subsidiary to continue to be a direct or indirect wholly owned subsidiary of the transferor for so long as such direct or indirect wholly owned subsidiary beneficially owns any such capital stock of the Companythis paragraph 4(b).

First Refusal. (a) A. If any Shareholder or Successor Shareholder desires to transfer shares of Shop-Vac stock but has not received prior written consent to October 10the transfer pursuant to Section 4.1 within a reasonable period of time, 2001, either Tracinda then said Shareholder or Seven (as appropriate Successor Shareholder shall so notify Shop-Vac and all other Shareholders and Successor Shareholders in this Article IVwriting. The notice shall set forth the name of the prospective Successor Shareholder, the "Transferring Party")number of shares of stock involved, desires and the terms of such intended disposition. The notice shall be accompanied by a written statement, acknowledging the terms and agreeing to sellexecute a counterpart of this Agreement pursuant to Section 7.5, ------------------ transfersigned by the prospective Successor Shareholder. B. For a period of sixty (60) days after the mailing of such notice, assign, pledge or otherwise dispose of (a "Transfer"), directly or -------- indirectly, in whole or part, Shop-Vac shall have the option to purchase all or any portion of the shares of capital stock of the Company beneficially owned by itdisposing Shareholder or Successor Shareholder or, at its option, to purchase so much of the stock as shall have been designated in the notice. C. If Shop-Vac fails to exercise such option, the Transferring Party other Shareholders and Successor Shareholders shall provide have the other party (the "Non-Transferring Party") with a written notice (the "First ---------------------- ----- Refusal Notice") (which First Refusal Notice may be sent concurrently with the -------------- Tag-Along Notice which may be required option to be sent with respect to such transaction pursuant to Section 3.2 purchase all of the Shareholders Agreement) setting forth: (i) the number and class of shares of capital stock of the Company proposed disposing Shareholder or Successor Shareholder or, at their option, so much thereof as shall have been designated in the notice, in amounts proportionate to their respective holdings, within sixty (60) days after the termination of Shop-Vac's option to purchase. Any shares not so purchased by one Shareholder or Successor Shareholder may be Transferred;purchased by the other Shareholders or Successor Shareholders in amounts proportionate to their holdings. (ii) that D. The purchase price of each share of Shop-Vac stock transferred under Subsections B or C above shall be computed in accordance with Section 6 and the Transferring Party has received a bona fide written offer from a prospective purchaser terms of said shares of capital stock of payment shall be as stated in Section 7, or as may be otherwise mutually agreed between the Company; (iii) the name and address of the prospective purchaser; (iv) the material terms and conditions of such proposed transaction; disposing Shareholder or Successor Shareholder and E. Any option that is created for Shop-Vac under this Section may be exercised by the affirmative vote of a majority of Shop-Vac's Board of Directors. F. If neither Shop-Vac nor the other Shareholders or Successor Shareholders elect to exercise the options granted under this Section , then the disposing Shareholder or Successor Shareholder shall be free to transfer his stock in accordance with his notice to Shop-Vac and the Shareholders and Successor Shareholders. If the disposing Shareholder or Successor Shareholder shall fail, however, to make such disposition within sixty (v60) that the Transferring Party is offering to Transfer such shares of capital stock of the Company to the Non-Transferring Party on the same terms and conditions as contained in the bona fide offer. The Non-Transferring Party shall have 20 calendar days following the receipt expiration of the First Refusal Notice to respond as to whether it desires to purchase the shares of capital stock of the Company specified in the First Refusal Notice. Such 20 calendar day period shall be referred to as the "Response Period." --------------- Within the Response Period, the Non-Transferring Party shall, options provided by notice in writing to the Transferring Party, have the opportunity and right to purchase (on the terms and conditions specified in the First Refusal Notice) the shares of capital stock of the Company specified in the First Refusal Notice. If the Non-Transferring Party shall not respond within the Response Periodthis Section , then such party his shares shall be deemed to have waived its right to purchase the shares of capital stock of the Company specified in the First Refusal Notice. If the Non- Transferring Party fails to exercise or waives its right to purchase the shares of capital stock of the Company referred to in the First Refusal Notice, then the Transferring Party shall be free, for a six-month period, to enter into a definitive agreement to Transfer such shares of capital stock of the Company to such third party on terms equivalent to or better than the terms specified in the First Refusal Notice without restriction under this Agreement; it being understood, however, that if the Transferring Party does not enter into such definitive agreement within such six-month period, or such definitive agreement is subsequently terminated, the Transferring Party shall once again be become subject to all of the provisions of this Section 4.1. (b) Each acceptance made hereunder shall constitute a separate and binding contract obligating the Transferring Party to sell, and the Non- Transferring Party to purchase, the shares of capital stock of the Company accepted at the price and upon the terms and conditions as set forth in the First Refusal Notice. The parties agree to negotiate in good faith to consummate the transaction as soon as possible, but in no event later than the date 30 calendar days after the appropriate Response Period has elapsed (as such period may be extended up to a maximum period of two months (unless further extension is agreed to by the Transferring Party) by any applicable waiting period required under the HSR Act or any other applicable law). At the closing, the Transferring Party shall deliver the certificate or certificates representing the shares of capital stock of the Company to be sold, duly endorsed for transfer or accompanied by duly executed stock powers, against receipt from the Non-Transferring Party of the purchase price for such shares of capital stock of the Company, in cash by wire transfer of immediately available funds or certified check, at the option of the Transferring Party, all in accordance with the terms and conditions set forth in the First Refusal Notice. Notwithstanding any provision of this Agreement to the contrary, in the event of failure by the Non-Transferring Party to close said transaction within the required time periods, the Transferring Party shall be entitled, in addition to all other available remedies, to treat such failure as a waiver under Section 4.1(a) of this Agreement by the Non-Transferring Party, entitling the Transferring Party to take the action specified in Section 4.1(a) of this Agreement pursuant to such waiver. (c) If the purchase price specified in the First Refusal Notice includes any property other than cash, the First Refusal Notice shall state how the non-cash property was valued, unless the Transferring Party and the proposed transferee expressly agree otherwise as stated in the First Refusal Notice and, the Non-Transferring Party may pay cash in an amount equal to the fair market value of any non-cash property determined in the following manner: (i) The fair market value of securities which are publicly traded shall be deemed to be the average of the daily closing prices (or, if no closing price is available, the average of the last bid and ask prices) of such securities for the five consecutive trading days immediately prior to the date of the First Refusal Notice; and (ii) The fair market value of any other property shall be determined by the good faith agreement of the parties or, if the parties are unable to agree, by an appropriate expert mutually selected by the parties. (d) The provisions of this Section 4.1 shall terminate, with respect to such capital stock of the Company, upon the transfer, in compliance with this Section 4.1, by Tracinda or Seven of such capital stock to any Person other than Tracinda or Seven or their respective Affiliates. (e) Nothing contained in the provisions of this Section 4.1 shall affect the tag-along rights of any party pursuant to Section 3.2 of the Shareholders Agreement. (f) The provisions of this Section 4.1 shall not apply to any bona fide pledge to a bank or other institutional financial lender. (g) Notwithstanding anything contained herein to the contrary, the provisions of this Section 4.1 shall not apply to, in the case of each of Tracinda and Seven, (i) the transfer of, or the grant of options for the acquisition of, up to 7,500 shares of Common Stock (such number to be appropriately adjusted in the event that the Company should effect any stock dividend, stock split, reverse stock split, or any similar transaction after the date hereof) beneficially owned by it to officers, directors, employees, consultants and affiliates so long as such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (ii) the transfer and assignment of all or any portion of the capital stock of the Company beneficially owned by it to any direct or indirect wholly owned subsidiary of such entity so long as (y) such transferee shall agree in writing to be bound by all the terms of this Agreement applicable to its transferor as if the transferee originally had been a party to this Agreement and (z) the transferor agrees to cause such direct or indirect wholly owned subsidiary to continue to be a direct or indirect wholly owned subsidiary of the transferor for so long as such direct or indirect wholly owned subsidiary beneficially owns any such capital stock of the Company.