EXHIBIT 4.4
AMENDED AND RESTATED SUPPLEMENTAL STOCKHOLDERS
AGREEMENT
DATED AS OF APRIL 8, 2002
BY AND AMONG
▇▇▇▇▇▇ ▇. ▇▇▇ EQUITY FUND IV, L.P.,
▇▇▇▇▇▇ ▇. ▇▇▇ FOREIGN FUND IV, L.P.
▇▇▇▇▇▇ ▇. ▇▇▇ FOREIGN FUND IV-B, L.P.,
▇▇▇▇▇▇ ▇. ▇▇▇ CHARITABLE INVESTMENTS LIMITED
PARTNERSHIP,
▇▇▇▇▇▇ ▇. ▇▇▇ INVESTORS LIMITED PARTNERSHIP,
CAPITAL ARC HOLDINGS, LLC,
THE TRAVELERS INDEMNITY COMPANY,
NASSAU CAPITAL FUND L.P.,
NASSAU CAPITAL PARTNERS II, L.P.,
NAS PARTNERS I, L.L.C.
AND
CERTAIN INDIVIDUALS
TABLE OF CONTENTS
Page
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1. Definitions................................................................................2
1.1 Affiliate................................................................2
1.2 ARC IV...................................................................2
1.3 ARC IV Partnership Agreement.............................................2
1.4 Bona Fide Offer..........................................................3
1.5 Business Day.............................................................3
1.6 Common Stock.............................................................3
1.7 Common Stock Deemed Outstanding..........................................3
1.8 Declining Stockholder....................................................3
1.9 Effective Date...........................................................3
1.10 Family Member............................................................4
1.11 Funding Cut-Off Date.....................................................4
1.12 Majority Stockholder Consent.............................................4
1.13 Other Voting Securities..................................................4
1.14 Partnership Unit.........................................................4
1.15 Permitted Transferee.....................................................4
1.16 Person...................................................................5
1.17 Qualified Public Offering................................................5
1.18 Securities Act...........................................................5
1.19 Stockholders Common Stock................................................5
1.20 Third Party..............................................................6
1.21 Transfer.................................................................6
1.22 Warrant..................................................................6
2. Transfer Prohibited........................................................................7
3. Additional Stockholders....................................................................9
3.1 Transferee of Stockholders...............................................9
3.2 Supplementary Agreement.................................................10
4. Miscellaneous.............................................................................10
4.1 Binding Effect..........................................................10
4.2 Recapitalizations, Exchanges Affecting the Common Stock ................10
4.3 Amendments..............................................................10
4.4 Notices.................................................................10
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4.5 Applicable Law..........................................................13
4.6 Section Headings........................................................13
4.7 Counterparts............................................................13
4.8 Termination.............................................................13
4.9 Entire Agreement........................................................13
4.10 Severability of Provisions..............................................13
4.11 Specific Performance....................................................14
4.12 Consent to Jurisdiction.................................................14
4.13 Waiver of Right to Jury Trial...........................................14
4.14 No Conflicting Agreement................................................15
4.15 Effectiveness of Agreement..............................................15
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AMENDED AND RESTATED SUPPLEMENTAL STOCKHOLDERS
AGREEMENT
AMENDED AND RESTATED SUPPLEMENTAL STOCKHOLD ERS AGREEMENT, dated as of
April 8, 2002, by and among ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund IV, L.P. ("Equity Fund"),
▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV, L.P. ("Foreign Fund #1"), ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign
Fund IV-B, L.P. ("Foreign Fund #2"), ▇▇▇▇▇▇ ▇. ▇▇▇ Charitable Investments
Limited Partnership ("Charitable Partnership"), ▇▇▇▇▇▇ ▇. ▇▇▇ Investors Limited
Partnership ("THL Partnership," and together with Equity Fund, Foreign Fund #1,
Foreign Fund #2 and Charitable Partnership, "THL"), Capital ARC Holdings, LLC
f./k/a UBS Capital ARC Holdings, LLC ("UBS"), The Travel ers Indemnity Company
("Travelers"), Nassau Capital Fund L.P. ("Nassau Fund"), Nassau Capital Partners
II, L.P. ("Nassau Partners"), NAS Partners I, L.L.C. ("NAS" and, together with
Nassau Fund and Nassau Partners, "Nassau") and the individuals listed on the
signature pages hereto (collectively, "Management"). The parties hereto and any
other person who shall hereafter acquire shares of the Common Stock (as
hereinafter defined) or Other Voting Securities of the Company (as hereinafter
defined) pursuant to the provisions of and subject to this Agreement are
sometimes referred to individually as a "Stockholder" and collectively as
"Stockholders." For purposes of this Agreement, each of THL and Nassau shall be
deemed to be one Stockholder.
WHEREAS, ARC IV REIT, Inc., a Maryland corporation (the "Company")
entered into a subscription and stock purchase agreement, dated August 9, 2000
(as amended, the "Purchase Agreement"), with THL, UBS and Travelers
(collectively, the "Initial Investors"), pursuant to which the Company agreed to
issue and sell, and the Initial Investors agreed to purchase, for $11.70 per
share, up to 14,427,350 shares of Common Stock (as defined below) for an
aggregate purchase price, if all such shares are issued and sold, of
approximately $168.8 million;
WHEREAS, concurrently with the execution of the Purchase Agree ment (i)
the Company and the Initial Investors entered into a Stockholders Agree ment
(the "Initial Stockholders Agreement") to provide for certain matters relating
to the corporate governance of the Company and to provide for certain conditions
on sales of Common Stock by the Company or the Initial Investors under certain
circumstances, and (ii) the Initial Investors entered into a Supplemental
Stockholders Agreement (the "Initial Supplemental Agreement") to provide for
certain additional conditions on sales of Common Stock by the Initial Investors
under certain circum stances;
WHEREAS, the Company and certain of its Affiliates (as defined herein)
have entered into an Agreement and Plan of Reorganization, dated as of April 6,
2002 (as may be amended, the "Reorganization Agreement"), which provides for
certain transactions (the "Reorganization") as a result of which, among other
things, Nassau and Management will become stockholders of the Company;
WHEREAS, concurrently with the execution of the Reorganization
Agreement, the parties hereto and the Company have entered into an Amended and
Restated Stockholders Agreement (the "Stockholders Agreement") to modify certain
terms of the Initial Stockholders Agreement and to add Nassau and Management as
parties thereto; and
WHEREAS, the parties hereto desire to amend and restate the Initial
Supplemental Agreement effective as of the Effective Date to modify certain of
its terms and to add Nassau and Management as parties thereto.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
1.1 Affiliate. The term "Affiliate" shall mean, with respect to a
Person (as hereinafter defined), (i) any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with such Person, (ii) any other Person that is an
officer, director, managing member or other similar management official of such
Person, or (iii) any Person that directly or indirectly is the beneficial owner
of 20% or more of any class of equity securities or other ownership interests of
such Person, or of which Such Person is directly or indirectly the owner of 20%
or more of any class of equity securities or other ownership interests.
1.2 ARC IV. The term "ARC IV" shall mean Affordable Residential
Communities IV, LP, a Delaware limited partnership.
1.3 ARC IV Partnership Agreement. The term "ARC IV Partnership
Agreement" shall mean the Agreement of Limited Partnership of ARC IV, dated as
of the Effective Date, by and between the Company, as general partner, and
Afford-
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able Residential Communities, L.L.C., as special limited partner, as amended
from time to time.
1.4 Bona Fide Offer. The term "Bona Fide Offer" shall mean any offer,
in writing, to purchase shares of Common Stock for cash, setting forth a
specific purchase price and a closing date of no more than sixty (60) days
therefrom which is fully financed and not subject to any material conditions.
1.5 Business Day. The term "Business Day" shall mean any calendar day
which is not a Saturday, Sunday or a day on which banks in the State of New York
are generally closed for regular business.
1.6 Common Stock. The term "Common Stock" shall mean the common stock,
par value $.01 per share, of the Company.
1.7 Common Stock Deemed Outstanding. The term "Common Stock Deemed
Outstanding" shall mean, as of any date, the total number of shares of Common
Stock outstanding as of such date plus (1) the total number of shares of Common
Stock that all Initial Investors are committed to purchase under the Pur chase
Agreement but have not yet purchased as of such date, plus (2) the total number
of shares of Common Stock which may be acquired upon exercise or conversion of
all options, warrants or other securities (including, without limitation,
Partnership Units) or rights convertible into or exercisable for shares of
Common Stock which were outstanding as of such date. For purposes of this
definition, no Initial Investor shall be deemed to be "committed" to purchase
any shares of Com mon Stock pursuant to the Purchase Agreement to the extent
that such shares of Common Stock have not been purchased by such Initial
Investor on or prior to the earlier of the Funding Cut-Off Date or the date, if
any, on which such Initial Investor became a Declining Stockholder.
1.8 Declining Stockholder. The term "Declining Stockholder" shall mean
any Initial Investor that has declined to acquire any shares of Common Stock as
to which the Company has delivered a funding notice pursuant to the Purchase
Agree ment.
1.9 Effective Date. The term "Effective Date" shall mean the date of
consummation of the transactions contemplated by the Reorganization Agreement.
1.10 Family Member. The term "Family Member" means, as to a Person that
is an individual, such Person's spouse, ancestors, descendants (whether by blood
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or by adoption), brothers and sisters and inter vivos or testamentary trusts of
which only such Person and his spouse, ancestors, descendants (whether by blood
or by adoption), brothers and sisters are beneficiaries.
1.11 Funding Cut-Off Date. The term "Funding Cut-Off Date" shall mean
the earlier of (x) June 30, 2003, and (y) the date the Company provides written
notice to the Initial Investors that it (i) will not make any additional
subscription notices under the Purchase Agreement and (ii) irrevocably releases
all of the Initial Investors from any further obligations to purchase shares of
Common Stock under the Pur chase Agreement.
1.12 Majority Stockholder Consent. The term "Majority Stockholder
Consent" shall mean the affirmative written consent of the Stockholders
representing not less than a majority of the Stockholders Common Stock.
1.13 Other Voting Securities. The term "Other Voting Securities" shall
mean any securities of the Company (other than Common Stock) that grant its
registered holders the right to vote collectively with the holders of Common
Stock on all matters submitted to a vote of stockholders of the Company.
1.14 Partnership Unit. The term "Partnership Unit" shall have the
meaning assigned to such term in the ARC IV Partnership Agreement.
1.15 Permitted Transferee. The term "Permitted Transferee" shall mean
(A) with respect to any Stockholder, (i) the Company or (ii) any Affiliate of
such Stockholder, (B) with respect to any Stockholder that is an individual, in
addition to those Persons listed in the foregoing clause (A), (i) any Family
Member of such Stockholder, or (ii) any Person of which all of the beneficial
owners are Family Members of such Stockholder, provided, however, that in the
case of a Transfer of Common Stock or Other Voting Securities by any individual
Stockholder to any Person contemplated by subclause (i) or (ii) of this clause
(B), the transferring Stockholder shall retain the right to vote such shares
following such Transfer except, in the case of Transfers for tax or estate
planning purposes, when to do so would result in a failure to effectuate the
purpose of the Transfer, and (C) in the case of Nassau, in addition to those
Persons listed in the foregoing clause (A), any Person who is an investor,
partner or member of Nassau Fund, Nassau Partners or NAS, but only in the case
of a distribution of Common Stock or Other Voting Securities made by Nassau
Fund, Nassau Partners or NAS to any such Person.
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1.16 Person. The term "Person" shall mean an individual, corporation,
partnership, trust, joint venture, limited liability company, unincorporated
organiza tion or other legal entity, or a government or any agency or political
subdivision thereof.
1.17 Qualified Public Offering. The term "Qualified Public Offering"
shall mean the completion of the sale of shares of Common Stock, whether by the
Com pany and/or for the account of one or more stockholders of the Company,
pursuant to an effective registration statement under the Securities Act (other
than a special purpose registration statement such as an S-8 or an S-4) in which
the aggregate gross proceeds of such sale, together with the aggregate gross
proceeds of any such underwritten public offerings previously completed, equal
or exceed $100,000,000, provided that after the completion of such sale the
shares of Common Stock are listed on a national securities exchange or are
authorized for quotation on The Nasdaq Stock Market.
1.18 Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended, or any federal statute then in effect which
has replaced such statute, and a reference to a particular section thereof shall
be deemed to include reference to the comparable section, if any, of any such
replacement federal statute.
1.19 Stockholders Common Stock. The term "Stockholders Common Stock"
shall mean, as of any date, the total number of shares of Common Stock owned by
the Stockholders as of such date plus (1) the total number of shares of Common
Stock that all Initial Investors are committed to purchase under the Pur chase
Agreement but have not yet purchased as of such date, plus (2) the total number
of shares of Common Stock which may be acquired by the Stockholders upon
exercise or conversion of all options, warrants or other securities (including,
without limitation, Partnership Units) or rights convertible into or exercisable
for shares of Common Stock which were outstanding as of such date and held by
any Stockholder. For purposes of this definition, no Initial Investor shall be
deemed to be "committed" to purchase any shares of Common Stock pursuant to the
Purchase Agreement to the extent that such shares of Common Stock have not been
purchased by such Initial Investor on or prior to the earlier of the Funding
Cut-Off Date or the date, if any, on which such Initial Investor became a
Declining Stockholder.
1.20 Third Party. The term "Third Party" shall mean any Person other
than (a) the Company, (b) any Stockholder and (c) any of their respective
Affiliates.
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1.21 Transfer. The term "Transfer" shall mean any direct or indirect
sale, assignment, mortgage, transfer, pledge, gift, hypothecation or other
disposition or transfer of, or any act creating a trust (voting or otherwise)
with respect to, stock or Other Voting Securities of the Company (other than any
bona fide pledge or hypothe cation to a financial institution(s), in connection
with any loan from such financial institution(s), of (A) in the case of any
Stockholder that is not a member of Manage ment, shares of Common Stock or Other
Voting Securities constituting less than 2.5% of the Common Stock Deemed
Outstanding, and (B) in the case of any Stock holder who is a member of
Management, up to 25% of the total number of shares of Common Stock held by such
Stockholder); provided, however, that in the case of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, in lieu
of the exception set forth in clause (B) above, the term "Transfer" shall not
include (i) the transfer of up to 50% of the total number of shares of Common
Stock held by him to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, provided that (a) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall
retain the voting rights associated with such shares following such transfer,
and (b) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall execute a supplementary agreement as
contemplated by Section 3.1 hereof at the time of such Transfer unless the Board
of Directors of the Company shall have determined by a majority of the directors
to waive such requirement, or (ii) the subsequent sale of such shares by
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (x) to the Company, one or more members of Management and/or
any benefit or compensation plan adopted by the Company after the date hereof,
or (y) to any other Person so long as such transfer is not made in violation of
the Stockholders Agreement; provided, that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ may only retain the
voting rights with respect to any such shares following such subsequent transfer
(a) to the extent that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ acquires any such shares in such
transaction, or (b) any other member of Management acquires any such shares in
such transaction and transfers the voting rights to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as
permitted by Section 2.9 of the Stockholders Agreement, or (c) the Company
benefit or compensation plan acquiring any such shares provides or permits that
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have such voting rights. Notwithstanding the foregoing,
any shares acquired from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or any other
member of Management may be pledged to secure a loan to finance such
acquisition.
1.22 Warrant. The term "Warrant" shall mean the common stock War rants,
dated prior to the date of the Initial Supplemental Agreement, held by THL and
any other stockholders of the Company to purchase Common Stock.
2. Transfer Prohibited.
(a) Prior to the completion of the Qualified Public Offering, without
the consent of all Stockholders, no Stockholder may Transfer any shares of
Common
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Stock or Other Voting Securities or all or any portion of the Warrant other than
(x) to another Stockholder, (y) to a Permitted Transferee or (z) to a Third
Party pursuant to a Bona Fide Offer, in each case in accordance with the terms
of the Stockholders Agreement.
(b) From and after the completion of the Qualified Public Offering
(whether or not it is the initial public offering by the Company of Common Stock
or Other Voting Securities registered under the Securities Act (the "IPO")),
without the consent of each of THL, UBS and Nassau, none of THL, UBS or Nassau
may Transfer any Common Stock, Other Voting Securities or all or any portion of
the Warrant (other than (w) to another Stockholder, (x) to a Permitted
Transferee, (y) to a Third Party pursuant to a Bona Fide Offer, in each case in
accordance with the terms of the Stockholders Agreement, or (z) in a registered
offering pursuant to rights granted under that certain Second Amended and
Restated Registration Rights Agreement, dated as of April 8, 2002, by and among
the Company and the parties listed on Exhibits A through D thereto), unless a
Person or Persons other than the Company shall have previously sold Common
Stock, Other Voting Securities or all or any portion of the Warrant to the
public in an offering registered under the Securities Act following the IPO (it
being understood that the sale of Common Stock or Other Voting Securities or all
or any portion of the Warrant by any Person or Persons other than the Company
pursuant to a "shelf" registration shall not constitute a sale "to the public in
an offering registered under the Securities Act following the IPO" for purposes
of this Section 2(b)). Notwithstanding anything to the contrary contained
herein, if, at the time a consent is requested pursuant to this Section 2(b),
(a) the Deemed Beneficial Ownership (as defined in the Stockholders Agreement)
of THL is less than 5%, then THL shall be stricken from this Section 2(b), (b)
the Deemed Beneficial Ownership of UBS is less than 5%, then UBS shall be
stricken from this Section 2(b), and (c) the Deemed Beneficial Ownership of
Nassau is less than 5%, then Nassau shall be stricken from this Section 2(b),
provided, however, that in the event the Deemed Beneficial Ownership of any
Permitted Transferee of any of THL, UBS or Nassau is 5% or more upon the
completion of the transfer to such Permitted Transferee, then such Permitted
Transferee shall be bound by the covenants contained in this Section 2(b) to the
same extent as the transferor thereof was so bound before such transfer. In the
event that any Permitted Transferee becomes bound by the covenants contained in
this Section 2(b), such Permitted Transferee and the transferring Stockholder
shall provide notice to each of the other Stockholders who at such time is
subject to the covenants contained in this Section 2(b) of the name of a
representative of such Permitted Transferee and all other notice information
commensurate with the information with respect to each Stockholder set forth in
Section 4.4 hereof.
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(c) Without the consent of THL, no Management Stockholder (as defined
below) may Transfer any shares of Common Stock or Other Voting Securi ties
(other than to a Permitted Transferee) if such proposed Transfer would cause the
Relative Percentage of Fully Diluted Securities (as defined below) of such
Manage ment Stockholder immediately following the effective time of the proposed
transfer (the "Determination Time") to be less than THL's Relative Percentage of
Fully Diluted Securities as of the Determination Time. With respect to any
Stockholder, the "Relative Percentage of Fully Diluted Securities" as of any
Determination Time shall mean the quotient obtained by dividing (A) the total
number of shares of Common Stock owned by such Stockholder as of such
Determination Time, plus the total number of shares of Common Stock which may be
acquired by such Stock holder upon exercise or conversion of all options,
warrants or other securities (including, without limitation, all Partnership
Units) or rights convertible into or exercisable for shares of Common Stock
which were owned by such Stockholder as of such Determination Time, by (B) the
total number of shares of Common Stock owned by such Stockholder as of the
Effective Date (following the completion of all transactions comprising the
Reorganization), plus (1) the total number of shares of Common Stock which may
be acquired by such Stockholder upon exercise or conversion of all options,
warrants or other securities (including, without limitation, all Partnership
Units) or rights convertible into or exercisable for shares of Common Stock
which were owned by such Stockholder as of the Effective Date (following
completion of all transactions comprising the Reorganization), plus (2) the
total number of shares of Common Stock acquired (other than pursuant to the
exercise or conversion of any options, warrants or other securities (including,
without limitation, any Partnership Units) or rights owned by such Stockholder
as of the Effective Date (following completion of all transactions comprising
the Reorganization)), or which may be acquired upon the exercise of any options,
warrants or other securities (including, without limitation, any Partnership
Units) or rights acquired, by such Stockholder after the Effective Date;
provided, however, that no shares of Common Stock which may be acquired upon
exercise or conversion of any options, warrants or other securities (other than
Partnership Units) or rights convertible into or exercis able for shares of
Common Stock shall be included for any part of the calculation of any
Stockholder's Relative Percentage of Fully Diluted Securities (including,
without limitation, the calculation under clause (B)(1) above) if either (x)
such option, warrant or other security or right has expired unexercised as of
the relevant Determi nation Time, or (y) the Stockholder owns such option,
warrant or other security or right as of the relevant Determination Time but the
exercise or conversion price per share of such option, warrant or other security
or right was greater than the Fair Market Value (as defined below) of the Common
Stock as of such Determination
8
Time. "Management Stockholder" means any Stockholder who is a member of
Management and any Stockholder who becomes a party to this Agreement after the
Effective Date who is designated as such in the supplementary agreement executed
by such Stockholder as contemplated by Section 3 hereof, provided that any such
Stockholder shall cease to be a Management Stockholder for purposes of this
Section 2 from and after such time as such Stockholder is no longer an employee
of the Company or any of its subsidiaries. "Fair Market Value" means the average
of the closing sale prices of the Common Stock as reported on the national
securities exchange on which the Common Stock is listed or, if not so listed, as
quoted on The Nasdaq Stock Market, for the ten consecutive trading days ending
on the fifth trading day prior to the relevant Determination Time.
(d) The covenants and agreements contained in Sections 2(b) shall
continue in full force and effect following completion of the Qualified Public
Offering, notwithstanding anything to the contrary contained in clause (i) of
Section 4.8 hereof, and shall expire and be of no further force or effect as of
the third anniversary of the date of completion of the Qualified Public
Offering. The cove nants and agreements contained in Section 2(c) shall continue
in full force and effect following completion of the Qualified Public offering,
notwithstanding anything to the contrary contained in the clause (i) of Section
4.8 hereof, and shall expire and be of no further force or effect immediately
upon the first to occur of (i) the third anniversary of the date of completion
of the Qualified Public Offering or (ii) the date on which THL's Relative
Percentage of Fully Diluted Securities is less than or equal to 40%.
3. Additional Stockholders.
3.1 Transferee of Stockholders. No Transfers of shares of Common Stock
or Other Voting Securities may be made to a Permitted Transferee or to any Third
Party, unless in each case prior to such Transfer any such transferee agrees in
writing to be bound (to the same extent as contemplated with respect to the
Stockholder (or the Permitted Transferee(s) thereof) transferring such shares of
Common Stock or Other Voting Securities) by the terms and conditions of this
Agreement pursuant to a supplementary agreement reasonably satisfactory in form
and substance to the Stockholders pursuant to a Majority Stockholder Consent.
The provisions of this Section 3.1 shall not apply to any Transfer (a) made
pursuant to a public offering of Company Stock or (b) made pursuant to Rule 144
following a public offering of Common Stock.
9
3.2 Supplementary Agreement. The supplementary agreement referred to in
Section 3.1 above shall become effective upon its execution by the new holder of
Common Stock, and it shall not require the signatures or the consent of the
other Stockholders (or their respective Permitted Transferees).
4. Miscellaneous.
4.1 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
4.2 Recapitalizations, Exchanges Affecting the Common Stock. Except as
otherwise specifically provided in Section 4.8, the provisions of this Agreement
shall apply, to the full extent set forth herein, with respect to the Common
Stock and Other Voting Securities and to any and all shares of stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution of the Common Stock or Other Voting
Securities, by reason of a stock dividend, stock split, stock issuance, reverse
stock split, combination, recapitalization, reclassifica tion, merger,
consolidation or otherwise. Upon the occurrence of any of such events, amounts
hereunder shall be appropriately adjusted.
4.3 Amendments. This Agreement may be amended only by a written
instrument signed by each of the parties hereto.
4.4 Notices. Any notice and other communication (facsimile transmission
shall not be a valid means of notice under this Agreement) provided for herein
shall be dated and in writing and shall be deemed to have been duly given when
received by the party to whom such notice or other communication is directed at
the following addresses:
(a) If to THL, to it at the following address:
▇▇▇▇▇▇ ▇. ▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
10
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
A Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Attention: ▇▇▇▇▇▇ ▇. Troop, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to UBS, to it at the following address:
Capital ARC Holdings, LLC
c/o UBS Capital
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇.
(c) If to Travelers, to it at the following address:
The Travelers Indemnity Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Real Estate Department
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Investment No.: 12809
11
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(e) If to one or more Stockholders comprising Management, to
such Stockholder(s) at the following address:
Management Stockholders
c/o ARC IV REIT, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(f) If to Nassau, to it at the following address:
Nassau Capital Funds, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
4.5 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland without giving effect to
the conflicts of law principles thereof.
12
4.6 Section Headings. The headings in this Agreement are for conve
nience of reference only and shall not limit or otherwise affect the meaning of
terms contained herein.
4.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
4.8 Termination. This Agreement (other than Sections 4.4, 4.5, 4.8,
4.9, 4.10, 4.11, 4.12, and 4.13) shall terminate on the earlier of (i) the
Qualified Public Offering, (ii) the written consent of each of the parties
hereto, (iii) August 9, 2010, (iv) upon the completion of a transaction
satisfying the requirements of and com pleted in accordance with the provisions
of Sections 5 and 6.2 of the Stockholders Agreement, or (v) as to any
Stockholder (and its Affiliates), when such Stockholder (collectively with its
Affiliates) no longer beneficially owns or holds of record any shares of Common
Stock (including, with respect to all Stockholders, any transaction in which the
Company is a constituent company in a merger and in connection therewith the
outstanding shares of Common Stock are converted into or exchanged for
securities of another Person and/or cash or other property).
4.9 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof, including the Initial Supplemental
Agreement.
4.10 Severability of Provisions. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
4.11 Specific Performance. Each of the Stockholders acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed, no adequate remedy at law would
exist and damages would be difficult to determine. It is accordingly agreed that
(x) in the event of a breach of any provision of this Agreement, the aggrieved
party shall be
13
entitled to specific performance of this Agreement and to enjoin any continuing
breach of this Agreement (without the necessity of proving actual damages and
without posting bond or other security), in addition to any other remedy to
which such aggrieved party may be entitled at law or in equity, and (y) each
Stockholder hereby waives the defense, in any action for specific performance or
other equitable relief, that a remedy at law would be adequate.
4.12 Consent to Jurisdiction. Each Stockholder, by its execution
hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts located in the County of New York, State of New York
for the purposes of any claim or action arising out of or based upon this
Agreement or relating to the subject matter hereof, (ii) hereby waives, to the
extent not prohibited by applicable law, and agrees not to assert by way of
motion, as a defense or otherwise, in any such claim or action, any claim that
it or he is not subject personally to the jurisdiction of the above-named
courts, that its or his property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court, and (iii) hereby agrees not to commence any claim
or action arising out of or based upon this Agreement or relating to the subject
matter hereof other than before the above- named courts nor to make any motion
or take any other action seeking or intending to cause the transfer or removal
of any such claim or action to any court other than the above-named courts
whether on the grounds of inconvenient forum or otherwise. Each Stockholder
hereby consents to service of process in any such proceeding in any manner
permitted by New York law, and agrees that service of process by registered or
certified mail, return receipt requested, at its address specified pursuant to
Section 4.4 hereof is reasonably calculated to give actual notice.
4.13 Waiver of Right to Jury Trial. Each Stockholder, by its execution
hereof, waives its right to a jury trial of any claim or cause of action based
upon or arising out of this Agreement or any dealings between them relating to
the subject matter of this transaction and the relationship that is being
established. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this Agreement, including without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
Each Stockholder acknowledges that this waiver is a material inducement to enter
into a business relationship, that each has already relied on the waiver in
entering into this Agreement and that each will continue to rely on the waiver
in their related future dealings. Each Stockholder further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with
14
legal counsel. This waiver is irrevocable, meaning that it shall apply to any
subse quent amendments, renewals, supplements or modifications to this Agreement
or to any other documents or agreements relating to the transaction contemplated
hereby. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
4.14 No Conflicting Agreement. No Stockholder will, on or after the
date of this Agreement, enter into any agreement with respect to the shares of
Common Stock or Other Voting Securities beneficially owned or held of record by
it which conflicts with the provisions hereof.
4.15 Effectiveness of Agreement. This Agreement shall be of no force or
effect until the Effective Date, and upon consummation of the Reorganization on
such date, this Agreement shall be in full force and effect and the Initial
Supplemen tal Agreement shall be deemed amended and restated in its entirety
hereby.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇ ▇. ▇▇▇ EQUITY
FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Partners, L.P.,
its Managing Member
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Advisors, LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal Managing
Director
▇▇▇▇▇▇ ▇. ▇▇▇ FOREIGN
FUND IV, L.P.
By: THL Equity Advisors IV, LLC,
its General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Partners, L.P.,
its Managing Member
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Advisors, LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal Managing
Director
▇▇▇▇▇▇ ▇. ▇▇▇ CHARITABLE
INVESTMENTS LIMITED
PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: General Partner
▇▇▇▇▇▇ ▇. ▇▇▇ INVESTORS
LIMITED PARTNERSHIP
By: THL Investment Management Corp.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal Managing
Director
▇▇▇▇▇▇ ▇. ▇▇▇ FOREIGN
FUND IV-B, L.P.
By: THL Equity Advisors IV, LLC,
its General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Partners, L.P.,
its Managing Member
By: ▇▇▇▇▇▇ ▇. ▇▇▇ Advisors, LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal Managing
Director
MANAGEMENT SIGNATURE PAGE
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
THE TRAVELERS INDEMNITY COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
CAPITAL ARC HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Partner
NASSAU CAPITAL FUND L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Princeton University Investment Company
NASSAU CAPITAL PARTNERS II, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. Hack
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. Hack
Title: Member
NAS PARTNERS I, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. Hack
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. Hack
Title: Member
