EXHIBIT 4
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT dated as of April 6, 1999, is among:
PRIMROSE HOLDINGS, INC., a Delaware corporation (the "Company"); SECURITY
CAPITAL CORPORATION, a Delaware corporation ("Security Capital"); Jo Kirchner of
Dallas, Georgia ("Kirchner"); Robert Benowitz of Cartersville, Georgia
("Benowitz"); and Raymond Orgera of Cartersville, Georgia ("Orgera"); and
SECURITY CAPITAL CORPORATION, a Delaware corporation ("Security Capital").
RECITALS
The Company, Security Capital, Primrose Holdings, Inc., Paul L. Erwin
("Erwin") and The Paul L. Erwin Grantor Retained Annuity Trust (together with
Erwin, the "Sellers") entered into a Stock Purchase Agreement dated as of April
6, 1999 (as amended and in effect from time to time, the "Purchase Agreement")
pursuant to which the Company agreed to purchase from Sellers, and Sellers
agreed to sell to the Company, all of the issued and outstanding stock of The
Jewel I Inc. d/b/a Primrose Country Day School, Metrocorp Properties, Inc. and
Primrose School Franchising Company (each a "Subsidiary" and, collectively, the
"Subsidiaries").
The parties hereto believe it is in the best interests of each of them to
enter into this Agreement to set forth their understanding with respect to
future dispositions of shares of the Company's capital stock and other matters
affecting the Company, all as more particularly set forth herein.
NOW THEREFORE, the parties to this Agreement hereby agree as follows:
ss.1. DEFINITIONS.
(a) For all purposes of this Agreement, the following terms shall have the
meanings set forth below (capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement for each such
term):
APPRAISER. Appraiser shall mean an investment banking firm, a "Big Five"
accounting firm, or other similarly qualified Person of recognized regional
standing which conducts appraisals for any of the purposes set forth in this
Agreement, which Person shall be an
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independent, disinterested third party and shall be knowledgeable in the
business of valuing companies, including companies engaged in the industry in
which the Company then competes.
CAPITAL PARTNERS. Capital Partners shall mean Capital Partners Holdings
II-A, L.P. and Capital Partners Holdings II-B, L.P., each a Delaware limited
partnership, and any affiliates thereof.
CAUSE. Cause shall mean, with respect to any Management Stockholder, any
of the following: (1) any conviction of, or a plea of guilty or no contest to,
any charge of embezzlement, theft or fraudulent act, or any felony which the
Board of Directors of the Subsidiary, acting in good faith, determine has had or
would reasonably be expected to have a material adverse effect upon the
business, operations, financial condition or prospects of the Subsidiary; (ii)
any breach by such Management Stockholder of obligations regarding
non-competition or confidentiality set forth in any written agreement between
the Subsidiary and such Management Stockholder; (iii) willful misconduct or
gross negligence by such Management Stockholder in the course of performing any
term or condition of his employment agreement with the Subsidiary or, in the
absence of such an agreement, as the Board of Directors of the Subsidiary,
acting in good faith, has reasonably required of such Management Stockholder if
and so long as such requirement was reasonably consistent with his past duties;
(iv) material failure by such Management Stockholder in the performance of any
other term or condition of his employment agreement with the Subsidiary or, in
the absence of such an agreement, as the Board of Directors of the Subsidiary,
acting in good faith, has reasonably required of such Management Stockholder if
and so long as such requirement was reasonably consistent with his past duties
(and, in the case of either clause (iii) or (iv) above, which the Board of
Directors of the Subsidiary, acting in good faith, determines has had or would
reasonably be expected to have a material adverse effect upon the business,
operations, financial condition or prospects of the Subsidiary and for which a
cure has not been commenced and diligently pursued within 10 days of notice to
such Management Stockholder from the Board of Directors of the Subsidiary).
COMMON STOCK. Common Stock shall mean the shares of the Company's common
stock, $.01 par value per share. Shares of Common Stock will continue to be
Common Stock subject to the terms of this Agreement following any Transfer to a
subsequent holder thereof (provided that such Transfer to a subsequent holder is
permitted by this Agreement) and, except as otherwise expressly provided herein,
each such subsequent holder will succeed to the rights and obligations of a
holder of Common Stock hereunder, PROVIDED that shares of Common Stock will
cease to be shares of Common Stock subject to the terms of this Agreement when
Transferred (i) pursuant to a Public Sale or (ii) to the Company pursuant to the
terms hereof.
DISABILITY, DISABLED. Disability or Disabled shall mean a mental or
physical condition which in the reasonable opinion of the Board of Directors of
the Subsidiary renders a Management Stockholder unable or incompetent to
properly carry out his duties and responsibilities contemplated under any
employment agreement between the Subsidiary and such Management Stockholder or,
in the absence of such an agreement, as the Board of Directors of
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the Subsidiary, acting in good faith, has reasonably required of such Management
Stockholder if and so long as such requirement was reasonably consistent with
his past duties, which condition shall have existed for a period of 120 or more
consecutive days. If the Management Stockholder should dispute the determination
of the Board of Directors as to whether a Disability exists, either the
Management Stockholder or the Subsidiary may require that the Management
Stockholder be examined by a physician and, in such case, the decision of such
physician shall be conclusive and binding on all parties. The examining
physician shall be mutually satisfactory to the Management Stockholder and the
Subsidiary, except if they are unable to agree, the Management Stockholder and
the Subsidiary shall each designate a physician and the examining physician
shall be a physician mutually acceptable to each of such designees.
EMPLOYEES. Employees shall mean any employee of the Company or any
Subsidiary determined by the Company's or such Subsidiary's Board of Directors
to be eligible to participate in any stock option plan approved by the Board and
adopted by the Company or such Subsidiary.
FAIR MARKET VALUE. Fair Market Value shall mean the total value of the
consideration which would be received upon the sale of shares of Common Stock
between a willing buyer and the holder of such shares as a willing seller with
the former under no compulsion to buy and the latter under no compulsion to
sell, all parties having reasonable knowledge of all relevant facts, calculated
in the case of any sale occurring as a result of any Management Stockholder's
death, without discount for the effects of his death.
GOOD REASON. Good Reason shall mean a cessation of employment of a
Management Stockholder occurring (i) as a result of the Disability of such
Management Stockholder, (ii) as a result of a significant health or other
material problem directly involving a member of such Management Stockholder's
immediate family which the Subsidiary's Board of Directors, acting in good
faith, reasonably determines will require the long-term relocation of the
Management Stockholder or will materially interfere with the proper discharge of
his duties and responsibilities to the Subsidiary on a long-term basis, or (iii)
after the fifth anniversary of the date hereof.
INSTRUMENT OF ACCESSION. Instrument of Accession shall mean an Instrument
of Accession in the form of SCHEDULE 1 hereto.
MANAGEMENT STOCKHOLDERS. Management Stockholders shall mean, initially,
Kirchner (as a holder of Common Stock and a holder of Options and any Common
Stock issued pursuant thereto), Benowitz (as a holder of Common Stock and a
holder of Options and any Common Stock issued pursuant thereto) and Orgera (as a
holder of Common Stock and a holder of Options and any Common Stock issued
pursuant thereto) and thereafter, any other employee of the Company or any
Subsidiary who is or becomes a Stockholder for purposes of this Agreement.
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PERMITTED TRANSFEREE. Permitted Transferee shall mean, (x) with respect to
any individual Stockholder, (a) such Stockholder's executor, administrator,
spouse, children or other lineal descendants, or (b) a trust established
exclusively for the benefit of such Stockholder and/or such Stockholder's
spouse, children or other lineal descendants, and (y) with respect to any
corporate Stockholder, the stockholders of such Stockholder or a liquidating
trust established for the benefit of such stockholders or any other affiliate of
such Stockholder. Whenever reference is made in this Agreement to the rights and
obligations of a Stockholder or group of Stockholders hereunder in respect of
Common Stock or Options owned by such Stockholder or group of Stockholders, such
reference shall be deemed to include all Permitted Transferees of such
Stockholder or group of Stockholders and all shares of Common Stock and Options
held by such Permitted Transferees.
PERSON. Person shall mean an individual, partnership, limited liability
company, limited liability partnership, corporation, association, trust, joint
venture, unincorporated organization, or any government, governmental department
or agency or political subdivision thereof.
PRIME. Prime shall mean the interest rate designated by Canadian Bank of
Commerce as being its prime rate of interest from time to time.
PUBLIC SALE. Public Sale shall mean any sale of Common Stock to the public
pursuant to a public offering registered under the Securities Act.
SCC FAIR MARKET VALUE PER SHARE. SCC Fair Market Value Per Share means, as
of the date of delivery of any written notice of the exercise of an Exchange
Right referred to in Section 9, (i) the average of the closing sales prices on
such date of the Class A Common Stock on all domestic securities exchanges on
which such security is listed, or (ii) if there have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or (iii) if on any day such security
is not so listed, the sales price for such security as of 4:00 P.M., New York
time, as reported on the Nasdaq Stock Market, or (iv) if such security is not
reported on the Nasdaq Stock Market, the average of the representative bid and
asked quotations for such security as of 4:00 P.M., New York time, as reported
on the Nasdaq interdealer quotation system, or any similar successor
organization, in each such case averaged over a period of 21 trading days
consisting of the day before "SCC Fair Market Value Per Share" is being
determined and the immediately prior 20 trading days prior to such day during
which such security was traded. Notwithstanding the foregoing, if at any time of
determination such security is not registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, and either listed on a national
securities exchange or authorized for quotation in the Nasdaq Stock Market, then
SCC Fair Market Value Per Share shall be determined by the Board of Directors of
Security Capital in its good faith judgment.
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SECURITIES ACT. Securities Act shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder, all as the same may be in effect
at the time.
STOCKHOLDERS. Stockholders shall mean, initially, the Management
Stockholders and Security Capital and thereafter, any Person who becomes a party
to this Agreement by executing an Instrument of Accession accepted by the
Company in connection with the issue or transfer to or acquisition by such
Person of shares of Common Stock from the Company, any Stockholder or any
subsequent transferee of a Stockholder.
TRANSFER. Transfer shall mean (i) the direct or indirect sale, assignment,
transfer, exchange, gift or other disposition of shares of Common Stock or any
Option, or (ii) the pledge, mortgage, or hypothecation of any interest in shares
of Common Stock or any Option, or (iii) the grant of any option or other right
to acquire shares of Common Stock or any Option.
TRIGGER EVENT. Trigger Event shall mean the occurrence of any of the
following: (i) the sale of assets of a Subsidiary having a fair value greater
than 80% of the fair value of all assets of such Subsidiary pursuant to any
single sale or series of related sales (other than the sale of inventory in the
ordinary course of business); (ii) the date a registration statement filed by a
Subsidiary or the Company pursuant to the Securities Act with respect to such
issuer's shares of common stock is declared effective by the Securities and
Exchange Commission; (iii) a sale of stock or series of related sales or a
merger, consolidation or similar corporate reorganization of a Subsidiary, and
as a result of which the Company shall own, directly or indirectly, less than
51% of the outstanding voting securities of such Subsidiary; (iv) a sale of
stock or series of related sales or a merger, consolidation or similar corporate
reorganization of the Company, and as a result of which Security Capital shall
own, directly or indirectly, less than 51% of the outstanding voting securities
of the Company; (v) a sale of stock or series of related sales or a merger,
consolidation or similar corporate reorganization of Security Capital, and as a
result of which Capital Partners shall own, directly or indirectly, in the
aggregate less than 50% of the outstanding voting securities of Security Capital
or (vi) Capital Partners shall cease to have the ability to elect a majority of
the Board of Directors of Security Capital (either through the ownership of
voting stock, by contract or otherwise).
(b) In addition to the foregoing definitions, the following terms shall have the
meanings ascribed to them in the Section set forth opposite such terms:
TERM SECTION DEFINED
"Adjustment Event" 4.1(d)
"Company" Preamble
"Management Call Notice" 4.1(a)
"Management Call Option" 4.1(a)
"Management Call Price" 4.1(b)
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"Management Put Notice" 4.2(a)
"Management Put Option" 4.2(a)
"Management Put Price" 4.2(a)
"Notice of Proposed Transfer" 3.1(a)
"Offer" 3.1(a)
"Offered Shares" 3.1(a)
"Offeror" 3.1(a)
"Options" 4.1(a)
"Permitted Voluntary Termination" 4.2(a)
"Proposed Purchaser" 3.1(a)
"Refusal Purchase Price" 3.1(e)
"Purchase Agreement" Recitals
"Security Capital" Preamble
"Subordinated Promissory Note" 4.3(b)
"Subsidiary" Recitals
ss.2. RESTRICTIONS ON DISPOSITIONS OF COMMON STOCK AND OPTIONS.
(a) Notwithstanding any other provision of this Agreement, except as expressly
permitted or required by Sections 3, 4, 5, 6, 7, 8 or 9 hereof, no
Stockholder shall Transfer any shares of Common Stock, including any
shares of Common Stock issued or issuable upon the exercise or conversion
of options, warrants, convertible securities or other similar instruments,
or any interest therein, to any Person other than a Permitted Transferee
of such Stockholder, without the prior written consent of the Board of
Directors of the Company.
(b) Except as expressly permitted or required by Sections 4, 5 or 8 hereof, no
Management Stockholder shall Transfer any Options nor any interest therein
to any Person other than a Permitted Transferee of such Stockholder,
without the prior written consent of the Board of Directors of the
Company.
(c) No transferee of any Stockholder (including any Permitted Transferee)
shall be entitled to the benefits of this Agreement unless and until such
transferee has executed and delivered to the Company an Instrument of
Accession and, in the case of a transferee other than a Permitted
Transferee, such Instrument of Accession has been accepted by the Company.
ss.3. RIGHTS OF REFUSAL.
3.1 Except as permitted by Section 2(a) hereof, no Stockholder shall
Transfer any shares of Common Stock, including shares of Common Stock issued or
issuable upon the exercise or conversion of options, warrants, convertible
securities or other similar instruments, or any interest therein, whether
presently owned by such Stockholder or hereafter acquired by purchase
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or by stock dividend, split up, combination, reclassification, reorganization,
consolidation or merger, except in accordance with the terms of this Section 3
as follows:
(a) In the event that at any time following the third anniversary of the
date of this Agreement any Stockholder desires to Transfer all or any
portion of his shares of Common Stock or any interest therein (hereinafter
sometimes referred to as the "Offeror"), he shall first deliver to the
Company and to each other Stockholder, a written notice (the "Notice of
Proposed Transfer") specifying the name and address of the proposed
transferee (hereinafter sometimes referred to as the "Proposed
Purchaser"), the identity and total number of shares of Common Stock which
the Offeror then desires to Transfer (the "Offered Shares"), and all of
the terms, including the price and payment terms, upon which the Offeror
proposes to Transfer the Offered Shares to the Proposed Purchaser. The
Notice of Proposed Transfer shall also state that the Company and/or the
other Stockholders shall have the right to purchase the Offered Shares in
the order specified in paragraph (b) hereof, at the price specified in
paragraph (e) hereof, and on the other terms specified in the Notice of
Proposed Transfer (an "Offer").
(b) (i) During the thirty (30) day period commencing on the date of the
Company's receipt of the Notice of Proposed Transfer, the Company shall
have the first option to purchase all or any portion of the Offered
Shares, before the same may be Transferred to any other Person. The
Company must give written notice of its election to the Offeror and the
other Stockholders during such 30-day period, specifying the number of
shares it intends to purchase and stating that it has the ability to
complete the intended purchase.
(ii) In the event that the Company does not elect to purchase all of
the Offered Shares pursuant to clause (i) of this paragraph (b), then each
other Stockholder shall have the second option to purchase, for a period
of fifteen (15) days commencing on the first day immediately following the
expiration of the 30- day period specified in clause (i) of this paragraph
(b), before the same may be Transferred to any other Person, that
proportion of the remaining Offered Shares as the number of shares of
Common Stock then owned by such Stockholder bears to the total number of
shares of Common Stock then held by all Stockholders electing to
participate in the Offer. This second option shall be exercisable by
giving written notice to the Offeror, the other Stockholders and the
Company of such election within the 15-day period specified in this clause
(ii), and shall include a statement to the effect that such Stockholder
has the ability to complete the intended purchase. To the extent a
Stockholder elects not to purchase his entire proportionate share of the
remaining Offered Shares, the right to purchase any remaining Offered
Shares shall be reallocated among the participating Stockholders, ratably.
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(c) If the Company and/or the other Stockholders have not given notice of
their intention to purchase all of the Offered Shares pursuant to
paragraph (b) hereof, neither the Company nor the other Stockholders shall
be entitled to purchase any of the Offered Shares and, during the period
of ninety (90) days commencing on the first day immediately following the
expiration of the last refusal period specified in paragraph (b), the
Offeror shall have the right to Transfer all of the Offered Shares to the
Proposed Purchaser at a price and on terms not more favorable to the
Proposed Purchaser than those specified in the Notice of Proposed
Transfer, PROVIDED that the Proposed Purchaser agrees in writing to become
a party to this Agreement by executing an Instrument of Accession accepted
by the Company. If for any reason the Offered Shares are not Transferred
to the Proposed Purchaser within such period and at such stated price and
on such stated terms, the right to Transfer in accordance with the Notice
of Proposed Transfer shall expire and the provisions of this Agreement
shall continue to be applicable to said shares.
(d) Offered Shares which are Transferred to a Proposed Purchaser shall
continue to be subject to the provisions of this Agreement, and the
Company shall not be obligated to issue any shares of Common Stock in the
name of such Proposed Purchaser unless and until he shall have become a
party to this Agreement by executing an Instrument of Accession accepted
by the Company.
(e) The Company or the Stockholder purchasing the greatest percentage of
the Offered Shares shall state in a written notice to the Offeror the time
and date for the closing of the purchase by all electing offerees, which
closing shall not be less than 30 days, nor more than 45 days, after the
first day immediately following the expiration of the last refusal period
specified in paragraph (b) hereof. The price to be paid to the Offeror for
the Offered Shares upon the exercise of the option provided for in this
Section 3.1 shall be the price at which the Offered Shares are proposed to
be Transferred as set forth in the Notice of Proposed Transfer (the
"Refusal Purchase Price").
3.2 The Refusal Purchase Price shall, unless otherwise agreed in writing
by the parties to such transaction, be paid on the same terms as are specified
in the Notice of Proposed Transfer on the date of the closing.
3.3 The closing of the purchase and sale of the Offered Shares shall be
held at the principal place of business of the Company on the date specified in
the notice described in Section 3.1(e), or at such earlier time or at such other
place as the Offeror and the participating Stockholders and/or Company, as the
case may be, shall mutually agree upon. At the closing, the participating
Stockholders or the Company, as the case may be, shall deliver the consideration
required by Section 3.2, and the Offeror shall deliver certificates representing
the Offered Shares together with stock powers duly endorsed for the transfer
thereof.
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3.4 Whenever the Company or any Stockholder agrees to purchase shares of
Common Stock of the Company pursuant to this Agreement, each Stockholder or the
personal representative of any decedent Stockholder shall do all things and
execute and deliver all papers as may be reasonably necessary to consummate such
purchase.
3.5 If any Transfer is made or attempted contrary to the provisions of
this Agreement, the other Stockholders and the Company shall have the option to
purchase the Common Stock so Transferred or attempted to be Transferred, in the
order of priority set forth in this Section 3 which would have been applicable
had there been compliance with this Agreement. Such option shall be exercisable
within one hundred eighty (180) days after the Stockholders and the Company
receive actual notice of such Transfer or attempted Transfer by giving written
notice to the owner thereof or his transferees either before or after the
Transfer.
3.6 Notwithstanding the foregoing provisions of this Section 3, no
Management Stockholder or any Permitted Transferee of any Management Stockholder
shall be entitled to participate in the purchase of the Offered Shares if such
Management Stockholder's employment has been terminated by the Subsidiary for
any reason, including, but not limited to, death, Disability or other
termination, whether with or without Cause or Good Reason.
ss.4. PUT/CALL RIGHTS IN RESPECT OF MANAGEMENT STOCKHOLDERS
(OTHER THAN BY REASON OF DEATH).
4.1 CALL. (a) In the event a Management Stockholder ceases to be employed
by each Subsidiary employing such Management Stockholder for any reason, other
than the death of such Management Stockholder, then, at any time within one year
of the occurrence of any such cessation of employment, the Company may, at its
sole option, purchase from such Management Stockholder and any Permitted
Transferees of such Management Stockholder, all of the Common Stock owned by
such Management Stockholder and Permitted Transferees of such Management
Stockholder and any rights to shares of Common Stock issuable upon exercise of
options, if any, in which such Management Stockholder had a vested interest as
of the date of the occurrence of such event ("Options"), and such Management
Stockholder and any Permitted Transferees of such Management Stockholder shall,
upon the exercise of such call option, sell all of such Common Stock and any
Options to the Company, at the applicable purchase price set forth in paragraph
(b) hereof (the "Management Call Option"). The Management Call Option shall be
exercised by delivery of written notice to such Management Stockholder and any
Permitted Transferees of such Management Stockholder within the one year period
after the occurrence of such cessation of employment (a "Management Call
Notice"), specifying a date not less than 60 and not more than 90 days after the
date of such Management Call Notice, on which date the Company will purchase the
Common Stock and any Options of such Management Stockholder and any Permitted
Transferees of such Management Stockholder.
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(b) If the Company elects to purchase Common Stock and any Options of a
Management Stockholder and his Permitted Transferees pursuant to a Management
Call Option, then
(y) in the case of a cessation of employment of such Management
Stockholder by reason of a termination by each applicable Subsidiary
without Cause or the voluntary cessation by such Management Stockholder of
his duties and responsibilities as an employee for Good Reason, the
purchase price per share of such Common Stock shall be equal to the Fair
Market Value thereof, and the purchase price for each Option, if any,
shall be equal to the Fair Market Value of each share of Common Stock
issuable thereunder net of the applicable exercise price; and
(z) in the case of a cessation of employment of such Management
Stockholder for any reason other than death and as specified in Section
4.1(b)(y), the purchase price per share of such Common Stock shall be
equal to the original cost therefor paid by such Management Stockholder
upon issuance thereof, and there shall be no consideration required to be
paid for the cancellation of any Option,
in each case as determined as at the date of the Management Call Notice (the
"Management Call Price").
(c) At the closing of the purchase of such shares of Common Stock and any
Options owned by such Management Stockholder and any Permitted Transferees of
such Management Stockholder pursuant to the exercise of a Management Call
Option, the Company shall pay in cash, or by certified or bank cashier's check,
the maximum amount of the Management Call Price then permitted to be paid in
cash by the Company's lenders, with the balance, if any, payable by delivery of
a Subordinated Promissory Note described in Section 4.3(b) hereof. The Company
will use commercially reasonable efforts (without any obligation on its part to
raise additional equity or debt for such purpose) to obtain any required waivers
from its lenders so as to permit payment of the Management Call Price in cash to
the maximum extent possible.
4.2 PUT. (a) In the event a Management Stockholder who is employed by the
Company or any of the Subsidiaries shall cease to be employed at any time prior
to the fifth anniversary of the date hereof for any reason other than death or
termination by the Company or any of the Subsidiaries with cause, then the
Management Stockholder and the Permitted Transferees of such Management
Stockholder may, at the sole option of such Management Stockholder and the
Permitted Transferees, require the Company to purchase from such Management
Stockholder and the Permitted Transferees of such Management Stockholder all of
the Common Stock owned by such Management Stockholder and the Permitted
Transferees of such Management Stockholder (the "First Management Put Option"),
and the Company shall, upon exercise of a First Management Put Option, purchase
all of such Common Stock from such Management Stockholder and the Permitted
Transferees of such Management Stockholder, at a purchase price of $500 per
share of Common Stock. In the event a Management Stockholder who is employed by
the Company or any of the Subsidiaries shall cease to be employed for any
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reason other than death or termination by the Company or any of the Subsidiaries
with cause at any time on or after the fifth anniversary of the date hereof,
then, at any time within one year after the sixth anniversary hereof, the
Management Stockholder and the Permitted Transferees of such Management
Stockholder may, at the sole option of such Management Stockholder and the
Permitted Transferees, require the Company to purchase from such Management
Stockholder and the Permitted Transferees of such Management Stockholder all of
the Common Stock and any Options owned by such Management Stockholder and the
Permitted Transferees of such Management Stockholder (the "Second Management Put
Option" and together with the First Management Put Option, the "Management Put
Option"), and the Company shall, upon exercise of a Second Management Put
Option, purchase all of such Common Stock and any Options from such Management
Stockholder and the Permitted Transferees of such Management Stockholder, at the
purchase price set forth in paragraph (b) hereof. The Management Put Option
shall be exercised by delivery of written notice to the Company within the one
year period after termination of employment by the Management Stockholder with
respect to the First Management Put Option or after the sixth anniversary hereof
with respect to the Second Management Put Option (the "Management Put Notice"),
specifying a date not less than 60 and not more than 90 days after the date of
such Management Put Notice on which date the Company shall be required to
purchase such shares of Common Stock and any Options owned by such Management
Stockholder and the Permitted Transferees of such Management Stockholder.
(b) If the Management Stockholder and the Permitted Transferees of such
Management Stockholder elect to require the Company to purchase Common Stock and
any Options of a Management Stockholder and such Permitted Transferees pursuant
to a Management Put Option, the purchase price per share of such Common Stock
shall be equal to the Fair Market Value thereof, and the purchase price for each
Option, if any, shall be equal to the Fair Market Value of each share of Common
Stock issuable thereunder net of the applicable exercise price, all as
determined as at the date of the Management Put Notice (the "Management Put
Price").
(c) At the closing of the purchase of such shares of Common Stock and any
Options owned by such Management Stockholder and the Permitted Transferees of
such Management Stockholder pursuant to the exercise of a Management Put Option,
the Company shall pay in cash, or by certified or bank cashier's check, the
maximum amount of the Management Put Price then permitted to be paid in cash by
the Company's lenders, with the balance, if any, payable by delivery of a
Subordinated Promissory Note described in Section 4.3(b) hereof. The Company
will use commercially reasonable efforts (without any obligation on its part to
raise additional equity or debt for such purpose) to obtain any required waivers
from its lenders so as to permit payment of the Management Put Price in cash to
the maximum extent possible.
4.3 (a) In the event the Fair Market Value of shares of Common Stock owned
by such Management Stockholder and the Permitted Transferees of such Management
Stockholder or issuable under any Options owned by such Management Stockholder
shall not be agreed upon by the parties under this Section 4 within 30 days
after the mailing of the Management Put or Call Notice, as applicable, then the
Fair Market Value of such shares shall be determined by an
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Appraiser reasonably satisfactory to the parties; PROVIDED, that if the parties
cannot so agree, then: (i) the Company shall designate an Appraiser; (ii) the
Management Stockholder shall designate an Appraiser, (iii) the two Appraisers
shall designate a third Appraiser; and (iv) the third Appraiser shall perform
the appraisal. In the event the two Appraisers are unable to promptly designate
the third Appraiser, the parties shall then immediately submit the issue of
determining such Fair Market Value to binding arbitration before an arbitrator
selected from a list of arbitrators practicing in Atlanta, Georgia with any
arbitration proceedings in connection therewith to be held in Atlanta, Georgia
in accordance with the rules and procedures of the American Arbitration
Association applicable to commercial transactions. Any such appraisal or
arbitration shall be final and binding on the parties. The cost of such
appraisal or arbitration shall be borne equally by the parties to such
transaction.
(b) Any Subordinated Promissory Note issued pursuant to this Section 4
shall be a Subordinated Promissory Note of the Company which (A) shall be
payable in equal annual installments, commencing one (1) year after the date of
its issuance and with a final maturity date on the sixth anniversary of the date
hereof (provided, however, that if the Subordinated Promissory Note is issued
pursuant to the exercise of a Management Put Option, the final maturity date
thereof shall be the earliest date permitted by the Company's lenders), (B)
shall bear interest at a rate per annum equal to Prime plus two percent (2%),
but in no event shall such annual rate exceed twelve percent (12%) per annum or
be less than eight percent (8%) per annum and in each case, such interest shall
be payable monthly in arrears so long as permitted by the Company's lenders; (C)
shall be subordinated in a manner acceptable to the Company's and each
Subsidiary's lenders; (D) shall be prepayable at any time without premium or
penalty; (E) shall be subject to mandatory prepayment in full without premium or
penalty upon the occurrence of a Trigger Event or the earliest date permitted by
the Company's lenders; and (F) shall include restrictive covenants identical to
those set forth in the promissory notes issued pursuant to the Purchase
Agreement.
(c) The closing of any purchase and sale of Common Stock and any Options
pursuant to this Section 4 shall be held at the principal place of business of
the Company on the date specified in the Management Put or Call Notice, or 15
days after the final determination of the Management Put or Call Price,
whichever date is later. At the closing, the Company shall deliver the purchase
consideration against delivery by such Management Stockholder and any Permitted
Transferees of such Management Stockholder of certificate(s) representing the
purchased shares of Common Stock with stock power(s) duly endorsed for the
transfer thereof and appropriate instruments terminating all rights existing
under any purchased Options.
(d) Notwithstanding anything to the contrary herein, the exercise of
rights to purchase or the requirement of the Company to purchase shares of
Common Stock and any Options pursuant to this Section 4 shall be subject to
limitations, if any, imposed upon the Company under applicable law or, subject
to the Company's obligations in respect of seeking waivers from its lenders as
provided in Section 4.1(c) or 4.2(c) hereof, by any agreements with the
Company's lenders then in effect, including, without limitation, restrictions on
the ability of the Company to
12
pay the cash portion of any Management Put or Call Price and on the ability to
pay principal or interest under the Subordinated Promissory Note during the
existence of any default under such lender's agreements.
ss.5. PUT/CALL RIGHTS OF MANAGEMENT STOCKHOLDERS IN THE EVENT
OF DEATH.
5.1 PUT. (a) In the event of the death of a Management Stockholder, then
at any time within one year of such event, the estate of such Management
Stockholder and the Permitted Transferees of any such Management Stockholder
may, at their option, sell to the Company, and require the Company to purchase,
all of the Common Stock and any Options owned by the estate of such Management
Stockholder and the Permitted Transferees of such Management Stockholder, at a
price per share equal to the Fair Market Value of such share of Common Stock and
at a purchase price for each Option, if any, equal to the Fair Market Value of
each share of Common Stock issuable thereunder net of the applicable exercise
price, all as determined as of the date of such death.
(b) The put option of the estate of such Management Stockholder and the
Permitted Transferees of such Management Stockholder pursuant to paragraph (a)
above shall be exercised by delivery of written notice to the Company, within
such applicable one year period, specifying a date not less than 60 and no more
than 90 days after the date of such notice on which date the Company shall be
required to close the required purchase of such Common Stock and any Options
owned by the estate of such Management Stockholder and the Permitted
Transferees.
5.2 CALL. (a) In the event of the death of a Management Stockholder, then
at any time within one year of such event, the Company may, at its sole option,
purchase all of the Common Stock and any Options owned by the estate of such
Management Stockholder and the Permitted Transferees of such Management
Stockholder, and the estate of such Management Stockholder and the Permitted
Transferees of such Management Stockholder shall, upon the exercise of such call
option, sell to the Company all of such Common Stock and any such Options, at a
price per share equal to the Fair Market Value of such share of Common Stock and
at a purchase price for each Option, if any, equal to the Fair Market Value of
each share of Common Stock issuable thereunder net of the applicable exercise
price, all as determined as at the date of such death.
(b) The call option of the Company pursuant to paragraph (a) above shall
be exercised by delivery of written notice to the estate of such Management
Stockholder and the Permitted Transferees of such Management Stockholder, within
such applicable one year period, specifying a date not less than 60 and no more
than 90 days after the date of such notice on which date the estate of such
Management Stockholder and the Permitted Transferees of such Management
Stockholder shall be required to sell to the Company the Common Stock and any
Options owned by the estate of such Management Stockholder and his Permitted
Transferees.
13
5.3 (a) At the closing of the purchase of shares of Common Stock and any
Options owned by the estate of a Management Stockholder and the Permitted
Transferees pursuant to the exercise of a put or call option under Section
5.1(a) or 5.2(a) hereof, the Company shall pay in cash, or by certified or bank
cashier's check, the maximum amount of such purchase price then permitted to be
paid in cash by the Company's lenders, with the balance payable by delivery of a
Subordinated Promissory Note of the Company as described in Section 4.3(b)
hereof. The Company will use commercially reasonable efforts (without any
obligation on its part to raise additional equity or debt for such purpose) to
obtain any required waivers from its lenders so as to permit payment of the
purchase price in cash to the maximum extent possible.
(b) In the event the Fair Market Value of shares of Common Stock owned by
the estate of such Management Stockholder and the Permitted Transferees or
issuable under any Options owned by the estate of such Management Stockholder
shall not be agreed upon by the parties within 30 days after the mailing of the
applicable put or call notice, then the Fair Market Value of such shares shall
be determined in the manner specified in Section 4.3(a) hereof, with the cost of
such determination borne in the manner set forth in such Section.
(c) The closing of any purchase and sale of Common Stock and any Options
pursuant to this Section 5 shall be held at the principal place of business of
the Company on the date specified in the applicable put or call notice, or 15
days after the final determination of the purchase price, whichever date is
later. At the closing, the Company shall deliver the purchase consideration
against delivery by the estate of such Management Stockholder and the Permitted
Transferees of certificate(s) representing the purchased shares of Common Stock
with stock power(s) duly endorsed for the transfer thereof and appropriate
instruments terminating all rights existing under any purchased Options.
(d) Notwithstanding anything to the contrary herein, the exercise of
rights to purchase or the requirement of the Company to purchase shares of
Common Stock and any Options pursuant to this Section 5 shall be subject to
limitations, if any, imposed upon the Company under applicable law or, subject
to the Company's obligations in respect of seeking waivers from its lenders as
provided in Section 5.3(a) hereof, by any agreements with the Company's lenders
then in effect, including, without limitation, restrictions on the ability of
the Company to pay the cash portion of any put or call and on the ability to pay
principal or interest under the Subordinated Promissory Note during the
existence of any default under such lender's agreements.
ss.6. TAG ALONG RIGHTS.
In the event that Security Capital shall propose to Transfer to any Person
(other than to a Permitted Transferee), in any single transaction or series of
related transactions, 20% or more of the aggregate amount of Common Stock held
by Security Capital and its Permitted Transferees immediately prior to giving
effect to such transaction or transactions, such Transfer shall be conditioned
upon receipt by each of the other Stockholders of a binding written offer (and
the proposed transferee's compliance with the terms thereof if such offer is
accepted by any of the
14
other Stockholders within 30 days of its receipt) by the proposed transferee to
purchase, for the same price per share and upon the same terms and conditions as
are applicable to Security Capital, a portion of each other Stockholder's Common
Stock of the Company up to (at such other Stockholder's option) an amount equal
to the same percentage of the other Stockholder's Common Stock in the Company as
the percentage of Security Capital's Common Stock of the Company proposed to be
sold or transferred (after adjustment of such percentage to account for shares
of Common Stock of each other Stockholder, in each case to the extent thereof to
be included in such sale pursuant to the terms of this Section 6). The closing
of the sale by any participating Stockholders shall occur concurrently with the
sale by Security Capital to the proposed transferee.
ss.7. DRAG ALONG RIGHTS.
In the event that, at any time from and after the date hereof, Security
Capital receives a bona fide written offer from another Person which is not a
partner or an affiliate of Security Capital, or a stockholder of Security
Capital, or a Permitted Transferee of Security Capital, to purchase more than
80% of the issued and outstanding Common Stock of the Company held by Security
Capital, which offer Security Capital is prepared to accept, then Security
Capital may, by notice in writing to the other Stockholders, require the other
Stockholders to sell, and the other Stockholders shall then be required to sell,
to the offeror the same percentage of Common Stock owned by them as the
percentage of shares being sold by Security Capital bears to all the shares of
Common Stock owned by Security Capital on the same terms and conditions
(including, without limitation, with respect to purchase price and terms of
payment) as are offered to Security Capital and as are specified in the
offeror's offer. The closing of the sale by Security Capital shall occur
concurrently with the sale by the other Stockholders to the offeror.
ss.8. CHANGE OF CONTROL PUT.
8.1 (a) In the event there occurs (i) the sale of assets of the Company
having fair value greater than 80% of the fair value of all assets of the
Company pursuant to any single sale or series of related sales (other than the
sale of inventory in the ordinary course of business); or (ii) a sale of stock
or series of related sales, or a merger, consolidation or similar corporate
reorganization of the Company, and as a result of which Security Capital shall
own, directly or indirectly, less than 51% of the outstanding voting securities
of the Company, the Company agrees to give prompt written notice of such event
to the Management Stockholders, whereupon each of the Management Stockholders
may, at his option exercisable at any time within 90 days of the date of such
notice, require the Company to purchase all of the Common Stock and any Options
owned by such Management Stockholder and any of his Permitted Transferees, and
the Company shall, upon the exercise of such put option, purchase from such
Management Stockholder and any of his Permitted Transferees, all of such Common
Stock and any such Options, at a price per share of Common Stock equal to the
Fair Market Value thereof, and at purchase price for each Option equal to the
Fair Market Value of each share of Common Stock
15
issuable thereunder net of the applicable exercise price, all as of the date of
such event, in accordance with the terms of this Section 8.
(b) The put options of the Management Stockholders pursuant to paragraph
(a) above shall be exercised by delivery of written notice(s) to the Company,
within such applicable 90 day period, specifying a date not less than 60 and no
more than 90 days after the date of such notice on which date the Company shall
purchase all of the Common Stock and any Options owned by such Management
Stockholder and any of his Permitted Transferees.
8.2 (a) At the closing of the purchase of shares of Common Stock and any
Options pursuant to the exercise of a put option under Section 8.1(a) hereof,
the Company shall pay the purchase price therefor in cash.
(b) In the event the Fair Market Value of shares of Common Stock shall not
be agreed upon by the applicable parties within 30 days after the mailing of the
put notice, then the Fair Market Value of such Common Stock and any shares
issuable under any Options shall be determined in the manner specified in
Section 4.3(a) hereof, with the cost of such determination borne in the manner
set forth in such Section.
(c) The closing of any purchase and sale of Common Stock and any Options
pursuant to this Section 8 shall be held at the principal place of business of
the Company on the date specified in the applicable put notice, or 15 days after
the final determination of the purchase price, whichever date is later. At the
closing, the Company shall deliver the purchase consideration against delivery
by such Management Stockholder and any Permitted Transferees of certificate(s)
representing the purchased shares of Common Stock with stock power(s) duly
endorsed for the transfer thereof and appropriate instruments terminating all
rights existing under any purchased Options.
(d) Notwithstanding anything to the contrary herein, the exercise of the
Company's obligations to purchase shares of Common Stock and any Options
pursuant to this Section 8 shall be subject to limitations, if any, imposed upon
the Company under applicable law or by any agreements with the Company's lenders
then in effect. The Company will utilize commercially reasonable efforts
(without any obligation on its part to raise additional equity or debt for such
purpose) to obtain any required waivers from its lenders so as to permit payment
of the purchase price in cash to the maximum extent possible.
ss.9. EXCHANGE RIGHTS.
After the fifth anniversary of the date of this Agreement, any Stockholder
may elect, during the thirty (30) day period following the filing of Security
Capital's Annual Report on Form 10-K for the then most recently completed fiscal
year, to exchange (the "Exchange Right") (i) any or all of the Common Stock
owned by such Stockholder for shares of the Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), of Security Capital at
16
an exchange rate equal to the aggregate Fair Market Value of the shares of the
Common Stock to be exchanged by such Stockholder divided by the SCC Fair Market
Value Per Share as of the date of delivery of the written notice as described
below; and (ii) any or all of the Options owned by such Stockholder and
currently exercisable for shares of the Class A Common Stock at an exchange rate
equal to (a) the sum of the aggregate Fair Market Value of the shares of the
Common Stock receivable upon exercise of the Options to be exchanged net of the
aggregate applicable exercise price, divided by (b) the SCC Fair Market Value
Per Share. In the event that the Company, Security Capital and such Stockholder
cannot agree on the Fair Market Value of the shares of the Common Stock to be
exchanged, such Fair Market Value shall be determined as set forth in Section
4.3(a).
The Exchange Right may be exercised by delivery of written notice to the
Company and Security Capital, specifying the number of shares of Common Stock
(including shares receivable upon exercise of exchanged Options) to be exchanged
and a date not less than 10 and not more than 30 days after the date of such
notice, on which the closing of such exchange shall occur.
The closing of any such exchange pursuant to this Section 9 shall be held
at the principal place of business of the Company on the date specified in such
written notice, or 15 days after final determination of the exchange ratio,
whichever is later. At the closing, Security Capital shall deliver to such
Stockholder certificate(s) representing the shares of the Class A Common Stock
to be issued in connection with such exchange, and such Stockholder shall
deliver to Security Capital certificate(s) representing the shares of the Common
Stock to be exchanged, with stock power(s) duly endorsed for transfer thereof
and appropriate instruments terminating all rights existing under any exchanged
Options.
ss.10. PARTIES TO THE AGREEMENT.
(a) Every stockholder or holder of an Option of the Company shall, at the
option of the Company's Board of Directors, be required to become a party to
this Agreement by signing or causing to be signed on its behalf and delivering
to the Company an Instrument of Accession if such Person is not already a party
to this Agreement. Except as set forth herein, no Person shall become an owner
of record of any shares of Common Stock of the Company through a subsequent
transfer from any Stockholder unless and until the Company has received an
executed Instrument of Accession signed by such Person and, in the case of a
transferee other than a Permitted Transferee, such Instrument of Accession shall
have been accepted by the Company. No transfer of shares of Common Stock shall
be effective for any purpose unless and until recorded on the Company's record
of stockholders upon surrender of the certificates representing such Common
Stock, duly endorsed for transfer. Common Stock shall be issued and recorded
only in the name of the beneficial owner thereof or in the name or name(s) of
the trustee or nominee or trustees or nominees holding legal title thereto for
such beneficial owner on a fully disclosed basis.
17
(b) All certificates representing shares of Common Stock shall be endorsed
with the following legend:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE AND ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF
A STOCKHOLDERS' AGREEMENT DATED AS OF APRIL 6, 1999, AMONG PRIMROSE
HOLDINGS, INC. AND ITS STOCKHOLDERS. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF PRIMROSE HOLDINGS, INC."
Each Stockholder, by signing this Agreement or causing it to be signed,
represents and warrants to the Company that such Stockholder is acquiring or has
acquired its or his shares of Common Stock for its or his own account for
investment and not with a view to, or for resale in connection with, the
distribution thereof.
ss.11. AMENDMENT AND WAIVER.
No modification, amendment or waiver of any provision of this Agreement
will be effective against the Company or any other parties hereto unless such
modification, amendment or waiver is approved in writing by all the parties
hereto. The failure of any party to enforce any of the provisions of this
Agreement will in no way be construed as a waiver of such provisions and will
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
ss.12. SEVERABILITY.
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
ss.13. ENTIRE AGREEMENT.
Except as otherwise expressly set forth herein, this document embodies the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
18
ss.14. SUCCESSORS AND ASSIGNS.
This Agreement will inure to the benefit of and be enforceable by (i) the
Company and its successors and assigns and (ii) the Stockholders and their
respective heirs, executors, administrators and permitted assigns of each of
them so long as they hold shares of Common Stock or until this Agreement is
terminated.
ss.15. SECURITIES LAWS.
No holder shall Transfer shares of Common Stock unless, prior to such
Transfer, the Company shall receive, if requested by its Board of Directors, a
written opinion reasonably satisfactory in form and substance to the Company of
counsel satisfactory to the Company that the proposed Transfer may be effected
without registration under the Securities Act. The holder of Common Stock
proposed to be Transferred will pay the reasonable fees and disbursements of
counsel in connection with all opinions rendered pursuant to this Section.
ss.16. COUNTERPARTS.
This Agreement may be executed in separate counterparts, each of which
will be an original and all of which taken together will constitute one and the
same agreement.
ss.17. REMEDIES.
The parties hereto will be entitled to enforce their rights under this
Agreement specifically (without posting a bond or other security), to recover
damages by reason of any material breach of any provision of this Agreement and
to exercise all other fights existing in their favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach
of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
ss.18. EMPLOYMENT.
Nothing contained in this Agreement is intended to create for any
Stockholder who is employed by the Company a right to continued employment with
the Company or employment in the same position or on the same terms as those
currently in effect.
ss.19. NOTICES.
Any notice or other communication in connection with this Agreement shall
be deemed to be delivered and received if in writing (or in the form of a telex
or telecopy) addressed as provided below (a) when actually delivered, in person,
(b) when telexed or telecopied to said
19
address, and confirmed by mail or overnight courier service, (c) in the case of
delivery by mail, three business days shall have elapsed after the same shall
have been deposited in the United States mails, postage prepaid and registered
or certified, or (d) in the case of delivery by overnight courier service, one
business day shall have elapsed after the same shall have been deposited with
such courier in accordance with the standard procedures of such courier.
(i) If to the Company or to Security Capital, at:
c/o Capital Partners
One Pickwick Plaza
Suite 310
Greenwich, Connecticut 06830
Attn: Brian D. Fitzgerald
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attn: Christopher T. Jensen
(ii) If to any Stockholder, at the address for such Stockholder
specified on Schedule 2 hereto.
with a copy to:
[ ]
(iii) if to any other Person who becomes a party hereto, to it at
its address set forth in the Instrument of Accession signed by such
party.
ss.20. TERMINATION.
(a) This Agreement shall terminate as to any Stockholder by the Transfer
(other than to a Permitted Transferee or an individual Stockholder's
estate) of all of such Stockholder's Common Stock and Options in
accordance with the provisions of this Agreement.
(b) This Agreement shall terminate as to all Stockholders on the earlier of
(i) the effective date of a registration statement covering the Company's
first public offering of Common Stock, and (ii) ten (10) years from the
date hereof, unless all parties hereto renew the same for an additional
term specified in writing.
20
ss.21. GOVERNING LAW.
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF
THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WITHIN SUCH STATE.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
21
ss.22. DESCRIPTIVE HEADINGS.
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
PRIMROSE HOLDINGS, INC.
By: /S/ A. GEORGE GEBAUER
A. George Gebauer
Vice President
STOCKHOLDERS:
SECURITY CAPITAL CORPORATION
By: /S/ A. GEORGE GEBAUER
Title: President
/S/ JO KIRCHNER
Jo Kirchner
/S/ ROBERT BENOWITZ
Robert Benowitz
/S/ RAYMOND ORGERA
Raymond Orgera
22
List of Schedules
Schedule 1 - Instrument of Accession
Schedule 2 - Addresses for Stockholder Notices
Schedule 1
to Stockholders'
AGREEMENT
INSTRUMENT OF ACCESSION
Reference is made to that certain Stockholders' Agreement dated as of
April 6, 1999, a copy of which is attached hereto (as amended and in effect from
time to time, the "Stockholders' Agreement"), among Primrose Holdings, Inc., a
Delaware corporation (the "Company"), and the persons set forth therein.
The undersigned, in order to become the owner or holder of ___ shares (the
"Shares") of Common Stock, $.01 par value per share, of the Company, hereby
agrees that by the undersigned's execution hereof, the undersigned shall become
a party to the Stockholders' Agreement and subject to all of the restrictions,
conditions and obligations applicable to Stockholders set forth in the
Stockholders' Agreement. This Instrument of Accession shall take effect and
shall become a part of said Stockholders' Agreement immediately upon execution
by the undersigned.
Executed as of the date set forth below under the laws of the State of Delaware.
Name:___________________________________
Signature:______________________________
Address:________________________________
Date:___________________________________
Accepted:
PRIMROSE HOLDINGS, INC.
By:_________________________________
Title:______________________________
Date:_______________________________
Schedule 2
to Stockholders'
AGREEMENT
ADDRESSES FOR STOCKHOLDER'S NOTICES