Exhibit 10.41
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SHARE TRANSFER AGREEMENT
March 30, 1999
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The parties to this agreement are (i) MedSource Technologies, Inc., a
Delaware corporation (the "Company"), (ii) the stockholders of the Company named
on Schedule A to this agreement (collectively, the "Stockholders") and (iii) ▇.
▇. ▇▇▇▇▇▇▇ III, L.P., a Delaware limited partnership ("▇. ▇. ▇▇▇▇▇▇▇"), and
Whitney Strategic Partners III, L.P., a Delaware limited partnership (together
with ▇. ▇. ▇▇▇▇▇▇▇, the "Investors").
The Stockholders own shares of the Company's common stock, par value
$.01 per share (the "Common Stock"). Simultaneously with the execution and
delivery of this agreement, the Company and the Investors are entering into a
securities purchase agreement (the "Securities Purchase Agreement") pursuant to
which, among other things, the Investors are purchasing from the Company an
aggregate of 300,000 shares (the "Investor Series B Shares") of the Company's 6%
series B cumulative convertible redeemable preferred stock, par value $.01 per
share (the "Series B Preferred Stock"), in the respective amounts set forth
opposite the name of each Investor on Schedule B to this agreement. The Investor
Series B Shares are convertible into shares of Common Stock.
The term "Investor Common Shares" when used in this agreement shall
refer to the maximum number of shares of Common Stock that would be issuable
pursuant to the conversion of the 300,000 Investor Series B Shares, pursuant to
the Company's certificate of incorporation, as amended, including, without
limitation, the certificate of designation relating to the Series B Preferred
Stock (the "Certificate of Incorporation"), at the time of the consummation of a
Valuation Transaction (as defined in section 3(c) below) (regardless of whether
any or all such Investor Series B Shares are then outstanding).
The Stockholders wish to provide the Investors with certain contingent
rights to the shares of Common Stock they are delivering to an escrow agent (the
"Escrow Agent") pursuant to the escrow agreement in the form attached as Exhibit
A to this agreement (the "Escrow Agreement").
It is therefore agreed as follows:
1. Deposit of Shares; One-Year Test and Partial Disposition.
(a) Simultaneously with the execution of this agreement, each of
the Stockholders is delivering to the Escrow Agent a certificate or certificates
representing the number of shares of Common Stock set forth opposite that
Stockholder's name on Schedule A to this agreement (the "Stockholder Common
Shares"), together with duly
executed, undated, blank stock transfer powers with respect thereto. The
Stockholder Common Shares, as adjusted pursuant to section 6 and including all
dividends, payments, earnings, proceeds and other distributions (collectively,
"Proceeds") with respect to such shares of Common Stock, are collectively
referred to as the "Escrow Shares." Notwithstanding any provision in this
agreement to the contrary, from and after the date hereof, no Stockholder shall
sell, transfer, assign or otherwise dispose of, or permit any Encumbrance (as
defined in section 7) to be placed upon, any of the Stockholder Common Shares or
Proceeds constituting the Escrow Shares other than any Encumbrances that may
exist under the terms of this agreement or the stockholders agreement being
entered into concurrently with this agreement by the Company, the Stockholders
and the Investors.
(b) If the Company's Adjusted EBITDA (as defined on Schedule C to
this agreement) for the four fiscal quarters of the Company ending March 31,
2000, as finally determined pursuant to section 1(c) below, is at least
$18,800,000, then any group of the Stockholders who deposited in the aggregate
at least 50% of the Escrow Shares (a "Stockholder Group") shall be entitled to
direct the Escrow Agent, by delivering to the Escrow Agent a written statement
in accordance with section 2(b) of the Escrow Agreement, to transfer and deliver
to the Stockholders, out of the initial 150,000 Escrow Shares being deposited
herewith, 50,000 shares of Company's Common Stock constituting such Escrow
Shares, together with all Proceeds with respect thereto.
(c) (i) Prior to directing the Escrow Agent to deliver any
Escrow Shares pursuant to section 1(b), the Stockholder Group intending to take
such action shall give the Investors written notice of the amount such
Stockholders believe represents the Adjusted EBITDA for the period indicated in
section 1(b), together with the calculation thereof in reasonable detail
including the amount of each adjustment corresponding to a numbered adjustment
item on Exhibit C to this agreement. If, within the 20-business-day period after
receipt of the notice referred to above from the Stockholders, the Investors do
not give the Stockholders notice of their disagreement as contemplated in the
next sentence, then the Adjusted EBITDA as set forth in the notice form the
Stockholders shall be final, binding and conclusive on the parties. If the
Investors disagree with the Adjusted EBITDA amount set forth in the notice from
the Stockholders, or any of the calculations relating thereto, the Investors
may, within 20 business days after their receipt of the notice referred to above
from the Stockholders, give the Stockholders written notice of their
disagreement which notice shall include reasonable detail of the basis upon
which such disagreement exists. In the event of such a dispute, the Stockholders
and the Investors shall attempt to reconcile their differences within 20
business days after the receipt of the Investors' notice of disagreement. Any
resolution by the Stockholders and the Investors as to any disputed items shall
be final, binding and conclusive on such parties.
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(ii) If the Stockholders and the Investors are unable to
reach a resolution with respect to all such disagreements within the
20-business-day period referred to in the penultimate sentence of section
1(c)(i), they shall promptly submit to Ernst & Young or another national
accounting firm of comparable size and stature selected by the Investors and
reasonably acceptable to the Stockholders (the "Accountants") the items, and
only those items, specified in the Investor's notice of disagreement that remain
in dispute. The Accountants shall be instructed to determine and report to the
Stockholders and the Investors upon such remaining disputed items within 20
business days after submission, which report shall be final, binding and
conclusive on the Stockholders and the Investors. The Accountants shall be
instructed to provide the Stockholders and the Investors with a report setting
forth the amounts (and calculations of such amounts in reasonable detail) of the
items in dispute that the Accountants believe to be reasonable based upon the
facts and circumstances as they understand them.
(iii) The Escrow Shares (including the Proceeds, if any,
included therein) that are referred to in section 1(b) as eligible for release
if the Adjusted EBITDA amount referred to in such section is reached shall not
be released until the earliest to occur of (i) the date on which the Investors
and the Stockholders have reached agreement with respect to the Adjusted EBITDA,
(ii) the date on which the Adjusted EBITDA shall be final, binding and
conclusive pursuant to section 1(c)(i) by virtue of the fact that the Investors
did not deliver a timely notice of disagreement, and (iii) the date that is five
business days after the date on which the Accountants have rendered their report
as contemplated in section 1(c)(ii). The fees and disbursements of the
Accountants shall be borne equally by the Stockholders and the Investors.
(d) If the Company's Adjusted EBITDA for the four fiscal quarters
of the Company ending March 31, 2000 is less than $18,800,000, then no Escrow
Shares (including Proceeds) shall be released to the Stockholders pursuant to
this section 1 (but may be released pursuant to the other provisions of this
agreement).
(e) In connection with the determination of Adjusted EBITDA for
these purposes, the Investors shall not unreasonably withhold their consent to
any adjustment to Adjusted EBITDA proposed in good faith by the Stockholders
pursuant to item 10 of Schedule C to this agreement.
2. Contingent Transfer of Escrow Shares.
(a) (i) If a Valuation Transaction (as defined in section 3)
results (prior to taking into consideration any Escrow Shares transferred
pursuant to the terms of this agreement) in the Investors achieving an internal
rate of return ("IRR") of less than 30%, then the Investors shall be entitled to
direct the Escrow Agent, by delivering to the Escrow Agent a written statement
in accordance with section 2(a) of the Escrow
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Agreement, within (A) 15 days after the consummation of a Valuation Transaction
referred to in section 3(c)(vi) below and (B) 65 days after the consummation of
any other Valuation Transaction to transfer and deliver to (A) the Investors
Escrow Shares having an aggregate value (determined in accordance with section
2(a)(ii)) as of the Valuation Date (as defined in section 3) that, when combined
with the value of the Investor Common Shares (determined pursuant to section
3(b) below), would result in an IRR of 30% and (B) the Stockholders the
remaining Escrow Shares, if any. In no event shall the Investors be entitled
under this agreement or the Escrow Agreement to receive or share in any
distributions in respect of, or proceeds from, any shares owned by the
Stockholders other than the Escrow Shares.
(ii) For purposes of section 2(a) the value of the Escrow
Shares shall be, without duplication, the sum of:
(A) the product of (X) the number of shares of
Common Stock included within the Escrow Shares multiplied by
(Y) the Net Proceeds Per Share (as hereinafter defined); and
(B) the fair value of all Proceeds included
within the Escrow Shares.
(b) Subject to section 2(a), at any time after the earlier of (i)
the date that is the 16th day following the consummation of a Valuation
Transaction referred to in section 3(c)(vi) below and (ii) the date that is the
66th day following the consummation of any other Valuation Transaction, any
Stockholder Group shall be entitled to direct the Escrow Agent, by delivering to
the Escrow Agent a written statement in accordance with section 2(b) of the
Escrow Agreement, to transfer and deliver the remaining Escrow Shares to the
Stockholders.
3. Determination of IRR.
(a) For purposes of section 2, the Investors shall be deemed to
have an "IRR" equal to the rate of interest (accruing daily on the basis of a
360-day year for the actual number of days elapsed and compounding annually)
that would discount the value (determined in accordance with section 3(b)) of
the Investor Common Shares, as of the date of the Valuation Transaction (the
"Valuation Date"), to a present value, as of the date of this agreement, equal
to the $22,000,000 aggregate purchase price paid by the Investors for the
Investor Series B Shares pursuant to the Securities Purchase Agreement.
(b) For purposes of section 3(a), the value of the Investor Common
Shares shall be the sum of:
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(i) the product of (X) the number of Investor Common
Shares multiplied by (Y) the Net Proceeds Per Share; and, without
duplication,
(ii) the fair value of all Proceeds received prior to
(and, without duplication of item (i) above, concurrently with) the
date of determination in respect of the Investor Series B Shares and
any shares of Common Stock issued upon conversion of the Investor
Series B Shares thereof.
(c) "Valuation Transaction" means the earliest to occur of:
(i) any sale, lease, transfer or other disposition,
either directly or indirectly, of assets constituting all or
substantially all of the assets of the Company and its subsidiaries
taken as a whole in a single transaction or in any series of related
transactions (any such transaction or series of transaction an "Asset
Sale");
(ii) any liquidation, dissolution or winding up of the
Company, other than such an event deemed to have occurred as
contemplated in item (iii) below (a "Liquidation");
(iii) any liquidation, dissolution or winding up of the
Company that shall have been deemed to occur only by virtue of the
operation of section 2.A.7.C.(ii) of the Certificate of Designation
relating to the Series B Preferred Stock other than any such event that
is otherwise covered by any of items (i), (iv) or (v) of this section
3(c) (a "Deemed Liquidation");
(iv) any consolidation or merger of the Company with or
into any other corporation or entity or other corporate reorganization
with respect to which the stockholders of the Company immediately prior
to such transaction own less than 50% of the voting power of the
Company or other surviving entity or no longer have the ability to
elect a majority of the Board of Directors of the Company or other
surviving entity immediately after such transaction (any such
transaction, a "Qualified Merger"); and
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(v) any transaction or series of related transactions
resulting in either (x) the transfer of more than 50% of the voting
power of the Company if the persons or entities holding such voting
power immediately prior to the transaction(s) do not collectively hold,
immediately following the transaction(s), more than 50% of the voting
power of the Company or other surviving entity, or (y) the transfer of
the right to elect a majority of the Board of Directors of the Company
or other surviving entity if the persons or entities collectively
having such right immediately prior to the transaction(s), do not have,
immediately following the transaction(s), the right to elect a majority
of the Board of Directors of the Company or other surviving entity (any
such transaction or series of related transactions, a "Qualified
Transaction" and together with a "Qualified Merger, an "Acquisition");
or
(vi) a public offering of common stock of the Company that
yields net proceeds (i.e., after underwriting discounts and
commissions) (the "IPO Proceeds") to the Company of at least $40
million (an "IPO");
provided, however, that, anything to the contrary contained above
notwithstanding, an Acquisition shall not be deemed to be a Valuation
Transaction unless one or more holders of shares of the Series B Preferred
Stock, or shares of Common Stock into which the Series B Preferred Stock are
converted, receive in the Acquisition in exchange for their shares consideration
other than securities in the Company or other surviving entity that are
reasonably equivalent to the Series B Preferred Stock or Common Stock, as
applicable, unless such transaction also constitutes a Deemed Liquidation.
(d) "Net Proceeds Per Share" means:
(i) with respect to an Asset Sale, Liquidation or
Acquisition, the Attributable Value with respect thereto divided by the
number of shares of Fully Diluted Common Stock at the time of the Asset
Sale or Liquidation, as the case may be; and
(ii) with respect to a Deemed Liquidation, the
Attributable Value in respect thereof; and
(iii) with respect to an IPO, the Attributable Value in
respect thereof.
(e) "Fully Diluted Common Stock" means the number of shares of
Common Stock then issued and outstanding plus the number of shares of Common
Stock issuable
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upon the exercise, exchange or conversion of all securities exercisable or
exchangeable for or convertible into Common Stock (including, without
limitation, all classes and series of convertible preferred stock, if
applicable) at a price per share that is less than the amount per share
determined by dividing the Attributable Value on the date of the consummation of
the Valuation Transaction in question by the number of shares of Common Stock
then issued and outstanding.
(f) "Attributable Value" means:
(i) in the case of an Asset Sale or an Acquisition, the
aggregate proceeds (whether in cash, securities or other property)
received or to be received by the holders of Common Stock pursuant to
such transaction;
(ii) in the case of a Liquidation, the aggregate amount
distributable in respect of the Common Stock upon such Liquidation
after paying all debts, liabilities, preferences and expenses of the
Corporation, including, without limitation, deducting any reserves for
contingent liabilities and expenses of the Liquidation itself; and
(iii) in the case of a Deemed Liquidation, the amount
received in connection therewith by the holders of shares of Series B
Preferred Stock in respect of each such share;
(iv) in the case of an IPO, the total IPO Proceeds per
share of Common Stock received by the Company;
provided, however, that (A) Attributable Value for purposes of a Liquidation,
Asset Sale or Acquisition shall also include the consideration received by the
Company upon the exercise, exchange or conversion of those securities whose
exercise, exchange or conversion is included in Fully Diluted Common Stock, and
(B) if the Attributable Value comprises property other than cash, then the value
of such other property shall be determined as set forth in section 4.
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4. Determination of Non-Cash Distributions. Except as expressly
provided in this agreement, the value of all non-cash amounts contemplated by
this agreement shall be determined by the reasonable good faith agreement of the
Company and a majority in interest of the Investors (the "Threshold Investors");
provided, however, that if the Company and the Threshold Investors are unable to
agree within 20 days after the Valuation Date, the parties shall select a
mutually agreeable investment banker to make the determination and, if they are
unable to agree on such an investment banker within 30 days after the Valuation
Date, then, at the initiation of any party to the dispute, such an investment
banker shall be appointed by the American Arbitration Association.
5. Proportional Delivery of Escrow Shares. The Escrow Agreement
shall provide that in each case where Escrow Shares are required to be delivered
pursuant to this agreement, such Escrow Shares shall be delivered (i) if to the
Investors, in the percentages set forth on Schedule A opposite each Investor's
respective name thereon, as such Schedule may be modified from time to time by
notice to the Stockholders and the Escrow Agent from the Threshold Investors,
and (ii) if to the Stockholders, in the percentages set forth on Schedule B
opposite each Stockholder's respective name thereon. In the event any delivery
of Escrow Shares shall include shares, cash and/or other assets (collectively
the "Assets"), each Investor and/or Stockholder entitled to such Escrow Shares
(the "Subject Shares"), shall receive Assets in all such categories, and the
proportion that each category of the Assets to be delivered to each such
Investor and/or Stockholder bears to all the Assets to be delivered to such
Investor and/or Stockholder shall equal the proportion that such category of
Assets to be delivered to each other Investor and/or Stockholder entitled to
receive Subject Shares bears to all the Assets to be delivered to such other
Investor and/or Stockholder.
6. Certain Provisions Relating to the Escrow Shares.
(a) The number of shares of capital stock included within the
Escrow Shares subject to this agreement shall be adjusted proportionately in the
event of any increase or decrease in the number of such shares of capital stock
resulting from a stock split, stock combination or the payment of a stock
dividend with respect to such shares or other similar event. Any additional
shares issued as contemplated by this provision shall be delivered to the Escrow
Agent to be held pursuant to the terms hereof and the Escrow Agreement as Escrow
Shares.
(b) All Proceeds, including without limitation any Proceeds
resulting from any Valuation Transaction or any Proceeds in respect of any other
Proceeds, in respect of the Stockholder Common Shares shall be assigned and paid
to the Escrow Agent to be held pursuant to terms hereof and the Escrow
Agreement.
(c) All of the shares held by the Escrow Agent shall bear, upon
the back thereof, the following legend (or a legend of similar effect):
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"THIS CERTIFICATE AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO
POSSIBLE REQUIRED TRANSFER PURSUANT TO THE PROVISIONS OF A SHARE
TRANSFER AGREEMENT DATED MARCH 30, 1999. A COPY OF THAT AGREEMENT, AS
IT MAY BE AMENDED FROM TIME TO TIME, IS MAINTAINED WITH THE CORPORATE
RECORDS OF THE COMPANY AND IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY."
7. Representations. Each Stockholder represents and warrants
that:
(i) he, she or it owns all right, title and interest in
and to the Escrow Shares set forth opposite such Stockholder's name on
Schedule A free and clear of all claims, liens, security interests,
restrictions on transfer or other encumbrance of any kind
(collectively, "Encumbrances") other than Encumbrances that may exist
under the terms of this agreement or the stockholders agreement being
entered into concurrently with this agreement by the Company, the
Stockholders and the Investors;
(ii) the Escrow Shares represent an aggregate of 150,000
shares of Common Stock;
(iii) all of the Escrow Shares are duly authorized, validly
issued, fully paid and non-assessable and are free of preemptive
rights; and
(iv) The execution, delivery and performance of this
agreement and the Escrow Agreement by such Stockholder will not
violate, conflict with, or constitute a default (with or without notice
or lapse of time or both) under any agreement, understanding or
commitment to which such Stockholder is a party or by which such
Stockholder's assets are bound, or violate any law, judgment, decree,
order, regulation or rule of any court or governmental body applicable
to such Stockholder.
The representations and warranties set forth in this section 7 shall survive the
execution and delivery of this agreement.
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8. Specific Performance. The parties acknowledge that any damages
available at law for a breach of this agreement would not be an adequate remedy.
Therefore, the provisions of this agreement shall be fully enforceable in a
court of equity, or other tribunal having jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for and granted in
connection therewith. Such remedies and all other remedies provided for in this
agreement shall, however, be cumulative and not exclusive and shall be in
addition to any other remedies that any party may have under this agreement or
otherwise.
9. Action Necessary to Effectuate the Agreement. Each of the
parties shall take or cause to be taken all such action as may be necessary to
effect the intent and purposes of this agreement.
10. Termination. This agreement shall terminate upon the
distribution of all of the Escrow Shares in accordance with the terms hereof and
the Escrow Agreement.
11. Miscellaneous.
(a) Notices. All notices, instructions and other communications in
connection with this agreement shall be in writing and shall be given by (and
effective when received by) (i) fax (with evidence of receipt) followed by
letter or other delivery, (ii) personal delivery or (iii) by a nationally
recognized overnight courier in each case to the parties at the address set
forth below (or at such other address as a party may specify in a notice to the
others):
If to the Company:
MedSource Technologies, Inc.
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Attention: Chief Executive Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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With copies to:
▇▇▇▇ & Company, LLC
Three Pickwick Plaza
Greenwich, Connecticut 06830
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Flattau & Klimpl, LLP
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If to any of the Investors or Stockholders, to the address of such
Investor or Stockholder specified under their respective signatures at
the end of this agreement.
(b) No Waiver. No course of dealing and no delay on the part of
any party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.
(c) Binding Effect. This agreement shall be binding upon and,
except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns.
(d) Assignability. The rights of any Investor under this agreement
shall be assignable upon the express written direction of such Investor. Neither
this Agreement nor any interest herein may be assigned by any Stockholder
without the prior written consent of the Threshold Investors. Any purported
assignment in violation of this section 10(d) shall be void ab initio.
(e) Severability. Any provision of this agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.
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(f) Modification. No term or provision of this agreement may be
amended, altered, modified, rescinded or terminated, except upon the express
written consent of the party against whom the same is sought to be enforced.
(g) Law Governing. This agreement shall be governed by and
construed in accordance with the law of the state of New York applicable to
agreements made and to be performed entirely in New York without regard to the
conflicts of law principles thereof.
(h) Headings. All headings and captions in this agreement are for
purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.
(i) Entire Agreement, etc. This agreement and the Escrow Agreement
contain, and are intended as, a complete statement of all the terms of the
arrangements between the parties with respect to the matters provided for herein
and therein and supersede any previous agreements and understandings between the
parties with respect to those matters. If one or more of the provisions of this
agreement conflict with one or more of the provisions of the Escrow Agreement
the relevant provisions of this agreement shall govern.
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MEDSOURCE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
[Stockholder and Investor Signature Pages Follow]
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Stockholder and Investor Signature Page
To Share Transfer Agreement
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Address:
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Address:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under
the ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
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Stockholder and Investor Signature Page
To Share Transfer Agreement
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under
the ▇▇▇▇ ▇. ▇▇▇▇ Trust
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under
the ▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
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Address:
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Stockholder and Investor Signature Page
To Share Transfer Agreement
Address:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Stockholder and Investor Signature Page
To Share Transfer Agreement
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
c/o Kidd & Company, LLC
Three Pickwick ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address:
c/▇ ▇▇▇▇▇▇ Advisory Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Stockholder and Investor Signature Page
To Share Transfer Agreement
▇. ▇. ▇▇▇▇▇▇▇ III, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Equity Partners III,
LLC, its General Partner
By: /s/
------------------------------
Name:
Title: A Managing Member
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
WHITNEY STRATEGIC PARTNERS III, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Equity Partners III,
LLC, its General Partner
By: /s/
------------------------------
Name:
Title: A Managing Member
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Stockholder and Investor Signature Page
To Share Transfer Agreement
▇▇. ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE A
To Share Transfer Agreement
List of Stockholders and Escrow Shares
Name of Stockholder Number of Escrow Shares Percentage
------------------- ----------------------- ----------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 30,380 20.253%
▇▇▇▇▇ ▇. ▇▇▇▇ 30,380 20.252%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under the
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust 10,126 6.751%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under the
▇▇▇▇ ▇. ▇▇▇▇ Trust 10,126 6.751%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee under the
▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust 10,126 6.751%
▇▇▇▇▇▇▇ ▇▇▇▇ 1,350 0.900%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,350 0.900%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 16,877 11.252%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 16,877 11.252%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 7,425 4.950%
▇▇▇▇ ▇. ▇▇▇▇▇▇ 12,000 8.000%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,983 1.988%
------- -------
Total Escrow Shares 150,000 100.000%
======= =======
SCHEDULE B
To Share Transfer Agreement
List of Investors and Shares of Series B Preferred Stock
Name of Stockholder Number of Shares Purchase Price Percentage
------------------- ---------------- -------------- ----------
▇. ▇. ▇▇▇▇▇▇▇ III L.P. 292,941.18 $ 21,481,376 97.64%
Whitney Strategic Partners III, L.P. 7,058.82 518,624 2.36
Total 300,000.00 $ 22,000,000 100.00%
21
SCHEDULE C
Adjusted EBITDA
"Adjusted EBITDA" shall mean Consolidated EBITDA (as defined in the Credit
Agreement (the "Original Senior Credit Agreement"), dated as of March 30, 1999
and as in effect as of such date, without regard to any amendment, supplement or
other modification thereto, among the Company, MedSource Technologies, LLC,
Various Banks, and Deutsche Bank AG, New York Branch, as Administrative Agent)
of the Company for the four consecutive fiscal quarters ending March 31, 2000,
other than any amount of Consolidated EBITDA generated by Non-Platform Companies
(as defined in the Original Senior Credit Agreement) (the "Core EBITDA"), plus
the following items in each case to the extent that such item has been deducted
in connection with the determination of Core EBITDA for such period; and
provided, that any expense that is included in more than one of the items
described below shall be added back only once in the calculation of Adjusted
EBITDA for these purposes:
1. Expenses relating to the cash out of certain life insurance
policies owned by the Company or its subsidiaries to the extent such
expenses relate to the Company or any of the companies identified on
Exhibit A-1 (such companies, the "Base Roll-up Acquisitions");
2. Expenses relating to extraordinary cash or stock bonuses paid by
the Company or its subsidiaries (but excluding any cash or stock bonuses
paid in the ordinary course of business) to the extent such expenses are
related to the Base Roll-up Acquisitions;
3. Expenses relating to the payout of deferred compensation plans
(but excluding any payout of deferred compensation plans paid in the
ordinary course of business) to the extent such expenses are related to the
Base Roll-up Acquisitions;
4. Expenses relating to the move of the Portlyn business to an
alternative facility/premises;
5. Expenses relating to the build-out of a technology center in
Minneapolis, MN;
6. Expenses relating to the write-up of inventory acquired in
connection with the Base Roll-up Acquisitions;
7. Expenses relating to the establishment of reasonable accounts
receivable and inventory reserves for the Company and its subsidiaries
established in connection with the Base Roll-up Acquisitions;
8. Expenses relating to employee severance costs to the extent such
expenses are related to the Base Roll-up Acquisitions;
9. Expenses relating to the formation and structuring of the Company
and the Base Roll-up Acquisitions;
10. Expenses relating to other one-time extraordinary expenses of the
Company or the Base Roll-up Acquisitions, and which have been consented to
in writing by Whitney Mezzanine Management Company, L.L.C.
11. Direct out-of-pocket third party expenses (it being understood
that neither the Stockholders and their affiliates nor the Investors and
their affiliates shall be considered "third parties" for this purpose)
relating to the negotiation, structuring and consummation of Permitted
Acquisitions; and
12. Expenses relating to the recruitment and moving costs incurred in
connection with the hiring of officers or division managers of the Company
or any of the Base Roll-up Acquisitions.
23
EXHIBIT C-1
Additional Information Needed in the
Calculation of Adjusted EBITDA
Companies Constituting the Base
Roll-up Acquisitions:
(1) Brimfield Precision, Inc., a Massachusetts corporation
(2) Kelco Industries, Inc., a Minnesota corporation
(3) W. N. Rushwood, Inc., a New York corporation d/b/a Hayden
Precision Industries
(4) National Wire and Stamping, Inc., a Colorado corporation
(5) Portlyn Corporation, a New Hampshire corporation
(6) Texcel, Inc., a Massachusetts corporation
(7) The MicroSpring Co., Inc., a Massachusetts corporation
24
▇▇▇▇ & COMPANY, LLC
Three Pickwick ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
July , 2000
▇.▇. ▇▇▇▇▇▇▇ III, ▇.▇.
▇▇▇▇▇▇▇ Strategic Partners III, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
MedSource Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
As you know, MedSource Technologies, Inc. effected a 10-for-1 stock
split in January 2000 and as a result, the 150,000 "Escrow Shares" referred to
in the Share Transfer Agreement dated March 30, 1999 among MedSource, the
Stockholders and the Investors named therein now represent 1,500,000 shares of
MedSource's Common Stock.
The undersigned, the holders of at least 50% of the Escrow Shares
deposited, for good and valid consideration the receipt and sufficiency of which
is hereby acknowledged, release any claim any or all of them may have arising
out of, relating to or in connection with any rights they may have to the
release of 500,000 post-split Escrow Shares in accordance with Section 1 of the
Share Transfer Agreement, with the understanding and agreement that all
1,500,000 post-split Escrow Shares will now be subject to transfer and delivery
to the Stockholders in accordance with Section 2 of the Share Transfer
Agreement.
Additionally, as you know, the Escrow Fund (as defined in the ▇▇▇▇
Closing Fee Escrow Agreement dated March 30, 1999 among MedSource, ▇▇▇▇ &
Company, LLC and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Flattau & Klimpl, LLP) is being released to ▇▇▇▇
& Company.
Very truly yours,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
1
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as trustee
of the ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as trustee
of the ▇▇▇▇ ▇. ▇▇▇▇ Trust
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as trustee
of the ▇▇▇▇▇▇ ▇. ▇▇▇▇ Trust
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Agreed:
▇.▇. ▇▇▇▇▇▇▇ III, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ Equity Partners III, LLC,
Its General Partner
By: /s/
----------------------------------
Name:
A Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇ Equity Partners III, LLC,
Its General Partner
By: /s/
----------------------------------
Name:
A Managing Member
MEDSOURCE TECHNOLOGIES, INC.
By: /s/
----------------------------------
2