STOCKHOLDERS AGREEMENT
AMONG
MSC HOLDINGS, INC.
AND
CERTAIN OF ITS STOCKHOLDERS,
OPTIONHOLDERS
AND
WARRANTHOLDERS
JUNE 27, 1995
TABLE OF CONTENTS
Page
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1. Definitions ................................................... 1
2. Restrictions on Transfer ...................................... 13
2.1 Shares Laws Restrictions on Transfer ..................... 13
2.2 Cooperation of Company ................................... 14
2.3 Rule 144 Acknowledgment .................................. 14
2.4 Transfer Restrictions for NOL Preservation ............... 15
2.5 Restrictions on Transfer for Benefit of Stockholders ..... 17
3. First Refusal Rights .......................................... 17
3.1 Restrictions Cumulative .................................. 17
3.2 Bona Fide Offers ......................................... 17
3.3 Involuntary Transfers .................................... 21
iii
TABLE OF CONTENTS (continued)
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3.4 Application of First Refusal Rights ...................... 22
3.5 Termination of First Refusal Rights ...................... 23
4. Third Party Offer for All Outstanding Shares .................. 23
4.1 Drag-Along Obligations ................................... 23
4.2 Termination of Drag-Along Obligations .................... 24
4.3 Restrictions Cumulative .................................. 24
4.4 Limitations on Drag-Along ................................ 24
5. Tag-Along Rights for Sales by Partnership Stockholders ........ 26
5.1 Tag-Along Sales by Partnership Stockholders .............. 26
5.2 Notice of Tag-Along Opportunity .......................... 27
5.3 Notice and Terms of Acceptance of Tag-Along Opportunity .. 28
5.4 Application of Tag-Along Provisions ...................... 29
5.5 Termination of Tag-Along Rights .......................... 30
5.6 Restrictions Cumulative .................................. 30
6. Tag-Along Rights for Sales by UBS Group ....................... 30
6.1 Tag-Along Sales by Originating Partnership Group ......... 30
6.2 Notice of Tag-Along Opportunity .......................... 32
6.3 Notice and Terms of Acceptance of Tag-Along Opportunity .. 32
6.4 Application of Tag-Along Provisions ...................... 33
6.6 Restrictions Cumulative .................................. 34
7. Preemptive Rights of UBS Capital .............................. 34
7.1 Grant of Right ........................................... 34
7.2 Exercise of Right ........................................ 35
7.3 Sale upon Waiver ......................................... 35
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TABLE OF CONTENTS (continued)
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7.4 Termination of Preemptive Rights ......................... 35
8. Affiliate Transactions ........................................ 35
9. Sale of Business .............................................. 36
9.1 Cooperation with UBS Capital ............................. 36
9.2 Receipt of Offer to Purchase ............................. 37
9.3 Evaluation of Alternative Offer .......................... 37
9.4 Confidentiality Agreement ................................ 38
9.5 No Right to Represent or Commit the Company .............. 38
9.6 Termination of Right to Deliver Alternative Offer ........ 38
9.7 Application to Drag-Along Sale ........................... 38
10. Restrictions on Amendment of Governing Documents .............. 39
11. Corporate Governance .......................................... 39
11.1 Observer Status .......................................... 39
11.2 Right of UBS Capital to Nominate Directors ............... 40
11.3 Vacancies ................................................ 40
11.4 Rights not Assignable without Consent .................... 41
11.5 Termination of Governance Rights ......................... 41
12. Termination ................................................... 41
13. Registration Rights ........................................... 41
14. Miscellaneous ................................................. 41
14.1 Governing Law ............................................ 41
14.2 Entire Agreement; Amendments ............................. 41
14.3 Legend on Stock Certificates ............................. 42
14.4 Specific Performance ..................................... 43
14.5 Waiver ................................................... 43
14.6 Successors and Assigns ................................... 43
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TABLE OF CONTENTS (continued)
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14.7 Severability ............................................ 43
14.8 Headings ................................................ 44
14.9 Further Assurances ...................................... 44
14.10 Gender .................................................. 44
14.11 Notices ................................................. 44
14.12 Counterparts ............................................ 44
14.13 Dispute Resolution ...................................... 44
14.14 Authority of UBS Capital ................................ 46
14.15 Effective Date .......................................... 46
EXHIBIT A List of Stockholders
EXHIBIT B Registration Rights
EXHIBIT C Form of Agreement of Beneficial Owner
SCHEDULE 2.4 Beneficial Owners
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STOCKHOLDERS AGREEMENT
This Stockholders Agreement (the "Agreement") is made and entered into as
of July ____, 1995 by and among AVIC GROUP INTERNATIONAL, INC., a Colorado
corporation (the "Company"), and each of the stockholders and warrantholders
of the Company whose names and addresses are listed on Exhibit A hereto, as
the same may be supplemented or amended from time to time (collectively, the
"Stockholders," which term shall include any Permitted Transferees thereof).
RECITALS
WHEREAS, the Company is authorized to issue an aggregate of 50,000,000
shares of common stock, par value $.01 per share; and
WHEREAS, the Stockholders desire to enter into an agreement with each
other and the Company concerning, INTER ALIA, the transfer or other
disposition of securities of the Company;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
"ACT" means the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.
"AFFILIATE," when used with reference to any Person, means any other
Person directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with such first Person
and, when used with reference to any natural person, shall also include such
person's spouse, parents and descendants (whether by blood or adoption, and
including stepchildren) and the spouses of such persons. "Control" means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise. "Affiliated with" shall have a
correlative meaning to the term "Affiliate."
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"ASSOCIATE" means, when used to indicate a relationship with any
Person, (a) any other Person of which such Person is an officer, director or
partner or is, directly or indirectly, the beneficial owner of ten percent
(10%) or more of any class of equity securities issued by such other Person,
(b) any trust or estate in which such Person has a substantial beneficial
interest or as to which such Person serves as a Trustee or in a similar
fiduciary capacity, and (c) any spouse of such Person, or any relative who
has the same home as such Person.
"BENEFICIAL OWNER" has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act (as in effect on the Initial Date), whether
or not applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" shall mean any day on which banking institutions in
New York, New York are not authorized or obligated by law to close.
"CAPITAL STOCK" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"CHANGE OF CONTROL" means with respect to the Company (i) any sale,
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated basis, in
one transaction or a series of related transactions, (ii) any transaction as
a result of which any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than an Excluded Person) is or becomes the beneficial
owner, directly or indirectly, of 50% or more of the total voting power in
the aggregate of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors, (iii) during any period
of twelve consecutive months after the Initial Date individuals who at the
beginning of any such twelve-month period constituted the Board of Directors
of the Company (together with any new directors whose election by such Board
or whose nomination for election by the shareholders of the Company was
approved by a vote of a majority of the directors then still in
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office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then
in office or (iv) if at any time prior to the consummation of a Qualified
IPO, the Originating Stockholders fail to have the ability to elect not less
than a majority of the members of the Board of Directors of the Company.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Common Stock, and all other stock of any
class or classes (however designated) of the Company the holders of which
have the right, without limitation as to amount, either to all or to a share
of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.
"CODE" shall mean the United States Internal Revenue Code of 1986,
as amended from time to time, and any successor statute thereto, in each such
case as supplemented or interpreted by all relevant Treasury Regulations,
interpretive opinions of the Internal Revenue Service and judicial
interpretations.
"ELIGIBLE HOLDERS" means all Stockholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"EXCLUDED PERSON" means (i) the Company, (ii) any employee benefit
plan of the Company or any trustee or similar fiduciary holding Capital Stock
of the Company for or pursuant to the terms of any such plan, (iii) the
holders of any Capital Stock of the Company on the Initial Date and, as to
any partnership which is a holder of the Capital Stock of the Company on the
Initial Date, any Person who holds, directly or indirectly, any beneficial
interest in any such partnership on the Initial Date, and (iv) all Related
Persons of any Person described in the foregoing clause (iii) of this
paragraph.
"FAIR MARKET VALUE" of Shares as of a particular date means:
(a) if such class of Shares is listed or admitted to trading on any
exchange or quoted through NASDAQ or any similar organization, the average of
the daily closing
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prices per share of such class of Shares for the 20 consecutive trading days
immediately preceding the date of public announcement of the event giving
rise to the determination of Fair Market Value or, if no such public
announcement is made with respect to such event, the average of the daily
closing prices per share of such class of Shares for the 20 consecutive
trading days immediately preceding the day as of which "Fair Market Value" is
being determined. The closing price for each day shall be the last sale
price regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way, in either case on
the New York Stock Exchange, or, if such class of Shares is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the class of Shares is listed or admitted to
trading, or if the class of Shares is not so listed or admitted to trading,
the average of the highest reported bid and lowest reported asked prices as
furnished by the National Association of Securities Dealers, Inc. through
NASDAQ or through a similar organization if NASDAQ is no longer reporting
such information.
(b) if such class of Shares is not listed or admitted to trading on
any exchange or quoted through NASDAQ or any similar organization, such value
as shall be determined by the Board of Directors of the Company, in good
faith and in the exercise of reasonable business judgment, which
determination shall be conclusive; provided, however, that if the Fair Market
Value of the Shares the value of which is being determined exceeds
$1,000,000, the Board of Directors of the Company shall provide written
notice of its determination of Fair Market Value to the party hereto seeking
to transfer such Shares, and in the event that such party disagrees with such
valuation, such party may provide written notice of such disagreement (which
notice shall include such party's valuation and the basis therefor) to the
Company within 15 days following such notice from the Board of Directors.
For a period of 15 days following delivery of a notice of disagreement from
the party seeking to transfer such Shares, the Company and such party shall
in good faith seek to mutually agree to a valuation. If at the end of such
15 day period the Company and such party have not mutually agreed to a
valuation, the value of the Shares shall be determined by arbitration in
accordance with the provisions of Section 13.13.
"INITIAL DATE" means June 28, 1995.
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"INVOLUNTARY TRANSFER" means any transfer, proceeding or action
(other than to a Permitted Transferee) by or in which a Stockholder shall be
deprived or divested of any right, title or interest in or to any Shares,
including, without limitation, (i) any seizure under levy of attachment or
execution, (ii) any foreclosure upon a pledge of such Shares, (iii) any
transfer in connection with a bankruptcy (whether pursuant to the filing of a
voluntary or an involuntary petition under the Federal Bankruptcy Code of
1978, or any modifications or revisions thereto or any similar state law) or
other court proceeding to a debtor in possession, trustee in bankruptcy or
receiver or other officer or agency, (iv) any transfer to a state or to a
public officer or agency pursuant to any statute pertaining to escheat or
abandoned property, or (v) any transfer to a Stockholder's spouse as a result
of the termination of the marital relationship of the Stockholder and the
Stockholder's spouse.
"LIENS" means any and all liens, claims, options, charges,
encumbrances, voting trusts, irrevocable proxies or other rights of any kind
or nature.
"LOAN PERIOD" means the period from the date of this Agreement until
such time as none of UBS Capital, Union Bank of Switzerland or any of their
respective Affiliates is a creditor of the Company or any Subsidiary of the
Company in respect of any commercial loan or revolving credit facility.
"MANAGEMENT SERVICES AGREEMENT" means the Management Services
Agreement of even date herewith between the Company and Aurora Capital
Partners L.P.
"NET OPERATING LOSS CARRYOVER" means the net operating loss, capital
loss, net unrealized built-in loss, general business credit, alternative
minimum tax credit, and any other carryovers or losses as determined for
United States federal income tax purposes existing as of the date of this
Agreement and that are or could become subject to limitation under Section
382 of the Code, and to which the Company is entitled under the Code.
"OPTION" means any options now or hereafter issued by the Company to
purchase Class D Common Stock.
"ORIGINATING PARTNERSHIP GROUP" means the Originating Partnerships
and each Permitted Transferee of the Originating Partnerships then holding
any Shares.
"ORIGINATING PARTNERSHIPS" means P-1 Limited Partnership and P-2
Limited Partnership.
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"P-1 LIMITED PARTNERSHIP" means Petrowax Equity Partners I L.P., a
Delaware limited partnership.
"P-2 LIMITED PARTNERSHIP" means Petrowax Equity Partners II L.P., a
Delaware limited partnership.
"P-3 LIMITED PARTNERSHIP" means Petrowax Equity Partners III L.P., a
Delaware limited partnership.
"P-4 LIMITED PARTNERSHIP" means Petrowax Equity Partners IV L.P., a
Delaware limited partnership.
"PERMITTED TRANSFEREE" means:
(a) as to any Stockholder who is a natural person, (i) the
successors in interest to such Stockholder, in the case of a Transfer upon
the death of such Stockholder, (ii) such Stockholder's spouse, parents and
descendants (whether by blood or adoption, and including stepchildren) and
the spouses of such persons, (iii) such Stockholder, with respect to the
disposition of the community property interest of such Stockholder's spouse
in all or any part of the Shares upon the death of such spouse, and any
transferee occasioned by the incompetence of such Stockholder and (iv) in the
case of a Transfer during such Stockholder's lifetime, any Person in which no
Person has any interest (directly or indirectly) except for any of such
Stockholder, such Stockholder's spouse, parents and descendants (whether by
blood or adoption, and including stepchildren) and the spouses of such
persons; PROVIDED that in respect of any Transfer by any Stockholder during
such Stockholder's lifetime pursuant to clause (ii) or (iv), such Stockholder
shall retain voting power over all of the outstanding Shares being
Transferred; and PROVIDED FURTHER, that, in the case of a Transfer to a
Person (such as a partnership or a trust) as to which a governing instrument
exists, (x) such Stockholder shall furnish a copy of such governing
instrument to the Company in advance, (y) the Company shall be reasonably
satisfied that the terms of such governing instrument shall not be
inconsistent with the terms of this Agreement and (z) during the period that
such Shares are held by such Person, the relevant Stockholder shall ensure
that the terms of such governing instrument shall not be amended in any
manner that results in such governing instrument being inconsistent with the
terms of this Agreement;
(b) as to any Stockholder which is a trust, all the beneficiaries
of which are natural persons, such beneficiaries or the grantor of the trust;
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(c) as to any Stockholder which is a limited partnership, (i) any
limited or general partner, officer, employee or Affiliate of such
Stockholder or (ii) any Affiliate of any limited or general partner of such
Stockholder;
(d) as to any Stockholder, a bank or other financial institution to
whom Shares are Transferred by way of pledge or to whom Shares are
Transferred upon the foreclosure thereof; PROVIDED, HOWEVER, that as to any
Stockholder, any such pledge must be approved in advance by a majority of the
disinterested directors of the Board;
(e) as to any Stockholder which is a corporation, all Affiliates of
such Stockholder; and
(f) as to UBS Capital, all UBS Permitted Transferees;
PROVIDED, in each such case, that prior written notice of any such Transfer
is given to the Company by such Stockholder and that the Permitted Transferee
shall agree in advance of such Transfer to be designated as a Stockholder and
to be bound by the terms of this Agreement pursuant to a written agreement
reasonably satisfactory to the Company and the Originating Partnerships.
"PERSON" means a company, a corporation, an association, a
partnership, a limited liability company, an organization, a joint venture, a
trust or other legal entity, an individual, a government or political
subdivision thereof or a governmental agency.
"PREFERRED STOCK" means the Series A Preferred Stock, the Series B
Preferred Stock and any other preferred stock of the Company issued after the
date hereof.
"PRIME RATE" means, as of any date, the per annum rate of interest
most recently publicly announced by Chemical Bank as its "base rate" for
domestic commercial loans.
"PRO RATA" means, with respect to any Stockholder in reference to any
class or group of Stockholders, the ratio of the number of shares of Common
Stock held by or issuable to such Stockholder to the aggregate number of
shares of Common Stock at the time outstanding held by or issuable to all
Stockholders of such class or group, in each case calculated on a fully
diluted basis.
"QUALIFIED IPO" means an underwritten public offering of Common Stock
pursuant to a registration
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statement filed with the Commission; provided that either (i) there are sales
pursuant to such registration statement of shares of Common Stock for an
aggregate offering price of not less than $15,000,000 or (ii) upon
consummation of such underwritten public offering at least fifteen percent
(15%) of the issued and outstanding shares of Common Stock shall have been
issued pursuant to one or more registration statements filed with the
Commission.
"QUALIFIED IPO DATE" means the effective date of the registration
statement for the Qualified IPO.
"REGISTRABLE SECURITIES" means:
(a) any shares of Common Stock issued and outstanding on the date
hereof or issuable upon exercise of options or warrants issued and
outstanding on the date hereof sold to the Stockholders;
(b) any shares of Common Stock issued after the date hereof or issuable
upon exercise of options or warrants issued after the date hereof that, in
any such case, are designated by the Company as Registrable Securities for
purposes of this Agreement to Persons who are or become Stockholders;
(c) any shares of Common Stock purchased pursuant to this Agreement; and
(d) any securities issued or issuable with respect to any Common Stock
referred to in subdivision (a), (b) or (c) of this definition by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
As to any particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when:
(x) a registration statement with respect to the sale of such
securities shall have become effective under the Act and such securities
shall have been disposed of in accordance with such registration statement;
(y) such securities shall have been distributed to the public pursuant
to Rule 144 (or any successor provision) under the Act; or
(z) such securities shall have ceased to be outstanding.
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Except as set forth in the preceding sentence, no Transfer of Registrable
Securities shall cause such Registrable Securities to lose such status.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with Section 6 and Exhibit B hereto, including,
without limitation, all registration, filing and NASD fees, all fees and
expenses of complying with securities or blue sky laws, all word processing,
duplicating and printing expenses, messenger and delivery expenses, the fees
and expenses of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, the
reasonable fees and expenses of a single counsel retained by the holders of a
majority of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any.
"RELATED PERSON" means, with respect to any Excluded Person (i) any
Person who, directly or indirectly, controls, is controlled by or under
common control with such Excluded Person; PROVIDED, HOWEVER, that for
purposes of this definition "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be deemed to include the beneficial
ownership of more than 10% of the total voting power of a Person normally
entitled to vote in the election of directors, managers or trustees, as
applicable, of a Person and (ii) as to any natural person, (A) such person's
spouse, parents and descendants (whether by blood or adoption and including
stepchildren) and the spouses of any of such natural persons and (B) any
corporation, partnership, trust or other Person in which no one has any
interest (directly or indirectly) except for any of such natural person, such
spouse, parents and descendants (whether by blood or adoption, and including
stepchildren) and the spouses of any of such natural persons.
"RESTRICTION TERMINATION DATE" means the first day of the first
taxable year following the taxable year (or years) in which Net Operating
Loss Carryovers have been reduced to zero.
"SECTION 382 STOCK" means any stock or other interests that are
treated as stock for purposes of Section 382 of the Code, and shall include
in any event the
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Common Stock and Warrants and exclude the Series A Preferred
Stock and the Series B Preferred Stock.
"SERIES A CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations, Preferences, and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof for the Company's Series A Redeemable Cumulative
Preferred Stock, as in effect on the date hereof or as amended from time to
time after the date hereof in accordance with its terms.
"SERIES A PREFERRED STOCK" means the Company's Series A Redeemable
Cumulative Preferred Stock, par value $.01 per share.
"SERIES B CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations, Preferences, and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof for the Company's Series B Redeemable Cumulative
Preferred Stock, as in effect on the date hereof or as amended from time to
time after the date hereof in accordance with its terms.
"SERIES B PREFERRED STOCK" means the Company's Series B Redeemable
Cumulative Preferred Stock, par value $.01 per share.
"SHARES" means the shares of Common Stock and Preferred Stock, the
Options and the Warrants now or hereafter issued to or otherwise acquired by
the Stockholders (including acquisitions of such securities concurrently with
the execution of this Agreement and acquisitions of any such securities after
the date hereof whether or not pursuant to the terms hereof and including
issuances of any such securities pursuant to any Option or Warrant existing
on the date hereof or issued subsequent to the date hereof) and all shares of
Capital Stock or other securities (including convertible securities and the
securities into which such convertible securities convert) of the Company or
any successor of the Company issued or issuable in respect thereof as a
result of any stock dividend on, or stock split or reclassification or
conversion of, or in exchange for, any such Common Stock and Preferred Stock
or issued or issuable with respect to such Common Stock, Preferred Stock,
Options or Warrants in connection with any merger or reorganization or
similar transaction involving the Company.
"SHELF REGISTRATION" means a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under
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the Act and/or any similar rule that may be adopted by the Commission.
"SIGNIFICANT STOCKHOLDER" means any Person who owns either (i) on a
fully diluted basis, 5% or more of the then outstanding shares of Common
Stock (treating any owner of securities exercisable for or convertible into
shares of Common Stock as the owner of such underlying shares of Common
Stock) or (ii) Preferred Stock with an aggregate stated value of not less
than $3,500,000.
"SUBSIDIARY" with respect to any Person means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly,
owned by such Person, by such Person and one or more Subsidiaries of such
Person or by one or more Subsidiaries of such Person, or (ii) any other
Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has
at least majority ownership interest.
"THREE-YEAR DATE" means the earlier of (i) the day after the
expiration of three full years from the date the Stockholder first acquires
shares of Common Stock and (ii) the Restriction Termination Date.
"TRANSFER" shall mean any direct or indirect disposition of an
interest whether by sale, exchange, merger, consolidation, transfer,
assignment, conveyance, distribution, pledge, inheritance, gift, mortgage,
the creation of any security interest in, or lien or encumbrance upon, any
other disposition of any kind and in any manner, by operation of law or
otherwise, or any other transfer or agreement which would result in a change
in the percentage of the Company's Capital Stock owned or considered owned by
a Stockholder or a Beneficial Owner (as defined in Section 2.4(c)) as
determined for purposes of Section 382 of the Code.
"TRANSFER ALLOTMENT" means, (i) with respect to P-1 Limited
Partnership, P-2 Limited Partnership, P-3 Limited Partnership, and P-4
Limited Partnership, the portion of a Beneficial Owner's Beneficial Interest
that may be Transferred after the Three-Year Date and prior to the
Restriction Termination Date such that after taking into account such
Transfer and all prior Transfers of Beneficial Interests and all Transfers of
shares of Common Stock held by such Stockholder, no more than 45% (or such
lesser amount as such Stockholder elects to permit its Beneficial Owners to
transfer in its sole discretion) of the shares of Common
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Stock initially acquired by such Stockholder will be deemed to have been
Transferred for purposes of determining the direct or indirect ownership of
such shares under Section 382 of the Code; and (ii) with respect to any other
Stockholder (other than UBS Capital), the portion of a Beneficial Owner's
Beneficial Interest that may be transferred prior to the Restriction
Termination Date such that after taking into account such Transfer and all
prior Transfers of Beneficial Interest and all Transfers of shares of Common
Stock held by such Stockholder, no more than 45% (or such lesser amount as
such Stockholder elects to permit its Beneficial Owners to transfer in its
sole discretion) of the shares of Common Stock initially acquired by such
Stockholder will be deemed to have been Transferred for purposes of
determining the direct or indirect ownership of such shares under Section 382
of the Code. Each Stockholder shall determine the Transfer Allotments for
its Beneficial Owners provided that the 45% limitation in the preceding
sentence is satisfied at all relevant times.
"TREASURY REGULATIONS" shall mean the regulations adopted under the
Code by the United States Secretary of the Treasury, as in effect from time
to time.
"UBS CAPITAL" means UBS Capital Corporation, a New York corporation.
"UBS GROUP" means UBS Capital and each UBS Permitted Transferee then
holding any Shares.
"UBS PERMITTED TRANSFEREE" means (A) any Affiliate of UBS Capital,
including co-investment entities established and controlled by UBS Capital
(collectively, "UBS Affiliates"), (B) any managing director, director,
officer or employee of UBS Capital or any UBS Affiliate or the heirs,
executors, administrators, testamentary trustee, custodians, legatees,
beneficiaries, spouses or lineal descendants of any of the foregoing persons
referred to in this clause (B) (collectively, "UBS Associates"); and (C) a
trust, the beneficiaries of which, or a corporation, limited liability
company or partnership, the stockholders, members or general or limited
partners of which, include only UBS Capital, UBS Affiliates or UBS Associates.
"UNRESTRICTED SECURITIES" means securities which are not restricted
securities within the meaning of Rule 144 promulgated under the Securities
Act of 1933, as amended.
"WARRANTS" means the warrants now or hereafter issued by the Company
entitling the holders thereof to purchase shares of the Class C Common Stock.
Holdings Stockholders Agreement
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2. RESTRICTIONS ON TRANSFER.
2.1 SECURITY LAWS RESTRICTIONS ON TRANSFER. Notwithstanding anything
herein to the contrary, each Stockholder agrees that, prior to making any
Transfer of any Shares (other than a Transfer to the Company or to another
Stockholder as required or permitted by this Agreement), such Stockholder
will give written notice to the Company describing the manner and terms of
such proposed Transfer, the identity of such proposed transferee and such
other information as the Company may reasonably request. Each such
Stockholder further agrees that such proposed Transfer will not be effected
until:
(a) the Company has notified such Stockholder that either:
(i) in the opinion of Company counsel, no registration
of such Shares under the Act is required in connection with such
proposed Transfer; or
(ii) a registration statement under the Act covering
such proposed disposition has been filed by the Company with
the Commission and has become effective under the Act; and
(b) the Company has notified such Stockholder that either:
(i) in the opinion of Company counsel, no registration
or qualification under the securities or "blue sky" laws of
any state is required in connection with such proposed disposition; or
(ii) compliance with applicable state securities or "blue sky"
laws has been effected.
The Company will use its best efforts to respond to any such notice from a
Stockholder within 15 days of its receipt of such notice, but in any event
shall respond to any such notice within 30 days.
2.2 COOPERATION OF COMPANY. In the case of any proposed Transfer under
Section 2.1, the Company will use reasonable efforts to comply with any such
applicable state securities or "blue sky" laws, but shall in no event be
required, in connection therewith, to qualify to do business in any state
where it is not then qualified or to take any action that would subject it to
tax or to the general service of process in any state where it is not then
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subject. The restrictions on Transfer contained in Section 2.1 shall be in
addition to, and not by way of limitation of, any other restrictions on
Transfer contained in any other section of this Agreement.
2.3 RULE 144 ACKNOWLEDGMENT. Each Stockholder acknowledges that such
Person is familiar with Rule 144 of the Rules and Regulations of the
Commission, as amended, promulgated pursuant to the Act ("Rule 144"), and
that such Person has been advised that Rule 144 permits, only under certain
circumstances, the resale of restricted securities such as the Shares being
purchased hereunder, but that Rule 144 is not currently, and may not in the
future become, available to permit resales by such Person of any Shares. Each
Stockholder understands that, to the extent that Rule 144 is not available,
such Person will be unable to sell any Shares without either registration
under the Act or the existence of another exemption from such registration
requirement, and that the Company has no obligation whatsoever (except as set
forth herein) to any Stockholder to register any Shares.
2.4 TRANSFER RESTRICTIONS FOR NOL PRESERVATION.
(a) Each Stockholder acknowledges that the Company has Net
Operating Loss Carryovers for United States federal income tax purposes and
understands that the ability of the Company to utilize such Net Operating
Loss Carryovers is subject to potential limitation under Section 382. The
term "Section 382" means Section 382 of the Code as interpreted and applied
in the Treasury Regulations, and any successor statute and regulations.
(b) Each Stockholder further understands that the potential
application of Section 382 depends upon the ultimate beneficial ownership of
the Section 382 Stock of the Company.
(c) Each Stockholder hereby represents that the individuals listed
on Schedule 2.4 hereto as the beneficial owners in that Stockholder
constitute all the Beneficial Owners in that Stockholder, except that, in the
case of UBS Capital, Schedule 2.4 does not list the Beneficial Owners of
Union Bank of Switzerland, the parent corporation of UBS Capital. For
purposes of this Section 2.4, the term "Beneficial Owner" shall, in
addition to the meaning set forth in Section 1 hereof, also include any
person who owns any direct or indirect, actual or beneficial interest
(including a constructive ownership interest under the attribution rules of
Section 382) in the Stockholder. The term "Beneficial Interest" shall mean
the interest of any Beneficial Owner in the Stockholder.
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14
(d) Each of P-1 Limited Partnership, P-2 Limited Partnership, P-3
Limited Partnership, and P-4 Limited Partnership agrees that without the
express written permission of the Company and (for so long as UBS Capital
remains a Significant Stockholder) UBS Capital (i) it will not Transfer any
shares of Section 382 Stock prior to the Three-Year Date and (ii) during the
period commencing on the Three-Year Date and ending on the Restriction
Termination Date it will not Transfer more than that number of shares of
Section 382 Stock, such that after taking into account such transfer and all
prior transfers of shares of Section 382 Stock held by such Stockholder and
all transfers of Beneficial Interests in such Stockholder, not more than 45%
of the shares of Section 382 Stock initially acquired by such Stockholder
will be deemed to have been transferred for purposes of determining the
direct or indirect ownership of such shares under Section 382 of the Code;
provided, however, that the transfer restrictions of this Section 2.4(d)
shall not apply to Transfers in connection with an Acquisition Proposal (as
defined in Section 4.1) pursuant to the provisions of Section 4 hereof. Each
of P-1 Limited Partnership, P-2 Limited Partnership, P-3 Limited Partnership
and P-4 Limited Partnership agrees that it shall not later than 30 days after
the date of this Agreement obtain the written agreement in the form of
Exhibit C attached hereto of each of its Beneficial Owners (i) not to
Transfer all or any portion of its Beneficial Interest prior to the
Three-Year Date and (ii) commencing on the Three-Year Date not to Transfer
more than such Beneficial Owner's Transfer Allotment. Notwithstanding the
foregoing, Transfers of Beneficial Interests in P-1 Limited Partnership, P-2
Limited Partnership, P-3 Limited Partnership, or P-4 Limited Partnership by a
Beneficial Owner who is an individual to family members (as described in
Section 382(l)(3)(A)(i) of the Code) or Transfers after the Three-Year Date
of the type described in Section 382(l)(3)(B) of the Code shall be permitted
provided that (i) such Beneficial Owner provides to the Company an opinion of
counsel, in form and substance reasonably satisfactory to the Company and
(for so long as UBS Capital remains a Significant Stockholder) UBS Capital,
that such Transfer will be governed by Section 382(l)(3)(A)(i) or Section
382(l)(3)(B) of the Code, as the case may be, and (ii) such Transfer
otherwise complies with the provisions of this Agreement.
(e) Each Stockholder (provided, however, that UBS Capital shall
not be subject to clause (ii) of this sentence) other than P-1 Limited
Partnership, P-2 Limited Partnership, P-3 Limited Partnership and P-4 Limited
Partnership agrees that (i) it will not Transfer, prior to the Restriction
Termination Date, more than that number of
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15
shares of Section 382 Stock, such that after taking into account such
transfer and all prior transfers of shares of Section 382 Stock held by such
Stockholder and all transfers of Beneficial Interests in such Stockholder,
not more than 45% of the shares of Section 382 Stock initially acquired by
such Stockholder will be deemed to have been transferred for purposes of
determining the direct or indirect ownership of such shares under Section 382
of the Code, and (ii) that it shall obtain the written agreement in the form
of Exhibit C attached hereto of each Beneficial Owner not to Transfer more
than its Transfer Allotment; provided, however, that the transfer
restrictions of this Section 2.4(e) shall not apply to Transfers in
connection with an Acquisition Proposal pursuant to the provisions of Section
4 hereof. Notwithstanding the foregoing, transfers of Beneficial Interests in
Stockholders other than P-1 Limited Partnership, P-2 Limited Partnership, P-3
Limited Partnership, or P-4 Limited Partnership by a Beneficial Owner who is
an individual to family members (as described in Section 382(l)(3)(A)(i) of
the Code) or transfers of the type described in Section 382(l)(3)(B) of the
Code shall be permitted provided that (i) such Beneficial Owner provides to
the Company an opinion of counsel, in form and substance reasonably
satisfactory to the Company and (for so long as UBS Capital remains a
Significant Stockholder) UBS Capital, that such transfer will be governed by
Section 382(l)(3)(A)(i) or Section 382(l)(3)(B) of the Code, as the case may
be, and (ii) such transfer otherwise complies with the provisions of this
Agreement.
(f) Upon request by the Company, each Stockholder (other than UBS
Capital for so long as it does not own any Common Stock) hereby agrees to
provide the Company with information concerning the ownership interests of
its Beneficial Owners in the form of statements that satisfy the requirements
of Treasury Regulation Section 1.382-2T(k)(1)(ii) (or any successor provision
thereof).
2.5 RESTRICTIONS ON TRANSFER FOR BENEFIT OF STOCKHOLDERS. Each
Stockholder agrees that such Stockholder will not Transfer any Shares (or any
direct or indirect interest therein) or any stock certificate representing
the same, now or hereafter at any time owned by him, except to a Permitted
Transferee or as required or permitted by the provisions of Sections 3, 4 and
5 of this Agreement.
3. FIRST REFUSAL RIGHTS.
3.1 RESTRICTIONS CUMULATIVE. The restrictions on transfer imposed
by this Section 3 on any Stockholder shall be in addition to, and not in lieu
of, the restrictions on transfer imposed by Sections 2, 4 and 5 of this
Agreement to
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16
the extent the same are otherwise applicable to such Stockholder.
3.2 BONA FIDE OFFERS.
(a) If any Stockholder desires to Transfer any Shares and such
Stockholder shall have received a bona fide arms' length written offer (a
"Bona Fide Offer") from a Person other than an Affiliate or Associate of
such Stockholder (the "Outside Party") for the Transfer of such Shares,
such Stockholder shall give written notice (the "Option Notice") to each
Originating Partnership, UBS Capital (acting as representative of the UBS
Group) and to the Company setting forth such desire, which notice shall set
forth at least the name and address of the Outside Party and the price and
terms of the Bona Fide Offer and shall be accompanied by a copy of the Bona
Fide Offer and evidence demonstrating, to the reasonable satisfaction of the
Originating Partnerships, UBS Capital and the Company, the Outside Party's
ability to consummate such offer. Upon the giving of such Option Notice,
each Originating Partnership and each member of the UBS Group (acting through
UBS Capital which shall act as the representative of the members of the UBS
Group for all purposes under this Section 3) (the "Initial Offerees") shall
have the option to purchase, at the price offered by the Outside Party in the
Bona Fide Offer, all or any portion of such Initial Offerees' allocation,
determined on a pro rata basis as between the Initial Offerees as provided in
paragraph (b) of this Section 3.2, of the Shares specified in the Option
Notice, said option to be exercised within ten Business Days following the
giving of such Option Notice, by giving a counter-notice (an "Initial
Offeree Counter-Notice") to the offering Stockholder (with a copy of such
Initial Offeree Counter-Notice to the other Initial Offerees and to the
Company). In the event that a determination must be made (as described
below) as to the fair market value of non-cash consideration, the ten
Business Day period referred to in the immediately preceding sentence shall
be extended to such greater period of time, not to exceed 20 Business Days
after said Option Notice, specified in good faith by a disinterested majority
of the Board. In the event that the Bona Fide Offer provides, in whole or in
part, for non-cash consideration, the "price" offered by the Outside Party
shall be deemed to be the amount of cash, if any, provided in the Bona Fide
Offer plus the fair market value of the non-cash consideration as determined
in good faith by a disinterested majority of the Board; PROVIDED, HOWEVER,
that if the non-cash consideration consists of shares that are listed or
admitted to trading on an Exchange or quoted through NASDAQ or any similar
organization, the fair market value of such Shares shall be deemed to equal
the average of
Holdings Stockholders Agreement
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17
the daily closing prices per share of such Shares for the 20 consecutive
trading days immediately preceding the date of public announcement of the
event giving rise to the determination of fair market value or, if no such
public announcement is made with respect to such event, the average of the
daily closing prices per share of such Shares for the 20 consecutive days
immediately preceding the day as of which fair market value is being
determined. The closing price for each day shall be determined in accordance
with the last sentence of paragraph (a) of the definition of "Fair Market
Value" set forth in Section 1 hereof.
(b) The allocation of Shares, other than Preferred Stock, specified
in an Option Notice as between the Initial Offerees shall be made based on
the Pro Rata allocation of Shares (other than Preferred Stock) held by the
Initial Offerees when the Option Notice is given. The allocation of Shares
of Preferred Stock specified in an Option Notice as between the Initial
Offerees shall be made based on the relative aggregate redemption value of
the Preferred Stock held by the Initial Offerees when the Option Notice is
given. Notwithstanding the foregoing, if the Stockholder which wishes to
Transfer Shares is an Initial Offeree, the other Initial Offerees shall have
the option to purchase all or any part of the Shares specified in the Option
Notice.
(c) If an Initial Offeree either does not exercise its option to
purchase Shares specified in an Option Notice or exercises such option to
purchase fewer than the number of Shares allocated to such Initial Offeree,
and one or more other Initial Offerees exercised their option to purchase the
entire amount of Shares so allocated to them, then each such other Initial
Offeree shall have the option to purchase those Shares as to which the option
to purchase had not been exercised, subject to allocation between them in
accordance with paragraph 3.2(b). Such option to purchase shall be
exercisable for ten Business Days after the giving of the Initial Offeree
Counter-Notice by such other Initial Offeree or the expiration of the period
within which such Initial Offeree Counter-Notice could have been given, and
shall be exercised by giving a further counter-notice (a "Reallocation
Exercise Notice") to the offering Stockholder (with a copy of such
Reallocation Exercise Notice to the other Initial Offerees and to the
Company).
(d) Subject to paragraph (e) and (f) of this Section 3.2, if any
and all of the Initial Offerees elect to purchase such Shares, each such
electing Initial Offeree shall be obligated to purchase, and such Stockholder
shall be obligated to sell, such Shares at a closing to be held on
Holdings Stockholders Agreement
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18
the 30th Business Day after the giving of the Initial Offeree Counter-Notice
(or, if two or more Initial Offeree Counter-Notices were given, the giving of
the latest) at the principal executive offices of the Company, or at such
other time and place as may be mutually acceptable to each purchasing Initial
Offeree and such selling Stockholder. The closing of any such purchase by an
Initial Offeree may, at the election of the purchasing Initial Offeree, be
delayed up to 30 Business Days in order to permit such acquisition of such
Shares to be made in conformity with applicable laws, including the HSR Act.
(e) Subject to paragraph (f) of this Section 3.2, if the Initial
Offerees do not elect to purchase all of such Shares proposed to be sold by
such Stockholder within the time limits specified in paragraphs (a) and (c)
of this Section 3.2, then the Company shall have the option, exercisable by
the delivery of a counter-notice to such Stockholder no later than 15
Business Days following the later of (x) the date of the latest Initial
Offeree Counter-Notice or Reallocation Exercise Notice or (y) the expiration
of any period within which a Reallocation Exercise Notice may be given, to
purchase, at the price offered by the Outside Party in the Bona Fide Offer,
all or any portion of the Shares specified in the Option Notice and not
purchased by the Initial Offerees. In the event that the Company elects to
purchase Shares pursuant to this Section 13.2(e), the Company will be
obligated to purchase, and such Stockholder shall be obligated to sell, such
Shares at a closing (which shall be the closing for all Shares being
purchased in connection with such Option Notice) to be held on the 30th
Business Day after the delivery of the Company's counter-notice to such
Stockholder at the principal executive offices of the Company, or at such
other time and place as may be mutually acceptable to each purchasing Initial
Offeree, the Company and such Selling Stockholder. The closing of any such
purchase by the Company may, at the election of the Company or any purchasing
Initial Offeree, be delayed up to 30 Business Days in order to permit such
acquisition of such Shares to be made in conformity with applicable laws,
including the HSR Act.
(f) If the Initial Offerees and the Company elect to purchase fewer
than all of the Shares subject to the Bona Fide Offer within the time limits
specified above, then the Initial Offerees and the Company shall have no
right to purchase any of such Shares under this Section 3.2 as a result of
such Option Notice, and the offering Stockholder, at any time within a period
of four months from the giving of said Option Notice, may Transfer all (but
not less than all) of the Shares specified in the Option Notice to the
Outside Party at the price and on the terms contained in the
Holdings Stockholders Agreement
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19
Bona Fide Offer; provided, however, that in the event such offering
Stockholder has not so Transferred said Shares to the Outside Party within
said four-month period, then said Shares thereafter shall continue to be
subject to all of the restrictions contained in this Agreement as though no
Option Notice had ever been given.
(g) At the closing of any purchase of certificated Shares pursuant
to this Section 3.2, the selling Stockholder shall deliver certificates
representing such Shares duly endorsed for transfer and accompanied by all
requisite stock transfer taxes. Any Shares purchased pursuant to this
Section 3.2 shall be free and clear of any and all Liens (other than those
arising under this Agreement) and at the closing of the purchase the selling
Stockholder shall represent and warrant to such effect and to the effect that
such selling Stockholder is the beneficial owner of such Shares. The Person
making such purchase shall deliver at such closing, by certified or bank
check, payment in full for the Shares being purchased by such Person. At
such closing, all of the parties to the transaction shall execute such
additional documents as are otherwise necessary or appropriate.
(h) If, in any instance, an Originating Partnership or the Company
elects not to exercise its rights hereunder or elects to waive such rights,
such election shall not constitute a waiver of such Person's rights to
receive an Option Notice in the case of any Transfer subsequently proposed by
such or any other Stockholder.
(i) Any restriction on Transfer of Shares imposed other than by
this Agreement shall not be superseded by the provisions of this Section 3.2,
and any purchase of Shares under this Section 3.2 may be effected only in
accord with this Section 3.2 and such other restrictions.
(j) Each notice required to be given to a member of the UBS Group
under this Section 3 shall be deemed given if delivered to UBS Capital. Each
notice required to be given by a member of the UBS Group under this Section 3
shall only be deemed given if delivered by UBS Capital.
3.3 INVOLUNTARY TRANSFERS.
(a) Each Stockholder shall notify the Company, the Originating
Partnerships and UBS Capital promptly upon the occurrence of an Involuntary
Transfer of Shares (including Involuntary Transfers of any Beneficial
Interest by a Beneficial Owner). If an Involuntary Transfer of any of the
Shares owned by any Stockholder shall occur, the Originating Partnerships,
each member of the UBS Group
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(acting through UBS Capital as the representative of the UBS Group) and the
Company shall have the same rights of first refusal under Section 3.2 above
with respect thereto (the "Transferred Shares") as if the Involuntary
Transfer had been a proposed voluntary Transfer by such Stockholder, except
that:
(i) the periods within which such rights must be exercised
shall run from the date notice of the Involuntary Transfer is received by
the Company, the Originating Partnerships and UBS Capital from the
Stockholder or its legal representatives with respect to which such
Involuntary Transfer has occurred;
(ii) such rights shall be exercised by notice to the involuntary
transferee rather than to the Stockholder with respect to which such
Involuntary Transfer has occurred; and
(iii) the purchase price of any Transferred Shares shall be the Fair
Market Value of such Transferred Shares on the date that the rights of
first refusal provided by this Section 3.3 are exercised with respect to
such Transferred Shares.
(b) At the closing of any purchase of Transferred Shares, the
involuntary transferee shall deliver certificates representing the
Transferred Shares being purchased by the relevant Originating Partnership,
members of the UBS Group or the Company, as the case may be, duly endorsed
for transfer and accompanied by all requisite stock transfer taxes, and such
Shares shall be free and clear of any and all Liens arising through the
action or inaction of the involuntary transferee (other than those arising
under this Agreement) and the involuntary transferee shall represent and
warrant to such effect and to the effect that such involuntary transferee is
the beneficial owner of such Shares. At the closing of any such purchase,
the Stockholder which was the transferor in respect of the Involuntary
Transfer shall represent and warrant to the purchaser or purchasers that such
Stockholder had conveyed to the involuntary transferee good and valid title
to the Transferred Shares. The Person making such purchase shall deliver at
closing, by a certified or bank check, payment in full of the purchase price,
for the Shares being purchased by such Person. At such closing, all of the
parties to the transaction shall execute such additional documents as are
otherwise necessary or appropriate.
Holdings Stockholders Agreement
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(c) In the event that the provisions of this Section 3.3 shall be
held to be unenforceable with respect to any particular Involuntary
Transfer of Shares, the Originating Partnerships and the Company shall
have a right of first refusal as set forth in Section 3.2 hereof if the
involuntary transferee subsequently obtains a Bona Fide Offer for and
desires to Transfer such Shares.
3.4 APPLICATION OF FIRST REFUSAL RIGHTS. The first refusal rights
provided in Sections 3.2 and 3.3 shall not apply to any Transfer of Shares:
(a) to the Company or to a Permitted Transferee;
(b) pursuant to an effective registration statement under the Act;
(c) by an Other Stockholder (as defined in Section 5.1) pursuant
to Section 5 below;
(d) by an Other Stockholder (as defined in Section 6.1) pursuant
to Section 6 below;
(e) by a Drag-Along Stockholder (as defined in Section 4.1)
pursuant to Section 4 below; or
(f) in any one transaction or series of related transactions
(other than to a Permitted Transferee) in which the Proposed Transferor
transfers 10,000 or fewer shares of Common Stock or 1,000 or fewer
shares of Preferred Stock, subject to an aggregate maximum per
transferor of 25,000 shares of Common Stock and 2,500 shares of
Preferred Stock, and provided that the transferee enters into a written
agreement in form and substance reasonably satisfactory to the Company
to be bound by the terms and conditions of this Agreement.
3.5 TERMINATION OF FIRST REFUSAL RIGHTS. Notwithstanding anything
herein to the contrary, the rights of first refusal provided in this Section
3 shall terminate, with respect to all Shares held by each Stockholder, upon
the occurrence of the Qualified IPO Date. In addition to termination
pursuant to the preceding sentence, all first refusal rights of UBS Capital
and the UBS Group under Sections 3.2 and 3.3 hereof shall terminate at such
time as UBS Capital is no longer a Significant Stockholder.
Holdings Stockholders Agreement
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4. THIRD PARTY OFFER FOR ALL OUTSTANDING SHARES.
4.1 "DRAG-ALONG" OBLIGATIONS. If either Originating Partnership
shall receive an offer in writing from a third party which is not an
Affiliate of such Originating Partnership (a "Third Party Offeror") to
purchase all of the issued and outstanding Common Stock held by the
Originating Partnerships, to effect a business combination of the Company
with such Third Party Offeror or an Affiliate thereof or to purchase all or
substantially all the assets of the Company (each an "Acquisition
Proposal"), and the Originating Partnerships desire to accept or cause the
Company to accept such Acquisition Proposal, both of the Originating
Partnerships shall deliver a notice (an "Acquisition Notice") to the
Company (which shall deliver a copy of such Acquisition Notice to each of the
other Stockholders), which Acquisition Notice shall contain a copy of such
Acquisition Proposal, including the name and address of the Third Party
Offeror and the terms of the Acquisition Proposal. If any other Stockholder
receives any Acquisition Proposal (which, for this purpose, includes an offer
to purchase all of the issued and outstanding Common Stock or Common Stock
and any other securities exercisable for or convertible into Common Stock but
not an offer to purchase only such other Stockholder's Common Stock or Common
Stock and any other securities exercisable for or convertible into Common
Stock) such Stockholder shall promptly transmit such Acquisition Proposal to
the Company and each Originating Partnership (which the Company or the
Originating Partnerships may elect not to pursue without any liability or
obligation to any Stockholder or the Company). The other Stockholders (the
"Drag-Along Stockholders") severally agree that, subject to Section 4.3,
upon receipt of such Acquisition Notice, they shall be obligated to sell all
of their Common Stock and any other securities exercisable for or convertible
into Common Stock to the Third Party Offeror upon the terms and conditions
set forth in the Acquisition Proposal or, as the case may be, to vote their
Shares in favor of the merger or sale of all or substantially all of the
assets of the Company as described in the Acquisition Proposal, and otherwise
to take all actions necessary or appropriate to cause the Company to
consummate the proposed transaction. In any such transaction, all of such
shares shall be purchased at, or be converted into the right to receive, the
same price per share of Common Stock and any other securities exercisable for
or convertible into Common Stock shall be purchased at, or be converted into
the right to receive, an aggregate amount equal to (a) the aggregate purchase
price of the number of shares which the holder of such securities is entitled
to receive upon exercise or conversion of such securities, at the purchase
price per share of Common Stock provided in the Acquisition Proposal,
Holdings Stockholders Agreement
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less (b) the aggregate exercise price or conversion price, as the case may
be, of such securities, but not less than zero.
4.2 TERMINATION OF DRAG-ALONG OBLIGATIONS. Notwithstanding anything
herein to the contrary, the rights and obligations provided for in this
Section 4 shall terminate, with respect to all Shares held by any
Stockholder, upon the earlier of (i) the occurrence of the Qualified IPO Date
and (ii) if UBS Capital so elects by delivery of written notice to the
Company, the occurrence of a Change of Control.
4.3 RESTRICTIONS CUMULATIVE. The restrictions on transfer imposed by
this Section 4 on any Stockholder shall be in addition to, and not in lieu
of, the restrictions on transfer imposed by Section 2, 3 and 5 of this
Agreement to the extent the same are otherwise applicable to such Stockholder.
4.4 LIMITATIONS ON DRAG-ALONG.
(a) In connection with any sale (a "Drag-Along Sale") of Common Stock
or any other securities exercisable for or convertible into shares of Common
Stock pursuant to this Section 4, (i) the only representation and warranty or
covenant which any Drag-Along Stockholder shall be required to make in
connection with the Drag-Along Sale is a representation and warranty with
respect to its own ownership of the shares of Common Stock or other
securities to be sold by it and its ability to convey title thereto free and
clear of all Liens and (ii) the liability of any Drag-Along Stockholder with
respect to any representation and warranty made in connection with the
Drag-Along Sale shall be the several liability of such Drag-Along Stockholder
(and not joint with any other person). Notwithstanding the foregoing, in the
event that the Originating Partnerships are required in connection with such
sale to make any additional representations and warranties or enter into any
additional covenants, each Drag-Along Stockholder shall be required to
severally indemnify the Originating Partnerships and any other persons making
such additional representations and warranties or entering into such
additional covenants for such Drag-Along Stockholder's pro rata share (based
on the consideration being received by the Originating Partnerships and
Drag-Along Stockholders for the securities being sold) of any liabilities
resulting from such representations and warranties or covenants; PROVIDED,
HOWEVER, that such indemnification liability shall be limited to an amount no
greater than the amount of proceeds actually received by such Drag-Along
Stockholder in the Drag-Along Sale.
Holdings Stockholders Agreement
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(b) For purposes of this Section 4, the purchase price per share of
Common Stock shall include, in addition to the purchase price per share
provided in the Acquisition Proposal, any and all other amounts payable to
Aurora Capital Partners L.P. or any Affiliate or Associate thereof in
connection with the Drag-Along Sale, including any amounts payable pursuant
to any employment agreement, consulting agreement or similar arrangement;
PROVIDED, HOWEVER, that in no event shall the purchase price per share be
deemed to include any amounts payable pursuant to or the payment of which is
contemplated by the Management Services Agreement.
(c) Notwithstanding the provisions of Section 4.1, without the consent
of UBS Capital, no Drag-Along Stockholder shall be required to participate in
an Acquisition Proposal pursuant to the provisions of Section 4.1 if less
than 70% of the consideration to be received by such Drag-Along Stockholder
in connection with such Acquisition Proposal consists of cash and
Unrestricted Securities.
5. "TAG-ALONG" RIGHTS FOR SALES BY PARTNERSHIP STOCKHOLDERS.
5.1 TAG-ALONG SALES BY PARTNERSHIP STOCKHOLDERS. If P-3 Limited
Partnership, P-4 Limited Partnership or any member of the Originating
Partnership Group (for purposes of this Section 5, the "Proposed
Transferor") at any time or from time to time, in one transaction or in a
series of related transactions, desires to Transfer (for purposes of this
Section 5, a "Tag-Along Sale") shares of Common Stock and/or Preferred
Stock to any Person (including the Company or any Subsidiary of the Company),
then each of the other Stockholders (other than P-3 Limited Partnership, P-4
Limited Partnership and any member of the Originating Partnership Group) (for
purposes of this Section 5, collectively, the "Other Stockholders") shall
have the right, but not the obligation, to elect that the Proposed Transferor
be obligated to require, as a condition to such Tag-Along Sale, that the
proposed purchaser purchase from each such electing Other Stockholder:
(a) up to the number of shares of Common Stock derived by multiplying
the total number of shares of Common Stock owned by or issuable to such
electing Other Stockholder by a fraction, the numerator of which is equal to
the number of Shares of Common Stock then owned by or issuable to the
Proposed Transferor that are to be purchased by the proposed purchaser
(without giving effect to any reduction in such number of shares by reason of
any Other Stockholder's election to exercise the "tag-along" rights
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provided in this Section 5 in connection with such transaction) and the
denominator of which is the total number of shares of Common Stock owned by
or issuable to the Proposed Transferor prior to such sale; and
(b) up to the number of shares of Preferred Stock having an aggregate
redemption value equal to the amount derived by multiplying the aggregate
redemption value of the shares of Preferred Stock owned by or issuable to
such electing Other Stockholder times a fraction, the numerator of which is
the aggregate redemption value of the shares of Preferred Stock then owned by
or issuable to the Proposed Transferor that are to be purchased by the
proposed purchaser (without giving effect to any reduction in such number of
shares by reason of any Other Stockholder's election to exercise the
"tag-along" rights provided in this Section 5 in connection with such
transaction) and the denominator of which is the aggregate redemption value
of the shares of Preferred Stock owned by or issuable to the Proposed
Transferor prior to such sale;
PROVIDED, HOWEVER, that if any Other Stockholder chooses not to sell any or
all Shares which such Other Stockholder may be entitled to sell under this
Section 5.1, and one or more of the Other Stockholders is exercising its
right to sell the maximum number of shares permissible (for purposes of this
Section 5, each, a "Reoffer Stockholder"), then each Reoffer Stockholder
and the Proposed Transferor shall have the option to sell such Shares as to
which the option to sell has not been exercised (for purposes of this Section
5, the "Reoffer Shares"), subject to allocation among them pro rata based
on their respective ownership of shares of Common Stock or Preferred Stock,
as the case may be.
Any such sales by any Other Stockholder shall be on the same terms and
conditions as the proposed Tag-Along Sale by the Proposed Transferor, except
that (i) the only representation and warranty or covenant which any Other
Stockholder shall be required to make in connection with the Tag-Along Sale
is a representation or warranty with respect to its own ownership of the
Shares to be sold by it and its ability to convey title thereto free and
clear of all Liens and (ii) the liability of any Tag-Along Stockholder with
respect to any representation and warranty made in connection with the
Tag-Along Sale shall be the several liability of such Other Stockholder (and
not joint with any other person). Notwithstanding the foregoing, in the
event that the Proposed Transferor is required in connection with such sale
to make any additional representations and warranties or enter into any
additional covenants, each Other Stockholder shall be required to severally
indemnify the Proposed Transferor and any other persons making such
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additional representations and warranties or entering into such additional
covenants for such Other Stockholder's pro rata share (based on the
consideration being received by the Proposed Transferor and Other
Stockholders for the securities being sold) of any liabilities resulting from
such representations and warranties or covenants; PROVIDED, HOWEVER, that
such indemnification liability shall be limited to an amount no greater than
the amount of proceeds actually received by such Other Stockholder in the
Tag-Along Sale. Each Other Stockholder whose shares are sold in a Tag-Along
Sale shall be required to bear a proportionate share of the expenses of the
transaction, including, without limitation, legal, accounting and investment
banking fees and expenses.
5.2 NOTICE OF TAG-ALONG OPPORTUNITY. The Proposed Transferor
participating in a Tag-Along Sale shall promptly (and in no event less than
30 Business Days prior to the consummation thereof) provide the Company with
notice (for purposes of this Section 5, the "Proposed Transferor
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Notice") of the proposed Tag-Along Sale (which the Company shall transmit to
each Other Stockholder within three Business Days of its receipt thereof)
containing the following:
(a) the name and address of the proposed Transferee of the Shares
in the Tag-Along Sale;
(b) the number of shares of Common Stock and Preferred Stock
proposed to be Transferred by the Proposed Transferor in the event none of
the Other Stockholders elects to participate;
(c) the proposed amount and form of consideration to be paid for
such Shares and the terms and conditions of payment offered by the proposed
Transferee;
(d) the aggregate number of shares of Common Stock and Preferred
Stock held of record by such Proposed Transferor as of the date of the notice
(for purposes of this Section 5, the "Notice Date") from the Proposed
Transferor to the Company;
(e) the aggregate number of shares of Common Stock and Preferred
Stock held of record as of the Notice Date by all Other Stockholders as a
group;
(f) the maximum number of shares of Common Stock and Preferred
Stock each such Other Stockholder is entitled to include in the Tag-Along
Sale (as computed in accordance with the equations set forth in Section 5.1);
and
(g) that the proposed Transferee has been informed of the
"tag-along" rights provided for in Section 5.1.
5.3 NOTICE AND TERMS OF ACCEPTANCE OF TAG-ALONG OPPORTUNITY. If an
Other Stockholder desires to participate in such Tag-Along Sale, such Other
Stockholder shall provide written notice (for purposes of this Section 5, the
"Tag-Along Notice") to such Proposed Transferor not later than 10 Business
Days after the Notice Date setting forth the number of shares of Common Stock
and Preferred Stock, if any, such Other Stockholder elects to include in the
Tag-Along Sale. In the event that any Other Stockholder chooses not to sell
any or all Shares which such Other Stockholder may be entitled to sell under
Section 5.1, the Proposed Transferor participating in the Tag-Along Sale
shall promptly (and in no event less than 15 Business Days prior to the
consummation of such Tag-Along Sale) provide the
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Company with notice (for purposes of this Section 5, the "Reoffer Notice")
of such Reoffer Shares available for sale pursuant to Section 5.1 (which the
Company shall transmit to each Reoffer Stockholder within 3 Business Days of
its receipt thereof). If a Reoffer Stockholder desires to participate in the
sale of any of the Reoffer Shares, such Reoffer Stockholder shall provide
written notice thereof to such Proposed Transferor not later than 5 Business
Days after receipt of the Reoffer Notice setting forth the number of
additional shares of Common Stock and Preferred Stock, if any, such Reoffer
Stockholder elects to include in the Tag-Along Sale. An Other Stockholder
may elect to include Shares in a Tag-Along Sale only if such Other
Stockholder elects to include in such Tag-Along Sale a ratio of shares of
Common Stock to shares of Preferred Stock equal to the ratio of shares of
Common Stock to shares of Preferred Stock proposed to be sold by the Proposed
Transferor in the Tag-Along Sale; PROVIDED, HOWEVER, that (i) if an Other
Stockholder is selling all shares of Common Stock owned by it and its
Affiliates (including all shares of Common Stock issuable upon the exercise
of Warrants and Options owned by it and its Affiliates) in such Tag-Along
Sale, then the number of shares of Preferred Stock sold by such Other
Stockholder in the Tag-Along Sale shall not be limited by the provisions of
this sentence and (ii) if an Other Stockholder is selling all of the shares
of Preferred Stock owned by it and its Affiliates in such Tag-Along Sale,
then the number of shares of Common Stock sold by such Other Stockholder in
the Tag-Along Sale shall not be limited by the provisions of this sentence.
The Tag-Along Notice and any notice given by an Other Stockholder to
participate in the sale of Reoffer Shares shall constitute such Other
Stockholder's binding agreement to sell such Shares as are included therein
on the terms and conditions applicable to such sale (including the
requirements of this Section 5). In the event that the proposed transferee
does not purchase the shares of the Proposed Transferor, then the proposed
Tag-Along Sale by the Other Stockholders to such proposed transferee shall
not take place.
5.4 APPLICATION OF TAG-ALONG PROVISIONS. The provisions of this Section
5 shall not apply to:
(a) any transaction in which shares of Common Stock or Preferred
Stock are proposed to be sold publicly pursuant to a registration statement
filed under the Act;
(b) any Transfer to a Permitted Transferee;
(c) any one transaction or series of related transactions involving
the Transfer (other than to a
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Permitted Transferee) by the Proposed Transferor of 10,000 or fewer shares of
Common Stock or 1,000 or fewer shares of Preferred Stock, subject to an
aggregate maximum per transferor of 25,000 shares of Common Stock and 2,500
shares of Preferred Stock, and provided that the transferee enters into a
written agreement in form and substance reasonably satisfactory to the
Company to be bound by the terms and conditions of this Agreement;
(d) any shares of Common Stock or Preferred Stock proposed to be
Transferred by the Proposed Transferor which are purchased by the Company or
any Other Stockholder pursuant to Section 3;
(e) any Transfer of shares of Common Stock in connection with an
Acquisition Proposal subject to the provisions of Section 4 hereof; or
(f) any Transfer by an Other Stockholder (as defined in Section
6.1) pursuant to Section 6 below.
5.5 TERMINATION OF TAG-ALONG RIGHTS. Notwithstanding anything herein to
the contrary, the rights and obligations provided for in this Section 5 shall
terminate, with respect to all Shares (other than Preferred Stock) held by
each Other Stockholder, upon the occurrence of the Qualified IPO Date.
5.6 RESTRICTIONS CUMULATIVE. The restrictions on transfer imposed by
this Section 5 on any Stockholder shall be in addition to, and not in lieu
of, the restrictions on transfer imposed by Sections 2, 3 and 4 of this
Agreement to the extent the same are otherwise applicable to such Stockholder.
6. "TAG-ALONG" RIGHTS FOR SALES BY UBS GROUP.
6.1 TAG-ALONG SALES BY UBS GROUP. If any member of the UBS Group (for
purposes of this Section 6, the "Proposed Transferor") at any time or from
time to time, in one transaction or in a series of related transactions,
desires to Transfer (for purposes of this Section 6, a "Tag-Along Sale")
shares of Preferred Stock to any Person (including the Company or any
Subsidiary of the Company), then each of P-1 Limited Partnership, P-2 Limited
Partnership, P-3 Limited Partnership and P-4 Limited Partnership (for
purposes of this Section 6, collectively, the "Other Stockholders") shall
have the right, but not the obligation, to elect that the Proposed Transferor
be obligated to require, as a condition to such Tag-Along Sale, that the
proposed purchaser purchase from each such electing
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Other Stockholder up to the number of shares of Preferred Stock having an
aggregate redemption value equal to the amount derived by multiplying the
aggregate redemption value of the shares of Preferred Stock owned by or
issuable to such electing Other Stockholder times a fraction, the numerator
of which is the aggregate redemption value of the shares of Preferred Stock
then owned by or issuable to the Proposed Transferor that are to be purchased
by the proposed purchaser (without giving effect to any reduction in such
number of shares by reason of any Other Stockholder's election to exercise
the "tag-along" rights provided in this Section 6 in connection with such
transaction) and the denominator of which is the aggregate redemption value
of the shares of Preferred Stock owned by or issuable to the Proposed
Transferor prior to such sale; PROVIDED, HOWEVER, that if any Other
Stockholder chooses not to sell any or all Shares which such Other
Stockholder may be entitled to sell under this Section 6.1, and one or more
of the Other Stockholders is exercising its right to sell the maximum number
of shares permissible (for purposes of this Section 6, each, a "Reoffer
Stockholder"), then each Reoffer Stockholder and each member of the UBS
Group shall have the option to sell such Shares as to which the option to
sell has not been exercised (for purposes of this Section 6, the "Reoffer
Shares"), subject to allocation among them pro rata based on their
respective ownership of shares of Preferred Stock.
Any such sales by any Other Stockholder shall be on the same terms
and conditions as the proposed Tag-Along Sale by the Proposed Transferor,
except that (i) the only representation and warranty or covenant which any
Other Stockholder shall be required to make in connection with the Tag-Along
Sale is a representation or warranty with respect to its own ownership of the
Shares to be sold by it and its ability to convey title thereto free and
clear of all Liens and (ii) the liability of any Tag-Along Stockholder with
respect to any representation and warranty made in connection with the
Tag-Along Sale shall be the several liability of such Other Stockholder (and
not joint with any other person). Notwithstanding the foregoing, in the
event that the Proposed Transferor is required in connection with such sale
to make any additional representations and warranties or enter into any
additional covenants, each Other Stockholder shall be required to severally
indemnify the Proposed Transferor and any other persons making such
additional representations and warranties or entering into such additional
covenants for such Other Stockholder's pro rata share (based on the
consideration being received by the Proposed Transferor and Other
Stockholders for the securities being sold) of any liabilities resulting from
such representations and warranties or covenants; PROVIDED,
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HOWEVER, that such indemnification liability shall be limited to an amount no
greater than the amount of proceeds actually received by such Other
Stockholder in the Tag-Along Sale. Each Other Stockholder whose shares are
sold in a Tag-Along Sale shall be required to bear a proportionate share of
the expenses of the transaction, including, without limitation, legal,
accounting and investment banking fees and expenses.
6.2 NOTICE OF TAG-ALONG OPPORTUNITY. The Proposed Transferor
participating in a Tag-Along Sale shall promptly (and in no event less than
30 Business Days prior to the consummation thereof) provide the Company with
notice (for purposes of this Section 6, the "Proposed Transferor Notice") of
the proposed Tag-Along Sale (which the Company shall transmit to each Other
Stockholder within three Business Days of its receipt thereof together with
any additional information which the Company elects to provide to the other
Stockholders in connection therewith) containing the following:
(a) the name and address of the proposed Transferee of
the Shares in the Tag-Along Sale;
(b) the number of shares of Preferred Stock proposed to
be Transferred by the Proposed Transferor in the event none of the
Other Stockholders elects to participate;
(c) the proposed amount and form of consideration to be
paid for such Shares and the terms and conditions of payment offered
by the proposed Transferee;
(d) the aggregate number of shares of Preferred Stock
held of record by such Proposed Transferor as of the date of the
notice (for purposes of this Section 6, the "Notice Date") from the
Proposed Transferor to the Company;
(e) that the proposed Transferee has been informed of
the "tag-along" rights provided for in Section 6.1.
6.3 NOTICE AND TERMS OF ACCEPTANCE OF TAG-ALONG OPPORTUNITY. If
an Other Stockholder desires to participate in such Tag-Along Sale, such
Other Stockholder shall provide written notice (for purposes of this Section
6, the "Tag-Along Notice") to such Proposed Transferor not later than 10
Business Days after the Notice Date setting forth the number of shares of
Preferred Stock, if any, such Other Stockholder elects to include in the
Tag-Along Sale. In the
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32
event that any Other Stockholder chooses not to sell any or all Shares which
such Other Stockholder may be entitled to sell under Section 6.1, the
Proposed Transferor participating in the Tag-Along Sale shall promptly (and
in no event less than 15 Business Days prior to the consummation of such
Tag-Along Sale) provide the Company with notice (for purposes of this Section
6, the "Reoffer Notice") of such Reoffer Shares available for sale pursuant
to Section 6.1 (which the Company shall transmit to each Reoffer Stockholder
within 3 Business Days of its receipt thereof). If a Reoffer Stockholder
desires to participate in the sale of any of the Reoffer Shares, such Reoffer
Stockholder shall provide written notice thereof to such Proposed Transferor
not later than 5 Business Days after receipt of the Reoffer Notice setting
forth the number of additional shares of Preferred Stock, if any, such
Reoffer Stockholder elects to include in the Tag-Along Sale. The Tag-Along
Notice and any notice given by an Other Stockholder to participate in the
sale of Reoffer Shares shall constitute such Other Stockholder's binding
agreement to sell such Shares as are included therein on the terms and
conditions applicable to such sale (including the requirements of this
Section 6). In the event that the proposed transferee does not purchase the
shares of the Proposed Transferor, then the proposed Tag-Along Sale by the
Other Stockholders to such proposed transferee shall not take place.
6.4 APPLICATION OF TAG-ALONG PROVISIONS. The provisions of this
Section 6 shall not apply to:
(a) any transaction in which shares of Preferred Stock
are proposed to be sold publicly pursuant to a registration statement
filed under the Act;
(b) any Transfer to a Permitted Transferee;
(c) any one transaction or series of related transactions
involving the Transfer (other than to a Permitted Transferee) by
the Proposed Transferor of 1,000 or fewer shares of Preferred Stock,
subject to an aggregate maximum per transferor of 2,500 shares of
Preferred Stock, and provided that the transferee enters into a
written agreement in form and substance reasonably satisfactory to
the Company to be bound by the terms and conditions of this Agreement;
(d) any shares of Preferred Stock proposed to be
Transferred by the Proposed Transferor which are purchased by the
Company or any Other Stockholder pursuant to Section 3;
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33
(e) any Transfer by an Other Stockholder (as defined in
Section 5.1) pursuant to Section 5 above.
6.6 RESTRICTIONS CUMULATIVE. The restrictions on transfer imposed
by this Section 6 on any Stockholder shall be in addition to, and not in lieu
of, the restrictions on transfer imposed by Sections 2, 3 and 4 of this
Agreement to the extent the same are otherwise applicable to such Stockholder.
7. PREEMPTIVE RIGHTS OF UBS CAPITAL.
7.1 GRANT OF RIGHT. If at any time hereafter the Company proposes
to sell or issue any Common Stock or Preferred Stock or any securities
exercisable for or convertible into Common Stock or Preferred Stock or any
Subsidiary of the Company proposes to sell or issue any equity securities or
any securities exercisable for or convertible into equity securities ("New
Stock"), the Company shall provide to the UBS Group a priority subscription
right to purchase up to a proportionate amount of New Stock determined (i) in
the case of Common Stock, any securities exercisable for or convertible into
Common Stock or any securities to be issued by a Subsidiary, by multiplying
the number of shares of New Stock proposed to be sold or issued by the
Company or any Subsidiary of the Company by a fraction, the numerator of
which is the number of shares of any class of Common Stock then held by or
issuable to the UBS Group and the denominator of which is the number of
shares of all classes of Common Stock then issued and outstanding on a fully
diluted basis, excluding the shares held by the Company or any direct or
indirect subsidiary of the Company, (ii) in the case of Preferred Stock or
any securities exercisable for or convertible into Preferred Stock, by
multiplying the aggregate redemption value of the shares of New Stock
proposed to be sold or issued by the Company by a fraction, the numerator of
which is the aggregate redemption value of all shares of Preferred Stock then
held by or issuable to the UBS Group and the denominator of which is the
aggregate redemption value of all shares of Preferred Stock then issued and
outstanding on a fully diluted basis, excluding the shares held by the
Company or any Subsidiary of the Company; PROVIDED, HOWEVER, that such
priority subscription right shall not apply to any issuance or sale of New
Stock (a) all or substantially all of the net proceeds of which are used in
connection with, or which are issued as acquisition consideration in, the
acquisition of any business enterprise by the Company or any of its
Subsidiaries; (b) in any public offering; (c) pursuant to any compensation
plan for any director, officer or other employee of the Company or its
Subsidiaries; (d) issuable upon the exercise or conversion
Holdings Stockholders Agreement
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of any securities outstanding on the date of this Agreement; (e) issuable
upon the exercise or conversion of any securities issued after the date of
this Agreement, the issuance of which were subject to the provisions of the
this Section 7.1; (f) which is issued to the Company or any Subsidiary of the
Company; or (g) which is issued in connection with the establishment of a
joint venture with an unaffiliated third party.
7.2 EXERCISE OF RIGHT. If the Company proposes to undertake an
issuance or sale of New Stock to which the priority subscription right
granted under Section 7.1 applies, the Company shall give UBS Capital (as
representative of the members of the UBS Group) notice of its intention,
which notice shall describe the type of New Stock and the price and the
general terms upon which the Company proposes to issue or sell such New Stock
and which, if any offering materials are provided to the proposed purchasers,
shall be accompanied by a copy of such offering materials. UBS Capital shall
have ten Business Days from the date such notice is given to give the Company
notice of the election of the UBS Group to purchase all or any portion of the
proportionate amount of such New Stock set forth in Section 7.1 for the price
and upon the general terms specified in such notice, stating the quantity of
such New Stock to be purchased; PROVIDED, HOWEVER, that if the price so
specified is payable in whole or in part in property, the UBS Group may pay
in cash the fair market value of such property as determined by the Board in
good faith. If UBS Capital does not give such notice within such period, the
UBS Group shall be deemed to have waived its rights pursuant to this Section
7 with respect to such New Stock.
7.3 SALE UPON WAIVER. Notwithstanding the preceding provisions of
this Section 7, the Company may sell any portion of an issue of New Stock,
with respect to which such rights have been waived in writing by UBS Capital,
prior to the expiration of the ten Business Day period provided for by
Section 7.2.
7.4 TERMINATION OF PREEMPTIVE RIGHTS. Notwithstanding anything
herein to the contrary, the rights and obligations provided for in this
Section 7 shall terminate upon the occurrence of the Qualified IPO Date.
8. AFFILIATE TRANSACTIONS. For so long as UBS Capital is a
Stockholder, the Company shall not engage in, undertake or enter into, or
commit to engage in, undertake or enter into, and shall cause its
Subsidiaries not to engage in, undertake or enter into, or commit to engage
in, undertake or enter into, any agreement, transaction or arrangement (other
than an agreement, transaction or
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arrangement providing for the payment of not more than $150,000 which has
been approved by an independent majority of the Board of Directors of the
Company) with any Affiliate of the Company, any Stockholder or any Affiliate
of any Stockholder, unless the Company, the respective Subsidiary of the
Company or the Company on behalf of such Subsidiary has obtained the written
consent of UBS Capital with respect to such agreement, transaction or
arrangement. If UBS Capital does not give written notice to the Company of
its disapproval of such agreement, transaction or arrangement within ten
Business Days after written notice of the proposed agreement, transaction or
arrangement is given to it, UBS Capital shall be deemed to have given its
written consent to such agreement, transaction or arrangement. The
restrictions contained in this Section 8 shall terminate upon the occurrence
of the Qualified IPO Date. Notwithstanding the foregoing, the provisions of
this Section 8 shall not apply to (i) agreements, transactions and
arrangements set forth in or contemplated by the Management Services
Agreement, (ii) agreements, transactions and arrangements between the Company
or any of its Subsidiaries and Union Bank of Switzerland, including, without
limitation, agreements, transactions and arrangements set forth in or
contemplated by the Facility Agreement, dated as of June 16, 1995, between
ABI Acquisition 2 PLC and Petrowax PA Inc. as initial borrowers, the
Companies named therein as initial guarantors, Union Bank of Switzerland as
arranger, Union Bank of Switzerland as facility agent, Union Bank of
Switzerland as security trustee and certain others, (iii) agreements,
transactions and arrangements set forth in or expressly contemplated by this
Agreement or any subscription agreement entered into on or before the date
hereof by the Company or any Subsidiary and (iv) agreements, transactions and
arrangements relating to the indemnification of officers and directors of the
Company and its Subsidiaries or the payment of reasonable and customary
directors' fees and reimbursement of directors' and officers' expenses.
9. SALE OF BUSINESS.
9.1 COOPERATION WITH UBS CAPITAL. Promptly after any
determination by the Board for the Company to consider undertaking a
transaction which would have as an intended result a Change of Control of the
Company, or cause the Company or any Subsidiary to undertake a transaction
which would have as an intended result a Change of Control of a Subsidiary or
a material operating division (a "Sale"), the Company will notify UBS Capital
with respect to the proposed Sale. If requested by UBS Capital, the Company
will consult with UBS Capital with respect to the terms and conditions on
which such Sale could be completed, including without
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36
limitation the anticipated amount and form of consideration, the proposed
structure of the Sale, the estimated costs to the Company or the Subsidiary
of completing the Sale and any evaluation of the desirability of the Sale.
Notwithstanding the foregoing, the Company shall have no obligation to
prepare any document, other than a brief term sheet, for the express purpose
of conveying information to UBS Capital concerning a proposed Sale.
9.2 RECEIPT OF OFFER TO PURCHASE. If the Company receives a bona
fide, written third-party offer to complete a Sale (the "Third Party Offer"),
the Company shall not accept such offer or commit the Company or a Subsidiary
to complete the Sale unless the Company notifies UBS Capital of the Offer and
provides to UBS Capital information reasonably sufficient to permit UBS
Capital to evaluate the attractiveness of the Third Party Offer. The Company
will not accept the Third Party Offer if within five Business Days after
giving notice of the offer to UBS Capital, UBS Capital gives written notice
to the Company that UBS Capital desires the Company to seek a Sale on terms
more advantageous than those set forth in the Third Party Offer and UBS
Capital identifies a third party the Company should contact. If UBS Capital
gives such notice, the Company will use reasonable efforts to respond to the
reasonable requests of the party identified by UBS Capital with respect to
information concerning the Company's business. During the period (the
"Consulting Period") ending on the earlier of (a) 30 days after the date of
such notice by UBS Capital to the Company and (b) delivery by UBS Capital to
the Company of a consent to proceed with the proposed Sale, the Company will
not make any commitments to third parties with respect to a Sale, including
making any exclusive dealing commitment, provided that the Company shall be
permitted to make commitments relating to the confidentiality of information,
the performance of due diligence and the expenses of the parties. If the
Company does not receive prior to the expiration of the Consulting Period a
bona fide third party written offer to complete a Sale of the Company or the
Subsidiary to which the Third Party Offer pertains, which offer is not
subject to conditions which the Company deems to be unduly burdensome (an
"Alternative Offer"), the restrictions imposed on the Company with respect to
such Sale shall terminate.
9.3 EVALUATION OF ALTERNATIVE OFFER. If an Alternative Offer is
presented to the Company prior to the expiration of the Consulting Period,
the Board in good faith shall make a determination as to the relative
desirability of the Third Party Offer and the Alternative Offer, taking into
account such factors as the Board may in its reasonable discretion determine
to be pertinent. If the Board
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determines that the Alternative Offer is more favorable to the Company than
the Third Party Offer, the Company may elect to undertake to complete the
Sale on the terms provided for in the Alternative Offer or may elect not to
undertake the Sale. If the Board does not determine that the Alternative
Offer is more favorable to the Company than the Third Party Offer, the
Company shall have no further obligations or be subject to any further
restrictions under this Section 9 with respect to such Sale. In that event,
the Company, without limitation, may elect to undertake to complete the Sale
on the terms of the Third Party Offer or on other terms, may elect to
undertake a Sale to the Offeror in respect of the Alternative Offer on terms
which may be other than those of the Alternative Offer, and may elect not to
undertake the Sale. The Stockholders agree that the performance by the
Company of its obligations under this Section 9 shall not breach any duty the
Company or any of its directors or officers or controlling stockholders may
have to the Stockholders, including any statutory or fiduciary duty or other
common law duty.
9.4 CONFIDENTIALITY AGREEMENT. The Company may condition any
undertaking of consultations with UBS Capital in connection with this Section
9 upon the execution and delivery by UBS Capital to the Company of a
confidentiality agreement reasonably satisfactory to the Company and its
counsel and upon the satisfaction of any governmental approvals, if any,
required in connection with the delivery of such documents or information or
with such consultations.
9.5 NO RIGHT TO REPRESENT OR COMMIT THE COMPANY. Notwithstanding
anything herein to the contrary, UBS Capital is not entitled to represent the
Company in any discussions with third parties and is not entitled to commit
or obligate the Company in any way.
9.6 TERMINATION OF RIGHT TO DELIVER ALTERNATIVE OFFER.
Notwithstanding anything herein to the contrary, the rights of UBS Capital
and the obligations of and restrictions imposed on the Company under this
Section 9 shall terminate upon the earlier of (i) the occurrence of the
Qualified IPO Date and (ii) such time as UBS Capital is no longer a
Significant Stockholder.
9.7 APPLICATION TO DRAG-ALONG SALE. In the event that any
Originating Partnership determines to consider undertaking a transaction
which would permit it to exercise its rights to cause a Drag-Along Sale
pursuant to Section 4, such transaction shall be considered a Sale and all
obligations imposed on the Company under this Section 9 shall apply to and be
fully complied with by such Originating Partnership.
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10. RESTRICTIONS ON AMENDMENT OF GOVERNING DOCUMENTS. The Company
and the Stockholders agree not to amend the articles of incorporation or
bylaws of the Company, and agree not to permit the amendment of the articles
of incorporation, charter or bylaws of any Subsidiary, or, for a Subsidiary
for which there are no articles of incorporation, charter or bylaws, such
other instrument or instruments having a purpose comparable to the articles
of incorporation, charter or bylaws of a corporation, without the prior
written consent of UBS Capital with respect to such amendment, which consent
shall not be unreasonably withheld; PROVIDED, HOWEVER, that (i) no consent of
UBS shall be required to establish a new series of Preferred Stock (including
the filing of a certificate of designations with respect thereto) or to
increase the number of authorized shares of capital stock of the Company and
(ii) UBS may withhold its consent in its sole discretion with respect to any
amendment which would materially and adversely affect the rights, preferences
or privileges of the Series A Preferred Stock or which would adversely
discriminate against the Class C Common Stock as compared to the Class A
Common Stock, Class B Common Stock or Class D Common Stock. Notwithstanding
the foregoing, UBS Capital shall be deemed to have given its written consent
to any such amendment if the Company has received no written objection
thereto from UBS Capital within ten Business Days after written notice of the
proposed amendment is given by the Company to UBS Capital. Notwithstanding
anything herein to the contrary, the obligations and restrictions contained
in this Section 10 shall terminate upon the earlier of (i) the occurrence of
the Qualified IPO Date and (ii) such time as UBS Capital is no longer a
Significant Stockholder.
11. CORPORATE GOVERNANCE.
11.1 OBSERVER STATUS. At any time that UBS remains a Significant
Stockholder and does not have one or more nominees on the Board pursuant to
Section 11.2, UBS Capital will have the right to designate two individuals to
observe any meeting of the Board, any committees of the Board, the boards of
directors of the Subsidiaries of the Company ("Subsidiary Boards") and any
committees of any Subsidiary Boards, subject, however, to the right of the
Company to in good faith exclude such observers from any Company or
subsidiary board or committee meeting to the minimum extent necessary for the
purpose of protecting any attorney/client privilege. Not more than two
observers may attend any single meeting. Each such observer shall be
required to execute and deliver to the Company a confidentiality agreement
reasonably satisfactory to the Company. Observers shall not interfere with
the performance by members of such boards of any of their respective
Holdings Stockholders Agreement
-------------------------------
39
statutory or common law duties. Subject to the right of the Company to in
good faith exclude observers from any meeting and limit the distribution of
information to the minimum extent necessary for the purpose of protecting any
attorney/client privilege in accordance with the first sentence of this
Section 11.1, Observers shall have the right to participate in all Board,
Subsidiary board and committee discussions and to receive copies of all
documents (including, without limitation, notices of meetings and requests
for written consents) at the same time as Board, Subsidiary board or
committee members receive such documents, but shall not have any voting or
approval rights.
11.2 RIGHT OF UBS CAPITAL TO NOMINATE DIRECTORS. From and after the
expiration of the Loan Period for so long as UBS Capital remains a
Significant Stockholder (the "Governance Period"), UBS Capital shall have the
right to nominate two members of the Board and one member of each Subsidiary
Board (each, a "UBS Nominee"). Each of the Stockholders agrees that such
Stockholder will vote all shares of Class A Common Stock now or hereafter
owned by such Stockholder at any meeting of stockholders of the Company and
in whatever other manner is necessary to ensure that during the Governance
Period, one UBS Nominee to the Board is duly elected. Each of the
Stockholders also agrees that such Stockholder will vote all shares of Class
B Common Stock now or hereafter owned by such Stockholder at any meeting of
shareholders of the Company and in whatever other manner is necessary to
ensure that during the Governance Period, the second UBS Nominee to the Board
is duly elected. The Company agrees that it will vote all shares of voting
Capital Stock of any Subsidiaries held by it and will cause to be voted all
shares of voting Capital Stock of the Subsidiaries at any meetings of
shareholders of Subsidiaries and in whatever other manner is necessary to
ensure that one UBS Nominee to each Subsidiary Board is duly elected during
the Governance Period. UBS Capital shall have the further right during the
Governance Period to have one UBS Nominee serve as a member of each Board
committee and each Subsidiary Board committee as may be established from time
to time.
11.3 VACANCIES. If any director ("Withdrawing Director")
selected in the manner set forth in Section 11.2 above is unable to serve or,
once having commenced to serve, is removed or withdrawn from the Board or a
Subsidiary Board, such Withdrawing Director's replacement (the "Substitute
Director") on the Board or the Subsidiary Board will be nominated by the
party who nominated the Withdrawing Director. Each of the Stockholders
agrees that such Stockholder will vote all shares of Class A Common Stock and
Class B Common Stock, as
Holdings Stockholders Agreement
-------------------------------
40
applicable, now or hereafter held by it, and the Company agrees to vote all
voting Capital Stock now or hereafter owned or controlled by it, directly or
indirectly, for the election to the Board or such Subsidiary Board of such
Substitute Director.
11.4. RIGHTS NOT ASSIGNABLE WITHOUT CONSENT. Notwithstanding
any other provision of this Agreement, the right of UBS Capital to select the
UBS Nominees is not transferable, whether by sale of Shares or otherwise,
except with the consent of the Company and the Originating Partnerships which
consent shall not be unreasonably withheld.
11.5 TERMINATION OF GOVERNANCE RIGHTS. Notwithstanding anything
herein to the contrary, the corporate governance rights of UBS Capital and
the obligations of the Stockholders and the Company provided for in this
Section 11 shall terminate upon the occurrence of the Qualified IPO Date and,
if requested by the Company, the Stockholders and the Company agree to take
such action, as soon as practicable thereafter, as may be necessary to
achieve the resignation or removal of all UBS Nominees. Nothing in this
Section 11.6 shall be deemed to prohibit or otherwise limited the exercise by
UBS Capital of its voting rights with respect to any shares of Capital Stock
held by it.
12. TERMINATION. Except for the provisions of Sections 6 and
13, which shall survive the expiration or other termination of this
Agreement, this Agreement shall terminate on the earlier to occur of (a) the
written approval of (i) the Originating Partnerships and (ii) UBS Capital if
then a Stockholder and (b) June 27, 2005. A Stockholder shall cease to be
deemed a Stockholder hereunder, and shall no longer be a party to this
Agreement, at such time as such Stockholder ceases to own any Shares.
13. REGISTRATION RIGHTS. The Company agrees to afford to each
Eligible Holder the registration rights set forth in Exhibit B hereto.
14. MISCELLANEOUS.
14.1 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without regard to principles of conflicts of law.
14.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement (including
the exhibits hereto) constitutes the entire agreement of the parties with
respect to the subject
Holdings Stockholders Agreement
-------------------------------
41
matter hereof and may not be modified or amended except by a written
agreement signed by (a) the Company, (b) the Originating Partnerships and (c)
UBS Capital if then a Stockholder. Notwithstanding the foregoing, the
Company shall have the right, subject to Section 7, from and after the date
hereof, in the sole discretion of the Board, to issue shares of Common Stock
or Preferred Stock, or options or warrants to purchase or securities
convertible into such shares, to any Person (whether or not such Person is
already party to this Agreement) and to cause such securities and such
Persons (to the extent not already subject to this Agreement) to become
subject to this Agreement as Registrable Securities and as a Stockholder of
whatever class as the Company may determine, respectively.
14.3 LEGEND ON STOCK CERTIFICATES. Each certificate
representing Shares which are subject to this Agreement shall be endorsed
with a legend substantially to the following effect (in addition to any
legend required by applicable state securities or "blue sky" laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THAT ACT AND UNDER APPLICABLE STATE SECURITIES LAW
OR MSC HOLDINGS, INC. (THE ""COMPANY'') SHALL HAVE RECEIVED AN OPINION OF
ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THAT ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. THE
SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS ALSO SUBJECT TO
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THAT CERTAIN STOCKHOLDERS
AGREEMENT, DATED AS OF JUNE 27, 1995, AS SUPPLEMENTED, MODIFIED AND AMENDED
FROM TIME TO TIME, AMONG THE COMPANY AND THE STOCKHOLDERS, OPTIONHOLDERS AND
WARRANTHOLDERS SIGNATORY THERETO, A COPY OF WHICH AGREEMENT IS AVAILABLE FOR
INSPECTION DURING REGULAR BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE OFFICES
OF THE COMPANY.
Any stock certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
the completion of a public distribution of securities of the Company
represented thereby) shall also bear such legend, unless the restrictions
contained in Sections 3, 4, 5 and 6 of this Agreement are no longer in effect
and, in the opinion of counsel for the Company, the Shares represented
thereby need no longer be subject to the restrictions contained in
Holdings Stockholders Agreement
-------------------------------
42
Section 2 of this Agreement. The provisions of Sections 2, 3, 4, 5 and 6 of
this Agreement shall be binding upon, and shall inure to the benefit of, the
Stockholders and all subsequent holders of Shares who acquired the same
directly or indirectly from a Stockholder in a transaction or series of
transactions not involving any public offering. The Company agrees that it
will not transfer on its books any certificate representing Shares in
violation of the provisions of this Agreement.
14.4 SPECIFIC PERFORMANCE. Due to the fact that the securities
of the Company cannot be readily purchased or sold in the open market, and
for other reasons, the parties will be irreparably damaged in the event that
this Agreement is not specifically enforced. In the event of a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement
by any of the parties hereto, the other parties shall, in addition to all
other remedies, be entitled (without any bond or other security being
required) to a temporary and/or permanent injunction, without showing any
actual damage or that monetary damages would not provide an adequate remedy,
and/or a decree for specific performance, in accordance with the provisions
hereof.
14.5 WAIVER. No waiver of any breach or default hereunder shall
be considered valid unless in writing, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
Anything in this Agreement to the contrary notwithstanding, any waiver,
consent or other instrument under or pursuant to this Agreement signed by, or
binding upon, a Stockholder shall be valid and binding upon any and all
persons or entities (other than the Company) who may, at any time, have or
claim any rights under or pursuant to this Agreement in respect of the Shares
originally acquired by such Stockholder.
14.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Stockholders and
their respective heirs, personal representatives, successors and permitted
assigns.
14.7 SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid
or unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
Holdings Stockholders Agreement
-------------------------------
43
14.8 HEADINGS. The section headings contained herein are for
the purposes of convenience of reference only and are not intended to define
or limit the contents of said sections.
14.9 FURTHER ASSURANCES. Each party hereto shall cooperate and
shall take such further action and shall execute and deliver such further
documents as may be reasonably requested by any other party in order to carry
out the provisions and purposes of this Agreement.
14.10 GENDER. Whenever the pronouns "he" or "his" are used
herein they shall also be deemed to mean "she" or "hers" or "it" or "its"
whenever applicable. Words in the singular shall be read and construed as
though in the plural and words in the plural shall be construed as though in
the singular in all cases where they would so apply.
14.11 NOTICES. Any notice or other communication to be given
hereunder by any party to any other party shall be in writing and delivered
in person or by courier or by facsimile transmission or by mail, postage
prepaid, as follows:
(a) if to the Company, to ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇., ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Financial
Officer, Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ (with a copy to ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇)), or at such other
place as the Company shall have designated by notice as herein provided to
each of the Stockholders; and
(b) if to a Stockholder, to the address of such Stockholder
as it appears on Exhibit A hereto, or at such other place as such
Stockholder shall have designated by notice as herein provided to the
Company.
14.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original for all
purposes, but all of which shall constitute but one and the same instrument.
14.13 DISPUTE RESOLUTION. To the fullest extent permitted by
law, any controversy, dispute or claim arising out of, in connection with, or
in relation to the interpretation, performance or breach of this Agreement or
any action taken by the Company or any Stockholder hereunder, or otherwise
arising out of the execution or performance hereof, including any claim based
on contract, tort or statute, shall be determined, at the request of any
Holdings Stockholders Agreement
-------------------------------
44
party, by arbitration conducted in the English language in New York, New York
or in Wilmington, Delaware, as determined by the American Arbitration
Association in accordance with and to the extent permitted by the Delaware
Arbitration Act and, to the extent not inconsistent therewith, the Rules for
Large Complex Cases of the American Arbitration Association as in effect on
the date that demand for such arbitration is filed with the American
Arbitration Association. The arbitrator shall be a member of the Large,
Complex Case Panel of the American Arbitration Association. The parties to
the arbitration shall attempt to select an arbitrator from such members. If
the parties to the arbitration do not agree on the selection of an arbitrator
within twenty (20) days after the date demand for the arbitration is filed,
an arbitrator having such experience shall be selected in accordance with
such Rules of the American Arbitration Association. The arbitrator shall set
forth his or her determination in writing (which shall be sent to each party
to such arbitration) and shall enumerate in reasonable detail the basis of
his or her determination. No party to the arbitration may seek, and the
arbitrator shall not award, punitive or exemplary damages. To the fullest
extent permitted by applicable law, any judgment or award rendered by the
arbitrator shall be final, conclusive and binding. Judgment may be entered on
any final, unappealable arbitration award by any state or federal court
having jurisdiction thereof. To the fullest extent permitted by applicable
law, any controversy concerning whether a dispute is an arbitrable dispute or
as to the interpretation or enforceability of this Section 14.13, shall be
determined by the arbitrator. The arbitration proceedings as well as the fact
such proceedings occur, shall be kept confidential by the Stockholders and
may only be disclosed to their personal representatives and advisors or as
required by law and insofar as is necessary to confirm, correct, vacate or
enforce the award. In the event of a breach of this provision, the
arbitrator is expressly authorized to assess damages and each of the
Stockholders consents to the expansion of the scope of arbitration for such
purpose. The pendency of any arbitration under this Section 14.13 shall not
relieve any Stockholder of its obligations under this Agreement. To the
fullest extent permitted by applicable law, if the Company or any Stockholder
shall resort to legal proceedings for injunctive or other similar relief
pending the outcome of any such arbitration proceeding or prior to the
initiation thereof, such Person shall not be deemed to have waived its rights
to cause such matter or any other matter to be referred to arbitration
pursuant to this Section 14.13. The parties intend that this agreement to
arbitrate be valid, enforceable and irrevocable. The designation of a situs
or a governing law for this Agreement or the arbitration shall not be deemed
an election to
Holdings Stockholders Agreement
-------------------------------
45
preclude application of the Federal Arbitration Act if it would be
applicable. The arbitrator shall have authority in his or her discretion to
grant injunctive relief, award specific performance and impose sanctions upon
any party to any such arbitration. In his or her award, the arbitrator shall
allocate, in his or her discretion, among the parties to the arbitration all
costs of arbitration, including the fees and expenses of the arbitrator and
reasonable attorneys' fees, costs and expert witness expenses of the parties.
14.14 AUTHORITY OF UBS CAPITAL. Each member of the UBS Group
(other than UBS Capital) hereby authorizes and empowers UBS Capital to take
all actions on behalf of and exercise all rights of such Person under this
Agreement, and UBS Capital shall act as the representative of the members of
the UBS Group for all purposes under this Agreement.
14.15 EFFECTIVE DATE. The effective date of this Agreement shall
be June 28, 1995, and each reference herein to the date of this Agreement
shall be deemed to be a reference to June 28, 1995.
Holdings Stockholders Agreement
-------------------------------
46
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
THE COMPANY:
MSC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------
Title: Vice President
--------------------------
Holdings Stockholders Agreement
-------------------------------
47
STOCKHOLDERS:
PETROWAX EQUITY PARTNERS I L.P.
By: CENTURY CITY 1800 PARTNERS,
L.P., as general partner
By: CENTURY CITY 1800 MANAGEMENT
PARTNERS L.P., as general
partner
By: GELPAR, INC., as general
partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------
Title: Vice President
-------------------------
PETROWAX EQUITY PARTNERS II L.P.
By: CENTURY CITY 1800 PARTNERS,
L.P., as general partner
By: CENTURY CITY 1800 MANAGEMENT
PARTNERS L.P., as general
partner
By: GELPAR, INC., as general
partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------
Title: Vice President
--------------------------
Holdings Stockholders Agreement
-------------------------------
48
PETROWAX EQUITY PARTNERS III L.P.
By: CENTURY CITY 1800 PARTNERS,
L.P., as general partner
By: CENTURY CITY 1800 MANAGEMENT
PARTNERS L.P., as general
partner
By: GELPAR, INC., as general
partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------
Title: Vice President
--------------------------
PETROWAX EQUITY PARTNERS IV L.P.
By: CENTURY CITY 1800 PARTNERS,
L.P., as general partner
By: CENTURY CITY 1800 MANAGEMENT
PARTNERS L.P., as general
partner
By: GELPAR, INC., as general
partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------
Title: Vice President
--------------------------
Holdings Stockholders Agreement
-------------------------------
49
UBS CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Managing Director
-------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Managing Director
-------------------------
Holdings Stockholders Agreement
-------------------------------
50
EXHIBIT A
STOCKHOLDERS
Number and Number of
Class of Shares and
Shares of Series of
Common Preferred
Name and Address Stock Stock
of Stockholder Owned Owned
-------------- ----- -----
Petrowax Equity Partners I L.P. 535,715 58,928
c/o Century City 1800 Partners L.P. Class A Series B
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Petrowax Equity Partners II L.P. 142,857 15,714
c/o Century City 1800 Partners L.P. Class B Series B
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Petrowax Equity Partners III L.P. 35,714 3,929
c/o Century City 1800 Partners L.P. Class C Series B
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Petrowax Equity Partners IV L.P. 35,713 3,929
c/o Century City 1800 Partners L.P. Class C Series B
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS Capital Corporation -- 142,500
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Exhibit A to Stockholders Agreement
-----------------------------------
A-1
Number of Shares of Class C
Name and Address Common Stock Subject to
of Warrant holder Warrants
----------------- --------
UBS Capital Corporation 409,090
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Number of Shares of Class D
Name and Address Common Stock Subject to
of Optionholder Options
--------------- -------
-- --
Exhibit A to Stockholders Agreement
-----------------------------------
A-2
EXHIBIT B
REGISTRATION RIGHTS
1. "PIGGY-BACK" REGISTRATION.
(A) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at any
time proposes to effect a Qualified IPO or, following a Qualified IPO,
proposes to register any of its equity securities under the Act (other than
by a registration on Form S-4 or S-8 or any successor or similar forms),
whether or not for sale for its own account, in a manner which would permit
registration of Registrable Securities for sale to the public under the Act,
then the Company will each such time give prompt written notice (which shall
be at least 30 days prior to filing) to all Eligible Holders of Registrable
Securities of its intention to do so and of such Eligible Holders' rights
under this paragraph 1. Upon the written request of any such Eligible Holder
made within 20 days after the receipt of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by such
Eligible Holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities
in the registration statement which covers the securities which the Company
proposes to register or in a separate registration statement concurrently
filed and on terms substantially the same as those being offered to the
Company; PROVIDED THAT if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give
written notice of such determination to each Eligible Holder of Registrable
Securities and, thereupon:
(i) in the case of a determination not to register, shall
be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay
the Registration Expenses in connection therewith), and
Exhibit B to Stockholders Agreement
-----------------------------------
B-1
(ii) in the case of a delay in registering, shall be
permitted to delay registering any Registrable Securities for the same
period as the delay in registering such other securities.
(b) PRIORITY IN "PIGGY-BACK" REGISTRATIONS. If a registration
pursuant to this paragraph 1 involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the
offering, the Company will include in such registration to the extent of the
number which the Company is so advised can be sold in such offering without
adversely affecting the offering, securities determined as follows:
(i) first, the securities proposed by the Company to
be sold for its own account,
(ii) second, any Registrable Securities requested to be
included in such registration pro rata among the holders thereof
requesting such registration on the basis of the number of shares of
such securities requested to be included by such holders, and
(iii) third, any other securities of the Company proposed
to be included in such registration statement in accordance with the
priorities, if any, then existing among the holders of such securities.
2. DEMAND REGISTRATION RIGHT OF UBS.
(a) RIGHT TO REQUIRE REGISTRATION. At any time after the earlier of
(a) the date 7 years after the date of this Agreement and (b) the date 9
months following a Qualified IPO, UBS Capital shall have the right to require
the Company to file a registration statement under the Securities Act (and
the UBS Permitted Transferees shall have the right to participate in such a
registration) for a public offering of all or any portion of the shares of
Series A Preferred Stock held by the UBS Group when such right is exercised,
or all or any portion of the shares of Common Stock either held by the UBS
Group when such right is exercised or for which Warrants held by the UBS
Group when such right is exercised are exercisable and/or convertible, or all
or any portion of both such shares of Series A Preferred Stock and such
shares of Common Stock (such shares subject to the demand, the "Registration
Demand
Exhibit B to Stockholders Agreement
-----------------------------------
B-2
Securities"), subject to the provisions of this paragraph 2. The demand
registration rights granted to the UBS Group in this paragraph 2 are subject
to the following limitations: (i) UBS Capital (on behalf of the UBS Group)
may make a demand under this paragraph 2 only two (2) times (each, a "Demand
Registration"); (ii) the Company shall not be obligated to cause any
registration statement filed under this paragraph 2 to be declared effective
less than six months after the effective date of the most recent registration
statement filed by the Company on its own behalf or for the benefit of the
Originating Partnership Group pursuant to Section 3; (iii) the managing
underwriter of any such offering shall be a recognized investment banking
firm selected by UBS Capital and approved by the Company (which approval
shall not be unreasonably withheld); (iv) notwithstanding the giving of
notice by UBS Capital of the exercise of its right to require registration
under this paragraph 2, the Company may elect to convert such registration
into a registration of shares for sale by the Company pursuant to paragraph 1
hereof by providing notice to the Stockholders in accordance with paragraph
1, and in such event the provisions of paragraph 1 shall apply to such
registration rather than the provisions of this paragraph 2 and such
registration shall not count as a Demand Registration; (v) the Company shall
have the right exercisable only one (1) time per each request for a demand
registration to postpone for up to six months any registration requested
pursuant to this paragraph 2 if, in the opinion of the Board, such
registration would interfere with any material transaction then being pursued
by the Company or any strategic plan or material business plan adopted by the
Company in advance of the registration demand; (vi) notwithstanding any other
provision hereof, UBS Capital shall have the right to transfer one or both of
its Demand Registrations in connection with a transfer of at least 50% of the
Shares owned by it at any time, each such transfer to be subject to the
approval of the Company, such approval not to be unreasonably withheld; and
(vii) any demand under this paragraph 2 shall be for a firm commitment
underwritten offering, with respect to which the Company shall be required to
maintain an effective registration statement for a maximum of 30 days.
(b) NOTICE OF EXERCISE OF DEMAND REGISTRATION RIGHT; PARTICIPATION
RIGHTS. UBS Capital shall provide written notice to the Company of the
registration demand (which notice shall state the number of shares of Common
Stock and Series A Preferred Stock the UBS Group desires the Company to
register and the intended method of disposition of such securities), and the
Company promptly shall provide written notice of such demand to all of the
other Stockholders and all of the Stockholders then will have the
Exhibit B to Stockholders Agreement
-----------------------------------
B-3
opportunity to include in the offering shares of Common Stock or
Preferred Stock of any series then owned by (or issuable, upon exercise
and/or conversion of other securities, to) such Stockholders, but in each
case only to the extent permitted by paragraph 2.3 below. In addition,
subject to paragraph 2.3 below, the Company may elect to include in any
registration statement and offering pursuant to this paragraph 2 newly issued
shares of Common Stock and Preferred Stock. Solely for purposes of
paragraphs 3 through 9 below, any securities registered pursuant to this
paragraph 2 shall be deemed to be Registrable Securities.
(c) PRIORITY. Notwithstanding the foregoing, if the registration
pursuant to this paragraph 2 involves an underwritten offering and the
managing underwriter advises the Company or UBS Capital in writing that the
number of shares of Common Stock or Preferred Stock desired to be offered by
the Company or Stockholders other than the UBS Group together with the
Registration Demand Securities of the UBS Group exceeds the maximum number of
such shares which the managing underwriter considers, in good faith, to be
appropriate based on market conditions and other relevant factors (including,
without limitation, pricing) (the "Maximum Number"), then the securities
proposed to be included by Stockholders other than the UBS Group or the
Originating Partnership Group (the "Other Sellers") shall be excluded from
such registration before any such securities of the UBS Group, the
Originating Partnership Group or the Company shall be excluded. If, and to
the extent that, after the exclusion of the securities proposed to be
included by the Other Sellers, the number of securities proposed to be
included by the UBS Group, the Originating Partnership Group and the Company
exceeds the Maximum Number, such securities to be included on behalf of the
Company shall be excluded. If, and to the extent that, after the exclusion
of the securities proposed to be included by the Other Sellers and the
Company, the number of such securities proposed to be included by the UBS
Group and the Originating Partnership Group exceeds the Maximum Number, the
UBS Group and the Originating Partnership Group shall be entitled to sell a
number of shares of such securities equal to the Maximum Number and such
Maximum Number shall be allocated among the UBS Group and the Originating
Partnership Group, in the case of shares of Common Stock, according to the
UBS Group's and the Originating Partnership Group's Pro Rata share of the
Common Stock held by the UBS Group and the Originating Partnership Group,
and, in the case of shares of Preferred Stock, based on the relative
aggregate redemption value of the shares of Preferred Stock held by the UBS
Group and the Originating Partnership Group. Each of the UBS Group, the
Originating Partnership Group, the Other Sellers and the Company (in the
Exhibit B to Stockholders Agreement
-----------------------------------
B-4
event that any securities are to be offered by the Company) may withdraw from
any demand registration pursuant to this paragraph 2 by giving written notice
to the Company prior to the filing date of such registration statement and,
in the event of a withdrawal by the UBS Group, such withdrawn Demand
Registration shall not be deemed to be a Demand Registration counting against
the maximum of two Demand Registrations set forth in paragraph 2(a) if (i)
the UBS Group pays or promptly reimburses the Company for all Registration
Expenses incurred by the Company in connection with such withdrawn Demand
Registration or (ii) a registration statement with respect to a Qualified IPO
is filed by the Company with the Commission within 90 days after such
withdrawal.
(d) COOPERATION. If so requested by the managing underwriter of any
offering of Common Stock and/or Preferred Stock pursuant to paragraph 1 or
this paragraph 2, each of the Stockholders and the Company shall agree not to
sell any such securities (other than shares to be sold in such offering) for
a period of seven days prior to and up to 180 days after the effective date
of the registration statement filed with respect to such offering, except for
sales by the Company pursuant to registrations on Form S-4 or S-8 or any
successor or similar forms thereto.
3. DEMAND REGISTRATION RIGHTS OF ORIGINATING PARTNERSHIPS.
(a) RIGHT TO REQUIRE REGISTRATION. At any time after the earlier of
(a) the date 7 years after the date of this Agreement and (b) the date 9
months following a Qualified IPO, either of the Originating Partnerships,
provided that such Originating Partnership is then a Stockholder, shall have
the right to require the Company to file a registration statement under the
Securities Act (and the other Originating Partnership and their respective
Permitted Transferees shall have the right to participate in such
registration) for a public offering of all or any portion of the shares of
Series B Preferred Stock held by the Originating Partnership Group when such
right is exercised, or all or any portion of the shares of Common Stock held
by the Originating Partnership Group when such right is exercised, or all or
any portion of both such shares of Series B Preferred Stock and such shares
of Common Stock (such shares subject to the demand, the "Registration Demand
Securities"), subject to the provisions of this paragraph 3. The demand
registration rights granted to the Originating Partnership Group in this
paragraph 3 are subject to the following limitations: (i) the Originating
Partnerships (on behalf of the Originating Partnership Group) may make a
demand under this paragraph 3 only two (2)
Exhibit B to Stockholders Agreement
-----------------------------------
B-5
times (each, a "Demand Registration"); (ii) the Company shall not be
obligated to cause any registration statement filed under this paragraph 3 to
be declared effective less than six months after the effective date of the
most recent registration statement filed by the Company on its own behalf or
for the benefit of the UBS Group pursuant to Section 2; (iii) the managing
underwriter of any such offering shall be a recognized investment banking
firm selected by the Originating Partnerships and approved by the Company
(which approval shall not be unreasonably withheld); (iv) notwithstanding the
giving of notice by either of the Originating Partnerships of the exercise of
its right to require registration under this paragraph 3, the Company may
elect to convert such registration into a registration of shares for sale by
the Company pursuant to paragraph 1 hereof by providing notice to the
Stockholders in accordance with paragraph 1, and in such event the provisions
of paragraph 1 shall apply to such registration rather than the provisions of
this paragraph 3 and such registration shall not count as a Demand
Registration; (v) the Company shall have the right exercisable only one (1)
time per each request for a demand registration to postpone for up to six
months any registration requested pursuant to this paragraph 3 if, in the
opinion of the Board, such registration would interfere with any material
transaction then being pursued by the Company or any strategic plan or
material business plan adopted by the Company in advance of the registration
demand; (vi) notwithstanding any other provision hereof, the Originating
Partnerships shall have the right to transfer one or both of their Demand
Registrations in connection with a transfer of at least 50% of the Shares
owned by them at any time, each such transfer to be subject to the approval
of the Company, such approval not to be unreasonably withheld; and (vii) any
demand under this paragraph 2 shall be for a firm commitment underwritten
offering, with respect to which the Company shall be required to maintain an
effective registration statement for a maximum of 30 days.
(b) NOTICE OF EXERCISE OF DEMAND REGISTRATION RIGHT; PARTICIPATION
RIGHTS. The Originating Partnership making a demand for registration shall
provide written notice to the Company and the other members of the
Originating Partnership Group of the registration demand (which notice shall
state the number of shares of Common Stock and Series B Preferred Stock such
Originating Partnership desires the Company to register and the intended
method of disposition of such Shares). For a period of 10 Business Days
following the delivery of such notice to the other members of the Originating
Partnership Group, the other members of the Originating Partnership Group may
elect to participate in the demand registration by delivery of
Exhibit B to Stockholders Agreement
-----------------------------------
B-6
written notice thereof to the Company and the Originating Partnership making
the demand for registration (which notice shall state the number of shares of
Common Stock and Series B Preferred Stock that such Person desires the
Company to register and the intended method of disposition of such Shares).
In addition, the Company promptly shall provide written notice of such demand
to all of the other Stockholders and all of the Stockholders then will have
the opportunity to include in the offering shares of Common Stock or
Preferred Stock of any series then owned by (or issuable, upon exercise
and/or conversion of other securities, to) such Stockholders, but in each
case only to the extent permitted by paragraph 2.3 below. In addition,
subject to paragraph 2.3 below, the Company may elect to include in any
registration statement and offering pursuant to this paragraph 2 newly issued
shares of Common Stock and Preferred Stock. Solely for purposes of
paragraphs 3 through 9 below, any securities registered pursuant to this
paragraph 2 shall be deemed to be Registrable Securities.
(c) PRIORITY. Notwithstanding the foregoing, if the registration
pursuant to this paragraph 2 involves an underwritten offering and the
managing underwriter advises the Company or the Originating Partnerships in
writing that the number of shares of Common Stock or Preferred Stock desired
to be offered by the Company or Stockholders other than the Originating
Partnership Group together with the Registration Demand Shares of the
Originating Partnership Group exceeds the maximum number of such shares which
the managing underwriter considers, in good faith, to be appropriate based on
market conditions and other relevant factors (including, without limitation,
pricing) (the "Maximum Number"), then the securities proposed to be
included by Stockholders other than the Originating Partnership Group or the
UBS Group (the "Other Sellers") shall be excluded from such registration
before any such Shares of the Originating Partnership Group, the UBS Group or
the Company shall be excluded. If, and to the extent that, after the
exclusion of the securities proposed to be included by the Other Sellers, the
number of securities proposed to be included by the Originating Partnership
Group, the UBS Group and the Company exceeds the Maximum Number, such
securities to be included on behalf of the Company shall be excluded. If,
and to the extent that, after the exclusion of the securities proposed to be
included by the Other Sellers and the Company, the number of such securities
proposed to be included by the Originating Partnership Group and the UBS
Group exceeds the Maximum Number, the Originating Partnership Group and the
UBS Group shall be entitled to sell a number of shares of such securities
equal to the Maximum Number and such Maximum Number shall be allocated among
the Originating Partnership
Exhibit B to Stockholders Agreement
-----------------------------------
B-7
Group and the UBS Group, in the case of shares of Common Stock, according to
the Originating Partnership Group's and the UBS Group's Pro Rata share of the
Common Stock held by the Originating Partnership Group and the UBS Group,
and, in the case of shares of Preferred Stock, based on the relative
aggregate redemption value of the shares of Preferred Stock held by each of
the Originating Partnership Group and the UBS Group. Each of the Originating
Partnership Group, the UBS Group, the Other Sellers and the Company (in the
event that any securities are to be offered by the Company) may withdraw from
any demand registration pursuant to this paragraph 3 by giving written notice
to the Company prior to the filing date of such registration statement and,
in the event of a withdrawal by the Originating Partnership Group, such
withdrawn Demand Registration shall not be deemed to be a Demand Registration
counting against the maximum of two Demand Registrations set forth in
paragraph 3(a) if (i) the Originating Partnership Group pays or promptly
reimburses the Company for all Registration Expenses incurred by the Company
in connection with such withdrawn Demand Registration or (ii) a registration
statement with respect to a Qualified IPO is filed by the Company with the
Commission within 90 days after such withdrawal.
(d) COOPERATION. If so requested by the managing underwriter of any
offering of Common Stock and/or Preferred Stock pursuant to paragraph 1 or
this paragraph 3, each of the Stockholders and the Company shall agree not to
sell any such securities (other than shares to be sold in such offering) for
a period of seven days prior to and up to 180 days after the effective date
of the registration statement filed with respect to such offering, except for
sales by the Company pursuant to registrations on Form S-4 or S-8 or any
successor or similar forms thereto.
4. REGISTRATION PROCEDURES. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable
Securities under the Act as provided in paragraphs 1, 2 and 3, the Company
will as expeditiously as possible (and, in any event, within 90 days),
subject to the terms and conditions of paragraphs 1, 2 or 3, as applicable:
(a) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause such
registration statement to become effective; PROVIDED, HOWEVER, that the
Company may discontinue any registration of its securities which are not
Registrable Securities at any time prior to the effective date of the
registration statement relating thereto;
Exhibit B to Stockholders Agreement
-----------------------------------
B-8
(b) prepare and file with the Commission 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
and to comply with the provisions of the Act with respect to the disposition
of all securities covered by such registration statement until the earlier of
such time as all of such securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof set
forth in such registration statement or the expiration of 90 days after such
registration statement becomes effective; PROVIDED that if less than all the
Registrable Securities are withdrawn from registration after the expiration
of such period, the shares so withdrawn shall be allocated PRO RATA among the
holders thereof on the basis of the respective numbers of Registrable
Securities held by them included in such registration, PROVIDED, FURTHER,
that in connection with any demand registration pursuant to Section 2 or 3,
if the Company fails to keep such registration statement effective for such
period, such registration shall be deemed not to constitute a Demand
Registration;
(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of conformed 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 contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Act, in conformity with the requirements of the Act, and such other
documents, as such seller may reasonably request;
(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such securities or blue sky laws of such jurisdictions as each seller thereof
shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for any
such purpose be required to:
(i) qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this
subdivision (d) be obligated to be so qualified,
Exhibit B to Stockholders Agreement
-----------------------------------
B-9
(ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller
or sellers thereof to consummate the disposition of such Registrable
Securities;
(f) furnish to each seller of Registrable Securities covered by such
registration statement a signed counterpart, addressed to such seller (and
the underwriters, if any), of:
(i) an opinion of counsel for the Company, dated the effective date
of such registration statement (or, if such registration includes an
underwritten public offering, an opinion of counsel for the Company dated
the date of the closing under the underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, a "comfort" letter dated the date of the closing under the
underwriting agreement), signed by the independent public accountants who
have certified the Company's financial statements included in such
registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statement, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the
accountants' letter, such other financial matters as such seller or such
holder (or the underwriters, if any) may reasonably request;
(g) immediately notify each holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Act, of the happening of any event or
Exhibit B to Stockholders Agreement
-----------------------------------
B-10
the existence of any condition as a result of which 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 the light of the circumstances under which they were made, or if in the
opinion of counsel for the Company it is necessary to supplement or amend
such prospectus to comply with law and, at the request of any such holder
promptly prepare and furnish to such holder a reasonable number of copies of
a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such 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 light of the circumstances under
which they were made or such prospectus, as supplemented or amended, shall
comply with law;
(h) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security
holders, 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 full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Act and the rules and regulations of the Commission
thereunder, and not file any amendment or supplement to such registration
statement or prospectus to which any such seller of Registrable Securities
covered by such registration statement shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Act or of the rules or regulations
thereunder, having been furnished with a copy thereof at least five business
days prior to the filing thereof;
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement;
(j) use its best efforts to list all Registrable Securities covered by
such registration statement on any securities exchange on which any of the
Registrable Securities are then listed; and
(k) pay all Registration Expenses relating to any registration pursuant
to paragraphs 1, 2 and 3 hereof.
Exhibit B to Stockholders Agreement
-----------------------------------
B-11
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company with such information
and undertakings as it may reasonably request regarding such seller and the
distribution of such securities as the Company may from time to time
reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities as follows:
(A) that upon receipt of any notice from the Company of the happening
of any event of the kind described in subdivision (g) of this paragraph 4,
such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (g) of this
paragraph 4 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 such holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice, and
(B) that it will immediately notify the Company, at any time when a
prospectus relating to the registration of such Registrable Securities is
required to be delivered under the Act, of the happening of any event as a
result of which information previously furnished by such holder to the
Company in writing for inclusion in such prospectus contains 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 the light of the circumstances under which they were made.
In the event the Company or any such holder shall give any such notice, the
period referred to in subdivision (b) of this paragraph 2 shall be extended
by a number of days equal to the number of days during the period from and
including the giving of notice pursuant to subdivision (g) of this paragraph
4 to and including the date when each seller of any Registrable Securities
covered by such registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by subdivision (g) of this
paragraph 4.
Exhibit B to Stockholders Agreement
-----------------------------------
B-12
5. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITING AGREEMENT. If the Company at any time proposes to
register any of its securities under the Act as contemplated by paragraphs 1,
2 or 3 and such securities are to be distributed by or through one or more
underwriters, the Company will, subject to the provisions of subdivision (b)
of paragraph 1, use its best efforts to arrange for such underwriters to
include the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters, and each holder
of Registrable Securities agrees, by acquisition of such Registrable
Securities, that all Registrable Securities of such holder to be included in
such registration shall be distributed and sold through such underwriters.
The holders of Registrable Securities to be distributed by such underwriters
shall be parties to the underwriting agreement between the Company and such
underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to
and for the benefit of such holders of Registrable Securities and that any or
all of the conditions precedent to the obligations of such underwriters shall
also be made to and for the benefit of such holders of Registrable
Securities. No holder of Registrable Securities shall be required to make
any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such holder and such holder's intended method of distribution and any other
representation required by law.
(b) SELECTION OF UNDERWRITERS.
(i) Subject to subsection (ii) of this Section 5(b), the selection of
the underwriter or underwriters for the public offering to be made pursuant
to a registration statement filed under paragraphs 1 above shall be made by
the Company, in its sole discretion, from amongst underwriting firms of
national reputation.
(ii) With respect to any proposed initial public offering ("IPO") by
the Company, promptly after the determination by the Company to consider
undertaking such an IPO, the Company shall notify UBS Capital in writing of
such determination. UBS Capital shall have the right to propose two (2)
underwriting firms of national reputation (the "Proposed Underwriters") for
such IPO by written notice to the Company delivered within 15 days of
receipt of the Company's notice. The Company shall be obligated to
Exhibit B to Stockholders Agreement
-----------------------------------
B-13
interview the Proposed Underwriters in good faith for purposes of
considering engaging either or both of the Proposed Underwriters for such
IPO. If the Company elects not to enter into a binding engagement letter
with one or both of the Proposed Underwriters, it may proceed with such
IPO free of the obligations of this Section 5(b)(ii), PROVIDED, that the
closing under the underwriting agreement with respect to such IPO must
occur within one (1) year from the date of the Company's original notice
to UBS Capital, otherwise such IPO shall again be subject to this Section
5(b)(ii).
6. PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Act, the
Company will give the holders of Registrable Securities registered under such
registration statement, their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with
the Commission, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities
to discuss the business, finances and accounts of the Company and its
subsidiaries with its officers, directors and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the Act.
7. CERTAIN RIGHTS OF HOLDERS. The Company will not file any
registration statement under the Act which refers to any holder of
Registrable Securities by name or otherwise as the holder of any securities
of the Company, unless it shall first have given such holder the right to
require:
(a) the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that, in the opinion of such
holder, the holding by such holder of such securities does not make such
holder a "controlling person" of the Company within the meaning of the Act
and is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such holder will assist in meeting any future
financial requirements of the Company, or
(b) in the event that such reference to such holder by name or otherwise
is not required by the Act or
Exhibit B to Stockholders Agreement
-----------------------------------
B-14
any rules and regulations promulgated thereunder, the deletion of the
reference to such holder.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration of
any securities of the Company under the Act, the Company will, and hereby
does, indemnify and hold harmless the seller of any Registrable Securities
covered by any registration statement filed pursuant to paragraph 1, 2 or 3,
its directors, officers, partners, employees, agents and investment advisors,
each other Person who participates as an underwriter in the offering or sale
of such securities and each other Person, if any, who controls such seller or
any such underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, from and against any losses, claims, damages
or liabilities, joint or several (or actions or proceedings, whether
commenced or threatened, in respect thereof) (collectively, "Claims"), to
which such seller or any such director or officer or employee or agent or
investment advisor or underwriter or controlling person may become subject
under either Section 15 of the Act or Section 20 of the Exchange Act or
otherwise, insofar as such Claims arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto (if used during the
period the Company is required to keep the registration statement current)
(collectively, "Registration Documents"), or 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 in light of the
circumstances in which made, or any violation by the Company of the Act or
any state securities law, or any rule or regulation promulgated under the Act
or any state securities law, or any other law applicable to the Company
relating to any such registration or qualification, and the Company will
reimburse such seller and each such director, officer, employee, agent,
investment advisor, underwriter and controlling person for any legal or any
other expenses reasonably incurred by them in connection with investigating
or defending any such Claim; PROVIDED that the Company shall not be liable in
any such case to the extent that any such Claim or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any such Registration Document in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by such seller stating that it is for use in the
preparation
Exhibit B to Stockholders Agreement
-----------------------------------
B-15
thereof; PROVIDED FURTHER that the Company shall not be liable to any Person
who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act
in any such case to the extent that any such Claim, or expense arises out of
such Person's failure to send or give a copy of the final prospectus to the
Person claiming an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
seller or any such director, officer, employee, agent, investment advisor,
partner, underwriter or controlling person and shall survive the transfer of
such securities by such seller.
(b) INDEMNIFICATION BY THE SELLERS. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to paragraphs 1, 2 or 3, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of
such securities, to indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this paragraph 8) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, with respect to any
statement or alleged statement or omission or alleged omission from such
Registration Document, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by
such seller specifically stating that it is for use in the preparation of
such Registration Document. Notwithstanding the foregoing, in no event shall
any selling stockholder or any director, officer, employee, agent, investment
advisor or controlling person thereof be liable to indemnify the Company
pursuant to this subdivision (b) of this paragraph 8 hereof in an amount in
excess of the amount of the net proceeds of the Registrable Securities sold
by him, her or it in any such offering. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company of any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the
Exhibit B to Stockholders Agreement
-----------------------------------
B-16
commencement of any action or proceeding involving a Claim referred to
in the preceding subdivisions of this paragraph 8, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
PROVIDED that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this paragraph 8, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall consent to entry of any judgment or enter into any
settlement of any pending or threatened proceeding in respect of which an
indemnified party is or could have been a party and indemnity could have been
sought under subdivision (a) of this paragraph 8 without the consent of the
indemnified party which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding subdivisions of this paragraph 8 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification
of securities under any Federal or state law or regulation of any
governmental authority, other than the Act. If the indemnification provided
for in subdivision (a), (b) or (c) of this paragraph 8 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying
Exhibit B to Stockholders Agreement
-----------------------------------
B-17
party or parties on the one hand and the indemnified party or parties
on the other hand from the offering of the securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that in no event shall any contribution by the selling
stockholder or any director, officer, employee, agent, investment advisor or
controlling person thereof pursuant to this subdivision (d) of this paragraph
8 exceed the amount of the net proceeds of the Registrable Securities sold by
him, her or it in any such offering.
(e) INDEMNIFICATION PAYMENTS. The indemnification required by this
paragraph 8 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
9. ADJUSTMENT AFFECTING REGISTRABLE SECURITIES. The Company will not
effect or permit to occur any combination or subdivision of shares which
would adversely affect the ability of the holders of Registrable Securities
to effect the registration of such securities in the manner contemplated by
these registration rights provisions.
10. COVENANTS RELATING TO RULE 144. At all times after the effective
date of the registration statement under the Act of the initial underwritten
public offering of Common Stock, and until such time as all of the
Registrable Securities are deregistered, the Company will file reports in
compliance with the Exchange Act and will, at its expense, forthwith upon the
request of any holder of Restricted Securities (as defined in Rule 144 (or
any successor provision) under the Act), deliver to such holder a
certificate, signed by the Company's principal financial officer, stating:
(a) the Company's name, address and telephone number (including area
code),
(b) the Company's Internal Revenue Service identification number,
(c) the Company's Commission file number,
Exhibit B to Stockholders Agreement
-----------------------------------
B-18
(d) the number of shares of Common Stock of the Company
outstanding as shown by the most recent report or statement published by
the Company, and
(e) whether the Company has filed the reports required to be
filed under the Exchange Act for a period of at least 90 days prior to
the date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.
Exhibit B to Stockholders Agreement
-----------------------------------
B-19
EXHIBIT C
FORM OF AGREEMENT OF BENEFICIAL OWNER
[FOR BENEFICIAL OWNER ▇▇ ▇-▇, ▇-▇, ▇-▇ ▇▇ ▇-▇ LIMITED
PARTNERSHIPS]
This Agreement of Beneficial Owner is made and entered into this __ day
of _______, 199_, by ____________ (the "Beneficial Owner") to and for the
benefit of MSC Holdings, Inc. (the "Company").
WHEREAS, the Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement") of Petrowax Equity Partners __ L.P. (the
"Partnership") imposes certain restrictions on the transfer of beneficial
interests in limited partners of the Partnership, which restrictions inure to
the benefit of the Company and all holders of direct or indirect interests in
the Company; and
WHEREAS, the undersigned Beneficial Owner is a limited partner of or
holds a beneficial interest in a limited partner of the Partnership, which is
a shareholder of the Company, and the Beneficial Owner is, thereby, a holder
of an indirect interest in the Company,
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Beneficial Owner agrees as follows:
1. Without the express written consent of the Company and UBS Capital
Corporation (for so long as UBS Capital Corporation remains a Significant
Stockholder), the Beneficial Owner will not transfer all or any portion of
its Beneficial Interest prior to the Three-Year Date.
2. During the period commencing on the Three-Year Date and ending on
the NOL Restriction Termination Date, the Beneficial Owner will not transfer
more than its Transfer Allotment of its Beneficial Interest without the
express written consent of the Company and UBS Capital Corporation (for so
long as UBS Capital Corporation remains a Significant Stockholder).
Notwithstanding the foregoing, transfers of Beneficial Interests by the
Beneficial Owner, if the Beneficial Owner is an individual, to family members
(as described in Section 382(l)(3)(A)(i) of the Code), or transfers after the
Three-Year Date of the type described in Section 382(l)(3)(B) of the Code,
shall be permitted, provided that (i) the Beneficial Owner provides to the
Company an opinion of counsel, in form and substance reasonably satisfactory
to the Company and (for so long as UBS Capital Corporation remains a
Significant Stockholder)
Exhibit C to Stockholders Agreement
-----------------------------------
C-1
UBS Capital Corporation, that such transfer will be governed by Section
382(l)(3)(A)(i) or Section 382(l)(3)(B) of the Code, as the case may be, and
(ii) such transfer otherwise complies with the provisions of the Stockholders
Agreement and the Partnership Agreement.
4. The Beneficial Owner acknowledges and agrees that any transfer of
all or any portion of its Beneficial Interest in violation of this Agreement
of Beneficial Owner shall be of no force or effect.
5. The Beneficial Owner acknowledges and agrees that the General
Partner, at any time or from time to time, may reduce or otherwise adjust the
Beneficial Owner's Transfer Allotment in accordance with the Partnership
Agreement.
6. Capitalized terms not defined in this Agreement of Beneficial Owner
shall have the meanings ascribed to them in the Partnership Agreement.
IN WITNESS WHEREOF, the Beneficial Owner has executed this Agreement of
Beneficial Owner on the year and date first set forth above.
____________________________
[Beneficial Owner]
Exhibit C to Stockholders Agreement
-----------------------------------
C-2
[FORM OF AGREEMENT OF BENEFICIAL OWNER FOR BENEFICIAL OWNERS
OF OTHER STOCKHOLDERS]
This Agreement of Beneficial Owner is made and entered into this __ day
of _______, 199_, by ____________ (the "Beneficial Owner") to and for the
benefit of [Stockholder] (the "Stockholder") and MSC Holdings, Inc. (the
"Company").
WHEREAS, the Stockholders Agreement Among MSC Holdings, Inc. and Certain
of its Stockholders, Optionholders and Warrantholders (the "Stockholders
Agreement") imposes certain restrictions on the transfer of direct or
indirect beneficial interests in stockholders, optionholders and
warrantholders of the Company, which restrictions inure to the benefit of the
Company and all holders of direct or indirect interests in the Company; and
WHEREAS, the undersigned Beneficial Owner holds a beneficial interest in
a stockholder, optionholder or warrantholder of the Company and the
Beneficial Owner is, thereby, a holder of an indirect interest in the Company,
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Beneficial Owner agrees as follows:
1. Without the express written consent of the Company and UBS Capital
Corporation (for so long as UBS Capital Corporation remains a Significant
Stockholder), the Beneficial Owner will not transfer all or any portion of
its Beneficial Interest prior to the Three-Year Date.
2. During the period commencing on the Three-Year Date and ending on
the Restriction Termination Date, the Beneficial Owner will not transfer more
than its Transfer Allotment of its Beneficial Interest without the express
written consent of the Company and UBS Capital Corporation (for so long as
UBS Capital Corporation remains a Significant Stockholder). Notwithstanding
the foregoing, transfers of Beneficial Interests by the Beneficial Owner, if
the Beneficial Owner is an individual, to family members (as described in
Section 382(l)(3)(A)(i) of the Code), or transfers after the Three-Year Date
of the type described in Section 382(l)(3)(B) of the Code, shall be
permitted, provided that (i) the Beneficial Owner provides to the Company an
opinion of counsel, in form and substance reasonably satisfactory to the
Company and (for so long as UBS Capital Corporation remains a Significant
Stockholder) UBS Capital Corporation, that such transfer will be governed by
Section 382(l)(3)(A)(i) or Section 382(l)(3)(B) of the Code, as the case may
be, and (ii) such transfer otherwise complies with any applicable provisions
of the Stockholders Agreement.
Exhibit C to Stockholders Agreement
-----------------------------------
C-3
4. The Beneficial Owner acknowledges and agrees that any transfer of
all or any portion of its Beneficial Interest in violation of this Agreement
of Beneficial Owner shall be of no force or effect.
5. The Beneficial Owner acknowledges and agrees that the Stockholder,
at any time or from time to time, may reduce or otherwise adjust the
Beneficial Owner's Transfer Allotment in accordance with the Stockholders
Agreement.
6. Capitalized terms not defined in this Agreement of Beneficial Owner
shall have the meanings ascribed to them in the Stockholders Agreement. IN
WITNESS WHEREOF, the Beneficial Owner has executed this Agreement of
Beneficial Owner on the year and date first set forth above.
____________________________
[Beneficial Owner]
Exhibit C to Stockholders Agreement
-----------------------------------
C-4