Execution Copy
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") made the 28th day of March, 2000
by and among DUALSTAR TECHNOLOGIES CORPORATION, a Delaware corporation (the
"Company"), and BLACKACRE CAPITAL MANAGEMENT L.L.C. and CERBERUS CAPITAL
MANAGEMENT, L.P. on behalf of various funds and accounts (collectively,
"Blackacre"), and Xxxxxxx Xxxxx and Xxxxxx X. Xxxxxxxx (such persons or
entities, each of which is listed on Schedule "A" hereto, are hereinafter
referred to individually as a "Stockholder" or collectively as the
"Stockholders", unless otherwise individually named).
WHEREAS, the Stockholders are stockholders, or may hereafter become
stockholders upon conversion or exercise of outstanding securities, of the
Company, and the Stockholders desire to make certain arrangements among
themselves and with the Company.
NOW, THEREFORE, in consideration of the foregoing premise and the covenants
and agreements contained herein, the parties agree as follows:
1. Nomination of Directors. Commencing with the 1999 Annual Meeting of
Stockholders of the Company (to be held in early 2000), and at each stockholders
meeting thereafter at which directors of the Company are to be elected, for so
long as Blackacre beneficially owns shares of Stock representing (or securities
convertible into or exercisable for) at least twenty percent (20%) of the Stock
of the Company outstanding on a fully-diluted basis, the Company shall recommend
to shareholders of the Company for election as Directors of the Company, that
number of persons designated by Blackacre as shall constitute a simple majority
of the Board as then constituted (the "Blackacre Designees").
2. Voting. So long as Blackacre beneficially owns shares of Stock
representing (or securities convertible into or exercisable for) at least twenty
percent (20%) of the Stock of the Company outstanding on a fully-diluted basis,
each Stockholder will vote, or direct the voting of, all of the shares of common
stock, par value $.01 per share, of the Company (the "Stock") as to which such
Stockholder now has or hereafter shall have voting power (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
at all meetings of stockholders of the Company for the election of Directors, or
shall express or direct the expression of consent to any such action of
stockholders taken without a meeting, for the election as Directors of (x) the
Blackacre Designees and (y) one (1) person nominated by Xxxxxxx Xxxxx and Xxxxxx
X. Xxxxxxxx.
3. Tag-Along Sale Rights.
3.1. Tag-Along by Blackacre. If any of the Stockholders other than
Blackacre, at any time or from time to time, in one or in a series of
transactions, enters into an agreement to transfer, sell or otherwise
dispose of, directly or indirectly (a "Tag-Along Sale"), any Stock to any
person or entity, Blackacre shall have the right to participate in such
Tag-Along Sale by selling up to the total number of shares of Stock
proposed to be sold in the Tag-Along Sale by all Stockholders (other than
Blackacre) participating in the Tag-Along Sale pursuant to Section 3.3.
3.2. Tag Along by Stockholders Other than Blackacre. If Blackacre at
any time or from time to time, in one or in a series of transactions,
enters into a Tag-Along Sale in respect of any Stock to any person or
entity, all Stockholders other than Blackacre shall have rights to
participate in such Tag-Along Sale by selling up to the total number of
shares of Stock proposed to be sold in the Tag-Along Sale by Blackacre
pursuant to Section 3.3.
3.3. Notice. Any Stockholder shall, if participating in a Tag-Along
Sale (the Notifying Stockholder"), promptly provide the other Stockholders
with written notice of such Tag-Along Sale. The Notice shall set forth: (i)
the name and address of the proposed transferee or purchaser of the Stock
in the Tag-Along Sale; (ii) the name of the seller or transferor and the
number of shares proposed to be transferred or sold; (iii) the proposed
amount and form of consideration to be paid for such shares and the terms
and conditions of payment offered by the proposed transferee or purchaser;
(iv) the number of shares that Blackacre or the Stockholders other than
Blackacre, as the case may be, are entitled to include in the Tag-Along
Sale; and (v) that the proposed transferee or purchaser has been informed
of the "tag-along rights" provided for in this Article 3 and has agreed to
purchase Stock in accordance with the terms thereof. Upon receipt of a
Notice, the recipient Stockholder (the "Recipient") shall within ten (10)
days thereafter give written notice (the "Recipient Notice") to the
Notifying Stockholder and the Company of the Recipient's election
(including number of shares) to be included in the Tag-Along Sale. If a
Recipient fails to provide the Recipient Notice as provided herein, the
Notifying Stockholder is thereafter free to sell in accordance with the
terms set forth in the Notice. Based on the application of the foregoing,
the Company or any officer shall determine the aggregate number of shares
of Stock to be sold by the Stockholder in any given Tag-Along Sale.
3.4. Type of Consideration. The provisions of this Article 3 shall
apply regardless of whether the consideration received in the Tag-Along
Sale is cash, debt, equity securities, property-in-kind, or any combination
thereof.
3.5. Duration. The Tag-Along Sale rights granted in this Article 3
shall continue from the date hereof for so long as Blackacre holds any
Stock, or until the date, if earlier, when the other shareholders cease to
own any Stock, and then shall terminate and be of no further force and
effect.
4. Miscellaneous.
4.1. Amendment. This Agreement and the Schedule hereto may not be
amended except by an instrument in writing signed by or on behalf of each
of the parties hereto.
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4.2. Waiver. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in an instrument in
writing signed by or on behalf of such party.
4.3. Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws
of the State of New York.
4.4. Captions. The Section captions used herein are for reference
purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
4.5. Publicity. None of the parties hereto shall issue any press
release or make any other public statement, in each case relating to or
connected with or arising out of this Agreement or the matters contained
herein, without obtaining the prior approval of the other parties to the
contents and the manner of presentation and publication thereof, except
such reports or other notices that the party issuing or making same has
been advised by counsel are required pursuant to applicable law or
regulation.
4.6. Notice. Any notice required hereunder shall be in writing and
shall be sufficiently given if delivered or sent by reputable overnight
courier and facsimile transmission (in each case with evidence of receipt),
addressed to the Company at its principal office and to the Stockholders at
the addresses set forth on Schedule A hereto. Any party may change such
address by like notice. Such notice shall be deemed to have been given as
of the next business day after it was deposited with the courier service.
4.7. Parties in Interest. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns.
4.8. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
4.9. Entire Agreement. This Agreement, including the Schedule referred
to herein, which forms a part hereof, contains the entire understanding of
the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement on the
date first set forth above.
CERBERUS CAPITAL MANAGEMENT, DUALSTAR TECHNOLOGIES CORPORATION
L.P., on behalf of various funds
and accounts
By: /s/ Xxxx X. Neporent By: /s/ Xxxxxxx Xxxxx
------------------------------- ---------------------------------
Xxxx X. Neporent Xxxxxxx Xxxxx
President and Chief Executive Officer
/s/ Xxxxxxx Xxxxx
---------------------------------
Xxxxxxx Xxxxx, individually
BLACKACRE CAPITAL MANAGEMENT /s/ Xxxxxx X. Xxxxxxxx
L.L.C., on behalf of various funds ---------------------------------
and accounts Xxxxxx X. Xxxxxxxx, individually
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
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SCHEDULE A*
NAMES, ADDRESSES AND STOCK OWNERSHIP OF THE COMPANY
NAME AND ADDRESS COMMON STOCK OWNERSHIP
----------------------------------------------- -------------------------------
435,000
Xxxxxxx Xxxxx
c/o DualStar Technologies Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No. 000-000-0000
Xxxxxx X. Xxxxxxxx 2,000
c/o DualStar Technologies Corporation
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No. 000-000-0000
Cerberus Partners, L.P. --
450 Park Avenue, 28th Floor -------
Xxx Xxxx, Xxx Xxxx 00000
Fax No. 000-000-0000
Blackacre Capital Management L.L.C. --
000 Xxxx Xxxxxx, 00xx Xxxxx -------
Xxx Xxxx, Xxx Xxxx 00000
Fax No. 000-000-0000
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* As of 3/17/00.
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