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EXHIBIT 4.3
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STOCKHOLDERS' AGREEMENT
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THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is made and
entered into as of this 18th day of October, 1994, by and among Sinter Metals,
Inc., a Delaware corporation (the "Company"), and the stockholders
(collectively, the "Stockholders" and singularly "Stockholder") listed on
EXHIBIT A attached hereto (including Citicorp Venture Capital, Ltd., a Delaware
corporation ("CVC"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxx X. XxXxxxx
("XxXxxxx") and Xxxxxxx X. XxXxxx ("XxXxxx")). This Agreement shall become
effective immediately prior to the time at which the Company's Class A Common
Stock, par value $.001 per share (the "New Class A Common Stock"), is registered
pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Effective
Time") in connection with the offering described in the Registration Statement
on Form S-1 filed with the Securities and Exchange Commission on August 3, 1994
and as amended (Registration No. 33-82390) (the "Public Offering"). The Amended
and Restated Stockholders' Agreement by and among the Company and the
stockholders of the Company dated as of November 16, 1993 will terminate as of
the Effective Time. As of the Effective Time, the shares of the Company's Class
A Common Stock, par value $.01 per share (the "Old Class A Stock") and the
Company's Class B Common Stock, par value $.01 per share (the "Old Class B
Common Stock;" and together with the Old Class A Common Stock, the "Old Common
Stock"), will represent all of the
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issued and outstanding shares of the Company's capital stock. Prior to the
consummation of the public offering of the New Class A Common Stock, (1) the Old
Common Stock will be converted into the New Class A Common Stock and (2) the
Company will issue to CVC and Key Equity Capital Corporation, an Ohio
corporation ("KECC"), shares of the Company's Class B Common Stock, par value
$.001 per share (the "New Class B Common Stock"; collectively, the New Class A
Common Stock and New Class B Common Stock is the "New Common Stock."
WHEREAS, the parties to this Agreement are the record and
beneficial owners of all of the issued and outstanding shares of capital stock
of the Company in the respective amounts set forth opposite their names on
EXHIBIT A; and
WHEREAS, the parties to this Agreement desire to set forth
their mutual understandings and agreements with respect to their rights and
obligations as stockholders of the Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants and subject to the terms and conditions herein set forth, the parties
hereby agree as follows:
SECTION 1. SHARES SUBJECT TO AGREEMENT. All of the shares of
the Old Common Stock and the New Common Stock (including, without limitation,
shares issuable hereafter upon exercise of stock options or upon conversion of
the Old Class B Common Stock or the New Class B Common Stock) now or hereafter
owned, legally or beneficially, by any party to this Agreement (collectively,
the "Shares"), shall be subject to the provisions of this Agreement.
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SECTION 2. "PIGGYBACK" REGISTRATIONS.
(a) Subject to Section 2(f) hereof, if the Company at
any time proposes to register any of its equity securities (as defined in the
Securities Act of 1933 (the "Act") ("Equity Securities")) under the Act on Form
X-0, X-0 or S-3 or any successor form (but not Form S-4 or S-8) or on any other
form upon which may be registered securities similar to the Shares, it will at
each such time give notice to all Stockholders of its intention to do so. Upon
the written request of any Stockholder given to the Company within 15 days after
receipt of any such notice, the Company shall cause the Shares which the Company
has been requested to register by such Stockholder to be registered under the
Act, to the extent required to permit the sale or other disposition by such
Stockholder of the Shares so registered as part of the offering described in the
registration statement.
(b) If, in the written opinion of the underwriter or
underwriters managing the public offering which is the subject of such
registration (or in the event that such distribution shall not be underwritten,
in the written opinion of an investment banking firm of recognized standing
reasonably satisfactory to the Stockholders requesting registration) the total
amount of the securities to be so registered, when added to the total number of
Shares which the Stockholders have requested to be registered pursuant to this
Section 2, will exceed the maximum amount of securities of the Company that can
be marketed (i) at a price reasonably related to their then current market
value; or (ii) without otherwise materially and adversely affecting the
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entire offering, including, without limitation, through a material reduction of
the net proceeds of the offering payable to the Company, then the Company shall
have the right to exclude from such registration such amount of Shares, pro rata
from each Stockholder requesting his or its Shares be registered (based on the
number of Shares requested to be so registered) that it would otherwise be
required to register pursuant to this Section 2 as is necessary to reduce the
total amount of securities to be so registered to the maximum amount of
securities that can be so marketed. Shares proposed to be registered and sold in
an underwritten public offering for the account of any of the Stockholders shall
be sold to prospective underwriters selected or approved by the Company and on
the terms and subject to the conditions of one or more underwriting agreements
negotiated between the Company, the selling Stockholders and the prospective
underwriters. The Stockholders who desire to sell any of the Shares in a
proposed public offering shall provide the Company and the prospective
underwriters with such information as the Company or prospective underwriters
may reasonably request, including without limitation, such information as may be
required by the National Association of Securities Dealers, Inc. or the
Securities and Exchange Commission. The Company may withdraw any registration
statement initiated by the Company at any time before it becomes effective, or
postpone such offering of securities, without obligation or liability to the
holders of the Shares. Each Stockholder who sells Shares in a registered
offering pursuant to this Section 2 shall be responsible for
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payment of any underwriting discounts or commissions with respect to the Shares
sold for such Stockholder's account, and for the costs of any counsel or other
third parties retained by such Stockholder, and the Company shall be responsible
for payment of all expenses incurred by the Company in connection with the
preparation and filing of the registration statement. Unless otherwise agreed by
the Company and the Stockholders who participate in a given offering, any
over-allotment option granted to the underwriters shall be participated in by
the Company and such selling Stockholders pro rata in accordance with the
relative number of shares to be offered by each in the principal offering. Each
Stockholder who desires to participate in a registered offering shall enter into
custody agreements, powers of attorney, underwriting agreements customary for
such offerings and reasonably satisfactory to the Company and the Underwriters
at such time as reasonably requested by the Company or the Underwriters.
(c) INDEMNIFICATION BY THE COMPANY. In the event of any
registration under the Act of any Shares pursuant to this Section 2, the Company
shall indemnify and hold harmless each holder of Shares to be registered and
each other Person, if any, who controls such holder within the meaning of the
Act and each other Person (including underwriters) who participates in the
offering of such Shares against any losses, claims, damages or liabilities,
joint or several, to which such holder of Shares to be registered or controlling
Person or participating Person may become subject under the Act or otherwise,
insofar as such
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losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which such Shares are registered under the Act, in any
preliminary prospectus or final prospectus contained therein, or in any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such holder of Shares or such controlling Person or participating
Person in connection with investigating or defending any such loss, claim,
damage, liability or proceeding; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to any such holder or other Person to the extent that
any such loss, claim, damage or liability arises out of or is based upon (i) an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, said preliminary or final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such holder or such controlling or
participating Person, as the case may be, specifically for use in the
preparation thereof; or (ii) an untrue statement or alleged untrue statement,
omission or alleged omission in a prospectus if such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the prospectus which amendment or supplement is delivered to such
holder and other
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Person and such holder or other Person thereafter fails to deliver such
prospectus as so amended or supplemented prior to or concurrently with the sale
of such Stock to the Person asserting such loss, claim, damage, liability or
expense. For purposes of this Agreement, "Persons" shall mean an individual, a
corporation, a partnership, an association, a trust or other entity or
organization.
(d) INDEMNIFICATION BY THE HOLDERS OF SHARES WHICH ARE
REGISTERED. It shall be a condition of the Company's obligation under this
Section 2 to effect any registration under the Act that there shall have been
delivered to the Company an agreement or agreements duly executed by each holder
of Shares to be so registered, whereby such holder agrees to indemnify and hold
harmless the Company, each other Person referred to in subparts (1), (2) and (3)
of Section 11(a) of the Act in respect of such registration statement and each
other Person, if any, that controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities, joint or several, to which
the Company, or such other Person or such Person controlling the Company may
become subject under the Act or otherwise, but only to the extent that such
losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statements or alleged untrue statement of
any material fact contained, on the effective date thereof, in any registration
statement under which such Shares are registered under the Act, in any
preliminary prospectus or final prospectus contained therein or in any amendment
or
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supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which, in each such
case, has been made in or omitted from such registration statement, said
preliminary or final prospectus or said amendment or supplement in reliance
upon, and in conformity with, written information furnished to the Company by
such holder of Shares specifically for use in the preparation thereof. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above, with
respect to information with respect to such Persons so furnished in writing by
such Persons specifically for inclusion in any prospectus or registration
statement.
(e) CONDUCT OF INDEMNIFICATION PROCEEDINGS. (i) Any Person
entitled to indemnification hereunder shall (A) give prompt written notice to
the indemnifying party; and (B) unless in such indemnified party's reasonable
judgment, a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. Whether or not such defense is assumed by the indemnifying
party, the indemnifying party shall not be subject to any liability for any
settlement made without its consent (but such consent shall not be unreasonably
withheld). No indemnifying party shall consent to
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the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of the claim, shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
(ii) If for any reason the indemnification provided for in the
preceding Sections 2(b) and 2(c) is unavailable to an indemnified party as
contemplated thereby, the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any Person who was not guilty of fraudulent
misrepresentation.
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(f) The provisions of this Section 2 shall not apply, and the
Company shall be under no obligation to register any of the Shares, or take any
other actions required by this Section 2, with respect to any registration, or
proposed registration, by the Company of (a) shares of stock having a preference
in liquidation, redemption, dividends or voting over the shares of its common
stock (however designated) ("Preferred Stock") or (b) any shares of common stock
(however designated) into which shares of Preferred Stock or any debt securities
of the Company may, by the terms of such instruments, be converted.
SECTION 3. CORPORATE GOVERNANCE.
(a) During the term of this Agreement, the Stockholders agree
that they will not vote the Shares, if any, held by them in favor of any
proposal to change the number of members of the Board of Directors of the
Company (the "Board") from its current size of seven (7) persons. Each
Stockholder hereby agrees to take any and all action necessary (including,
without limitation, voting their shares or, to the extent then permitted by the
Company's Certificate of Incorporation and ByLaws (each as amended from time to
time), executing and delivering written consents of stockholders, or calling
special stockholders' meetings) to elect to the Board (the "Initial Board") the
following seven (7) individuals:
(i) Carreras;
(ii) XxXxxxx;
(iii) E. Xxxxxx Xxxxxxxxxx;
(iv) Xxxxxxx X. Xxx;
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(v) Xxxxxxx X. Xxxxx;
(vi) Xxxxx X. Xxxx; and
(vii) Xxxx X. Xxxxx; PROVIDED, HOWEVER, that if,
upon completion of the Public Offering, KECC does not
own at least 740,344 shares of Common Stock, Xxxx X.
Xxxxx shall be replaced by a person designated by
CVC.
(b) At any annual or special meeting of the Company's
stockholders occurring on or after the completion of the Public Offering, or by
consent in writing of such Stockholders in lieu thereof (to the extent then
allowed by the Company's Certificate of Incorporation and By-Laws), at which or
pursuant to which some or all of the members of the Board are to be elected
(other than the Initial Board), each Stockholder hereby agrees to take any and
all action necessary (including, without limitation, voting their shares or, to
the extent then permitted by the Company's Certificate of Incorporation and
By-Laws, executing and delivering written consents of stockholders, or calling
special stockholders' meetings) to elect to the Board of Directors of the
Company the following seven (7) individuals:
(i) one (1) individual designated in writing by CVC;
PROVIDED, HOWEVER, that if CVC's ownership of
Common Stock is reduced below ten percent (10%)
of the total number of shares of Common Stock of
the Company then outstanding, CVC's right to
designate an individual shall terminate;
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(ii) one (1) individual designated in writing by KECC;
PROVIDED, HOWEVER, that if KECC ceases to own at least
740,344 shares of Common Stock, KECC's right to
designate an individual shall be transferred to CVC if
CVC then holds at least twenty-five percent (25%) of
the total number of shares of Common Stock then
outstanding, and otherwise the right created by this
clause (ii) shall terminate;
(iii) Carreras, for so long as he serves as an officer of
the Company, and thereafter the person who then serves
as the first ranking executive officer of the Company;
(iv) XxXxxxx, for so long as he serves as an officer of the
Company, and thereafter the person who then serves as
the second ranking executive officer of the Company;
and
(v) three (3) individuals nominated by the Directors then
serving, at least two of whom shall not be employees of
the Company or otherwise be affiliates (as defined in
the Act) of the Company.
(c) If any vacancy on the Board occurs during the term of this
Agreement, the Stockholders shall use their best efforts to cause the Directors
remaining in office to elect to fill such vacancy in a manner consistent with
the provisions of Section 3(b) hereof.
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(d) Each Stockholder promptly shall inform the Company of any
Shares such Stockholder owns beneficially that are held through nominee or
"street" name. Certificate representing the Shares shall be stamped with a
legend stating that such shares are subject to the terms of this Agreement.
(e) The number of members of the Board may be increased from
seven (7) persons from time to time at the discretion of the Board; PROVIDED,
HOWEVER, that such increases shall require the approval of six (6) of the
directors then in office. In the event that the size of the Board is increased,
the additional members shall be persons selected by such process as the Board
determines.
SECTION 4. HOLDBACK AGREEMENT. If the Company at any time
proposes to register any of its Equity Securities under the Act, the
Stockholders agree, upon written request of the Company (the "Holdback Notice"),
not to effect any public or private sale, transfer or other disposition of any
Shares or any other Equity Securities for the period of time set forth in the
Holdback Notice (the "Holdback Period"). The Holdback Period shall be determined
in the sole discretion of the Board after consultation with the underwriter or
underwriters managing the public offering. Each Stockholder agrees to deliver to
the Underwriters and the Company a written confirmation of the foregoing in form
reasonably satisfactory to the Underwriters.
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SECTION 5. MISCELLANEOUS.
(a) WAIVERS AND AMENDMENTS. This Agreement may not be amended
or modified and compliance herewith may not be waived (either generally or in a
particular instance and either retroactively or prospectively) except by a
writing signed by all of the parties hereto; PROVIDED, HOWEVER, that EXHIBIT A
of this Agreement shall be automatically updated by the Company in the event
that the number of Shares held by the existing Stockholders change and/or Shares
are issued or transferred to new stockholders of the Company who agree to be
bound by the provisions of this Agreement and sign a counterpart hereof.
(b) NOTICES. Any notice, request, consent and other
communication required or permitted under this Agreement shall be in writing and
shall be deemed to have been duly given (i) when received if personally
delivered, (ii) one day after being sent by recognized overnight delivery
service, or (iii) five days after being sent by registered or certified mail,
return receipt requested, postage prepaid, to the parties at their respective
addresses set forth below.
If to the Company:
Sinter Metals, Inc.
The Xxxxxxxx Xxxxx
Xxxxx 0000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
00
00
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxx, Esq.
If to CVC:
Citicorp Venture Capital, Ltd.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Comfort
If to KECC:
Key Equity Capital Corporation
Society Center
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx
Notices to all other Stockholders will be addressed and delivered to the address
set forth below that Stockholder's name on EXHIBIT A or to such other person or
at such other place as any of the parties may from time to time furnish to the
other parties in writing.
(c) PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto.
(d) HEADINGS. The headings of the Sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
(e) CHOICE OF LAW. It is the intention of the parties that the
laws of the State of Delaware shall govern the validity of this Agreement, the
construction of its terms, and
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the interpretation of the rights and duties of the parties, without giving
effect to the choice of law provisions thereof.
(f) COUNTERPARTS. This Agreement may be executed concurrently
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(g) SEVERABILITY. If any provision of this Agreement shall be
deemed or declared to be unenforceable, invalid or void, such provisions shall
be ineffective only to the extent of such unenforceability or invalidity and the
same shall not impair any of the other provisions of this Agreement, which shall
be enforced in accordance with their respective terms.
(h) TERMINATION OF AGREEMENT; TERMINATION OF RESTRICTIONS.
This Agreement and all restrictions on Shares owned by Stockholders shall
terminate at the earliest of (a) such time as the rights of both CVC and KECC to
designate individuals to serve on the Board terminate, (b) the unanimous written
agreement of the Stockholders to this Agreement, (c) the consummation of a
merger or consolidation of the Company into another entity and which is not
controlled directly or indirectly by any of the Stockholders, individually or in
a group, where the Company is not the survivor, (d) the consummation of an
acquisition of another entity and which is not controlled directly or indirectly
by any of the Stockholders individually or in a group by merger, consolidation,
exchange of shares or otherwise) in a transaction in which the Company issues
shares of its Common Stock that exceed twenty-five percent (25%) of the
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then outstanding Common Stock, (e) the sale of all or substantially all of the
Company's assets, (f) the effectiveness of the Shareholders' Agreement dated as
of November 18, 1993 by and among the Company, PMI Powder Metal Holding, Ltd.,
CVC, KECC and Xxxxxx Financial, Inc.; (g) the issuance or sale by the Company,
other than upon conversion of any of the Shares that are Old or New Class B
Common Stock to shares of Old or New Class A Common Stock, to any person or
affiliated group of persons (consisting either of a group of Affiliates or a
group as such term is used in Section 13(d)(3) of the Securities Exchange Act of
1934) of voting securities, or of options, warrants or other rights to acquire
voting securities, where such securities or rights to acquire securities would
represent 50% or more of the Company's securities generally eligible to vote in
the election of directors of the Company; (h) the date on which the aggregate
number of shares of Old or New Class A Common Stock and Old or New Class B
Common Stock owned by the Stockholders then party to this Agreement shall be
less than twenty-five percent (25%) of the outstanding shares of Class A Common
Stock, or (i) the tenth anniversary of this Agreement. The obligations of each
party to this Agreement shall terminate upon the sale of all of the Shares held
by such person. This Agreement shall in no event restrict the freedom of any
party hereto to sell, pledge, transfer or otherwise dispose of any Shares.
Furthermore, the obligations of each of Carreras, XxXxxxx and XxXxxx hereunder
shall terminate, and each such person shall cease to be a party hereunder, if
and when such person ceases to be employed by the Company in a
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position substantially equivalent, or superior to, the position now held by such
person.
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IN WITNESS WHEREOF, the parties have executed, or have caused
to be executed, this Stockholders' Agreement as of the day and year first
written above.
SINTER METALS, INC.
By: ______________________________
Name:
Its:
CITICORP VENTURE CAPITAL, LTD.
By:______________________________
Name:
Its:
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Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. XxXxxxx
-----------------------------------
Xxxxxxx X. XxXxxx
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EXHIBIT A
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Class A Class B
Common Stock Common Stock
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Citicorp Venture Capital, Ltd. 878,325* 2,443,307*
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx X. Xxxxxxxx 479,452 -
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Xxxxxx X. XxXxxxx 202,713 -
R.R. 2, Xxx 00
Xxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx X. XxXxxx 104,061 -
X.X. 0, Xxx 00
Xxxxxxxx, Xxxxxxxxxxxx 00000
* Assumes that Citicorp Venture Capital, Ltd. receives an aggregate of
416,911 shares of Class A Common Stock under the Exchange Agreement,
which is based upon an initial public offering price of $13.00 per
share. Such number will change to the extent the initial public
offering price differs from $13.00 per share.
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