SECURITYHOLDERS’
AGREEMENT
THIS
SECURITYHOLDERS’ AGREEMENT (this “ Agreement
”) is made as of December 23, 2003, by and among
(i) Sun Horsehead, LLC, a Delaware limited liability company
(“ Sun ”), (ii) each Person whose name
appears on the signature page hereto or who otherwise hereafter
becomes a party to this Agreement (collectively, the “
Minority Stockholders ”), and Horsehead Holding Corp.,
a Delaware corporation (the “ Company ”).
Certain other capitalized terms used herein are defined in
Section 1 .
NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby
agree as follows:
1.
Certain Definitions . The terms defined in this
Section 1 , whenever used in this Agreement, shall,
unless the context clearly otherwise requires, have the following
respective meanings:
“
Affiliate ” of a Person shall mean any other Person
directly or indirectly controlling, controlled by or under common
control with such Person.
“
Applicable Percentage ” shall have the meaning set
forth herein in Section 3.1(c) .
“ Common
Stock ” shall mean the Voting Common Stock and the
Non-Voting Common Stock.
“
Company ” shall have the meaning set forth in the
first paragraph of this Agreement.
“ Exempt
Transfer ,” as applied to any Stockholder, shall mean
(a) any sale or Transfer permitted by the Registration
Agreement, (b) any Permitted Affiliate Sale, (c) in the
case of an individual, any Transfer to a member of the Family of
such Stockholder, or a trust or other entity for the sole benefit
of a member of the Family of such Stockholder, if such individual
or trust or other entity agrees to be bound by the terms of this
Agreement and executes a joinder hereto, or (d) any Transfer
to another Stockholder.
“
Family ,” as applied to any individual, shall mean
(a) the children of such individual (by birth or adoption),
(b) the parents, spouse and siblings of such individual,
(c) the children of the siblings of such individual,
(d) any trust solely for the benefit of, or any partnership,
limited liability company or other entity owned solely by, anyone
or more of such aforementioned individuals (so long as such
individuals have the exclusive right to control such trust or other
entity) and (e) the estate of such individual.
“
Minority Shares ” shall mean shares of the
Company’s Common Stock owned or controlled by the Minority
Stockholders.
“
Minority Stockholders ” shall have the meaning set
forth in the first paragraph of this Agreement.
“
Minority Stockholder Notes ” shall mean the promissory
notes issued by the Company to one or more Minority
Stockholders.
“
Non-Voting Common Stock ” shall mean the Non-Voting
Common Stock, $0.01 par value per share, of the Company as
constituted on the date hereof and any stock into which any such
Non-Voting Common Stock shall have been changed or any stock
resulting from any reclassification of any such Non-Voting Common
Stock.
“
Notes ” shall mean the Sun Note and the Minority
Stockholder Notes.
“ Notice
of Transfer ” shall have the meaning set forth herein in
Section 3.1(b) .
“ Outside
Offer ” shall have the meaning set forth herein in
Section 2.2( a) .
“
Permitted Affiliate Sale ” shall mean any sale by a
holder of Securities to any one or more of its Affiliates, if such
Affiliate agrees to be bound by the terms of this Agreement to the
same extent as the transferor and executes a joinder
hereto.
“
Person ” shall mean an individual, a corporation, a
limited liability company, an association, a joint-stock company, a
business trust or other similar organization, a partnership, a
joint venture, a trust, an unincorporated organization or a
government or any agency, instrumentality or political subdivision
thereof.
“
Prospective Purchaser ” shall have the meaning set
forth herein in Section 2.2(a) .
“
Registration Agreement ” shall mean that certain
Registration Agreement, dated as of the date hereof, by and between
the Company, Sun, and the other Persons listed on the signature
page thereto.
“
Rights ” shall have the meaning set forth in
Section 4(a) .
“
Securities ” shall mean the Common Stock and the
Notes.
“
Securities Act ” shall mean the Securities Act of
1933, as amended, or any successor federal statute, and the rules
and regulations promulgated thereunder, all as amended, modified or
supplemented from time to time.
“ Selling
Stockholder ” shall have the meaning set forth in
Section 2.2(a) .
“
Stockholder ” shall mean Sun, the Minority
Stockholders and each other Person who shall acquire any shares of
Common Stock from the Company, Sun or the Minority Stockholders and
their respective heirs, executors, successors and assigns in
accordance with the terms and conditions of this
Agreement.
“ Sun
Note ” shall mean the promissory note issued by the
Company to Sun.
“
Transfer ” shall mean any sale, pledge, gift,
assignment or other transfer.
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“ Voting
Common Stock ” shall mean the Voting Common Stock $0.01
par value per share, of the Company as constituted on the date
hereof and any stock into which any such Voting Common Stock shall
have been changed or any stock resulting from any reclassification
of any such Voting Common Stock.
2.
Restriction on Transfer of Securities by Minority
Stockholders .
2.1 General
. The Minority Stockholders shall not Transfer any interest in the
Securities (except in connection with an Exempt Transfer) and the
Company shall not register the Transfer of, or otherwise permit the
Transfer of, any interest in the Securities by any Minority
Stockholders (except in connection with an Exempt Transfer) unless
(a) such Transfer has been consummated in accordance with the
terms hereof and (b) the new holder thereof shall first have
become a party to this Agreement and shall have agreed in writing
to be bound by all of the terms and conditions hereof applicable to
the Minority Stockholders. Any Transfer of any interest in the
Securities by any Minority Stockholder which is not consummated in
accordance with this Agreement shall be void.
2.2 Limited
Right to Dispose of Interest .
(a)
Bona Fide Offer to Purchase Interest . If any Minority
Stockholder (or any of his, her or its transferees) shall at any
time desire to Transfer all or any part of his, her or its interest
in the Securities as permitted under the terms of this Agreement,
such Person (the “ Selling Stockholder ”) shall
first obtain a bona fide written offer which such Selling
Stockholder desires to accept (the “ Outside Offer
”) to purchase all or any portion of such Selling
Stockholder’s Securities for a fixed cash price payable in
full at the closing of such transaction. The Outside Offer shall
set forth its date, the proposed purchase price, an identification
of the Securities to be purchased, and the other terms and
conditions upon which the purchase is proposed to be made, as well
as the name and address of the Prospective Purchaser. “
Prospective Purchaser ”, as used herein, shall mean
the prospective record owner or owners of the interest in the
Securities which are the subject of the Outside Offer and all other
Persons proposed to have a beneficial interest in such Securities.
The Selling Stockholder shall transmit copies of the Outside Offer
to the Company and Sun within five (5) days after the Selling
Stockholder’s receipt of the Outside Offer.
(b)
Option of Company and Sun .
(i) As
a result of the foregoing transmittal of the Outside Offer, the
Selling Stockholder shall be deemed to have offered in writing to
sell to the Company all, but not less than all, of such Selling
Stockholder’s interest in the Securities which are proposed
to be purchased in the Outside Offer at the price and upon the
terms and conditions set forth in the Outside Offer. For a period
of ten (10) days after such deemed offer by the Selling
Stockholder to the Company, the Company shall have the option,
exercisable by written notice to the Selling Stockholder, to accept
the Selling Stockholder’s offer, in whole and not in part, as
to the Selling Stockholder’s interest in the Securities that
are the subject of the Outside Offer.
(ii) If
the Company does not exercise its option set forth in the preceding
Section 2.2(b)(i) , the Selling Stockholder shall be deemed
to have offered in writing to
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sell to Sun
all, but not less than all, of such Selling Stockholder’s
interest in the Securities which are proposed to be sold in the
Outside Offer at the price and upon the terms and conditions set
forth in the Outside Offer. For a period of ten (10) days
after such deemed offer by the Selling Stockholder to Sun, Sun
shall have the option, exercisable by written notice to the Selling
Stockholder, to accept the Selling Stockholder’s offer, in
whole and not in part, as to the Selling Stockholder’s
interest in the Securities that are the subject of the Outside
Offer.
(c)
Acceptance of the Bona Fide Offer . If, at the end of the
option periods described in Section 2.2(b) hereof, the
option has not been exercised either by the Company or Sun to
purchase all of the Selling Stockholder’s interest in the
Securities proposed to be purchased in the Outside Offer, the
Selling Stockholder shall be free for a period of forty-five
(45) days thereafter to Transfer such interest in the
Securities proposed to be purchased in the Outside Offer to the
Prospective Purchaser at the price and upon the terms and
conditions set forth in the Outside Offer, provided that the
Prospective Purchaser is not a Person that, directly or indirectly
(whether as sole proprietor, partner, manager, consultant,
director, officer, employee or agent), owns, manages, operates,
controls, finances, engages or participates in the ownership,
management, operation or control of any Person that competes with
the Company. If such Securities are not so transferred within the
forty-five (45) day period, the Selling Stockholder shall not
be permitted to sell such Securities without again complying with
this Section 2.2.
(d) Notwithstanding
anything contained in this Agreement to the contrary, the
restrictions on the Transfer of Securities set forth in this
Section 2.2 shall not apply to Sun or any of its
Affiliates and shall not apply with respect to an Exempt Transfer
by a Minority Stockholder.
3.
Tag-Along Rights; Drag-Along Rights .
3.1 Tag-Along
Rights . Subject to Section 3.1(f) :
(a) If
Sun at any time proposes to Transfer any interest in Securities,
then, as a condition precedent thereto, Sun shall afford the
Minority Stockholders the right to participate in such Transfer in
accordance with this Section 3.1 .
(b) If
Sun wishes to Transfer any interest in Securities, it shall give
written notice to the Minority Stockholders (a “ Notice of
Transfer ”) not less than ten (10) nor more than
thirty (30) days prior to any proposed Transfer of any such
shares. Each such Notice of Transfer shall:
(i) specify
in reasonable detail (A) the number of shares of Common Stock,
if any, which Sun proposes to Transfer, (B) the principal
amount of the Sun Note, if any, which Sun proposes to Transfer,
(C) the identity of the proposed transferee or transferees of
such shares, (D) the time within which, the prices at which,
and all other terms and conditions upon which, Sun proposes to
Transfer such interest in Securities, (E) the percentage of
the Common Stock then owned by Sun (calculated on a fully-diluted
basis) which Sun proposes to Transfer to such proposed transferee
or transferees, (F) the percentage of the principal amounts of
the Notes then outstanding represented by the principal amount of
the Sun Note and (G) a representation that such proposed
transferees have been informed of the tag-along rights provided for
in this
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Section 3.1 and have agreed to purchase interests in the
Securities in accordance with the terms hereof;
(ii) make
explicit reference to this Section 3.1 and state that
the right of the Minority Stockholders to participate in such
Transfer under this Section 3.1 shall expire unless
exercised within ten (10) days after receipt of such Notice of
Transfer; and
(iii) contain
an irrevocable offer by Sun to the Minority Stockholders to
participate in the proposed Transfer to the extent provided in
Section 3.1 (c) .
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