SHAREHOLDER AND VOTING AGREEMENT
THIS SHAREHOLDER AND VOTING AGREEMENT (this "Agreement") is made and
entered into effective as of September 29, 2003, by and among Bridgewater
International Group, LLC, a Utah limited liability Company ("BIG"), Xxxx X.
Xxxxxx ("Xxxxxx") and Atlas Management Partners, LLC, a Utah limited liability
company ("Atlas").
RECITALS
A. BIG and Xxxxxx own voting capital shares in MACC Private Equities, Inc.
("MACC"), a Delaware corporation whose shares are listed for trading on the
Nasdaq SmallCap market.
B. BIG is a consultant to Atlas and Xxxxxx is a member of Atlas. Atlas may in
the future act as investment manager of MACC and MorAmerica Capital Corp., an
investment fund that is a wholly owned subsidiary of MACC.
C. The Parties desire to set forth their agreements in writing.
AGREEMENT
In consideration of the foregoing recitals, the mutual promises and
obligations set forth hereafter, and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Appointment of Atlas. Subject to the terms and conditions of this
Agreement, BIG hereby appoints Atlas as its proxy, attorney-in-fact and agent
with full authority to vote the 804,689 capital shares in MACC currently owned
by it on any matter that properly comes before the shareholders of MACC for
vote; except on those issues as to which Atlas determines that it cannot or
should not vote because of conflicts of interest, for which issues the shares
will not be voted. In the event of such conflicts of interest, if BIG is allowed
to exercise control over MACC under SBA regulations and if BIG would not be
similarly precluded from voting due to conflicts of interest, Atlas will grant
to BIG the right to vote the shares on such issues. The 804,689 capital shares
of MACC subject to this Agreement are sometimes referred to herein as the MACC
Shares. Notwithstanding the transfer of such voting rights to Atlas, the Parties
agree that legal title to said MACC Shares and all beneficial ownership other
than the right to vote shall remain in BIG. The appointment of Atlas is intended
to be the grant of a proxy coupled with an interest, and shall be irrevocable
during the term of this Agreement except as otherwise expressly set forth
herein.
2. Term of Agreement. The voting provisions of this Agreement shall be
effective and remain in force among the parties from the date of execution of
this Agreement by all parties (the "Effective Date") until the date six (6)
years from the execution of investment management agreements between Atlas and
both MACC and MorAmerica Capital Corp. (the "Commencement"), unless earlier
terminated as provided herein or in the Strategic Agreement of even date among
the parties and certain other prospective members of Atlas. This Agreement shall
be automatically renewed for up to two (2) additional periods of three (3) years
each (each called an "Extended Term") if the Management Agreement between BIG
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and Atlas is also extended for such Extended Term. If the Management Agreement
terminates at the end of its initial term as a result of BIG electing not to
renew, then the voting rights described in Section 1 hereof, but not the
provisions of Section 3, 4 or 5, shall continue for one year after termination
of the Management Agreement.
3. Lock-Up, Leak-out. BIG agrees that it will not, without the
unanimous prior written approval of the holders of all of the outstanding
membership interests (including the interests of Members and Economic Owners) in
Atlas, offer for sale, sell, pledge, hypothecate or otherwise dispose of,
directly or indirectly, any of the MACC Shares in any manner whatsoever whether
by way of a private sale, a public sale, or pursuant to SEC Rule 144 or
otherwise, prior to the date that is three (3) years from Commencement ("Lock-Up
Period"). During the three year period starting immediately after the end of the
Lock-up Period (the "Leak-out Period") the MACC Shares shall be subject to the
same restrictions as during the Lock-up Period; provided, that BIG may sell or
otherwise dispose of up to 80,469 of the MACC Shares in any calendar quarter,
but not more than a total of 241,407 MACC Shares during the entire term of the
Leak-out Period; and further provided that the First Right of Purchase
provisions of Section 4 are complied with. MACC Shares sold under this Leak-out
provision shall not be subject to this Agreement, but all remaining MACC Shares
shall remain subject hereto.
4. First Right to Purchase. BIG further agrees that during the Leak-out
Period and any Extended Term (together, the "Extended Period"), it shall not
sell, pledge, assign, or otherwise transfer all or any part of the MACC Shares
without first offering to Atlas or its designees and Xxxxxx the right and option
to purchase said Shares as provided in this section (the "Right of First
Purchase").
4.1 If BIG desires to sell, pledge, assign or otherwise transfer
any or all of its MACC Shares at any time during the Extended
Period, it shall first give written notice (the "Alert
Notice") to Atlas and Xxxxxx of its intention to sell, pledge,
assign or otherwise transfer the MACC Shares. The Alert Notice
shall indicate the number of MACC Shares proposed to be sold
(hereinafter the "Offered Shares"). The Alert Notice must be
given to Atlas and Xxxxxx at least thirty (30) days prior to
the Sale Notice described below.
4.2 Prior to the actual sale of the Offered Shares, BIG shall give
a second written notice to Atlas and Xxxxxx of its immediate
intention to sell the Offered Shares described in the Alert
Notice. The Sale Notice constitutes an irrevocable offer by
BIG to sell any or all of the Offered Shares to (i) Atlas or
its designees, or (ii) to the extent not exercised by Atlas,
to Xxxxxx, at the price equal to the Market Value. Atlas and
Xxxxxx shall have 24 hours (which must include at least 8
hours of a business day) from Atlas's receipt of such Sale
Notice in which to notify BIG of how many of the Offered
Shares they desire to purchase. If Atlas (or its designee) and
Xxxxxx both notify BIG that they desire to purchase Offered
Shares, Xxxxxx'x purchase will be fulfilled only to the extent
that Atlas did not purchase all of the Offered Shares. The
person(s) exercising the option to purchase Offered Shares is
referred to as the "Buyer".
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4.3 Buyer shall purchase the Offered Shares as to which it
exercises its Right of First Purchase by delivering payment in
full for the purchase price against delivery of the Offered
Shares being purchased within fifteen (15) days after the date
of the Sale Notice.
4.4 Any Offered Shares described in a Sales Notice for which both
of Xxxxxx and Atlas and its designees fail to exercise their
option as provided in this section, may be sold by BIG within
a period of thirty (30) business days commencing one business
day after the date of the Sale Notice; provided that either
(a) such sale occurs on the principal public trading market
for MACC equity securities, or (b) such sale is for no less
than the Market Value. Any Offered Shares not sold within such
thirty (30) business day period shall remain subject to this
Agreement.
4.5 For purposes of this Agreement, "Market Value" shall mean the
market price of the MACC Shares as determined by the average
closing price of the shares sold or traded over the
immediately preceding five (5) trading days, excluding all
transactions on any days in which Xxxxxx, BIG, Atlas or any
affiliates of such persons, buys or sells shares on the market
(as reported in Forms 144, 4, Schedule 13D or other publicly
available information). Market Value shall be determined as of
the date of the Sales Notice.
5. First Right of Refusal. If during the Extended Period (as defined in
Section 4) BIG receives and intends to accept a bona fide written offer from a
third party (the "Offeror") to purchase some or all of the MACC Shares in a
private transaction, BIG shall not accept the offer or sell the MACC Shares to
the Offeror without first offering to Atlas and Xxxxxx the right and option to
purchase said Shares on the same terms as offered by the Offeror as provided in
this section (the "Right of First Refusal").
5.1 BIG shall notify Atlas and Xxxxxx in writing of its intent to
accept the third party offer (the "Refusal Notice"). The
Refusal Notice shall indicate the number of MACC Shares
proposed to be sold (the "Offered Shares"), the cash price
offered by the Offeror, and any other material terms of the
Offeror's offer and shall be accompanied by a copy of the
Offeror's written offer.
5.2 The Refusal Notice constitutes an irrevocable offer by BIG to
sell any or all of the Offered Shares to (i) Atlas or its
designees, or (ii) to the extent not exercised by Atlas, to
Xxxxxx, at the cash price contained in the Offeror's offer.
The cash price is the price to be paid by the Offeror, less
any consideration to be paid in a form other than cash or
marketable securities and, if the purchase price is to be paid
over a period of more than one year, reduced to present value.
Atlas and Xxxxxx shall have thirty (30) days from Atlas's
receipt of the Refusal Notice in which to notify BIG if they
are exercising the Right of First Refusal to purchase, in the
aggregate, all of the Offered Shares. The Right of First
Refusal may not be exercised in part. If Atlas (or its
designee) and Xxxxxx both notify BIG that they desire to
purchase Offered Shares, Xxxxxx'x purchase will be fulfilled
only to the extent that Atlas did not purchase all of the
Offered Shares. The person(s) exercising the option to
purchase Offered Shares is referred to as the "Buyer". Buyer
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shall purchase the Offered Shares as to which it exercises its
Right of First Refusal by delivering payment in full for the
purchase price against delivery of the Offered Shares being
purchased within three (3) business days after notifying BIG
of Buyer's election to purchase the Offered Shares.
5.3 Any Offered Shares described in a Refusal Notice for which
both of Xxxxxx and Atlas and its designees fail to exercise
their option as provided in this section, may be sold by BIG
to the Offeror within a period of thirty (30) business days
commencing thirty-one (31) business days after the date of the
Refusal Notice; provided that such sale occurs on terms no
more favorable to the Offeror than those stated in the Refusal
Notice.
6. Exceptions to Lock-up, First Right of Refusal and First Right of
Purchase. If (i) the transferee of the MACC Shares agrees that such shares
remain subject to this Agreement, and (ii) the transfer otherwise complies with
any restrictions on transfer imposed by MACC, the following transactions in MACC
Shares are not prohibited by Section 3 and do not require compliance with
Section 4 and 5:
(a) Transfers by operation of law, including
transfers resulting from the merger, consolidation or
liquidation of BIG;
(b) Transfers by BIG to an affiliate of BIG without
consideration;
(c) Transfers by BIG pursuant to the Management
Agreement between BIG and Atlas.
7. Reduction in Profit Participation Percentages. In the event that BIG
sells in excess of 120,703 MACC Shares pursuant to Sections 3, 4 and 5 above,
then BIG's Profit Participation Percentage shall be reduced as set forth in
Atlas's Second Amended and Restated Operating Agreement.
8. Termination. Except as provided herein, this Agreement may not be
terminated by any party. Notwithstanding the previous sentence, this Agreement
may be terminated by any party upon written notice to each of the other Parties
if any of the following events occurs and such event is not cured within forty
five (45) days after its occurrence:
8.1. If, at any time after the expiration of eighteen (18) months
from the date hereof, the average net asset value of MACC
falls below $3.5 million during any six month period; or
8.2. If payments of salary, consulting fees or guaranteed dividends
or any payments under the Promissory Note between Atlas and
BIG dated the date of this Agreement are not paid within
thirty (30) days of their due date; or
8.3. If, at any time after the expiration of eighteen (18) months
from the date hereof, Atlas receives a written notice from the
U. S. Small Business Administration ("SBA") that the SBA
intends to remove Atlas as investment advisor of MACC or
MorAmerica.
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9. Standard of Care. In voting on all matters which come to the
Shareholders of MACC for a vote, the Managers of Atlas shall exercise their best
business judgment. However, it is understood that neither Atlas nor its Managers
shall incur any responsibility by reason of any error of law or by anything done
or omitted under this Agreement except for gross negligence or fraud.
10. Miscellaneous Provisions.
10.1. Notices. 15.1 Notices. Without precluding any other sufficient
form of notice, all notices, demands, or other communications
under this Agreement shall be deemed given as outlined below
if sent by fax or first class mail, to the most recent address
given by the party to whom notice is given and directed to the
attention of the individual(s) specified in any communication
as contact persons or individuals authorized to receive notice
on behalf of a party. Without limiting any means by which a
Party may be able to prove that a notice has been received by
another party, a notice will be deemed to be duly received:
(a) if sent by first class mail, 5 days (if posted
within a country to an address in the same country) or 10 days
(if posted from one country to another) after the date of
posting; or
(b) if sent by facsimile, upon receipt by the sender
of an acknowledgment or transmission report generated by the
machine from which the facsimile was sent indicating that the
facsimile was sent in its entirety to the recipient's
facsimile number.
10.2. Legends. All certificates representing the MACC Shares and
MACC's transfer records shall bear the following restrictive
legend:
This Certificate and the transfer of interests in the
underlying shares hereof are subject to the terms and
conditions of that certain Shareholder and Voting
Agreement dated as of September 29, 2003, among
Bridgewater International Group, LLC, Xxxx X. Xxxxxx
and Atlas Management Partners, LLC
BIG shall surrender the certificates representing the MACC
Shares to MACC for inclusion of such legend.
10.3. Removal of Legends. Upon request of BIG, Atlas shall promptly
execute and deliver to MACC's transfer agent a letter in
substantially the form attached hereto as Exhibit "A"
authorizing removal of the restrictive legend described above
with respect to (i) MACC Shares released from the terms of
this Agreement upon sale pursuant to Sections 3, 4 or 5, and
(ii) all remaining MACC Shares upon the later to occur of
termination of this Agreement or the termination of sales
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restrictions set forth in the Management Agreement between BIG
and Atlas. Delivery of such letter by Atlas shall be binding
on all parties hereto.
10.4. Assignment. This Agreement may not be assigned by any party
without the prior written consent of the other, except that a
merger, consolidation, or sale of substantially all of the
assets of any party shall not be considered an assignment and
shall not require the other party's consent. If assignment is
permitted hereunder, this Agreement shall be binding upon the
parties' permitted successors, heirs, devisees, divisions,
subsidiaries, officers, directors, employees, and agents and
any and all persons or entities in privity with them or having
notice of this Agreement.
10.5. Waiver. Failure of any of the parties hereto to enforce any of
the provisions of this Agreement or any rights with respect
thereto or to exercise any election provided for herein, shall
in no way be considered as a waiver of such provisions,
rights, or elections or in any way affect the validity of this
Agreement. No term or provision hereof shall be deemed waived
and no breach excused, unless such waiver or consent shall be
in writing and signed by the party claimed to have waived or
consented. The failure by any of the parties hereto to enforce
any of said provisions, rights, or elections shall not
preclude or prejudice such party from later enforcing or
exercising the same or any other provisions, rights, or
elections which it may have under this Agreement. Any consent
by any party to, or waiver of, a breach by the other, whether
express or implied, shall not constitute a consent to, or
waiver of, or excuse for any other, different, or subsequent
breach.
10.6. Headings. Headings used in this Agreement are for reference
purposes only and shall not be deemed a part of this
Agreement.
10.7. Choice of Law and Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Utah. Any action to enforce the terms of this Agreement shall
be brought and prosecuted in the state or federal courts
sitting in the State of Utah. All parties submit to the
jurisdiction of the courts sitting in the State of Utah and
agree that venue shall be proper in Salt Lake County, State of
Utah. Nothing herein shall prevent either party from seeking
removal to federal court of an action filed in state court to
the extent permitted by law.
10.8. Entire Agreement. The parties hereto have read this Agreement
and agree to be bound by all its terms. The parties further
agree that this Agreement, related Agreements of even date and
agreements referenced therein shall constitute the complete
and exclusive statement of the Agreement among them and that
this Agreement supersedes all proposals, oral or written, and
all other communications among them relating to the subject
matter of this Agreement.
10.9. Reliance on Facsimile Signatures, Counterparts. This Agreement
maybe executed in two counterparts, each of which shall be
deemed an original and which taken together shall constitute a
single instrument. The delivery of a counterpart signature by
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facsimile shall be effective as delivery of a manually signed
original and the receiving party may rely thereon for all
purposes.
IN WITNESS WHEREOF, the parties have signed this Agreement as
the date and year first above written.
BIG:
BRIDGEWATER INTERNATIONAL GROUP, LLC
By: /s/ Xxxxxxxx Xxxxxxxxxx
-------------------------
Its: Manager
/s/ XXXX XXXXXX
--------------------------------------------
Xxxx X. Xxxxxx
ATLAS MANAGEMENT PARTNERS, LLC
By /s/ XXXX XXXXXX
------------------------------------------
Xxxx X. Xxxxxx, Its Manager
Exhibit "A"
[Name and Address of Transfer Agent]
Re: Shareholder Agreement dated September 29, 2003
Gentlemen:
We understand that Bridgewater International Group, LLC ("BIG") is
presenting to you for transfer certificate(s) representing _________ shares of
MACC Private Equities, Inc. ("MACC") which bear the following restrictive
legend:
This Certificate and the transfer of interests in the
underlying shares hereof are subject to the terms and
conditions of that certain Shareholder and Voting
Agreement dated as of September 29, 2003, among
Bridgewater International Group, LLC, Xxxx X. Xxxxxx
and Atlas Management Partners, LLC
On behalf of the parties to the Shareholder and Voting Agreement
referred to in the legend, you are authorized to issue certificate(s) for the
number of MACC shares indicated above to the transferee(s) as directed by BIG
free of the above restrictive legend.
ATLAS MANAGEMENT PARTNERS, LLC
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