[FORM OF
SALE PARTICIPATION AGREEMENT]
SALE PARTICIPATION AGREEMENT (hereinafter called this
"Agreement"), dated as of September __, 1996, between Nomura International plc,
a public limited company incorporated under the laws of England and Wales
("NIplc"), and _______________ (the "Purchaser").
RECITALS
WHEREAS, Antigua Acquisition Corporation, a Delaware corporation
("Merger Sub"), has entered into an Agreement and Plan of Merger, dated as of
June 5, 1996, as amended (the "Merger Agreement"), among AT&T Capital
Corporation, a Delaware corporation (the "Company"), AT&T Corp., a New York
corporation, Hercules Limited, a Cayman Islands company ("Holdings"), and Merger
Sub, which is a wholly-owned subsidiary of Holdings, providing for the merger
(the "Merger") of Merger Sub with and into the Company, after which the Company
will continue its corporate existence as the surviving corporation (the
"Surviving Corporation");
WHEREAS, in connection with the Merger, Merger Sub and the
Purchaser are contemporaneously entering into a Subscription Agreement of even
date herewith (the "Subscription Agreement"), pursuant to which the Purchaser,
as one of a limited number of management investors, will purchase [(i)]
immediately prior to the Merger, shares of Common Stock, par value $.01 per
share, of Merger Sub (the "Merger Sub Common Stock"), each of which will be
converted at the effective time of the Merger (the "Effective Time") pursuant to
the Merger Agreement into one share of Common Stock, par value $.01 per share,
of the Surviving Corporation ("Surviving Corporation Common Stock") [and (ii)
following the Merger, additional shares of Surviving Corporation Common Stock],
in accordance with the terms of the Subscription Agreement;
WHEREAS, following the Merger, NIplc will also beneficially own
shares of Surviving Corporation Common Stock; and
WHEREAS, incident to the Purchaser's ownership of shares of
Surviving Corporation Common Stock, NIplc and the Purchaser propose to agree to
certain provisions with respect to the future sale, upon certain terms and
subject to certain conditions, of such shares.
2
NOW, THEREFORE, to implement the foregoing and in consideration
of the premises and of the mutual agreements contained herein, the parties
hereto agree as follows:
1. Take-Along Rights.
(a) In the event that at any time (i) NIplc or any of its
affiliates (including, without limitation, GRS Holding Company Limited ("GRSH")
and Hercules Limited, which also beneficially own, directly or indirectly, the
shares of Merger Sub Common Stock beneficially owned by NIplc, but, for the
avoidance of any doubt, excluding Xxxxxxx & Xxxxx, Inc. or any of its
affiliates), as the case may be (each, a "Selling Entity"), proposes to sell for
cash or any other consideration, either directly or indirectly (by way of the
sale of beneficial ownership interest in any such affiliate or otherwise), any
shares of Surviving Corporation Common Stock owned by it, in any transaction
other than (x) a public offering of securities, (y) a sale or other transfer to
one of their affiliates or (z) a sale or other transfer of beneficial ownership
in (A) up to 9,000,000 shares of Surviving Corporation Common Stock to Xxxxxxx &
Xxxxx, Inc. or any of its affiliates or (B) up to 12,000,000 shares of Surviving
Corporation Common Stock to GRSH (a "Proposed Sale") and (ii) such Proposed
Sale, when considered together with previous direct or indirect sales of
Surviving Corporation Common Stock by the Selling Entity and any of its
affiliates (other than (1) sales or other transfers to one of their affiliates
or (2) sales or other transfers of beneficial ownership in the shares of
Surviving Corporation Common Stock referred to in clause (z) above), would
constitute the sale of the direct or indirect beneficial ownership of more than
25% of the outstanding shares of Surviving Corporation Common Stock, then the
Selling Entity will notify the Purchaser or the Purchaser's Estate or
Purchaser's Trust (as such terms are defined in Section 4(a) of the Subscription
Agreement), as the case may be, in writing (a "Notice") of such proposed sale
and the material terms of the Proposed Sale as of the date of the Notice (the
"Material Terms") promptly, and in any event not less than 15 days prior to the
consummation of the Proposed Sale and not more than 5 days after the execution
of the definitive agreement relating to the Proposed Sale, if any (the "Sale
Agreement").
(b) If (i) within 10 days of the Purchaser's or the Purchaser's
Estate's or Purchaser's Trust's, as the case may be, receipt of such Notice the
Selling Entity receives from the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, a written request (a "Request") to
include shares of Surviving Corporation Common Stock held by the Purchaser or
the Purchaser's Estate or Purchaser's Trust, as the case may be, in the Proposed
Sale (which Request shall be irrevocable unless (x) there shall be a material
adverse change in the Material Terms (including, without limitation, a change in
the Material Terms that would result in the sale price being decreased by more
than 10% from that set forth in the Notice) or (y) if otherwise
3
mutually agreed to in writing by the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, and the Selling Entity) or (ii)
notwithstanding that the Purchaser, the Purchaser's Estate or the Purchaser's
Trust, as the case may be, may have declined to make a Request, the Selling
Entity so decides in its sole discretion, shares of Surviving Corporation Common
Stock held by the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as
the case may be, will be included in the Proposed Sale as provided herein;
provided that, in the case of (i) above, only one Request, which shall be
executed by the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the
case may be, may be delivered with respect to any Proposed Sale for all shares
of Surviving Corporation Common Stock held by the Purchaser or the Purchaser's
Estate or Purchaser's Trust. Promptly after the consummation of the transactions
contemplated thereby, the Selling Entity will furnish the Purchaser, the
Purchaser's Trust or the Purchaser's Estate with a copy of the Sale Agreement,
if any.
(c) The number of shares of Surviving Corporation Common Stock
that the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case
may be, will be permitted to include in a Proposed Sale pursuant to a Request,
or that the Selling Entity will be permitted to decide to include in a Proposed
Sale, will be in the aggregate that number of shares of Surviving Corporation
Common Stock owned collectively by the Purchaser, the Purchaser's Estate and the
Purchaser's Trust, as the case may be, that is equal to the pro rata portion of
the total number of shares proposed to be sold in the Proposed Sale, based upon
the product of (i) the sum of the number of shares of Surviving Corporation
Common Stock then owned by the Purchaser or the Purchaser's Estate or
Purchaser's Trust, as the case may be, plus all shares of Surviving Corporation
Common Stock that the Purchaser or the Purchaser's Estate or Purchaser's Trust,
as the case may be, are then entitled to acquire under an unexercised option to
purchase shares of Surviving Corporation Common Stock, to the extent such option
is then vested and exercisable or would become vested and exercisable as a
result of the consummation of the Proposed Sale (ii) multiplied by a percentage
calculated by dividing the aggregate number of shares of Surviving Corporation
Common Stock that the Selling Entity proposes to sell in the Proposed Sale by
the total number of shares of Surviving Corporation Common Stock owned by the
Selling Entity.
Notwithstanding the foregoing, in the case of any Proposed Sale
(i) the consummation of which is reasonably expected to occur on a date after
the tenth anniversary of the Effective Time and (ii) that would constitute a
"Change of Control" (as defined in the Stock Purchase Agreement of even date
herewith between NIplc and the Purchaser), the Purchaser or the Purchaser's
Estate or Purchaser's Trust, as the case may be, will be permitted to include in
such Proposed Sale pursuant to a Request all shares of Surviving Corporation
Common Stock then owned by the Purchaser or the Purchaser's Estate or
Purchaser's
4
Trust, as the case may be, plus all shares of Surviving Corporation Common Stock
that the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case
may be, are then entitled to acquire under an unexercised option to purchase
shares of Surviving Corporation Common Stock, to the extent such option is then
vested and exercisable or would become vested and exercisable as a result of the
consummation of the Proposed Sale.
(d) Except as may otherwise be provided herein, shares of
Surviving Corporation Common Stock subject to a Request, or that the Selling
Entity may decide will be so included, will be included in a Proposed Sale
pursuant hereto and in any agreements with purchasers relating thereto on the
same terms and subject to the same conditions applicable to the shares of
Surviving Corporation Common Stock which the Selling Entity proposes to sell in
the Proposed Sale. Such terms and conditions shall include, without limitation:
the sales price; the payment of fees, commissions and expenses; the provision
of, and representation and warranty as to, information requested by the Selling
Entity; and the provision of requisite indemnifications; provided that any
indemnification provided by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust shall be pro rata in proportion with the number of shares of
Surviving Corporation Common Stock to be sold. In the case of indirect sales by
the Selling Entity of beneficial ownership of the Surviving Corporation Common
Stock, the sale price for the shares of the Purchaser or the Purchaser's Estate
or Purchaser's Trust, as the case may be, shall be determined by an independent
investment bank or appraisal firm on the basis of the proportion of any sale
price applicable to the Selling Entity that is deemed to be attributable to the
Surviving Corporation alone, and the other terms and conditions of the Proposed
Sale shall be appropriately adjusted to reflect, for purposes of the inclusion
of the Purchaser's, the Purchaser's Estate's or the Purchaser's Trust's shares
in such Proposed Sale, a sale of the Surviving Corporation Common Stock. In
connection with any such indirect sale for consideration other than cash, the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
will be entitled to receive a proportionate amount (determined as described in
the preceding sentence) of a like kind of non-cash compensation, or a
proportionate interest therein. Notwithstanding anything to the contrary
contained herein, in connection with any sale, whether direct or indirect, for
consideration other than cash, in the absolute discretion of the Selling Entity,
the shares of the Purchaser or the Purchaser's Estate or Purchaser's Trust, as
the case may be, subject to a Request may be purchased instead for an amount in
cash equal to the fair market value (determined by an independent investment
bank or appraisal firm) of any non-cash consideration that would otherwise be
receivable hereunder.
5
2. Custody Agreement and Power of Attorney.
Upon delivering a Request or upon notice that the Selling Entity
has decided to include shares held by the Purchaser, the Purchaser's Estate or
the Purchaser's Trust, as the case may be, in the Proposed Sale, the Purchaser
or the Purchaser's Estate or Purchaser's Trust, as the case may be, will, if
requested by the Selling Entity, execute and deliver a custody agreement and
power of attorney in form and substance satisfactory to the Selling Entity with
respect to the shares of Surviving Corporation Common Stock which are to be sold
by the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case may
be, pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Purchaser or the Purchaser's Estate or Purchaser's Trust, as the case may be,
will deliver to and deposit in custody with the custodian and attorney-in-fact
named therein a certificate or certificates representing such shares of
Surviving Corporation Common Stock (duly endorsed in blank by the registered
owner or owners thereof) and irrevocably appoint said custodian and
attorney-in-fact as the Purchaser or the Purchaser's Estate's or Purchaser's
Trust's, as the case may be, agent and attorney-in-fact with full power and
authority to act under the Custody Agreement and Power of Attorney on the
Purchaser's or the Purchaser's Estate's or Purchaser's Trust's, as the case may
be, behalf with respect to the matters specified therein.
3. Obligations to Purchaser.
(a) The Purchaser or the Purchaser's Estate's or Purchaser's
Trust's, as the case may be, right pursuant hereto to participate in a Proposed
Sale shall be contingent on the Purchaser's or the Purchaser's Estate's or
Purchaser's Trust's, as the case may be, strict compliance with each of the
provisions hereof and the Purchaser's or the Purchaser's Estate's or Purchaser's
Trust's, as the case may be, willingness to execute such documents in connection
therewith as may be reasonably requested by the Selling Entity.
(b) The obligations of the Selling Entity hereunder shall extend
only to the Purchaser or the Purchaser's Estate or Purchaser's Trust, as the
case may be, and no other of the Purchaser's or the Purchaser's Estate's or
Purchaser's Trust's, as the case may be, successors or assigns shall have any
rights pursuant hereto.
4. Notices.
All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered to the
party to whom it is directed:
6
(a) If to NIplc, to it at the following address:
Nomura International plc
Xxxxxx Xxxxx
0 Xx. Xxxxxx'x-xx-Xxxxx
Xxxxxx XX0X 0XX
Attention: Mr. Xxx Xxxxx
(b) If to the Purchaser, to him or her at the address
set forth below under his or her signature;
(c) If to the Purchaser's Estate or Purchaser's Trust, at the
address provided to NIplc by such entity.
or at such other address as any of the above shall have specified by
notice in writing delivered to the others by certified mail.
Any notice which is required to be given to the Purchaser shall, if the
Purchaser is then deceased, be given to the Purchaser's personal representative
if such representative has previously informed NIplc of his or her status and
address by written notice under this Section 4.
5. Applicable Law.
The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding against the Seller, with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of New Jersey, as
NIplc may elect in its sole discretion, and the Seller hereby submits to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. By the execution and delivery of this Agreement,
the Seller appoints the Secretary of the Surviving Corporation, at the executive
offices of the Surviving Corporation in Morristown, New Jersey (or such other
place within the State of New Jersey as may be designated for such purpose), as
his or her agent upon which process may be served in any such suit, action or
proceeding. Service of process upon such agent, together with notice of such
service given to the Seller in the manner provided in Section 4 hereof, shall be
deemed in every respect effective service of process upon him or her in any
suit, action or proceeding. Nothing herein shall in any way be deemed to limit
the ability of NIplc to serve any such writs, process or summonses in any other
manner permitted by applicable law or to obtain jurisdiction over the Seller, in
such other jurisdictions and in such manner, as may be permitted by applicable
law. The Seller hereby irrevocably waives any objections which he or she may now
or hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement
7
brought in any court of competent jurisdiction in the State of New Jersey, and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient forum.
No suit, action or proceeding against NIplc with respect to this Agreement may
be brought in any court, domestic or foreign, or before any similar domestic or
foreign authority other than in a court of competent jurisdiction in the State
of New Jersey, and the Seller hereby irrevocably waives any right which he or
she may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. NIplc hereby
submits to the jurisdiction of such courts for the purpose of any such suit,
action or proceeding, and by the execution and delivery of this Agreement, the
Seller appoints the Secretary of the Surviving Corporation, at the executive
offices of the Surviving Corporation in Morristown, New Jersey (or such other
place within the State of New Jersey as may be designated for such purpose), as
his or her agent upon which process may be served in any such suit, action or
proceeding. Service of process upon such agent, together with notice of such
service given to NIplc in the manner provided in Section 4 hereof, shall be
deemed in every respect effective service of process upon NIplc in any suit,
action or proceeding. NIplc hereby irrevocably waives any objections which it
may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New Jersey, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum.
6. Assignability of Certain Rights by NIplc.
If the Selling Entity transfers its interest in the Surviving
Corporation to an affiliate, such affiliate shall assume the obligations
hereunder of the Selling Entity, but such assignment shall not, without the
written consent of the Purchaser or the Purchaser's Estate or Purchaser's Trust,
as the case may be, relieve NIplc of its obligations hereunder.
7. Binding Effect.
The provisions of this Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns, and shall also inure to the benefit of
each affiliate of NIplc that may become a Selling Entity.
8. Purchaser's Acknowledgement.
It is the understanding of the Purchaser that, and he or she
hereby acknowledges, that the Purchaser is aware that no Proposed Sale presently
is contemplated and that such a sale may never occur.
8
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
NOMURA INTERNATIONAL plc
By:
--------------------------------
Name:
Title:
----------------------------------
Purchaser
----------------------------------
----------------------------------
Address of Purchaser
