STOCKHOLDERS AGREEMENT DATED AS OF MARCH 31, 2005

Exhibit 10.1

Execution Copy

 

MCP-MSC ACQUISITION, INC.

 

STOCKHOLDERS’ AGREEMENT

 

Dated as of March 31, 2005

 

Table of Contents

 

 

i

Table of Contents

(continued)

 

 

ii

STOCKHOLDERS’ AGREEMENT

This Stockholders’ Agreement (the “ Agreement ”) is made as of March 31, 2005 by and among:

 

(a)

MCP-MSC Acquisition, Inc., a Delaware corporation (the “ Company ”);

 

(b)

Monitor Clipper Equity Partners II, L.P., a Delaware limited partnership (“ MCP II ”);

 

(c)

Monitor Clipper Equity Partners II (NQP), L.P., a Delaware limited partnership (“ MCP II NQP ”, and, together with MCP II, “ MCP ”);

 

(d)

The Persons listed on the signature pages hereto as Other Investors (each, an “ Other Investor ” and, collectively, the “ Other Investors ”; MCP and the Other Investors being sometimes referred to herein collectively as the “ Investors ”); and

 

(e)

each director, officer or employee of, or consultant or adviser to, the Company or any of its direct or indirect subsidiaries (other than an Other Investor in its capacity as such) listed on the signature pages hereto as a Manager, from time to time becoming party hereto as a Manager by executing a counterpart signature page hereof or who has otherwise has been issued or awarded Shares (as hereinafter defined) or Options (as hereinafter defined) for Shares (collectively, the “ Managers ”, and together with the Investors, the “ Holders of Shares ”) pursuant to the MCP-MSC Acquisition, Inc. 2005 Stock Option Plan, as from time to time in effect (the “ Plan ”) or other rights granted thereunder.

Recitals

1. The Company, MSC Acquisition, Inc., a Florida corporation (“ MSC ”), and certain other parties thereto are party to a Stock Purchase Agreement dated as of March 7, 2005, as amended by the First Amendment thereto, dated March 31, 2005 and from time to time in effect (the “ Stock Purchase Agreement ”), pursuant to which the Company will acquire, directly or indirectly, all of the outstanding equity interests in MSC.

2. The Company and the Holders of Shares agree that it is in their respective best interests to: (i) provide that the Shares shall be transferable only upon compliance with the terms hereof; (ii) provide for certain rights and obligations with respect to voting for members of the board of directors of the Company; and (iii) set forth their agreements on certain other matters.

 

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Agreement

Therefore, the parties hereto hereby agree as follows:

1. EFFECTIVENESS; DEFINITIONS.

1.1. Effectiveness . This Agreement shall become effective if and when the Closing (as such term is defined in the Stock Purchase Agreement, the “Closing”) shall occur.

1.2. Definitions. Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 10 hereof.

2. VOTING AGREEMENT.

2.1. Election of Directors. Each Holder of Shares agrees to cast all votes which such Holder of Shares is entitled to cast in respect of Shares now or hereafter acquired, whether at any annual or special meeting, by written consent or otherwise, (i) to cause, and the Company shall cause, the Board of Directors of the Company (the “ Board ”) to consist of three members or such other number as may be specified from time to time by the Sponsors and (ii) to elect as directors such individuals as shall be specified by the Sponsors.

2.2. Removal. No director may be removed from the Board without the consent of the Sponsors. The Sponsors may (i) remove and replace any director from such position, with or without cause, and (ii) designate another director to fill any vacancy caused by the resignation of any director.

2.3. Further Assurances. Each Holder of Shares and each of the other parties hereto shall promptly take any and all actions necessary to cause the appointment, election, removal or replacement of directors in accordance with Sections 2.1 and 2.2.

2.4. Significant Transactions. Each Holder of Shares agrees to cast all votes which such holder is entitled to cast in respect of its Shares, whether at any annual or special meeting, by written consent or otherwise, in the same proportion as Shares are voted by the Sponsors in connection with any transaction with respect to which the Sponsors exercise their “drag along” rights described in and in accordance with Section 3.4.

2.5. Consent to Amendment. Each Holder of Shares agrees to cast all votes which such holder is entitled to cast in respect of his or its Shares, whether at any annual or special meeting, by written consent or otherwise, in the same proportion as Shares are voted by the Sponsors to change the capitalization of the Company, including by authorizing new classes, series or types of capital stock or by increasing the number of authorized shares of capital stock, all as may from time to time be specified by the Sponsors.

2.6. Special Voting Provisions.

2.6.1. MCP II NQP hereby irrevocably assigns to MCP II all rights to take, or to refrain from taking, actions under this Agreement or any agreement relating to the

 

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Company which MCP II NQP would have in the absence of this Section 2.6.1, and MCP II NQP hereby ratifies and confirms all actions taken by MCP II in accordance with the assignment contained in this Section 2.6.1.

2.6.2. The Company acknowledges and agrees that MCP II shall have the right to substantially participate in, and to substantially influence, the conduct of management of the Company.

2.7. Grant of Proxy. Each Holder of Shares hereby grants to the Sponsors an irrevocable proxy, coupled with an interest, to vote its Shares in accordance with such holder’s agreements contained in this Section 2, which proxy shall be valid and remain in effect until the provisions of this Section 2 expire pursuant to Section 2.9.

2.8. The Company. The Company agrees not to give effect to any action by any Holder of Shares or any other Person which is in contravention of this Section 2.

2.9. Period. The foregoing provisions of this Section 2 shall expire on the earliest of (i) a Change of Control, (ii) the closing of a Qualified Initial Public Offering and (iii) the last date permitted by law.

3. FIRST REFUSAL, PARTICIPATION, “TAG ALONG” AND “DRAG ALONG” RIGHTS.

3.1. Rights of First Refusal.

3.1.1. No holder of any Other Investor Shares or Manager Shares (each such holder, a “ Prospective Selling Holder” ) shall Transfer any part of the economic or other rights evidenced by such Share to any other Person (the “ Prospective Buyer ”) except in the manner and on the terms set forth in this Section 3.1. Any attempted Transfer of Shares not permitted by this Section 3.1 shall be null and void, and the Company shall not in any way give effect to any such impermissible Transfer.

3.1.2. A written notice (the “ First Refusal Notice ”) shall be furnished by the Prospective Selling Holder to the Company and to each holder of an Investor Share (collectively with the Company, the “ Offerees ”) at least 15 business days prior to such Transfer. The Company shall provide each Prospective Selling Holder with the name and address of each holder of a Investor Share necessary to give such holder the First Refusal Notice in accordance with the terms hereof. The First Refusal Notice shall include:

(a) The principal terms of the proposed Transfer, including the number of Shares to be Transferred (the “ Offered Shares ”), the proposed purchase price per Share, the name and address of the Prospective Buyer, and the material terms and conditions to be contained in the definitive documentation relating to such Transfer; provided, however , that in the event that the consideration to be paid in exchange for any of the Offered Shares contains non-cash consideration, then such notice shall specify the Fair Market Value of such non-cash consideration; and

 

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(b) An offer by the Prospective Selling Holders to the Offerees to sell all (but not less than all) of the Offered Shares specified in the First Refusal Notice, on the same terms and conditions as the Prospective Selling Holders shall propose to Transfer to the Prospective Buyer; provided, however , that in the event that the consideration to be paid in exchange for any of the Offered Shares contains non-cash consideration, such offer shall give the Offerees the option to pay, in lieu of delivering such non-cash consideration, cash in the amount of the Fair Market Value of such non-cash consideration.

3.1.3. Within 10 business days after the effectiveness of the First Refusal Notice, each Offeree desiring to accept the offer to purchase the Offered Shares proposed to be Transferred in the proposed Transfer (each a “ Participating First Refusal Buyer ”) shall send a written irrevocable acceptance (the “ First Refusal Acceptance” ) to the Prospective Selling Holders specifying the portion of the Offered Shares which such Participating First Refusal Buyer desires to purchase pursuant to the First Refusal Notice. Any Offeree, including the Company, who does not so accept the Prospective Selling Holders’ offer to so purchase the Offered Shares shall be deemed to have waived all of its rights under this Section 3.1 with respect to such Transfer.

3.1.4. Subject to compliance by the Prospective Selling Holders with the provisions of this Section 3.1, if the total number of Offered Shares specified to be purchased in all First Refusal Acceptances shall be less than the number of Offered Shares, the Prospective Selling Holders shall thereafter be free to Transfer all but not less than all of the Offered Shares to the Prospective Buyer, upon the same terms and conditions set forth in the First Refusal Notice, at an aggregate price for the Offered Shares of no less than 95% of the purchase price set forth in the First Refusal Notice and on other terms which are not materially more favorable to the Prospective Buyer than those set forth in the First Refusal Notice taken as a whole, without any further obligation to the Offerees. If (a) prior to consummation, the terms of the proposed Transfer shall change with the result that the aggregate purchase price to be paid in such proposed Transfer for Offered Shares shall be less than 95% of the purchase price set forth in the First Refusal Notice, the other terms of such proposed Transfer shall be materially more favorable to the Prospective Buyer than those set forth in the First Refusal Notice taken as a whole, or the identity of the Prospective Buyer shall change, or (b) at the end of the 135th day following the date of the effectiveness of the First Refusal Notice, the Prospective Selling Holders have not completed the proposed Transfer, the First Refusal Notice shall be null and void, and it shall be necessary for a separate First Refusal Notice to be furnished, and the terms and provisions of this Section 3.1 separately complied with, in order to consummate such proposed Transfer pursuant to this Section 3.1; provided, however, that in the case of such a separate First Refusal Notice given pursuant to the immediately preceding clause (a), each applicable period to which reference is made in Sections 3.1.2 and 3.1.3 shall be the longer of (i) the remaining portion of the 10 business day period applicable to the original First Refusal Notice distributed in connection with such proposed Transfer or (ii) five business days.

3.1.5. If the total number of Offered Shares specified to be purchased in all First Refusal Acceptances shall equal or exceed the number of Offered Shares, then:

 

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(a) If the total number of Offered Shares specified to be purchased in all First Refusal Acceptances shall equal the number of such Offered Shares, such Offered Shares shall be allocated to each Participating First Refusal Buyer in accordance with the amount specified by such Participating First Refusal Buyer in such Participating First Refusal Buyer’s First Refusal Acceptance; and

(b) If the total number of Offered Shares specified to be purchased in all First Refusal Acceptances shall exceed the number of such Offered Shares, such Offered Shares shall be allocated (a) if the Company is a Participating First Refusal Buyer, then first to the Company, up to the amount specified by the Company in its First Refusal Acceptance, and (b) then to each Participating First Refusal Buyer, pro rata based upon the aggregate number of all Investor Shares held by each such Participating First Refusal Buyer concurrently receiving an allocation of the Offered Shares; provided, however, that if, in the case of any such Participating First Refusal Buyer, such Participating First Refusal Buyer shall have been so allocated the number of such Offered Shares specified by such Participating First Refusal Buyer in such Participating First Refusal Buyer’s First Refusal Acceptance, then such Participating First Refusal Buyer shall not be allocated any of the Offered Shares in excess of the number so specified, and any of such Offered Shares remaining unallocated shall be allocated among the remaining Participating First Refusal Buyers pro rata based on the aggregate number of all Investor Shares held by each such remaining Participating First Refusal Buyer until all of the Offered Shares have been so allocated.

3.1.6. The closing of any purchase of Offered Shares pursuant to this Section 3.1 shall take place as soon as reasonably practicable and in no event later than 30 days after termination of the applicable exercise period and at the principal office of the Company, or at such other time and location as the parties to such purchase may mutually determine. At the closing of any purchase and sale of Offered Shares pursuant to this Section 3.1, the Prospective Selling Holders shall deliver to the Participating First Refusal Buyers the Offered Shares free and clear of any lien or encumbrance, together with any necessary transfer tax stamps affixed or payment for any other transfer taxes and any other certificates, transfer powers or other documents that the Participating First Refusal Buyers may reasonably request (including a “medallion” signature guarantee), and the Participating First Refusal Buyers shall pay to the Prospective Selling Holders, by certified or bank check or wire transfer of immediately available federal funds or other applicable delivery, the purchase price of the Offered Shares. The delivery of the Offered Shares by the Prospective Selling Holders shall be deemed a representation and warranty by each Prospective Selling Holder that such Prospective Selling Holder has full right, title and interest in and to the Offered Shares, that such Prospective Selling Holder has all necessary power and authority and has taken all necessary action to sell the Offered Shares as contemplated hereby, and that the Offered Shares are free and clear of any and all liens and encumbrances.

3.1.7. Notwithstanding the foregoing provisions of this Section 3.1, no other Holder of Shares shall have any right of first refusal pursuant to the provisions of this Section 3.1 with respect to any Transfer of Shares:

(a) pursuant to the performance by such holder of its “drag along” obligations contained in Section 3.4;

 

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(b) to an Affiliate of such holder or to holders of equity interests in the transferor for no consideration and pro rata in accordance with such equity interests, provided that this clause (b) shall not apply to any Transfer to the Company or any Subsidiary of the Company;

(c) with respect to each such holder who is a natural person:

 

(i)

to a Member of the Immediate Family of such holder; or

 

(ii)

upon the death of such holder, by the will or other instrument taking effect at the death of such holder or by applicable laws of descent and distribution to such holder’s estate, executors, administrators and personal representatives, and then to such holder’s heirs, legatees or distributees, whether or not such recipients are Members of the Immediate Family of such holder; or

(d) in a Public Sale.

3.1.8. No Person which is not an Accredited Investor shall have any rights under this Section 3.1.

3.1.9. Any Shares acquired pursuant to this Section 3.1 shall be deemed for all purposes hereof to be Investor Shares hereunder. Any shares acquired by a Sponsor pursuant to this Section 3.1 shall be deemed for all purposes to be Sponsor Shares hereunder. Any Shares acquired by an Other Investor pursuant to this Section 3.1 shall be deemed for all purposes to be Other Investor Shares hereunder.

3.1.10. The foregoing provisions of this Section 3.1 shall expire upon the closing of a Qualified Initial Public Offering and shall not apply to any Shares which have been Sold in a Public Sale.

3.2. Participation Rights . The Company shall not issue or sell any Equity Securities to the Sponsors or any Affiliate of the Sponsors (each an “ Issuance ” of “ Subject Securities ”) except in compliance with the provisions of this Section 3.2.

3.2.1. Not fewer than 15 business days prior to the consummation of the Issuance of Subject Securities, a written notice (the “ Participation Notice ”) shall be given by the Company to each holder of Investor Shares. The Participation Notice shall include:

(a) The principal terms of the proposed Issuance, including (i) the amount and kind of Subject Securities to be included in the Issuance, (ii) the number of Subject Securities, (iii) the price per unit of the Subject Securities, (iv)

 

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the portion of the Issuance equal to the aggregate number of all of such holder’s Investor Shares at the time such Participation Notice is given divided by the aggregate number of all Investor Shares outstanding at such time (the “ Participation Portion ”), (v) the name and address of each Person to whom the Subject Securities are proposed to be Issued (each a “Prospective Subscriber” ), and (vi) if the Subject Securities are to be issued as a unit together with other securities, including without limitation debt securities, in a single transaction or related transaction (the “Related Securities” ), the terms and conditions on which such Related Securities are to be issued, provided that if the consideration to be paid by the Prospective Subscriber for the Subject Securities and, if applicable, the Related Securities contains non-cash consideration, then the Participation Notice shall also specify the Fair Market Value of such non-cash consideration; and

(b) An offer by the Company to Issue to such holder such portion (not in any event to exceed the Participation Portion of the total amount of Subject Securities to be included in the Issuance) of the Subject Securities and, if applicable, the Related Securities to be included in the Issuance as may be requested by such holder, at the same price and otherwise on the same terms and conditions, with respect to each unit of Subject Securities and, if applicable, Related Securities issued to the holders of Investor Shares, as the Issuance to each of the Prospective Subscribers, provided , that if the consideration to be paid by the Prospective Subscriber for the Subject Securities and, if applicable, Related Securities contains non-cash consideration, then such offer shall give each holder of Investor Shares the option to pay, in lieu of delivery of such non-cash consideration, cash in the amount of the Fair Market Value of such non-cash consideration.

3.2.2. Each holder of Investor Shares desiring to accept the offer contained in the Participation Notice shall send an irrevocable commitment (each a “ Participation Commitment ”) to the Company within 10 business days after the effectiveness of the Participation Notice specifying the amount or proportion (not in any event to exceed the Participation Portion of the total amount of Subject Securities and, if applicable, Related Securities to be included in the Issuance) of Subject Securities and, if applicable, Related Securities which such holder desires to be issued (each a “ Participating Buyer ”); provided , however , that if the Subject Securities are to be issued as a unit with Related Securities, such Participation Commitment must specify a proportion of Related Securities equal to the proportion of Subject Securities specified in such Participation Commitment. Each holder of Investor Shares which has not so accepted such offer shall be deemed to have waived all of such holder’s rights with respect to the Issuance under this Section 3.2, and the Company shall thereafter be free to Issue Subject Securities and, if applicable, Related Securities in such Issuance to the Prospective Subscribers and any Participating Buyers, at a price no less than 95% of the price set forth in the Participation Notice and on other terms not materially more favorable to the Prospective Subscribers than those set forth in the Participation Notice taken as a whole, without any further obligation to such non-accepting holders under this Section 3.2. If, prior to consummation, the terms of such proposed Issuance shall change with the result that the

 

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price shall be less than 95% of the price set forth in the Participation Notice or any of the other terms shall be materially more favorable to the Prospective Subscribers than those set forth in the Participation Notice taken as a whole, it shall be necessary for a separate Participation Notice to be furnished, and the terms and provisions of this Section 3.2 separately complied with, in order to consummate such Issuance pursuant to this Section 3.2; provided, however, that in the case of such a separate Participation Notice, each applicable period to which reference is made in this Section 3.2 shall be the longer of (a) the remaining portion of the 10 business day period applicable to the first Participation Notice distributed in connection with such proposed Issuance or (b) five business days.

3.2.3. The acceptance of each Participating Buyer shall be irrevocable except as hereinafter provided, and each such Participating Buyer shall be bound and obligated to acquire in the Issuance on the same terms and conditions, with respect to each unit of Subject Securities and, if applicable, Related Securities Issued, as the Prospective Subscribers (subject to the proviso to Section 3.2.1(b) ), such amount or proportion of Subject Securities and, if applicable, Related Securities as such Participating Buyer shall have specified in such Participating Buyer’s Participation Commitment.

3.2.4. If at the end of the 135 ^th day following the date of the effectiveness of the Participation Notice the Company has not completed the Issuance on the terms and conditions specified in such Participation Notice, each Participating Buyer shall be released from its obligations under such Participating Buyer’s Participation Commitment, the Participation Notice shall be null and void, and it shall be necessary for a separate Participation Notice to be furnished, and the terms and provisions of this Section 3.2 separately complied with, in order to consummate any Issuance subject to this Section 3.2.

3.2.5. Each Holder of Shares, whether in his capacity as a Participating Buyer, Holder of Shares or otherwise, and the Company shall take or cause to be taken all such reasonable actions as may be reasonably necessary or desirable in order expeditiously to consummate each Issuance pursuant to this Section 3.2 and any related transactions, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments, filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Company, the Prospective Subscribers and the Participating Buyers (if any). Without limiting the generality of the foregoing, each such Participating Buyer agrees to execute and deliver such subscription and other agreements specified by the Company to which the Prospective Subscriber will be party. Notwithstanding the foregoing, the execution, acknowledgement and delivery of any such consents, assignments, waivers, agreements, instruments, applications, reports, returns, filings and other documents shall not require any Holder of Shares to make any representation or warranty (other than representations and warranties related to compliance with federal and state securities laws), and any and all costs of preparing the foregoing consents, assignments, waiver, agreements, instruments, applications, reports, returns, filings and other documents, and the making of any such filings, shall be borne by the Company.

 

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3.2.6. All reasonable costs and expenses incurred by the Holders of Shares, the Company or the Participating Buyers in connection with any proposed Issuance of Subject Securities and, if applicable, Related Securities (whether or not consummated), including all reasonable attorney’s fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company. Any other costs and expenses incurred by or on behalf of any other holder of Investor Shares in connection with such proposed Issuance of Subject Securities and, if applicable, Related Securities (whether or not consummated) shall be borne by such holder.

3.2.7. The closing of an Issuance pursuant to this Section 3.2 shall take place at such time and place as the Company shall specify by notice to each Participating Buyer, which shall be substantially contemporaneously as the closing of the Issuance with respect to each Prospective Subscriber participating in the Issuance. At the Closing of any Issuance under this Section 3.2 to a Participating Buyer, each Participating Buyer shall be delivered the notes, certificates or other instruments evidencing the Subject Securities and, if applicable, Related Securities to be Issued to such Participating Buyer, registered in the name of such Participating Buyer or his designated nominee, free and clear of any liens or encumbrances, with any transfer tax stamps affixed, against delivery by such Participating Buyer of the applicable consideration.

3.2.8. Notwithstanding the preceding provisions of this Section 3.2, the preceding provisions of this Section 3.2 shall not apply to:

(a) any Issuance of Equity Securities to directors, officers, employees, managers, consultants or advisors of the Company or any Subsidiary of the Company, in each case in connection with their compensation as such;

(b) any Issuance of Shares which is being made or offered to all holders of Investor Shares pro rata in accordance with the aggregate number of Investor Shares held by such holders or to all Holders of Shares pro rata in accordance with the aggregate number of Shares held by such Holders of Shares;

(c) any Issuance pursuant to the exercise or conversion of Options, Warrants, or Convertible Securities or of other Equity Securities; and

(d) the Issuance by the Company of Shares on the date hereof.

3.2.9. In the event that the consideration to be paid by the Prospective Subscriber for the Subject Securities contains non-cash consideration, the aggregate amount of securities issued pursuant to this Section 3.2 will be increased to the extent reasonably necessary to afford the holders of Investor Shares their rights under this Section 3.2.

3.2.10. If the offer to or receipt of any Subject Securities by a holder of Investor Shares would require under applicable law (i) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities or (ii) the provision to any holder of Investor Shares of any information other

 

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than such information as would be required under Regulation D in an offering made pursuant to Regulation D solely to Accredited Investors, the Company shall be obligated only to use its reasonable efforts to cause the requirements under Regulation D to be complied with to the extent necessary to permit such holder to be offered and receive such securities, it being understood and agreed that the Company shall not be under any obligation to effect a registration of such securities under the Securities Act or similar statutes unless the securities offered and issued to holders of Investor Shares are so registered. Notwithstanding any provisions of this Section 3.2, if use of reasonable efforts does not result in the requirements under Regulation D being complied with to the extent necessary to permit such holder to be offered and receive such securities, the Company shall be under no obligation under this Section 3.2 with respect to such holder. The obligation of the Company to use reasonable efforts to cause such requirements to have been complied with to the extent necessary to permit a holder to be offered and receive such Subject Securities and, if applicable, Related Securities shall be conditioned on such holder executing such documents and instruments, and taking such other actions (including if reasonably required by the Company, agreeing to be represented during the course of such transaction by a “purchaser representative” (as defined in Regulation D) in connection with evaluating the merits and risks of the prospective investment and acknowledging that it was so represented), as the Company shall reasonably request in order to permit such requirements to be complied with. Unless the holder in question shall have taken all actions reasonably requested by the Company in order to comply with the requirements under Regulation D, the Company may proceed with the proposed Issuance without the participation of such holder.

3.3. Tag Along .

3.3.1. No Sponsor (each such holder, a “ Prospective Selling Holder ”) shall Transfer any Share held by such holder for value (a “ Sale ”) to any Person (a “Prospective Buyer” ), except in the manner and on the terms set forth in this Section 3.3. Any attempted Transfer of Shares not permitted by this Section 3.3 shall be null and void, and the Company shall not in any way give effect to any such impermissible Transfer.

3.3.2. A written notice (the “ Tag Along Notice ”) shall be furnished by the Prospective Selling Holders to each other holder of a Share (collectively, the “ Tag Along Offerors ”) at least 15 business days prior to such Transfer. The Tag Along Notice shall include:

(a) The principal terms of the proposed Sale insofar it relates to the Shares, including the number of Shares of each Class to be purchased from the Prospective Selling Holders, the percentage of all Shares of the same Class held by the Prospective Selling Holder which such number of Shares proposed to be so purchased constitutes (the “ Tag Along Sale Percentage ” with respect to each Class of Shares), the expected per Share purchase price and the name and address of the Prospective Buyer;

(b) An invitation to each Tag Along Offeror to make an offer to include in the proposed Sale to the Prospective Buyer an additional number of

 

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Shares (not in any event to exceed the Tag Along Sale Percentage of each Class of Shares owned by such Tag Along Offeror) owned by such Tag Along Offeror, on the same terms and conditions with respect to each Share Sold (subject to Section 3.5), as the Prospective Selling Holders shall Sell each of their Shares; and

(c) If available at the time the Tag Along Notice is furnished to the Tag Along Offerors and, in any event, at least five business days prior to the closing of the proposed Sale, a copy of all agreements between the Prospective Selling Holders and the Prospective Buyer relating to the proposed Sale.

3.3.3. Within 10 business days after the effectiveness of the Tag Along Notice, each Tag Along Offeror desiring to make an offer to include Shares in the proposed Sale (each a “ Participating Seller ” and, together with the Prospective Selling Holders, collectively, the “ Tag Along Sellers ”) shall send a written offer (the “ Tag Along Offer ”) to the Prospective Selling Holders specifying the number of Shares (not in any event to exceed, with respect to Shares held by such Participating Seller, the Tag Along Sale Percentage of such Shares) which such Participating Seller desires to have included in the proposed Sale. Each Tag Along Offeror who does not so accept the Prospective Selling Holders’ invitation to make an offer to include Shares in the proposed Sale shall be deemed to have waived all of such Tag Along Offeror’s rights with respect to such Sale, and the Tag Along Sellers shall thereafter be free to Sell to the Prospective Buyer, at a per Share price no greater than 105% of the per Share price set forth in the Tag Along Notice and on other terms which are not materially more favorable to the Tag Along Sellers than those set forth in the Tag Along Notice taken as a whole, without any further obligation to such non-accepting Tag Along Offerors.

3.3.4. The Prospective Selling Holders shall use all commercially reasonable efforts to obtain the inclusion in the proposed Sale of the entire number of Shares which the Tag Along Sellers desire to have included in the Sale (as evidenced in the case of the Prospective Selling Holders by the Tag Along Notice and in the case of each Participating Seller by such Participating Seller’s Tag Along Offer). In the event the Prospective Selling Holders shall be unable to obtain the inclusion of such entire number of Shares in the proposed Sale, the number of Shares to be sold in the proposed Sale by each Tag Along Seller shall be reduced on a pro rata basis according to the proportion which the number of Shares which each such Tag Along Seller desires to have included in the Sale bears to the aggregate number of all Shares which all of the Tag Along Sellers desire to have included in the Sale.

3.3.5. The offer of each Participating Seller contained in his Tag Along Offer shall be irrevocable, and, to the extent such offer is accepted, such Participating Seller shall be bound and obligated to Sell in the proposed Sale on the same terms and conditions, with respect to each Share Sold (subject to Section 3.5), as the Prospective Selling Holders, up to such number of Shares as such Participating Seller shall have specified in such Participating Seller’s Tag Along Offer; provided, however, that (a) if the principal terms of the proposed Sale change with the result that the per Share price shall be less than 95% of the per Share price set forth in the Tag Along Notice or the

 

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other terms shall be materially less favorable to the Tag Along Sellers than those set forth in the Tag Along Notice taken as a whole, each Participating Seller shall be permitted to withdraw the offer contained in his Tag Along Offer and shall be released from such Participating Seller’s obligations thereunder and (b) if, at the end of the 135th day following the date of the effectiveness of the Tag Along Notice, the Prospective Selling Holders have not completed the proposed Sale, each Participating Seller shall be released from such Participating Seller’s obligations under his Tag Along Offer, the Tag Along Notice shall be null and void, and it shall be necessary for a separate Tag Along Notice to be furnished, and the terms and provisions of this Section 3.3 separately complied with, in order to consummate such proposed Sale pursuant to this Section 3.3; provided, however, that, if the failure to complete such Sale resulted from any failure by any Participating Seller to comply with the terms of this Section 3.3, such Sale may be consummated within 15 days after the end of such period on the same terms and conditions as if such Participating Seller had never sent a Tag Along Offer.

3.3.6. If, prior to consummation, the terms of the proposed Sale shall change with the result that the per Share price to be paid in such proposed Sale shall be greater than 105% of the per Share price set forth in the Tag Along Notice or the other terms of such proposed Sale shall be more favorable, in any material respect, to the Tag Along Sellers than those set forth in the Tag Along Notice, the Tag Along Notice shall be null and void, and it shall be necessary for a separate Tag Along Notice to be furnished, and the terms and provisions of this Section 3.3 separately complied with, in order to consummate such proposed Sale pursuant to this Section 3.3; provided , however , that in the case of such a separate Tag Along Notice, each applicable period to which reference is made in Section 3.3 shall be the longer of (i) the remaining portion of the 10 business day period applicable to the assigned Tag Along Notice distributed in connection with such proposed transfer or (ii) five business days.

3.3.7. Notwithstanding the foregoing provisions of this Section 3.3, no Holder of Shares shall have any tag along right pursuant to the provisions of this Section 3.3 with respect to any Transfer of Shares:

(a) pursuant to the performance by such holder of its “drag along” obligations contained in Section 3.4;

(b) to an Affiliate of a Prospective Selling Holder or to holders of equity interests in the Prospective Selling Holder for no consideration and pro rata in accordance with such equity interests, provided that this clause (b) shall not apply to any (i) Transfer to the Company or any Subsidiary of the Company or (ii) any Transfer to an Affiliate if such Transfer results in a liquidity event for the holders of equity interests in the Prospective Selling Holder;

(c) with respect to each such holder who is a natural person:

 

(i)

to a Member of the Immediate Family of such holder; or

 

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(ii)

upon the death of such holder, by the will or other instrument taking effect at the death of such holder or by applicable laws of descent and distribution to such holder’s estate, executors, administrators and personal representatives, and then to such holder’s heirs, legatees or distributees, whether or not such recipients are Members of the Immediate Family of such holder; or

(d) in a Public Sale.

3.3.8. Notwithstanding anything to the contrary in this Section 3.3, the unvested portion of the Manager Shares of any holder of Manager Shares shall not be included in any of the provisions of this Section 3.3.

3.3.9. The foregoing provisions of this Section 3.3 shall expire upon the closing of a Qualified Initial Public Offering and shall not apply to any Shares which have been Sold in a Public Sale.

3.4. Drag Along .

3.4.1. In connection with the good faith Sale by the Sponsors (each such holder, a “ Prospective Selling Holder ’) on an arm’s-length basis to one or more Persons which are not Affiliates of such Sponsors (collectively, the “ Prospective Buyer ”) of a number of Shares such that, immediately after giving effect to such Transfer (including the Transfer of Shares by other Holders of Shares in accordance with this Section 3.4), the Prospective Buyer will hold Shares representing at least a majority of all Shares then outstanding (the percentage of the aggregate of all Shares held by the Prospective Selling Holders which such number of Shares to be so sold by the Prospective Selling Holders represents is referred to herein as the “ Drag Along Sale Percentage ”), each Holder of Shares hereby agrees, if the Prospective Selling Holders give the Drag Along Notice referred to in Section 3.4.2 and subject to the provisions of Section 3.4.4, to Sell Shares representing, with respect to each Class of Shares held by such holder, the Drag Along Sale Percentage of such Shares, in the manner and on the terms set forth in this Section 3.4.

3.4.2. If the Prospective Selling Holders elect to exercise their rights under this Section 3.4, a written notice (the “ Drag Along Notice ”) shall be furnished by the Prospective Selling Holders to each other Holder of Shares. The Drag Along Notice shall set forth the principal terms of the proposed Sale including the number of Shares to be acquired by the Prospective Buyer in the Sale, the number of Shares to be acquired from the Prospective Selling Holders, the manner in which such Shares are to be Sold, the Drag Along Sale Percentage, the per Share consideration to be received in the proposed Sale and the name and address of the Prospective Buyer.

3.4.3. If the Prospective Selling Holders consummate the proposed Sale to which reference is made in the Drag Along Notice, each other Holder of Shares (each a “ Participating Seller ”, and, together with the Prospective Selling Holders, collectively,

 

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the “ Drag Along Sellers ”) shall be bound and obligated to Sell Shares representing, with respect to the Shares held by such holder, the Drag Along Sale Percentage of such Shares in the proposed Sale on the same terms and conditions with respect to each Share Sold (subject to Section 3.5), as the Prospective Selling Holders shall Sell each Share in the Sale. No Holder of Shares shall have the right to exercise any rights of first refusal or tag along rights contained in Sections 3.1 or 3.3 in connection with the proposed Sale to which reference is made in the Drag Along Notice. If at the end of the 135th day following the date of the effectiveness of the Drag Along Notice the Prospective Selling Holders have not completed the proposed Sale, each Participating Seller shall be released from his obligation under the Drag Along Notice, the Drag Along Notice shall be null and void, and it shall be necessary for a separate Drag Along Notice to be furnished and the terms and provisions of this Section 3.4 separately complied with, in order to consummate such proposed Sale pursuant to this Section 3.4.

3.4.4. Notwithstanding the foregoing, the Sponsors shall not have any right to require (a) a Holder of Shares to Sell any such Shares pursuant to the provisions of this Section 3.4 with respect to any Sale of Shares to any Affiliate of the Sponsors or (b) any Other Investor to Sell any Shares pursuant to the provisions of this Section 3.4 if the consideration to be received for such Shares in the Sale includes securities or other non-cash consideration other than (i) Marketable Securities or (ii) securities with respect to which the Other Investors will receive, in connection with such Sale, tag-along rights substantially identical to the rights set forth in this Section 3.4 which shall apply to the transfer or sale of such securities from and after the consummation of the Sale in which such securities are received.

3.4.5. The foregoing provisions of this Section 3.4 shall expire upon the closing of a Qualified Initial Public Offering and shall not apply to any Shares which have been Sold in a Public Sale.

3.5. Miscellaneous Provisions Relating to Sales under Section 3.3 and 3.4 . The following provisions shall be applied to any Sale to which Section 3.3 or 3.4 applies:

3.5.1. In the event the consideration to be paid in exchange for Shares in a proposed Sale pursuant to Section 3.3 or 3.4 includes any securities, and the offer thereof to, or receipt thereof by, a Participating Seller would require under applicable law (i) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities or (ii) the provision to any Participating Seller of any information other than such information as would be required under Regulation D in an offering made pursuant to Regulation D solely to Accredited Investors, the Prospective Selling Holders shall be obligated only to use their reasonable efforts to cause the requirements under Regulation D to be complied with to the extent necessary to permit such Participating Seller to be offered and receive such securities, it being understood and agreed that the Prospective Selling Holders shall not be under any obligation to effect a registration of such securities under the Securities Act or similar statutes unless the securities issued to the Prospective Selling Holders are so registered. Notwithstanding any provisions of this Section 3.5 or of Section 3.3 or 3.4, if use of reasonable efforts does not result in the requirements under Regulation D being complied with to the extent

 

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necessary to permit such Participating Seller to be offered or receive such securities, the Prospective Selling Holders shall cause to be paid to such Participating Seller in lieu thereof, against surrender of the Shares (in accordance with Section 3.5.4) which would have otherwise been Sold by such Participating Seller to the Prospective Buyer in the Sale, an amount in cash equal to the Fair Market Value of such Shares as of the date of the issuance of securities in exchange for Shares. The obligation of the Prospective Selling Holders to use reasonable efforts to cause such requirements to have been complied with to the extent necessary to permit a Participating Seller to be offered or receive such securities shall be conditioned on such Participating Seller executing such documents and instruments, and taking such other actions (including if reasonably required by the Prospective Selling Holders, agreeing to be represented during the course of such transaction by a “purchaser representative” (as defined in Regulation D) in connection with evaluating the merits and risks of the prospective investment and acknowledging that he was so represented), as the Prospective Selling Holders shall reasonably request in order to permit such requirements to be complied with. Unless the Participating Seller in question shall have taken all actions reasonably requested by the Prospective Selling Holders in order to comply with the requirements under Regulation D: (i) such Participating Seller shall not have the right to require the payment of cash in lieu of securities under this Section 3.5.1 and (ii) the Prospective Selling Holders may proceed with the proposed Sale without the participation of such Participating Seller.

3.5.2. Each Participating Seller, whether in his capacity as a Participating Seller, Holder or officer of the Company, or otherwise, and the Company shall take or cause to be taken all such actions as may be reasonably necessary or desirable in order expeditiously to consummate each Sale pursuant to Section 3.3 or 3.4 and any related transactions, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; furnishing information and copies of documents; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Prospective Selling Holders and the Prospective Buyer; provided , however , that Participating Sellers shall be obligated to become liable in respect of any representations, warranties, covenants, indemnities or otherwise to the Prospective Buyer solely to the extent provided in the immediately following sentence. Without limiting the generality of the foregoing (but subject to the provisos to the immediately preceding sentence), each Participating Seller agrees to execute and deliver such agreements as may be reasonably specified by the Prospective Selling Holders to which such Prospective Selling Holders will also be party, including agreements to (a) make individual representations, warranties, covenants and other agreements as to the unencumbered title to its Shares and the power, authority and legal right to Transfer such Shares and (b) be severally (with all other sellers) liable (whether by purchase price adjustment, indemnity payments or otherwise) in respect of representations, warranties, covenants and agreements in respect of the Company and its Subsidiaries; provided , however , that, except with respect to individual representations, warranties, covenants, indemnities and other agreements of Participating Sellers of the type described in clause (a) above, the aggregate amount of such liability shall not exceed either (i) such Participating Seller’s pro rata portion of any such liability, to be determined in accordance with such Participating Seller’s portion of the aggregate proceeds to all holders of Shares in connection with such Sale, or (ii) the

 

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proceeds to such Participating Seller in connection with such Sale; and provided, further, that the nature and extent of such representations, warranties, covenants and indemnities shall be the same with respect to all Shares being sold in such sale.

3.5.3. All reasonable costs and expenses incurred by any Prospective Selling Holder, any Participating Seller or the Company in connection with any proposed Sale pursuant to Section 3.3 or 3.4 (whether or not consummated), including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid from the sales proceeds prior to the distribution thereof to the Prospective Selling Holders and the Participating Sellers and shall be borne by the Prospective Selling Holders and the Participating Sellers pro rata based on the proceeds which would otherwise be received by them. The Company may retain legal counsel and other advisors, if necessary, to assist with the Sale.

3.5.4. The closing of a Sale pursuant to Section 3.3 or 3.4 shall take place at such time and place as the Prospective Selling Holders shall specify by reasonable notice to each Participating Seller. At the clo