Exhibit (c)(15)
UNIVERSAL HOSPITAL SERVICES, INC.
FORM OF STOCKHOLDERS' AGREEMENT
Dated as of February 25, 1998
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
Transfer Provisions
2.1 Restrictions on Transfers . . . . . . . . . . . . . . . . . . . 11
2.2 Call by the Company . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Put By Management Holders . . . . . . . . . . . . . . . . . . . 15
2.4 Tagalong . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Dragalong . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.6 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7 Restrictions on Other Agreements . . . . . . . . . . . . . . . 21
2.8 Stockholder Action . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
Registration Rights
3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Piggyback Registration . . . . . . . . . . . . . . . . . . . . 22
3.3 Obligations of the Company . . . . . . . . . . . . . . . . . . 23
3.4 Furnish Information . . . . . . . . . . . . . . . . . . . . . . 27
3.5 Expenses of Registration . . . . . . . . . . . . . . . . . . . 27
3.6 Underwriting Requirements . . . . . . . . . . . . . . . . . . . 27
3.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.9 Market Stand-Off Agreement . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
Certain Miscellaneous Other Provisions
4.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2 Entire Agreement; Amendment; Termination . . . . . . . . . . . 33
4.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.5 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 34
4.6 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.7 Recapitalization, Exchanges, etc. . . . . . . . . . . . . . . . 35
4.8 JWC Representative . . . . . . . . . . . . . . . . . . . . . . 35
4.9 Action Necessary to Effectuate the Agreement . . . . . . . . . 36
4.10 Purchase for Investment; Legend on Certificate . . . . . . . . 36
4.11 Effectiveness of Transfers . . . . . . . . . . . . . . . . . . 37
4.12 Additional Stockholders . . . . . . . . . . . . . . . . . . . . 37
4.13 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.15 Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . 38
4.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.17 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 38
Exhibits
Exhibit A - - Schedule of Stockholders . . . . . . . . . . . . . . . A-1
Exhibit B - - Form of Promissory Note . . . . . . . . . . . . . . . . . B-1
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into as
of February 25, 1998, by and among Universal Hospital Services, Inc., a
Minnesota corporation (the "Company"), those persons listed as the
Management Holders on the signature pages hereof (the "Management Holders")
and those persons listed as the JWC Holders on the signature pages hereof
(the "JWC Holders").
RECITALS
A. Upon consummation of the transactions contemplated by the
Agreement and Plan of Merger, dated as of November 25, 1997 by and among
X.X. Childs Equity Partners, L.P., a Delaware limited partnership, UHS
Acquisition Corp., a Minnesota corporation, and Universal Hospital
Services, Inc., a Minnesota corporation (the "Acquisition Agreement"), and
of certain related transactions to be consummated concurrently therewith,
the Stockholders (as hereinafter defined) will own (and may hereafter
acquire) certain shares of Common Stock (as hereinafter defined) and
certain options, warrants, securities and other rights to acquire from the
Company, by exercise, conversion, exchange or otherwise, shares of Common
Stock or securities convertible into Common Stock.
B. All of the Stockholders desire to enter into this Agreement for
the purpose of regulating certain aspects of the Stockholders'
relationships with one another and with the Company.
AGREEMENT
In consideration of the premises and the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:
ARTICLE I
Definitions
1.1 Definitions. For the purposes of this Agreement, the
following terms shall be defined as follows:
The "1933 Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute thereto, and the rules and regulations of
the SEC promulgated thereunder, all as the same shall be in effect from
time to time.
The "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute thereto, and the rules and
regulations of the SEC promulgated thereunder, all as the same shall be in
effect from time to time.
An "Affiliate" of a specified Person shall mean a Person who,
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with the specified Person and,
when used with respect to the Company or any Subsidiary of the Company,
shall include any holder of at least 5% of the capital stock, or any
officer or director, of the Company or any Subsidiary of the Company.
"Business Day" shall mean any day, other than a Saturday, Sunday or
a day on which commercial banking institutions in New York, New York or
Boston, Massachusetts are authorized or required by law to be closed.
"Call Event" shall have the meaning set forth in Section 2.2(a).
"Call Group" shall have the meaning set forth in Section 2.2(a).
"Call Notice" shall have the meaning set forth in Section 2.2(a).
"Call Option" shall have the meaning set forth in Section 2.2(a).
"Call Price" shall mean, as of any date, a per share price equal to
the remainder of (a) (i) the excess of (A) the product of 4.75 times
EBITDA, over (B) the aggregate amount of the Consolidated Indebtedness as
of the date of the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries, divided by (ii) the aggregate number of
Common Stock Equivalents at the time outstanding, minus, (b) in the case of
Vested Options, the per share exercise price payable in connection with
such Vested Options.
"Call Securities" shall have the meaning set forth in Section
2.2(a).
"Cause" shall mean, with respect to any Management Holder, such
Management Holder's (a) continued failure, whether willful, intentional or
grossly negligent, after written notice, to perform substantially his
duties as an employee of the Company or any of its Subsidiaries, other than
as a result of a "Disability" as defined (if applicable) in any Employment
Agreement by and between the Company and the Management Holder; (b)
dishonesty in the performance of such Management Holder's duties as an
employee of the Company; (c) conviction or confession of an act or acts on
such Management Holder's part constituting a felony under the laws of the
United States or any state thereof; (d) other willful act or omission on
such Management Holder's part which is materially injurious to the
financial condition or business reputation of the Company or any of its
Subsidiaries; (e) breach of any duty or obligation of noncompetition or
confidentiality owed by such Management Holder to the Company or any of its
Subsidiaries; or (f) breach of any provision or covenant contained in any
employment agreement between such Management Holder and the Company or any
of its Subsidiaries, which breach shall not have been cured within sixty
(60) days after notice thereof from the Company to the Management Holder.
"Common Stock" shall mean shares of Common Stock, par value $.01
per share, of the Company.
"Common Stock Equivalents" shall mean, as of any date, (a) all
shares of Common Stock outstanding as of such date and (b) all shares of
Common Stock that may be acquired as of such date pursuant to Vested
Options.
The "Company" shall mean Universal Hospital Services, Inc., a
Minnesota corporation, and its successors and assigns.
"Company Call Period" shall have the meaning set forth in Section
2.2(a).
"Consolidated Indebtedness" shall mean, as of any date, the
aggregate amount outstanding, on a consolidated basis, of (a) all
indebtedness of the Company and its Subsidiaries for borrowed money (other
than intercompany debt), (b) those letters of credit that would be required
to be honored upon liquidation of the Company and/or its Subsidiaries (c)
all notes payable, drafts accepted and other obligations (including,
without limitation, any amounts representing deferred signing bonuses
payable to various employees of the Company in accordance with the terms of
their respective employment agreements with the Company and any Promissory
Note (as hereinafter defined) of the Company issued pursuant to Section
2.3(e) hereof) representing extensions of credit to the Company and/or its
Subsidiaries, whether or not representing obligations for borrowed money,
and (d) that portion of obligations with respect to capital leases which is
reflected as a liability on the most recently prepared consolidated balance
sheet of the Company and its Subsidiaries.
"Cost Price" shall mean, with respect to any Subject Securities,
the purchase price, if any, per share of Common Stock or per Vested Option,
as the case may be, paid to the Company for such Subject Securities by the
original holder thereof; provided, however, that in the event that any such
Subject Securities were obtained by the holder thereof pursuant to the
terms of an agreement in writing between JWC Equity Partners and/or UHS
Acquisition Corp., a Minnesota corporation, and the holder of such Subject
Securities, as referenced in the first clause of Section 1.6(a) or the
first clause of Section 1.8(a) of the Acquisition Agreement, then the Cost
Price of such Subject Securities shall be (a) in the case of Common Stock,
the Merger Consideration (as defined in the Acquisition Agreement), and (b)
in the case of Vested Options, the Option Consideration (as defined in the
Acquisition Agreement). If at any time the number of shares of Common
Stock outstanding is (a) increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of shares of Common Stock or
(b) decreased by a combination of shares of such Common Stock, following
the record date for such stock dividend, subdivision, split-up or
combination, the Cost Price per share of Common Stock shall be adjusted
upward or downward, as appropriate, to reflect the decrease or increase in
shares of Common Stock outstanding.
"Credit Agreement" means the Credit Agreement dated as of February
25, 1998, among the Company, the lenders party thereto in their capacities
as lenders thereunder and Bankers Trust Company, as administrative agent,
together with the related documents thereto (including, without limitation,
any guarantee agreements and security documents), in each case as such
agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including
any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding additional borrowers or guarantors
thereunder) all or any portion of the indebtedness under such agreement or
any successor or replacement agreement and whether by the same or any other
administrative agent, lender or group of lenders.
"Designated Employee" and "Designated Employees" shall have the
meanings set forth in Section 2.2(e).
"Dragalong Group" shall have the meaning set forth in Section
2.5(a).
"EBITDA" shall mean, as of any date for which it is to be
determined, the consolidated earnings of the Company and its Subsidiaries
before interest, taxes, depreciation and amortization and after deduction
of all operating expenses, all as calculated in accordance with generally
accepted accounting principles consistently applied, as reflected in the
Company's consolidated financial statements for the four (4) most recent
consecutive fiscal quarters of the Company ending at least 45 days prior to
such date.
"Equity Partners Agreement" shall have the meaning set forth in
Section 4.8.
"Executive Officers" shall mean Xxxxx X. Xxxxxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx and Xxxx X.
Xxxxxxx.
"Good Reason" shall mean, with respect to any Management Holder,
such Management Holder's resignation from his employment with the Company
or any of its Subsidiaries following and because of (a) the Company's
reducing or reassigning a material portion of the Management Holder's
duties under his employment agreement, if any, without Cause (b) in the
case of Xxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxxxx or Xxxx X. Xxxxxxx, the Company's requiring such Executive Officer
to relocate outside the greater Minneapolis, Minnesota area; (c) in the
case of Xxxxx X. Xxxxx only, the Company's requiring Xx. Xxxxx to relocate
outside the greater Madison, Wisconsin area; (d) a reduction of the
Management Holder's base salary other than in connection with an
across-the-board reduction of executive compensation imposed by the Board
of Directors of the Company in response to negative financial results or
other adverse circumstances affecting the Company; (e) an illness of the
Management Holder, that, in the good faith determination of the Board of
Directors of the Company, is likely to result in the Management Holder
becoming disabled and unable to continue his employment with the Company;
or (f) a material breach by the Company of any Employment Agreement by and
between the Company and the Management Holder.
"Holder" shall have the meaning set forth in Section 3.1.
"Indenture" shall mean the Indenture dated as of February 25, 1998
among Universal Hospital Services, Inc. and First Trust National
Association, as amended and in effect from time to time.
"Initiating Stockholder" shall have the meaning set forth in
Section 2.4(a).
"JWC Equity Partners" shall mean X.X. Childs Equity Partners, L.P.,
a Delaware limited partnership.
"JWC Holders" shall have the meaning set forth in the preamble
preceding the Recitals to this Agreement and shall also include Permitted
Transferees of the JWC Holders and other transferees of the JWC Holders
unless immediately prior to such Transfer such transferee was a Management
Holder.
"JWC Inc." shall mean X.X. Childs Associates, Inc., a Delaware
corporation.
"JWC Representative" shall have the meaning set forth in Section
4.8.
"Management Holders" shall have the meaning set forth in the
preamble preceding the Recitals to this Agreement and shall also include
(a) any director, officer or management employee of the Company or any of
its Subsidiaries (other than JWC Holders) who, with the written consent of
the Company and the JWC Representative, hereafter becomes a party to this
Agreement and (b) Permitted Transferees of the Management Holders, unless
immediately prior to such Transfer such transferee was a JWC Holder.
"Non-Initiating Management Holders" shall have the meaning set
forth in Section 2.3(c).
"Participating Notice" shall have the meaning set forth in Section
2.4(a).
"Participating Offerees" shall have the meaning set forth in
Section 2.4(a).
"Participating Securities" shall have the meaning set forth in
Section 2.4(a).
"Permitted Transfer" shall mean:
(a) a Transfer of any Subject Securities between any JWC Holder or
Management Holder who is a natural person and such Stockholder's spouse,
children, parents or siblings (whether natural, step or by adoption) or to
a trust solely for the benefit of one or more of any of such Persons;
provided that with respect to any such Transfer, the Stockholder retains,
as trustee or by some other means, the sole authority to vote such Subject
Securities (including any Common Stock that may be acquired pursuant to any
Vested Options);
(b) a Transfer of Subject Securities by a JWC holder to JWC Inc.
or to an officer, employee or consultant of JWC Inc. or to a corporation or
to a partnership (or other entity for collective investment, such as a
fund) which is (and continues to be) controlled by, controlling or under
common control with JWC Inc.;
(c) a Transfer of Subject Securities (i) by a Management Holder to
another Management Holder or (ii) from a JWC Holder to another JWC Holder;
(d) a Transfer of Subject Securities between any Stockholder who
is a natural person and such Stockholder's guardian or conservator; or
(e) (i) a bona fide pledge of Subject Securities by a JWC Holder
to a bank or financial institution or (ii) any pledge existing at the date
hereof of Subject Securities by a Management Holder.
No permitted Transfer shall be effective unless and until the transferee of
the Subject Securities so transferred executes and delivers to the company
an executed counterpart of this Agreement in accordance with Section 4.13
hereof.
"Permitted Transferee" shall mean any Person who shall have
acquired and who shall hold any Subject Securities pursuant to a Permitted
Transfer.
"Person" means an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government or any
agency or political subdivision thereof, or other entity.
"Promissory Note" shall have the meaning set forth in Section
2.3(e).
"Public Float Date" shall mean the first date on which shares of
Common Stock shall have been sold pursuant to one or more Public Offerings
in which the aggregate proceeds (before deducting underwriter discounts and
commissions) to the Company and the selling stockholders, if any, of such
shares equal or exceed $25 million.
A "Public Offering" shall mean the completion of a sale of shares
of Common Stock pursuant to a registration statement which has become
effective under the 1933 Act, excluding registration statements on Form S-4
or Form S-8 or similar limited purpose forms.
"Put Event" shall have the meaning set forth in Section 2.3(a).
"Put Notice" shall have the meaning set forth in Section 2.3(a).
"Put Option" shall have the meaning set forth in Section 2.3(a).
"Put Period" shall have the meaning set forth in Section 2.3(a).
"Put Price" shall mean, as of any date, a per share price equal to
the remainder of (a) (i) the excess of (A) the product of 4.5 times EBITDA,
over (B) the aggregate amount of the Consolidated Indebtedness as of the
date of the most recently prepared consolidated balance sheet of the
Company and its Subsidiaries, divided by (ii) the aggregate number of
Common Stock Equivalents at the time outstanding, minus, (b) in the case of
Vested Options, the per share exercise price payable in connection with
such Vested Options.
"Put Securities" shall have the meaning set forth in Section
2.3(a).
"Registrable Securities" shall mean, as of any date, with respect
to any Stockholder, (a) all shares of Common Stock held by such Stockholder
as of such date and (b) all shares of Common Stock that may be acquired as
of such date by such Stockholder upon exercise of Vested Options; provided
that, as to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement (other
than a registration statement on Form S-8) with respect to the sale or
exchange of such securities shall have become effective under the 1933 Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) a registration statement on Form S-8 with
respect to such securities shall have become effective under the 1933 Act,
(iii) such securities shall have been sold or acquired under a Rule 144
Transaction, or (iv) such securities have ceased to be outstanding.
"Rule 144 Transaction" means a transfer of Common Stock (a)
complying with Rule 144 under the 1933 Act as such rule or a successor
thereto is in effect on the date of such transfer (but only a sale pursuant
to a "brokers transaction" as defined in clauses (i) and (ii) of paragraph
(g) of Rule 144 as in effect on the date hereof) and (b) occurring at a
time when the Common Stock is registered pursuant to Section 12 of the 1934
Act.
"Sale Request" shall have the meaning set forth in Section 2.5(a).
"Schedule of Stockholders" shall refer to the Schedule of
Stockholders attached hereto as Exhibit A as from time to time amended
pursuant to Section 4.2.
"SEC" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the 1933 Act.
"Stockholder" shall mean any party hereto other than the Company,
including any Person who hereafter becomes a party to this Agreement
pursuant to Section 4.13 hereof.
"Stockholder Group" shall mean any of (a) the JWC Holders taken as
a group or (b) the Management Holders taken as a group. The Company shall
not in any case be deemed to be a member of any Stockholder Group (whether
or not the Company holds or repurchases any Common Stock Equivalents).
"Subject Securities" shall mean any Common Stock or Vested Options
now or hereafter held by any Stockholder.
"Subsidiary" with respect to any Person (the "parent") shall mean
any Person of which such parent, at the time in respect of which such term
is used, (a) owns directly or indirectly more than fifty percent (50%) of
the equity or beneficial interest, on a consolidated basis, or (b) owns
directly or controls with power to vote, indirectly through one or more
Subsidiaries, shares of capital stock or beneficial interest having the
power to cast at least a majority of the votes entitled to be cast for the
election of directors, trustees, managers or other officials having powers
analogous to those of directors of a corporation. Unless otherwise
specifically indicated, when used herein the term Subsidiary shall refer to
a direct or indirect Subsidiary of the Company.
"Third Party" means any Person other than the Company.
"Transfer" shall mean to transfer, sell, assign, pledge,
hypothecate, give, grant or create a security interest in or lien on, place
in trust (voting or otherwise), assign an interest in or in any other way
encumber or dispose of, directly or indirectly and whether or not by
operation of law or for value, any of the Subject Securities.
"Vested Options" shall mean, as of any date, options, warrants,
securities and other rights to acquire from the Company, by exercise,
conversion, exchange or otherwise, shares of Common Stock or securities
convertible into Common Stock, but only to the extent that such options,
warrants, securities and other rights are both, as of such date, (a) vested
under the terms thereof or under any plan, agreement or instrument pursuant
to which such options, warrants, securities and other rights were issued,
and (b) so exchangeable, exercisable or convertible.
ARTICLE II
Transfer Provisions
2.1 Restrictions on Transfers.
(a) Without the prior written consent of the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders, no
Stockholder shall Transfer all or any part of the Subject Securities at the
time held by such Stockholder to any Person.
(b) The provisions of this Section 2.1 shall not apply to a
Transfer which is (i) a Permitted Transfer, (ii) pursuant to a Public
Offering, or (iii) after a Public Offering, pursuant to a Rule 144
Transaction.
2.2 Call by the Company.
(a) (i) If the employment of a Management Holder by the Company
or any of its Subsidiaries shall terminate (a "Call Event") for any
reason prior to the Public Float Date, then, subject to Section
2.2(a)(ii), the Company shall have the right to purchase (the "Call
Option"), by delivery of a written notice (the "Call Notice") to such
terminated Management Holder (with a copy thereof to the JWC
Representative) no later than 90 days after the date of the Call Event
(the "Company Call Period"), and such Management Holder and such
Management Holder's direct and indirect transferees (a "Call Group")
shall be required to sell, all or any portion of the Subject
Securities which are held by the members of the Call Group on the date
of such Call Event that (A) were originally issued by the Company to
such Management Holder, and (B) were owned by such Management Holder
or his direct or indirect transferees on the date of the Call Event
(such Subject Securities to be purchased hereunder being referred to
collectively as the "Call Securities") at, except as otherwise
provided in Section 2.2(a)(ii) hereof, a price per share equal to the
greater of (x) the Call Price of such Call Securities as of the date
of the Call Event and (y) the Cost Price of such Call Securities.
(ii) Notwithstanding anything set forth in this
Section 2.2 to the contrary, in the event a Management Holder resigns
without Good Reason from his employment with the Company or any of its
Subsidiaries, or his employment is terminated for Cause by the Company
or a Subsidiary, then the purchase price per share payable for the
Call Securities shall be an amount equal to the Cost Price of such
Call Securities.
(b) The closing of any purchase of Call Securities by the Company
from a Call Group pursuant to this Section 2.2 shall take place at the
principal office of the Company on such date within 30 days after the
expiration of the Company Call Period with respect to such Call Group as
the Company shall specify to the members of such Call Group in writing. At
such closing, the members of the Call Group shall deliver, against payment
for the Call Securities in accordance with Section 2.2(f) hereof, to the
Company certificates and/or other instruments representing, together with
stock or other appropriate powers duly endorsed with respect to, the Call
Securities, free and clear of all claims, liens and encumbrances. All of
the foregoing deliveries will be deemed to be made simultaneously and none
shall be deemed completed until all have been completed.
(c) Notwithstanding anything set forth in this Section 2.2 to the
contrary, prior to the exercise by the Company of its Call Option to
purchase Call Securities pursuant to this Section 2.2, one or more
prospective or existing employees of the Company or any Subsidiary may be
designated by the Chief Executive Officer of the Company, subject to the
approval of the Board of Directors of the Company (individually, a
"Designated Employee" and, collectively, "Designated Employees"), who shall
have the right, but not the obligation, to exercise the Call Option and to
acquire, in lieu of the Company, some or all (as determined by the Company)
of the Call Securities that the Company is entitled to purchase from the
Call Group hereunder, for cash and otherwise on the same terms and
conditions as set forth in Section 2.2(b) which apply to the repurchase of
Call Securities by the Company. Concurrently with any such purchase of
Call Securities by any such Designated Employee, such Designated Employee
shall execute a counterpart of this Agreement whereupon such Designated
Employee shall be deemed a "Management Holder" and shall have the same
rights and be bound by the same obligations as the other Management Holders
hereunder. Payment under this Section 2.2(c) and under Section 2.2(d)
below shall be made by a certified check or checks payable to the
respective members of the Call Group, in an amount equal to the purchase
price for such Call Securities under Section 2.2(a) hereof.
(d) If and to the extent that, subsequent to a Call Event, (i)
neither the Company nor any Designated Employee elects to exercise the Call
Option by delivery of a Call Notice prior to the expiration of the Company
Call Period with respect to such Management Holder in accordance with this
Section 2.2 and (ii) if applicable, the Management Holder has not delivered
a Put Notice to the Company prior to the expiration of the Put Period with
respect to such Management Holder in accordance with Section 2.3(a), then
the JWC Holders, pro rata in accordance with the respective Common Stock
Equivalents at the time held by the JWC Holders so exercising their rights
under this Section 2.2(d), may exercise the Call Option in lieu of the
Company and such Designated Employees by delivery of a Call Notice to such
terminated Management Holder no later than 30 days after the expiration of
the Company Call Period with respect to such Management Holder. The
closing of any purchase of Call Securities by such JWC Holders shall take
place on such date within 60 days after the expiration of the Company Call
Period with respect to such Management Holder as the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders so
exercising their rights under this Section 2.2(d) shall specify to the
members of such Call Group in writing, provided that if any such JWC Holder
fails to purchase all or a portion of the number of Call Securities which
such JWC Holder may purchase pursuant to this Section 2.2(d), then the
other JWC Holders so exercising their rights under this Section 2.2(d)
shall be entitled to purchase such Call Securities (pro rata based upon
their respective Common Stock Equivalents at the time held, or as otherwise
agreed, by such JWC Holders).
(e) If none of the Company, any Designated Employees or any JWC
Holders elects to exercise the Call Option and deliver a Call Notice within
120 days after the date of the Call Event, then the Call Option provided
for in this Section 2.2 shall terminate, but such Management Holder and his
direct and indirect transferees shall continue to hold such Call Securities
pursuant to all of the other provisions of this Agreement, including
Sections 2.1 and 2.5 hereof.
(f) At each closing for the purchase of Call Securities to be
purchased pursuant to Section 2.2(a) above, the Company shall repurchase
such Call Securities for cash (by delivery of a certified check or checks
payable to the Management Holder or his direct or indirect transferees, as
the case may be). If an agreement or indenture governing indebtedness for
borrowed money of the Company or any Subsidiary (including, without
limitation, the Credit Agreement and the Indenture) contains a restriction
on the amount of Call Securities that can be repurchased from any
terminated Management Holder or his direct or indirect transferees in any
given fiscal year of the Company, the maximum amount which the Company
shall be permitted to pay in such fiscal year for the repurchase of Call
Securities pursuant to Section 2.2 hereof from a terminated Management
Holder or his transferees shall be, in the aggregate, (x) the maximum
amount permitted by such agreement or indenture for the fiscal year of the
Company in which such Management Holder terminates his employment with the
Company, less (y) the aggregate amount previously paid by the Company to
repurchase Call Securities from any other Management Holder whose
employment with the Company terminated in such fiscal year.
2.3 Put by Management Holders.
(a) (i) If the employment of any Management Holder by the
Company or any Subsidiary shall be terminated for any reason (other
than for Cause or upon a resignation without Good Reason) prior to the
Public Float Date (any such termination being hereinafter referred to
as a "Put Event"), any such terminated or resigning Management Holder
and his direct and indirect transferees shall have the right (the "Put
Option"), subject to Section 2.3(a)(ii) below, by delivery of one or
more written notices to the Company (with copies to each Non-
Initiating Management Holder and JWC Holder) (the "Put Notice") during
the 30-day period beginning on the date of the Put Event (the "Put
Period"), to cause the Company to purchase, and the Company shall
purchase, all of the Subject Securities that (x) were originally
issued by the Company to such Management Holder, and (y) were owned by
such Management Holder or his direct or indirect transferees on the
date of the Put Event (such Subject Securities to be purchased
hereunder being referred to collectively as the "Put Securities"), at
the Put Price of such Put Securities as of the date of the Put Event.
Neither termination for Cause nor resignation without Good Reason
shall constitute a Put Event.
(ii) If and to the extent that, subsequent to a
Put Event and prior to the expiration of the Put Period with respect
to such Management Holder, the Management Holder and his direct and
indirect transferees do not elect to exercise the Put Option by
delivery of a Put Notice to the Company in accordance with this
Section 2.3, all of the Management Holder's and such transferees'
rights to sell Put Securities to the Company pursuant to this Section
2.3 shall terminate.
(b) The closing of the purchase of any Put Securities from a
Management Holder or his direct and indirect transferees pursuant to this
Section 2.3 shall take place at the principal office of the Company on such
date within 30 days after the expiration of the Put Period with respect to
such Management Holder as the Company shall specify to such Management
Holder and his direct and indirect transferees in writing. At any closing
pursuant to this Section 2.3, the Company shall deliver the payment for the
Put Securities in accordance with Section 2.3(e) hereof against delivery of
certificates and/or other instruments representing, together with stock or
other appropriate powers duly endorsed with respect to, the Put Securities
specified in the Put Notice, free and clear of all claims, liens and
encumbrances.
(c) The Company shall have the right, but not in any case the
obligation, to satisfy its obligations pursuant to this Section 2.3 by
allowing the Management Holders other than the Management Holder and his
direct and indirect transferees, if any, exercising his rights under this
Section 2.3 (the "Non-Initiating Management Holders"), to purchase all or
any portion of the Put Securities, pro rata in accordance with the Common
Stock Equivalents at the time held by such Non-Initiating Management
Holders (with rights to over-allotment to the other Non-Initiating
Management Holders should any Non-Initiating Management Holder choose to
purchase none (or less than its pro rata share) of such Put Securities
under this Section 2.3(c)). Each Non-Initiating Management Holder shall,
within 30 days after the receipt of the Put Notice by it, notify the
Company if such Non-Initiating Management Holder wishes to purchase all or
any portion of its pro rata share of the Put Securities at the Put Price.
At the closing of the purchase of the Put Securities in accordance with
Section 2.3(b) above, each Non-Initiating Management Holder purchasing Put
Securities shall deliver a certified check or checks payable to the
Management Holder or his direct or indirect transferees, as the case may
be, selling Put Securities as specified in the Put Notice, in an aggregate
amount equal to the Put Price for such Put Securities, against delivery of
certificates and/or other instruments representing the Put Securities to be
purchased by it in accordance with this Section 2.3(c), free and clear of
all claims, liens and encumbrances, together with stock or other
appropriate powers therefor duly endorsed.
(d) If and to the extent that, subsequent to a Put Event, the Non-
Initiating Management Holders elect to purchase fewer than all of the Put
Securities by delivery of written notice to the Company pursuant to Section
2.3(c), the Company shall have the right, but not in any case the
obligation, to satisfy its obligations pursuant to this Section 2.3 by
allowing the JWC Holders to purchase all or any portion of the Put
Securities, pro rata in accordance with the Common Stock Equivalents at the
time held by such JWC Holders (with rights to over-allotment to the JWC
Holders should any JWC Holder choose to purchase none (or less than its pro
rata share) of such Put Securities under this Section 2.3(c)). The
procedures by which such JWC Holders shall notify the Company and purchase
the Put Securities shall be identical in all respects to the procedures
provided for in Section 2.3(c) for the Non-Initiating Management Holders.
(e) Notwithstanding anything to the contrary set forth herein, the
Company shall not be required to purchase Put Securities pursuant to this
Section 2.3 (i) after the Public Float Date, (ii) if, after giving effect
to such purchase, the Company would be (or with the lapse of time or the
giving of notice would be) in default under any of the agreements and
indentures governing indebtedness for borrowed money of the Company or any
Subsidiary (including, without limitation, the Credit Agreement and the
Indenture) or (iii) if the Company does not at the time have sufficient
funds legally available for such purchase.
(f) At each closing for the purchase of Put Securities to be
purchased pursuant to Section 2.3(a)(i) above, such Subject Securities
shall, subject to Section 2.3(f) below, be purchased as follows: to the
extent (and only to the extent) that (i) funds are legally available for
the repurchase of equity securities of the Company and (ii) the Company is
permitted to repurchase for cash equity securities of terminated employees
pursuant to the agreements and indentures governing indebtedness for
borrowed money of the Company or any Subsidiary, the Company shall
repurchase such Put Securities for cash (by delivery of a certified check
or checks payable to the Management Holder or his direct or indirect
transferees, as the case may be). If the Company is unable pursuant to the
foregoing provisions of this Section 2.3(f) to purchase for cash any Put
Securities from any terminated Management Holder or his direct or indirect
transferees, and only so long as the incurrence of such indebtedness is
permitted pursuant to the terms of the agreements and indentures referred
to in clause (ii) above, the purchase price therefor shall be paid by
delivery of a subordinated promissory note (each a "Promissory Note")
substantially in the form attached hereto as Exhibit B in an original
principal amount equal to the purchase price of such Put Securities not so
paid in cash. If an agreement or indenture referred to in clause (ii)
above contains a restriction on the amount of Put Securities that can be
repurchased from any terminated Management Holder or his direct or indirect
transferees in any given fiscal year of the Company, the maximum amount
which the Company shall be required to apply to the repurchase of Put
Securities pursuant to this Section 2.3 in such fiscal year shall be, in
the aggregate, (x) the maximum amount permitted by such agreement or
indenture for the fiscal year of the Company in which such Management
Holder terminates his employment with the Company, less (y) the aggregate
amount previously paid by the Company to repurchase Put Securities from any
other Management Holder whose employment with the Company terminated in
such fiscal year.
(g) Any amounts which would otherwise be available with respect to
any fiscal year of the Company for the repurchase of Put Securities and
Call Securities shall first be applied to prepayment of outstanding
Promissory Notes issued under Section 2.3(e) and any payment-in-kind
Promissory Notes issued in payment of interest, in the order in which such
Promissory Notes were issued, until all such Promissory Notes have been
prepaid in accordance herewith. Prepayments shall be applied first to
accrued and unpaid interest and second to principal.
2.4 Tagalong. Except as provided in Section 2.2 or 2.3 hereof, no
Stockholder shall Transfer (in one or a series of transactions within any
24-month period) any Subject Securities representing more than ten percent
(10%) of the Common Stock Equivalents held by such Stockholder on the date
of execution of this Agreement by such stockholder, to a Third Party
without complying with the terms and conditions set forth in this Section
2.4, as applicable; provided that this Section 2.4 shall not in any way
limit or affect the restrictions of Section 2.1, and any Stockholder may be
an Initiating Stockholder (as defined below) under this Section 2.4 only if
such Transfer is permitted under Section 2.1:
(a) Any Stockholder (the "Initiating Stockholder") desiring to
Transfer such Subject Securities shall give not less than 10 days' prior
written notice of such intended Transfer to each other Stockholder
("Participating Offerees") and to the Company. Such notice (the
"Participation Notice") shall set forth the terms and conditions of such
proposed Transfer, including the name of the prospective transferee, the
number of Common Stock Equivalents proposed to be transferred (the
"Participation Securities") by the Initiating Stockholder, the purchase
price per share proposed to be paid therefor and the payment terms and type
of Transfer to be effectuated. Within 15 days following the delivery of
the Participation Notice by the Initiating Stockholder to each
Participating Offeree and to the Company, each Participating Offeree shall,
by notice in writing to the Initiating Stockholder and to the Company, have
the opportunity and right to sell to the purchasers in such proposed
Transfer (upon the same terms and conditions as the Initiating Stockholder)
up to that number of Subject Securities representing Common Stock
Equivalents at the time held by such Participating Offeree as shall equal
the product of (i) a fraction, the numerator of which is the number of
Common Stock Equivalents owned by such Participating Offeree as of the date
of such proposed Transfer and the denominator of which is the aggregate
number of Common Stock Equivalents owned as of the date of such
Participation Notice by each Initiating Stockholder and by all
Participating Offerees so electing to sell Subject Securities pursuant to
this Section 2.4(a), multiplied by (ii) the number of Participation
Securities. The amount of Participation Securities to be sold by any
Initiating Stockholder shall be reduced to the extent necessary to provide
for such sales of Subject Securities by Participating Offerees.
(b) At the closing of any proposed Transfer in respect of which a
Participation Notice has been delivered, the Initiating Stockholder,
together with all Participating Offerees so electing to sell Subject
Securities pursuant to this Section 2.4(a) shall deliver to the proposed
transferee certificates and/or other instruments representing the Subject
Securities to be sold, free and clear of all liens and encumbrances,
together with stock or other appropriate powers duly endorsed therefor, and
shall receive in exchange therefor the consideration to be paid or
delivered by the proposed transferee in respect of such Subject Securities
as described in the Participation Notice.
(c) The provisions of this Section 2.4 shall not apply to (i) any
Transfer pursuant to a Public Offering, (ii) following a Public Offering,
pursuant to a Rule 144 Transaction or (iii) any Transfers pursuant to
Section 2.5 hereof.
2.5 Dragalong.
(a) If Stockholders holding at least a majority of Common Stock
Equivalents at the time held by the Stockholders (the "Dragalong Group")
determine to sell or exchange (in a sale or exchange of securities of the
Company or in a merger, consolidation or other business combination or any
similar transaction) in one or a series of bona fide arms-length
transactions to an unrelated and unaffiliated Third party fifty percent
(50%) or more of the Subject Securities at the time held by them (the
actual percentage of the total number of Subject Securities held by the
Dragalong Group represented by the Subject Securities determined to be so
sold or exchanged being referred to as the "Dragalong Percentage"), then,
upon 30 days' written notice from the Dragalong Group to the other
Stockholders, which notice shall include reasonable details of the proposed
sale or exchange including the proposed time and place of closing and the
consideration to be received by the Dragalong Group (such notice being
referred to as the "Sale Request"), each other Stockholder shall be
obligated to, and shall, (i) sell, transfer and deliver, or cause to be
sold, transferred and delivered, to such Third Party the Dragalong
Percentage of the Subject Securities at the time held by such Stockholder,
in the same transaction at the closing thereof and shall (A) execute and
deliver such agreements for the purchase of such Subject Securities and
other agreements, instruments and certificates as the members of the
Dragalong Group shall execute and deliver in connection with such proposed
transaction and (B) deliver certificates and/or other instruments
representing all of such Stockholder's Subject Securities, together with
stock or other appropriate powers therefor duly executed, at the closing,
free and clear of all claims, liens and encumbrances), and each Stockholder
shall receive upon the closing of such transaction the same per share
consideration to be paid or delivered by the proposed transferee in respect
of such Stockholder's Subject Securities as shall be payable to the members
of the Dragalong Group in respect of their Subject Securities, and (ii) if
stockholder approval of the transaction is required, vote such
Stockholder's Common Stock in favor thereof.
(b) The provisions of this Section 2.5 shall not apply to any
Transfer (i) pursuant to a Public Offering or (ii) pursuant to a Permitted
Transfer.
2.6 [RESERVED]
2.7 Restrictions on Other Agreements. Except for JWC Holders as
provided in Sections 4.8 and 4.9, no Stockholder shall grant any proxy or
enter into or agree to be bound by any voting trust with respect to any
Subject Securities nor shall any Stockholder enter into any stockholders
agreements or arrangements of any kind with any Person with respect to any
of the Subject Securities on terms which conflict with the provisions of
this Agreement (whether or not such agreements and arrangements are with
other Stockholders or holders of Common Stock Equivalents that are not
parties to this Agreement), including but not limited to, agreements or
arrangements with respect to the acquisition, disposition or voting of
Subject Securities inconsistent herewith.
2.8 Stockholder Action. Each Stockholder agrees that, in such
Stockholder's capacity as a stockholder of the Company, such Stockholder
shall, pursuant to Section 2.5 hereof, vote, or grant proxies relating to
the Common Stock at the time held by such Stockholder to vote, all of such
Stockholder's Common Stock in favor of any sale or exchange of securities
of the Company or any merger, consolidation or other business combination
or any similar transaction pursuant to Section 2.5 hereof if, and to the
extent that, approval of the Company's stockholders is required in order to
effect such transaction.
ARTICLE III
Registration Rights
3.1 General. For purposes of this Article III: (a) the terms
"register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement on Form X-0, X-0
or S-3 in compliance with the 1933 Act and the declaration or ordering of
effectiveness of such registration statement; and (b) the term "Holder"
means any Stockholder.
3.2 Piggyback Registration. If, at any time, the Company
determines to register any Public Offering of any of the Common Stock
Equivalents for the account of any JWC Holder under the 1933 Act in
connection with the public offering of such securities, the Company shall,
at each such time, promptly give each Holder written notice of such
determination no later than 30 days before its intended filing with the
SEC. Upon the written request of any Holder received by the Company within
10 days after the giving of any such notice by the Company, the Company
shall use its best efforts to cause to be registered under the 1933 Act all
of the Registrable Securities of such Holder that such Holder has requested
be registered. If the total amount of Registrable Securities that are to
be included by the Company in such registration exceeds the amount of
securities that the underwriters reasonably believe compatible with the
success of the offering, then the Company will include in such registration
only the number of securities which in the opinion of such underwriters can
be sold, in the following order:
(i) first, all securities of the Company to be
offered for the account of the Company; and
(ii) second, the Registrable Securities, pro rata
based on the number of Registrable Securities held by each Holder
seeking to have Registrable Securities included in such registration.
3.3 Obligations of the Company.
(a) Whenever required under Section 3.2 hereof to use its best
efforts to effect the registration of any Registrable Securities, the
Company shall:
(i) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become and remain
effective, including, without limitation, filing of post-effective
amendments and supplements to any registration statement or prospectus
necessary to keep the registration statement current;
(ii) as expeditiously as reasonably possible,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement and to keep each
registration and qualification under this Agreement effective (and in
compliance with the 1933 Act) by such actions as may be necessary or
appropriate for a period of 90 days after the effective date of such
registration statement (unless all securities covered by such
registration statement are sooner disposed of), all as requested by
such Holder or Holders;
(iii) as expeditiously as reasonably possible
furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them in accordance with the plan of
distribution provided for in such registration statement;
(iv) as expeditiously as reasonably possible use
its best efforts to register and qualify the securities covered by
such registration statement under such securities or "blue sky" laws
of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement;
provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such jurisdiction;
and further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any
jurisdiction in which the securities shall be qualified shall require
that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling stockholders, then
such expenses shall be payable by selling stockholders pro rata, to
the extent required by such jurisdiction;
(v) notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller or Holder promptly prepare to furnish to such seller or
Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances under which they were made;
(vi) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months but not more than
18 months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section ll(a) of the 1933
Act, and will furnish to each such seller at least 2 Business Days
prior to the filing thereof a copy of any amendment or supplement to
such registration statement or prospectus and shall not file any
thereof to which any such seller shall have reasonably objected,
except to the extent required by law, on the grounds that such
amendment or supplement does not comply in all material respects with
the requirements of the 1933 Act or of the rules or regulations
thereunder;
(vii) provide and cause to be maintained a
transfer agent and registrar for all Registrable Securities covered by
such registration statement from and after a date not later than the
effective date of such registration statement; and
(viii) use its best efforts to list all
Registrable Securities covered by such registration statement on any
securities exchange on which any class of Registrable Securities is
then listed.
(b) The Company will furnish to each Holder on whose behalf
Registrable Securities have been registered pursuant to this Agreement a
signed counterpart, addressed to such Holder, of (i) an opinion of counsel
for the Company dated the effective date of such registration statement,
and (ii) a so-called "cold comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included
in such registration statement, and such opinion of counsel and
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriters in connection
with underwritten public offerings of securities.
(c) If the Company at any time proposes to register any of its
securities under the Securities Act subject to the piggyback registration
rights of the Holders under Section 3.2 hereof, and such securities are to
be distributed by or through one or more underwriters, then the Company
will make reasonable efforts, if requested by any Holder of Registrable
Securities who requests registration of Registrable Securities in
connection therewith pursuant to Section 3.2 hereof, to arrange for such
underwriters to include such Registrable Securities among the securities to
be distributed by or through such underwriters.
(d) In connection with the preparation and filing of each
registration statement registering Registrable Securities under this
Agreement, the Company will give the Holders of Registrable Securities on
whose behalf such Registrable Securities are to be so registered and their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, and each
amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the
business of the Company with its officers, its counsel and the independent
public accountants who have certified its financial statements, as shall be
reasonably necessary, in the opinion of such Holders or such underwriters
or their respective counsel, in order to conduct a reasonable and diligent
investigation within the meaning of the 1933 Act. Without limiting the
foregoing, each registration statement, prospectus, amendment, supplement
or any other document filed with respect to a registration under this
Agreement shall be subject to review and reasonable approval by the Holders
registering Registrable Securities in such registration and by their
counsel.
3.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article III
that each Holder shall furnish to the Company such information regarding
such Holder, the Registrable Securities held by such Holder, and the
intended method of disposition of such securities as the Company shall
reasonably request and as shall be required in connection with the action
to be taken by the Company.
3.5 Expenses of Registration. All expenses incurred in connection
with a registration pursuant to Section 3.2 hereof (excluding underwriters'
discounts and commissions, which shall be borne by the sellers), including
without limitation all registration and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders
(which counsel shall be selected by the holders of a majority in interest
of such Holders based on the number of Registrable Securities included in
such registration) shall be borne by the Company.
3.6 Underwriting Requirements. In connection with any
underwritten registration of Registrable Securities under this Agreement,
the Company shall, if requested by the Company or the underwriters for any
Registrable Securities included in such registration, enter into an
underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, provisions relating to indemnification and
contribution. The Holders on whose behalf Registrable Securities are to be
distributed by such underwriters shall be parties to any such underwriting
agreement, and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall be also made to and for the benefit of such Holders of
Registrable Securities. Such underwriting agreement shall comply with
Section 3.7.
3.7 Indemnification. In the event any Registrable Securities are
included in a registration statement pursuant to this Article III:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder joining in a registration, any
underwriter (as defined in the 0000 Xxx) for it, and each Person, if any,
who controls such Holder or such underwriter within the meaning of the 1933
Act, from and against any losses, claims, damages, expenses (including
reasonable attorneys' fees and expenses and reasonable costs of
investigation) or liabilities, joint or several, to which they or any of
them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages, expenses or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based on any untrue or alleged untrue statement of any material
fact contained in such registration statement including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements 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 made therein not misleading in
light of the circumstances under which they were made or arise out of any
violation by the Company of any rule or regulation promulgated under the
1933 Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration; provided
that the indemnity agreement contained in this Section 3.7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Company (which consent shall not be unreasonably withheld), nor shall
the Company be liable to anyone for any such loss claim, damage, liability
or action to the extent that it arises out of or is based upon an untrue
statement or omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements
thereto in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by such
Holder, underwriter or control person. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
such Holder, underwriter or control person and shall survive the transfer
of such securities by such Holder.
(b) To the fullest extent permitted by law, each Holder joining in
a registration shall indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement,
each Person, if any, who controls the Company within the meaning of the
1933 Act, and each agent and any underwriter for the Company and any Person
who controls any such agent or underwriter and each other Holder and any
Person who controls such Holder (within the meaning of the 0000 Xxx)
against any losses, claims, damages or liabilities to which the Company or
any such director, officer, control person, agent, underwriter or other
Holder may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
an untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of
or are based upon the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in such registration statement,
preliminary or final prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished by such
Holder with respect to such Holder expressly for use in connection with
such registration, and such Holder shall reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
control person, agent, underwriter or other Holder in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided that the indemnity obligation of each such Holder
hereunder shall be limited to and shall not exceed the proceeds actually
received by such Holder upon a sale of Registrable Securities pursuant to a
registration statement hereunder; provided, further that the indemnity
agreement contained in this Section 3.7(b) shall not apply to amounts paid
in settlements effected without the consent of such Holder (which consent
shall not be unreasonably withheld). Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer, Holder, underwriter or control
person and shall survive the transfer of such securities by such Holder.
(c) Any person seeking indemnification under this Section 3.7 will
(i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification, but the failure to give such notice will
not affect the right to indemnification hereunder, (except to the extent
the indemnifying party is materially prejudiced by such failure) and (ii)
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, and other
indemnifying parties similarly situated, jointly to assume the defense of
such claim with counsel reasonably satisfactory to the parties. In the
event that the indemnifying parties cannot mutually agree as to the
selection of counsel, each indemnifying party may retain separate counsel
to act on its behalf and at its expense. The indemnified party shall in
all events be entitled to participate in such defense at its expense
through its own counsel. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent
will not be unreasonably withheld). No indemnifying party will consent to
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 a claim will 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 of such indemnified
parties with respect to such claim, in which event the indemnifying party
shall be obligated to pay the reasonable fees and expenses of such
additional counsel.
(d) If for any reason the foregoing indemnification is unavailable
to any party or insufficient to hold it harmless as and to the extent
contemplated by the preceding paragraphs of this Section 3.7, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage expense or
liability in such proportion as is appropriate to reflect the relative
benefits received by the applicable indemnifying party, on the one hand,
and the applicable indemnified party, as the case may be, on the other
hand, and also the relative fault of the applicable indemnifying party and
any applicable indemnified party, as the case may be, as well as any other
relevant equitable considerations.
3.8 Rule 144. With a view to making available to the Holders and
their transferees the benefits of Rule 144 and Rule 144A under the 1933 Act
and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to take all action
that may be required as a condition to the availability after a public
offering of Rule 144, Rule 144A or such other rules or regulations,
including without limitation to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to 90 days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Company;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act
(including, without limitation, under Section 13 or Section 15 of the 0000
Xxx); and
(c) furnish to any Holder forthwith upon request a written
statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after 90 days after the effective
date of said first registration statement filed by the Company), and of the
1933 Act and the 1934 Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as may be reasonably requested in availing any Holder of any rule
or regulation of the SEC permitting the selling of any such securities
without registration.
3.9 Market Stand-Off Agreement. Each Stockholder agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company at the time held by such Stockholder (other than
securities included in the applicable registration statement or shares
purchased in the public market after the effective date of registration) or
any interest or future interest therein during such period (not to exceed
180 days) as is mutually acceptable to a majority in interest of
Stockholders and the underwriter following the effective date of each
registration statement of the Company filed under the 1933 Act which
includes securities of the Company to be sold to the public in an
underwritten offer.
ARTICLE IV
Certain Miscellaneous Other Provisions
4.1 Remedies. The parties to this Agreement acknowledge and agree
that the covenants of the Company and the Stockholders set forth in this
Agreement may be enforced in equity by a decree requiring specific
performance. Without limiting the foregoing, if any dispute arises
concerning the sale or other disposition of any of the securities of the
Company subject to this Agreement or concerning any other provisions hereof
or the obligations of the parties hereunder, the parties to this Agreement
agree that an injunction may be issued in connection therewith. Such
remedies shall be cumulative and non-exclusive and shall be in addition to
any other rights and remedies the parties may have under this Agreement or
otherwise.
4.2 Entire Agreement; Amendment; Termination.
(a) This Agreement, together with the Acquisition Agreement, sets
forth the entire understanding of the parties, and supersedes all prior
agreements and all other arrangements and communications, whether oral or
written, with respect to the subject matter hereof.
(b) The Schedule of Stockholders may be amended in writing by the
Company to reflect changes in the composition of the Stockholders and
changes in their addresses or telecopy numbers that may occur from time to
time as a result of Permitted Transfers or Transfers permitted under
Article II hereof. Amendments to the Schedule of Stockholders reflecting
Permitted Transfers or Transfers permitted under Article II hereof shall
become effective when the amended Schedule of Stockholders, and a copy of
the Agreement as executed by any new transferee in accordance with Section
4.14, are filed with the Company.
(c) Any other amendment to this Agreement shall be in writing and
shall require the written consent of (a) the Company, (b) either the JWC
Representative or the holders of a majority of Common Stock Equivalents at
the time held by the JWC Holders, and, (c) if adverse to the interests of a
particular Stockholder or Stockholder Group, that Stockholder or the
holders of a majority of the Common Stock Equivalents at the time held by
that Stockholder Group, as the case may be.
(d) Notwithstanding the foregoing provisions of this Section 4.2,
this Agreement may be terminated at any time upon the written consent of
(i) the Company and (ii) the holders of a majority of the Common Stock
Equivalents at the time held by the Management Holders and the JWC Holders
(or the JWC Representative), voting together as a single group.
4.3 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as
if the invalid or unenforceable provision were omitted.
4.4 Notices. All notices, consents and other communications
required, or contemplated under this Agreement shall be in writing and
shall be delivered in the manner specified herein or, in the absence of
such specification, shall be deemed to have been duly given (i) 3 Business
Days after mailing by first class certified mail, postage prepaid, (ii)
when delivered by hand, (iii) upon confirmation of receipt by telecopy, or
(iv) 1 Business Day after sending by overnight delivery service, to the
respective addresses of the parties set forth below:
(a) For notices and communications to the Company:
c/o X.X. Childs Associates, L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
(b) For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule of Stockholders.
(c) With a copy in the case of the JWC Holders to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
By notice complying with the foregoing provisions of this Section 4.4, each
party shall have the right to change the mailing address for future notices
and communications to such party.
4.5 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and to their respective
transferees, successors, assigns, heirs and administrators; provided that
the rights under this Agreement may not be assigned except as expressly
provided herein. No such assignment shall relieve an assignor of its
obligations hereunder.
4.6 Termination. Without affecting any other provision of this
Agreement requiring termination of any rights in favor of any Stockholder,
Permitted Transferee or any other transferee of Common Stock Equivalents,
the provisions of Articles II and III of this Agreement shall terminate as
to such Stockholder, Permitted Transferee or other transferee, when,
pursuant to and in accordance with this Agreement, such Stockholder,
Permitted Transferee or other transferee, as the case may be, no longer
owns any Common Stock Equivalents.
4.7 Recapitalization, Exchanges, etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to
Common Stock Equivalents, to any and all shares of capital stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect
of, in exchange for, or in substitution of the Common Stock Equivalents, by
reason of a stock dividend, stock split, stock issuance, reverse stock
split, combination, recapitalization, reclassification, merger,
consolidation or otherwise. Upon the occurrence of any such events,
amounts hereunder shall be appropriately adjusted.
4.8 JWC Representative. Each JWC Holder hereby designates and
appoints (and each Permitted Transferee of each such JWC Holder shall be
deemed to have so designated and appointed) Xxxxxx X. Xxxxx, with full
power of substitution (the "JWC Representative") the representative of each
such Person to perform all such acts as are required, authorized or
contemplated by this Agreement to be performed by any such Person and
hereby acknowledges that the JWC Representative shall be the only Person
authorized to take any action so required, authorized or contemplated by
this Agreement by each such Person. Each such Person further acknowledges
that the foregoing appointment and designation shall be deemed to be
coupled with an interest and shall survive the death or incapacity of such
Person. Each such person hereby authorizes (and each Permitted Transferee
shall be deemed to have authorized) the other parties hereto to disregard
any notice or other action taken by such Person pursuant to this Agreement
except for the JWC Representative. The other parties hereto are and will
be entitled to rely on any action so taken or any notice given by the JWC
Representative and are and will be entitled and authorized to give notices
only to the JWC Representative for any notice contemplated by this
Agreement to be given to any such Person. A successor to the JWC
Representative may be chosen by the holders of a majority of the Common
Stock Equivalents at the time held by the JWC Holders; provided that
written notice thereof is given by the successor JWC Representative to the
Company, the Management Holders and the other JWC Holders. Each of the JWC
Holders agrees to be bound by all of the provisions of paragraph 3.07 of
the First Amended and Restated Agreement of Limited Partnership of X.X.
Childs Equity Partners, L.P. dated as of December 20, 1995 (the "Equity
Partners Agreement") including without limitation, the provisions of
paragraph 3.07(b) thereof, and further agrees to be bound by the
confidentiality provisions set forth in paragraph 14.08 of the Equity
Partners Agreement as if such JWC Holder were a limited partner under the
Equity Partners Agreement.
4.9 Action Necessary to Effectuate the Agreement. The parties
hereto agree to use their reasonable best efforts to take or cause to be
taken all such corporate and other action as may be necessary to effect the
intent and purposes of this Agreement.
4.10 Purchase for Investment; Legend on Certificate. Each
Stockholder acknowledges that all of the securities of the Company held by
such Stockholder are being (or have been) acquired for investment and not
with a view to the distribution thereof and that no transfer, hypothecation
or assignment of any such securities (including the Common Stock for which
such securities may be exercisable or exchangeable or into which such
securities may be convertible) may be made except in compliance with
applicable federal and state securities laws. All the certificates or
other instruments representing any of such securities (including the Common
Stock for which such securities may be exercisable or exchangeable or into
which such securities may be convertible) which are now or hereafter held
by any Stockholder shall be subject to the terms of this Agreement and
shall have endorsed in writing, stamped or printed, thereon the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF FEBRUARY
25, 1998, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE
WITH AND AVAILABLE FROM THE SECRETARY OF THE COMPANY."
4.11 Effectiveness of Transfers. Any Subject Securities
transferred by a Stockholder (other than pursuant to an effective
registration statement under the 1933 Act or a Rule 144 Transaction) shall
be held by the transferee thereof pursuant to this Agreement. Such
transferee shall, except as otherwise expressly stated herein, have all the
rights and be subject to all of the obligations of a Stockholder under this
Agreement automatically and without requiring any further act by such
transferee or by any parties to this Agreement. Without affecting the
preceding sentence, if such transferee is not a Stockholder on the dates of
such transfer, then such transferee, as a condition to such transfer, shall
confirm such transferee's obligations hereunder in accordance with Section
4.12 hereof. The Subject Securities shall not be transferred on the
Company's books and records, and no transfer thereof shall be otherwise
effective, unless any such transfer is made in accordance with the terms
and conditions of this Agreement, and the Company is hereby authorized by
all of the Stockholders to enter appropriate stop transfer notations on its
transfer records to give effect to this Agreement.
4.12 Additional Stockholders. Any Person acquiring any Subject
Securities (except for any acquisition thereof (a) in an offering
registered under the 1933 Act or (b) in a Rule 144 Transaction) shall on or
before the transfer or issuance to it of such Subject Securities, sign a
counterpart signature page hereto in form reasonably satisfactory to the
Company and the JWC Representative and shall thereby become a party to this
Agreement; provided that a transferee which is a pledgee and within the
definition of a Permitted Transferee shall not be obligated so to agree
until foreclosure on its pledge. The Company shall require each Person
acquiring an option, warrant or other right to purchase shares of Common
Stock under any option or other equity participation plan to execute a
counterpart signature page hereto.
4.13 No Waiver. No course of dealing and no delay on the part of
any party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such
party's rights, powers and remedies. No single or partial exercise of any
rights, powers or remedies conferred by this Agreement shall preclude any
other or further exercise thereof or the exercise of any other right, power
or remedy.
4.14 Counterparts. This Agreement may be executed 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, and all signatures
need not appear on any one counterpart.
4.15 Headings, etc. All headings and captions in this Agreement
are for purposes of reference only and shall not be construed to limit or
affect the substance of this Agreement. Words used in this Agreement,
regardless of the gender and number used, will be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other
number, singular or plural, as the context requires. As used in this
Agreement, the word "including" is not limiting, and the word "or" is not
exclusive. The words "this Agreement", "hereto", "herein", "hereunder",
"hereof", and words or phrases of similar import refer to this Agreement as
a whole, together with any and all Schedules and Exhibits hereto, and not
to any particular article, section, subsection, paragraph, clause or other
portion of this Agreement.
4.16 Governing Law. This Agreement shall be construed under and
governed by the substantive and procedural laws of The Commonwealth of
Massachusetts applicable to a contract executed in and wholly performed
within Massachusetts.
4.17 Effective Time. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall become binding and effective as of the
date of the Closing (as defined in the Merger Agreement).
[Signatures on Following Pages]
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Counterpart Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE COMPANY:
UNIVERSAL HOSPITAL
SERVICES, INC.
By: ________________________
Name:
Title:
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Additional Counterpart Signature Page
THE MANAGEMENT HOLDERS:
Print Name: ________________________
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Additional Counterpart Signature Page
THE JWC HOLDERS:
By: ____________________________
Name:
By executing above, the foregoing JWC Holder acknowledges that,
pursuant to Section 4.8 of this Stockholders' Agreement, the foregoing JWC
Holders has designated and appointed Xxxxxx X. Xxxxx as its sole
representative to perform all acts as are required, authorized or
contemplated by this Stockholders' Agreement, all as set forth in such
Section 4.8.
EXHIBIT A
Schedule of Stockholders
I. The Management Holders
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, joint tenants
Xxxxxx X. Xxxxx and Xxxx Xxxxx, joint tenants
Xxxxx X. Xxxxx
Xxxxx Xxxxxxx, Inc. as Custodian FBO Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx,joint tenants
Xxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx, joint tenants
Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, joint tenants
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx, joint tenants
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, joint tenants
Xxxx X. Xxxxxx and Xxxxxxxxx X. Xxxxxx, joint tenants
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, joint tenants
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxx X. XxXxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxx, joint tenants
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx, joint tenants
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx, Inc. FBO Custodian Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx, joint tenants
Xxxx X. Xxxxxxxxx
XX. The JWC Holders
X.X. Childs Equity Partners, X.X.
Xxxx Family Trust
Xxxxx X. Childs
Xxxx X. Childs
Xxxxxxx X. Childs
Xxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
OFS Investment Partners
Xxxxxxx X. Xxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
SGS 1995 Family Limited Partnership
SGS - III Family Limited Partnership
Xxxxxx X. Xxxxx 1995 Irevocable Trust
Xxxx X. Xxxxxx
Suttin Family Trust
Xxxxxx X. Xxx
Exhibit B
UNIVERSAL HOSPITAL SERVICES, INC.
Stockholders' Agreement
Form of Promissory Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH APPLICABLE STATE LAW.
AS PROVIDED IN THIS NOTE, PAYMENT OF PRINCIPAL OF AND INTEREST ON THIS NOTE
IS SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO ALL "SENIOR DEBT" (AS
SUCH TERM IS DEFINED IN THIS NOTE).
UNIVERSAL HOSPITAL SERVICES, INC.
SUBORDINATED NOTE DUE 20__
Boston, Massachusetts
U.S.$ _________ _____________ __, 19
FOR VALUE RECEIVED, the undersigned, Universal Hospital Services,
Inc., a Minnesota corporation (the ''Company''), hereby promises to pay to
__________, a __________ with a business address at
_______________(facsimile number __________) (the "holder"), on [I.E. 10
YEARS AFTER THE DATE OF ISSUANCE], the principal amount of __________United
States Dollars (U.S.$__________ ) or such part thereof as then remains
unpaid, with interest (computed on the basis of a 365/6-day year and the
actual number of days elapsed) on the unpaid principal amount hereof at a
rate per annum equal to the Applicable Rate (as defined in Section 4) from
the date hereof payable semiannually on the last day of May and November in
each year (each such date is hereinafter referred to as a "Payment Date"),
beginning on __________, 19__, until such principal amount shall become due
and payable (whether at maturity or a date fixed for payment or prepayment
or by acceleration or otherwise).
1. The Note. All payments of principal, interest and other amounts
payable on or in respect of this Note or the indebtedness evidenced hereby
shall be made at the address of the holder specified herein. All payments
received in respect of the indebtedness evidenced by this Note shall,
subject to the provisions of Section 5 hereof, be applied first to interest
hereon accrued to the date of payment, then to the payment of other amounts
(except principal) at the time due and unpaid hereunder, and finally to the
unpaid principal hereof.
If any payment on this Note becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to any payment of principal,
interest thereon shall be payable at the then Applicable Rate during such
extension.
2. Payment Provisions.
2.1 On __________ __, ____ [I.E. THE MATURITY DATE] or on any
accelerated maturity of this Note, the Company will pay to the holder
hereof the entire principal amount of this Note then outstanding, without
premium, but together with accrued and unpaid interest thereon. The Company
may at any time or from time to time prepay all or any part of the
outstanding principal amount of this Note at the principal amount thereof,
without premium, but together with accrued and unpaid interest thereon.
2.2 Except as otherwise expressly provided herein, payments on
account of principal and interest with respect to this Note shall be made
by mailing a check or money order to the holder hereof at the address of
such holder appearing herein and without the necessity of any presentment
or notation of payment, except upon payment in full, and the amount of
principal so paid on this Note shall be regarded as having been retired and
canceled at the time of the mailing of such payment. The holder of this
Note, before any transfer thereof, shall make a notation thereon of the
date to which interest has been paid and of all principal payments
theretofore made thereon and shall in writing notify the Company of the
name and address of the transferee. Anything herein to the contrary
notwithstanding, the Corporation may elect to pay interest payable on any
Payment Date occurring on or before __________ __, ____, in lieu of cash
interest payments, by issuing and delivering a note (each, a "Paid-in-Kind
Interest Note") to the holder hereof having an aggregate original principal
amount equal to the accrued and unpaid interest on this Note and otherwise
containing the same terms and provisions as this Note.
3. Defaults.
3.1 Events of Default. If any one or more Events of Default shall
occur and be continuing, then and in each and every such case, the holder
may by notice in writing to the Company declare all or any part of the
unpaid balance of this Note then outstanding to be forthwith due and
payable without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived, and the holder may proceed
to enforce payment of such balance or part thereof in such manner as he may
elect, except in each and every such case to the extent the foregoing
rights of the holder hereof are restricted by the provisions of Section 5
hereof.
3.2 Annulment of Defaults. An Event of Default shall not be
deemed to have occurred or to be in existence for any purpose of this Note
if the holder shall have waived such Event of Default in writing or stated
in writing that the same has been cured to such holder' s satisfaction, but
no such waiver shall extend to or affect any subsequent Event of Default or
impair any of the rights of the holder upon the occurrence thereof.
3.3 Waivers. The Company hereby waives to the extent not
prohibited by applicable law (a) all presentments, demands for performance,
notices of nonperformance (except to the extent required by the provisions
hereof or of any instrument executed and delivered in connection with this
Note), protests, notices or protest, and notices of dishonor in connection
with this Note.
4. Definitions. For purposes of this Note:
4.1 "Applicable Rate" shall mean, for any period, the weighted
average of the daily interest rates for such period applicable to all
borrowings by the Company outstanding during such period under the Credit
Agreement, as determined by the Company in accordance with sound financial
practice; provided, however, that if the Company is not party to any Credit
Agreement during any (or any portion of any) period, the Applicable Rate
during such (or such portion of such) period shall be equal to the Prime
Rate plus one percent (1%). Notwithstanding anything in this Note to the
contrary, the interest rate hereunder shall not exceed the maximum legal
rate.
4.2 "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., and
the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations and any reference to any statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
4.3 "Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in Boston,
Massachusetts or New York, New York are authorized or required by
applicable law to be closed.
4.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended, or any successor federal law of similar import.
4.5 "Credit Agreement" shall mean that Credit Agreement dated as
of February 25, 1998 by and among the Company, the lenders from time to
time party thereto and Bankers Trust Company, as administrative agent, as
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including without limitation any
agreement extending the maturity of, refinancing, replacing otherwise
restructuring (including without limitation increasing the amount of
available borrowings thereunder or adding additional borrowers or
guarantors thereunder) all or any portion of the indebtedness under such
agreement or any successor or replacement agreement and whether by the same
or any other agent, lender, or group of lenders.
4.6 "Debt" shall mean (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations to pay the deferred purchase price of property
(other than trade accounts payable), (d) obligations as lessee under leases
which shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capitalized leases, and (e) obligations
under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise
assure a creditor against loss in respect of, indebtedness or obligations
of the kinds referred to in clauses (a) through (d) above.
4.7 "Event of Default" shall mean the occurrence and continuance
of any of the following events:
(a) The Company shall have failed, for a period of thirty
(30) days after written notice thereof, to make any principal,
interest, fee or other payment on any of the indebtedness evidenced by
this Note or pursuant to any provision of this Note (notwithstanding
that such payment shall have been suspended pursuant to the
subordination provisions hereof); or
(b) The Company shall:
(i) commence a voluntary case under the Bankruptcy
Code or authorize, by appropriate proceedings of its board of
directors, the commencement of such a voluntary case;
(ii) (A) have filed against it a petition commencing
an involuntary case under the Bankruptcy Code that shall not have
been dismissed within sixty (60) days after the date on which
such petition is filed, or (B) file an answer or other pleading
within such 60-day period admitting or failing to deny the
material allegations of such a petition or seeking, consenting or
to acquiescing in the relief therein provided, or (C) have
entered against it an order for relief in any involuntary case
commenced under the Bankruptcy Code;
(iii) seek relief as a debtor under any applicable
law, other than the Bankruptcy Code, of any jurisdiction relating
to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors, or consent
to or acquiesce in such relief;
(iv) have entered against it an order by a court of
competent jurisdiction (A) finding it to be bankrupt or
insolvent, (B) ordering or approving its liquidation or
reorganization as a debtor or any modification or alteration of
the rights of its creditors or (C) assuming custody of, or
appointing a receiver or other custodian for all or a substantial
portion of its property; or
(v) make an assignment for the benefit of, or enter
into a composition with, its creditors, or appoint, or consent to
the appointment or, or suffer to exist a receiver or other
custodian for, all or a substantial portion of its property.
4.8 "Indenture" shall mean the Indenture dated as of February
25, 1998 among Universal Hospital Services, Inc. and First Trust National
Association, as amended and in effect from time to time.
4.9 "Obligations" means any principal, interest (including
post-petition interest, whether or not allowed as a claim in any
proceeding), penalties, fees, costs, expenses, indemnifications,
reimbursements, damages and other liabilities payable under or in
connection with any Debt.
4.10 "Payment Date" shall have the meaning given such term in
the first paragraph of this Note.
4.11 "Person" shall mean any natural individual or any
corporation, firm, limited liability company, unincorporated organization,
association, partnership, a trust (inter vivos or testamentary), an estate
of a deceased individual, business trust, joint stock company, joint
venture or other organization, entity or business, or any governmental
authority.
4.12 "Prime Rate" shall mean the prime rate in effect as
announced from time to time by Senior Bank Documents.
4.13 "Senior Bank Debt" means all Obligations outstanding
under or in connection with the Senior Bank Documents.
4.14 "Senior Bank Documents" shall mean the Credit Agreement
and any note, mortgage, security agreement, pledge agreement, guaranty or
other agreement or instrument now or hereafter evidencing, securing or
executed in connection with any Senior Bank Debt, and any credit agreement,
note, mortgage, security agreement, pledge agreement, guaranty or other
agreement or instrument hereafter executed in connection with any
extension, renewal, refunding or refinancing thereof.
4.15 "Senior Debt" means (a) the Senior Bank Debt and (b) any
other Debt, including without limitation the Indenture, unless the
instrument under which such Debt is incurred expressly provides that it is
on a parity with or subordinated in right of payment to this Note,
including in the case of each of (a) and (b) above, any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided
for in the documentation with respect thereto, whether or not such interest
is an allowed claim under applicable law. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (i) any liability
for federal, state, local or other taxes owed or owing by the Company, (ii)
any Debt of the Company to any of its Subsidiaries or other Affiliates or
(iii) any trade payables.
4.16 "Senior Debt Default" shall have the meaning given such
term in Section 5.2 hereof.
4.17 "Subordinated Distributions" shall have the meaning given
such term in Section 5.1 hereof.
4.18 "Subordinated Payments" shall have the meaning given such
term in Section 5 hereof.
5. Subordination. The payment of principal (whether at maturity,
upon mandatory or voluntary prepayment, or upon declaration or otherwise)
of, interest on, and all fees, expenses, indemnities and other amounts
payable with respect to, this Note (collectively, the "Subordinated
Payments") are hereby subordinated and junior in right of payment, to the
extent and in the manner set forth in this Section to all Senior Debt.
This Section shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Debt, whether now outstanding or hereafter created, incurred,
assumed or guaranteed, and such provisions are made for the benefit of the
holders (which term shall include owners, if not otherwise holders, of
Senior Debt) of Senior Debt, and such holders of Senior Debt are made
obligees hereunder and beneficiaries hereof (with the same force and effect
as if named herein) and any one or more of them may enforce such
provisions. This Section is binding upon the Company and its successors and
assigns and the holders, from time to time, of this Note, each of whom, by
his acceptance of this Note, agrees to be bound by and comply with all of
the provisions of this Section. Notwithstanding any provision of this Note
to the contrary, neither this Section nor any of its provisions may be
changed or waived to adversely affect or impair in any way whatsoever the
rights of the holders of Senior Debt, except with the prior written consent
of the holders of the Senior Debt at the time outstanding.
5.1 Subordinated Distributions. Upon any payment or
distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities, by way of set-off or
otherwise (including any collateral, whether the proceeds thereof or in
kind, at any time securing this Note and including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of this Note) of the Company (all such payments and distributions being
referred to collectively as "Subordinated Distributions"), upon any
dissolution, winding up, liquidation (partial or complete) or
reorganization of the Company (whether voluntary or involuntary and whether
in bankruptcy, insolvency, receivership or other proceedings, or upon an
assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of the Company or otherwise), each of the Company
and the holder of this Note, by acceptance hereof, covenants and agrees
that:
(a) all Senior Debt shall first be paid in full in cash,
or provision made for such payment, in accordance with the terms of
such Senior Debt, before any payment or distribution of any
Subordinated Distribution is made on account of any Subordinated
Payments and before the holder of this Note shall be entitled to
retain any amounts so paid or distributed in respect thereof;
(b) any payment or distribution of any Subordinated
Distribution to which the holder of this Note would be entitled except
for the provisions of this Section, shall be paid or delivered by the
Company or any debtor, custodian, receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of Senior Debt or their
representative or representatives (in accordance with any certificate
referred to in this Section) or to the trustee or agent for the
holders of such Senior Debt, as their respective interests may appear,
to the extent necessary to pay in full all Senior Debt remaining
unpaid in accordance with the terms of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders
of such Senior Debt, before any payment or distribution is made to the
holder of this Note; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of any Subordinated Distribution shall be
received by the holder of this Note before all Senior Debt is paid in
full in cash, or provision made for the payment thereof, in accordance
with the terms of such Senior Debt, such payment or distribution shall
be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Senior Debt or their representative
or representatives, or to the trustee or agent for the holders of such
Senior Debt, as their respective interests may appear, to the extent
necessary to pay in full all Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders
of such Senior Debt.
The Company shall give prompt written notice to the holder of
this Note of any declaration of any Senior Debt as due and payable before
its stated maturity and of any event which pursuant to this Section would
prevent payment or distribution of any Subordinated Distribution or any
Subordinated Payment with respect to this Note. The holder of this Note
shall be entitled to assume that no such event has occurred and shall not
at any time be charged with knowledge of the existence of any event which
would prohibit the making of any payment to it, unless and until such
holder shall have received written notice thereof from the Company or from
the holders of Senior Debt or any trustee, agent or representative thereof;
and prior to the receipt of any such written notice the holder of this Note
shall be entitled to assume conclusively that no such event exists,
without, however, limiting any such rights of holders of Senior Debt under
this Section to recover from the holder of this Note any payment made to
any such holder which it is not entitled under this Section to retain.
Upon any payment or distribution of any Subordinated
Distribution, the holder of this Note shall be entitled to rely upon an
order or decree of any court of competent jurisdiction in which such
bankruptcy, insolvency, reorganization, liquidation, receivership or other
proceeding is pending, or a certificate of the debtor, custodian, receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, to the holder of this Note, for the purpose
of ascertaining the Persons entitled to participate in such distribution,
the holders of the Senior Debt and other indebtedness of the Company, the
amount distributed thereon and all other facts pertinent thereto or to this
Section.
The holder of this Note shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself to be a holder
of Senior Debt to establish that such notice has been given by a holder of
Senior Debt.
5.2 No Payments Under Certain Circumstances.
(a) No payment (by purchase of this Note or otherwise)
shall be made or agreed to be made, directly or indirectly, in cash,
property or securities (other than Paid-in-Kind Interest Notes), or by
way of set-off or otherwise, by the Company of any Subordinated
Payment with respect to this Note if, at the time of such payment or
immediately after giving effect thereto,
(i) (A) the Company shall be in default in the
payment of any Senior Debt, and all applicable grace or cure
periods shall have expired (a "Senior Debt Payment Default") or
(B) there shall have occurred and be continuing any default
(other than a Senior Debt Payment Default) with respect to any
Senior Debt and all applicable grace or cure periods shall have
expired (a "Senior Debt Non-Payment Default", and including any
Senior Debt Payment Default, a "Senior Debt Default"), which
Senior Debt Non-Payment Default would entitle the holder of such
Senior Debt, or any trustee therefor, to declare the principal of
such Senior Debt, if not already due and payable, to be due and
payable, unless and until such Senior Debt Non-Payment Default
shall have been cured or waived or shall cease to exist; and
(b) The Company shall immediately deliver to the holder
of this Note a copy of any written notice by the holders of any Senior
Debt, or any trustee therefor, of any Senior Debt Default received by
the Company.
(c) If notwithstanding the foregoing provisions of this
Section 5.2, the Company shall make any Subordinated Payment
prohibited by the provisions of this Section, then, except as
hereinafter in this Section otherwise provided, unless and until full
payment in cash of all amounts then due for principal of, sinking
fund, if any, premium, if any, and interest on, and all other amounts
payable with respect to, Senior Debt has been made in cash or duly
provided for in accordance with the terms of such Senior Debt, or
unless and until any such default or Senior Debt Default shall have
been cured or waived or shall cease to exist, such prohibited
Subordinated Payment shall be held in trust for the benefit of, and
shall be paid over or delivered, in the form received and without
interest, to the holders of Senior Debt or their respective
representative or to the trustee or agent for the holders of such
Senior Debt, as their respective interests may appear, to the extent
necessary to pay in full all principal of, premium, if any, and
interest on, and all other amounts payable with respect to, Senior
Debt, to the extent any of the same are then due after giving effect
to any concurrent payment or distribution to the holders of such
Senior Debt.
(d) Unless and until written notice of such event shall
be given to the holder of this Note at its address set forth on the
register maintained by the Company by or on behalf of any holder of
Senior Debt or by the Company, the holder of this Note shall be
entitled to conclusively presume that no event exists which would
prohibit the making of any payment to the holder of this Note.
5.3 Standstill.
(a) Acceleration. No holder of this Note shall take any
action to accelerate the maturity of the indebtedness evidenced by
this Note unless the Senior Debt shall have been paid in full in cash
or all Senior Debt shall theretofore have become due and payable.
(b) Remedies. No holder of this Note as such will
commence any action or proceeding against the Company to recover all
or any part of any indebtedness evidenced by this Note or bring or
join with any creditor in bringing, unless the holders of the Senior
Debt then outstanding shall join therein, any proceeding against the
Company under any bankruptcy, reorganization, readjustment of debt,
arrangement of debt, receivership, liquidation or insolvency law or
statute unless and until all Senior Debt shall be paid in full,
provided that the foregoing shall not prohibit a holder of this Note
from, at any time at which the holder of this Note shall be permitted
to accelerate the maturity of this Note as provided in Section 5.3(a),
commencing any proceeding against the Company under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation, or insolvency law or statute, provided
further, that any amounts received by the holder of this Note as a
result of any such action or proceeding shall be subject to the
provisions of Sections 5.1 and 5.2 of this Note.
5.4 No Impairment. Nothing contained in this Section or
elsewhere in this Note is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt and the holder
of this Note, the obligation of the Company, which is absolute and
unconditional, to pay to the holder of this Note, subject to the rights of
the holders of Senior Debt, all Subordinated Payments with respect to this
Note, as and when the same shall become due and payable in accordance with
its terms (subject to the applicable requirements of the Code concerning
withholding of taxes), or is intended to or shall affect the relative
rights of the holders and creditors of the Company other than the holders
of Senior Debt, nor shall anything herein or therein prevent the holder of
this Note from exercising all remedies otherwise permitted by applicable
law or under the terms of this Note upon an Event of Default with respect
to this Note subject to the rights, if any, under this Section, of the
holders of Senior Debt in respect of Subordinated Distributions received
upon the exercise of any such remedy.
5.5 Subrogation. Subject to the payment in full in cash of
all Senior Debt at the time outstanding, the holder of this Note shall be
subrogated (equally and ratably with the holders of all indebtedness of the
Company which, by its express terms, ranks on a parity with this Note and
is entitled to like rights of subrogation) to the rights of the holders of
Senior Debt (to the extent of payments or distributions previously made to
such holders of Senior Debt pursuant to the provisions of this Section) to
receive payments or distributions of assets or securities of the Company
payable or distributable to holders of the Senior Debt until all
Subordinated Payments with respect to this Note shall be paid in full. For
purposes of such subrogation, no payments or distributions on the Senior
Debt pursuant to Section 5.1 or 5.2 shall, as between the Company and its
creditors other than the holders of Senior Debt, and the holder of this
Note, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt, and no payments or distributions to the holder
of this Note of assets or securities by virtue of the subrogation herein
provided for shall, as between the Company and its creditors other than the
holders of Senior Debt and the holder of this Note, be deemed to be a
payment to or on account of this Note. The provisions of this Section are
and are intended solely for the purpose of defining the relative rights of
the holder of this Note, on the one hand, and the holders of the Senior
Debt, on the other hand.
5.6 No Impairment of Rights. No right of any present or
future holder of any Senior Debt of the Company to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or
failure to act, in good faith, by any such holder of Senior Debt, or by any
noncompliance by the Company with the terms, provisions and covenants of
this Note, regardless of any knowledge thereof with which any such holder
of Senior Debt may have or be otherwise charged.
5.7 Waiver of Notice. The holder of this Note, by his
acceptance thereof, waives all notice of the acceptance of the
subordination provisions contained herein by each holder of Senior Debt,
whether now outstanding or hereafter incurred, and waives reliance by each
such holder upon such provisions.
5.8 Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Debt. The holders of Senior Debt may at any
time or from time to time, and in their absolute discretion, change the
manner, place or terms of payment of, change or extend the time of payment
of, renew or alter, any Senior Debt, or amend or supplement any agreement,
instrument or document evidencing any Senior Debt, or exercise or refrain
from exercising any other of their rights under the Senior Debt including
without limitation the waiver of default thereunder, all without notice to
or assent from the holder of this Note. No right of any present or future
holders of any Senior Debt to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act
by any such holder or by any noncompliance by the Company with the terms of
this Note, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with.
6. Waivers; Amendments. Subject to the provisions of Section 9
hereof, amendments to and modifications of this Note may be made, required
consents and approvals may be granted, compliance with any term, covenant,
agreement, condition or other provision set forth herein may be omitted or
waived, either generally or in a particular instance and either
retroactively or prospectively with, but only with, the written consent of
the Company and the holder; provided, however, that no amendment or
modification of this Note shall be made without the prior written consent
of the holders of the Senior Bank Debt.
7. Notices. All notices and other communications which by any
provision of this Note are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, or by
recognized courier service, postage prepaid, (b) sent by facsimile or other
form of rapid transmission, confirmed by mailing (by first class or express
mail, or by recognized courier service, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
(c) personally delivered to the receiving party (which if other than an
individual shall be an officer or other responsible party of the receiving
party). All such notices and communications shall be mailed, sent or
delivered as follows: if to the holder hereof, at the address and/or
facsimile number of such holder appearing on the first page hereof; if to
the Company, c/o X.X. Childs Associates, L.P., Xxx Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx. Xxxx X. Childs
(Facsimile No.: (000) 000-0000); or to such other person(s), facsimile
number(s) or address(es) as the party to receive any such communication or
notice may have designated by written notice to the other party.
8. Section Headings. The headings contained in this Note are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Note.
9. Governing Law. The validity, interpretation, construction and
performance of this Note shall be governed by, and construed in accordance
with, the internal laws of the state of New York, without giving effect to
any choice or conflict of laws provision or rule that would cause the
application of domestic substantive laws of any other jurisdiction.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed as a sealed instrument as of the date first above written.
UNIVERSAL HOSPITAL
SERVICES, INC.
By:_______________________
Title:
