1
Exhibit 4.02
EMC HOLDINGS, INC.
(a Delaware corporation)
STOCKHOLDERS AGREEMENT
among
the Stockholders
listed on the
Schedules of Stockholders hereto,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Interfunding Inc.,
EMC Holdings, Inc.
Employee Stock Ownership Trust
and
EMC Holdings, Inc.
Dated as of October 26, 1989
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Table of Contents
Page
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Article I. Interpretation
1.1 Certain Definitions............................................... 4
Article II. Management Agreements
2.1 General........................................................... 14
2.2 Conduct of Business............................................... 15
2.3 Restated Certificate of Incorporation
of Holdings................................................... 15
2.4 By-Laws of Holdings............................................... 15
2.5 Change of Circumstances........................................... 15
2.6 Significant Transactions.......................................... 16
Article III. Board of Directors
3.1.1 Election of Directors............................................. 22
3.1.2 Committees of the Board of Directors.............................. 24
3.1.3 Meetings of the Board of Directors
and Observer.................................................. 25
3.2 Removal Without Cause............................................. 26
3.3 Removal for Cause................................................. 27
3.4 Vacancies on the Board............................................ 27
3.5 Agreement to Cooperate............................................ 28
3.6 Conflicting Charter or By-Laws Provisions......................... 28
3.7 Board of EMC...................................................... 28
3.8 Application of Articles II and III................................ 28
Article IV. Reservation of Shares; Restrictions
on Transfer
4.1 Reserved Shares................................................... 29
4.2 Limitations as to Transferees..................................... 29
Article V. No Dilution; Reissuance of Shares
5.1 No Dilution....................................................... 31
5.2 Reissuance of Shares.............................................. 33
Article VI. Registration Rights
6.1.1 Registration Rights; Demand
Registration Rights........................................... 34
6.1.2 Limitation on Number of Filings................................... 38
6.1.3 Demand Registration Expenses...................................... 38
6.1.4 Securities Included............................................... 38
6.1.5 Priorities of Offering............................................ 39
6.2.1 Piggyback Registration............................................ 41
6.2.2 Piggyback Registration Expenses................................... 42
6.2.3 Priorities in Offering............................................ 42
6.2.4 Notice to Certain Holders......................................... 43
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Table of Contents (Continued)
Page
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6.3 Repayment of Indebtedness......................................... 43
6.4 Rule 144.......................................................... 43
6.5 Registration Procedures........................................... 44
Article VII. Rights of Inclusion and Rights of First Offer
7.1 Rights of Inclusion............................................... 50
7.2 Right of First Offer.............................................. 54
7.3 Application of Article VII........................................ 57
Article VIII. Certain Covenants of Holdings
8.1 No Transfers of Shares on Books................................... 58
8.2 Financial Statements.............................................. 58
8.3 Certain Prohibited Transferees.................................... 59
Article IX. Certain Additional Covenants
9.1 Transfers Generally............................................... 60
Article X. Term
10.1 Term.............................................................. 61
Article XI. Acknowledgement by EMC
11.1 Acknowledgement................................................... 62
Article XII. Puts and Calls
12.1 Calls............................................................. 62
12.2 Puts.............................................................. 63
12.3 No Interference with Put Option................................... 63
12.4 Certain Delays in the Exercise of
the Put Option.................................................... 65
Article XIII. Parties
13.1 Parties........................................................... 66
Article XIV. Miscellaneous
14.1 Amendment; Modification; Etc...................................... 67
14.2 Governing Law..................................................... 67
14.3 Execution in Counterparts......................................... 67
14.4 Notices........................................................... 68
14.5 Entire Agreement; Headings........................................ 68
14.6 Assignment........................................................ 69
14.7 Specific Enforcement; Other Remedies.............................. 69
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Table of Contents (Continued)
Page
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Annex A Third Restated Certificate of Incorporation of
Holdings
Annex B By-Laws of Holdings
SCHEDULE 1: MANAGEMENT STOCKHOLDERS
SCHEDULE 2: MLCP INVESTORS
SCHEDULE 3: OTHER INVESTORS
ANNEXES AND SCHEDULES WILL BE AVAILABLE UPON REQUEST
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of October 25, 1989, among the
persons listed on Schedule 1 hereto (the "Management Stockholders"), the various
partnerships and corporations listed on Schedule 2 hereto (the "MLCP
Investors"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERFUNDING INC., a Delaware corporation
("Interfunding"), the institutions listed on Schedule 3 hereto (the "Other
Investors"), EMC HOLDINGS, INC., a Delaware corporation ("Holdings"), and the
EMC HOLDINGS, INC. EMPLOYEE STOCK OWNERSHIP TRUST (the "ESOT"). The Other
Investors, Interfunding and the MLCP Investors are collectively referred to as
the "Institutional Investors."
W I T N E S S E T H
WHEREAS, as of the date hereof, Holdings is authorized by its
Third Amended and Restated Certificate of Incorporation to issue capital stock
consisting of 25,000,000 shares of Class A common stock, par value $.0001 (the
"Class A Shares"), 17,000,000 shares of Class B Common Stock, par value $.
("Class B Shares"), and 1,000,000 shares of blank check preferred stock, of
which 250,000 shares are authorized as 10.19% Convertible Preferred Stock
par value $.0001 ("Preferred Shares") (Class A Shares and Class B Shares being
hereinafter collectively referred to as "Common Shares"), all of such Common
Shares and Preferred Shares having the voting powers, designations, preferences
and relative, participating, optional and other special rights and the
qualifications, limitations and restrictions set forth in
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Holdings' Third Amended and Restated Certificate of Incorporation;
WHEREAS, the parties hereto have entered into this Agreement and
related transactions in order to accomplish a recapitalization of Holdings and a
restructuring of the ownership of Holdings (collectively the "Recapitalization
and Restructuring"), following the consummation of which each of the parties
hereto (other than Holdings) will own the number and class of equity securities
of Holdings set forth opposite its respective name on Schedule 4 hereto;
WHEREAS, in connection with the Recapitalization and
Restructuring, each of the Management Stockholders has entered into a separate
Exchange and Repurchase Agreement, each dated as of October 25, 1989
(collectively, the "Management Subscription Agreements") with Holdings; the MLCP
Investors have each entered into a separate ▇▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock
Subscription Agreement dated as of October 25, 1989 (the "▇▇▇▇▇▇▇ ▇▇▇▇▇
Subscription Agreements") with Holdings; the Other Investors in their capacity
as the purchasers under the Note and Warrant Purchase Agreements dated as of
October 25, 1989 (collectively the "Note and Warrant Agreements") between
Holdings and the Other Investors, acquired warrants to purchase up to 5,956,079
Class B Shares (the "Warrants"); interfunding has entered into a Stock Purchase
Agreement dated October 25, 1989 (the "Interfunding Subscription Agreement")
with Holdings; the ESOT has entered into a Preferred Stock Purchase Agreement
with Holdings and a separate Common Stock Purchase Agreement with certain
stockholders of Holdings, each dated as of October 25, 1989 (such agreements
being collectively the "ESOT Purchase Agreements"); and Holdings has
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made a capital contribution to the ESOT of 50,000 Preferred Shares;
WHEREAS, Holdings is the sole record and beneficial owner of all
of the outstanding shares of common stock, without par value (the "EMC Shares"),
of Education Management Corporation, a Pennsylvania corporation ("EMC"); and
WHEREAS, the parties wish to define their respective rights,
duties and obligations in connection with the ownership and management of
Holdings.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereto agree,
intending to be legally bound, as follows:
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ARTICLE I
Interpretation
1.1 Certain Definitions. For the purposes of this Agreement, the
following terms have the following meanings, respectively:
"Act" means the Securities Act of 1933, as amended.
"Adjusted Purchase Price", as of any date with respect to any
Common Shares, means the purchase price, whether actual or imputed, per share as
set forth in the applicable Subscription Agreement, or any other agreement or
plan pursuant to which such Common Shares were issued, adjusted to account for
stock splits, stock dividends and reverse stock splits, if any.
"Affiliate", with respect to any Person, means any director or
officer of such Person, any corporation, association, firm or other entity of
which such Person (or any officer or director of such Person) is a member,
director or officer, the spouse of such Person (or of any officer or director of
such Person), either parent of such Person (or of any officer or director of
such Person) or of such Person's spouse (or of the spouse of any officer or
director of such Person), any descendant of any such parent, any relative of
such Person (or of any officer or director of such Person) who has the same home
as such Person (or as any officer or director of such Person), and any other
Person, directly or indirectly controlling, controlled by, or under common
control with, such Person. For the purpose of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
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the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement" means this Agreement, as amended from time to time.
"Bankruptcy Law" is Title 11, U.S. Code or any similar federal,
state or local law for the relief of debtors.
"Base Rate" is, for any period, a fluctuating interest rate per
annum, calculated for the actual number of days elapsed in a 365- or 366-day
year, as shall be in effect from time to time during such period, which rate per
annum shall at all times be equal to the rate of interest publicly announced by
Pittsburgh National Bank, in Pittsburgh, Pennsylvania, from time to time, as its
prime rate.
"Board" means the Board of Directors of Holdings. "Class A
Shares" is defined in the introduction to this Agreement.
"Class B Shares" is defined in the introduction to this
Agreement.
"Closing Date" means the last closing date to occur in connection
with the purchases and sales of Common Shares and securities convertible into or
exchangeable for Common Shares under the Subscription Agreements, the Note and
Warrant Agreements and the ESOT Purchase Agreements, but in no event later than
the closing date of the Note and Warrant Purchase Agreements.
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"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commission" means the U.S. Securities and Exchange Commission
and any successor federal agency having similar powers.
"Common Shares" is defined in the introduction to this Agreement.
"Custodian" is any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law. "EMC" is defined in the introduction
to this Agreement.
"EMC Shares" is defined in the introduction to this Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ESOP" is the EMC Holdings, Inc. Employee Stock Ownership Plan.
"ESOT" is defined in the introduction to this Agreement.
"ESOT Purchase Agreements" is defined in the introduction to this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" of any Common Shares (other than Common
Shares owned by the ESOT) means the value ascribed to such shares by an
appraisal thereof performed promptly after the event giving rise to the need to
value Common Shares by a nationally-recognized investment banking firm selected
as
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follows: first, the Institutional Investors shall select three
nationally-recognized investment banking firms (none of which may be an
Institutional Investor or an Affiliate of an Institutional Investor); and
second, Holdings shall then select one of such three investment banking firms
(the "Appraiser") to perform the appraisal with the cost of such appraisal being
borne by Holdings. With respect to Common Shares owned by the ESOT, "Fair Market
Value" shall be determined as set forth in the immediately preceding sentence;
provided, that the Appraiser shall be an independent appraiser as defined in
Code Section 401(a)(28)(C). In determining Fair Market Value of any Common
Shares, and solely for such purpose, the Appraiser shall treat the Preferred
Shares as debt or as the Common Shares into which they are convertible,
whichever shall yield the highest value to the Preferred Shares. "Holder" is any
Person who or which is a beneficial owner of Common Shares or Warrants.
"Holdings" is defined in the introduction to this Agreement.
"Initial Public Offering" means the first Public Offering.
"Institutional Investors" is defined in the introduction to this
Agreement.
"Interfunding" is defined in the introduction to this Agreement.
"Interfunding Subscription Agreement" is defined in the
introduction to this Agreement.
"Management Holder" means the Management Stockholders
and each of their successors, assigns and transferees
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"Management Stockholder" is defined in the introduction to this
Agreement.
"Management Subscription Agreements" is defined in the
introduction to this Agreement.
"MLCP Holder" means the MLCP Investors and each of their
successors, assigns and transferees.
"MLCP Investors" is defined in the introduction to this
Agreement.
"MLCP Subscription Agreements" is defined in the introduction to
this Agreement.
"Note and Warrant Agreements" is defined in the introduction to
this Agreement.
"Other Investors" is defined in the introduction to this
Agreement.
"Permitted Transferees" has the meaning given to it in the
Subscription Agreements pursuant to which the Common Shares being transferred
were originally acquired and with respect to the Other Investors, shall mean (i)
any entity which is a subsidiary of any Other Investor, (ii) any entity of which
any Other Investor is a subsidiary, (iii) any entity which is a subsidiary of an
entity referred to in clause (i) or (ii) above or this clause (iii) and (iv) any
financial institution to which National Union Fire Insurance Company of
Pittsburgh, Pa. ("NUFIC") shall sell or otherwise transfer Common Shares or
Warrants during the six-month period commencing on the Closing Date; provided,
(i) that the aggregate number of Common Shares or Warrants sold or otherwise
transferred by NUFIC pursuant to subclause (iv) above shall not in the aggregate
exceed 744,436 Common
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Shares or Warrants exercisable therefor and (ii) each such transfer shall be
made only after consultation with Holdings.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or a government or any
department or agency thereof.
"Public Distribution" means a Public Offering of Common Shares at
the conclusion of which (i) Holdings is required to register the Common Shares
under Section 12(b) or (g) of the Exchange Act and (ii) 25% of the outstanding
Common Shares shall have been sold to the public pursuant to one or more
effective registration statements under the Act.
"Public Offering" means a public offering of securities of
Holdings pursuant to an effective registration statement under the Act.
"Registrable Securities" means, subject to the provisions of
Section 6 hereof, (a) Common Shares issued on the Closing Date pursuant to the
Management Subscription Agreements or the MLCP Subscription Agreements, (b)
Common Shares now or hereafter held by the ESOT, (c) Common Shares issued or
issuable pursuant to the Warrants, (d) Common Shares issued or issuable pursuant
to stock options hereafter granted to employees of Holdings and (e) Common
Shares and other securities that may be issued or distributed in respect of (a),
(b), (c) or (d) above or this clause (e) by way of stock dividend or stock split
or other distribution, recapitalization or reclassification, or in a merger or
consolidation. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a registration
statement with
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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, (ii) they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision under the Act), (iii) they
shall have been otherwise transferred, new certificates therefor not bearing a
legend restricting further transfer shall have been delivered by Holdings and
subsequent disposition of them shall not require their registration under the
Act or (iv) they shall have ceased to be outstanding (except that Registrable
Securities which are acquired by Holdings and reissued in accordance with the
By-Laws of Holdings and Section 5.2 hereof shall again become Registrable
Securities upon such reissuance).
"Registration Expenses" means all expenses incident to Holdings'
performance of or compliance with Section 6 hereof, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities and blue sky laws, all word processing, duplicating
and printing expenses, all messenger and delivery expenses, the fees and
disbursements of counsel for Holdings and 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 premiums and other costs
of insurance policies against liabilities arising out of the Public Offering of
the Registrable Securities being registered, the reasonable fees and
disbursements of counsel (other than house counsel) for the Holders on whose
behalf Registrable Securities are being registered, and any fees and expenses of
underwriters customarily
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paid by issuers, but excluding underwriting discounts and commissions and
applicable transfer and documentary stamp taxes, if any, which shall be borne by
the seller of the securities in all cases.
"Requesting Holder" means the Holder of Registrable Securities
requesting registration of such securities pursuant to Section 6.1.1 or 6.2.1
hereof.
"Restricted Payments" means dividends on or purchases,
redemptions or retirements for value, or the making of any payment or the
setting apart of any fund by Holdings or any of its Subsidiaries on the account
of the purchase, redemption or other acquisition or retirement for value of, any
capital stock of Holdings or any Affiliate of Holdings or any warrants, rights
or options to purchase or acquire any such capital stock other than (i) on
account of capital stock held by the ESOT, (ii) as permitted hereunder,
including without limitation any such dividend, purchase, redemption, retirement
or payment or setting apart expressly permitted under Sections 4.1, 4.2, 5.1,
5.2, 6.1.1, 7.1, 7.2, 12.1 and 12.2 hereof and under any Subscription Agreement
and (iii) repurchases, redemptions, and cancellations of options with respect to
Common Shares held by current or former employees of Holdings and its
Subsidiaries in accordance with the applicable Management Subscription
Agreements in the amounts permitted under the Senior Indebtedness and the
Subordinated Indebtedness, as such provisions may be amended from time to time.
"Senior Indebtedness" means the indebtedness of Holdings under
that certain Credit Agreement, dated as of
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October 25, 1989, among Holdings, as borrower, the several banks (the "Banks")
who are or become party to such agreement and Pittsburgh National Bank, as agent
for the Banks (the "Credit Agreement"), as amended from time to time as provided
herein. "Significant Transaction" is defined in Section 2.6 hereof.
"Specified Defaults" means any of the following:
(i) the non-payment when due by Holdings or any of its
Subsidiaries of principal, interest or other monetary obligations on any
indebtedness in an amount in excess of $51.5 million, of Holdings or any
of its Subsidiaries; provided, however, that Holdings shall have 30 days
to cure a default under the Subordinated Indebtedness or any future
indebtedness of Holdings which is by its terms subordinated to the
Senior Indebtedness, if any, caused solely by the exercise of a right by
a lender under the Senior Indebtedness to prohibit payment of amounts
due under the Subordinated Indebtedness, which right arose by reason of
a default under a financial covenant contained in the Credit Agreement
other than a covenant relating to the maintenance by Holdings of a
specified net worth;
(ii) the acceleration of any indebtedness in an amount in excess
of $1.5 million, under any one or more debt instruments of Holdings or
any Subsidiary;
(iii) any failure by Holdings or any of its Subsidiaries to
maintain financial covenants relating to net worth under any applicable
debt instruments of Holdings or any of its Subsidiaries;
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(iv) any breach by Holdings of Articles V, VI, or XII or Section
14.1 hereof, which breach remains uncured for a period of 15 days from
the date of the event, action or omission giving rise thereto;
(v) Holdings or any Subsidiary pursuant to or within the meaning
of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; and
(vi) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against Holdings or any Subsidiary in an
involuntary case or proceeding,
(B) appoints a Custodian of Holdings or any Subsidiary or for
all or substantially all of its property, or
(C) orders the liquidation of Holdings or any Subsidiary, and
in the case of (vi) above, the order or decree remains unstayed
and in effect for 120 days.
"Stockholder" is any party to this Agreement who or which is, or
at some future time becomes, a record and beneficial owner of Common Shares.
"Subordinated Indebtedness" means the indebtedness of Holdings
under those certain Note and Warrant Purchase Agreements, among Holdings and
each of the purchasers named in
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the Schedule of Purchasers thereto, dated October 25, 1989, as amended from time
to time.
"Subscription Agreement" means any of the MLCP Subscription
Agreements, the Management Subscription Agreements and the Interfunding
Subscription Agreement.
"Subsidiary" with respect to any Person means any corporation of
which such Person owns or controls, directly or indirectly, more than 50% of the
outstanding stock, which stock by the terms thereof has ordinary voting power to
elect a majority of the board of directors.
"Warrants" is defined in the introduction to this Agreement.
"Whole Board of Directors" means the total number of directors of
Holdings prescribed by Holdings' certificate of incorporation, whether or not
there shall be any vacancies on the Board.
ARTICLE II
Management Agreements
2.1 General. The parties hereto confirm that it is their
intention that the business and affairs of Holdings and its Subsidiaries shall
be managed by its Board of Directors in the best interests of Holdings and its
Subsidiaries taken as a whole. In furtherance of the foregoing, the parties
hereto agree that, after the Closing Date, neither they nor any of their
Affiliates controlled by them will enter into any written or oral contract,
agreement or other arrangement to engage in business or enter into any
transaction, or will engage in business or enter into
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any transaction, with Holdings or any of its Subsidiaries other than
transactions among Holdings and any of its Subsidiaries or among such
Subsidiaries unless the terms and provisions of such contract, agreement or
other arrangement or the terms on which such business or transaction is
conducted, as the case may be, are substantially equivalent to terms that would
have been obtained in an arm's-length relationship. Nothing contained in this
Section 2.1 shall in any manner affect the ability of Holdings or any of its
Subsidiaries to perform its obligations under existing contracts.
2.2 Conduct of Business. The parties hereto agree that, unless
otherwise authorized by a vote of at least 80% of the Whole Board of Directors,
Holdings will not materially change the fundamental nature of its business as
carried on immediately prior to the Closing Date.
2.3 Restated Certificate of Incorporation of Holdings. Attached
hereto as Annex A is a copy of the Third Restated Certificate of Incorporation
of Holdings which will be in effect after the Closing Date. The provisions of
Annex A are hereby approved by, and made a part of this Agreement among, the
parties hereto.
2.4 By-Laws of Holdings. The Stockholders agree that the By-Laws
attached hereto as Annex B will be adopted as the By-Laws of Holdings that will
be in effect immediately after the Closing Date. The provisions of Annex B are
hereby approved by, and made a part of this Agreement among the parties hereto.
2.5 Change of Circumstances. The parties hereto acknowledge that
the arrangements among themselves, including
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this Agreement, and the provisions of other arrangements among any of the
parties hereto to be in effect immediately after the Closing Date, have been
entered into with the agreement of each holder of securities of Holdings (to the
extent known to such holders) and that, in the event of a Public Offering or in
the event of a public offering pursuant to an effective registration statement
under the Act of securities of any Subsidiary of Holdings, at the conclusion of
which Holdings or such Subsidiary will have security holders who are not parties
to this Agreement, it is expected that appropriate changes in this Agreement
(other than with respect to Article VI) may be necessary or advisable (subject
to agreement by such parties at such time) in order to accommodate such change
in such circumstances; the purpose of this Section 2.5 being to express the
parties' understanding that the public sale of securities of Holdings or any of
Holdings' Subsidiaries may require revisions to the management and ownership
structures set forth herein without committing any party to an alternative
structure at this time.
2.6 Significant Transactions. (a) Notwithstanding the fact that
no vote may be required or that a lesser percentage vote may be required by law,
by the Third Restated Certificate of Incorporation or By-Laws of Holdings, by
any agreement with any national securities exchange or otherwise, any
Significant Transaction, as defined in subsection (b) of this Section 2.6, shall
require the affirmative vote of a majority of the Whole Board of Directors,
provided, that any such majority vote must include the affirmative vote of at
least one of either (i) one of the two directors designated by the MLCP
Investors or (ii) the
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director designated by Other Investors pursuant to Section 3.1.1.
hereof.
(b) The term "Significant Transaction," with respect to Holdings
or any of its Subsidiaries, shall mean any of the following actions:
(A) Any merger or consolidation involving Holdings or any of its
Subsidiaries (other than transactions involving the merger or
consolidation of a Subsidiary with or into Holdings or with or into a
wholly-owned subsidiary of Holdings);
(B) Any sale, lease, exchange, transfer or other disposition,
directly or indirectly, in a single transaction or series of related
transactions, of all or substantially all of the assets of Holdings, EMC
or any of their respective operating Subsidiaries, or the tangible
assets constituting 50% or more of the net worth of Holdings and its
Subsidiaries, taken as a whole, to or with any person other than
Holdings or a wholly-owned Subsidiary;
(C) Any purchase, lease, exchange or other acquisition of assets
(including securities) by Holdings or any of its Subsidiaries, in a
single transaction or a series of related transactions, if the amount of
consideration paid by Holdings for such assets whether cash, securities
or goods, is, or has a fair market value, in excess of $25 million,
except purchases of supplies and equipment made in the ordinary and
usual course of business;
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(D) Any increase or reduction of Holdings' authorized capital or
the creation of any additional class of capital stock of Holdings;
(E) Any sale or issuance of shares of capital stock of Holdings
(or warrants, options or rights to acquire shares of capital stock of
Holdings or securities convertible into or exchangeable for capital
stock of Holdings) except (i) the sale or issuance of shares, or options
to purchase shares of capital stock as permitted hereunder, (ii) the
sale or issuance of shares of capital stock of a wholly-owned subsidiary
of Holdings to Holdings or another wholly-owned subsidiary of Holdings,
(iii) the sale or issuance of shares of capital stock of Holdings
pursuant to any option plan approved by the Board, but only upon the
specific recommendation of the Compensation Committee, including, where
required by Section 3.1.2, the affirmative vote of the director
nominated by the Other Investors, and (iv) the reissuance of Common
Shares purchased from Stockholders as permitted hereunder;
(F) Any amendment to or modification or repeal of any provision
of the Third Restated Certificate of Incorporation or By-Laws of
Holdings;
(G) The declaration or making of any Restricted Payment; and
(H) The dissolution of Holdings, EMC or any of their respective
operating Subsidiaries; the adoption of a plan of liquidation of
Holdings, EMC or any of their respective operating Subsidiaries; any
motion by Holdings, EMC or any
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of their respective operating Subsidiaries to commence any case,
proceeding or other action (i) under any existing or future law of any
jurisdiction relating to bankruptcy, insolvency, reorganization or
relief of debtors seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it, or (ii) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or making a general assignment for the benefit of its creditors.
(c) If (i) the term of this Agreement shall continue through the
tenth anniversary hereof, as provided in Section 10.1 hereof, and (ii) on the
day immediately prior to such anniversary the Institutional Investors shall
beneficially own 25% or more of the Common Shares, on a fully diluted basis at
such time, then notwithstanding anything contained herein to the contrary,
including in particular such Section 10.1, the parties hereto agree that they
shall take any and all actions as may be necessary to cause the certificate of
incorporation of Holdings, as it may exist at that time, to be amended at the
earliest practicable date (the "Amendment Date") to provide that any Surviving
Significant Transaction, as defined in subsection (d) of this Section 2.6, shall
require the affirmative vote of the holders of at least two-thirds of the
outstanding Common Shares voting together as a single class. Such vote shall be
required notwithstanding the fact that no vote may be required or
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24
that a lesser percentage vote may be required by law, by Holdings' By-Laws, by
any agreement with a national securities exchange or otherwise, and, in the
event this Section 2.6(c) shall come into effect, neither Holdings nor any of
its Subsidiaries shall engage in any Surviving Significant Transaction between
the tenth anniversary hereof and the Amendment Date.
(d) The term "Surviving Significant Transaction," with respect to
Holdings or any of the Subsidiaries shall mean any of the following actions:
(A) Any merger or consolidation involving Holdings or any of its
Subsidiaries (other than transactions involving the merger or
consolidation of a Subsidiary with or into Holdings or with or into a
wholly-owned Subsidiary of Holdings);
(B) Any sale, lease, exchange, transfer or other disposition,
directly or indirectly, in a single transaction or series of related
transactions, of all or substantially all of the assets of Holdings and
its Subsidiaries, taken as a whole, or tangible assets constituting 50%
or more of the net worth of Holdings and its Subsidiaries, taken as a
whole, to or with any person other than Holdings or a wholly-owned
Subsidiary of Holdings;
(C) Any sale or issuance of shares of capital stock of Holdings
(or warrants, options or rights to acquire shares of capital stock of
Holdings or securities convertible into or exchangeable for capital
stock of Holdings) (i) in excess of the number authorized by Holdings'
certificate of
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25
incorporation at that time or (ii) at a price below (x) the price
determined in the most recent yearly ESOP appraisal of its Common
Shares, if there has not been an Initial Public Offering or (y) the
average closing price, or the average closing bid and ask price, as the
case may be, during the 10 trading days immediately preceding such sale
or issuance, if there has been an Initial Public Offering; except for
(i) the issuance of shares of capital stock of Holdings pursuant to
options or warrants granted or issued, as the case may be, prior to the
tenth anniversary hereof and in accordance with the terms hereof; (ii)
the reissuance of shares of Holdings' capital stock purchased from
Stockholders prior to the tenth anniversary hereof and in accordance
with the terms hereof; and (iii) the sale or issuance of shares of
capital stock of a wholly-owned Subsidiary of Holdings to Holdings or to
another wholly-owned Subsidiary of Holdings;
(D) Any amendment to or modification or repeal of any provision
of the certificate of incorporation or By-Laws of Holdings, provided,
Holdings may amend its certificate of incorporation as contemplated in
Section 2.6(c) hereof and may amend, modify or repeal its By-Laws so
long as the By-Laws do not conflict with any provision of Holdings'
certificate of incorporation included as a result of this Section 2.6;
(E) The declaration or making of any Restricted Payment, except
(i) if each class of Common Shares shall share equally in such
Restricted Payment, without any preferences of any kind to any class,
(ii) for any one or
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26
series of Restricted Payments which, in the aggregate, constitute the
purchase, redemption or other acquisition by Holdings, EMC or any of
their respective Subsidiaries of not more than 10% of the then
outstanding Common Shares, on a fully diluted basis, and (iii) for any
one or more Restricted Payments made pursuant to contracts approved in
accordance with the terms hereof prior to the tenth anniversary hereof;
and
(F) The dissolution of Holdings, EMC or any of their respective
operating Subsidiaries or the adoption of a plan of liquidation of
Holdings, EMC or any of their respective operating Subsidiaries.
ARTICLE III
Board of Directors
3.1.1 Election of Directors. The parties (other than the ESOT)
agree that the number of directors on the Board of Directors of Holdings shall
be seven and that, from the date hereof until the earlier of (i) the Public
Distribution of at least 50% of the Common Shares, on a fully diluted basis, and
(ii) the seventh anniversary hereof, at any special or annual meeting of
Stockholders at which directors are to be elected to the Board, the parties
(other than the ESOT and Holdings) shall vote their Common Shares in favor of
the persons nominated for director as follows: (a) the MLCP Investors and their
Permitted Transferees, by a majority vote of the Common Shares owned by such
MLCP Investors and such transferees, shall nominate two individuals to serve as
directors (the "MLCP Directors") on the Board for one-year terms, (b) the
Management Stockholders and
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27
their Permitted Transferees, by a majority vote of the Common Shares owned by
such Management Stockholders and such transferees shall nominate four
individuals to serve as directors on the Board for one-year terms, and (c) the
Other Investors and their Permitted Transferees, by majority vote of the Common
Shares actually held and underlying unexercised Warrants owned by such Other
Investors and their Permitted Transferees, shall nominate one individual to
serve as a director on the Board for a one-year term; provided, however, that in
the event of any Specified Default, the parties (other than the ESOT and
Holdings) shall take all actions necessary to increase the size of the Board by
two directors and the MLCP Investors and their Permitted Transferees, by a
majority vote of the Common Shares owned by such MLCP Investors and such
transferees, shall designate two additional individuals to serve as directors on
the Board; provided, further, that in the event that any such default is (A)
cured pursuant to the terms of the applicable debt instrument or (B) waived by
any party entitled to waive such a default, the terms of office of the two
individuals designated to serve as directors pursuant to the preceding proviso
shall, in the case of a cure, automatically terminate 30 days thereafter and, in
the case of a waiver, terminate 180 days thereafter, and the two vacancies
created thereby shall thereupon be eliminated and the parties hereto (other than
the ESOT and Holdings) shall take all actions necessary at the annual meeting of
stockholders of Holdings next following such cure or waiver to reduce the size
of the Board by two directors. Each party hereto (other than the ESOT and
Holdings) hereby agrees, from and after the Closing
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Date, to use such party's best efforts and take all actions necessary to call,
or cause Holdings and the appropriate officers and directors of Holdings to
call, a special or annual meeting of stockholders of Holdings and to vote all
Common Shares owned or held of record by such party at any such annual or
special meeting in favor of, or to take all actions by written consent in lieu
of any such meeting necessary to cause, the election as members of the Board
those individuals so nominated in accordance with, and to otherwise effect the
intent of this Section 3.1.1.
3.1.2 Committees of the Board of Directors. The parties agree
that (i) the Board shall have at least two permanently sitting committees, a
compensation committee (the "Compensation Committee") and an audit committee
(the "Audit Committee"), (ii) each such committee shall have three members, with
the Compensation Committee consisting of the two MLCP Directors and the Chairman
of Holdings (who shall also be Chairman of the Compensation Committee) and
the Audit Committee consisting of the two MLCP Directors and one of the
directors nominated by the Management Stockholders pursuant to Section 3.1.1
hereof and (iii) any action taken by each such committee shall require a
majority vote of the members thereof; provided, that so long as ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ is Chairman of the Compensation Committee any action taken by the
Compensation Committee shall require his affirmative vote. Each proposal
considered by the Compensation Committee shall be initiated by its Chairman and
the Compensation Committee shall review such proposals and make recommendations
to the Board concerning (i) any changes of the base salary, bonuses, benefits
and other compensation paid to
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officers of Holdings at or above the level of executive vice president, (ii) the
aggregate amount of incentive cash compensation to be paid to (a) all officers
of Holdings at or above the level of executive vice president and (b) all
officers of Subsidiaries of Holdings based upon the overall financial
performance of Holdings and its Subsidiaries, (iii) any and all grants by
Holdings to members of management or other employees of Holdings or any of its
Subsidiaries of any option or other right to acquire any security of Holdings;
provided, that the grant of any option or right to acquire any equity security
of Holdings, which grant together with all other grants of options or rights to
acquire equity Securities of Holdings (exclusive of the Warrant and the
Preferred Shares) from the date hereof shall exceed 3% of the outstanding Common
Shares, on a fully diluted basis, on the date hereof, shall require the
affirmative vote of the director designated by the Other Investors in addition
to the affirmative vote of the Compensation Committee specified above, and (iv)
the making of any loan, advance or other investment in or to any Management
Stockholder or employee of Holdings and any of its Subsidiaries, other than in
the ordinary course of business. The Board will take no action upon any matter
relating to (i), (ii) or (iii) in the immediately preceding sentence other than
as specifically recommended by the Compensation Committee. The Compensation
Committee shall have such other responsibilities and functions as the Board may
reasonably delegate to it.
3.1.3 Meetings of the Board of Directors and Observer.
The parties agree that the Board shall meet at least once during
each quarter of Holdings' fiscal year. So long as either Other
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30
Investor is the owner of any Warrants acquired under its respective Note and
Warrant Purchase Agreement (or the Common Shares issuable pursuant to such
Warrants) and does not have an employee, officer, director, or Affiliate who is
a member of the Board, it shall be entitled to have an observer at each special
and annual meeting of the Board of Holdings and to receive such notice of such
meetings and any materials distributed in advance thereof as shall be given to
the members of the Board.
3.2 Removal Without Cause. Notwithstanding the provisions of
Section 3.3 or any other Section hereof to the contrary, any director may be
removed without Cause as follows: (i) the party which nominated the director who
is to be removed without Cause (and only such party may seek such removal
without Cause) shall send written notice to each other party hereto (other than
the ESOT and Holdings) of its desire to remove such director; (ii) all such
parties shall then use their best efforts and take all actions necessary to
cause Holdings to call a special meeting of stockholders at the earliest
practicable date for the purpose of removing such director and electing a
director to fill the vacancy created by such removal; and (iii) at such special
meeting of stockholders the parties hereto (other than Holdings and the ESOT)
shall vote all of the securities of Holdings owned by them and entitled to vote
at such meeting and upon such matter (A) in favor of removal of the director
specified on the notice delivered pursuant to such clause (i) of this Section
3.2 and (B) in favor of the nominee of the party which originally nominated the
director being removed without Cause.
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3.3 Removal for Cause. The parties agree that (a) no director
shall be removed without Cause except as provided in Section 3.2 hereof and (b)
any director may be removed for Cause at any time by the affirmative vote of the
holders of a majority of all the outstanding Common Shares. For the purposes
hereof, "Cause" shall mean the commission by a director of an act involving the
reckless disregard of his duties to Holdings or any of its Subsidiaries, bad
faith, gross negligence, willful misconduct or fraud.
3.4 Vacancies on the Board. If as a result of death, disability,
retirement, resignation, removal (with or without Cause), or otherwise there
shall exist or occur any vacancy on the Board, each party other than Holdings
hereby agrees that the party and its respective transferees which nominated
(pursuant to Section 3.1.1 hereof) the director whose death, disability,
retirement, resignation or removal (with or without Cause) resulted in such
vacancy on the Board shall nominate (in the manner set forth in Section 3.1.1
hereof) another individual to fill such vacancy and to serve as a director;
provided that such nominee shall not previously have been a member of the Board
of Holdings who was removed for Cause. Each party (other than the ESOT and
Holdings) agrees to use its best efforts and take all actions necessary to call,
or cause Holdings and the appropriate officers and directors of Holdings to
call, a special or annual meeting of stockholders of Holdings and will vote all
Common Shares owned or held of record by it at any such special or annual
meeting in favor of, or take all actions by written consent in lieu of any such
meetings necessary to cause, the
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election of the individual nominated in accordance with this Section 3.4 to fill
such vacancy on the Board of Holdings.
3.5 Agreement to Cooperate. In order to effectuate the provisions
of this Article III, each party (other than Holdings) hereby agrees that when
any action or vote is required to be taken by it pursuant to this Agreement,
each such party shall use its best efforts and take all actions necessary to
call, or cause Holdings and the appropriate officers and directors of Holdings
to call, a special or annual meeting of Stockholders of Holdings, as the case
may be, or execute or cause to be executed a consent in writing in lieu of any
such meetings necessary to effectuate such stockholder action and each party
shall vote its Common Shares in accordance with, and for the purpose of
implementing the provisions of, this Agreement.
3.6 Conflicting Charter or By-Laws Provisions. Each party (other
than Holdings) shall vote its Common Shares, and shall take all actions
necessary to ensure that Holdings' Third Restated Certificate of Incorporation
and By-Laws do not, from time to time, conflict with the provisions of this
Agreement.
3.7 Board of EMC. The parties agree that the Board of Directors
of EMC and the committees thereof shall consist of the same persons who at the
time are members of the Board of Holdings and members of the corresponding
committees thereof, respectively.
3.8 Application of Articles II and III. Anything in this
Agreement to the contrary notwithstanding, the ESOT shall not be obligated to
comply with any of the terms of Articles II or III hereof to the extent that the
ESOP Trustee determines, in
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33
good faith, and with respect to legal matters upon the advice (which shall, if
Holdings so requests, be in the form of a written opinion of counsel) of its
outside legal counsel, that the ESOT's compliance with any of such terms would
result in (i) a breach by the ESOT Trustee of its fiduciary obligations under
ERISA or the Code, (ii) a violation by any party hereto of any provision of
ERISA or the Code, or (iii) a finding by the U.S. Department of Labor of a
"prohibited transaction" (as defined under ERISA).
ARTICLE IV
Reservation of Shares; Restrictions on Transfer
4.1 Reserved Shares. Prior to the Closing Date,
5,956,079 authorized but unissued Class B Shares (the "Warrant Shares") will
have been reserved for issuance pursuant to the Warrants.
4.2 Limitations as to Transferees. No transfer of Common Shares,
Preferred Shares or Warrants to any Person who is not a party to or has not
joined in and agreed to be bound by this Agreement shall be effective until any
such transferee has expressly agreed in writing to be bound by the terms and
conditions contained herein which defines or effects the rights, privileges and
obligations of the holder of the Common Shares, Preferred Shares or Warrants, as
the case may be, being transferred (other than in the case of a transferee
receiving Preferred Shares or Common Shares from the ESOT, who shall also be
subject to each provision from which the ESOT has been exempted as a result of
its legal status under ERISA; provided, further, that (i) in the event any party
(the "Potential
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34
Transferor") shall seek to transfer Common Shares, Preferred Shares or Warrants
to a Person who, in the reasonable opinion of the Board, is directly or
indirectly engaged in, or is an officer, director or affiliate of any other
Person engaged in a business competitive with that conducted by Holdings on the
date hereof (except that the endowment fund of a not-for-profit educational
institution shall not constitute such a competitor), Holdings shall have the
right (the "Right of First Refusal"), and the right to assign such right (except
that there shall be no such right of assignment with respect to Common Shares or
Preferred Shares owned by the ESOT), during the 14-day period following its
receipt of a written notice from the Potential Transferor setting forth the
terms of the proposed transfer and the name and background of the proposed
transferee, to purchase not less than all of the Common Shares, Preferred Shares
and Warrants proposed to be transferred at the price per share and upon the
terms set forth in such written notice and (ii) any potential transfer of Common
Shares, Preferred Shares or Warrants by any party other than the ESOT to a
Person whose specific ownership thereof, in the good faith determination of the
Board, is reasonably likely (other than due to any change in control of Holdings
or any of its Subsidiaries resulting from such ownership) to result in a
material adverse effect on any license, accreditation or regulatory approval of
Holdings or any of its Subsidiaries, or in the suspension of, or imposition of
any material restrictions on the availability of, any federal, state or local
financial or other similar benefits available to students enrolled in operating
Subsidiaries of Holdings
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35
immediately prior to such proposed transfer, shall be prohibited, and any such
transfer to any such Person shall be void, and any such transfer by the ESOT
shall be subject to a Right of First Refusal in favor of Holdings in accordance
with subclause (i) of this Section 4.2. The closing on any exercise of a Right
of First Refusal shall take place at the principal executive offices of Holdings
as soon as practicable following Holdings' exercise of such right and the
parties thereto shall use their best efforts that such closing occurs promptly
after such exercise. If Holdings does not exercise its Right of First Refusal
during such 14-day period, the transfer of the Common Shares by the Potential
Transferor to the potential transferee may occur at any time within the 90-day
period following the expiration of the 14-day period, at the price and upon the
principal terms set forth in the Notice provided to Holdings. If the Potential
Transferor does not make such transfer within such 90-day period, then the
Potential Transferor shall not transfer the Common Shares without again
complying with this Section 4.2. Any sale by the Potential Transferor pursuant
to this Section 4.2, whether to Holdings or a potential transferee, is subject
to the provisions of Article VII hereof. The provisions of this Section 4.2
shall not apply to any transfer in a Public Offering or in a distribution to the
public pursuant to Rule 144 under the Act, or any successor provision.
ARTICLE V
No Dilution; Reissuance of Shares
5.1 No Dilution. (a) Prior to any Initial Public Offering, the
parties hereto agree that Holdings shall not issue
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36
any shares of its capital stock, any options or warrants for any such shares or
any securities convertible into or exchangeable for any such shares (other than
as expressly permitted herein, in any Subscription Agreement, in the Note and
Warrant Agreements, and in the ESOT Purchase Agreements), unless Holdings shall
grant each other party hereto the option (a "Non-Dilution Option") to acquire
(on the same terms and conditions as in the issuance giving rise to such
Non-Dilution Option) such number of newly issued shares as shall be necessary to
maintain each party's respective percentage ownership interest in Holdings
(including with respect to the Holders of the Warrants the respective
percentages that would be owned by such Holders after full exercise of their
Warrants), on a fully diluted basis, as existed immediately prior to the
proposed issuance by Holdings of shares, options, warrants or other securities;
provided, however, (i) that no party shall be entitled to a Non-Dilution Option
in the event of an issuance by Holdings of equity securities along with debt
securities unless such party agrees to purchase a pro rata portion of the debt
securities being sold and (ii) that the Non-Dilution Option shall not apply to
(A) any options granted pursuant to a stock option plan adopted by the Board
following a favorable recommendation of the Compensation Committee including,
where required by Section 3.1.2, the affirmative vote of the director nominated
by the Other Investors and (B) the reissuance at no less than Fair Market Value
by the Company of any Common Shares, Preferred Shares and Warrants purchased by
the Company from any other party hereto in accordance with this Agreement or an
applicable Subscription Agreement, as the case may be.
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(b) In the event Holdings shall propose to issue any shares of
its capital stock or any options, warrants or other securities convertible into
or exchangeable for such shares and, pursuant to Section 5.1(a) hereof the
Non-Dilution Option shall apply to such issuance, Holdings shall deliver a
notice to such effect to each other party, which notice shall specify (i) the
number of shares, options, warrants or convertible or exchangeable securities
being issued (including, where appropriate, all conversion and exchange rates
and other similar features), (ii) the Person to whom or which they are to be
issued, and (iii) the price to be paid per share (and the method of calculation
thereof). Each Stockholder shall have 30 days from its receipt of such notice to
exercise its Non-Dilution Option with respect thereto, if at all.
5.2 Reissuance of Shares. Any Common Shares acquired by Holdings
pursuant to the provisions of Sections 9 and 10 of a Management Subscription
Agreement may be reissued by Holdings in accordance with its By-Laws at such
price as shall be determined by the Compensation Committee and only to a Person
who (i) is an individual who is another Management Stockholder or another member
of the management of Holdings or one of its Subsidiaries, (ii) is approved by a
majority of the members of the Compensation Committee, provided that (a) if the
Compensation Committee does not approve a reissuance hereunder within 180 days
following an acquisition by Holdings, a majority of the Board of Holdings may
recommend and approve such reissuance and (b) if the individual or individuals
approved by the Compensation Committee elects or elect not to purchase such
Common Shares, the Compensation
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Committee (or the Board if the Compensation Committee fails to act within 90
days) shall approve another individual or other individuals in accordance with
this Section 5.2, (iii) executes a counterpart of, and becomes a party to, this
Agreement pursuant to the provisions of Article XIII hereof and (iv) agrees to
be bound by all of the provisions (other than Sections 3, 4 and 5)
of the Management Subscription Agreements.
ARTICLE VI
Registration Rights
6.1.1 Registration Rights; Demand Registration Rights. Upon the
written request of any Holder or Holders of Registrable Securities requesting
that Holdings effect the registration (a "demand registration") under the
Securities Act of all or part of such Holder's or Holders' Registrable
Securities and specifying the number of Registrable Securities to be registered
by each such Holder and the intended method of disposition thereof (such notice
is hereinafter referred to as a "Holder's Request"), Holdings will promptly give
written notice of such requested demand registration to all other Holders of
Registrable Securities, and thereupon will, as expeditiously as possible, use
its best efforts to effect such demand registration under the Securities Act of
(i) the Registrable Securities which Holdings has been so requested to register
by such Holder or Holders and (ii) all other Registrable Securities which
Holdings has been requested to register by any other Holder thereof by written
request given to Holding within 20 days after the giving of such written notice
by Holdings (which request shall specify the intended method of disposition of
such Registrable Securities),
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all to the extent necessary to permit the disposition of the
Registrable Securities to be so registered. Holdings shall not,
however, be obligated to file a registration statement relating
to any Holder's Request unless
(A) at any time prior to the fifth anniversary hereof, Holdings
shall have received requests for such demand registration from the
Holders of an aggregate of the Registrable Securities consisting of at
least 51% of the Common Shares other than those underlying options
granted after the date hereof, on a fully diluted basis exclusive of
such option shares, (where each Holder counted toward such 51% threshold
shall have designated for sale no less than 20% of the total number of
Registrable Securities held by it); provided, however, that Holdings may
decline to act on any such demand registration request if the shares of
Holdings' Registrable Securities so offered have an aggregate offering
value of less than $10,000,000;
(B) at any time after the fifth anniversary of the Closing Date
or after an Initial Public Offering, Holdings shall have received
requests for such demand registration from the holders of an aggregate
of the Registrable Securities consisting of at least 13.0%, in the case
of the first such demand registration request under this subclause (B),
and 6.5%, in the case of each such subsequent demand registration
request under this subclause (B), of the Common Shares other than those
underlying options granted after the date hereof, on a fully diluted
basis exclusive of such option shares, (where each holder counted toward
such 13.0%
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or 6.5% threshold, as the case may be, shall have designated for sale no
less than 20% of the total number of Registrable Securities held by it);
provided, however, that (i) Holdings may decline to act on any such
demand registration request if the Registrable Securities so offered
have an aggregate offering value of less than $10,000,000 (unless such
demand registration is the last of the four demand registrations
permitted under this subsection (B) and under the next following
subsection (C)), and (ii) Holdings shall have the right, but not the
obligation, during the thirty-day period immediately following its
receipt of a demand for registration in accordance with this subclause
(B) to purchase no less than all of the Registrable Securities as to
which such demand for registration has been made at the Fair Market
Value, if there has been no Initial Public Offering, or at the average
closing price, or the average bid and ask price, as the case may be, for
the Registrable Securities during each of the ten trading days
immediately prior to such purchase, if there has been an Initial Public
Offering; or
(C) at any time after the fifth anniversary of the Closing Date
or after an Initial Public Offering, Holdings shall have received
requests for such demand registration from the holders of an aggregate
of at least 51% of the Registrable Securities held by the Institutional
Investors and their Permitted Transferees (where each holder counted
toward such 51% threshold shall have designated for sale no less than
20% of the total number of Registrable Securities
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41
held by it); provided, however, that (i) Holdings may decline to act on
any such demand registration request if the shares of Holdings'
Registrable Securities so offered shall not have an aggregate offering
value of less than $10,000,000 (unless such demand registration is the
last of the four demand registrations permitted under this subsection
(C) and under the immediately preceding subsection (B)), and (ii)
Holdings shall have the right, but not the obligation, during the
thirty-day period following its receipt of a demand for registration in
accordance with this subclause (C) to purchase no less than all of the
Registrable Securities as to which such demand for registration has been
made at the Fair Market Value, if there has been no Initial Public
Offering, or at the average closing price, or the average closing bid
and ask price, as the case may be, for the Common Shares during each of
the ten trading days immediately prior to such purchase, if there has
been a registration statement to effect an Initial Public Offering;
provided, that Holdings shall not be required to effect any demand
registration pursuant to this Article VI at any time during (x) the
45-day period immediately preceding Holdings' estimated date of filing
of a registration statement to effect an Initial Public Offering, and
(y) the 180-day period following the effective date of a registration
statement pertaining to an underwritten public offering of securities
for the account of Holdings, provided that Holdings is actively
employing in good faith all reasonable efforts to cause such
registration
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statement to become effective and that Holdings' estimate of the date of
filing such registration statement is made in good faith.
6.1.2 Limitation on Number of Filings. Notwithstanding the
foregoing, Holdings shall be obligated to file only that number of demand
registration statements as set forth in this Section 6.1.2, which are as
follows: (i) pursuant to subsection (A) above, an unlimited number during the
five-year period set forth in such subsection and none thereafter; (ii) pursuant
to subsection (B) above, two demand registration statements; and (iii) pursuant
to subsection (C) above, two demand registration statements. Holdings shall not,
however, be obligated to file any registration statement that would require the
inclusion of audited financial statements for a period other than Holdings'
fiscal year.
6.1.3 Demand Registration Expenses. Holdings will pay all
Registration Expenses in connection with each of the demand registrations of
Registrable Securities of the type described above effected by it and each
Person selling Registrable Securities shall pay all underwriting discounts and
commissions and transfer taxes and documentary stamp taxes, if any, relating to
the sale or disposition by such Person of Registrable Securities pursuant to a
registration statement effected in the manner contemplated above.
6.1.4 Securities Included. The only securities that
may be included in any such offering are (i) Registrable
Securities and (ii) Common Shares that Holdings elects to include
in such offering ("Company Securities"); provided, however, if,
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in the event of a demand registration which when filed is an Initial Public
Offering, the managing underwriter advises Holdings that, in its judgment, the
number of Company Securities necessary to be included in the registration
statement referred to above is equal to or greater than 50% of the number of
Common Shares, exclusive of those underlying options granted after the date
hereof, included in such registration statement, then the registration of
Registrable Securities shall be deemed to be made pursuant to the provisions set
forth below relating to piggyback registrations; and provided further, that
Holdings shall have the right, at its option, to require that any Warrants or
options constituting Registrable Securities be exercised into Common Shares
before they are included in any such offering.
6.1.5 Priorities of Offering. (a) If, in the case of a demand
registration which is an Initial Public Offering, the managing underwriter
advises Holdings that, in its judgment, a number of Company Securities should be
included in such an offering and, accordingly, the number of Common Shares
proposed to be included in such offering should be limited due to market
conditions, then Holdings will promptly so advise each Holder of Registrable
Securities that has requested such demand registration and will include in such
demand registration (i) first, the securities, if any, Holdings proposes to
sell, and (ii) second, the number of such Registrable Securities requested to be
included in such registration statement which, in the opinion of the managing
underwriter, can be sold, such number to be allocated among the selling Holders
of Registrable Securities pro rata in accordance with the number of shares of
Registrable
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Securities that each such holder has requested be included in such registration
statement.
(b) In the event of any demand registration other than (i) an
Initial Public Offering, as described in subsection (a) immediately above, and
(ii) the final demand registration, as described in subsection (c) immediately
below, Holdings shall be entitled to participate in a demand registration by
selling Company Securities in such registration but only on a pro rata basis
along with all the Holders selling Common Shares or Warrants in such
registration; provided that in any such registration Holdings shall not be
entitled to sell Company Securities which represent in excess of the number of
Registrable Securities being sold by the Requesting Holders in such
registration.
(c) Notwithstanding anything contained herein to the contrary,
the priorities in the final demand registration made pursuant to Section 6.1.1
hereof, as determined in accordance with Section 6.1.2 hereof, shall be as
follows: (i) first, the Registrable Securities the Institutional Investors and
their Permitted Transferees propose to sell, (ii) second, the securities
Holdings proposes to sell, and (iii) third, the number of additional Registrable
Securities requested to be included in such registration statement which, in the
opinion of the managing underwriter, can be sold, such number to be allocated
among the then remaining Holders of Registrable Securities pro rata in
accordance with the number of shares of Registrable Securities that each such
Holder has requested be included in such registration statement.
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6.2.1 Piggyback Registration. If Holdings at any time proposes to
register any of its equity securities under the Securities Act (other than
pursuant to a demand registration), whether or not for sale for its own account,
on a form and in a manner that would permit registration (a "Company
Registration") of Registrable Securities for sale to the public under the
Securities Act, it will give notice to the Holders of Registrable Securities 60
days prior to the anticipated filing of a registration of its intention to do
so, specifying the form and manner and the other relevant facts involved in such
proposed Company Registration. Upon the written request of any such Holder or
Holders delivered to Holdings within 20 days after the date such notice was
given by Holdings (which request shall specify the number of Registrable
Securities intended to be registered and the intended method of disposition
thereof), Holdings will use its best efforts to effect Holdings registration
under the Securities Act of all of the Registrable Securities that Holdings has
been so requested to register; provided, however, that: (i) if, at any time
after giving such 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, Holdings shall determine for any reason not to register
such securities, Holdings may, at its election, give written notice of such
determination to each Holder of Registrable Securities who made a request as
hereinabove provided and thereupon shall be relieved of its obligation to
register any Registrable Securities in connection with such Company Registration
(but not from its obligation to
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pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights, if any, of any one or more Holders to request that such
Company Registration be effected as a demand registration and (ii) all Holders
of Registrable Securities requesting to be included in such Company Registration
must sell their Registrable Securities to the underwriters selected by Holdings
on the same terms and conditions as apply to Holdings.
6.2.2 Piggyback Registration Expenses. Holdings will pay all
Registration Expenses in connection with each Company Registration of
Registrable Securities and each Person selling Registrable Securities shall pay
all underwriting discounts and commissions and transfer taxes and documentary
stamp taxes, if any, relating to the sale or disposition by such Person of
Registrable Securities pursuant to a Company Registration statement.
6.2.3 Priorities in Offering. If, in the case of a Company
Registration, the managing underwriter advises Holdings that, in its opinion,
the number of Common Shares proposed to be included in such Company Registration
should be limited due to market conditions, then Holdings will promptly so
advise each Holder of Registrable Securities that has requested registration and
will include in such Company Registration (i) first, the securities Holdings
proposes to sell, and (ii) second, the number of such Registrable Securities
requested to be included in such registration statement which, in the opinion of
the managing underwriter, can be sold, such number to be allocated among the
selling Holders of Registrable Securities pro rata in accordance
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with the number of shares of Registrable Securities that each such holder has
requested be included in such registration statement. Nothing contained in this
Section 6.2.3 shall in any manner affect the priorities established in Section
6.1.5(c) hereof in connection with the final demand registration made pursuant
to Section 6.1.1 hereof.
6.2.4 Notice to Certain Holders. Holdings shall not file any
registration statement under the Securities Act, unless it shall first have
given to each Stockholder at least 30 days' prior notice thereof.
6.3 Repayment of Indebtedness. If a Holder of Registrable
Securities acquired from Holdings or any of its subsidiaries purchased such
Registrable Securities from Holdings or such subsidiary with a note from, or
other form of indebtedness of, such Holder, such Holder shall not be entitled to
effect any transfer of such shares in connection with any demand registration or
Company Registration, unless such Holder shall have repaid in full the principal
of and the accrued and unpaid interest on any such note or indebtedness.
6.4 Rule 144. If Holdings shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act,
Holdings covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder (or, if Holdings is not required to file
such reports, it will, upon the request of any Holder of Registrable Securities,
make publicly available other
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information), and it will take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder of Registrable Securities,
Holdings will deliver to such Holder a written statement as to whether it has
complied with such requirements.
6.5 Registration Procedures. If and whenever Holdings is required
to effect the registration of any Registrable Securities under the Securities
Act as provided in Sections 6.1.1 and 6.2.1 hereof, Holdings will as
expeditiously as possible:
(i) prepare and (within 60 days after the end of the period
within which requests for registration may be given to Holdings) file
with the Commission the requisite registration statement to effect such
registration and thereafter use its best efforts to cause such
registration statement to become effective;
(ii) 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 for a period of either (A) not less than 90 days or,
if such registration statement relates to an underwritten offering, such
longer period as in the opinion of counsel for the
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underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or
dealer or (B) such shorter period as will terminate when all of the
securities covered by such registration statement have been disposed of
in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement (but in any
event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until 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;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and each Requesting Holder 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
Securities Act, in conformity with the requirements of the Securities
Act, and such other documents in order to facilitate the disposition of
the Registrable Securities owned by such seller, as such seller may
reasonably request;
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(iv) use its best efforts to register or qualify such Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as
each seller thereof and each Requesting Holder 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, provided that Holdings shall not for any such purpose be
required to (A) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required
to qualify but for the requirements of this subdivision (iv), (B)
consent to general service of process in any such jurisdiction or (C)
subject itself to taxation in such jurisdiction;
(v) 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
by virtue of the business and operations of Holdings to enable the
seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each seller of Registrable Securities and each
Requesting Holder a signed counterpart, addressed to such seller of
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(x) the opinion of counsel for Holdings delivered to the
underwriter, if such registration includes an underwritten public
offering, dated the effective date of such registration statement
and the date of the closing under the underwriting agreement, or,
in the absence of an underwriter, in such form as may be
reasonably satisfactory to such seller, and
(y) the "comfort" letter, delivered to the underwriter, if
such registration includes an underwritten public offering, dated
the effective date of such registration statement and the date of
the closing under the underwriting agreement, or, in the absence
of an underwriter, in such form as may be reasonably satisfactory
to such seller, signed by the independent public accountants who
have certified Holdings' 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 statements 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, and,
in the case of the legal opinion, such other legal matters, as such
seller or such Requesting Holder (or the underwriters, if any) may
reasonably request;
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(vii) notify each seller of Registrable Securities covered by
such registration statement and each Requesting Holder, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the discovery of the
happening of any event 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, and at the request of any such seller or Requesting
Holder promptly prepare and furnish to such seller or Requesting 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 the light of the circumstances under which
they were made;
(viii) 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 a period of twelve months, beginning with a calendar
month commencing not more than three months after the effective date of
such registration statement, which earnings
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statement shall satisfy the provisions of Section 11(a) of the
Securities Act, and will furnish to each such seller and each Requesting
Holder at least five business days prior to the filing thereof a copy of
any amendment or supplement to such registration statement or prospectus
and shall not file any such amendment or supplement to which any such
seller or any Requesting Holder shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or of the
rules or regulations thereunder;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration statement; and
(x) use its best efforts (A) to cause all such Registrable
Securities covered by such registration statement to be listed on a
national securities exchange (if such Registrable Securities are not
already so listed) and on each other securities exchange on which
similar securities issued by Holdings are then listed, if the listing of
such Registrable Securities is then permitted under the rules of such
exchange; or, at the option of Holdings, (B) to secure the designation
of all such Registrable Securities covered by such registration
statement as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure
NASDAQ authorization for such
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Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such
with respect to such Registrable Securities with the National
Association of Securities Dealers.
Holdings may require each seller of Registrable Securities as to
which any registration is being effected to furnish Holdings such information
regarding such seller and the distribution of such securities as Holdings may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that upon receipt of any notice from Holdings of the
happening of any event of the kind described in subdivision (vii) of this
Section 6.5, 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 (vii) of this
Section 6.5 and, if so directed by Holdings, such holder will use its best
efforts to deliver to Holdings (at Holdings' 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.
ARTICLE VII
Rights of Inclusion and Rights of First Offer
7.1 Rights of Inclusion. (a) Until the termination of
this Agreement, none of the parties (other than Holdings) and
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their respective Permitted Transferees shall sell or otherwise dispose of any
Common Shares or any right, option or warrant to purchase Common Shares pursuant
to an offer (a "Third Party Offer") by any Person (individually, a "Third Party"
and collectively, "Third Parties"), whether initiated by such Third Party or by
the party seeking to sell such Common Shares or such right, option or warrant
unless the terms and conditions of such sale or other disposition to such Third
Party shall include an offer to each of the other parties (other than Holdings)
and their respective Permitted Transferees (for purposes of this Section 7.1(a),
the "Offerees"), to include, at the sole option of each Offeree, in the sale or
other disposition to the Third Party a pro rata number of Common Shares owned by
each such Offeree determined in accordance with Section 7.1(b) hereof. The party
or its respective Permitted Transferee that receives the Third Party Offer (the
"Transferor") shall cause the Third Party Offer to be reduced to writing (which
writing shall include an offer to purchase or otherwise acquire Common Shares
from the Offerees on the same terms and subject to the same conditions as set
forth in such Third Party Offer) and shall send written notice of the Third
Party Offer (the "Notice") to each of the Offerees in the manner set forth in
Article XIV hereof. The Notice shall be accompanied by a true and correct copy
of the Third Party Offer. At any time within 30 days after the date of receipt
by the Offerees of the Notice, each of the Offerees may, at his or its sole
option, accept the offer included in the Notice for up to such number of Common
Shares as is determined in accordance with the provisions of Section 7.1(b)
hereof by
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furnishing written notice of such acceptance to the Transferor and delivering to
the Transferor the certificate or certificates representing the Common Shares to
be sold or otherwise disposed of pursuant to such offer by such Offeree,
together with a limited power-of-attorney authorizing the Transferor to sell or
otherwise dispose of such Common Shares pursuant to the terms of such Third
Party Offer and the Notice, both on forms provided for that purpose with the
Notice.
(b) Each Offeree shall have the right to sell pursuant to a Third
Party Offer a pro rata number of such Offeree's Common Shares equal to the
product obtained by multiplying (i) the number of Common Shares held by such
Offeree times (ii) a fraction, the numerator of which is the total number of
Common Shares covered by the Third Party Offer, and the denominator of which is
the total number of Common Shares, on a fully diluted basis, owned by the
Transferor and the Offerees. In all cases, the number of Common Shares sold by
the Transferor shall equal the number of Common Shares to be sold pursuant to
the Third Party Offer less the number of Common Shares the Offerees have elected
to sell.
(c) Promptly after the consummation of the sale or other
disposition of Common Shares of the Transferor and the Offerees to the Third
Party pursuant to the Third Party Offer, the Transferor shall notify the
Offerees thereof and shall remit to each of the Offerees a certified check
and/or notes, on a pro rata basis in accordance with the terms of the Third
Party Offer, for the total sales price of the Common Shares of such Offeree sold
or otherwise disposed of pursuant thereto, and shall furnish
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such other evidence of the completion and time of completion of such sale or
other disposition and the terms thereof as may be reasonably requested by any of
the Offerees.
(d) If within 30 days after the date of the Notice, any Offeree
has not accepted the offer contained in the Notice, the Transferor shall have 30
days in which to sell or otherwise dispose of not more than the amount of Common
Shares covered by the Third Party Offer to the Transferor as described in the
Notice, on terms including, without limitation, price and form of consideration
no more favorable to the Transferor than were set forth in the Notice; provided,
however, that such sale shall include such number of Common Shares of any
Offerees who did accept the offer contained in the Notice within 30 days of the
date thereof as determined in accordance with this Section 7.1. If, at the end
of 60 days following the date of the Notice, the Transferor has not completed
the sale or other disposition of Common Shares of the Transferor and the
Offerees in accordance with the terms of the Third Party Offer, the Transferor
shall return to the Offerees all certificates representing Common Shares which
the Offerees delivered for sale or other disposition pursuant to this Section
7.1 and all related documents including, but not limited, to stock powers and
the limited powers-of-attorney authorizing the Transferor to sell such Common
Shares and all the restrictions on sale or other disposition contained in this
Agreement with respect to Common Shares and options to purchase Common Shares
owned by the Transferor shall again be in effect.
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(e) Notwithstanding anything contained in this Section 7.1 to the
contrary, no Management Holder shall be entitled to be included in a sale by any
Transferor pursuant to this Section 7.1 during the five-year period commencing
on the date hereof, unless the holders of a majority of the Common Shares held
by the Management Holders shall agree otherwise.
7.2 Right of First Offer. (a) If any party (other than Holdings)
desires to sell any Common Shares or any right, option or warrant to acquire
Common Shares owned by it, such party (for purposes of this Section 7.2, the
"Prospective Seller") shall provide Holdings and each of the other parties
hereto written notice of such Offer (for purposes of this Section 7.2, an
"Offer Notice"). The Offer Notice shall identify the number of Common Shares
actually owned and underlying any options, warrants or other rights to acquire
Common Shares owned by the Prospective Seller which the Prospective Seller
wishes to sell (for purposes of this Section 7.2, the "Offered Shares"), the
cash price per Common Share at which a sale is proposed to be made (for purposes
of this Section 7.2, the "Offer Price"), and all the other material terms and
conditions of the offer.
(b) (i) The receipt of an Offer Notice by Holdings, each
Management Stockholder and the ESOT (collectively, the "Other Offerees") from a
Prospective Seller shall constitute an offer by such Prospective Seller to sell
to each Other Offeree the Offered Shares at the Offer Price in cash, except that
an Offer Notice delivered by the ESOT shall constitute an offer solely to
Holdings to purchase the Offered Shares at the Offer Price in cash. Such offer
shall be irrevocable for 30 days (14
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days in the case of an offer from the ESOT to Holdings) after receipt of such
Offer Notice by each Other Offeree. During such 30- or 14-day period, as the
case may be each Other Offeree shall, subject to the priorities set forth in the
next succeeding paragraph, have the right to accept such offer as to all or a
portion of the Offered Shares by giving a written notice of acceptance (for
purposes of this Section 7.2, the "Notice of Acceptance") to the Prospective
Seller prior to the expiration of such 30- or 14-day period, as the case may be
(for the purposes of this Section 7.2, any such Other Offeree or the Company so
accepting such offer, an "Accepting Party").
(ii) Each such Other Offeree shall be entitled to accept such
offer from the Prospective Seller in the following order of priority: first,
Holdings shall be entitled to accept such offer for any or all of the Offered
Shares; second, the ESOT shall be entitled to accept such offer for any or all
of the then remaining Offered Shares; and third, if neither Holdings nor the
ESOT shall have accepted such offer for all the Offered Shares, the Management
Stockholders, in such portions as they may agree among themselves, shall be
entitled to accept such offer for no fewer than all of the Offered Shares then
remaining unaccepted. No Other Offeree shall be entitled to purchase any of the
Offered Shares unless and until the Other Offerees have, in the aggregate,
agreed to purchase all of the Offered Shares. If any Other Offeree so accepts
the Prospective Seller's offer, such Person will purchase from the Prospective
Seller, and the Prospective Seller will sell to such Accepting Party, such
number of Offered Shares as to which such Accepting Party shall have
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accepted (and is entitled to accept) the Prospective Seller's offer. The price
per Common Share to be paid by such Accepting Party shall be the Offer Price
specified in the Offer Notice. The Notice of Acceptance shall specify (i) such
Accepting Party's acceptance of the Prospective Seller's offer and (ii) the
number of Offered Shares to be purchased by such Accepting Party.
(c) The consummation of any such purchase by and sale to any
Accepting Party shall take place as soon as practicable following termination of
the 30- or 14-day period, as the case may be, specified in subsection (b) above.
Upon the consummation of such purchase and sale, the Prospective Seller shall
(i) deliver to the Accepting Party certificates evidencing the Offered Shares
purchased and sold duly endorsed in blank or accompanied by written instruments
of transfer in form satisfactory to such Accepting Party duly executed by the
Prospective Seller, and (ii) shall assign all its rights under this Agreement
with respect to the Offered Shares purchased and sold pursuant to an instrument
of assignment reasonably satisfactory to such Accepting Party.
(d) In the event that (i) each Other Offeree and the Company
shall have received an Offer Notice from a Prospective Seller but the
Prospective Seller shall not have received therefrom Notices of Acceptance as to
all the Offered Shares prior to the expiration of the 30- or 14-day period, as
the case may be, following receipt of such Offer Notice or (ii) an Accepting
Party shall have given a Notice of Acceptance to the Prospective Seller but
shall have failed to consummate, other than as a result of the fault of the
Prospective Seller, a
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purchase of the Offered Shares with respect to which such Notice of Acceptance
was given within 60 days after receipt of the Notice of Acceptance by the
Prospective Seller, nothing in this Section 7.2 shall limit the right of the
Prospective Seller to make a sale of the Offered Shares not purchased by one or
more Accepting Parties so long as all the Offered Shares that are sold or
otherwise disposed of by the Prospective Seller (which number of Offered Shares
shall be not less than the number of Offered Shares specified in such Offer
Notice less any shares purchased by any Accepting Parties) are sold or otherwise
disposed of for cash (A) within 180 days after the date of receipt of such Offer
Notice by each Other Offeree and (B) at the Offer Price included in such Offer
Notice.
(e) Nothing contained in this Section 7.2 shall be deemed to
limit or affect the terms of Section 7.1 hereof. If the Prospective Seller does
not sell or otherwise dispose of the Offered Shares within the 180-day period
specified above and upon terms no less favorable to the Prospective Seller than
those contained in the Offer Notice, then the Prospective Seller shall no longer
be entitled to sell the Offered Shares without again complying with the
provisions of this Section 7.2.
7.3 Application of Article VII. Anything in this Article VII to
the contrary notwithstanding, the provisions of this Article VII shall not be
applicable to (i) sales or other dispositions of Common Shares (A) referred to
in, or made pursuant to and in compliance with, Articles VI or XII hereof or (B)
to any Permitted Transferee and (ii) the grant of options and
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the purchase of Common Shares pursuant thereto in accordance with subclause (ii)
of Section 9.1(a) hereof. In addition, the provisions of Section 7.1 hereof
shall not apply to the ESOT.
ARTICLE VIII
Certain Covenants of Holdings
8.1 No Transfers of Shares on Books. Holdings agrees
that it will not permit the transfer of any Common Shares to be registered on
its books unless it has reasonable grounds to believe and does believe that such
transfer is not in violation of any provision of any Subscription Agreement, the
Note and Warrant Agreements, the ESOT Purchase Agreements or this Agreement.
8.2 Financial Statements. Holdings agrees to furnish to each
other party (a) as soon as available but in no event more than 45 days after the
end of the first, second and third quarterly periods of each fiscal year,
consolidated balance sheets of Holdings and its Subsidiaries as of the close of
such period and consolidated statements of income and stockholders' equity and
statement of cash flows for such quarterly period and for the period from the
beginning of the then current fiscal year to the end of such quarterly period
setting forth in comparative form corresponding figures as at the corresponding
date in, and for the corresponding period of, the preceding fiscal year, all in
reasonable detail and certified by the Chief Financial Officer of Holdings; and
(b) as soon as available but in no event more than 120 days after the close of
each of Holdings' fiscal years, financial statements consisting of consolidated
balance sheets of Holdings and its Subsidiaries as at the end of such year and
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consolidated statements of income and stockholders' equity and statement of cash
flows of Holdings and its Subsidiaries for such year, and setting forth, when
available and appropriate under generally accepted accounting principles, in
each case in comparative form corresponding consolidated figures from the
preceding annual audit, together with the audit report thereon of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. or such other independent public accountants of nationally
recognized standing selected by Holdings whose certification shall state that
their examination was performed in accordance with generally accepted accounting
principles.
8.3 Certain Prohibited Transferees. Each party hereto (other than
the ESOT and Holdings) agrees that it will not, and Holdings agrees that it will
not consent to, the transfer by any other party to this Agreement of any Common
Shares or right, option or warrants to acquire Common Shares, in each case,
covered hereby and owned by such other party to a Person whom such party or
Holdings knows, or believes or after reasonable inquiry should know, has been
convicted of a felony which, due to its nature or notoriety, reflects or would
reflect adversely upon Holdings or any Subsidiary thereof or which has resulted
in the incarceration of such Person for 30 days or more (unless such conviction
is reversed in any final appeal thereof), and any such transfer by the ESOT
shall be subject to a Right of First Refusal in favor of Holdings in accordance
with subclause (i) of Section 4.2 hereof.
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ARTICLE IX
Certain Additional Covenants
9.1 Transfers Generally. (a) Each Management Holder shall not,
directly or indirectly, transfer, sell, assign, grant options on or otherwise
dispose of such Holder's Common Shares during the five-year period commencing on
the date hereof except (i) if Holders of a majority of the Common Shares held by
Management Holders shall approve such disposition, (ii) with respect to granting
options, each Management Holder may grant options to acquire his Common Shares
to any employee of Holdings or any of its Subsidiaries, but only at an exercise
price at or above the price determined in the then most recent ESOP appraisal of
its Common Shares, if there has not been an Initial Public Offering, or the
average closing price, or the average closing bid and ask price, as the case may
be, for the Common Shares during the 10 trading days immediately preceding such
grant, if there has been an Initial Public Offering or (iii) to Permitted
Transferees of such Management Holder, and, in any of such cases, only in
accordance with the terms of this Agreement.
(b) From and after the Closing Date, each Management Holder shall
have and maintain sole beneficial ownership of such Holder's Common Shares, as
long as such shares are owned by such Holder, free and clear of any and all
liens, claims, encumbrances, security interests and rights and interests of
others of any kind (other than for options granted in accordance with Section
9.1(a) hereof), except that each Management Holder may, with the approval of the
Board, upon the favorable recommendation of the Compensation Committee, pledge
Common
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Shares, other than those owned and acquired by the Management Stockholders on
the Closing Date, to Holdings in connection with such Holder's acquisition of
such shares.
(c) Each Management Holder and its Permitted Transferees shall
have and maintain from and after the Closing Date sole voting power with respect
to such Holder's Common Shares, will not grant any proxy with respect to such
Common Shares which is irrevocable for longer than six months, enter into by
voting trust or other voting agreement or arrangement with respect to such
Common Shares or grant any other rights to vote such Common Shares, except as
specifically provided herein. Any proxy granted by any Management Holder shall
include an express provision requiring the holder of such proxy to vote the
Common Shares relating to such proxy strictly in accordance with the terms of
this Agreement.
ARTICLE X
Term
10.1 Term. This Agreement shall become effective (the "Effective
Date") upon the Closing Date and shall continue in effect until the earlier of
(i) the tenth anniversary of the Effective Date or (ii) the Public Distribution
of more than 50% of the outstanding Common Shares; provided, (A) that any
termination pursuant to subclause (i) of this Section 10.1 shall be subject to
the provisions of Section 2.6(c) and (d) hereof and shall not relieve Holdings
of its obligations, or the Institutional Investors of their rights, under
Sections 12.2 and 12.3 hereof in the event the Institutional Investors shall
exercise a Put Option on or prior to the tenth anniversary hereof
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and in such event such obligations and rights shall not terminate until all of
the Institutional Investors' Common Shares and Warrants have been sold pursuant
to the exercise of such Put Option or the exercise of a Put Option on a
succeeding anniversary, including an anniversary after the tenth anniversary,
and (B) any termination pursuant to subclause (i) or (ii) of this Section 10.1
shall not affect the obligations of the parties to each other under Article VI
hereof, which shall remain in full force and effect at all times until the
fifteenth anniversary hereof.
ARTICLE XI
Acknowledgment by EMC
11.1 Acknowledgment. EMC acknowledges and agrees to the terms and
provisions of this Agreement, the Subscription Agreements, the Note and Warrant
Agreements and the ESOT Purchase Agreements.
ARTICLE XII
Puts and Calls
12.1 Calls. Unless there has been an Initial Public Offering, on
each anniversary of this Agreement commencing with the seventh anniversary
hereof, Holdings shall have the right, but not the obligation (a "Call Option"),
to purchase from the Institutional Investors and their Permitted Transferees,
and the Institutional Investors and their Permitted Transferees shall be
obligated to sell to Holdings (a "Call"), no less than all of the Common Shares
and Warrants then owned by the Institutional Investors and their Permitted
Transferees at the Fair Market Value on such anniversary. Written notification
of any exercise
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of a Call Option must be delivered to the Institutional Investors and their
Permitted Transferees at least 10 days prior to the anniversary as to which such
exercise pertains, the closing on such Call shall take place at the principal
executive offices of Holdings, or such other place as the applicable parties
agree, as soon as practicable after such anniversary and each party thereto
shall use its respective best efforts to ensure that such closing occurs
promptly after such anniversary.
12.2 Puts. Unless there has been an Initial Public Offering, on
each anniversary of this Agreement commencing with the seventh anniversary
hereof, the Institutional Investors and their Permitted Transferees, upon the
affirmative vote of a majority of the Common Shares owned by them or issuable
pursuant to Warrants owned by them, shall have the right, but not the obligation
(a "Put Option"), to sell to Holdings, and Holdings shall be obligated to
purchase from the Institutional Investors and their Permitted Transferees (a
"Put") no less than all of the Institutional Investors' and their Permitted
Transferees' Common Shares and Warrants at the Fair Market Value on such
anniversary. Written notification of any exercise of a Put Option must be
delivered to Holdings at least 10 days prior to the anniversary as to which such
exercise pertains, the closing on such Put shall take place at the principal
executive offices of Holdings as soon as practicable after such anniversary, and
the parties thereto shall use their respective best efforts to ensure that such
closing takes place promptly after such anniversary.
12.3 No Interference with Put Option. Holdings hereby
covenants and agrees that it shall take no action, including,
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without limitation, the entering into of any agreement or the issuance of any
security, the result or terms of which would in any manner prohibit Holdings
from performing its obligations to the Institutional Investors in the event of
the exercise of a Put Option under Section 12.2 hereof. Anything contained in
Section 12.2 hereof or in the immediately preceding sentence of this Section
12.3 to the contrary notwithstanding, Holdings' performance under such Section
12.2 shall be subject to the (i) availability to Holdings of adequate financing
("Put Financing"), which financing Holdings shall use its best efforts to
procure, (ii) performance of such obligation by Holdings not resulting in a
default under the Senior Indebtedness, if then in effect and (iii) such
performance not being prohibited under then applicable law; provided, that in
the event then applicable law shall prohibit performance of Holdings'
obligations under Section 12.2 hereof, Holdings shall take such actions and do
all such things as the Institutional Investors and their Permitted Transferees
may reasonably request to fulfill the intent and purpose of such Section 12.2.
In the event the Management Stockholders believe, in their good faith judgment,
that the terms of any Put Financing as a whole are commercially unreasonable,
then Holdings shall not be obligated to enter into such Put Financing unless
each of the MLCP Directors and the director designated by the Other Investors
pursuant to Section 3.1.1 hereof (such three directors being collectively the
"Institutional Investor Directors") shall, in the exercise of their business
judgment subject to their fiduciary duties as directors of Holdings under
Delaware law, unanimously vote in favor of Holdings entering into the Put
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Financing. Such vote of the Institutional Investor Directors shall be
determinative of such matter notwithstanding any vote of the Whole Board of
Directors, and in the event of such affirmative vote by the Institutional
Investor Directors Holdings shall have 12 months from the date of such vote to
consummate its acquisition of the Institutional Investors' Common Shares and
Warrants pursuant to the Put. If Holdings shall not perform its obligations
under Section 12.2 hereof pursuant to some provision of this Section 12.3 in the
event of an exercise of a Put Option, such failure to consummate such Put shall
not in any manner impair or adversely affect the Institutional Investors'
right thereafter to exercise a Put Option on each succeeding anniversary hereof
or in any manner relieve Holdings of its good faith obligation to obtain
adequate financing for each such succeeding Put, subject to the conditions set
forth in Section 12.2 hereof and this Section 12.3. In addition, any extension,
modification or restructuring of the Senior Indebtedness as existing on the date
hereof must be approved by a majority vote of the Board of Holdings, which vote
must include the affirmative vote of at least one of the MLCP Directors.
12.4 Certain Delays in the Exercise of the Put Option. (a) If,
during the twelve-month period commencing on the sixth anniversary of this
Agreement, Holdings shall seek to effect an Initial Public Offering, but shall
be prevented from effecting such offering by the negative vote of the MLCP
Directors and the director nominated by the Other Investors in accordance with
the provisions of Section 2.6 hereof, then, in such event, the Institutional
Investors shall not be entitled to exercise the Put
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Option which would have otherwise arisen on the seventh anniversary hereof and,
subject to the next following subsection (b), the first time at which the
Institutional Investors shall be entitled to exercise a Put Option shall be on
the eighth anniversary hereof.
(b) If, during the twelve-month period commencing on the seventh
anniversary of this Agreement, Holdings shall seek to effect an Initial Public
Offering, but shall be prevented from effecting such offering by the negative
vote of the MLCP Directors and the director nominated by the Other Investors in
accordance with the provisions of Section 2.6 hereof, then, in such event, the
Institutional Investors shall not be entitled to exercise the Put Option which
would have otherwise arisen on the eighth anniversary hereof and the first time
at which the Institutional Investors shall be entitled to exercise a Put Option
shall be on the ninth anniversary hereof.
ARTICLE XIII
Parties
13.1 Parties. The parties hereto agree that any Person who is not
already a party hereto and who acquires Common Shares, Preferred Shares or
Warrants from a party (or his executor or administrator) or its Permitted
Transferee (other than in a Public Offering) shall, by execution of a
counterpart of this Agreement, become a party hereto, with all of the rights and
obligations with respect to such shares or Warrants hereunder of the party
hereto from whom such shares or Warrants were acquired (other than in the case
of a transferee (other than a distributee pursuant to the terms of the ESOP and
in accordance
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with ERISA) receiving Preferred Shares or Common Shares from the ESOT, who shall
also be subject to each provision from which the ESOT has been exempted as a
result of its legal status under ERISA).
ARTICLE XIV
Miscellaneous
14.1 Amendment; Modification; Etc. This Agreement may be amended,
modified or terminated and any provision hereof may be waived only by a written
instrument duly executed by the holders of 80% or more of the Common Shares at
the time outstanding and Common Shares issuable upon the exercise of outstanding
Warrants and subject to this Agreement. Notwithstanding the foregoing, any
amendment, modification, termination or waiver to this Agreement which adversely
affects the rights of the MLCP Investors or the Other Investors, as the case may
be, under Article III, V, VI, VII, X, XII or this Section 14.1 shall have no
effect unless such amendment, modification, termination or waiver has been
consented to in writing by all of the MLCP Investors or by all of the Other
Investors, as the case may be.
14.2 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware.
14.3 Execution in Counterparts. This Agreement may be signed in
one or more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
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14.4 Notices. All communications provided for herein shall be in
writing and delivered by hand or mailed via Federal Express overnight courier as
follows:
(i) if to a Stockholder, to such Stockholder at its address
specified in the Schedule of Stockholders (or an annex thereto, if such
Stockholder shall have become a party hereto pursuant to Article XIII
hereof), or
(ii) if to Holdings, addressed to it, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq., or
(iii) if to the Other Investors, addressed to them at their
respective addresses set forth on Schedule 3 hereto; or
(iv) if to EMC, addressed to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., or
(v) if to the ESOT, addressed to it at Marine Midland Bank, N.A.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., or to such other address as any party shall
furnish to the other parties in writing in accordance with this Section
14.4.
14.5 Entire Agreement; Headings. This Agreement and
the Agreements referred to herein embody the entire agreement and
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understanding among the parties and supersede all prior agreements and
understandings relating to the subject matter hereof. The headings in and date
of this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
14.6 Assignment. Except as otherwise provided herein, no party to
this Agreement may assign any of its rights or obligations hereunder. This
Agreement shall be binding on, and inure to the benefit of and be enforceable
by, the parties hereto and their respective successors, executors or
administrators and permitted assigns.
14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
EMC HOLDINGS, INC.
By_____________________________
Title
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
ML EMPLOYEES LBO PARTNERSHIP
NO. I, L.P.
By ML Employees LBO Managers,
Inc., as General Partner
By__________________________________
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
ML OFFSHORE LBO PARTNERSHIP
NO. IV
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO
Partners No. I, L.P., as
Investment General Partner
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Partners, Inc., as Managing
General Partner
By______________________________________
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERFUNDING INC.
By___________________________________________
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION
PARTNERSHIP NO. IV, L.P.
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO
Partners No. I, L.P.,
as General Partner
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners,
Inc., as Managing General Partner
By___________________________________________
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP, L.P. 1986
By___________________________________________
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
EMC HOLDINGS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
By Marine Midland Bank, N.A., solely
as Trustee and not in its
individual or corporate capacity
By___________________________________________
Title:
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By___________________________________________
Name:
Title:
(Counterpart Signature Page to Stockholders Agreement)
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14.7 Specific Enforcement; Other Remedies. Each party hereto
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that each party hereto, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto signed their
names or have caused this Agreement to be duly executed by their officers
thereunto duly authorized as of the date first above written.
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA
By___________________________________________
Name:
Title:
(Counterpart Signature Page to Stockholders Agreement)
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