AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
BY AND AMONG
▇▇▇▇▇ MAS,
▇▇▇▇ ▇▇▇▇▇▇ MAS,
▇▇▇▇ ▇▇▇▇▇ MAS,
GENERAL ELECTRIC CAPITAL CORPORATION,
GECFS, INC.,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ FUND I, L.P.,
▇▇▇▇▇▇ CAPITAL ADVISORS, INC.
AND
▇▇▇▇ CORP.
DATED AS OF MARCH 25, 1998
TABLE OF CONTENTS
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PAGE
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Section 1. Definitions. 5
Section 2. Board of Directors. 9
Section 3. Actions Requiring Special Board Approval. 13
Section 4. Right of First Refusal. 15
Section 5. Restrictions on Transfers of Stock by Mas Stockholders, ▇▇▇▇▇▇,
▇▇▇▇▇▇ Capital and ▇▇. ▇▇▇▇▇▇▇▇▇▇. 17
Section 6. Restrictions on Transfers and Purchases of Stock by GE Capital. 18
Section 7. Intentionally Omitted. 19
Section 8. Other Restrictions on Sales of Stock. 19
Section 9. Registration Rights. 20
Section 10. Books and Records. 28
Section 11. Legend. 28
Section 12. Representations and Warranties. 29
Section 13. Termination of Agreement. 31
Section 14. Further Assurances. 31
Section 15 Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial. 31
Section 16. Amendment and Waiver. 32
Section 17. No Inconsistent Agreements. 32
Section 18. Transactions with Affiliates. 32
Section 19. Conflict with Articles of Incorporation and/or By-Laws. 32
Section 20. Severability. 32
Section 21. Entire Agreement. 33
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Section 22. Successors and Assigns 33
Section 23. Remedies. 33
Section 24. Notices. 33
Section 25. Confidentiality. 35
Section 26. Descriptive Headings 36
Section 27. Construction. 36
Section 28. Survival of Representations and Warranties. 36
Section 29. Counterparts. 36
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AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT ("Agreement") is made as
of March 25, 1998 by and among ▇▇▇▇▇ MAS, ▇▇▇▇ ▇▇▇▇▇▇ MAS, ▇▇▇▇ ▇▇▇▇▇ MAS, each
of whom is an individual residing in Florida (▇▇▇▇▇ Mas, ▇▇▇▇ ▇▇▇▇▇▇ Mas and
▇▇▇▇ ▇▇▇▇▇ Mas sometimes referred to herein individually as a "Mas Stockholder"
and collectively as the "Mas Stockholders"), GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GE Capital"), GECFS, Inc., a Nevada
corporation ("GECFS"), ▇▇▇▇▇▇ FUND I, L.P., a Texas limited partnership
("▇▇▇▇▇▇"), ▇▇▇▇▇▇ CAPITAL ADVISORS, INC., a Florida corporation (`▇▇▇▇▇▇
Capital") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (▇▇. ▇▇▇▇▇▇▇▇▇▇, as well as each Mas
Stockholder, GE Capital, GECFS, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Capital referred to herein as
a "▇▇▇▇ Stockholder" and collectively as the "▇▇▇▇ Stockholders") and ▇▇▇▇
CORP., a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company, GE Capital, GECFS, the Mas Stockholders
and ▇▇. ▇▇▇▇▇▇▇▇▇▇ have entered into a Stockholders' Agreement, dated as of
December 31, 1996;
WHEREAS, the Company and GECFS are entering into an Exchange
Agreement pursuant to which GECFS shall exchange 800,000 shares of Series B
Cumulative Preferred Stock, par value $.01 per share, of the Company and 800,000
shares of Series C Cumulative Preferred Stock, par value $.01 per share, of the
Company for 70,877 shares of Class B Special Common Stock, par value $.01 of the
Company (the "Class B Common Stock");
WHEREAS, ▇▇▇▇▇▇, GECFS and the Company may enter into one or
more Securities Purchase Agreements pursuant to which ▇▇▇▇▇▇ shall purchase
shares of Class B Common Stock from GECFS, which it shall convert into an equal
number of shares of Class A Common Stock, par value $.01 per share, of the
Company (the "Class A Common Stock");
WHEREAS, ▇▇▇▇▇▇ Capital and GECFS are entering into a Stock
Option Agreement pursuant to which ▇▇▇▇▇▇ Capital shall have the option to
purchase certain shares of Class B Common Stock from GECFS;
WHEREAS, a condition to the closing of each of the Exchange
Agreement and the Securities Purchase Agreements is that the parties hereto
amend and restate the Stockholders' Agreement dated as of December 31, 1996 and
the parties hereto deem it to be in their best interests to amend and restate
the agreement with respect to certain rights and obligations associated with
ownership of shares of capital stock of the Company;
WHEREAS, this Amended and Restated Agreement constitutes the
entire agreement between the parties hereto and supersedes all prior agreements,
if any,
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understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof;
NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants and obligations hereinafter set forth, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS.
As used herein, the following terms shall have the following
meanings :
"AFFILIATE" means with respect to any Person, (i) each other
Person that, directly or indirectly, owns or controls, whether beneficially or,
as a trustee, guardian or other fiduciary, ten percent (10%) or more of the
Stock having ordinary voting power in the election of directors of such Person,
(ii) each Person that directly or indirectly controls, is controlled by or is
under common control with such person or any Affiliate of such Person, (iii)
each of such Person's officers, directors, joint ventures and partners, and (iv)
the spouse, each sibling and each lineal descendant and ascendant of any such
specified Person or Affiliate of such specified Person. In the case of the Mas
Stockholders and ▇▇▇▇▇▇, "Affiliate" shall in any event include MasTec, Inc. and
its respective successors and assigns. In the case of GE Capital, "Affiliate"
shall in any event include GECFS and, in the case of GECFS, "Affiliate" shall in
any event include GE Capital. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"BOARD" means the Board of Directors of the Company.
"BY-LAWS" means the By-Laws of the Company.
"CERTIFICATE OF INCORPORATION" means the Amended and Restated
Certificate of Incorporation of the Company, as amended from time to time.
"CLASS A COMMON STOCK" means the Class A Common Stock, par
value $.01 per share, of the Company.
"CLASS B COMMON STOCK" means the Class B Special Common Stock,
par value $.01 per share, of the Company.
"COMMON STOCK" means all classes of the common stock of the
Company.
"COMPANY" means ▇▇▇▇ Corp., a Delaware corporation.
"COMPETITOR" means (i) any Person included in the most recent
RENTAL EQUIPMENT REGISTER list of the top 100 equipment rental companies or (ii)
any Person who has revenues from construction equipment dealership activities
equal to or exceeding $20 million.
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"CONTROL OPTION" means the option provided for under the
Control Option Agreement by and among the Company, the Mas Stockholders and GE
Capital that gives GE Capital the right, under certain circumstances, to
purchase from the Mas Stockholders and/or the Company sufficient shares of
Common Stock so that GE Capital's Equity Ownership of the Company after such
purchase is 51%.
"EQUITY OWNERSHIP" means, as to each ▇▇▇▇ Stockholder, the
quotient obtained (expressed as a percentage) by dividing (A) the number of
shares of Common Stock owned by such ▇▇▇▇ Stockholder by (B) the total number of
shares of Common Stock issued and outstanding.
"EQUITY SECURITIES" means Common Stock, Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and any other share of
capital stock or other equity security of the Company including, without
limitation, any options, warrants or other rights to subscribe for, purchase or
otherwise acquire any equity security of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any succeeding law.
"EXCLUDED SECURITIES" means (a)(i) options issued by the
Company pursuant to any employee stock option or similar plan (and any shares of
Common Stock issuable thereunder) (including, without limitation, any shares of
Common Stock subject to options forfeited under such plan that become subject to
new options reissued by the Company pursuant to such plan) and the shares of
Common Stock issuable upon the exercise of such options; (ii) options issued to
▇▇. ▇▇▇▇▇▇▇▇▇▇ pursuant to the Stock Option Agreement between ▇▇. ▇▇▇▇▇▇▇▇▇▇ and
the Company, dated as of December 1, 1995 (the "▇▇▇▇▇▇▇▇▇▇ Stock Option
Agreement"), and the shares of Common Stock issuable upon the exercise thereof;
and (iii) options issued to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ pursuant to the Stock Option
Agreement between ▇▇. ▇▇▇▇▇▇ and the Company, dated as of June 28, 1996 (the
"▇▇▇▇▇▇ Stock Option Agreement") and the shares of Common Stock issuable upon
the exercise thereof, in each of the foregoing clauses (i) - (iii) as and to the
extent set forth in Schedule 12(b) hereto; and (b) shares of Common Stock
issuable upon exercise of the Control Option.
"GE CAPITAL" means General Electric Capital Corporation, a New
York corporation.
"GECFS" means GECFS, Inc., a Nevada corporation.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement
Act of 1976, as amended.
"INITIAL PUBLIC OFFERING" means the first underwritten public
offering of Class A Common Stock with gross proceeds in excess of $50 million
that is effected pursuant to a registration statement filed with, and declared
effective by, the SEC under the Securities Act.
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"MAS STOCKHOLDER" means any of ▇▇▇▇▇ Mas, ▇▇▇▇ ▇▇▇▇▇▇ Mas or
▇▇▇▇ ▇▇▇▇▇ Mas.
"▇▇▇▇ STOCKHOLDER" means any of the Mas Stockholders, GE
Capital, GECFS, ▇▇▇▇▇▇, ▇▇▇▇▇▇ Capital and ▇▇. ▇▇▇▇▇▇▇▇▇▇ and their permitted
assignees hereunder.
"PERSON" means any individual, sole proprietorship,
partnership (including a limited partnership), joint venture, trust,
unincorporated organization, association, corporation, institution, public
benefit corporation, limited liability company, joint stock company, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof) or any other business entity.
"PRE-EMPTIVE PERCENTAGE" means, as to each ▇▇▇▇ Stockholder,
the quotient obtained (expressed as a percentage) by dividing (A) the number of
shares of Common Stock owned by the ▇▇▇▇ Stockholder on the date of the Capital
Increase Notice (as defined in Section 4) by (B) the total number of shares of
Common Stock issued and outstanding on the date of the Capital Increase Notice.
"PROPOSED AMOUNT" means, with respect to the Registrable
Securities, the aggregate amount of shares thereof that the Registering Mas
Stockholders shall request the Company to register pursuant to Section 9(b).
"PUBLIC SALE" means a Sale pursuant to a bona fide
underwritten public offering pursuant to an effective registration statement
filed under the Securities Act or pursuant to Rule 144 under the Securities Act.
"REGISTERING MAS STOCKHOLDER" means any Mas Stockholder who
exercises his registration rights under Section 9(a) or 9(b) of this Agreement.
"REGISTRABLE SECURITIES" means The shares of Class A Common
Stock owned of record or beneficially by a Mas Stockholder (the "Shares"),
including any additional securities of the Company issued in respect of the
Shares, including by way of a stock split, dividend or other recapitalization or
exchange or securities with or by the Company. Once issued, such securities
shall cease to be Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been Sold pursuant to
Rule 144 (or any successor provision) under the Securities Act, (iii) they shall
have been otherwise transferred and new certificates for them not bearing a
legend restricting further transfer shall have been delivered by the Company, or
(iv) they shall cease to be outstanding.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Fund I, L.P., a Texas limited
partnership
"▇▇▇▇▇▇ CAPITAL" means ▇▇▇▇▇▇ Capital Advisors, Inc., a
Florida corporation.
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"SEC" means the United States Securities and Exchange
Commission and any successor to the functions thereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and any succeeding law.
"SELL" means, as to any securities, to sell, or in any other
way directly or indirectly transfer, assign, distribute, issue, pledge, encumber
or otherwise dispose of, such securities, either voluntarily or involuntarily,
and the terms SALE and SOLD shall have meanings correlative to the foregoing.
"SELLING EXPENSES" means all underwriting discounts, selling
commissions, stock transfer taxes, and fees and disbursements of counsel for,
and any other Person retained, by the Registering Mas Stockholders, applicable
to the securities registered by the Registering Mas Stockholders.
"SERIES A PREFERRED STOCK" means the cumulative preferred
stock, Series A, par value $.01 per share of the Company.
"SERIES B PREFERRED STOCK" means the cumulative convertible
preferred stock, Series B, par value $.01 per share of the Company.
"SERIES C PREFERRED STOCK" means the cumulative, convertible
preferred stock, Series C, par value $.01 per share of the Company.
"STOCK" means all shares, options, warrants, general or
limited partnership interests, participations or other equivalents (regardless
of how designated) of or in a Person, whether voting or nonvoting, including,
without limitation, common stock, preferred stock, or any other "equity
security" (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act), including, without
limitation, any securities with profit participation features, and any rights,
warrants, options or other securities convertible into or exercisable or
exchangeable for any such shares, equity or profits interests, participations or
other equivalents, or such other securities, directly or indirectly (or any
equivalent ownership interests, in the case of a Person which is not a
corporation).
"SUBSIDIARY" shall mean, with respect to any Person, (i) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power for the election of directors, managers or trustees
of such corporation (irrespective of whether, at the time, Stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially or controlled, directly or indirectly,
by such Person and/or one or more Subsidiaries of such Person, or any
combination thereof, or with respect to which any such Person has the right to
vote or designate the vote of more than 50% of such Stock whether by proxy,
agreement, operation of law or otherwise, (ii) any partnership, limited
liability company, association or other business entity, in which such Person
and/or one or more Subsidiaries of such Person shall have more than 50% of the
partnership or other
8
similar ownership interests thereof (whether in the form of voting or
participation in profits or capital contribution), and (iii) all other Persons
from time to time included in the consolidated financial statements of such
Person. For purposes hereof, a Person or Persons shall be deemed to have more
than a 50% ownership interest in a limited liability company, partnership,
association or other business entity if such Person or Persons shall be
allocated more than 50% of limited liability company, partnership, association
or other business entity gains or losses or shall be or control any managing
director or general partner of such limited liability company, partnership,
association or other business entity.
Section 2. BOARD OF DIRECTORS
(a) MEMBERS - PRIOR TO AN INITIAL PUBLIC OFFERING.
(i) Prior to an Initial Public Offering of the
Company, the following shall apply: The Board shall consist of seven directors,
six of whom shall be divided into three classes (I, II and III) of two directors
each serving three year terms and shall be designated initially by the Mas
Stockholders. The seventh director shall be the director whom the holders of a
majority of the outstanding shares of Series A Preferred Stock are entitled to
elect pursuant to Article FOURTH of the Company's Amended and Restated
Certificate of Incorporation and shall be designated initially by GE Capital and
GECFS; this director shall serve one year terms. If and when GE Capital's and
any Affiliate of GE Capital's aggregate Equity Ownership of the Company exceeds
fifty percent, either as a result of the exercise of the Control Option or
purchases of Equity Securities by GE Capital or any Affiliate of GE Capital from
the Company or from the Mas Stockholders, or otherwise, GE Capital and GECFS
shall designate four members of the Board and the Mas Stockholders shall
designate three members of the Board. After GE Capital and GECFS have received
the right to designate four of the members of the Board, if GE Capital's and any
Affiliate of GE Capital's Equity Ownership of the Company is equal to or exceeds
in the aggregate (x) sixty-five percent, then GE Capital and GECFS shall
designate five members of the Board and the Mas Stockholders shall designate two
members of the Board; (y) eighty percent, then GE Capital and GECFS shall
designate six members of the Board and the Mas Stockholders shall designate one
member of the Board; and (z) ninety-five percent, then GE Capital and GECFS
shall designate seven members of the Board; PROVIDED HOWEVER, that if the Mas
Stockholders' Equity Ownership of the Company is equal to or exceeds in the
aggregate fifty, sixty-five, eighty or ninety-five percent, at any time after GE
Capital and GECFS have received the right to designate four of the members of
the Board, then the Mas Stockholders shall designate four, five, six and seven
members of the Board, respectively, and GE Capital and GECFS shall designate
three, two, one and no members of the Board, respectively. For purposes of this
Section 2(a), the Mas Stockholders' Equity Ownership of the Company shall
include ▇▇▇▇▇▇' and ▇▇▇▇▇▇ Capital's Equity Ownership of the Company. A director
designated by the Mas Stockholders is hereinafter referred to as a "MAS
DESIGNEE" and a director designated by GE Capital and GECFS is hereinafter
referred to as a "GE CAPITAL DESIGNEE." At each meeting of the stockholders of
the Company held for the purpose of electing directors, the ▇▇▇▇ Stockholders
shall cast their votes so as to cause the Mas Designees and the GE Capital
Designees to be elected as directors.
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(ii) GE Capital shall deliver a written notice to the
Company (the "Equity Ownership Notice") promptly after any change in GE
Capital's and any Affiliate of GE Capital's aggregate Equity Ownership of the
Company that would cause the number of GE Capital Designees to increase or
decrease. If there is an increase in GE Capital's and any Affiliate of GE
Capital's aggregate Equity Ownership of the Company sufficient to cause the
number of GE Capital Designees to increase, the Equity Ownership Notice shall
(i) state the number of additional directors to be designated to the Board by GE
Capital and GECFS, (ii) name the GE Capital Designee(s) to be appointed to the
Board and (iii) include evidence reasonably satisfactory to the Company of GE
Capital's and any Affiliate of GE Capital's aggregate Equity Ownership of the
Company. At or before the next regular or special meeting of the Board, the ▇▇▇▇
Stockholders shall take such steps as are necessary to cause the GE Capital
Designees named in the Equity Ownership Notice to be elected as directors and to
replace the corresponding number of Mas Designees. If the Equity Ownership
Notice is provided in connection with the right of GE Capital and GECFS to elect
four members of the Board, such necessary steps shall be taken as soon as
reasonably possible after the delivery of such Equity Ownership Notice and in
any event not less than five business days following the delivery of such Equity
Ownership Notice. If there is a decrease in GE Capital's and any Affiliate of GE
Capital's aggregate Equity Ownership of the Company sufficient to cause the
number of GE Capital Designees to decrease, the Equity Ownership Notice shall
(i) state the number of directors to be removed from the Board by GECFS and GE
Capital, (ii) name the GE Capital Designee(s) to be removed from the Board and
(iii) include evidence reasonably satisfactory to the Company of GE Capital's
and any Affiliate of GE Capital's aggregate Equity Ownership of the Company. At
or before the next regular or special meeting of the Board, the ▇▇▇▇
Stockholders shall take such steps as are necessary to cause the GE Capital
Designees named in the Equity Ownership Notice to be removed from the Board and
to replace such GE Capital Designees with a corresponding number of Mas
Designees. If the Mas Stockholders' Equity Ownership of the Company increases or
decreases, the Mas Stockholders may, at their option, follow the procedures
regarding designation of Board members as set forth in this Section 2(a).
(iii) VOTING REQUIREMENTS. Notwithstanding anything
in the Certificate of Incorporation or the By-Laws to the contrary, except as
set forth under Section 3 below and except the reconfiguration of the Board as
set forth above, all decisions of the Board, including the selection of the
Chairman of the Board and any committee appointed thereby, shall require a
majority vote. In the case of a tie vote, the Chairman of the Board's vote shall
count as two votes.
(iv) VACANCIES. Notwithstanding anything in the
Certificate of Incorporation or the By-Laws to the contrary, each of the Mas
Designees and the GE Capital Designees shall hold office until his or her death,
resignation or removal or until his or her successor shall have been duly
elected and qualified. If any Mas Designee shall cease to serve as a director of
the Company for any reason, the resulting vacancy shall be filled by another
person designated by the Mas Stockholders. If any GE Capital Designee shall
cease to serve as
10
a director of the Company for any reason, the resulting vacancy shall be filled
by another person designated by GE Capital.
(v) REMOVAL. A director may be removed from office at
any time, with or without cause, at a meeting called for that purpose, and only
by the affirmative vote of the holders of at least 66-2/3% of the voting power
of all shares of the Corporation entitled to vote generally in the election of
directors, voting together as a single class. If the Mas Stockholders wish to
remove a Mas Designee with or without cause, the ▇▇▇▇ Stockholders shall vote to
remove such Mas Designee. If GE Capital wishes to remove a GE Capital Designee
with or without cause, the ▇▇▇▇ Stockholders shall vote to remove such GE
Capital Designee.
(vi) QUORUM REQUIREMENTS/MEETINGS. A majority of the
entire Board shall be necessary to form a quorum for purposes of Board meetings.
Directors participating by telephone conference in any meeting of the Board
shall be considered in determining whether a quorum of directors is present. The
Board shall meet in accordance with the Certificate and By-Laws.
(vii) SERIES A PREFERRED STOCK. If the holders of
Series A Preferred Stock receive the right, pursuant to Article FOURTH of the
Company's Amended and Restated Certificate of Incorporation, to elect an
additional four directors, the size of the Board shall be increased to eleven
directors and the holders of Series A Preferred Stock shall designate the four
additional members of the Board. These additional directors shall serve one year
terms and shall not be divided into classes.
(viii) COMMITTEES. The composition of any committees
of the Board with respect to the number of members who are Mas Designees and GE
Capital Designees shall reflect the composition of the entire Board to the
greatest extent possible.
(ix) SUBSIDIARIES. The Boards of Directors of any
Subsidiaries of the Company shall either (i) reflect the composition of the
entire Board to the greatest extent possible with respect to the number of
members who are selected by the Mas Stockholders and by GE Capital and GECFS or
(ii) shall consist of one director, who shall be ▇▇. ▇▇▇▇▇▇▇▇▇▇.
(b) MEMBERS - SUBSEQUENT TO AN INITIAL PUBLIC OFFERING.
(i) Subsequent to an Initial Public Offering of the
Company, the following shall apply: Subject to Section 2(b)(ii), the Board shall
consist of six directors and shall be divided into three classes of two
directors each (I, II and III). The initial members of Class I shall be ▇▇▇▇▇
Mas and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and the initial term of office for members of Class
I shall expire at the annual meeting of stockholders in 2000. The initial
members of Class II shall be ▇▇▇▇ ▇▇▇▇▇▇ Mas and ▇▇▇▇ ▇▇▇▇▇ Mas and the initial
term of office for members of Class II shall expire at the annual meeting of
stockholders in 1999. The initial members of Class III shall be two
"independent" directors, as such term is defined in the New York Stock Exchange
listing requirements and the initial term of office for members of Class
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III shall expire at the annual meeting of stockholders in 1998. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders after their election, and shall continue to hold office until their
respective successors are elected and qualified or until their death, or until
they shall have resigned, or have been removed.
(ii) If and when any of GE Capital, GECFS or any
Affiliate thereof transfer a block of Equity Securities which equals or exceeds
the lesser of (i) the number of shares of Common Stock held by GE Capital, GECFS
and any Affiliate thereof at the consummation of the Initial Public Offering if
such number equals or exceeds 10% of the Equity Ownership of the Company or (ii)
15% of the Equity Ownership of the Company to a single third party purchaser
other than any of the ▇▇▇▇ Stockholders at the time of such transfer and such
single third party purchaser is not a Competitor of the Company (the "GE
TRANSFEREE"), the Board shall adopt a resolution increasing the number of
directors on the Board by one by increasing the number of directors in Class III
to three. The GE Transferee shall designate the additional director (the "GE
TRANSFEREE DESIGNEE") and the Board will appoint the GE Transferee Designee to
fill the vacancy created by increasing the Board to seven directors. Thereafter,
at each meeting of the stockholders of the Company held for the purpose of
electing the class of directors of which the GE Transferee Designee is a member,
the ▇▇▇▇ Stockholders shall cast their votes so as to cause the GE Transferee
Designee to be elected as a director. The ▇▇▇▇ Stockholders shall no longer be
so required to cast their votes so as to cause the GE Transferee Designee to be
elected as a director if and when the GE Transferee's Equity Ownership of the
Company falls below the lesser of (i) the aggregate number of shares of Common
Stock purchased by the GE Transferee from GE Capital, GECFS and/or any Affiliate
thereof or (ii) 15%.
(iii) VACANCIES. Vacancies in the Board resulting
from death, resignation, retirement, disqualification, removal from office or
any other cause may be filled by the Board, provided that a quorum is then in
office and present, or by a majority of the directors then in office, if less
than a quorum is then in office, or by the sole remaining director. Directors
elected to fill a newly created directorship or other vacancies shall hold
office for the remainder of the full term of the class of directors in which the
new directorship was created or the vacancy occurred and until such director's
successor has been elected and has qualified; PROVIDED, HOWEVER, that directors
elected by the holders of Series A Preferred Stock shall hold office until the
next annual meeting of stockholders when such directors' successors have been
elected and qualified. Notwithstanding the foregoing, or anything in the
Certificate of Incorporation or the By-Laws to the contrary, if the GE
Transferee Designee dies, resigns or is removed, the GE Transferee shall
designate a director to fill the resulting vacancy and the Board of Directors or
the ▇▇▇▇ Stockholders, as applicable, shall cast their votes so as to cause such
designee to be elected as a director.
(iv) REMOVAL. A director may be removed from office
at any time, with or without cause, at a meeting called for that purpose, and
only by the affirmative vote of the holders of at least 66-2/3% of the voting
power of all shares of the Corporation entitled to
12
vote generally in the election of directors, voting together as a single class.
Notwithstanding the foregoing, any directors elected by the holders of Series A
Preferred Stock may only be removed by the holders of a majority of the issued
and outstanding Series A Preferred Stock and the director elected pursuant to
Section 2(c) below, if any, may only be removed with or without cause by the
holders of 66-2/3% of the issued and outstanding Class B Common Stock. If the GE
Transferee wishes to remove the GE Transferee Designee with or without cause,
the ▇▇▇▇ Stockholders shall vote to remove the GE Transferee Designee.
(c) RIGHT OF CLASS B COMMON STOCK TO ELECT ONE DIRECTOR. On
March 31, 2000, if the number of issued and outstanding shares of Class B Common
Stock equals or exceeds twenty percent (20%) of the issued and outstanding
Common Stock, Class III of the Board shall be increased by one member and the
holders of a majority of the Class B Common Stock, voting separately as a single
class in the election of directors of the Company, to the exclusion of all other
classes of the Company's capital stock and with each share of Class B Common
Stock entitled to one vote, shall be entitled to elect immediately one director
to serve in Class III of the Board until his successor is duly elected by
holders of a majority of the Class B Common Stock or he is removed from office
by holders of a majority of the Class B Common Stock. If the holders of a
majority of the Class B Common Stock for any reason fail to elect anyone to fill
such directorship, such position shall remain vacant until such time as the
holders of a majority of the Class B Common Stock elect a director to fill such
position and shall not be filled by resolution or vote of the Board or the
Company's other stockholders. If the number of shares of Class B Common Stock
issued and outstanding does not equal or exceed twenty percent (20%) of the
issued and outstanding Common Stock at any time after March 31, 2000, the
director elected by a majority of the holders of Class B Common Stock, if any,
shall be removed from the Board and Class III of the Board shall be decreased by
one member.
(d) POWERS. The Board shall have full power to manage the
Company. The Board may delegate certain powers to certain directors or
committees under its authority. The day-to-day management of the Company shall
be the responsibility of the Company's officers, who shall act in accordance
with the policies and guidelines established or authorized by the Board.
(e) DIRECTORS' INDEMNIFICATION. The Company's Certificate of
Incorporation and By-Laws shall, to the fullest extent permitted by law, provide
for indemnification of, and advancement of expenses to, and limitation of the
personal liability of, the directors of the Company. The Company's Certificate
and By-Laws shall provide that the Company may purchase customary liability
insurance for the directors and officers of the Company, and the Company shall
purchase and maintain such insurance.
(f) WAIVER OF DAMAGES. Directors shall waive any rights to
damages in case of removal without cause by the party that appointed them.
Section 3. ACTIONS REQUIRING SPECIAL BOARD APPROVAL.
13
Prior to an Initial Public Offering of the Company, the
following actions shall require approval by at least a majority of the Board,
including at least one director who is a Mas Designee and one director who is a
GE Capital Designee or, if the Board is acting by written consent, by the
unanimous consent of the Board:
(a) a change in the corporate form of the Company;
(b) the merger or consolidation of the Company into or with
another Person, or a similar business combination of the Company and another
Person, other than with or into a wholly-owned subsidiary of the Company;
(c) the sale or spin-off of any of the Company's Subsidiaries;
(d) acquisitions or divestitures for consideration (including
assumed liabilities) in excess of an aggregate amount equal to $10,000,000
(directly or indirectly through one or more transactions) during any six month
period, including the sale of ▇▇▇▇ Rental, Inc. or ▇▇▇▇ Machinery, Inc., other
than acquisitions or divestitures of equipment in the ordinary course of
business;
(e) any amendment to the Certificate of Incorporation or
By-Laws;
(f) the liquidation, dissolution or winding up of the Company
(g) the filing of a petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy law or the consent to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
or trustee of the Company or of any substantial part of the Company's
properties;
(h) entering into contracts or transactions between the
Company and an Affiliate (directly or indirectly through one or more
transactions) for consideration (including assumed liabilities) in excess of an
aggregate amount equal to $1,000,000 during any three month period;
(i) the sale of all or substantially all of the assets of the
Company;
(j) a change in the corporate domicile of the Company;
(k) entering or committing to enter into any joint ventures or
partnerships or establishing any non-wholly-owned subsidiaries, where the
contribution or investment during any six month period by the Company and all of
its Subsidiaries taken together is in excess of an aggregate amount equal to
$10,000,000 in cash or assets or assumed liabilities;
(l) the expansion into new lines of business (it being
understood that "new lines of business" do not include the conduct in additional
states in the United States or in
14
countries other than the United States of lines of businesses conducted by the
Company or its Subsidiaries as of the date hereof);
(m) the declaration or payment of dividends or the making of
any other distribution in respect of shares of Common Stock or the redemption or
repurchase of Common Stock;
(n) the election of any person as chief executive officer of
the Company;
(o) the selection of the Company's independent certified
public accountants;
(p) any issuance of securities of the Company, except (a)(i)
options issued by the Company pursuant to any stock option or similar plan (and
any shares of Class A Common Stock issuable thereunder) (including, without
limitation, any shares of Common Stock subject to options forfeited under such
plan that become subject to new options reissued by the Company pursuant to such
plan) and the shares of Class A Common Stock issuable upon the exercise of such
options; (ii) options issued to ▇▇. ▇▇▇▇▇▇▇▇▇▇ pursuant to the ▇▇▇▇▇▇▇▇▇▇ Stock
Option Agreement and the shares of Class A Common Stock issuable upon the
exercise thereof and (iii) options issued to ▇▇. ▇▇▇▇▇▇ pursuant to the ▇▇▇▇▇▇
Stock Option Agreement and the shares of Class A Common Stock issuable upon the
exercise thereof, in each of the foregoing clauses (i) - (iii) as and to the
extent set forth in Schedule 12(b), PROVIDED HOWEVER, that the Company may issue
options to employees of the Company or its Subsidiaries to purchase Class A
Common Stock where such issuance (together with any shares of Class A Common
Stock to be issued under any existing options granted to such employees) would
not be in excess of 5 percent of the outstanding Common Stock; (b) shares of
Common Stock issuable upon exercise of the Control Option, (c) as part of an
Initial Public Offering of the Company and (d) shares of Class A Common Stock
issuable upon the conversion of Class B Common Stock.
Section 4. RIGHT OF FIRST REFUSAL WITH RESPECT TO COMPANY SALES.
Prior to an Initial Public Offering of the Company, the
Company shall not Sell any Common Stock except in accordance with the following
procedures:
(a) The Company shall deliver to each of the ▇▇▇▇ Stockholders
a written notice (a "CAPITAL INCREASE NOTICE"), which shall (i) state the
Company's intention to Sell Common Stock, or securities convertible into Common
Stock, or options to purchase Common Stock, to one or more Persons, the amount
and type of Common Stock, or securities convertible into Common Stock to be
issued (the "SECTION 4 STOCK"), the purchase price therefor and a summary of the
other material terms of the proposed Sale, including the manner of distribution,
and (ii) offer each of the ▇▇▇▇ Stockholders the option to acquire all or any
part of the Section 4 Stock (the "Section 4 Offer"). Each ▇▇▇▇ Stockholder shall
have the right and option, for a period of 45 days after delivery of the Capital
Increase Notice (the "SECTION 4 OFFER ACCEPTANCE PERIOD"), to accept all or any
part of the Section 4 Stock at the purchase price and on the terms stated in the
Capital Increase Notice. Such acceptance shall be made by delivering a written
notice (the "ACCEPTANCE NOTICE") to the Company within the Section 4 Offer
Acceptance Period
15
specifying the maximum number of shares of the Section 4 Stock such ▇▇▇▇
Stockholder will purchase (the "ACCEPTED SHARES"). If, upon the expiration of
the Section 4 Acceptance Period, the aggregate amount of Accepted Shares exceeds
the amount of Section 4 Stock, the amount of Section 4 Stock shall be allocated
among the ▇▇▇▇ Stockholders as follows: (i) First, each ▇▇▇▇ Stockholder shall
be entitled to purchase no more than its Pre-emptive Percentage of Section 4
Stock; (ii) Second, if any shares of Section 4 Stock have not been allocated for
purchase pursuant to (i) above (the "REMAINING SECTION 4 SHARES"), each ▇▇▇▇
Stockholder (an "OVERSUBSCRIBED SECTION 4 STOCKHOLDER") that had offered to
purchase a number of shares of Section 4 Stock in excess of the amount of stock
allocated for purchase to it in accordance with previous allocations of such
shares of Section 4 Stock, shall be entitled to purchase an amount of Remaining
Section 4 Shares equal to no more than its Pre-emptive Percentage (treating only
Oversubscribed Section 4 Stockholders as Stockholders for these purposes) of the
Remaining Section 4 Shares; and (iii) Third, the process set forth in (ii) above
shall be repeated with respect to any shares of Section 4 Stock not allocated
for purchase until all shares of Section 4 Stock are allocated for purchase.
(b) If effective acceptance shall not be received pursuant to
Section 4(a) above with respect to all of the Section 4 Stock offered for Sale
pursuant to the Section 4 Offer Notice, then the Company may Sell all or any
portion of such Section 4 Stock so offered for Sale and not so accepted, at a
price not less than the price, and on terms not more favorable to the purchaser
thereof than the terms, stated in the Section 4 Offer Notice at any time within
120 days after the expiration of the Section 4 Acceptance Period (the "ISSUANCE
PERIOD"), PROVIDED HOWEVER, that if the Company is offering the Section 4 Stock
for Sale pursuant to a public offering, the Issuance Period shall run for a
period of 180 days after the expiration of the Section 4 Acceptance Period. To
the extent the Company Sells all or any portion of the Section 4 Stock so
offered for Sale during the Issuance Period, the Company shall promptly notify
the ▇▇▇▇ Stockholders, as to (i) the number of shares of Section 4 Stock, if
any, that the Company has Sold, (ii) the terms of such Sale and (iii) the name
of the owner(s) of any shares of Section 4 Stock so Sold. In the event that all
of the Section 4 Stock is not so Sold by the Company during the Issuance Period,
the right of the Company to Sell such unsold Section 4 Stock shall expire and
the obligations of this Section 4 shall be reinstated and such securities shall
not be offered unless first reoffered to the Stockholders in accordance with
this Section 4.
(c) All Sales of Section 4 Stock to the ▇▇▇▇ Stockholders
subject to any Section 4 Offer Notice shall be consummated contemporaneously at
the offices of the Company on the later of (i) a mutually satisfactory business
day within 30 days after the expiration of the Section 4 Acceptance Period or
(ii) the fifth business day following the expiration or termination of all
waiting periods under the HSR Act, applicable to such issuance, or at such other
time and/or place as the Company and the ▇▇▇▇ Stockholders purchasing Section 4
Stock may agree. The delivery of certificates or other instruments evidencing
such Section 4 Stock shall be made by the Company on such date against payment
of the purchase price for such Section 4 Stock.
(d) The provisions of this Section 4 shall not apply to the
Sale by the Company of Excluded Securities.
16
(e) For purposes of this Section 4, "Common Stock" shall
include Common Stock, securities convertible into Common Stock and options to
purchase Common Stock, PROVIDED HOWEVER, that "Common Stock" shall not include
securities convertible into Common Stock and options to purchase Common Stock
for purposes of calculating a stockholder's Pre-emptive Percentage.
Section 5. RESTRICTIONS ON SALE OF STOCK BY THE MAS STOCKHOLDERS, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ AND ▇▇▇▇▇▇ CAPITAL
Prior to an Initial Public Offering of the Company, the Mas
Stockholders, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Capital shall not Sell any
Common Stock except in accordance with the following procedures:
(a) The Mas Stockholders, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇
Capital (the "SECTION 5 STOCKHOLDERS") may Sell any shares of Common Stock to
any third party purchasers who are not Competitors of the Company or the
Commercial Equipment Financing division of GE Capital, PROVIDED, HOWEVER, that
prior to such transfer, the Section 5 Stockholder(s) shall provide GE Capital
with a written notice (an "OFFER NOTICE"), which shall (i) specifically identify
the proposed transferee of the Common Stock, the amount of Common Stock proposed
to be Sold, the purchase price therefor and a summary of the other material
terms and conditions of the proposed Sale, and (ii) contain an offer by the
Section 5 Stockholder(s) to sell to GE Capital all (but not less than all) of
such shares of Common Stock upon the terms and subject to the conditions of the
proposed Sale as set forth in the Offer Notice (the "SECTION 5 STOCKHOLDER
OFFER"). GE Capital may accept the Section 5 Stockholder Offer by the delivery
of a written notice to the Section 5 Stockholder(s) within 45 days after receipt
of the Offer Notice (the "OFFER ACCEPTANCE PERIOD"). If GE Capital does not
accept the Section 5 Stockholder Offer, the Section 5 Stockholder(s) may only
Sell the shares of Common Stock which were the subject of the Offer Notice in
accordance with terms no less favorable to the Section 5 Stockholder(s) than
were specified in the Offer Notice, and the Sale of such shares of Common Stock
must occur within 120 days following the date of the Offer Notice.
(b) All Sales of Common Stock to GE Capital subject to any
Offer Notice shall be consummated contemporaneously at the offices of the
Company on the later of (i) a mutually satisfactory business day within 30 days
after the expiration of the Offer Acceptance Period or (ii) the fifth business
day following the expiration or termination of all waiting periods under the HSR
Act, applicable to such issuance, or at such other time and/or place as the
Section 5 Stockholders and GE Capital may agree. The delivery of certificates or
other instruments evidencing such Common Stock Sold to GE Capital subject to any
Offer Notice shall be made by the Section 5 Stockholders on such date against
payment of the purchase price for such Common Stock. To the extent the Section 5
Stockholder(s) Sell all or any portion of the Common Stock that is the subject
of the Offer Notice to buyers other than GE Capital, the Section 5
Stockholder(s) shall promptly notify the Company and the other ▇▇▇▇ Stockholders
as to (i) the number of shares of Common Stock, if any, that the Section 5
Stockholder has Sold, (ii) the terms of such Sale and (iii) the name of the
owner(s) of any shares of Common Stock so Sold. In the event that all of the
Common Stock that is the subject of the Offer Notice is not Sold by the
17
Section 5 Stockholder within 120 days following the date of the Offer Notice,
the right of the Section 5 Stockholder to Sell such unsold Common Stock shall
expire and the obligations of this Section 5 shall be reinstated and such
securities shall not be offered unless first reoffered to GE Capital in
accordance with this Section 5.
(c) Notwithstanding anything to the contrary contained in this
Section 5, any Section 5 Stockholder may, without the prior written approval of
GE Capital and GECFS, pledge or otherwise encumber any of its shares of Common
Stock, PROVIDED, HOWEVER, that the pledgee shall not be a Competitor of the
Company and PROVIDED, FURTHER, that (i) the Section 5 Stockholder agrees to
provide reasonable notice to GE Capital of the proposed pledge of its shares of
Common Stock, including the identity of the proposed pledgee and to pledge its
shares of Common Stock to GE Capital instead of the proposed pledgee if GE
Capital provides the Section 5 Stockholder with financing on the substantially
the same terms as the Section 5 Stockholder was to receive from the proposed
pledgee and (ii) if GE Capital does not provide such financing, the pledgee
agrees that as a condition to taking title to any pledged Common Stock, it will
be bound by this Agreement, as contemplated by Section 8(b).
(d) Any Person other than GE Capital and GECFS who purchases
Common Stock from a Section 5 Stockholder (the "Section 5 Buyer") shall be bound
by the provisions of this Section 5 and shall execute and deliver such
documentation as reasonably required by GE Capital and GECFS to evidence the
Section 5 Buyer's agreement to be so bound.
(e) For purposes of this Section 5, " Common Stock" shall
include Common Stock, securities convertible into Common Stock and options to
purchase Common Stock.
Section 6. RESTRICTIONS ON SALES AND PURCHASES OF STOCK BY GE CAPITAL.
Prior to an Initial Public Offering of the Company, GE Capital
and GECFS shall not Sell any Class A or Class B Common Stock except in
accordance with the procedures described in this Section 6. Subsequent to an
Initial Public Offering of the Company, GE Capital and GECFS shall not Sell any
Class B Common Stock without first converting it to Class A Common Stock.
(a) Prior to an Initial Public Offering of the Company, GE
Capital and GECFS may Sell Common Stock to any third party purchasers who are
not Competitors of the Company, PROVIDED, HOWEVER, that prior to such Sale, GE
Capital shall provide the Section 5 Stockholders with an Offer Notice, which
shall (i) specifically identify the proposed transferee of the Common Stock, the
amount of Common Stock proposed to be Sold, the purchase price therefor and a
summary of the other material terms and conditions of the proposed Sale, and
(ii) contain an offer by GE Capital to Sell to the Section 5 Stockholders all
(but not less than all) of such shares of Common Stock upon the terms and
subject to the conditions of the proposed Sale as set forth in the Offer Notice
(the "GE CAPITAL OFFER"). The GE Capital Offer shall be made to the Section 5
Stockholders collectively. The Section 5 Stockholders shall determine among
themselves how to allocate the purchase, if any, of the Common Stock so offered.
The Section 5 Stockholders may accept the GE Capital Offer by the delivery of a
written notice to GE Capital within the Offer Acceptance Period. If the Section
5 Stockholders do not accept the GE Capital
18
Offer, GE Capital may only Sell the shares of Common Stock that were the subject
of the Offer Notice in accordance with terms no less favorable to GE Capital
than were specified in the Offer Notice, and the Sale of such shares of Common
Stock must occur within 120 days following the date of the Offer Notice.
(b) All Sales of Common Stock to the Section 5 Stockholders
subject to any Offer Notice shall be consummated contemporaneously at the
offices of the Company on the later of (i) a mutually satisfactory business day
within 30 days after the expiration of the Offer Acceptance Period or (ii) the
fifth business day following the expiration or termination of all waiting
periods under the HSR Act, applicable to such issuance, or at such other time
and/or place as the Section 5 Stockholders and GE Capital may agree. The
delivery of certificates or other instruments evidencing such Common Stock Sold
to the Section 5 Stockholders subject to any Offer Notice shall be made by GE
Capital on such date against payment of the purchase price for such Common
Stock. To the extent GE Capital Sells all or any portion of the Common Stock
that is the subject of the Offer Notice to buyers other than the Section 5
Stockholders, GE Capital shall promptly notify the Company and the other ▇▇▇▇
Stockholders as to (i) the number of shares of Common Stock, if any, that GE
Capital has Sold, (ii) the terms of such Sale and (iii) the name of the owner(s)
of any shares of Common Stock so Sold. In the event that all of the Common Stock
that is the subject of the Offer Notice is not Sold by GE Capital within 120
days following the date of the Offer Notice, the right of GE Capital to Sell
such unsold Common Stock shall expire and the obligations of this Section 6
shall be reinstated and such securities shall not be offered unless first
reoffered to the Section 5 Stockholders in accordance with this Section 6.
(c) Notwithstanding anything to the contrary contained in this
Section 6, GE Capital and GECFS may, without the prior written approval of the
Section 5 Stockholders, pledge or otherwise encumber any of its shares of Common
Stock, PROVIDED that the pledgee shall not be a Competitor of the Company and
PROVIDED, FURTHER, that the pledgee agrees that as a condition to taking title
to any pledged Common Stock, it will be bound by this Agreement, as contemplated
by Section 8(b).
(d) Notwithstanding any provision in this Agreement to the
contrary, GE Capital and any Affiliate of GE Capital shall not acquire shares of
Common Stock pursuant to a tender offer a recommendation with respect to the
consummation of which is rejected by a majority of the disinterested members of
the Board.
(e) Any Person other than a Section 5 Stockholder who
purchases Common Stock from GE Capital or GECFS (the "GE Buyer") shall be bound
by the provisions of this Section 6 and shall execute and deliver such
documentation as reasonably required by the Section 5 Stockholders to evidence
the GE Buyer's agreement to be so bound.
(f) For purposes of this Section 6, "Common Stock" shall
include Common Stock, securities convertible into Common Stock and options to
purchase Common Stock.
Section 7. INTENTIONALLY OMITTED.
19
Section 8. OTHER RESTRICTIONS ON SALES OF STOCK
(a) Prior to an Initial Public Offering of the Company,
notwithstanding anything in this Agreement to the contrary, the Sale of any
Equity Securities of the Company by any ▇▇▇▇ Stockholder shall be made in
compliance with all applicable federal and state laws (including, without
limitation, federal and state securities and "blue sky" laws). Any ▇▇▇▇
Stockholder that proposes to Sell any Equity Securities shall furnish the
Company, at its request, with a written opinion of legal counsel that is
reasonably satisfactory in form and substance to the Company and its counsel to
the effect that the proposed Sale will comply with all applicable federal and
state securities laws and, subsequent to the consummation of such Sale, evidence
that the Sale complied with all applicable federal and state laws.
(b) Prior to an Initial Public Offering of the Company,
notwithstanding anything in this Agreement to the contrary, any ▇▇▇▇ Stockholder
that proposes to Sell any Equity Securities to any Person (including an
Affiliate), must obtain the written agreement of such Person to be bound by the
provisions of this Agreement (including but not limited to the restrictions on
transfer) and such agreement must be reasonably satisfactory in form and
substance to the Company (and the other parties hereto) and their counsel,
PROVIDED, HOWEVER, that this Section 8(b) shall not apply to the Sale of Equity
Securities that have been registered under the Securities Act to a Person who is
not an Affiliate of any ▇▇▇▇ Stockholder. The parties hereto agree to amend this
Agreement to reflect any additional parties hereto.
(c) Any Sale or attempted Sale of any Equity Securities of the
Company in violation of any provision of this Agreement shall be void, and the
Company shall not record such Sale on its books or treat any purported
transferee of such Equity Securities as the owner thereof for any purpose.
Section 9. REGISTRATION RIGHTS.
(a) INCIDENTAL (PIGGYBACK) REGISTRATION. If the Company
proposes to register any of its securities under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), for public offering and sale (other than
registrations with regard to acquisitions of employee stock options, employee
purchase plans or other employee benefit plans on Form S-8 under the Securities
Act or any successor form), the Company shall give notice to each of the Mas
Stockholders (as defined below) of its intention to effect such a registration
prior to the filing with the Securities and Exchange Commission (the "SEC") of
such registration statement. Upon written request of one or more Registering Mas
Stockholders, given within 7 days after receipt from the Company of such notice,
the Company shall use its best efforts to cause the number of the Registering
Mas Stockholder's Registrable Securities then held by the Registering Mas
Stockholders and referred to in such request to be included in such registration
statement; PROVIDED, HOWEVER, that in the event that the offering pursuant to
such registration statement shall be underwritten and the underwriters advise
the Company in writing that in their opinion the number of securities requested
to be included in such registration pursuant to this Section 9(a) exceeds the
number of securities that can be sold in the offering without adversely
affecting the offering price or the marketing of the Company's
20
securities, the Company may first include in such registration all securities
the Company proposes to sell, and each Registering Mas Stockholder shall accept
a reduction (pro rata with any other holders of the Company's equity securities
entitled to register such securities on such registration statement whose
registration rights are on a par with and are not subordinate to the Registering
Mas Stockholders') on the basis of the proportion that the market value (based
upon the proposed offering price of such securities or the mid-point of the
range of the proposed offering prices of any of such securities (the "MARKET
VALUE") of each security holder's aggregate securities requested to be
registered bears to the Market Value of the aggregate amount of all equity
securities (other than those to be sold for the Company's account) as to which
registration is sought) in the number of securities to be included in such
registration, which reduction may, if necessary, be total. Nothing in this
Section 9(a) shall limit the Company's ability to withdraw, or temporarily cease
to seek effectiveness of, a registration statement it has filed whether before
or after its effectiveness.
(b) DEMAND REGISTRATION. (i) After the earlier of (x) December
29, 1998 or (y) the completion by the Company of the first underwritten public
offering of Common Stock that is effected pursuant to a registration statement
filed with, and declared effective by the SEC under the Securities Act, except
as provided in Section 9(b)(ii) below, upon the written request of one or more
Registering Mas Stockholders that the Company effect pursuant to this Agreement
the registration of Registrable Securities under the Securities Act (which
request shall specify the Registrable Securities so requested to be registered,
the Proposed Amounts thereof and the intended method of disposition by the
Registering Mas Stockholders), the Company will, as expeditiously as reasonably
possible, use its best efforts to effect the registration under the Securities
Act of the Proposed Amount of Registrable Securities, for disposition in
accordance with the intended method of disposition stated in such request;
PROVIDED, HOWEVER, that (A) if in the good faith judgment of the Board of
Directors of the Company, such registration would be detrimental to the Company
and the Board of Directors of the Company concludes, as a result, that it is in
the best interests of the Company to defer the filing of such registration
statement at such time, and (B) the Company shall furnish to the Registering Mas
Stockholders a certificate signed by an executive officer of the Company that
the Board of Directors of the Company has made such a determination and that it
is, therefore, necessary to defer the filing of such registration statement,
then the Company shall have the right to defer such filing for the period during
which such registration would be detrimental, provided that the Company may not
defer the filing for a period of more than 180 days after receipt of the request
of the Registering Mas Stockholders in the case of an underwritten public
offering or for more than 120 days if such method of disposition is not an
underwritten public offering. The Company shall be entitled to include in any
registration statement filed pursuant to this Section 9(b): (x) securities of
the Company held by any other securities holder of the Company, and (y) in an
underwritten public offering, securities of the Company to be sold by the
Company for its own account, except as and to the extent that (1) in the written
opinion of the managing underwriter, which shall be an underwriter of nationally
recognized standing (if such method of disposition shall be an underwritten
public offering), such inclusion would materially adversely affect the marketing
of the Registrable Securities to be sold by the Registering Mas Stockholders or
(2) in the written opinion of an investment banker of nationally recognized
standing jointly selected by the Registering Mas Stockholder and the
21
Company (if such method of disposition is not an underwritten public offering),
such inclusion would materially adversely affect the price at which the
Registrable Securities may be sold pursuant to the plan of distribution.
(ii) The Company shall not be obligated to take any
action to effect any registration requested by the Registering Mas Stockholders
pursuant to Section 9(b)(i) hereof (A) after the Company has effected two (2)
such registrations pursuant to this Agreement and each such registration has
been declared or ordered effective, (B) during the period starting with the date
30 days prior to the Company's estimate of the date of filing of, and ending on
a date 180 days after the effective date of, a Company initiated registration,
provided that the Company is using all reasonable efforts to cause such
registration statement to become effective, or (C) for a period of six (6)
months after the Company has effected one such registration pursuant to this
Agreement and such registration has been declared or ordered effective, such 180
day period to commence on the date the registration statement was declared or
ordered effective.
(iii) Notwithstanding any other provision of this
Agreement to the contrary, a registration requested pursuant to this Section
9(b) shall not be deemed to have been effected (A) unless it has become
effective, provided that a registration that does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal of the Registering Mas Stockholders to proceed shall be deemed to
have been effected by the Company at the request of the Registering Mas
Stockholders unless the Registering Mas Stockholders shall have elected to pay
all Company Registration Expenses in connection with such registration, (B) if
after it has become effective such registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court for any reason other than a misrepresentation or an omission by
the Registering Mas Stockholders, or (C) if the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied other than by reason of some wrongful
act or omission, or act or omission in bad faith, by the Registering Mas
Stockholders.
(c) REGISTRATION PROCEDURES. Subject to the limitations set
forth elsewhere herein, if and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company will, as expeditiously as possible:
(i) in the case of a registration under Section 9(b)
hereof, prepare and file with the SEC (such filing to be made within 75 days
after the initial request by the Registering Mas Stockholders) a registration
statement with respect to such Registrable Securities on a form appropriate to
permit the Registering Mas Stockholders to sell the Proposed Amount in
accordance with the Registering Mas Stockholders' intended method of
distribution and use its best efforts to cause such registration statement to
become and remain effective;
22
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for such period as shall be requested by the Registering Mas
Stockholders, which period shall not exceed six (6) months, and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement during such
period;
(iii) furnish to counsel for the Registering Mas
Stockholders and such underwriter of the securities being sold by the
Registering Mas Stockholders, at least 5 days prior to the filing thereof, such
number of copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the Securities
Act, and such other documents, as such counsel may reasonably request, in
substantially the form in which they are proposed to be filed with the SEC, in
order to facilitate the public sale or other disposition of the Registrable
Securities owned by the Registering Mas Stockholders;
(iv) use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions in the United States as each
underwriter of the securities being sold by the Registering Mas Stockholders
shall reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable the Registering Mas Stockholders and such
underwriter to consummate the disposition in such jurisdictions in the United
States of such Registrable Securities owned by the Registering Mas Stockholders
except that the Company shall not for any purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction where, but
for the requirements of this clause (iv), it would not be obligated to be so
qualified, or subject itself to taxation in any such jurisdiction;
(v) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities in the United States
as may be necessary to enable the Registering Mas Stockholders to consummate the
disposition of such Registrable Securities;
(vi) notify the Registering Mas Stockholders, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the Company's becoming aware that the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and promptly prepare and furnish to the
Registering Mas Stockholders and each underwriter a reasonable amount of copies
of a prospectus supplement or amendment so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
23
(vii) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to the
Registering Mas Stockholders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first day of the Company's first calendar
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
(viii) enter into such agreements (including an
underwriting agreement in customary form) and take such other actions as the
Registering Mas Stockholders shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(ix) use its best efforts to furnish to the
Registering Mas Stockholders an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountant (in accordance
with SAS 72), addressed to the Registering Mas Stockholders, in customary form
and covering such matters of the type customarily covered by such opinions and
"cold comfort" letters as the Registering Mas Stockholders shall reasonably
request;
(x) make available for inspection by the Registering
Mas Stockholders, by any other underwriter participating in any disposition to
be effected pursuant to such registration statement, and by any attorney,
accountant or other agent retained by the Registering Mas Stockholders or any
such underwriter, all reasonably pertinent financial and other records,
reasonably pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors, employees and the independent
public accountants who have audited its financial statements to supply all
information reasonably requested by the Registering Mas Stockholders or any such
underwriter, attorney, accountant or agent in connection with such registration
statement; PROVIDED, HOWEVER, that the Registering Mas Stockholders and each
such representative of the Registering Mas Stockholders, underwriter, attorney,
accountant or agent must execute and deliver to the Company a confidentiality
agreement in form and substance reasonably acceptable to the Company agreeing to
keep any such information and records concerning the Company confidential;
(xi) permit the Registering Mas Stockholders to
participate in the preparation of such registration or comparable statement;
(xii) at or prior to the effective date of the
registration use commercially reasonably efforts to (i) secure a CUSIP number
for all Registrable Securities, and (ii) cause the Registrable Securities to be
listed on the New York Stock Exchange, the American Stock Exchange or included
for reporting on the NASDAQ Stock Market, and cause the Registrable Securities
to be listed on each other national securities exchange, if any, on which any
other class of the Company's securities are then listed; and
24
(xiii) in the case of an underwritten offering,
enable the Registrable Securities to be in such denominations or such number of
shares and registered in such names as the underwriters may request at least two
business days prior to the sale of the Registrable Securities.
In the case of an underwritten offering, the underwriters shall be
selected by the Company and reasonably acceptable to the Registering Mas
Stockholders.
The Registering Mas Stockholders shall, upon receipt of any notice from
the Company of the happening of any event of the kind described in subdivision
(vi) above, forthwith discontinue their disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until the Registering Mas Stockholders receive copies of the supplemented or
amended prospectus contemplated by said subdivision and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in the Registering Mas Stockholders'
possession of the prospectus covering such Registrable Securities current at the
time of receipt of such notice. In the event the Company shall give any such
notice, the period mentioned in subdivision (ii) above shall be extended by the
number of days during the period from and including the date of the giving of
such notice to and including the date when the Registering Mas Stockholders
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (vi) above, PROVIDED, HOWEVER, that in no event will
the period mentioned in subdivision (ii) above exceed six months after giving
effect to the extension.
The Registering Mas Stockholders shall enter into such customary
agreements as requested by the Company in connection with the registration of
securities as contemplated by this Agreement.
The Registering Mas Stockholders shall furnish to the Company in
writing such information and documents regarding the Registering Mas
Stockholders and the distribution of such securities as may be required to be
disclosed in the registration statement by the rules and regulations under the
Securities Act or under any other applicable securities or blue sky laws of the
jurisdictions referred to in Section 9(c)(iv) hereof.
If any such registration or comparable statement refers to the
Registering Mas Stockholders by name or otherwise as the holders of any
securities of the Company then the Registering Mas Stockholders shall have the
right to require (A) the insertion therein of language, in form and substance
satisfactory to the Registering Mas Stockholders and presented to the Company in
writing, to the effect that the holding by the Registering Mas Stockholders of
such securities is not to be construed as a recommendation by the Registering
Mas Stockholders of the investment quality of the Company's securities covered
thereby and that such holding does not imply that the Registering Mas
Stockholders will assist in meeting any future financial requirements of the
Company, or (B) in the event that such reference to the Registering Mas
Stockholders by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to the
Registering Mas Stockholders.
25
(d) REGISTRATION EXPENSES. In connection with any registration
on Registrable Securities pursuant to this Agreement the Company will, whether
or not any registration pursuant to this Agreement shall become effective, from
time to time promptly upon receipt of bills or invoices relating thereto, pay
all expenses (other than Selling Expenses) incident to its performance of or
compliance with this Section 9, including, without limitation, all registration,
filing and NASD fees, fees and expenses of compliance with securities or blue
sky laws, word processing, duplicating and printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and all
independent public accountants (including the expenses of any audit and/or "cold
comfort" letter) and the other Persons retained by the Company; PROVIDED,
HOWEVER, that in all events, the Registering Mas Stockholders shall be
responsible for the fees and expenses of their counsel and accountants and for
their Selling Expenses.
(e) INDEMNIFICATION. (i) The Company will, and hereby does,
indemnify, to the extent permitted by law, the Registering Mas Stockholders
against all losses, damages, liabilities (or proceedings in respect thereof) and
expenses under the Securities Act, caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus (and as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities (or proceedings in
respect thereof) or expenses are caused by any untrue statement or alleged
untrue statement made in reliance on or in conformity with any information
furnished in writing to the Company by the Registering Mas Stockholders or any
participating underwriter expressly for use therein. If the offering pursuant to
any registration statement provided for under this Agreement is made through
underwriters, the Company agrees to enter into an underwriting agreement in
customary form with such underwriters and to indemnify such underwriters, their
officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the same
extent as herein before provided with respect to the indemnification of the
Registering Mas Stockholders.
(ii) If for any reason the indemnity under Section
9(e)(i) is unavailable, then the Company shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (A) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the indemnified party on
the other or (B) if the allocation provided by subdivision (A) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative fault of the Company on the one hand and the indemnified party
on the other but also the relative benefits received by the Company and the
indemnified party as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
26
(iii) The Registering Mas Stockholders will, and
hereby do, jointly and severally indemnify, to the extent permitted by law, the
Company, its officers and directors, if any, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against all losses, claims, damages, liabilities (or proceedings in respect
thereof) and expenses under the Securities Act, caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus (and as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading but only to the extent that such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses are caused by any
untrue statement or alleged untrue statement made in reliance on or in
conformity with any information furnished to the Company by the Registering Mas
Stockholders. If the offering pursuant to any registration statement provided
for under this Agreement is made through underwriters, the Registering Mas
Stockholders agree to enter into an underwriting agreement in customary form
with such underwriters and to indemnify such underwriters, their officers and
directors, if any, and each Person who controls such underwriters within the
meaning of Section 15 of the Securities Act to the same extent as hereinbefore
provided with respect to the indemnification of the Company, its officers and
directors, if any, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act.
(iv) If for any reason the indemnity under Section
9(e) (iii) is unavailable, then the Registering Mas Stockholders shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages, liabilities or expenses (i) in such proportion as
is appropriate to reflect the relative fault of the parties or (ii) if the
allocation provided by subdivision (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative fault of
parties but also the relative benefits received by the parties as well as any
other relevant equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(v) The Company and the Registering Mas Stockholders
shall make payments of all amounts required to be made pursuant to the foregoing
provisions of this Section 9(e) to or for the account of the indemnified party
from time to time promptly upon receipt of bills or invoices relating thereto or
when otherwise due and payable.
(f) LIMITATIONS ON SALE OR DISTRIBUTION OF SECURITIES. If a
registration under this Agreement shall be in connection with an underwritten
public offering of securities for the Company's or any other security holder's
account (other than the Mas Stockholders), the Mas Stockholders shall not effect
any public sale or distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any Registrable Securities, during such period prior and
subsequent to the commencement of the offering of securities pursuant to such
registration statement as may be reasonably requested by the underwriters
thereof, and in all cases to otherwise comply with all applicable rules under
the Securities Act and the Exchange Act,
27
including, without limitation, and Regulation M under the Exchange Act or any
similar rules thereafter adopted by the SEC.
(g) REGISTRATION RIGHTS TO OTHERS. The rights of the Mas
Stockholders shall be on a par, pro rata to share holdings, with those granted
to (i) GE Capital and GECFS under the Registration Rights Agreement, dated as of
even date herewith, among the Company, GE Capital and GECFS, (ii) ▇▇. ▇▇▇▇▇▇▇▇▇▇
under the Stock Option Agreement, dated as of December 1, 1995, between the
Company and ▇▇. ▇▇▇▇▇▇▇▇▇▇, (iii) ▇▇▇▇▇▇ under the Registration Rights
Agreement, dated as of even date herewith, between the Company and ▇▇▇▇▇▇ and
(iv) ▇▇▇▇▇▇ Capital under the Registration Rights Agreement, dated as of even
date herewith, between the Company and ▇▇▇▇▇▇. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, such
rights shall be subordinate to and shall not be in conflict with or adversely
affect any of the rights provided in this Agreement to the Registering Mas
Stockholders.
Section 10. BOOKS AND RECORDS.
As of the date hereof, the books and records of the Company
shall be audited by Deloitte & Touche, unless and until a different Big Six
accounting firm is selected by the Board.
Section 11. LEGEND.
Each ▇▇▇▇ Stockholder and the Company shall take all such
action necessary (including exchanging with the Company certificates
representing shares of Common Stock issued prior to the date hereof) to cause
each certificate representing outstanding shares of Common Stock or securities
convertible into Common Stock owned by a ▇▇▇▇ Stockholder to bear a legend
containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT."
"IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND VOTING SET FORTH IN THE AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT DATED AS OF MARCH __, 1998, AS AMENDED FROM TIME TO TIME
BY THE COMPANY AND THE PARTIES THERETO, A COPY OF WHICH IS ON FILE IN THE OFFICE
OF THE COMPANY."
The requirement that the first paragraph of the above
securities legend be placed upon certificates evidencing shares of Common Stock
shall cease and terminate upon the earliest of the following events: (i) when
such shares are transferred in an underwritten public offering, (ii) when such
shares are transferred pursuant to Rule 144 under the Securities Act or (iii)
when
28
such shares are transferred in any other transaction if the seller delivers to
the Company a written opinion of its counsel, which counsel and opinion shall be
reasonably satisfactory in form and substance to the Company and its counsel, or
a "no-action" letter from the staff of the Securities and Exchange Commission,
in either case to the effect that such legend is no longer necessary in order to
protect the Company against a violation by it of the Securities Act upon any
Sale or other disposition of such shares without registration thereunder. The
requirement that the second paragraph of the above securities legend be placed
upon certificates evidencing shares of Common Stock shall cease and terminate
upon the Sale of such shares of Common Stock pursuant to a Public Sale. Upon the
consummation of any event requiring the removal of a portion of the legend
hereunder, the Company, upon the surrender of certificates containing such
portion of such legend, shall, at its own expense, deliver to the holder of any
such shares as to which the requirement for such portion of such legend shall
have terminated, one or more new certificates evidencing such shares not bearing
such portion of such legend.
Section 12. REPRESENTATIONS AND WARRANTIES.
(a) Each party hereto represents and warrants to the other
parties hereto as follows:
(i) It has full power and authority to execute,
deliver and perform its obligations under this Agreement.
(ii) This Agreement has been duly and validly
authorized, executed and delivered by it, and constitutes a
valid and binding obligation of it, enforceable against it in
accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally.
(iii) The execution, delivery and performance of this
Agreement by it does not (x) violate, conflict with, or
constitute a breach of or default under its organizational
documents, if any, or any material agreement to which it is a
party or by which it is bound or (y) violate any law,
regulation, order, writ, judgment, injunction or decree
applicable to it.
(iv) Except for expiration or termination of any
applicable waiting periods under the HSR Act, no consent or
approval of, or filing with, any governmental or regulatory
body is required to be obtained or made by it in connection
with the transactions contemplated hereby.
29
(v) It is not a party to any agreement which is
inconsistent with the rights of any party hereunder or
otherwise conflicts with the provisions hereof.
(b) The Company represents and warrants to the other parties
hereto as follows:
(i) It, its Subsidiaries, its and its Subsidiaries'
respective assets, and its and its Subsidiaries' respective business and record
keeping practices are not in violation of any applicable law, regulation, order,
writ, judgment, injunction or decree (treating, for purposes of this
representation, Section 12(b)(1), Sections 13(b)(2) and 30(A) of the Exchange
Act as if they are applicable to the Company).
(ii) The authorized, issued and outstanding capital
stock of the Company is as set forth on SCHEDULE 12(B). All of the issued and
outstanding shares of capital stock of the Company have been duly authorized,
are validly issued, fully paid and nonassessable, are not subject to, nor were
they issued in violation of, any preemptive rights. Except as set forth on
SCHEDULE 12(B), there are no outstanding or authorized securities with profit
participating features or profit interests, or options, warrants, rights or
other agreements or commitments to which the Company is a party or that are
binding upon the Company providing for the issuance, disposition or acquisition
of any of its capital stock or any such securities or interests (collectively
"Options") (other than this Agreement). Except as set forth on SCHEDULE 12(B)
there are no outstanding or authorized stock appreciation, phantom stock or
similar rights with respect to the Company. Except as set forth on SCHEDULE
12(B) or as contemplated herein, there are no voting trusts, proxies or any
other agreements or understandings with respect to the voting of the capital
stock of the Company. Except as set forth on SCHEDULE 12(B) or as contemplated
herein, the Company is not subject to any obligations (contingent or otherwise)
to repurchase or otherwise acquire or retire any shares of its capital stock or
any Options.
30
Section 13. TERMINATION OF AGREEMENT.
The rights and obligations of a ▇▇▇▇ Stockholder under this
Agreement shall terminate at such time as such ▇▇▇▇ Stockholder is no longer the
beneficial owner of Equity Securities. This Agreement shall terminate at any
time upon the mutual written agreement of the Mas Stockholders, ▇▇▇▇▇▇, ▇▇▇▇▇▇
Capital, GE Capital, GECFS and any Persons who become party to this Agreement
pursuant to Section 8(b). If the Equity Ownership of (i) GE Capital and any
Affiliate of GE Capital in the aggregate, or (ii) the Mas Stockholders and any
Affiliate of the Mas Stockholders in the aggregate is equal to or exceeds
ninety-five percent, this Agreement shall be null and void, except for Section 1
(to the extent certain defined terms contained therein are used in any of the
surviving Sections), Section 9, Sections 15 - 18 and Sections 20 - 29, PROVIDED,
HOWEVER, that Section 25 shall terminate on the fifth anniversary after the
termination of this Agreement pursuant to clause (ii) hereof. Subsequent to an
Initial Public Offering of the Company, this Agreement shall be null and void,
except for Section 1 (to the extent certain defined terms contained therein are
used in any of the surviving Sections), Section 2(b) - (f), the second sentence
of the preamble to Section 6, Sections 9 - 18 and Sections 20 - 29.
Section 14. FURTHER ASSURANCES.
At any time or from time to time after the date hereof, the
parties agree to cooperate with each other, and at the request of any other
party, to execute and deliver any further instruments or documents and to take
all such further action as the other party may reasonably request in order to
evidence or effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties hereunder.
Section 15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United States of
America, in each case located in the Borough of Manhattan, in the City of New
York, for any action or proceeding commenced by another party hereto in any
court ("LITIGATION") arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any Litigation
relating thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its respective
address set forth in this Agreement shall be effective service of process for
any Litigation brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any Litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America, in each case located in the Borough of Manhattan, in the City of New
York, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such Litigation brought in any such
court has been brought in an inconvenient forum. Each of the parties irrevocably
and unconditionally waives, to the fullest
31
extent permitted by applicable law, any and all rights to trial by jury in
connection with any Litigation arising out of or relating to this Agreement or
the transactions contemplated hereby.
Section 16. AMENDMENT AND WAIVER.
Except as otherwise provided herein, no modification,
amendment or waiver of any provision of this Agreement shall be effective
against any party hereto unless such modification, amendment or waiver is
approved in writing by all of the parties hereto. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
Section 17. NO INCONSISTENT AGREEMENTS.
Neither the Company nor any ▇▇▇▇ Stockholder shall take any
action or enter into any agreement which is inconsistent with the rights of any
party hereunder or otherwise conflicts with the provisions hereof.
Section 18. TRANSACTIONS WITH AFFILIATES.
(a) All transactions between the Company and any Board
director, any stockholder of the Company or any Affiliate of the foregoing shall
be conducted on terms no less favorable to the Company than might be obtained in
an arm's length transaction from a Person who is not a Board director or any of
the ▇▇▇▇ Stockholders or an Affiliate of any of the foregoing.
(b) In the event the Company proposes to merge, consolidate or
otherwise combine with a Person that is an Affiliate of any director, those
directors who are not Affiliated with such Person shall have the right to cause
the Company to select a nationally recognized investment bank for purposes of
valuing the proposal and determining whether the consideration offered to the
▇▇▇▇ Stockholders is fair from a financial point of view.
Section 19. CONFLICT WITH ARTICLES OF INCORPORATION AND/OR BY-LAWS.
The parties hereto intend that in the event of any conflict or
inconsistency between this Agreement and the Certificate of Incorporation or
By-Laws of the Company, the provisions of this Agreement shall control, and
therefore, in the event that any term or provision of this Agreement is rendered
invalid, illegal or unenforceable by such Certificate of Incorporation or
By-Laws, the ▇▇▇▇ Stockholders agree to take all action, including voting their
shares of Common Stock, to amend such Certificate of Incorporation or By-Laws
(as the case may be) so as to render such term or provision valid, legal and
enforceable, if and to the extent legally permitted.
Section 20. SEVERABILITY.
32
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 21. ENTIRE AGREEMENT.
This Agreement and the other writings referred to herein or
delivered pursuant hereto which form a part hereof contain the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
Section 22. SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, this Agreement shall bind
and inure to the benefit of and be enforceable by the Company and its successors
and assigns and each ▇▇▇▇ Stockholder and their respective successors, assigns,
heirs and personal representatives, so long as they hold Common Stock.
Section 23. REMEDIES.
Each ▇▇▇▇ Stockholder shall be entitled to enforce its rights
under this Agreement specifically to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights existing in
their favor, PROVIDED, HOWEVER, that the parties hereto waive and shall not seek
any claim to consequential or punitive or exemplary damages. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that each party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of this
Agreement.
Section 24. NOTICES.
Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed first class mail (postage
prepaid) or sent by reputable overnight courier service (charges prepaid) to the
Company at the address set forth below and to any ▇▇▇▇ Stockholder at the
address set forth below, or at such address or to the attention of such other
person as the recipient party has specified by prior written notice to the
sending party. Notices will be deemed to have been given hereunder when
delivered personally, four business days after deposit in the U.S. mail and one
business day after deposit with a reputable overnight courier service. The
Company's, ▇▇. ▇▇▇▇▇▇▇▇▇▇'▇ and each Mas Stockholder's address is:
33
▇▇▇▇ Corp.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GE Capital's address is:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
First Floor
Stamford, CT 06927
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
First Floor
Stamford, CT 06927
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GECFS' address is:
GECFS, Inc.
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
First Floor
Stamford, CT 06927
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Electric Capital Corporation
34
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
First Floor
Stamford, CT 06927
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇' and ▇▇▇▇▇▇ Capital's address is:
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 25. CONFIDENTIALITY OF INFORMATION.
Each of the parties hereto agrees to treat confidentially and
to use all reasonable efforts to cause each of its employees, agents and
representatives to treat confidentially, all information concerning this
Agreement, the Company and other parties hereto (such information, together with
any analyses, compilations, forecasts, studies or other documents that contain
or otherwise reflect such information, being "Confidential Information")
provided to such party or its employees, agents and representatives and shall
not disclose any Confidential Information to any third party without the prior
written consent of the other parties hereto, except as required to be disclosed
by judicial action or other requirements of law or the rules of any applicable
stock exchange or any applicable regulatory authority (and, prior to disclosing
any Confidential Information, such party shall provide the other parties hereto
with prior written notice of any such requirements and shall provide reasonable
cooperation in giving the other parties hereto an opportunity to present
objections to or requests for limitations of such requirements). Notwithstanding
the provisions of the previous sentence: (i) each of the parties hereto shall
have the right to provide Confidential Information to its Subsidiaries, PROVIDED
that prior to the provision of such information, each such Subsidiary agrees to
be bound by the confidentiality provisions contained herein; (ii) each party
hereto shall have the right to disclose Confidential Information to its
employees, agents and representatives for the purpose of enabling or assisting
such party in enforcing its rights or in performing its obligations under this
Agreement; (iii) each party hereto shall have the right to provide Confidential
Information to potential acquirers of its equity interest in the Company,
PROVIDED that prior to the provision of such information, each such potential
acquirer agrees to be bound by the confidentiality provisions contained herein;
and (iv) each party hereto shall have the right to provide Confidential
Information to potential or
35
existing financing parties, including, but not limited to lenders that are a
party to the Amended and Restated Credit Agreement, dated as of December 31,
1997, by and among the Company, ▇▇▇▇ Machinery, Inc., ▇▇▇▇ Rental, Inc., the
Lenders party thereto, GE Capital, as Agent and Bankers Trust as Syndication
Agent, PROVIDED that prior to the provision of such information, each such
potential existing financing party agrees to be bound by the confidentiality
provisions contained herein. Confidential Information shall not include
information that (x) is or becomes part of the public domain (other than as a
result of a violation of this Section 19) or (y) was disclosed to a party
hereto, its employees, agents or representatives, or its Affiliates by a third
party that was not bound by any confidentiality agreement with any other party
hereto.
Section 26. DESCRIPTIVE HEADINGS.
The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
Section 27. CONSTRUCTION.
Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Section 28. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in this Agreement
or made in writing by any party in connection herewith shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby regardless of any investigation made by, or on
behalf of, any ▇▇▇▇ Stockholder.
Section 29. COUNTERPARTS.
This Agreement may be executed in separate counterparts each
of which shall be an original and all of which taken together shall constitute
one and the same agreement.
36
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders'
Agreement on the day and year first above written.
/S/ ▇▇▇▇▇ MAS
--------------------------------------------
▇▇▇▇▇ MAS
/S/ ▇▇▇▇ ▇▇▇▇▇▇ MAS
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ MAS
/S/ ▇▇▇▇ ▇▇▇▇▇ MAS
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇ MAS
GENERAL ELECTRIC CAPITAL CORPORATION
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Operations Manager
GECFS, INC.
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Operations Manager
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
37
▇▇▇▇▇▇ FUND I, L.P.
By: ▇▇▇▇▇▇ Fund, Inc.
its General Partner
By: /S/ ILLEGIBLE
--------------------------------------------
Name:
Title:
▇▇▇▇▇▇ CAPITAL ADVISORS, INC.
By: /S/ ILLEGIBLE
--------------------------------------------
Name:
Title:
▇▇▇▇ CORP.
By: /S/ ILLEGIBLE
--------------------------------------------
Name:
Title:
38
SCHEDULE 12(b)
Authorized, Issued and Outstanding Stock of ▇▇▇▇ Corp.:
Authorized Common Stock: 140,000,000 shares
Issued and Outstanding Class A Common Stock:
▇▇▇▇▇ Mas: 43,740 shares
▇▇▇▇ ▇▇▇▇▇▇ Mas 28,130 shares
▇▇▇▇ ▇▇▇▇▇ Mas 28,130 shares
▇▇▇▇▇▇ Fund I, L.P. 10,632 shares
The Company has filed a registration statement on form S-1 with the Securities
and Exchange Commission with respect to the Class A Common Stock. This
registration statement has not been declared effective yet.
Issued and Outstanding Class B Common Stock:
GECFS, Inc. 60,245 shares
The Class B Common Stock is convertible into Class A Common Stock.
Common Stock Reserved for Issuance to Employees in Connection with Options
Granted to Employees: 6,666 shares
Issued and Outstanding Options to Purchase Common Stock:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇: 3 % of the Common Stock of the Company on a fully
diluted basis (after giving effect to the exercise of all options to purchase
Common Stock and the conversion or exchange of all securities convertible or
exchangeable into Common Stock).
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇: 1,000 shares
The Company has a phantom stock plan, and intends to implement a stock
incentive plan, the terms and conditions of which will be decided by the Board
of Directors. The Company intends to reserve 1,000,000 shares of Class A Common
Stock for issuance in connection with awards made under the stock incentive
plan.
The Company intends to effect an 84.65 to one stock split with respect
to the Class A and the Class B Common Stock.
Authorized Preferred Stock: 20,000,000 shares
Series A Cumulative Preferred: 519,503 shares
39
The Company intends to establish a class of Preferred Stock titled
"Series B Junior Preferred Stock" and authorize 1,000,000 shares of Preferred
Stock as Series B Junior Preferred Stock.
Issued and Outstanding Cumulative Preferred Stock
General Electric Capital Corporation: 340,907 shares of Series A Cumulative
Preferred
40
