EXHIBIT 10.5
[EXECUTION COPY]
SECURITYHOLDERS AGREEMENT
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THIS SECURITYHOLDERS AGREEMENT (this "Agreement") is made as of July
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22, 1998, by and among Xxxxxxx Xxxxx Rental Holdings, L.P., a Pennsylvania
limited partnership (the "Partnership"), ACR Management, L.L.C., a Delaware
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limited liability company and the sole general partner of the Partnership (the
"General Partner") and each of the securityholders from time to time a party
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hereto (the "Securityholders"). Capitalized terms used but not otherwise
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defined herein are defined in Section 8 hereof or in the Partnership Agreement
referred to below.
The Partnership, the General Partner and the Securityholders desire to
enter into this Agreement for the purposes of, among others, inducing certain of
the Securityholders to enter into the Amended and Restated Agreement of Limited
Partnership of even date herewith, as amended or modified from time to time (the
"Partnership Agreement") and the Limited Liability Company Agreement of the
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General Partner of even date herewith, as amended from time to time (the "LLC
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Agreement") and to restrict the sale, assignment, transfer, encumbrance or other
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disposition of the Securities.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
1. Restrictions on Transfer of Securities.
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(a) Transfer of Securities. No holder of Other Securities shall sell,
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transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of
law) any interest in such holder's Securities (a "Transfer"), except
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pursuant to (i) Section 1(b) or 1(d) hereof, (ii) a Public Sale, (iii) a
Liquidity Event pursuant to Section 5, (iv) a repurchase pursuant to the
Executive Agreements or (v) the consent of the Board; provided that the
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applicable requirements of Sections 2 and 3 (if any) are also satisfied.
(b) Participation Rights.
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(i) If one or more of the Xxxx Group (the "Transferring
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Securityholders") desires to Transfer all or any portion of any class
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of its Securities to any Person(s), they must first deliver to all of
the other holders of such class of Securities (the "Other
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Securityholders") a written notice (the "Sale Notice") in which the
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prospective Transferring Securityholders state the price and other
material terms and conditions on which they propose to effect such
Transfer of Securities, or portion thereof, and the identity of the
proposed Transferee(s). For purposes of this Section 1(b), a Transfer
by the Xxxx Group shall include a transfer by the holders of the
equity securities of the Xxxx Group and a transfer of any securities
which has the economic effect of a Transfer of the equity securities
of the Xxxx Group and such transfers will be deemed to be a Transfer
by the Xxxx Group for purposes of determining the rights of Other
Securityholders
under this Section 1(b). Each Other Securityholder to whom such a Sale
Notice is given may within 15 days following receipt of the Sale
Notice, give to the Partnership, the General Partner and the
Transferring Securityholders a written notice ("Tag-Along Notice")
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indicating that it desires to participate in such Transfer. If any
Other Securityholders have elected to participate in such Transfer,
each of the Transferring Securityholders and such Other
Securityholders will be entitled to sell in the contemplated Transfer,
at the same price and on the same terms and conditions, a number of
Securities of such class equal to the product of (A) the quotient
determined by dividing the number of Securities of such class owned by
such person by the aggregate number of Securities of such class owned
by the Transferring Securityholders and the Other Securityholders
participating in such Transfer and (B) the number of Securities of
such class to be sold in the contemplated Transfer (the "Pro Rata
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Share"). Notwithstanding the foregoing, in the event that the
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Transferring Securityholders intend to Transfer more than one class of
Securities, the Other Securityholders participating in such Transfer
shall be required to sell in the contemplated Transfer a pro rata
portion of all such classes of Securities (to the extent such Other
Securityholders own any such other classes of Securities), which
portion shall be determined in the manner set forth immediately above.
For example (by way of illustration only), if the Sale Notice
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contemplated a sale of 100 Class A Common Units by the
Transferring Securityholders, and if the Transferring
Securityholders at such time owns 30% of the Class A Common Units
and if one Other Securityholder elects to participate and owns
20% of the Class A Common Units, the Transferring Securityholders
would be entitled to sell 60 Class Common A Units (30% / 50% x
100 units) and the Other Securityholder would be entitled to sell
40 Class A Common Units (20% / 50% x 100 units).
(ii) The Transferring Securityholders will use reasonable efforts
to obtain the agreement of the prospective Transferee(s) to the
participation of the Other Securityholders in any contemplated
Transfer, and the Transferring Securityholders will not Transfer any
of their Securities to the prospective Transferee(s) unless (A)
simultaneously with such transfer, the prospective Transferee or
Transferees purchase from the Other Securityholders the Securities
which the Other Securityholders are entitled to sell to such
prospective Transferee(s) pursuant to paragraph 1(b)(i) above or (B)
simultaneously with such transfer, the Transferring Securityholders
purchase (on the same terms and conditions on which such Securities
were sold to the transferee(s)) the number of Securities of such class
from the Other Securityholders which the Other Securityholders would
have been entitled to sell pursuant to paragraph 1(b)(i) above.
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(c) Transfers by Certain Indirect Owners. Each holder of Other
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Securities that is not an individual shall not permit (i) the issuance of
additional interests in such holder or (ii) any Transfer of any interest of
any Indirect Owner in such holder. Notwithstanding the foregoing, any
Indirect Owner of such holder or of another Indirect Owner may Transfer its
interest in such holder or other Indirect Owner to another Indirect Owner
of a holder or to a Permitted Transferee or, provided that one or more
Permitted Transferees at all times controls such holder or Indirect Owner,
an interest in such holder or Indirect Owner may be transferred to a
charitable organization; provided that the restrictions contained in this
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Section 1(c) will continue to apply to such securities following such
Transfer and the Permitted Transferees thereof will be required, prior to
the effectiveness of such Transfer, to execute a written agreement in form
and substance satisfactory to the Board pursuant to which such Permitted
Transferees acknowledge and agree to be bound by the Transfer restrictions
contained in this Agreement (including, without limitation, this Section
1(c)). To the extent such securities are certificated, the certificates
evidencing the equity securities of such holder and each Indirect Owner
will be stamped or otherwise imprinted with a legend referencing the
restrictions on transfer contained in this Section 1(c).
(d) Permitted Transfers. The restrictions contained in this Section 1
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shall not apply with respect to any Transfer of Securities (i) in the case
of any natural Person, pursuant to applicable laws of descent and
distribution or among such Person's Family Group (ii) in the case of any
other Person, among its Affiliates or (iii) to a Person each Indirect Owner
of which is a Permitted Transferee (transferees permitted pursuant to
clauses (i), (ii) and (iii) above are together referred to herein as
"Permitted Transferees"); provided that the restrictions contained in this
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Section 1 shall continue to be applicable to such Securities after any such
Transfer; and provided further that the applicable requirements specified
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in Sections 2 and 3 in connection with such Transfer shall have been
satisfied. A Person's "Family Group" means such Person's (or if such
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Person is not an individual then such Person shall refer to the ultimate
individual beneficial owners of such Person) grandparents, spouse and
descendants (whether natural or adopted) of such grandparents and spouses
of any of them, and any trust or other entity or other vehicle formed
primarily for the benefit of such Person and/or any of such Person's spouse
and/or descendants. Notwithstanding the foregoing, no party hereto shall
avoid the provisions of this Agreement by making one or more transfers to
one or more Permitted Transferees and then disposing of all or any portion
of such party's interest in any such Permitted Transferee.
(e) Management Group Transfers. On or before December 31, 1998, the
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Xxxx Group is specifically authorized to sell (or grant options to
purchase) to persons who are employees of or who have performed services
for the Partnership up to a 20% interest in the Common Units and a 20%
interest in the Membership Interests, at a purchase price equal to the cost
to the Xxxx Group of such interests on the date of this Agreement. The
participation rights set forth in paragraph (b) above shall not apply to
any Transfer of Securities described in this paragraph (e).
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(f) Termination of Restrictions. The restrictions set forth in this
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Section 1 shall continue with respect to each Security until the earlier of
(i) the consummation of a Liquidity Event pursuant to Section 5 or (ii) the
consummation of an IPO. If the consummation of a Transfer pursuant to this
Section 1 would cause a Liquidity Event to occur, the provisions of Section
5 (as opposed to this Section 1) shall control such Transfer.
2. Additional Restrictions on Transfer.
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(a) Restricted Securities Legend. The Securities have not been
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registered under the Securities Act and, therefore, in addition to the
other restrictions on Transfer contained in this Agreement, cannot be sold
unless subsequently registered under the Securities Act or an exemption
from such registration is then available. To the extent such Securities
have been certificated, each certificate evidencing Securities and each
certificate issued in exchange for or upon the Transfer of any Securities
(if such securities remain Securities as defined herein after such
Transfer) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON JULY 22, 1998 AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE SECURITYHOLDERS
AGREEMENT, DATED AS OF JULY 22, 1998, AS AMENDED AND MODIFIED FROM
TIME TO TIME, AMONG THE ISSUER (THE "PARTNERSHIP"), AND CERTAIN
INVESTORS, AND THE PARTNERSHIP RESERVES THE RIGHT TO REFUSE THE
TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED
WITH RESPECT TO ANY TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE PARTNERSHIP TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
The Partnership and/or the General Partner shall imprint such legend on
certificates (if any) evidencing Securities. The legend set forth above shall
be removed from the certificates (if any) evidencing any Securities which cease
to be Securities in accordance with the definition thereof. Notwithstanding the
foregoing, to the extent the Securities are not certificated, the Partnership
Agreement will contain a legend in substantially the form stated above.
(b) Opinion of Counsel. No holder of Securities may Transfer any
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Securities (except pursuant to an effective registration statement under
the Securities Act or to a
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Permitted Transferee or pursuant to Section 4 or 5 hereof) without first
delivering to the Partnership and the General Partner an opinion of counsel
(reasonably acceptable in form and substance to the Board) that neither
registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such Transfer.
(c) Transfers by the Xxxx Group. If any member of the Xxxx Group
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sells any Common Units, or securities into which such Common Units are
reorganized (except for sales to Affiliates and sales to employees of the
Partnership), the Company shall contemporaneously redeem, or a member of
the Xxxx Group or an independent third party selected by the Xxxx Group
shall purchase, a corresponding percentage of the Partnership's outstanding
Class A Preferred Units (or preferred stock into which such Preferred Units
are reorganized upon an IPO), along with any accrued yield or dividends
thereon, which percentage shall be determined by dividing the number of
Common Units (or their equivalent) to be transferred by the Xxxx Group by
the aggregate number of Common Units (or their equivalent) owned by the
Xxxx Group as of the date hereof.
3. Transfer. Prior to Transferring any Securities (other than
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pursuant to a Liquidity Event pursuant to Section 5, a Public Sale or an IPO),
the Transferring Securityholder shall cause the prospective Transferee to be
bound by this Agreement, the Partnership Agreement (if the prospective
Transferee is admitted as a substituted partner under the Partnership
Agreement), the LLC Agreement (if the prospective Transferee is admitted as a
substituted partner under the Partnership Agreement), the Registration Agreement
and any other agreements executed by holders of Units and Membership Interests
relating to such Units and Membership Interests in the aggregate (collectively,
the "Other Agreements") and if the prospective Transferee is acquiring
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Securities subject to an Executive Agreement, the provisions of such Executive
Agreement relating to equity securities, including the repurchase thereof, and
to execute and deliver to the Partnership, the General Partner and the other
holders of Securities counterparts of this Agreement, the Partnership Agreement
(if the Prospective Transferee is admitted as a substituted partner under the
Partnership Agreement), the LLC Agreement (if the Prospective Transferee is
admitted as a substituted member under the LLC Agreement), the Registration
Agreement, the applicable Other Agreements and if applicable an acknowledgment
as to the provisions of such Executive Agreement relating to equity securities.
Any Transfer or attempted Transfer of any Securities in violation of any
provision of this Agreement shall be void, and the Partnership or the General
Partner, as the case may be, shall not record such Transfer on its books or
treat any purported Transferee of such Securities as the owner of such
securities for any purpose.
4. Public Offering.
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(a) If at any time the Board approves a public offering of any of the
equity securities of the Partnership to be registered under the Securities
Act or the requisite percentage of holders (the "Requisite Holders")
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otherwise request the Partnership to make a public offering of equity
securities of the Partnership pursuant to the Registration Rights
Agreement, the holders of Securities and the Partnership will take all
necessary or
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desirable actions in connection with the consummation of such registered
offering approved by the Board and, to the extent not inconsistent
therewith, the Requisite Holders. It is the intent that immediately prior
to, and contingent upon the consummation of, the initial registered
offering of equity securities of the Partnership, whether or not pursuant
to the immediately preceding sentence and whether pursuant to a sale by the
Partnership or by any Securityholder, (i) a Delaware corporation will be
incorporated (the "Company"), and (ii) the equity securities of the
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Partnership will be recapitalized or reorganized (whether by merger,
exchange, contribution, a combination of the foregoing or otherwise) into a
single class of common stock of the Company, where all holders will receive
such common stock in a manner described in Code Section 351 (or successor
provision or a similar nonrecognition Code provision), and in which all
Securityholders are eligible to be treated as direct or indirect
transferors under Code Section 351 (or successor provision or a similar
nonrecognition Code provision). Such recapitalization, reorganization or
exchange will be effected in such a manner so that, immediately thereafter,
the Securityholders hold only securities of the same class as the
securities that are to be offered to the public in such offering. The
securities to be so held by the Securityholders will be allocated, to the
extent practicable, among the Securityholders (or additional securities
will be issued to one or more Securityholders) so that, immediately after
such recapitalization, reorganization or exchange, each Securityholder
holds securities having an aggregate value equal to the amount which such
Securityholder would have received if, immediately prior to such
recapitalization, reorganization or exchange, the Partnership had
distributed to its Securityholders an aggregate amount equal to the
aggregate value of the securities which are to be held by all
Securityholders immediately after such recapitalization, reorganization or
exchange in a complete liquidation pursuant to the rights and preferences
set forth in the Partnership's constituent documents immediately prior to
such recapitalization, reorganization or exchange, with each share of such
securities having a "value" for such purposes equal to the price per share
of sales to the public as part of such offering. Each Securityholder hereby
agrees that (if so requested by the Board or the Requisite Holders) it will
consent to and vote for a recapitalization, reorganization or exchange of
the existing equity securities of the Partnership into a single class of
common stock of the Company that is consistent with the provisions
described above and that the Board and the Requisite Holders find
acceptable and will take all necessary or desirable actions in connection
with the consummation of the recapitalization, reorganization or exchange.
Without limiting the generality of the foregoing, each holder of Securities
hereby waives any dissenters rights, appraisal rights or similar rights in
connection with such recapitalization, reorganization or exchange.
(b) Notwithstanding the foregoing, unless the Xxxx Group otherwise
agrees, any such recapitalization, reorganization or exchange will be
structured and implemented in the manner contemplated by Section 13.9 of
the Partnership Agreement; provided that the shares of the common stock of
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the Company will be allocated among the Securityholders as described in
paragraph (a) above. Notwithstanding anything else contained in this
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Agreement to the contrary, this Section 4(b) may not be amended without the
prior written consent of the Xxxx Group (so long as it is a
Securityholder).
5. Liquidity Event.
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(a) The Partnership shall seek to effectuate a Liquidity Event upon
the request of a majority of the Xxxx Group (the "Majority Holder").
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(b) From and after the time (if any) when the Partnership has
informed each of the Securityholders that it desires to effectuate a
Liquidity Event, the Partnership and each holder of Securities shall (i)
cooperate in good faith to effectuate such Liquidity Event, and (ii)
consent to and raise no objections against, and take all necessary or
desirable actions in connection with, the consummation of such Liquidity
Event, including those reasonably requested by the Seller (as defined
below). Without limiting the generality of the foregoing, subject to the
terms set forth in this Section 5, (i) each holder of Securities hereby
waives any dissenters rights, appraisal rights or similar rights in
connection with such Liquidity Event and (ii) if all or any portion of any
such Liquidity Event is structured as a sale of securities, each holder of
Securities shall agree to sell any or all of his or its securities and
rights to acquire securities on the terms and conditions approved by the
Board, if such Liquidity Event is being effectuated by the Board, or the
Majority Holder, if such Liquidity Event is being effectuated by the
Majority Holder. The Person seeking to effectuate such Liquidity Event is
referred to herein as the "Seller".
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(c) In connection with any Liquidity Event (whether by sale, merger,
recapitalization, reorganization, consolidation, combination or otherwise)
pursuant to this Section 5, each holder of Securities immediately prior to
such Liquidity Event shall receive (on behalf of itself and, where
applicable (e.g., the structure contemplated by Section 13.9 of the
Partnership Agreement is implemented), its direct and indirect
securityholders) the same form of consideration and the same portion of the
aggregate consideration that such holder of Securities would have received
if the aggregate consideration paid by the Buyer to all direct and indirect
securityholders in connection with such Liquidity Event (the "Aggregate
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Consideration") had been paid directly to the Partnership and then
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distributed by the Partnership in a complete liquidation pursuant to the
terms of the Partnership Agreement as in effect immediately prior to such
Liquidity Event (and after giving effect to any transfer taxes payable in
connection with such Liquidity Event, the amount of which will be paid
directly to the persons owing such taxes). In furtherance thereof, each
holder of then currently exercisable rights to acquire any class of
Securities will be given an opportunity to either (A) exercise such rights
prior to the consummation of such Liquidity Event and participate in such
sale as holders of such class of Securities or (B) upon the consummation of
such Liquidity Event, or at such other time agreed to by such holder,
receive in exchange for (or, if applicable, upon the exercise of) such
rights, the consideration contemplated to be received by such holder as a
result of such Liquidity Event in the agreement or instrument pursuant to
which such holder acquired such rights from the Partnership or, if no such
consideration is
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contemplated thereby, the consideration such holder would have received if
such holder exercised such rights prior to the consummation of such
Liquidity Event less the amount such holder would have paid to the
Partnership to exercise such rights. Each holder of Securities shall take
all necessary or desirable actions in connection with the receipt of the
Aggregate Consideration from such Liquidity Event as is requested by the
Majority Holder to effectuate the foregoing.
(d) If the Partnership or the holders of the Partnership's securities
enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities and Exchange
Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), each holder of
Securities which is not an accredited investor (as that term is defined in
Rule 501 or any similar rule then in effect ("Rule 501") promulgated by the
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Securities and Exchange Commission) will, at the request of the Seller,
appoint a purchaser representative (as such term is defined in Rule 501)
reasonably acceptable to the Seller. If any holder of Securities appoints a
purchaser representative designated by the Seller, the Partnership will be
responsible for the fees of the purchaser representative so appointed. If
any holder of Securities declines to appoint the purchaser representative
designated by the Seller, such holder will appoint another purchaser
representative (reasonably acceptable to the Seller), and such holder will
be responsible for the fees of the purchaser representative so appointed.
(e) The Partnership will pay the costs of any sale of Securities
pursuant to a Liquidity Event to the extent such costs are incurred for the
benefit of all holders of Securities and are not otherwise paid by the
acquiring party, but including in any event the reasonable fees and
disbursements of one counsel chosen by a majority of the Xxxx Group (so
long as it is a Securityholder). Costs incurred by any holder of
Securities on its own behalf will not be considered costs of the
transaction hereunder.
(f) The provisions of this Section 5 shall terminate upon the
consummation of an IPO or a Liquidity Event.
(g) Notwithstanding the foregoing, unless the Xxxx Group otherwise
agrees, any such Liquidity Event will be structured and implemented in the
manner contemplated by Section 13.9 of the Partnership Agreement; provided
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that the Aggregate Consideration will be paid among the direct and indirect
holders of Securities as described in paragraph (c) above. Notwithstanding
anything else contained in this Agreement to the contrary, this Section
5(g) may not be amended without the prior written consent of the Xxxx Group
(so long as they are Securityholders).
(h) The Majority Holder shall provide Xxx X. Xxxxxxx with notice of a
Liquidity Event at least 5 days prior to the execution of a letter of
intent or a definitive agreement to effectuate a Liquidity Event.
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6. Preemptive Rights.
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(a) Except as set forth in subparagraph (b) below, the Partnership
and the General Partner will not issue, sell or otherwise transfer for
consideration to the Xxxx Group or its Affiliates (an "Issuance") at any time
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prior to an IPO, any Equity Securities or Membership Interests (the "Preemptive
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Interests") unless, at least 30 days and not more than 60 days prior to such
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issuance, the Partnership or the General Partner, as the case may be, notifies
each Securityholder in writing of the Issuance (including the price, the
purchasers thereof and the other terms thereof) and grants to each
Securityholder, the right (the "Right") to subscribe for and purchase such
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Preemptive Interests so issued at the same price and on the same terms as issued
in the Issuance such that, after giving effect to the Issuance and exercise of
the Right, the Preemptive Interests owned by such holder shall represent the
same percentage of the outstanding Class A Common Units, Class L Common Units
and Membership Interests as were owned by such holder prior to the Issuance on a
fully diluted basis, or such lesser amount designated by such holder. The Right
may be exercised by such holder at any time by written notice to the Partnership
and the General Partner, received by the Partnership and the General Partner
within 15 days after receipt by such holder of the notice from the Partnership
and the General Partner referred to above. The closing of the purchase and sale
pursuant to the exercise of the Right shall occur at least 10 days after the
Partnership and the General Partner receive notice of the exercise of the Right
and concurrently with the closing of the Issuance. In the event that the
consideration received by the Partnership and the General Partner in connection
with an Issuance is property other than cash, each Securityholder may, at its
election, pay the purchase price for such additional securities in such property
or solely in cash. In the event that any such holder elects to pay cash, the
amount thereof shall be determined based on the fair value of the consideration
received or receivable by the Partnership and/or the General Partner in
connection with the Issuance.
(b) Notwithstanding the foregoing, the Right shall not apply to
issuances of equity securities (or securities convertible into or exchangeable
for, or options to purchase, such units), pro rata to all holders of Common
Units, as a dividend on, subdivision of or other distribution in respect of, the
Common Units in accordance with the Partnership's Partnership Agreement, nor
issuances of equity securities (or securities convertible into or exchangeable
for, or options to purchase, such membership interests), pro rata to all holders
of Membership Interests, as a dividend on, subdivision of or other distribution
in respect of the Membership Interests in accordance with the General Partner's
LLC Agreement.
(c) The provisions of this paragraph 6 will terminate upon the
consummation of an IPO (as defined in paragraph 8).
7. Change in General Partner. Without the consent of all of the
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holders of Membership Interests (or other equity interests in a Successor
General Partner described below), no Successor General Partner (as defined in
the Partnership Agreement) will be elected by the Securityholders and admitted
to the Partnership (and no successor general partner of any Subsidiary of the
Partnership will be elected by the Securityholders and admitted to such
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Subsidiary) unless such Successor General Partner is a newly formed, single
purpose entity with no other assets or liabilities, and each holder of
Membership Units (or such other equity interests described above) is given an
opportunity to purchase an ownership interest in such Successor General Partner
equivalent in value, voting power and other rights and privileges to the
ownership interest in the General Partner which such holder of Membership
Interests (or such other equity interests described above) has in such General
Partner at such time solely in exchange for such holder's Membership Interests
(or such other equity interests described above), and the ownership interests in
such Successor General Partner become subject to this Agreement as if such
ownership interests were Membership Units. Further, the Securityholders will not
elect to dissolve the General Partner or the Partnership (or any successor to
such entity) in order to evade or avoid the restrictions set forth above, to
remove a holder of Units or Membership Interests, or otherwise to defeat or
evade the intent of this paragraph 7.
8. Certain Definitions.
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"Affiliate" is defined in the Recapitalization Agreement.
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"Xxxx Group" means the General Partner and Bain/ACR, L.L.C.
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"Board" means the Board of Managers of the General Partner.
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"Class A Common Units" means (i) any Class A Common Units (as defined
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in the Partnership Agreement) purchased or otherwise acquired by any
Securityholder, and (ii) any equity securities issued or issuable directly or
indirectly with respect to any of the Class A Common Units referred to in clause
(i) above, by way of a dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Class L Common Units" means (i) any Class L Common Units (as defined
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in the Partnership Agreement) purchased or otherwise acquired by any
Securityholder, and (ii) any equity securities issued or issuable directly or
indirectly with respect to any of the Class L Common Units referred to in clause
(i) above, by way of a dividend or split or exchange or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Common Units" is defined in the Partnership Agreement.
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"Executive Agreements" means each of the Executive Purchase Agreements
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entered into from time to time by and among the Partnership, the General
Partner, Bain/ACR, L.L.C. and certain of the executives of the Partnership and
the General Partner.
"Equity Securities" is defined in the Partnership Agreement.
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"General Partner" is defined in the preamble.
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"Indirect Owner" means with respect to each Person which is (i) a
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corporation or any similar entity, each shareholder and each Indirect Owner of
such shareholder; (ii) a limited liability company or any similar entity, each
member and each Indirect Owner of such member; (iii) a partnership (whether
limited or general) or similar entity, each partner and each Indirect Owner of
such partner; (iv) a trust or any similar entity, each beneficiary who has the
legal right (or whose spouse has the present legal right) to demand a
distribution of the trust's interest and each Indirect Owner of such beneficiary
or such beneficiary's spouse (whether in such beneficiary's capacity as a
beneficiary, trustee or otherwise and whether by revocation or amendment of such
trust or otherwise).
"IPO" means a public offering either (a) where the Partnership has
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received net proceeds of at least $75 million (measured as of the time of
issuance) or (b) which constitute at least 20% of the Partnership's outstanding
Units (measured as of the date of determination).
"Liquidity Event" is defined in the Partnership Agreement.
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"LLC Agreement" is defined in the preamble.
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"Membership Interests" means membership interests in the General
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Partner.
"Other Securities" means Securities owned by Securityholders that are
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not a part of the Bain Group.
"Partnership Agreement" is defined in the preamble.
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"Preferred Units" means the Series A Preferred Units of the
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Partnership (as defined in the Partnership Agreement).
"Public Sale" means any sale of Securities to the public pursuant to
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an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act.
"Recapitalization Agreement" means that certain Recapitalization
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Agreement by and among the Partnership, Bain/ACR, L.L.C., ACR Management,
L.L.C., Xxx X. Xxxxxxx and the other parties signatory thereto.
"Registration Rights Agreement" means that certain Registration Rights
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Agreement, dated as of the date hereof, between the Partnership and its
securityholders, as amended or modified from time to time.
"Securities" means, collectively, Class A Common Units, Class L Common
----------
Units, Preferred Units, Membership Interests and any other equity interests of
the Partnership or the
11
General Partner, but explicitly excluding rights to acquire equity interests of
the Partnership or the General Partner. As to any particular Securities, such
units and membership interests shall cease to be Securities when they have been
disposed of in a Public Sale or repurchased by the Partnership, the General
Partner or any Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended, and
--------------
applicable rules and regulations thereunder, and any successor to such statute,
rules or regulations. Any reference herein to a specific section, rule or
regulation of the Securities Act shall be deemed to include any corresponding
provisions of future law.
"Securities and Exchange Commission" includes any governmental body
----------------------------------
or agency succeeding to the functions thereof.
"Subsidiary" is defined in the Partnership Agreement.
----------
9. Amendment and Waiver. Except as otherwise provided herein, no
--------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Partnership, the General Partner or the holders of
Securities unless such modification, amendment or waiver is approved in writing
by the holders of at least a majority of the Securities held by the Xxxx Group;
provided that no such amendment or modification that would adversely affect
-------- ----
holders of one class or group of Securities in a manner different than holders
of any other class or group of Securities (other than amendments and
modifications in connection with the issuances of Equity Securities permitted by
Section 3.6 of the Partnership Agreement) shall be effective against the holders
of such class or group of Securities without the prior written consent of
holders of at least a majority of Securities of such class or group adversely
affected thereby. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute a waiver
of any such breach or any other covenant, duty, agreement or condition.
10. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
11. Entire Agreement. This Agreement, those documents expressly
----------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12
12. Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement shall bind and inure to the benefit of and be enforceable by the
Partnership, the General Partner and their successors and permitted assigns and
the Securityholders and any subsequent holders of Securities and the respective
successors and permitted assigns of each of them, so long as they hold
Securities. Neither the Partnership nor the General Partner may assign any of
its obligations under this Agreement (other than in connection with a merger,
consolidation or other form of reorganization permitted by other sections of
this Agreement) without the prior written consent of a majority of the Bain
Group.
13. Counterparts. This Agreement may be executed in separate
------------
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
14. Remedies. Any Person having rights under any provision of this
--------
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement. Nothing contained in this Agreement will be construed to confer upon
any Person who is not a signatory hereto any rights or benefits, as a third
party beneficiary or otherwise.
15. Notices. Any notice provided for in this Agreement will be in
-------
writing and will be either personally delivered, or received by certified mail,
return receipt requested, or sent by reputable overnight courier service
(charges prepaid) to the Partnership at the address set forth below and to any
other recipient and to any subsequent holder of Securities subject to this
Agreement at such address as indicated by the Partnership's records, or at such
address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices will be deemed
to have been given hereunder when delivered personally, three days after deposit
in the U.S. mail and one day after deposit with a reputable overnight courier
service. The Partnership's and General Partner's addresses are:
To the Partnership:
------------------
Xxxxxxx Xxxxx Rental Holdings, L.P.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx
13
To the General Partner:
----------------------
ACR Management, L.L.C.
c/o Bain Capital Inc.
Two Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxx
16. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Pennsylvania. Any dispute relating hereto shall
be heard in the state or federal courts of Pennsylvania, and the parties agree
to jurisdiction and venue therein.
17. Descriptive Headings; Interpretation. The descriptive headings
------------------------------------
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation. Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended or otherwise modified from time to time in accordance with
the terms thereof, and if applicable hereof. Without limiting the generality of
the immediately preceding sentence, no amendment or other modification to any
agreement, document or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification. The use of the words "or," "either" and "any" shall not be
exclusive.
18. No Strict Construction. The parties hereto have participated
-----------------------
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
19. Issuances of Additional Securities. Notwithstanding anything
----------------------------------
contained herein to the contrary, neither the Partnership nor the General
Partner shall issue any securities of the same type as any Securities held by
any Securityholder to any recipient that is not a party hereto (other than in
connection with a public offering of the Partnership's equity securities
registered under the Securities Act) unless the recipient thereof executes the
agreements that such recipient would be required to execute pursuant to Section
3 if such recipient were a transferee of such securities, thereby becoming a
party hereto and thereto, prior to, or concurrently with,
14
receiving securities of the Partnership or the General Partner. Any issuance or
attempted issuance in violation of any provision of this Agreement shall be
void, and neither the Partnership nor the General Partner shall record such
issuance on its books or treat any purported recipient of such securities as the
owner of such securities for any purpose.
* * * * *
15
IN WITNESS WHEREOF, the parties hereto have executed this
Securityholders Agreement as of the day and year first above written.
XXXXXXX XXXXX RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Its: Secretary
------------------------------------------
ACR MANAGEMENT, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Its: Secretary
------------------------------------------
BAIN/ACR, L.L.C.
By: /s/ Xxxxxx X. Xxx
------------------------------------------
Its: President
------------------------------------------
XXXXXXX IRON AND METAL COMPANY
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
A General Partner
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxxxx
/s/ Xxxxxx X. Xxxx
-----------------------------------------------
Xxxxxx X. Xxxx
Continuation of signature page to
the Securityholders Agreement
/s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx
