SHAREHOLDER AND VOTING AGREEMENT
(Xxxxxx X. Xxxxxx)
THIS SHAREHOLDER AND VOTING AGREEMENT (this "Agreement") is made and
entered into effective as of September 29, 2003, by and among Xxxxxx X. Xxxxxx
("X. Xxxxxx"), Xxxx X. Xxxxxx ("Xxxxxx") and Atlas Management Partners, LLC, a
Utah limited liability company ("Atlas").
RECITALS
A. R. Xxxxxx owns voting capital shares in MACC Private Equities, Inc.
("MACC"), a Delaware corporation whose shares are listed for trading on the
Nasdaq SmallCap market.
B. R. 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, X. Xxxxxx hereby appoints Atlas as its proxy, attorney-in-fact and
agent with full authority to vote the 100,119 capital shares in MACC currently
owned by him 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 Xxxxxx is
allowed to exercise control over MACC under SBA regulations and if Xxxxxx would
not be similarly precluded from voting due to conflicts of interest, Atlas will
give to Xxxxxx the right to vote the shares on such issues. Atlas covenants that
it shall vote the MACC shares subject to this Agreement in accordance with the
instructions of Xxxxxx, except in situations in which all of the Voting Managing
Directors of Atlas then in office, with the exception of Xxxxxx, instruct Atlas
to vote otherwise. The 100,119 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 X. Xxxxxx. 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 term of this Agreement shall commence on the
date first written above, and shall continue in effect during the term of the
Shareholder and Voting Agreement between BIG, Xxxx X. Xxxxxx and Atlas of even
date herewith, as such term may be terminated or extended
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3. Lock-Up, Leak-out. X. Xxxxxx agrees that he 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 X. Xxxxxx may
sell or otherwise dispose of up to 10,012 of the MACC Shares in any calendar
quarter, but not more than a total of 30,036 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. X. Xxxxxx further agrees that during the
Leak-out Period and any Extended Term (together, the "Extended Period"), he
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 X. Xxxxxx desires to sell, pledge, assign or otherwise
transfer any or all of his MACC Shares at any time during the
Extended Period, he shall first give written notice (the
"Alert Notice") to Atlas and Xxxxxx of his 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, X. Xxxxxx
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 X. Xxxxxx 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 X. Xxxxxx of
how many of the Offered Shares they desire to purchase. If
Atlas (or its designee) and Xxxxxx both notify X. Xxxxxx 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 X. Xxxxxx
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 R. Madsen, Madsen, 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) X. Xxxxxx 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, X. Xxxxxx 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 X. Xxxxxx 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 X.
Xxxxxx 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 X. Xxxxxx 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 X. Xxxxxx that they desire to
purchase Offered Shares, Xxxxxx'x purchase will be fulfilled
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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".
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 X.
Xxxxxx 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 will, descent, laws of intestacy or operation
of law; or
(b) Transfers by X. Xxxxxx to a family member without
consideration.
7. Reduction in Profit Participation Percentages. In the event that X.
Xxxxxx sells in excess of 15,018 MACC Shares pursuant to Sections 3, 4 and 5
above, then X. Xxxxxx'x Profit Participation Percentage shall be reduced as set
forth in the Atlas Second Amended and Restated Operating Agreement.
8. Standard of Care. In voting on all matters which come to the
Shareholders of MACC for a vote, the Voting Managing Directors of Atlas shall
exercise their best business judgment. However, it is understood that neither
Atlas nor its Voting Managing Directors 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.
9. Miscellaneous Provisions.
9.1 Notices. Without precluding any other sufficient form of
notice, all notices, demands, or other communications under
this Agreement shall be deemed given 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.
9.2 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
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conditions of that certain Shareholder and Voting
Agreement dated as of ___________, 2003, among Xxxxxx
X. Xxxxxx, Xxxx X. Xxxxxx and Atlas Management
Partners, LLC
X. Xxxxxx shall surrender the certificates representing the
MACC Shares to MACC for inclusion of such legend.
9.3 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.
9.4 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.
9.5 Headings. Headings used in this Agreement are for reference
purposes only and shall not be deemed a part of this
Agreement.
9.6 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.
9.7 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
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this Agreement supersedes all proposals, oral or written, and
all other communications among them relating to the subject
matter of this Agreement.
9.8 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
facsimile shall be effective as delivery of a manually signed
original and the receiving party may rely thereon for all
purposes.
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IN WITNESS WHEREOF, the parties have signed this Agreement as the date
and year first above written.
X. XXXXXX:
/s/ Xxxxxx Xxxxxx
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Xxxxxx X. Xxxxxx
XXXXXX:
/s/ Xxxx Xxxxxx
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Xxxx X. Xxxxxx
ATLAS MANAGEMENT PARTNERS, LLC
By /s/ Xxxx Xxxxxx
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Xxxx X. Xxxxxx, Its Manager
Xxxxxx X. Xxxxxx Shareholder and Voting Agreement
