Exhibit 10.2

 

CONTRIBUTION AND SUPPORT AGREEMENT

 

This CONTRIBUTION AND SUPPORT AGREEMENT (this “Agreement”), dated as of November
14, 2013, is made by and among Blue Eagle Holdings, L.P., a Delaware limited
partnership (“Parent”), and the undersigned shareholders of the Company (the
“Investors”). Parent and the Investors are sometimes individually referred to
herein as a “Party” and collectively as the “Parties.” Capitalized terms used
but not defined herein shall have the meanings set forth in the Merger Agreement
(as defined herein).

 

RECITALS

 

A.           Immediately following the execution and delivery of this Agreement,
Parent, Innotrac Corporation, a Georgia corporation (the “Company”), and Blue
Eagle Acquisition Sub, Inc., a Georgia corporation and a wholly-owned subsidiary
of Parent (“Purchaser”), will enter into an Agreement and Plan of Merger, dated
as of the date hereof (the “Merger Agreement”).

 

B.           On the terms and subject to the conditions set forth in the Merger
Agreement, (i) Purchaser will commence a tender offer to purchase (the “Offer”)
all of the issued and outstanding shares of common stock of the Company, par
value $0.10 per share (the “Common Stock”), at an offer price equal to the Offer
Price payable to the seller in cash, without interest, subject to withholding of
taxes required by applicable Law and (ii) following the consummation of the
Offer and at the Effective Time, Purchaser will merge with and into the Company
(the “Merger”), with the Company continuing as the surviving corporation,
whereby each issued and outstanding share of Common Stock (other than Excluded
Shares) will be converted into the right to receive the Common Merger
Consideration payable to the seller in cash, without interest, subject to
withholding of taxes required by applicable Law.

 

C.           Each Investor beneficially owns the number of shares of Common
Stock set forth opposite such Investor’s name on Schedule I hereto under the
heading “Investor Owned Shares” (such shares of Common Stock, together with any
other shares of Common Stock the beneficial ownership of which is directly or
indirectly acquired by such Investor until the termination of this Agreement
pursuant to the terms hereof, are collectively referred to herein as the
“Investor Owned Shares”).

 

D.           At the Contribution Closing (as defined herein), each Investor will
contribute to Parent all of the Investor Owned Shares owned by such Investor.

 

E.           In exchange for the Investor Owned Shares contributed by each
Investor, at the Contribution Closing, Parent will issue and deliver to such
Investor (the “Exchange”) the number of preferred units in Parent (“Preferred
Units”) set forth opposite such Investor’s name on Schedule I hereto under the
heading “Exchange Units” (such Preferred Units, the “Exchange Units”).

 

F.           The Contribution and Exchange is intended to qualify as a
contribution of property in exchange for a partnership interest under Section
721 of the Code.

 

G.           Immediately following the Contribution Closing, Parent will cause
one or more of its Affiliates to acquire from each Investor the number of
Exchange Units set forth opposite such Investor’s name on Schedule I hereto
under the heading “Purchased Units”) (such Exchange Units, the “Purchased
Units”) pursuant to the terms and conditions of a unit purchase agreement in
substantially the form attached hereto as Exhibit A (the “Unit Purchase
Agreement”).

 

 

 

  

H.            In order to facilitate the Contribution and Exchange in accordance
with the requirements of Rule 14d-10(a)(2) promulgated under the Exchange Act
with respect to the Offer, none of the Investors will tender any of the Investor
Owned Shares in connection with the Offer.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

 

CONTRIBUTION AND EXCHANGE; PURCHASE AND SALE of purchased units

 

Section 1.1           Contribution and Exchange.

 

(a)           Upon the terms and subject to the conditions of this Agreement, at
the Contribution Closing, (i) each Investor shall transfer, contribute and
deliver to Parent all of such Investor’s Investor Owned Shares, free and clear
of all Liens other than any such Lien arising hereunder and any applicable
restriction on transfer under applicable securities Law, and (ii) in exchange
for such Investor Owned Shares, Parent shall issue and deliver to such Investor
the number of Exchange Units set forth opposite such Investor’s name on Schedule
I hereto.

 

(b)           Each Investor shall be deemed to have contributed to the capital
of Parent securities with a fair market value equal to (i) the Offer Price
multiplied by (ii) the number of Investor Owned Shares contributed to Parent by
such Investor hereunder. The aggregate fair market value of each Investor’s
Investor Owned Shares is set forth opposite such Investor’s name on Schedule I
hereto.

 

(c)           The Contribution and Exchange is intended to qualify as a
contribution of property in exchange for a partnership interest under Section
721 of the Code. The parties agree to file all applicable income tax returns
consistent with such treatment and not take any position inconsistent with such
treatment.

 

Section 1.2           Contribution Closing.  Subject to the satisfaction or
waiver of the conditions to the Contribution set forth in Section 1.3, the
closing of the Contribution and Exchange (the “Contribution Closing”) will take
place immediately after Purchaser’s acceptance of the shares of Common Stock
tendered pursuant to the Offer at the offices of Kilpatrick Townsend & Stockton
LLP, 1100 Peachtree Street NE, Suite 2800, Atlanta, Georgia 30309-4528. At the
Contribution Closing, each Investor will deliver or cause to be delivered to
Parent (a) stock certificates, if any, representing such Investor’s Investor
Owned Shares, with duly executed stock powers attached in proper form to enable
delivery and transfer of such Investor Owned Shares from such Investor to Parent
or its designees and (b) a counterpart signature page to the Amended and
Restated Limited Partnership Agreement of Parent, in substantially the form
attached hereto as Exhibit B (the “Limited Partnership Agreement”). Upon receipt
of the foregoing deliveries by Parent, and effective as of the Contribution
Closing, each Investor will be admitted as a limited partner of Parent. The
rights, privileges and preferences of the Exchange Units issued to each Investor
shall be as set forth in the Limited Partnership Agreement. The date upon which
the Contribution Closing occurs is the “Contribution Closing Date”.

 

Section 1.3           Conditions to Contribution and Exchange.

 

(a)           Conditions to Parent’s Obligations.   The obligations of Parent to
consummate the Contribution and Exchange are subject to the satisfaction or
waiver by Parent of the following conditions:

 

 

 

  

(i)          all of the conditions to the consummation of the Merger under the
Merger Agreement shall have been satisfied;

 

(ii)         the representations and warranties of each Investor contained in
Article IV of this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Contribution Closing Date with
the same force and effect as if made on and as of such date;

 

(iii)        each Investor shall have performed in all material respects all of
its obligations under this Agreement required to be performed by it at or prior
to the Contribution Closing; and

 

(iv)        no Restraint shall be in effect enjoining, restraining, preventing
or prohibiting the consummation of the Contribution and Exchange or making the
consummation of the Contribution and Exchange illegal.

 

(b)          Conditions to Investors’ Obligations.   The obligations of each
Investor to consummate the Contribution and Exchange are subject to the
satisfaction or waiver by such Investor of the following conditions:

 

(i)          all of the conditions to the consummation of the Merger under the
Merger Agreement shall have been satisfied;

 

(ii)         the representations and warranties of Parent contained in Article V
of this Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Contribution Closing Date with the same
force and effect as if made on and as of such date;

 

(iii)        Parent shall have performed in all material respects all of its
obligations under this Agreement required to be performed by it at or prior to
the Contribution Closing; and

 

(iv)        no Restraint shall be in effect enjoining, restraining, preventing
or prohibiting the consummation of the Contribution and Exchange or making the
consummation of the Contribution and Exchange illegal.

 

Section 1.4         Purchase and Sale of Purchased Units.   Immediately
following the Contribution Closing (the “Purchase and Sale Closing”), Parent
will cause one or more of its Affiliates to acquire from each Investor the
number of Purchased Units set forth opposite such Investor’s name on Schedule I
hereto pursuant to the terms and conditions set forth in the Unit Purchase
Agreement. Upon the Purchase and Sale Closing, (a) each Investor shall deliver
to Parent a copy of the Unit Purchase Agreement, duly executed by such Investor,
and (b) Parent shall cause its designated Affiliate(s) to deliver to each
Investor a copy of the Unit Purchase Agreement, duly executed by such Affiliate.

 

ARTICLE II

 

COVENANTS REGARDING INVESTOR OWNED SHARES

 

Section 2.1          Agreement Not to Tender.   Each Investor agrees that such
Investor shall not, without the prior written consent of Parent, directly or
indirectly, tender such Investor’s Investor Owned Shares into the Offer in any
manner. Each Investor agrees to comply in all respects with Rule 14e-5
promulgated under the Exchange Act (notwithstanding whether such Investor would
be subject to Rule 14e-5).

 

 

 

 

Section 2.2           Voting Agreement.

 

(a)          From and after the date hereof, at any meeting of the Company’s
shareholders (or any adjournment or postponement thereof), however called, each
Investor separately agrees to vote (or cause to be voted) in person or by proxy
all of such Investor’s Investor Owned Shares:

 

(i)          in favor of (and shall provide written consent to) the approval of
the Merger Agreement and the Transaction (and in favor of any actions and
proposals required, or submitted for approval at any meeting of the Company
shareholders, in furtherance thereof);

 

(ii)         against (and shall not provide any written consent to) any proposal
presented to the Company’s shareholders for approval at any meeting of the
Company’s shareholders, or any written consent in lieu thereof, if the action,
transaction or agreement that is the subject of such proposal, following
approval by the Company’s shareholders would reasonably be expected, directly or
indirectly, to result in a breach by the Company of any covenant,
representation, warranty or other obligations of the Company set forth in the
Merger Agreement; and

 

(iii)        against (and shall not provide any written consent to) the
following actions or proposals (other than the Transaction): (A) any Takeover
Proposal; (B) the adoption of any Acquisition Agreement or any other agreement
relating to a Takeover Proposal, (C) any nominee for election to the Board other
than (x) a Person nominated by the Board or any committee thereof and/or (y)
Scott D. Dorfman; or (D) any other action or proposal to be voted upon by the
Company’s shareholders at any meeting of the Company’s shareholders, or any
written consent in lieu thereof, if such action or proposal would reasonably be
expected, to prevent, impede, interfere with, delay, postpone or adversely
affect the Transaction.

 

(b)          Each Investor separately agrees to cause such Investor’s Investor
Owned Shares to be duly counted for purposes of determining that a quorum is
present and for purposes of recording the results of any vote or consent
required pursuant to Section 2.2(a).

 

(d)          Parent acknowledges that each Investor has entered into this
Agreement solely in his, her or its capacity as the record or beneficial owner
of his, her or its Investor Owned Shares (and not in any other capacity,
including any capacity as a director or officer of the Company). Nothing herein
shall limit or affect any actions taken by any Investor in such Investor’s
capacity as a director or officer of the Company, or require any Investor to
take any action in such Investor’s capacity as a director or officer of the
Company. Without limiting the foregoing, and for the avoidance of doubt, nothing
in this Section 2.2(c) shall affect any of the rights or remedies of Parent and
Purchaser under the Merger Agreement or relieve the Company from any breach or
violation of the Merger Agreement caused by any action or omission of any
Investor (in such Investor’s capacity as a director or officer of the Company or
otherwise).

 

Section 2.3           Irrevocable Proxy.

 

(a)          In furtherance of each Investor’s agreements in Sections 2.1 and
2.2 of this Agreement, each Investor hereby appoints Parent and Parent’s
designees, and each of them individually, as such Investor’s proxy and
attorney-in-fact (with full power of substitution) (the “Proxyholders”), for and
in the name, place and stead of such Investor, to vote all Investor Owned Shares
owned by such Investor (at any meeting of the Company’s shareholders (or any
adjournment or postponement thereof), however called), or to execute one or more
written consents in respect of such Investor Owned Shares with respect to the
matters described in Section 2.2(a) of this Agreement. If any Investor fails for
any reason to be counted as present or to vote (including by written consent, if
applicable) such Investor’s Investor Owned Shares in accordance with the
requirements of Section 2.2(a) above, then Parent shall have the right to cause
to be present or vote such Investor’s Investor Owned Shares in accordance with
the provisions of Section 2.2(a). The Proxyholders may not exercise this
irrevocable proxy on any matter except as provided above. Each Investor may vote
such Investor’s Investor Owned Shares on all other matters.

 

 

 

 

(b)          The proxy granted pursuant to Section 2.3(a) shall (i) be valid and
irrevocable until the valid termination of this Agreement in accordance with (or
as otherwise provided in) Article VI hereof and (ii) automatically terminate
upon the valid termination of this Agreement in accordance with (or as otherwise
provided in) Section 6.1 hereof. Each Investor represents that any and all other
proxies and powers of attorney heretofore given in respect of such Investor’s
Investor Owned Shares owned by such Investor are revocable, and that such other
proxies have been revoked. Each Investor affirms that the foregoing proxy is:
(A) given (I) in connection with the execution of the Merger Agreement and (II)
to secure the performance of such Investor’s duties under this Agreement, (B)
coupled with an interest and may not be revoked except as otherwise provided in
this Agreement and (C) intended to be irrevocable prior to valid termination of
this Agreement or as otherwise provided in Section 6.1 hereof. All authority
herein conferred shall survive the death, bankruptcy or incapacity of such
Investor and shall be binding upon the heirs, estate, administrators, personal
representatives, successors and assigns of such Investor.

 

Section 2.4           Documentation and Information; Schedule 13E-3.

 

(a)          Each Investor (i) consents to and authorizes the publication and
disclosure by Parent of such Investor’s identity and holdings of such Investor’s
Investor Owned Shares and the nature of such Investor’s commitments,
arrangements and understandings under this Agreement, in any press release, the
Offer Documents or any other disclosure document required in connection with the
Transaction, and (ii) will use reasonable best efforts to give to Parent, as
promptly as practicable, any information reasonably related to the foregoing as
it may reasonably require for the preparation of any such disclosure documents.
Each Investor will use reasonable best efforts to notify Parent, as promptly as
practicable, of any required corrections with respect to any written information
supplied by such Investor specifically for use in any such disclosure document,
if and to the extent such Investor becomes aware that any such information has
become false or misleading in any material respect.

 

(b)          Without limiting the generality of the foregoing, on the date the
Offer Documents and the Schedule 14D-9 are initially filed with the SEC, the
Investors (together with the Company and Purchaser) shall, in a manner that
complies with Rule 13e-3 promulgated under the Exchange Act, jointly file with
the SEC the Schedule 13E-3 and shall jointly with the Company and Purchaser mail
the Schedule 13E-3 to the holders of Common Stock promptly after filing the
Schedule 13E-3 with the SEC. Each Investor shall promptly correct any
information provided by it for use in the Schedule 13E-3 if and to the extent
that such information shall have become false or misleading in any material
respect, and each Investor shall take all steps necessary to amend or supplement
the Schedule 13E-3 and to cause the Schedule 13E-3, as so amended or
supplemented, to be filed with the SEC and disseminated to the Company’s
shareholders, in each case as and to the extent required by the Exchange Act.
Each Investor and the counsel for the Investors shall be given a reasonable
opportunity to review the Schedule 13E-3 before it is filed with the SEC. Each
Investor shall promptly notify Parent and the Company upon the receipt of any
comments from the SEC (or the staff of the SEC) or any request from the SEC (or
the staff of the SEC) for amendments or supplements to the Schedule 13E-3, and
shall provide Parent and the Company with copies of all correspondence (or
telephonic notice of any oral responses or discussions) with the SEC (or the
staff of the SEC). Each Investor shall use reasonable best efforts to respond as
promptly as reasonably practicable to any comments of the SEC (or the staff of
the SEC) with respect to the Schedule 13E-3. Prior to the filing of any
amendment or supplement to the Schedule 13E-3 or responding to any comments of
the SEC (or the SEC staff) with respect to the Schedule 13E-3, each Investor
shall have a reasonable opportunity to review and to propose comments on such
document or response.

 

 

 

 

Section 2.5           Other Actions.  Each Investor agrees not to enter into any
agreement or commitment with any Person the effect of which would, or would
reasonably be expected to, violate, be inconsistent with or otherwise frustrate
the purposes of the provisions and agreements set forth in this Article II.

 

ARTICLE III

 

STANDSTILL AND NON-SOLICITATION

 

Section 3.1           Standstill in Respect of Investor Owned Shares.  Each
Investor hereby agrees that, from and after the date hereof until the earlier of
the Effective Time and the valid termination of the Merger Agreement, such
Investor shall not, directly or indirectly, unless (i) specifically requested by
Parent in writing or (ii) expressly contemplated by the terms of this Agreement
or the Merger Agreement:

 

(a)          sell, transfer, tender, pledge, encumber, assign or otherwise
dispose of (collectively, a “Transfer”), or enter into any contract, option or
other agreement with respect to, or consent to, a Transfer of, any or all of
such Investor’s Investor Owned Shares; provided that this Section 3.1(a) shall
not limit or preclude any Investor’s right to Transfer any Investor Owned Shares
to any Permitted Transferee solely for estate planning or charitable purposes,
provided that, (i) the Investor provides at least three Business Days advance
written notice to Parent of such proposed transfer (including providing such
other information and documentation related to the proposed Permitted Transferee
as Parent may reasonably request), (ii) such Permitted Transferee agrees in a
written agreement with Parent in form and substance satisfactory to Parent, in
its reasonable discretion, to hold such Investor Owned Shares pursuant to, and
to be bound by, the terms and conditions of this Agreement as an “Investor”
hereunder, and to make each of the representations and warranties (which may be
made in reliance upon a certificate from the Investor) hereunder in respect of
the Investor Owned Shares transferred as such Investor shall have made hereunder
and (iii) an opinion, in form and substance reasonably acceptable to Parent, of
counsel that is knowledgeable in securities matters to the effect that such
Transfer was made in accordance with applicable securities Laws and that this
Agreement is binding upon and enforceable against such Permitted Transferee;
provided, further, in the event that any proposed Permitted Transferee does not
comply with the obligations imposed hereunder with respect to the Investor Owned
Shares purported to be transferred to such Person, such transfer shall be deemed
null and void ab initio;

 

(b)          acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any assets of the Company or any Company
Subsidiary;

 

(c)          make, or in any way participate in, directly or indirectly, any
“solicitation” of “proxies” (as such terms are used in the rules of the
Securities and Exchange Commission) to vote or consent to, or otherwise take any
action intended to advise or influence any Person with respect to the voting of,
or giving consent with respect to, any voting securities of the Company, other
than in support of the Transaction and the Merger Agreement;

 

(c)          make any public announcement with respect to, or submit a proposal
for, or offer for (with or without conditions) any extraordinary transaction
involving the Company, any Company Subsidiary or their securities or assets;

 

(d)          form, join or in any way participate in a “group” (as defined in
Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing;

 

 

 

  

(e)          seek, in any way which may be reasonably likely to require, involve
or trigger public disclosure of such request pursuant to applicable Law, to have
any provision of this Section 3.1 amended, modified or waived; or

 

(f)          otherwise take, directly or indirectly, any actions with the
purpose of avoiding or circumventing any provision of this Section 3.1 or which
would reasonably be expected to have the effect of preventing, impeding,
interfering with or adversely affecting the consummation of the Transaction or
its ability to perform his, her or its obligations under this Agreement.

 

Any action taken in violation of the foregoing shall be null and void ab initio.

 

Section 3.2          Dividends, Distributions, Etc. in Respect of Investor Owned
Shares; Additional Investor Owned Shares. In the event of a share dividend or
share distribution, or any change in the shares of Common Stock by reason of any
share dividend or share distribution, split-up, recapitalization, combination,
exchange of shares or the like, the term “Investor Owned Shares” shall be deemed
to refer to and include the Investor Owned Shares as well as all such share
dividends and share distributions and any securities into which or for which any
or all of the Investor Owned Shares may be changed or exchanged or which are
received in such transaction. Each Investor hereby agrees, during the term of
this Agreement, to promptly notify Parent of any new shares of Common Stock
acquired by such Investor, if any, after the execution of this Agreement. Any
such shares of Common Stock shall be subject to the terms of this Agreement as
though owned by such Investor on the date of this Agreement.

 

Section 3.3           Competing Proposals in Respect of Investor Owned Shares.

 

(a)          Each Investor shall not, and shall use his, her or its reasonable
best efforts to ensure that each of his, her or its Representatives and
Affiliates do not, directly or indirectly: (i) solicit or initiate, or knowingly
facilitate or encourage (including by way of providing information), any
inquiries, proposals or offers that constitute, or that would reasonably be
expected to lead to, a Takeover Proposal; (ii) participate in any negotiations
regarding, or furnish to any person (other than Parent, the Company, any other
Investor or any Representatives of such Investor, Parent, the Company or any
other Investor) any nonpublic information with respect to, any Takeover
Proposal; or (iii) engage in discussions with any Person (other than Parent, the
Company, any other Investor or any Representatives of such Investor, Parent, the
Company or any other Investor) with respect to any Takeover Proposal.
Notwithstanding the foregoing, nothing in this Agreement shall prohibit an
Investor (A) who is an officer or director of the Company from taking any action
in the Investor’s capacity as an officer or director of the Company that is
permitted to be taken by an officer or director of the Company under Section
4.02 of the Merger Agreement and (B) from engaging in discussions with a third
party that the Company is permitted to engage in discussions with regarding a
Takeover Proposal or Acquisition Transaction pursuant to Section 4.02(c) or
4.02(g) of the Merger Agreement regarding such Investor’s equity participation,
investment or reinvestment in a Takeover Proposal or an Acquisition Transaction;
provided that prior to the termination of this Agreement, no Investor will enter
into any agreement with respect to any of the foregoing.

 

(b)         If any Investor, or any of his, her or its Representatives, at any
time during the period beginning on the date hereof and ending on the valid
termination of this Agreement, receives any bona fide Takeover Proposal (or any
other inquiry regarding a potential Takeover Proposal) from a potential bidder
or its Representatives, then such Investor shall promptly: (i) advise the
Company and Parent in writing of such Takeover Proposal or inquiry (including
the identity of the Person making or submitting such Takeover Proposal or
inquiry and the material terms and conditions thereof); and (ii) provide the
Company and Parent with copies of all documents and other written communications
received by such Investor setting forth the terms and conditions of such
Takeover Proposal or inquiry.

 

 

 

 

(c)          Each Investor shall, and shall ensure that each of his, her or its
Representatives and Affiliates (if applicable), immediately terminate and cause
to be terminated any existing solicitation by such Investor, his, her or its
Representatives or Affiliates of, or discussions or negotiations between such
Investor, his, her or its Representatives or Affiliates and, any Person relating
to any Takeover Proposal, and such Investor shall be responsible for any breach
of this Agreement by his, her or its Representatives or Affiliates.

 

(d)          Each Investor agrees that such Investor will promptly inform each
of his, her or its Representatives and his, her or its Affiliates’
Representatives of the obligations undertaken in this Article III.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

 

Each Investor hereby severally and not jointly represents and warrants to Parent
as follows:

 

Section 4.1           Binding Nature of Agreement.  This Agreement has been duly
and validly executed and delivered by such Investor and, assuming that this
Agreement constitutes the valid and binding agreement of Parent, constitutes the
valid and binding agreement of such Investor, enforceable against such Investor
in accordance with its terms, except that such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws now
or hereafter in effect relating to creditors’ rights generally, and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).

 

Section 4.2           Ownership of Shares.  As of the date hereof, such Investor
beneficially owns the number of Investor Owned Shares set forth opposite the
name of such Investor on Schedule I hereto under the heading “Investor Owned
Shares”. Such Investor has the sole power to vote (or cause to be voted) such
Investor Owned Shares and has good and valid title to such Investor Owned
Shares, free and clear of any and all Liens, other than those created by this
Agreement or restrictions on transfer arising under applicable securities Law.
At the Contribution Closing, such Investor will transfer good and valid title to
such Investor’s Investor Owned Shares, free and clear of all Liens, other than
those created by this Agreement or restrictions on transfer arising under
applicable securities Law.

 

Section 4.3           No Conflicts.  Neither the execution and delivery of this
Agreement by such Investor, nor the consummation by such Investor of the
transactions contemplated hereby, will result in, or give rise to, a violation
or breach of or a default under any of the terms of any material contract,
understanding, agreement or other instrument or obligation to which such
Investor is a party or by which such Investor or any of such Investor’s Investor
Owned Shares or such Investor’s assets may be bound, or (ii) violate any
applicable Law, except, with respect to any of the foregoing clauses (i) and
(ii), as does not and would not reasonably be expected to impair such Investor’s
ability to perform his, her or its obligations under this Agreement.

 

Section 4.4           Investment Intent.   Each Investor is acquiring the
Exchange Units for such Investor’s own account, for investment only, and not
with a view to any resale or public distribution thereof. Each Investor agrees
that such Investor will not offer to sell or otherwise dispose of the Exchange
Units to be held by it in violation of any applicable Law. Each such Investor
acknowledges that (a) the Exchange Units have not been registered under the
Securities Act, or any state or foreign securities Laws, (b) there is no public
market for the Exchange Units and there can be no assurance that a public market
shall develop, (c) the Exchange Units are subject to the restrictions on
transfer set forth in the Limited Partnership Agreement and (d) such Investor
must bear the economic risk of its investment in the Exchange Units to be held
by it for an indefinite period of time. Each Investor has all requisite legal
power and authority to acquire the Exchange Units in accordance with the terms
of this Agreement and is an “accredited investor” within the meaning of the Rule
501 promulgated under the Securities Act. Such Investor has been given the
opportunity to consult with independent legal counsel regarding such Investor’s
rights and obligations under the Limited Partnership Agreement, has read and
fully understands the terms and conditions contained in the Limited Partnership
Agreement, and intends for such terms to be binding and enforceable upon such
Investor.

 

 

 

 

Section 4.5           Enforceability Against Spouses.  If such Investor is a
married individual and such Investor’s Investor Owned Shares constitute
community property or otherwise require spousal approval in order for this
Agreement to be a legally valid and binding obligation of such Investor, this
Agreement has been duly executed and delivered by Investor’s spouse and
constitutes a legally valid and binding obligation of such Investor’s spouse,
enforceable against such Investor’s spouse in accordance with its terms, except
that such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws now or hereafter in effect
relating to creditors’ rights generally, and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).

 

Section 4.6           Reliance by Parent.  Such Investor understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
such Investor’s execution and delivery of this Agreement and the representations
and warranties of such Investor contained herein. Such Investor understands and
acknowledges that the Merger Agreement governs the terms of the Merger and the
Transaction.

 

Each Investor that is a non-natural person further severally and not jointly
represents and warrants to Parent as follows:

 

Section 4.7           Due Organization.  Such Investor is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
formation.

 

Section 4.8           Authority Relative to This Agreement.  Such Investor has
the requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by such Investor of the transactions contemplated hereby have been
duly and validly authorized by the board of directors, general partner or
similar governing body of such Investor, and no other corporate proceedings on
the part of such Investor are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby.

 

Section 4.9           No Conflicts.  Neither the execution and delivery of this
Agreement by such Investor, nor the consummation by such Investor of the
transactions contemplated hereby, will conflict with or result in any breach of
the organizational documents of such Investor.

 

ARTICLE V
REPRESENTATION AND WARRANTIES OF PARENT

 

Parent hereby represents and warrants to the Investors as follows:

 

Section 5.1           Due Organization.  Parent is a limited partnership duly
organized, validly existing and in good standing under the Laws of the State of
Delaware.

 

 

 

 

Section 5.2          Authority Relative to this Agreement.  Parent has the
requisite limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and the consummation by Parent of the transactions contemplated hereby have been
duly and validly authorized by the general partner of Parent, and no other
limited partnership proceedings on the part of Parent are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Parent and,
assuming that this Agreement constitutes the valid and binding agreement of the
Investors, constitutes the valid and binding agreement of Parent, enforceable
against Parent in accordance with its terms, except that such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar Laws now or hereafter in effect relating to creditors’ rights generally,
and (ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).

 

Section 5.3          No Conflicts.  Neither the execution and delivery of this
Agreement by Parent, nor the consummation by Parent of the transactions
contemplated hereby, will (i) conflict with or result in any breach of the
governing documents of Parent; (ii) require any Permit from any Governmental
Authority; (iii) result in, or give rise to, a violation or breach of or a
default under any of the terms of any material contract, understanding,
agreement or other instrument or obligation to which Parent is a party, or (iv)
violate any applicable Law, except, with respect to any of the foregoing clauses
(i) through (iv), as does not and could not reasonably be expected to impair
Parent’s ability to perform its obligations under this Agreement.

 

Section 5.4          Valid Issuance of Exchange Units.   Assuming the truth and
accuracy of the representations and warranties set forth in Section 4.4, when
issued and delivered on the Contribution Closing Date, the Exchange Units shall
be validly issued and fully paid and shall have been issued in compliance with
the Securities Act and applicable state securities Laws.

 

ARTICLE vi 

termination

 

Section 6.1           Termination.

 

(a)          Subject to Section 6.1(b), this Agreement shall terminate (except
for Article VI and Article VII, which shall survive such termination), without
further action by any of the parties hereto, and none of Parent or any of the
Investors shall have any rights or obligations under this Agreement, immediately
upon the earliest to occur of: (i) the termination of this Agreement by mutual
written consent of Parent and each Investor, (ii) the termination of the Merger
Agreement in accordance with its terms (provided, however, that each Investor’s
obligations under Section 2.2(a)(iii) and Section 3.3 shall survive for 18
months following any termination of the Merger Agreement by Parent pursuant to
Section 7.01(c)(ii) of the Merger Agreement as a result of the Board effecting a
Company Adverse Recommendation Change resulting from an Intervening Event) and
(iii) the Effective Time of the Merger.

 

(b)          Notwithstanding Section 6.1(a), termination of this Agreement shall
not prevent any party hereunder from seeking any remedies (at law or in equity)
against any other party hereto for such party’s breach of any of the terms of
this Agreement prior to the termination of this Agreement.

 

ARTICLE vii

 

MISCELLANEOUS PROVISIONS

 

Section 7.1           Dissenters’ Rights.  To the extent permitted by applicable
Law, each Investor hereby waives and agrees not to exercise any rights to
dissent from the Transaction that he, she or it may have under applicable Law.

 

 

 

  

Section 7.2           Further Actions. Each of the Parties agrees to use
reasonable best efforts to do all things reasonably necessary to effectuate this
Agreement.

 

Section 7.3           Waivers.  No failure on the part of any party to exercise
any power, right, privilege or remedy under this Agreement, and no delay on the
part of any party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No party shall be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.

 

Section 7.4           Counterparts.   This Agreement may be executed and
delivered (including by facsimile transmission or by e-mail of a .pdf
attachment) in two or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.

 

Section 7.5           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.

 

Section 7.6           Venue and Exclusive Jurisdiction.  Each of the Parties (a)
consents to submit itself to the exclusive personal jurisdiction of the federal
and state courts located in the State of Georgia situated in Fulton County, in
the event any dispute arises out of this Agreement, (b) agrees that he, she or
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (c) agrees that he, she or it
will not bring any action relating to this Agreement in any court other than the
federal and state courts located in the State of Georgia situated in Fulton
County. Each Party hereby (i) consents to service of process in any action
between the parties arising in whole or in part under or in connection with this
Agreement in any manner permitted by Georgia Law, (ii) agrees that service of
process made in accordance with clause (i) or made by registered or certified
mail, return receipt requested, at its address specified on the first page of
this Agreement, will constitute good and valid service of process in any such
action, and (iii) waives and agrees not to assert (by way of motion, as a
defense, or otherwise) in any such action any claim that service of process made
in accordance with clause (i) or (ii) does not constitute good and valid service
of process.

 

Section 7.7           Waiver of Jury Trial.   Each Party hereby unconditionally
and irrevocably waives, to the fullest extent permitted by applicable Law, any
right it may have to a trial by jury in respect of any Proceeding arising out of
this Agreement. Each party hereto certifies and acknowledges that (a) no
representative, agent or attorney of any other Party has represented, expressly
or otherwise, that such other Party would not, in the event of any action, suit
or proceeding, seek to enforce the foregoing waiver in the event of a legal
action, (b) such {arty has considered the implications of this waiver, (c) such
party makes this waiver voluntarily and (d) such {arty has been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 7.7.

 

Section 7.8           Notices.  Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission or e-mail of a
.pdf attachment (provided that any notice received by facsimile or e-mail
transmission or otherwise at the addressee’s location on any Business Day after
5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00
a.m. (addressee’s local time) on the next Business Day), by reliable overnight
delivery service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 7.8):

 

 

 

 

If to Parent to: c/o Sterling Fund Management, LLC 401 North Michigan Avenue,
Suite 3300 Chicago, Illinois 60611 Attention: Office of General Counsel
Facsimile No.: (312) 465-7001
Email: aepstein@sterlingpartners.com with a copy to: Katten Muchin Rosenman LLP
525 West Monroe Street Chicago, Illinois 60661 Attention:

Saul Rudo, Esq.

Jeffrey R. Patt, Esq.

Facsimile No. (312) 577-8870 Email:

saul.rudo@kattenlaw.com

jeffrey.patt@kattenlaw.com

  If to any Investor, to:   Scott D. Dorfman 6465 East Johns Crossing, Suite 400
Johns Crossing, GA 30097 Facsimile No.:
Email:  sdorfman@innotrac.com

with a copy to:

 

Ledbetter Wanamaker Glass LLP 1201 Peachtree St., Suite 1501 Atlanta, Georgia
30361 Attention: Bruce D. Wanamaker, Esq. Facsimile No.: (404) 835-9540
Email: bwanamaker@lwglaw.com

  

Section 7.9           Entire Agreement.   This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, or among the Parties with respect to the subject matter hereof. This
Agreement shall be binding upon, and shall be enforceable by and inure solely to
the benefit of, the Parties and their respective successors and permitted
assigns; provided, however, that neither this Agreement nor any of the Parties’
rights, interests or obligations hereunder may be assigned or delegated, in
whole or in part, by operation of law or otherwise, without the prior written
consent of the other Parties, and any attempted assignment or delegation of this
Agreement or any of such rights, interests or obligations by any Party without
the other Parties’ prior written consent shall be void and of no effect;
provided, however, that Parent may assign this Agreement to an Affiliate
thereof; provided that, upon such assignment, Parent shall remain jointly and
severally liable with its applicable Affiliate to the Investors for performing
all of its obligations hereunder. Nothing in this Agreement, express or implied,
is intended to or shall confer upon any Person (other than the Parties) any
right, benefit or remedy of any nature. This Agreement is intended to create a
contractual relationship between the Investors, on the one hand, and Parent, on
the other hand, and is not intended to create, and does not create, any agency,
partnership, joint venture or any like relationship among the Parties. Without
limiting the generality of the foregoing, none of the Investors nor Parent, by
entering into this Agreement, intends to form a “group” for purposes of Rule
13d-5(b)(1) of the Exchange Act or any other similar provision of applicable Law
with Parent or any other shareholder of the Company.

 

 

 

 

Section 7.10         Severability. If any term or provision of this Agreement is
held by a court of competent jurisdiction or Governmental Entity to be invalid,
void or unenforceable in any situation in any jurisdiction, such holding shall
not affect the validity or enforceability of the remaining terms and provisions
of this Agreement or the validity or enforceability or application of the
invalid or unenforceable term or provision in any other situation or in any
other jurisdiction. If a final judgment of a court of competent jurisdiction
declares that any term or provision of this Agreement is invalid or
unenforceable, the Parties agree that the court making such determination shall
have the power to limit such term or provision, to delete specific words or
phrases or to replace such term or provision with a suitable and equitable term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Agreement shall be valid and enforceable as so modified. In the event such court
does not exercise the power granted to it in the prior sentence, the Parties
agree to replace such invalid or unenforceable term or provision with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term or
provision.

 

Section 7.11         Certain Interpretations. For purposes of this Agreement:

 

(a)          Unless otherwise specified, all references in this Agreement to
Articles and Sections shall be deemed to refer to Articles and Sections of this
Agreement.

 

(b)          The Article and Section captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.

 

(c)          Unless the context otherwise requires, words describing the
singular number shall include the plural and vice versa, and words denoting any
gender shall include all genders.

 

(d)          The words “include,” “includes” and “including,” when used herein
shall be deemed in each case to be followed by the words “without limitation.”

 

(e)          The Parties agree that they have been represented by legal counsel
during the negotiation and execution of this Agreement and, therefore, waive the
application of any Law or rule of construction providing that ambiguities in an
agreement or other document shall be construed against the Party drafting such
agreement or document.

 

(f)          “Affiliate” means, with respect to any specified Person, any Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified.

 

 

 

 

(g)          “Permitted Transferee” means, with respect to any Investor
(including any Permitted Transferee), any other Investor, any immediate family
member of any Investor, any trust, partnership, corporation, limited liability
company or other entity of which the beneficiaries or beneficial owners, as the
case may be, are Investors or Permitted Transferees, a trust or other entity for
the benefit of any Person that is qualified as a charitable organization under
Section 501(c)(3) of the Code, or a family foundation established by or on
behalf of one or more of the Investors for the purpose of making charitable
gifts or donations to Persons that are qualified as charitable organizations
under Section 501(c)(3) of the Code.

 

(h)          “Representative” means, with respect to any Person, any director,
officer, other employee, accountant, consultant, legal counsel, financial
advisor, agent or other representative of such Person.

 

Section 7.12         Fees and Expenses.  Upon the consummation of the Merger,
the Company will reimburse Investors for up to an aggregate of $30,000 of the
reasonable and documented out-of-pocket expenses incurred by Investors in
connection with the negotiation and preparation of this Agreement and the
consummation of the transactions contemplated hereby.

 

Section 7.13         Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Parent any direct or indirect ownership or incidence
of ownership of or with respect to any Investor Owned Shares. All rights,
ownership and economic benefits of and relating to the Investor Owned Shares
shall remain vested in and belong to the Investors, and Parent shall have no
authority to direct the Investors in the voting or disposition of any of the
Investor Owned Shares, except as otherwise provided in this Agreement.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed,
as of the date first above written.

 

  PARENT:       BLUE EAGLE HOLDINGS, L.P.         By: /s/ Merrick Elfman   Name:
Merrick Elfman   Title: President         INVESTOR:

 

  /s/ Scott D. Dorfman   Scott D. Dorfman, individually, and as Custodian for
Jesse Dorfman, Cory Dorfman and Joan Dorfman under the Georgia Uniform Transfer
to Minors Act   Address: [REDACTED]   [REDACTED]   Facsimile:          
INVESTOR:       /s/ Susan Mary Trotochaud   Susan Mary Trotochaud, individually,
and as Custodian for Bradley Dorfman, Brent Dorfman and Jesse Dorfman under the
Georgia Uniform Transfer to Minors Act   Address: [REDACTED]   [REDACTED]  
Facsimile:           INVESTOR:       /s/ Larry Dorfman   Larry Dorfman, as
Trustee for Bradley Dorfman, Brent Dorfman and Jesse Dorfman Accumulation Trusts
  Address: [REDACTED]   [REDACTED]   Facsimile:  

 

 

 

 

Spousal Consent to Contribution and Support Agreement

 

The undersigned (a) understands that, pursuant to the provisions of the
Contribution and Support Agreement (the “Agreement”) to which this Spousal
Consent is attached, Susan Mary Trotochaud has agreed not to tender the Investor
Owned Shares in the Offer and, upon the terms and subject to the conditions of
the Agreement, to contribute and deliver to Parent all of the Investor Owned
Shares, (b) understands that she may have a community property or other interest
in such Investor Owned Shares, and (c) consents to such non-tender provisions
and the Contribution and agrees to be bound by each and every provision of the
Agreement. Capitalized terms used in this Spousal Consent and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.

 

  /s/ Susan Mary Trotochaud   Susan Mary Trotochaud

 

 

 

  

Schedule I

 

   Investor Owned
Shares  Aggregate Fair
Market Value of
Investor Owned
Shares  Exchange Units  Purchased Units Scott D. Dorfman   5,673,429  
$46,522,117.80    46,522.12    31,948.61  Scott D. Dorfman, as Custodian for
Jesse Dorfman, under the Georgia Uniform Transfer to Minors Act   6,000  
$49,200.00    49.20    33.79  Scott D. Dorfman, as Custodian for Cory Dorfman
under the Georgia Uniform Transfer to Minors Act   6,000   $49,200.00    49.20  
 33.79  Scott D. Dorfman, as Custodian for Joan Dorfman under the Georgia
Uniform Transfer to Minors Act   6,000   $49,200.00    49.20    33.79  Susan
Mary Trotochaud   415   $3,403.00    3.40    2.34  Susan Mary Trotochaud, as
Custodian for Bradley Dorfman under the Georgia Uniform Transfer to Minors Act 
 21,428   $175,709.60    175.71    120.67  Susan Mary Trotochaud, as Custodian
for Brent Dorfman under the Georgia Uniform Transfer to Minors Act   21,428  
$175,709.60    175.71    120.67 

 

 

 

 

   Investor Owned
Shares   Aggregate Fair
Market Value of
Investor Owned
Shares   Exchange Units   Purchased Units  Susan Mary Trotochaud, as Custodian
for Jesse Dorfman under the Georgia Uniform Transfer to Minors Act   21,428  
$175,709.60    175.71    120.67  Larry I. Dorfman as Trustee for Bradley Dorfman
Accumulation Trust   27,778   $227,779.60    227.78    156.43  Larry I. Dorfman
as Trustee for Brent Dorfman Accumulation Trust   27,778   $227,779.60  
 227.78    156.43  Larry I. Dorfman as Trustee for Jesse Dorfman Accumulation
Trust   27,778   $227,779.60    227.78    156.43 

 

 

 

 

FORM OF
UNIT PURCHASE AGREEMENT

 

THIS UNIT PURCHASE AGREEMENT (this “Agreement”) is made as of [________], 2014,
by and among Sterling Capital Partners IV, L.P., a Delaware limited partnership
(“SCP IV”), SCP IV Parallel, L.P. (“Parallel” and, together with SCP IV, the
“Purchasers”), and the Person listed on Schedule I hereto as the “Seller” (the
“Seller”).

 

A.           On November 14, 2013, Blue Eagle Holdings, L.P., a Delaware limited
partnership (“Parent”), Blue Eagle Acquisition Sub, Inc., a Georgia corporation
and wholly-owned subsidiary of Parent (“Purchaser”), and Innotrac Corporation, a
Georgia corporation (the “Company”) entered into an Agreement and Plan of
Merger.

 

B.           Immediately prior to the execution and delivery of this Agreement,
pursuant to the terms set forth in the Merger Agreement, Purchaser accepted for
payment all shares of common stock, par value $0.10 of the Company (the “Common
Stock”), validly tendered pursuant to the Offer (as defined in the Merger
Agreement).

 

C.           Immediately following the consummation of the Offer, but prior to
the execution and delivery of this Agreement, the Seller contributed to Parent
shares of Common Stock in exchange for the number of preferred units in Parent
(the “Preferred Units”) set forth opposite the Seller’s name on Schedule I
hereto under the heading “Exchange Units” (the “Exchange Units”).

 

D.           Each Purchaser desires to purchase from the Seller, and the Seller
desires to sell to the such Purchaser, the number of Exchange Units set forth
opposite such Purchaser’s name on Schedule II hereto under the heading “Sale
Units” (the “Sale Units”).

 

NOW THEREFORE, in consideration of the mutual promises made herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

Section 1.          Purchase and Sale.

 

1A.        Purchase and Sale.   The Seller hereby sells, transfers and delivers
to each Purchaser, and such Purchaser hereby accepts from the Seller, the number
of Sale Units set forth opposite such Purchaser’s name on Schedule II hereto
under the heading “Sale Units.” In consideration for the sale, transfer and
delivery of such Sale Units, each Purchaser shall pay to the Seller,
simultaneous with the execution and delivery of this Agreement, an amount in
cash set forth opposite such Purchaser’s name on Schedule II hereto under the
heading “Purchase Price” by wire transfer of immediately available funds.

 

1B.         Representations and Warranties of Purchasers.   Each of the
Purchasers represents and warrants for itself that:

 

(a)          Binding Nature of Agreement.   This Agreement has been duly and
validly executed and delivered by such Purchaser and, assuming that this
Agreement constitutes the valid and binding agreement of the Seller, constitutes
the valid and binding agreement of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except that such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors’ rights generally,
and (ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).

 

 

 

  

(b)          No Conflicts. Neither the execution and delivery of this Agreement
by such Purchaser, nor the consummation by such Purchaser of the transactions
contemplated hereby, will result in, or give rise to, a violation or breach of
or a default under any of the terms of any of the organizational documents of
the Purchaser or any material contract, understanding, agreement or other
instrument or obligation to which such Purchaser is a party or by which such
Purchaser or its assets may be bound, or (ii) violate any applicable law,
except, with respect to any of the foregoing clauses (i) and (ii), as does not
and would not reasonably be expected to impair such Purchaser’s ability to
perform its obligations under this Agreement.

 

(c)          Investment Intent.   Each Purchaser is acquiring the Sale Units for
such Purchaser’s own account, for investment only, and not with a view to any
resale or public distribution thereof. Each Purchaser agrees that such Purchaser
will not offer to sell or otherwise dispose of the Sale Units to be held by it
in violation of any applicable law. Each Purchaser acknowledges that (i) the
Sale Units have not been registered under the Securities Act of 1933 (the
“Securities Act”), or any state or foreign securities laws, (ii) there is no
public market for the Sale Units and there can be no assurance that a public
market shall develop, (iii) the Sale Units are subject to the restrictions on
transfer set forth in the Amended and Restated Limited Partnership Agreement of
Parent, dated as of the date hereof, as such agreement may be amended from time
to time (the “Limited Partnership Agreement”), and (iv) such Purchaser must bear
the economic risk of its investment in the Sale Units to be held by it for an
indefinite period of time. Each Purchaser has all requisite legal power and
authority to acquire the Sale Units in accordance with the terms of this
Agreement and is an “accredited investor” within the meaning of the Rule 501
promulgated under the Securities Act. Such Purchaser has been given the
opportunity to consult with independent legal counsel regarding such Purchaser’s
rights and obligations under the Limited Partnership Agreement, has read and
fully understands the terms and conditions contained in the Limited Partnership
Agreement, and intends for such terms to be binding and enforceable upon such
Purchaser.

 

(d)          Due Organization. Such Purchaser is duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.

 

(e)          Authority Relative to this Agreement. Such Purchaser has the
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by such Purchaser of the transactions contemplated hereby have been
duly and validly authorized by the general partner of such Purchaser, and no
other partnership proceedings on the part of such Purchaser are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.

 

Section 2.          Representations and Warranties of the Seller.

 

The Seller represents and warrants to each Purchaser as follows:

 

(a)          Ownership of Sale Units. The Seller is the record and beneficial
owner of the Sale Units free and clear of all liens, other than those created by
this Agreement or restrictions on transfer arising under applicable securities
law.

 

(b)          Authority Relative to this Agreement. The Seller has the requisite
capacity to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. To the extent that the Seller is not a natural
person, this Agreement and the consummation by the Seller of the transactions
contemplated hereby have been duly and validly authorized by the governing body
of the Seller, and no other proceedings on the part of the Seller are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by the
Seller and, assuming that this Agreement constitutes the valid and binding
agreement of the Purchasers, constitutes the valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms, except that
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally, and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).

 

2

 

  

(c)          No Conflicts. Neither the execution and delivery of this Agreement
by the Seller, nor the consummation by the Seller of the transactions
contemplated hereby, will result in, or give rise to, a violation or breach of
or a default under any of the terms of any of the organizational documents of
the Seller (if the Seller is not a natural person) or any material contract,
understanding, agreement or other instrument or obligation to which the Seller
is a party or by which the Seller or its assets may be bound, or (ii) violate
any applicable law, except, with respect to any of the foregoing clauses (i) and
(ii), as does not and would not reasonably be expected to impair the Seller’s
ability to perform his, her or its obligations under this Agreement.

 

Section 3.          Miscellaneous.

 

3A.        Consent to Amendments.  Except as otherwise expressly provided
herein, no amendment, modification or waiver of any of the provisions of this
Agreement shall be effective against any party hereto unless such party has
consented to such amendment, modification or waiver in writing. No course of
dealing between the Seller and the Purchasers or any delay in exercising any
rights hereunder shall operate as a waiver of any rights.

 

3B.         Survival of Representations and Warranties.   All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.

 

3C.         Successors and Assigns.   Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto, whether so
expressed or not, provided, however, that none of the parties hereto shall
assign this Agreement without the prior written consent of the other parties
hereto.

 

3D.         Severability.   Whenever possible, each provision of this Agreement
shall 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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

 

3E.          Counterparts.   This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same agreement.

 

3F.          Descriptive Headings; Interpretation; No Strict Construction.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document, or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof.
The use of the words “include” or “including” in this Agreement shall be by way
of example rather than by limitation. The use of the words “or,” “either” or
“any” shall not be exclusive. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.

 

3

 

  

3G.         Governing Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

 

3I.           Notices.  All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be
made as set forth in the Limited Partnership Agreement.

 

*        *        *        *         *        *

 

4

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Unit Purchase
Agreement as of the day and year first above written.

 

  [SELLER]         By:     Name:     Title:           STERLING CAPITAL PARTNERS
IV, L.P.       By:  SC PARTNERS IV, L.P., its General Partner      
By:  Sterling Partners IV, LLC, its General Partner         By:     Name:    
Title:           SCP IV PARALLEL, L.P.       By:  SC PARTNERS IV, L.P., its
General Partner       By:  Sterling Partners IV, LLC, its General Partner      
  By:     Name:     Title:  

 

 

 

 

SCHEDULE I

 

Seller   Exchange Units      

 

 

 

  

SCHEDULE I

 

Purchaser   Sale Units   Purchase Price Sterling Capital Partners IV, L.P.      
  SCP IV Parallel, L.P.        

  

 

 

 

FORM OF
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
BLUE EAGLE HOLDINGS, L.P.

 

This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of Blue Eagle Holdings,
L.P. (this “Agreement”) is effective as of [_________], 2014 (the “Effective
Date”), by and among the General Partner (as hereinafter defined) and the
persons set forth as Limited Partners (as hereinafter defined) on Exhibit A
attached hereto and made a part hereof.

 

WHEREAS, Blue Eagle Holdings, L.P. (the “Partnership”) was formed by the filing
of a certificate of limited partnership filed with the Secretary of State of the
State of Delaware on November 8, 2013 (the “Certificate of Limited
Partnership”).

 

WHEREAS, the General Partner is party to that certain Limited Partnership
Agreement of the Partnership, dated as of November 8, 2013 (the “Existing
Limited Partnership Agreement”).

 

WHEREAS, effective as of the Effective Date and in connection with or as a
result of the closing of the transactions contemplated by the Merger Agreement
(as defined below): (i) the General Partner, SCP (as defined below), SCP
Parallel (as defined below) and the Rollover Securityholders (as defined below)
acquired Preferred Units (as defined below), and (ii) the Partnership acquired,
directly or indirectly, all of the shares of capital stock of Innotrac
Corporation, a Georgia corporation (the “Company”).

 

WHEREAS, the General Partner desires to amend and restate the Existing Limited
Partnership Agreement on the terms set forth herein.

 

WHEREAS, the Limited Partners desire to enter into this Agreement which sets
forth, among other things, the governance of the Partnership, the respective
ownership interests of the Partners and the relationship of the parties thereto.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements set forth herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

Article I
Defined Terms

 

In addition to the capitalized terms defined throughout this Agreement, the
following capitalized terms shall have the meanings specified in this Article I.

 

“Act” means the Delaware Revised Uniform Limited Partnership Act, as amended
from time to time (or any corresponding provisions of succeeding law).

 

 

 

 

“Additional Partners” means the Persons admitted as additional Partners in
accordance with Section 3.2(a).

 

“Additional Securities” means any Units or other equity interests in the
Partnership or any of its Subsidiaries, or Convertible Securities, whether now
authorized or not, issued pursuant to a sale transaction or series of sales
transactions, where (A) such sales are made solely for cash delivered in
immediately available funds, (B) the proceeds of such sales are to be used to
finance the ongoing operations of the Partnership and/or its Subsidiaries, and
(C) the opportunity to participate in such sales is offered primarily to Persons
other than Service Partners; provided that, for the avoidance of confusion, the
term “Additional Securities” does not include any (i) Convertible Securities
issued to employees, directors, independent contractors or consultants of the
Partnership or any of its Subsidiaries pursuant to the Option Plan and Units or
other equity interests of the Partnership or any of its Subsidiaries issued upon
exercise of such options or exercise or conversion or exchange of such other
Convertible Securities, (ii) Units or other equity interests of the Partnership
or any of its Subsidiaries issued to employees, directors, independent
contractors or consultants of the Partnership or any of its Subsidiaries
pursuant to exercise of options issued under the Option Plan, (iii) Units or
other equity interests of the Partnership or any of its Subsidiaries issued upon
exercise, conversion or exchange of any Convertible Securities pursuant to their
terms, (iv) Units or other equity interests of the Partnership or any of its
Subsidiaries, or Convertible Securities issued in connection with any
acquisition by the Partnership or any of its Subsidiaries of any shares of
capital stock or assets of any Person, or any merger, consolidation or
reorganization involving the Partnership or any of its Subsidiaries, (v) Units
or other equity interests of the Partnership or any of its Subsidiaries issued
pursuant to a public offering that is registered under the Securities Act, (vi)
Units or other equity securities of the Partnership or any of its Subsidiaries,
or Convertible Securities issued in connection with a stock split or other
subdivision of, or as a dividend or other distribution with respect to, the
Units or other equity interests, (vii) Units or other equity interests of the
Partnership or any of its Subsidiaries, or Convertible Securities issued in
connection with strategic alliances, joint ventures, financing arrangements,
third party credit arrangements or other partnering arrangements on behalf of
the Partnership or any of its Subsidiaries authorized by the General Partner, or
(viii) Units or other equity interests of the Partnership or any of its
Subsidiaries issued to any Service Providers of the Partnership or its
Affiliates in exchange for capital contributions made by such Persons to the
Partnership or any of its Subsidiaries on such terms as determined by the
General Partner.

 

“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Capital Account as of the end of the
relevant taxable year or other period, after giving effect to the following
adjustments:

 

(a)          credit such Capital Account by any amounts which such Partner is
obligated to restore pursuant to this Agreement (including any note obligations)
or is deemed to be obligated to restore pursuant to the penultimate sentence of
each of Regulations Sections 1.704-2(i)(5) and 1.704-2(g); and

 

(b)          debit such Capital Account by the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

2

 

 

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

 

“Affiliate” of, or a Person “Affiliated” with, a specified Person means a Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified; provided
that, for the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise. Without limiting the foregoing, the ownership of
ten percent (10%) or more of the voting securities of a Person shall be deemed
to constitute control.

 

“Agreement” means this Limited Partnership Agreement, as amended, modified,
supplemented or restated from time to time in accordance with its terms.

 

“Applicable Federal Rate” means, as of any date, the applicable federal rate of
interest as determined under Section 1274(d) of the Code in effect as of such
date.

 

“Assumed Tax Rate” means, with respect to a taxable year of the Partnership, the
higher of the then applicable (i) the sum of the highest federal individual
income tax rate and highest state and local individual income tax rate in the
states in which the Partnership does business, and (ii) the sum of the highest
federal corporate income tax rate and the highest state and local corporate
income tax of any state in which the Partnership does business; provided,
however, that the deductibility of the state income taxes for federal income tax
purposes shall be taken into account.

 

“Available Cash” means all cash revenues, funds and proceeds received by the
Partnership from any source, except for Capital Contributions, less the sum of
(i) all payments of principal, interest and other amounts then due and payable
on any indebtedness of the Partnership; (ii) all expenses and expenditures paid
in cash by the Partnership; and (iii) reasonable working capital reserves
(including for investments by the Partnership in new projects) and reasonable
reserves for contingencies as determined by the General Partner or as otherwise
required by GAAP.

 

“Business” the business of providing fulfillment services, order processing,
call centers, customer care services, including e-commerce fulfillment or
e-commerce return services, related software platform and application services
and similar and related services, as well as other similar services that the
Partnership and its Subsidiaries may be involved in, and, unless otherwise
specifically provided in any unit option or similar agreement between the
Partnership and a Service Partner, any other businesses in which the Partnership
and/or its Subsidiaries are engaged in, or any planned business for which the
Partnership and/or its Subsidiaries have taken affirmative steps toward engaging
in, as of the time of the termination of such Service Partner’s employment with
or engagement by the Partnership and/or its Subsidiaries.

 

3

 

 

“Capital Account” means the account maintained by the Partnership for each
Partner. If any Unit or interest in the Partnership is transferred pursuant to
the terms hereof, the transferee shall succeed to the Capital Account of the
transferor to the extent the Capital Account is attributable to the transferred
Unit or interest in the Partnership. It is intended that the Capital Accounts of
all Partners shall be maintained in compliance with the provisions of Regulation
Section 1.704-1(b), and all provisions hereof relating to the maintenance of
Capital Accounts shall be interpreted and applied in a manner consistent with
that Regulation.

 

“Capital Contribution” means the total amount of cash and the Gross Asset Value
of any other assets contributed to the Partnership by a Partner, net of
liabilities assumed or to which the assets contributed are subject.

 

“Cause” means, with respect to a Service Partner:

 

(a)          if such Service Partner has an employment or similar agreement with
Employer, the meaning assigned to such term in such employment or similar
agreement (including after the termination thereof), and

 

(b)          in all other cases, such Service Partner’s termination of
employment with or engagement by Employer, the occurrence of any of the
following events: (i) such Service Partner’s gross negligence or willful
misconduct in the performance of his duties to the Partnership hereunder or to
Employer; (ii) the determination of the General Partner that such Service
Partner has committed a felony or other crime causing harm to the Partnership or
its Affiliates or any act constituting fraud with respect to the Partnership or
any of its Affiliates; (iii) a breach by such Service Partner of any terms or
condition of this Agreement, any employment agreement, equity grant agreement or
a breach by such Service Partner of any of such Service Partner’s other
obligation to the Partnership or any of its Affiliates; (iv) such Service
Partner shall have refused to perform directives of the General Partner or any
officer to whom such Person reports, or the board of directors of any Affiliate
(or any officer of such Affiliate) that are consistent with the scope and nature
of his duties and responsibilities as an employee or service provider of the
Partnership or its Affiliates; (v) such Service Partner shall have engaged in
the unlawful use (including being under the influence) or possession of illegal
drugs; (vi) such Service Partner shall have refused, upon request by Employer
(which request may be provided by Employer in Employer’s sole discretion at any
time while such Service Partner is employed by Employer) to be screened or
tested for drug use; (vii) such Service Partner shall have engaged in dishonesty
during his or her hiring process; or (viii) such Service Partner shall have
failed to disclose to the Partnership any conflict of interest. A Service
Partner’s employment by Employer also shall be deemed terminated for Cause under
subsection (b) of this definition if the Service Partner resigns from Employer
and the General Partner determines in good faith that one or more of the events
described above existed as of the time of such resignation.

 

The decision to terminate a Service Partner’s employment for Cause, or to take
other action or to take no action in response to any occurrence or
non-occurrence with respect to a Service Partner’s employment, shall be in the
sole and exclusive discretion of General Partner.

 

“Code” means the United States Internal Revenue Code of 1986, as amended, or any
corresponding provision of any succeeding law.

 

4

 

 

“Common Limited Partner” means a Limited Partner holding Common Units.

 

“Common Unit” means an interest in the Profits and Losses and distributions of
the Partnership as provided herein. The Common Units shall be non-voting.

 

“Common Unit Factor” means, with respect to the Common Units as of any
determination date, the applicable Common Unit Percentage as of such
determination date, multiplied by the quotient of (a) the number of issued and
outstanding Common Units as of such determination date, divided by (b) the
number of Common Units (whether issued or unissued).

 

“Common Unit Percentage” means, with respect to the Common Units, (i) ten
percent (10%) as of the Effective Date, and (ii) as of any time after the
Effective Date, such other percentage as determined by the General Partner.

 

“Convertible Securities” means rights, options or warrants to purchase equity
interests in the Partnership or any of its Subsidiaries, and securities of any
type whatsoever that are, or may become, convertible into or exchangeable for
equity interests in the Partnership or any of its Subsidiaries.

 

“Depreciation” means, for each fiscal year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to assets
for such fiscal year, except that if the Gross Asset Value of the assets differs
from its adjusted basis for federal income tax purposes at the beginning of such
fiscal year, Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such fiscal year bears to
such beginning adjusted tax basis; provided, however, that if the adjusted basis
for federal income tax purposes of an asset at the beginning of such fiscal year
is zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.

 

“Economic Interest” means a Partner’s or Economic Owner’s share of the
Partnership’s Profits and Losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management
and affairs of the Partnership, the right to vote or otherwise participate in
any decisions of the Partners, or any right to receive information concerning
the Business and the Partnership.

 

“Economic Owner” means any owner of an Economic Interest who is not a Partner,
but holds Units pursuant to a Transfer described in Section 7.2(d). An owner of
an Economic Interest who is not a Partner shall not be deemed a “partner” (as
the term is used in the Act) of the Partnership.

 

“Employer” means the Partnership or any of its Subsidiaries.

 

5

 

 

“Fair Market Value” means, with respect to any Covered Units or other Units
being purchased pursuant to Section 7.5 or Section 7.6, the fair market value of
such Units, which amount shall be determined by the General Partner in good
faith, in the exercise of its reasonable business judgment, without taking into
account any minority interest or liquidity discounts, and subject; in the case
of any Rollover Buyout Event, to the terms and conditions of Section 7.6. In the
event that as of the time of exercise of the Partnership’s repurchase right
pursuant to Section 7.5 or Section 7.6 (x) a capital raise by the Partnership is
imminent, as determined by the General Partner in good faith, and/or any
Convertible Securities are outstanding, then the General Partner, or appraiser,
as applicable, shall be authorized to take into account when determining such
Fair Market Value the effect of such capital raise or conversion of such
Convertible Securities on the value of the Covered Units or other Units, or (y)
a valuation of the Partnership and its assets has been undertaken within the
past six months, then the General Partner, or appraiser, as applicable, shall be
authorized to take into account when determining such Fair Market Value the
results of such valuation.

 

“General Partner” means Blue Eagle GP, LLC, a Delaware limited liability
company, and any additional or successor general partner admitted or designated
in accordance with Section 5.1(b).

 

“General Partner Determined Cause Event” means, with respect to a Service
Partner who is no longer engaged by or provides services to any Employer, a
determination by the General Partner in good faith that such Service Partner has
committed a felony or other crime causing harm to the Partnership or any of its
Affiliates or any act constituting fraud with respect to the Partnership or any
of its Affiliates.

 

“General Partner Determined Competition” means, with respect to a Service
Partner, a determination by the General Partner in good faith that such Service
Partner is competing or has competed with the Business as conducted by the
Partnership and/or any of its Subsidiaries; provided, however, that such
determination shall not be based solely on competition that was permissible
under a Restrictive Covenant during the applicable duration thereof.

 

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:

 

(a)          The initial Gross Asset Value of any asset contributed by a Partner
to the Partnership shall be the gross fair market value of such asset, as
determined in accordance with this Agreement;

 

(b)          The Gross Asset Values of all Partnership Property shall be
adjusted to equal the respective gross fair market values of such property, as
determined by the General Partner, as of the following times: (i) the
acquisition of an additional Economic Interest by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (ii) the distribution
by the Partnership to a Partner of more than a de minimis amount of Partnership
Property as consideration for an Economic Interest; (iii) the liquidation of the
Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations and (iv) the issuance of an Economic Interest to any Person as
compensation for services provided to or on behalf of the Partnership; provided,
however, that adjustments pursuant to clauses (i), (ii) and (iv) above shall be
made only if the General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;

 

6

 

 

(c)          The Gross Asset Value of any Partnership Property distributed to
any Partner shall be adjusted to equal the gross fair market value of such
property on the date of distribution as determined by the distributee and the
General Partner; and

 

(d)          The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations; provided, however,
that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to
the extent the General Partner determines that an adjustment pursuant to
subsection (b) hereof is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subsection (d).

 

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraph (a), (b), or (d) hereof, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.

 

“Involuntary Withdrawal” means, with respect to a Partner, the occurrence of any
of the following events:

 

(a)          the Partner (i) makes a general assignment for the benefit of
creditors; (ii) files a voluntary petition of bankruptcy, is adjudged bankrupt
or insolvent or has entered against it an order for relief in any bankruptcy or
insolvency proceeding; (iii) seeks, consents to, or acquiesces in the
appointment of a trustee for, receiver for, or the liquidation of the Partner or
of all or any substantial part of the Partner’s properties; or (iv) files an
answer or other pleading admitting, or failing to contest, the material
allegations of a petition filed against the Partner in any proceeding described
in subsections (i) through (iii);

 

(b)          if the Partner is a partnership or limited liability company, the
dissolution and commencement of winding up of the Partner;

 

(c)          if the Partner is a corporation, the dissolution of the corporation
or the revocation of its charter; or

 

(d)          if the Partner is an individual, his or her death or legal
incompetence.

 

“Limited Partner” means each Person listed as a Limited Partner on the books and
records of the Partnership and any other Person subsequently admitted as a
Limited Partner of the Partnership in accordance with the terms hereof.

 

“Majority-in-Interest of the Preferred Limited Partners” means the Preferred
Limited Partners holding in the aggregate more than fifty percent (50%) of the
Preferred Units held by all Preferred Limited Partners.

 

“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of
November 14, 2013, by and among the Partnership, Blue Eagle Acquisition Sub,
Inc. and the Company.

 

7

 

 

“Net Equity Value” means, as of any particular date, the aggregate proceeds
which would be received by the holders of Units if: (i) the assets of the
Partnership as a going concern were sold at their fair market value; (ii) the
Partnership satisfied and paid in full all of its obligations and liabilities
(including all taxes, costs and expenses of the Partnership incurred in
connection with such transaction and any reserves reasonably established by the
General Partner for contingent liabilities); and (iii) such net sale proceeds
were then distributed in accordance with Section 4.1, all as of such particular
date and as determined by the General Partner in its reasonable discretion.

 

“Option Plan” means an option plan adopted by the General Partner, which permits
employees or service providers of the Partnership and/or its Subsidiaries to
receive options to acquire Common Units representing in the aggregate up to ten
percent (10%) of the common equity of the Partnership (on a fully diluted basis)
as of the Effective Date; provided that such percentage may be increased at any
time by the General Partner in its sole discretion.

 

“Partially Adjusted Capital Account” means with respect to any Partner for any
taxable year, the Capital Account of such Partner at the beginning of such
taxable year, increased by all contributions during such year and all special
allocations of income and gain pursuant to the last paragraph of Section 4.4 and
Section 4.5 with respect to such taxable year, and decreased by all
distributions during such taxable year and all special allocations of losses and
deductions pursuant to the last paragraph of Section 4.4 and Section 4.5, but
before giving effect to any allocation of Profits or Losses for such taxable
year pursuant to Section 4.4(a) and (b).

 

“Partner” means any Person whose name is set forth on Exhibit A attached hereto
or who has become a Partner pursuant to the terms of this Agreement.

 

“Partnership Property” means any and all property, real or personal, tangible or
intangible, owned of record or beneficially by the Partnership.

 

“Permitted Transferee” means, (a) with respect to SCP or SCP Parallel, any
Affiliate thereof, and (b) with respect to any other Limited Partner who is an
individual and holds Preferred Units (and with respect to such Preferred Units),
(i) the spouse of such Limited Partner, (ii) any trust created solely for the
benefit of such Limited Partner and/or his or her spouse, parents, siblings
and/or lineal descendants (including adoptive relationship and step children)
and/or the spouses of any of the foregoing (collectively, the “Family Members”),
(iii) a charitable remainder trust, the income from which will be paid to such
Limited Partner during his life, (iv) a corporation, partnership or limited
liability company whose only owners are such Limited Partner and/or the Family
Members described in clause (ii) above and (v) such Persons executors,
administrators, testamentary trustees, legatees or beneficiaries, by will or by
the laws of intestate succession; provided that in all cases such Person remains
in control of such transferee after such transfer and shall act for and on
behalf of such transferee in all matters pertaining to such transferee’s
Preferred Units and the Partnership shall be entitled to rely on all decisions,
acts, consents and instructions of such Person as being the decision, act,
consent and instruction of such Person’s transferees.

 

8

 

 

“Person” means and includes any individual, corporation, partnership,
association, limited liability company, trust, estate, custodian, nominee or any
other individual or entity in its own or any representative capacity.

 

“Preferred Base Amount” means, with respect to a Preferred Partner, the amount
of Capital Contributions made by such Partner with respect to the Preferred
Units held by such Partner.

 

“Preferred Limited Partner” means a Limited Partner holding Preferred Units.

 

“Preferred Partners” means the General Partner and the Preferred Limited
Partners.

 

“Preferred Return” means, for each Preferred Partner as of any date, an eight
percent (8%) annual return, which return shall compound quarterly, on the Unpaid
Preferred Base Amount of such Partner as of such date. For the avoidance of
doubt, Tax Distributions made pursuant to Section 4.2 to a Preferred Partner
shall not reduce such Partner’s Unpaid Preferred Base Amount for purposes of the
calculation of such Partner’s Preferred Return.

 

“Preferred Unit” means an interest in the capital, profits, losses and
distributions of the Partnership as provided herein. Each Preferred Unit shall
entitle the holder thereof (other than the General Partner) to one vote on any
matter submitted to the vote of the Limited Partners.

 

“Profits” and “Losses” means, for each period taken into account under Article
IV, an amount equal to the Partnership’s taxable income or taxable loss for such
period, determined in accordance with federal income tax principles, with the
following adjustments:

 

(a)          There shall be added to such taxable income or taxable loss an
amount equal to any income received by the Partnership during such period which
is wholly exempt from federal income tax (e.g., interest income which is exempt
from federal income tax under Section 103 of the Code);

 

(b)          Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures
pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations, and not otherwise
taken into account in computing Profits or Losses, shall be subtracted from such
taxable income or loss;

 

(c)          In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to the terms of this Agreement, the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses;

 

(d)          Gain or loss resulting from any disposition of Partnership Property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership property differs from its Gross Asset Value;

 

(e)          In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year or other period;

 

9

 

 

(f)          To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or Section 743(b) of the Code is
required pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations to be
taken into account in determining Capital Accounts as a result of a distribution
other than in liquidation of a Partner’s Economic Interest, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes
of computing Profits or Losses; and

 

(g)          Any items that are specially allocated pursuant to Section 4.4(c)
and Section 4.5 shall not be taken into account in computing Profits and Losses.

 

“Pro Rata Share” means, with respect to any Preferred Partner as of any date of
determination, the ratio of the total number of the Preferred Units held by such
Partner as of such date to the total number of Preferred Units then held by all
Preferred Partners (who have not forfeited their pre-emptive rights).

 

“Regulations” means the income tax regulations, including any temporary
regulations, from time to time promulgated under the Code.

 

“Restrictive Covenants” means any confidentiality, non-competition,
non-solicitation and other similar covenants to which a Service Partner is
subject pursuant to an employment, subscription, restricted units or other
agreement between such Service Partner and the Partnership and/or any of its
Affiliates.

 

“Rollover Buyback Event” means, with respect to any Rollover Securityholder, the
occurrence of any of the following: (a) a material breach of any Restrictive
Covenant by such Rollover Securityholder, (b) a General Partner Determined Cause
Event relating to such Rollover Securityholder, (c) the termination of such
Rollover Securityholder’s employment with the Employer for Cause, or (d) a
General Partner Determined Competition relating to such Rollover Securityholder.

 

“Rollover Securityholder” means each of Scott Dorfman, Larry Hanger, Robert
Toner and their respective Permitted Transferees.

 

“SCP” means Sterling Capital Partners IV, L.P., a Delaware limited partnership,
and any successor.

 

“SCP Parallel” means SCP IV Parallel, L.P., a Delaware limited partnership, and
any successor.

 

“Secretary” means the Secretary of State of the State of Delaware.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Sell-Down Transaction” means the transfer or sale (in one or more
transactions), directly or indirectly, of Preferred Units by any Selling Partner
at any time on or prior to the 12-month anniversary of the Effective Date to any
independent third party in an aggregate amount, together with any Sell-Down
Transactions effected prior to such transfer or sale, of up to 15% of the total
number of Preferred Units held by SCP, SCP Parallel and their respective
Affiliates as of the Effective Date (as adjusted to reflect any splits, reverse
splits, share dividends or other similar events or circumstances).

 

10

 

 

“Service Partner” means any Partner who is employed by or provides services to
the Partnership and/or any of its Subsidiaries; provided that neither SCP, SCP
Parallel nor any Affiliate thereof shall be deemed to be a Service Partner. For
purposes of this Agreement, a Person shall be treated as and shall remain a
Service Partner with respect to all of the Units held by such Person even if
such Person no longer provides service to the Partnership and/or any of its
Subsidiaries.

 

“Subsidiary” means, with respect to any Person, any entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other entity (other than a corporation), a majority
of membership, partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association, or other entity (other than
a corporation) if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association, or other entity gains or
losses or shall be a manager, managing member, managing director or general
partner of, or shall otherwise control the activities of, such limited liability
company, partnership, association, or other entity. For purposes hereof,
references to a “Subsidiary” of any Person shall be given effect only at such
times that such Person has one or more Subsidiaries, and, unless otherwise
indicated, the term “Subsidiary” refers to a Subsidiary of the Partnership.

 

“Substituted Partner” means any Person admitted to the Partnership as a
substitute or additional Partner pursuant to the provisions of Section 7.2(c).

 

“Target Capital Account” means, with respect to any Partner and any taxable
year, an amount (which may be either a positive or a deficit balance) equal to
(A) the amount that would be received by such Partner if all Partnership assets
were sold for cash equal to their Gross Asset Value, all Partnership liabilities
were satisfied to the extent required by their terms (limited, with respect to
each partner non-recourse liability and partner non-recourse debt, as defined in
Regulations Section 1.704-2(b)(4), to the Gross Asset Value of the assets
securing such liability), and the net assets of the Partnership were distributed
in full to the Partners as required pursuant to Section 8.2(a)(iv), all as of
the last day of such taxable year, minus (B) the sum of (1) the Partner’s share
of partner minimum gain determined pursuant to Regulations Section 1.704-2(g),
and (2) the Partner’s share of the partner non-recourse debt minimum gain
determined in accordance with Regulations Section 1.704-2(i)(5), in each case
computed immediately prior to the hypothetical sale described above.

 

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“Transfer” means, when used as a noun, any voluntary sale, hypothecation,
pledge, assignment, attachment, or other transfer, and, when used as a verb,
means, voluntarily to sell, hypothecate, pledge, assign, or otherwise transfer.

 

“Unit” means a Preferred Unit, a Common Unit or any other class or series of
unit of the Partnership created by the General Partner in accordance with this
Agreement.

 

“Unpaid Preferred Base Amount” means, with respect to each Preferred Partner as
of any date of determination, the excess (if any) of (i) such Partner’s
Preferred Base Amount, over (ii) the aggregate amount of all distributions made
to such Partner pursuant to Section 4.1(a)(ii) as of such date.

 

“Unpaid Preferred Return” means, with respect to each Preferred Partner as of
any date of determination, the excess (if any) of (i) such Partner’s Preferred
Return over (ii) the aggregate amount of all distributions made to such Partner
pursuant to Section 4.1(a)(i) as of such date.

 

Article II
Formation and Name; Office; Purpose; Term

 

2.1           Formation of the Partnership.   The Partnership was formed as a
limited partnership pursuant to the Act. The General Partner shall use all
reasonable efforts to assure that all filing, recording, publishing and other
acts necessary or appropriate for compliance with all requirements for the
continuation of the Partnership as a limited partnership under the Act are made
or taken. Each party hereto represents and warrants that it is duly authorized
to join in this Agreement and that the Person executing this Agreement on its
behalf is duly authorized to do so.

 

2.2           Name of the Partnership.   The name of the Partnership is “Blue
Eagle Holdings, L.P.” The Partnership may do business under that name and under
any other name or names that the General Partner selects. If the Partnership
does business under a name other than that set forth in its Certificate of
Formation, then the Partnership shall comply with any requirements of the Act or
applicable law necessary to do business under such name or names.

 

2.3           Purpose.   The purpose and business of the Partnership shall be to
engage in the Business (directly or through one or more Subsidiaries) and, in
the discretion of the General Partner, in any other lawful act or activity which
may be conducted by a limited partnership organized under the laws of the State
of Delaware.

 

2.4           Term.   The term of the Partnership shall continue in perpetuity,
unless its existence is terminated pursuant to Article VIII hereof.

 

2.5           Registered Office; Registered Agent; Principal Office; Other
Offices.   The registered office of the Partnership required by the Act to be
maintained in the State of Delaware shall be the office of the registered agent
named in the Certificate of Limited Partnership or such other office (which need
not be a place of business of the Partnership) as the General Partner may
designate from time to time in the manner provided by law. The registered agent
of the Partnership in the State of Delaware shall be the registered agent named
in the Certificate of Limited Partnership or such other Person or Persons as the
General Partner may designate from time to time in the manner provided by law.
The principal office of the Partnership shall be at such place as the General
Partner may designate from time to time and the Partnership shall maintain
records there. The Partnership may have such other offices as the General
Partner may designate from time to time.

 

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2.6          Partners.   The name, Capital Contribution, and number and classes
of Units of each Partner (other than an Common Limited Partner) are set forth on
Exhibit A, as such Exhibit shall be amended from time to time in accordance with
the terms of this Agreement. Any reference in this Agreement to Exhibit A shall
be deemed to refer to Exhibit A as amended and then in effect in accordance with
the terms of this Agreement.

 

Article III
Capital Contributions

 

3.1          Capital Contributions as of the Effective Date.

 

(a)          Each Preferred Partner has contributed or is deemed to have
contributed to the Partnership the amount set forth opposite such Partner’s name
in the column entitled “Preferred Base Amount” on Exhibit A in exchange for the
number of Preferred Units set forth opposite such Partner’s name.

 

(b)          The number of Common Units issued to any Service Partner upon
exercise of a unit option shall be reflected on the books and records of the
Partnership.

 

(c)          Each Partner shall be liable only to make such Partner’s Capital
Contribution to the Partnership expressly provided in this Section 3.1, and no
Partner shall be required to make total contributions to the capital of the
Partnership in excess of such Capital Contribution.

 

3.2          Additional Capital Contributions; Preemptive Rights.

 

(a)          Additional Capital.   If at any time the General Partner in its
sole discretion determines to raise capital through the issuance and sale of
interests in the Partnership in excess of the Capital Contributions described in
Section 3.1 to properly carry out or further the business of the Partnership,
the General Partner shall have the right, subject to the provisions of Section
3.2(b), to raise such additional capital and, to the extent the Person(s)
investing such capital are not already Partners, to admit such Person(s) as
Additional Partners, on terms that, subject to the rights set forth in Section
3.2(b), may be senior to, junior to or on parity with the terms of the interests
of the Partners in respect of their Units.

 

(b)          Preemptive Rights.   If the General Partner determines to issue
Additional Securities pursuant to this Section 3.2, or if any of the
Partnership’s Subsidiaries determines to issue Additional Securities, each
Preferred Partner shall have the right to purchase up to such Partner’s Pro Rata
Share of all (or any part of) the Additional Securities which the Partnership
may, from time to time, propose to sell and issue, or in the case of any of the
Partnership’s Subsidiaries, such Partner’s Pro Rata Share of all (or any part
of) the Additional Securities available for purchase by SCP, SCP Parallel and
their respective Affiliates, as determined by the General Partner in good faith.
The preemptive rights granted to the Preferred Partners under this Section 3.2
shall be subject to the following provisions:

 

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(i)          Notice of Issuance of Additional Securities; Acceptance.   In the
event the Partnership or any of its Subsidiaries undertakes or proposes to
undertake an issuance or issuances of Additional Securities in which any
Preferred Partner has the right to participate pursuant to Section 3.2(b), the
Partnership shall give each such Preferred Partner at least thirty (30) days’
prior written notice (the “Preemptive Notice”) thereof, describing the type(s)
of Additional Securities, the price(s), and the general terms upon which the
Additional Securities are proposed to be issued. Each Preferred Partner shall
have thirty (30) days from the date of receipt of any such Preemptive Notice
(i) to provide written confirmation in form and substance acceptable to the
Partnership in its sole discretion of such Partner’s status as an “accredited
investor” (as defined in the Rules and Regulations promulgated under the
Securities Act) and (ii) to agree to purchase up to the Partner’s Pro Rata Share
of such Additional Securities (subject to the further provisions of this Section
3.2(b) below) for the price(s) and upon the general terms specified in the
Preemptive Notice by giving written notice to the Partnership and stating
therein the quantity of Additional Securities to be purchased.

 

(ii)         Right to Proceed with Issuance.   If the Partnership gives a
Preemptive Notice prior to an issuance of Additional Securities, any definitive
agreement to issue such Additional Securities on substantially the same economic
terms as set forth in the Preemptive Notice that is entered into within one
hundred fifty (150) days after such Preemptive Notice shall be deemed to be part
of the same offering and issuance, and no further Preemptive Notice shall be
required pursuant to Section 3.2(b)(i) above with respect to such offer or
issuance. If the Partnership or Subsidiary, as the case may be, offers or agrees
to issue any Additional Securities on economic terms that are different in any
material respect from those set forth in the most recently delivered Preemptive
Notice or, in any event, more than one hundred fifty (150) days after the most
recently delivered Preemptive Notice, the offer or issuance of such Additional
Securities by the Partnership or Subsidiary, as the case may be, shall be deemed
a new offering and the Partnership shall be required to give a separate
Preemptive Notice with respect thereto.

 

(iii)        Non-Purchase Event.   In the event that any Service Partner who is
also a Preferred Partner does not exercise in full its right to purchase up to
such Partner's Pro Rata Share of any Additional Securities offered by the
Partnership or any of its Subsidiaries pursuant to Section 3.2(b)(i) above at
any time after such Partner ceases to be employed or engaged by the Partnership
or its Subsidiaries, such Preferred Partner thereafter shall no longer be
entitled to the pre-emptive rights afforded to the Preferred Partners under this
Section 3.2(b).

 

(iv)        Acknowledgment.   Each Preferred Partner acknowledges that if such
Partner does not exercise the rights granted to such Partner pursuant to this
Section 3.2(b), upon an issuance of Additional Securities, such Partner’s
percentage ownership of Units on a fully diluted, as-if converted basis will be
reduced. Each Preferred Partner acknowledges that if such Partner does exercise
the rights granted to such Partner pursuant to this Section 3.2(b), such Partner
and the Partnership or Subsidiary, as the case may be, shall be required to
execute customary documentation in connection therewith, including customary
representations, warranties, covenants and indemnities as may reasonably be
required by the Partnership or Subsidiary, as the case may be.

 

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3.3          No Interest on Capital Contributions. Partners shall not be paid
interest on their Capital Contributions.

 

3.4          Return of Capital Contributions.   Except as otherwise provided in
this Agreement, no Partner shall have the right to receive the return of any
Capital Contribution.

 

3.5          Form of Return of Capital.   If a Partner is entitled to receive a
return of a Capital Contribution, the Partner shall not have the right to
receive any form of consideration other than cash in return of the Partner’s
Capital Contribution.

 

3.6          Capital Accounts.   The Partnership shall maintain a separate
Capital Account for each Partner.

 

3.7          Loans.   Any Partner or an Affiliate of a Partner may make loans to
the Partnership or any Subsidiary of the Partnership in the event the General
Partner determines that the Partnership or any of its Subsidiaries requires such
loan in order to fund the Partnership’s or any of its Subsidiaries’ working
capital or avoid any default under any agreement with its lenders or other third
parties. Any such loan by a Partner shall be on such terms as agreed to by such
Partner and the Partnership.

 

3.8          Common Units.

 

(a)          As of the Effective Date, the Partnership has authorized
[________]1 Common Units (the “Authorized Common Units”), which shall be
reserved for issuance by the Company upon exercise of options granted pursuant
to the Option Plan. To the extent that, on or after the Effective Date, any such
Common Units are forfeited, canceled or otherwise terminated, or the Common
Units are not delivered because an option award under the Option Plan is settled
in cash or used to satisfy the applicable tax withholding obligation, such
Common Units shall remain part of the Authorized Common Units. The number of
Authorized Common Units can be increased by the General Partner at any time in
its sole discretion.

 

(b)          As a condition to the award of any options under the Option Plan,
the intended recipient of such options shall execute a unit option or similar
agreement, in a form approved by the General Partner, and shall take such other
steps, and execute such other documents as are contemplated thereunder.

 

Article IV
Distributions and Allocations

 

4.1           Distributions of Available Cash.   For purposes of this Article
IV, a “Partner” shall be deemed to include an Economic Owner.

 

 

1            Number of Common Units equal to 10% of the fully-diluted equity of
Parent to be inserted.

 

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(a)          In General. The General Partner may in its sole discretion from
time to time cause the Partnership to make distributions of Available Cash to
the Partners. Subject to the rights of any senior or pari passu securities
issued under Section 3.2(a), any distributions of Available Cash shall be made
to the Partners in the following order of priority:

 

(i)          first, an amount equal to the aggregate Unpaid Preferred Return as
of the date of such distribution shall be distributed to the Preferred Partners
pro rata in accordance with their respective Unpaid Preferred Returns;

 

(ii)         second, an amount equal to the aggregate Unpaid Preferred Base
Amount as of the date of such distribution shall be distributed to the Preferred
Partners pro rata in accordance with their respective Unpaid Preferred Base
Amounts; and

 

(iii)        thereafter, the remaining Available Cash shall be distributed to
the Partners as follows:

 

(A)         an amount equal to the product of the remaining Available Cash
multiplied by the Common Unit Factor shall be distributed to the Common Limited
Partners in proportion to the number of Common Units held by each such Partner;
and

 

(B)         an amount equal to the remaining Available Cash after the
distribution described in clause (iii)(A) above shall be distributed to the
Preferred Partners in proportion to the number of Preferred Units held by each
such Partner.

 

(b)          In-Kind Distribution.   If any assets of the Partnership are
distributed in kind to the Partners, those assets shall be valued on the basis
of their fair market value, as determined by an appraiser selected by the
General Partner and any Partner entitled to receive such assets may receive an
interest in such assets as a tenant-in-common with all other Partners so
entitled.

 

(c)          No Obligation to Restore Negative Capital Account.   No Partner
shall be obligated to restore a Negative Capital Account during the term of, or
upon dissolution of, the Partnership.

 

4.2          Distributions with Respect to Tax.

 

(a)           Notwithstanding Section 4.1 or any other provision of this
Agreement, the Partnership shall use reasonable best efforts, prior to any
distributions pursuant to Section 4.1(a), to distribute to each Partner an
amount equal to such Partner’s Tax Distribution (as defined in Section 4.2(b))
to enable the Partners to pay federal, state and local income taxes on taxable
income of the Partnership allocated to the Partners during a taxable year (said
taxable income allocated to a Partner to be determined by netting all items of
Profits and Losses which are allocated by the Partnership to the Partners and as
to which the Partners are subject to tax, provided, however, in no event shall
the Partnership make Tax Distributions to a Partner if the cumulative taxable
losses allocated to a Partner over the life of the Partnership at any given time
exceed the cumulative taxable income of the Partnership allocated to such
Partner for such period. Distributions made pursuant to Sections 4.1(a)(i), and
(iii) shall serve to discharge the Partnership’s obligations under this Section
4.2 to the extent paid. Distributions made under this Section 4.2 shall reduce
amounts distributable pursuant to Sections 4.1(a)(i) and (iii) and Section
8.2(a)(iv).

 

16

 

 

(b)         The amount distributable to a Partner pursuant to Section 4.2(a) (a
“Tax Distribution”) with respect to a taxable year of the Partnership shall be
equal to the product of (i) the excess of (A) the taxable income allocated to
such Partner by the Partnership for that year on which taxes will be payable for
Federal and state income tax purposes, over (B) the cumulative net losses, if
any, theretofore allocated to such Partner from the Partnership from the date
hereof through the end of such taxable year and not previously applied for
purposes of this Section 4.2(b), and (ii) the Assumed Tax Rate.

 

(c)         Any and all Tax Distributions shall be paid with respect to any
taxable year of the Partnership on a quarterly basis to allow the Partners to
pay their estimated income tax liability (based on the General Partner’s good
faith estimate of the taxable income of the Partnership for the current taxable
year and the amount of Tax Distribution which such Partner is entitled pursuant
to Section 4.2(b)), with any additional distribution (based on the actual
taxable income of the Partnership for such taxable year) to be paid no later
than March 10 following such taxable year.

 

4.3          Limitations on Distributions.   Notwithstanding anything to the
contrary contained herein, the Partners hereby acknowledge and agree that the
Partnership’s ability to make any distributions to its Partners may be subject
to the satisfaction of certain covenants and approvals pursuant to such
commercially-reasonable loans with third parties and/or associated security
agreements or mortgages to which the Partnership is a party or by which its
assets may be bound and that the distributions due to the Partners pursuant to
this Agreement may be prohibited by such loan and/or security agreements. The
Partnership will use good faith efforts to negotiate for Tax Distributions to
generally be permitted by the Partnership’s loan and/or security agreements.

 

4.4          Allocations of Profits and Losses.   Except as otherwise required
by Section 704(b) of the Code and Sections 4.5 and 4.6 hereof, Profits and
Losses of the Partnership for any taxable year shall be allocated as follows:

 

(a)         Profits.   Profits for each taxable year shall be allocated to the
Partners so as to reduce, proportionally, the difference between their
respective Target Capital Accounts and Partially Adjusted Capital Accounts for
such fiscal year. No portion of the Profits for any taxable year shall be
allocated to a Partner whose Partially Adjusted Capital Account is greater than
or equal to its Target Capital Account for such fiscal year.

 

(b)         Losses.   Losses for each taxable year shall be allocated to the
Partners so as to reduce, proportionally, the difference between their
respective Partially Adjusted Capital Accounts and Target Capital Accounts for
such fiscal year. No portion of the Losses for any taxable year shall be
allocated to a Partner whose Target Capital Account is greater than or equal to
its Partially Adjusted Capital Account for such fiscal year.

 

17

 

 

(c)          Loss Limitation.   Losses allocated pursuant to Section 4.4(b)
shall not exceed the maximum amount of Losses that can be allocated without
causing any Partner to have an Adjusted Capital Account Deficit at the end of
any taxable year. In the event that some but not all of the Partners would have
and Adjusted Capital Account Deficit as a consequence of an allocation of Losses
pursuant to Section 4.4(b), the limitations set forth herein shall be applied on
a Partner-by-Partner basis and Losses not allocable to any Partner as a result
of such limitation shall be allocated to the other Partners in accordance with
the positive balances in such Partners’ Capital Accounts so as to allocate the
maximum permissible Losses to each Partner under Regulations Section
1.704-1(b)(2)(ii)(d).

 

Notwithstanding the foregoing, the General Partner may make such allocations as
it deems reasonably necessary to give economic effect to the provisions of this
Agreement, taking into account facts and circumstances as the General Partner
deems reasonably necessary for this purpose.

 

4.5          Regulatory Allocations.

 

(a)          Minimum Gain and Partner Minimum Gain Chargebacks.
  Notwithstanding any other provision of this Article IV, items of Partnership
income and gain shall be allocated so as to comply with the minimum gain
chargeback requirements of Regulations Sections 1.704-2(f) and 1.704-2(i)(4).

 

(b)          Qualified Income Offset.   If a Partner unexpectedly receives any
adjustments, allocations or distributions described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6),
items of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the Adjusted Capital Account Deficit of such Partner as
quickly as possible; provided, however, that an allocation pursuant to this
Section 4.5(b) shall be made if and only to the extent that the Partner would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Article IV have been tentatively made as if this Section 4.5(b) were
not in this Agreement.

 

(c)          Non-recourse Deductions.   Non-recourse deductions (as defined in
Regulations Section 1.704-2(b)(1)) for any taxable year or other period shall be
allocated to the Preferred Partners pro rata in accordance with their respective
Preferred Units. The amount of non-recourse deductions and excess non-recourse
liabilities shall be determined in accordance with Regulations Section
1.704-2(c).

 

(d)          Partner Non-recourse Deductions.   Any partner non-recourse
deductions (as defined in Regulations Section 1.704-2(i)(1)) for any taxable
year or other period shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the partner non-recourse debt to which
such partner non-recourse deductions are attributable in accordance with
Regulations Section 1.704-2(i). The amount of partner non-recourse deductions
shall be determined in accordance with Regulations Section 1.704-2(i)(2).

 

18

 

 

(e)          Effect of Regulatory Allocations.   The allocations described in
Section 4.4(c) and Section 4.5(a), (b), (c) and (d) above (the “Regulatory
Allocations”) are intended to comply with certain requirements of Regulations
Sections 1.704-1(b) and 1.704-2 and as such may not be consistent with the
manner in which the Partners intend to allocate items of income, gain, loss,
deduction and expense or make distributions. Accordingly, notwithstanding other
provisions of this Section 4.5 and Section 4.4(c), but subject to the
requirements of the Regulations, items of income, gain, loss, deduction and
expense in subsequent taxable years shall be allocated among the Partners in
such a way as to reverse as quickly as possible the effect of the Regulatory
Allocations and thereby cause the respective Capital Accounts of the Partners to
be in the amounts they would have been if Profits and Losses (and such other
items of income, gain, deduction and loss) had been allocated without reference
to the Regulatory Allocations.

 

4.6          Special Allocations Relating to Entity-Level Taxes; Withholding.

 

(a)          Special Allocations Relating to Entity-Level Taxes.
  Notwithstanding anything to the contrary herein, in the event that and to the
extent that any state, local or other income tax imposed on the Partnership as
an entity is reduced by reason of the holding of an interest by any Partner, no
part of the expense of the Partnership for such tax shall be allocated to such
Partner. In addition, if the Partnership is obligated under applicable law to
pay any amount to a governmental agency because of a Partner’s status as a
Partner of the Partnership for federal or state withholding or other taxes, such
amount shall reduce the distributions which would otherwise be made to such
Partner pursuant to this Article IV.

 

(b)          Withholding.   The Partnership shall comply with the withholding
provisions of Federal, state and local law and shall remit amounts withheld to
and file required forms with the applicable jurisdictions. To the extent the
Partnership is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Partner, the amount withheld
shall be treated as a distribution in the amount of the withholding to that
Partner for all purposes under this Agreement. In the event of any claimed
over-withholding, the Partner shall be limited to a refund claim against the
applicable jurisdiction. If the amount withheld was not withheld from actual
distribution to a Partner, the Partnership may, at the General Partner’s option,
(i) require the Partner to reimburse the Partnership for such withholding upon
request by the General Partner, or (ii) reduce any subsequent distributions to
the Partner by the amount of such withholding. Each Partner agrees to furnish
the Partnership with any representations and forms as shall reasonably be
requested by the General Partner to assist it in determining the extent of, and
in fulfilling, the Partnership's withholding obligations.

 

4.7          Allocation for Income Tax Purposes.

 

(a)          Allocation in General.   Except as otherwise provided in Section
4.7(b), for each fiscal year, items of Partnership income, gain, loss, deduction
and expense, shall be allocated, for federal, state and local income tax
purposes, among the Partners in the same manner as the Profits (and the items
thereof) or Losses (and the items thereof) of which such items are components
were allocated pursuant to Section 4.4.

 

(b)          Section 704(c) Items.   In accordance with Section 704(c) of the
Code and the Regulations thereunder, income, gain, loss, and deduction with
respect to any property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to take account
of any variation between the adjusted basis of such property to the Partnership
for federal income tax purposes and its initial Gross Asset Value. If the Gross
Asset Value of a Partnership asset is adjusted pursuant to clause (b) of the
definition of Gross Asset Value, subsequent allocations of income, gain, loss,
and deduction with respect to such asset for tax purposes shall take account of
any variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Section 704(c) of
the Code and the Regulations thereunder. Any elections or other decisions
relating to such allocations shall be made by the General Partner.

 

19

 

 

(c)          Allocations Solely for Tax Purposes. Allocations pursuant to this
Section 4.7 are solely for purposes of federal, state and local taxes and shall
not affect, or in any way be taken into account in computing, any Partner’s
Capital Account or share of Profits and Losses or other items or distributions
pursuant to any provision of this Agreement.

 

Article V
General Partner

 

5.1          General Partner.

 

(a)          General Partner.   The Partnership shall be managed by the General
Partner.

 

(b)          Withdrawal of General Partner.   The General Partner may withdraw
as a General Partner of the Partnership without the consent of any Person upon
notice to the Limited Partners. Any such withdrawal by the General Partner shall
result in the dissolution of the Partnership; provided that the General Partner
may admit additional general partners of the Partnership or successor general
partners of the Partnership, which additional or successor general partners may
be affiliated with the General Partner or, subject to applicable law, may be
unaffiliated third parties, and in such case the withdrawal by the General
Partner shall not result in the dissolution of the Partnership.

 

(c)          Authority of the General Partner.   The General Partner shall have
the power and authority to manage, control, administer and operate the business
and affairs of the Partnership and to take all such actions as it deems
necessary or appropriate to accomplish the purposes of the Partnership as set
forth herein.

 

(d)          Agents and Officers.   The General Partner may from time to time
authorize or appoint individuals to act as officers or agents of the Partnership
on a general basis or for a specific purpose, which individuals shall have full
power and authority to act for and bind the Partnership as authorized by the
General Partner. Each officer or agent of the Partnership appointed by the
General Partner shall hold office until his successor is elected or appointed or
until his earlier displacement from office by resignation, removal or otherwise.
Any officer or agent of the Partnership may resign by written notice to the
Partnership and may be removed for cause or without cause by the General Partner
in its sole discretion. Any number of offices may be held by the same person.

 

5.2          Right to Engage in Other Activities.   Subject to any employment or
other agreements with the Partnership or any Subsidiary or between or among any
Partners, to which a Person may be a party or otherwise subject, each Partner,
at any time and from time to time, may engage in and own interests in other
business ventures of any type and description, independently or with others.

 

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5.3          Transactions Between the Partnership and the Partners.
 Notwithstanding that it may constitute a conflict of interest, the Partners and
their respective Affiliates may engage in any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service or the establishment of any salary, other compensation or other terms of
employment) with the Partnership and/or one or more of its Subsidiaries so long
as such transaction is, as determined by the General Partner in good faith. The
Partners hereby specifically consent to and authorize the Company to enter into
an advisory services agreement with Sterling Fund Management, LLC, an Affiliate
of SCP, substantially in the form attached hereto as Exhibit B (the “Advisory
Services Agreement”).

 

5.4          Limitation of Liability.

 

(a)          Except as otherwise provided herein or in any agreement entered
into by such Person and the Partnership, and to the maximum extent permitted by
the Act, no present or former General Partner, or any of its Affiliates,
employees, agents or representatives, shall be liable to the Partnership or to
any Partner for any act or omission performed or omitted by such Person in its
capacity as, or on behalf of, the General Partner; provided that, except as
otherwise provided herein, such limitation of liability shall not apply to the
extent the act or omission was attributable to such Person’s willful misconduct,
gross negligence, bad faith or knowing violation of law or if such liability
results from such Person’s action taken in his capacity as an individual or
outside the authority with respect to the Partnership conferred to such Person.
The General Partner may, in good faith, exercise any of the powers granted to it
by this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its Affiliates, employees, agents or representatives,
and the General Partner shall not be responsible for any misconduct or
negligence on the part of any such Person appointed by the General Partner (so
long as such Person was selected in good faith and with reasonable care). The
General Partner shall be entitled to consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisors selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters that the General Partner
reasonably believes to be within such Person’s professional or expert competence
shall be conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.

 

(b)          Whenever in this Agreement or any other agreement contemplated
herein, the General Partner is permitted or required to take any action, the
General Partner, acting in good faith, shall be entitled to consider such
interests and factors as it desires (including the interests of the General
Partner or any of its Affiliates as a Partner).

 

(c)          Whenever in this Agreement the General Partner is permitted or
required to take any action or to make a decision in its “good faith” or under
another express standard, the General Partner shall act under such express
standard and, to the extent permitted by applicable law, shall not be subject to
any other or different standards imposed by this Agreement or any other
agreement contemplated herein, and, notwithstanding anything contained herein to
the contrary, so long as the General Partner acts in good faith or such other
express standard required, the resolution, action or terms so made, taken or
provided by the General Partner shall not constitute a breach of this Agreement
or any other agreement contemplated herein or impose liability upon the General
Partner or any of its respective Affiliates, employees, agents or
representatives.

 

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(d)          To the maximum extent permitted by applicable law, each Partner
hereby waives any claim or cause of action against the General Partner or any of
its Affiliates, employees, agents and representatives for any breach of any
fiduciary duty to the Partnership or the Partners, including as may result from
a conflict of interest between the Partnership or any of its Subsidiaries and
such Person in his or her capacity as a Partner. Subject to compliance in good
faith with the terms of this Agreement, the General Partner shall not be
obligated to recommend or take any action as the General Partner or as an agent
of the Partnership that prefers the interests of the Partnership or any of its
Subsidiaries or the other Partners over the interests of the General Partner or
any of its Affiliates, employees, agents or representatives, and the Partnership
and each of the Partners hereby waive the duty, if any, of the General Partner
to act as a fiduciary to the Partnership or any of the Partners, or to consider
the effect of any actions on any particular class or series of Units, including
in the event of any such conflict of interest.

 

(e)          Except as otherwise required by law or the provisions of this
Agreement, the Partnership shall indemnify its present and former General
Partner and their respective Affiliates, employees, agents and representatives
(and their heirs, executors and personal and legal representatives) against any
losses, liabilities, damages or expenses (including amounts owed for attorneys’
fees, judgments and settlements in connection with any threatened, pending or
completed action, suit or proceeding) to which any of such Persons may directly
or indirectly become subject for action taken or omitted to be taken on behalf
of the Partnership or the General Partner or in connection with any involvement
with the Partnership or its Subsidiaries (including serving as a manager, agent,
officer, director, consultant or employee of the Partnership or its
Subsidiaries), unless such losses, liabilities, damages or expenses are caused
by such Person’s gross negligence, willful misconduct or bad faith; provided,
however, that, except for proceedings to enforce rights to indemnification, the
Partnership shall not be obligated to indemnify any Person (or his or her heirs,
executors or personal or legal representatives) in connection with a proceeding
(or part thereof) initiated by such Person unless such proceeding (or part
thereof) was authorized or consented to by the General Partner. The right to
indemnification conferred by this Section 5.4(e) shall include the right to be
paid by the Partnership the expenses incurred in defending or otherwise
participating in any proceeding in advance of its final disposition upon receipt
by the Partnership of an undertaking by or on behalf of the General Partner or
other Person receiving advancement to repay the amount advanced if it shall
ultimately be determined that the General Partner or other Person is not
entitled to be indemnified by the Partnership under this Section 5.4(e).

 

(f)          The Partnership shall be the primary obligor in respect of the
General Partner or any other Person’s claim for indemnification, advancement of
expenses and/or insurance, to the extent subject to this Section 5.4, and the
obligation, if any, of SCP, SCP Parallel or any of their respective Affiliates
(each, a “Related Fund”) to indemnify, advance expenses to or provide insurance
for the General Partner or any other Person shall be secondary to the
obligations of the Partnership under this Section 5.4. In the event that any
Related Fund is or is threatened to be made a party to or a participant in any
proceeding, and the Related Fund’s involvement in the proceeding arises in whole
or in part from the service to the Partnership of the General Partner, then the
Related Fund shall be directly entitled to all rights and remedies of the
General Partner hereunder to the same extent as the General Partner. To the
extent any Related Fund advances or pays any amounts to the General Partner in
connection with any claim subject to this Section 5.4, whether or not such
Related Fund is or is threatened to be made a party to or a participant in any
proceeding, such Related Fund shall be subrogated to the rights of the General
Partner against the Partnership pursuant to this Section 5.4. For the avoidance
of doubt, each Related Fund is a third-party beneficiary of this Section 5.4(f)
and may enforce its terms against the Partnership.

 

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5.5          Indemnification of Officers.  The Partnership, at the direction of
the General Partner, may indemnify and advance expenses to an officer, employee
or agent of the Partnership or any Subsidiary to the same extent and subject to
the same conditions under which it shall indemnify and advance expenses under
Section 5.4(e).

 

5.6          Nonexclusivity of Rights.  The right to indemnification and the
advancement and payment of expenses conferred in this Article V shall not be
exclusive of any other right that the General Partner or other Person
indemnified pursuant to this Article V may have or hereafter acquire under any
contract, law (common or statutory) or provision of this Agreement.

 

5.7          Insurance.  The Partnership or one or more of the Subsidiaries may
obtain and maintain, at its expense, insurance to protect itself and the General
Partner, and any officers or other agents of the Partnership or any Subsidiary
who is or was serving at the request of the Partnership or any Subsidiary as a
manager, representative, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
limited liability company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, against any
expense, liability or loss, whether or not the Partnership would have the power
to indemnify such Person against such expense, liability or loss under this
Article V. The Partnership shall use its best efforts to cause its insurance
providers, if any, to satisfy any claims under this Article V to the fullest
extent of the coverage provided, notwithstanding any other indemnities or
insurance available to any Person from any Related Fund.

 

5.8          Savings Clause.  If this Article V or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Partnership shall nevertheless indemnify and hold harmless each Person
indemnified pursuant to this Article V as to costs, charges and expenses
(including reasonable attorneys’ fees and expenses), judgments, fines and
amounts paid in settlement with respect to any Proceeding, appeal, inquiry or
investigation to the full extent permitted by any applicable portion of this
Article V that shall not have been invalidated and to the fullest extent
permitted by applicable law.

 

5.9          Power of Attorney.

 

(a)         Grant of Power.  Each Partner constitutes and appoints the General
Partner as the Partner’s true and lawful attorney-in-fact (“Attorney-in-Fact”),
and in the Partner’s name, place and stead, to make, execute, sign, acknowledge,
and file, with respect to the Partnership:

 

(i)          the Certificate of Limited Partnership consistent with this
Agreement;

 

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(ii)         all documents (including amendments to the Certificate of Limited
Partnership and/or this Agreement) which the Attorney-in-Fact deems appropriate
to reflect any amendment, change, or modification of this Agreement that has
been properly approved in accordance with Section 10.4 of this Agreement;

 

(iii)        any and all other certificates or other instruments required to be
filed by the Partnership under the laws of the State of Delaware or of any other
state or jurisdiction, including, without limitation, any certificate or other
instruments necessary in order for the Partnership to continue to qualify as a
limited partnership under the laws of the State of Delaware;

 

(iv)        one or more applications to use an assumed name;

 

(v)         all documents and instruments which the Attorney-in-Fact deems
necessary and appropriate to execute on behalf of a Partner if such Partner does
not take any actions properly requested by the General Partner pursuant to
Section 7.3, 7.5 or 7.6; and

 

(vi)        all documents which may be required to dissolve and terminate the
Partnership and to cancel the Certificate of Limited Partnership.

 

(b)         Irrevocability.  The foregoing power of attorney is irrevocable and
is coupled with an interest, and, to the extent permitted by applicable law,
shall survive the death or dissolution of a Partner or the Transfer of a Unit,
except that if the transferee of such Unit is approved for admission as a
Substituted Partner pursuant to Section 7.2(c), this power of attorney granted
by the transferor shall survive the delivery of the assignment for the sole
purpose of enabling the Attorney-in-Fact to execute, acknowledge and file any
documents needed to effectuate the substitution.

 

Article VI
Limited Partners

 

6.1          No Right to Participate in Management.  Notwithstanding anything to
the contrary contained herein, except as required by the Act and except as
explicitly set forth herein, the Limited Partners shall not participate in the
management or control of the Partnership’s business nor shall they transact any
business for the Partnership, nor shall they have the power to act for or bind
the Partnership, said powers being vested solely and exclusively in the General
Partner.

 

6.2          Liability.  Except as otherwise required by the Act, a Limited
Partner, as such, shall not be personally liable for any of the debts,
liabilities, contracts or any other obligations of the Partnership.

 

6.3          Incapacity or Dissolution.  The death, incapacity, dissolution or
bankruptcy of a Limited Partner, or the transfer of all of his interest in the
Partnership to anyone that is not a Limited Partner, shall not cause a
dissolution of the Partnership, but the rights of such Limited Partner to share
in the Profits and Losses of the Partnership, to receive distributions of
Partnership funds and to assign an interest pursuant to Article VII hereof
shall, on the happening of such an event, devolve on his or its
successors-in-interest, if any, and the Partnership shall continue as a limited
partnership under the Act.

 

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6.4          Duties of the Parties.

 

(a)         Except as otherwise set forth in Section 6.4(b) below or in any
other agreement between a Limited Partner and the Partnership, nothing herein
shall be deemed to restrict in any way the rights of any Limited Partner, any
Affiliate of any Limited Partner, or any member, partner or shareholder of any
Partner or each of their respective Affiliates to conduct any other business or
activity whatsoever, and no Limited Partner shall be accountable to the
Partnership or to any other Partner with respect to that business or activity.
The organization of the Partnership shall be without prejudice to the rights of
the Partners (or the rights of their respective Affiliates) to maintain, expand
or diversify such other interests and activities and to receive and enjoy
profits or compensation therefrom. Except as otherwise set forth in Section
6.4(b) below or in any other agreement between a Limited Partner and the
Partnership, no Partner or Affiliate thereof shall be obligated to present any
particular investment opportunity to the Partnership or any Partner even if such
opportunity is of a character that, if presented to the Partnership, could be
taken by the Partnership, and any Partner or Affiliate thereof shall have the
right to take for its own account (individually or as a partner, member,
shareholder, fiduciary or otherwise) or to recommend to others any such
particular investment opportunity. Each Partner hereby waives any rights the
Partner or its Affiliates might otherwise have to share or participate in such
other interests or activities of any other Partner, the Partner’s Affiliates, or
any member, partner or shareholder of any Partner or any of their respective
Affiliates.

 

(b)         Each Service Partner agrees that while such Person (or any of his
Affiliates or Permitted Transferees) is a full-time employee of the Partnership
or any of its Subsidiaries, if such Person (or any of his Affiliates or
Permitted Transferees) learns of any investment opportunity in an entity engaged
in the Business, such Person shall present, or shall cause his Affiliates to
present, such investment opportunity to the Partnership.

 

Article VII
Uncertificated Units; Transfer of Units

 

7.1          Uncertificated Units.  The Partnership will not issue certificates
representing Units or other equity interests in the Partnership, and the Units
or other equity interests in the Partnership outstanding at any time shall be as
set forth on Exhibit A, as the same may be amended or modified in accordance
with this Agreement.

 

7.2          Transfers.

 

(a)         Other than Transfers to a Permitted Transferee or pursuant to
Section 7.3, 7.5, 7.6 or 7.8, no Person may Transfer all or any portion of its
Units or any interest in the Partnership without the prior written consent of
the General Partner, which consent may be given or withheld in the General
Partner’s sole discretion.

 

(b)         In addition to the other requirements of this Section 7.2, unless
waived by the General Partner, no Transfer of all or any portion of Units or any
interest in the Partnership shall be made unless the following conditions are
met:

 

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(i)          The Transfer will not violate registration requirements under any
Federal or state securities laws;

 

(ii)         The transferee delivers to the Partnership a written instrument
agreeing to be bound by the terms of this Agreement and assume all obligations
of the transferor under this Agreement with respect to the Units being
transferred;

 

(iii)        The Transfer will not result in the Partnership being subject to
the Investment Company Act of 1940, as amended; and

 

(iv)        The Transfer will not cause the Partnership to be treated as a
“publicly traded partnership” within the meaning of the Code and Regulations.

 

(c)         No transferee of a Partner’s Unit or interest in the Partnership
shall become a Substituted Partner unless such transfer shall be made in
compliance with Section 7.2(a) and (b) and:

 

(i)          the General Partner shall have consented to the admission of such
transferee as a Substituted Partner; and

 

(ii)         the transferring Partner and the transferee shall have executed and
acknowledged such other instruments as the General Partner may deem necessary
and desirable.

 

(d)         A transferee of a Partner’s Unit or interest in the Partnership that
is not admitted as a Substituted Partner shall become an Economic Owner.

 

(e)         Each Partner hereby acknowledges the reasonableness of the
prohibition contained in this Section 7.2 in view of the purposes of the
Partnership and the relationship of the Partners. Any Person to whom Units or
interests in the Partnership are attempted to be transferred in violation of
this Section 7.2 shall not be entitled to vote on matters coming before the
Partners, participate in the management of the Partnership, act as an agent of
the Partnership, receive distributions from the Partnership or have any other
rights in or with respect to the Units or interests in the Partnership.

 

7.3          Drag-Along Rights.

 

(a)         If the General Partner elects to consummate a sale of all of the
Units or equity interests in the Partnership (including by merger,
consolidation, reorganization or combination of the Partnership) to any
independent third party (each such transaction referred to as a “Sale”), the
General Partner shall notify the Partners and Economic Owners in writing of such
Sale and provide a description of the Sale setting forth the reasonable details,
terms, and conditions thereof. Upon request by the General Partner, each Partner
and Economic Owner will consent to and raise no objections to the proposed
transaction, and will take all other actions reasonably necessary or desirable
to cause the consummation of such Sale on the terms proposed by the General
Partner. The obligations of the Partners and Economic Owners pursuant to this
Section 7.3(a) with respect to a Sale are subject to the following conditions:
(x) the consideration payable upon consummation of such Sale to all of the
Partners and Economic Owners shall be allocated among the Partners and Economic
Owners as set forth in Section 4.1(a), and (y) upon the consummation of the
Sale, all of the Partners and Economic Owners who own the same class of
securities shall receive the same form of consideration per Unit as the other
holders of the same class of securities. Each Partner agrees to be bound by
agreements with respect to indemnification obligations, amounts paid into
escrow, amounts subject to holdbacks or amounts subject to post-closing purchase
price adjustments, and agreements to appoint representatives; provided, that any
such indemnification, escrow, holdback and adjustment obligations undertaken by
any Partner (A) shall be in the reverse order of the distributions pursuant to
Section 4.1(a) (i.e., Partners and Economic Owners having the lowest priority of
distributions having the first obligation with respect to any such
indemnification, escrow, holdback and adjustment obligations), and (B) shall not
exceed the total amount of consideration received by such Partner in connection
with such Sale (except with respect to representations and warranties relating
solely to such Partner, including title to any Units).

 

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(b)         To the extent that a Partner or Economic Owner does not take any
actions when requested by the General Partner pursuant to this Section 7.3, each
such Partner or Economic Owner hereby constitutes and appoints the General
Partner as such Partner’s or Economic Owner’s true and lawful Attorney-in-Fact
and authorizes the Attorney-in-Fact to execute on behalf of such Partner or
Economic Owner any and all documents and instruments which the Attorney-in-Fact
deems necessary and appropriate in connection with the Sale. The foregoing power
of attorney is irrevocable and is coupled with an interest.

 

7.4          Withdrawal of Partners.  No Limited Partner shall have the right to
withdraw from the Partnership, except in the case of an Involuntary Withdrawal
or transfer of all of such Partner’s Units in accordance with the terms of this
Agreement. Immediately upon the occurrence of an Involuntary Withdrawal, the
successor(s) of the Partner so withdrawing shall thereupon become Economic
Owner(s) but shall not become Partner(s).

 

7.5          Repurchase of Service Partner’s Common Units.  Notwithstanding
anything to the contrary contained herein, all Common Units held by a Service
Partner or beneficially owned by any Service Partner or any of his or her
transferees (the “Covered Units”) shall be subject to the Partnership’s right of
repurchase or forfeiture under the circumstances and on the terms and conditions
specified below.

 

(a)         Repurchase and Forfeiture Upon Termination.  If any Service
Partner’s employment or service with the Employer is terminated:

 

(i)          (x) by the Employer for any reason other than for Cause, (y) by the
Service Partner, or (z) as a result of the Service Partner’s death or
disability, the Partnership shall have the right, but not the obligation,
pursuant to procedures described in Section 7.5(c), to purchase all of such
Service Partner’s Covered Units for an aggregate price equal to the Fair Market
Value of the Covered Units to be purchased as of the date of such termination of
employment; and

 

(ii)         by the Employer for Cause, all of such Service Partner’s Covered
Units shall be forfeited as of the effective date of such termination of
employment without any act by the General Partner, the Partnership or any
Partner.

 

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The repurchase option described in clause (i) above shall be exercisable by the
General Partner by delivery of written notice to such Service Partner (or his
Permitted Transferees) or his executor or personal representative, as
applicable, within 180 days of the effective date of such Service Partner’s
termination of employment or service with Employer.

 

(b)         Partnership’s Rights Upon Breach of Restrictive Covenant,
Competition with the Partnership or General Partner Determined Cause Event.

 

(i)          If any Service Partner breaches any Restrictive Covenant, the
Partnership shall have the right, but not the obligation, to cause the
forfeiture of any Covered Units.

 

(ii)         In the event of a General Partner Determined Competition or General
Partner Determined Cause Event with respect to a Service Partner, the
Partnership shall have the right, but not the obligation pursuant to procedures
described in Section 7.5(c), to purchase all of such Service Partner’s Covered
Units for an aggregate price equal to the Fair Market Value of such Units as of
the closing date of such repurchase event; provided that the Partnership shall
have the right to cause the forfeiture of all of such Covered Units if the event
giving rise to such General Partner Determined Competition is that such Service
Partner competed with the Partnership and/or its Subsidiaries while employed by
or providing services to the Partnership and/or its Affiliates.

 

(iii)        The foregoing option shall be exercisable by the General Partner by
written notice to such Service Partner or his executor or personal
representative, as applicable, on or before 180 days after the date such breach
or event is discovered by the Partnership.

 

(c)          Repurchase Procedures.

 

(i)          The Partnership shall have the right, but not the obligation, to
purchase all or any non-forfeited Covered Units held by a Service Partner by
sending written notice to the Service Partner within the 180-day period
described in Section 7.5(a) or Section 7.5(b) above, as applicable. Such a
notice shall specify the closing date for the repurchase of any Covered Units by
the Partnership.

 

(ii)         The purchase price for the Covered Units shall be paid by the
Partnership, in the General Partner’s election, (x) in cash at closing, (y) by
delivery of an unsecured promissory note subordinated and junior in right of
payment to all other indebtedness of the Partnership, with customary terms and
conditions, including interest at a rate equal to the Applicable Federal Rate,
and payable in sixteen equal quarterly installments of principal together with
accrued interested thereon, with the first installment due on the first day of
the first quarter after the closing and the subsequent quarterly installments
due on the first day of the successive sixteen quarters (a “Repurchase Note”),
or (z) in any combination thereof; provided, however, that, in the event that
the Partnership repurchases any Covered Units pursuant to Section 7.5(a)(i), the
purchase price shall be paid by the partnership (A) in an amount in cash at
closing equal to the lesser of the (I) the purchase price, (II) $250,000
($500,000, with respect to Scott D. Dorfman), and (III) the maximum amount
permitted to be paid by the Partnership under its or any of its Subsidiaries
credit facilities and (B) by delivery of a Repurchase Note in the principal
amount equal to the purchase price for the Covered Units minus the amount paid
in cash pursuant to clause (A).

 

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(iii)        If any Person required to sell Covered Units pursuant to this
Section 7.5 fails, for any reason, to tender the instruments reasonably required
for the purchase and sale of the Covered Units at the time and place specified
by the Partnership, such Person shall be deemed to have assigned all of his
right, title and interest in and to the Covered Units to the Partnership and
such Person shall cease to have any rights with respect to the Covered Units
except only to receive the purchase price therefor as computed pursuant to this
Section 7.5 and such Transferred Units shall be deemed cancelled on the
Partnership’s books and shall no longer be outstanding.

 

(iv)        In the event the Partnership exercises its repurchase right with
respect to any Covered Units in accordance with Section 7.5(a) or Section 7.5(b)
above, the Partnership shall have the right, in the General Partner’s sole
discretion, to pay for such Covered Units by causing the Partnership to first
distribute to the applicable Service Partner shares of stock of the Company with
“fair market value” equal to the purchase price for such Covered Units (such
shares of the Company, the “Redemption Shares”), in which case the Company shall
immediately repurchase the Redemption Shares from the Service Partner, and the
Service Partner shall sell to the Company the Redemption Shares, under the same
terms and conditions as the terms and conditions applicable to such repurchased
Covered Units.

 

7.6          Repurchase of Service Partner’s Preferred Units.

 

(a)         Upon the occurrence of a Rollover Buyback Event with respect to a
Rollover Securityholder, the Partnership shall have the right, but not the
obligation pursuant to procedures described in Section 7.5(c) (except that any
references to “Covered Units” shall be deemed to refer to “Preferred Units”), to
purchase all of the Preferred Units held by any of such Rollover Securityholder
(and his Affiliates) for an aggregate price equal to the Fair Market Value of
such Preferred Units as of the closing date of such Rollover Buyback Event. The
foregoing option shall be exercisable by written notice to such Rollover
Securityholders on or before 180 days after the date such Rollover Buyback Event
is discovered by the Partnership or the General Partner makes such
determination.

 

(b)         In the event that the foregoing option is exercised, the notice
thereof will be accompanied by the General Partner’s determination of the Fair
Market Value of such Preferred Units.

 

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7.7          Incorporation.  The Partners hereby agree that, upon the approval
of the General Partner of a plan to incorporate the Partnership or merging the
Partnership into an Affiliate of SCP to effectuate a consummation of an initial
public offering of the Partnership (the “Incorporation Plan”) in any transaction
intended to qualify under Section 351 (or any successor provision) of the Code,
and which maintains the relative rights (including distribution rights) of the
Units hereunder (the “Section 351 Transaction”), each Partner will consent to
and raise no objections to the proposed Section 351 Transaction, and will take
all other actions reasonably necessary or desirable to cause the consummation of
the Section 351 Transaction on the terms proposed by the General Partner,
including but not limited to, each Partner will transfer such Partner's Units to
a corporation specifically formed for such purpose or to such Affiliate of SCP
(each of such new corporation and Affiliate of SCP, the “Corporation”) in
exchange for stock of the Corporation. The Corporation shall issue its stock in
the Section 351 Transaction in accordance with the Incorporation Plan, which
shall specify the classes of stock for which the Units shall be exchanged and
which shall attach as an exhibit the form of organizational document which shall
set forth the rights and privileges of such classes of stock; provided that such
classes of stock shall provide for comparable economic, governance, priority and
other rights and privileges as in effect immediately prior to the Incorporation
Plan, in each case, to the extent such governance and other rights (other than
comparable economic rights) are permitted under applicable laws and regulatory
requirements.

 

7.8          Tag-Along Right.  Notwithstanding any consent given by the General
Partner pursuant to Section 7.2, in the event that SCP, SCP Parallel or any of
their respective Affiliates that is a Partner (each, a “Selling Partner”)
receives from an independent third party a bona fide offer to purchase all or
any portion of the Preferred Units held by such Selling Partner (the “Transfer
Units”), other than pursuant to a Sell-Down Transaction, and the Selling Partner
wishes to accept such offer, the Selling Partner may engage in such sale as long
as the Rollover Securityholders holding Preferred Units (each such Partner, a
“Tag-Along Partner”) shall be afforded the right to sell to such transferee
(such transfer, a “Tag-Along Sale”) simultaneously therewith (on the same
general terms and conditions as the terms and conditions set forth in the offer
received by the Selling Partner) a number of Preferred Units determined as
provided in this Section 7.8 (the “Tag-Along Right”). The Selling Partner shall
send a written notice to each Tag-Along Partner, which notice shall contain the
number of Preferred Units the Selling Partner desires to sell, the name of the
prospective transferee, the consideration offered in connection therewith, and
all other material information about the proposed sale and the proposed
transferee as has been provided to the Selling Partner (the “Sale Offer”). Each
Tag-Along Partner may elect to participate in the contemplated sale by
delivering written notice of such election to the Selling Partner within fifteen
(15) days after delivery of the Sale Offer. The number of Preferred Units which
such Tag-Along Partner shall be entitled to sell pursuant to this Section 7.8
shall equal the product of (1) the total number of Preferred Units to be sold in
the contemplated sale multiplied by (2) the quotient determined by dividing (x)
the number of Preferred Units owned by such Tag-Along Partner, by (y) the
aggregate number of Preferred Units owned by the Selling Partner and the
Tag-Along Partners who elected to participate in such sale. This Section 7.8
shall not apply to, and shall terminate upon the consummation of, a public
offering that is registered under the Securities Act.

 

Article VIII
Dissolution, Liquidation, and Termination of the Partnership

 

8.1          Events of Dissolution.  The Partnership shall be dissolved upon the
decision of the General Partner to liquidate or dissolve the Partnership.

 

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8.2          Procedure for Winding Up and Dissolution.

 

(a)         If the Partnership is dissolved, the General Partner shall wind up
its affairs. On the winding up of the affairs of the Partnership, the assets of
the Partnership shall be distributed in the following order of priority:

 

(i)          first, to pay the costs and expenses of the winding up, liquidation
and termination of the Partnership;

 

(ii)         second, to creditors of the Partnership, including any liabilities
and obligations payable to the Partners or Affiliates of the Partners;

 

(iii)        third, to establish reserves determined by the General Partner to
be reasonably adequate to meet any and all contingent or unforeseen liabilities
or obligations of the Partnership; and

 

(iv)        fourth, in accordance with Section 4.1(a).

 

(b)         Notwithstanding anything to the contrary in this Agreement, upon a
liquidation within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), if
any Partner has a deficit Capital Account balance (after giving effect to all
contributions, distributions, allocations and other Capital Account adjustments
for all taxable years, including the year during which such liquidation occurs),
such Partner shall have no obligation to make any contribution to the capital of
the Partnership and the deficit balance in such Partner’s Capital Account shall
not be considered an asset of the Partnership or as a debt owed by such Partner
to the Partnership or to any other Person for any purpose whatsoever.

 

8.3          Certificate of Cancellation.  On completion of the distribution of
Partnership assets as provided herein, the Partnership is terminated, and shall
file a certificate of cancellation with the Secretary, cancel any other filings
made pursuant to Section 2.1 and take such other actions as may be necessary to
terminate the Partnership.

 

Article IX
Books, Records, Accounting, and Tax Elections

 

9.1          Bank Accounts.  All funds of the Partnership shall be deposited in
a bank account or accounts maintained in the Partnership’s name. The General
Partner shall determine the institution or institutions at which the accounts
will be opened and maintained, the types of accounts, and the Persons who will
have authority with respect to the accounts and the funds therein.

 

9.2          Books and Records.

 

(a)          The General Partner shall keep or cause to be kept complete and
accurate books and records of the Partnership and supporting documentation of
the transactions with respect to the conduct of the Partnership’s business. The
records shall include, but not be limited to, a copy of the Certificate of
Limited Partnership and this Agreement and all amendments to the Certificate of
Limited Partnership and this Agreement, a current list of the names and last
known business, residence, or mailing addresses of all Partners, and the
Partnership’s Federal, state or local tax returns.

 

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(b)         The books and records shall be kept on the cash or accrual method of
accounting, as determined from time to time by the General Partner, and shall be
maintained in accordance with sound accounting practices and shall be available
at the Partnership’s principal office for examination by any Preferred Limited
Partner (and not any other Partner) or such Partner’s duly authorized
representative at any and all reasonable times during normal business hours.
Each such Partner shall reimburse the Partnership for all costs and expenses
incurred by the Partnership in connection with such Partner’s inspection and
copying of the Partnership’s books and records.

 

(c)         All matters concerning (i) the determination of the relative amount
of allocations and distributions among the Partners pursuant to Articles III and
IV, and (ii) accounting procedures and determinations, and other determinations
not specifically and expressly provided for by the terms of this Agreement,
shall be determined by the General Partner in good faith and in the exercise of
its reasonable business judgment, whose determination shall be final and
conclusive as to all of the Partners absent manifest clerical error.

 

9.3          Annual Accounting Period.  The annual accounting period of the
Partnership shall end on December 31. The Partnership’s taxable year shall be
selected by the General Partner, subject to the requirements and limitations of
the Code.

 

9.4          Reports.  Within one hundred fifty (150) days after the end of each
taxable year of the Partnership, the General Partner shall use its good faith
efforts to cause to be sent to each Preferred Limited Partner a complete
accounting (including audited financial statements) of the affairs of the
Partnership for the taxable year then ended. In addition, within ninety (90)
days after the end of each taxable year of the Partnership, the General Partner
shall use its good faith efforts to cause to be sent to each Person who was a
Partner at any time during the taxable year then ended, that tax information
concerning the Partnership which is necessary for preparing the Partner’s income
tax returns for that year.

 

9.5          Tax Matters Partner; Tax Elections.  The General Partner is hereby
designated the “tax matters partner” of the Partnership. The General Partner may
make any tax elections for the Partnership allowed under the Code, or the tax
laws of any state or other jurisdiction having taxing jurisdiction over the
Partnership. The General Partner may, in its reasonable discretion, make or
revoke the election referred to in Section 754 of the Code.

 

9.6          Title to Partnership Property.  All real and personal property
acquired by the Partnership shall be acquired and held by the Partnership in its
name.

 

Article X
General Provisions

 

10.1        Further Assurances. Each Partner shall execute all such certificates
and other documents and shall do all such filing, recording, publishing and
other acts as the General Partner deems appropriate to comply with the
requirements of law for the formation and operation of the Partnership and to
comply with any laws, rules, and regulations relating to the acquisition,
operation, or holding of the property of the Partnership.

 

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10.2        Notifications.  Except as otherwise provided in this Agreement, any
notice, demand, consent, election, offer, approval, request, or other
communication (collectively, a “notice”) required or permitted hereunder must be
in writing and either delivered personally, sent by certified or registered
mail, postage prepaid, return receipt requested, sent by facsimile or sent by
recognized overnight delivery service. A notice must be addressed to a Partner
at the Partner’s last known address (or facsimile number) on the records of the
Partnership. A notice to the Partnership must be addressed to the Partnership at
the Partnership’s principal office (or facsimile number). A notice delivered
personally will be deemed given only when acknowledged in writing by the person
to whom it is delivered. A notice that is sent by mail will be deemed given
three (3) business days after it is mailed. A notice sent by facsimile will be
deemed given on the next business day after the date of such delivery so long as
a copy also is sent by other means permitted hereunder. A notice sent by
recognized overnight delivery service will be deemed given when received or
refused. Any party may designate, by notice to all of the others, substitute
addresses or addressees for notices; and, thereafter, notices are to be directed
to those substitute addresses or addressees.

 

10.3        Specific Performance.  The parties recognize that irreparable injury
will result from a breach of any provision of this Agreement and that money
damages will be inadequate to fully remedy the injury. Accordingly, in the event
of a breach or threatened breach of one or more of the provisions of this
Agreement, any party to this Agreement who may be injured (in addition to any
other rights and remedies that may be available to such Person under this
Agreement, any other agreement or under any law) shall be entitled (without
posting a bond or other security) to one or more preliminary or permanent orders
(i) restraining and enjoining any act which would constitute a breach or (ii)
compelling the performance of any obligation which, if not performed, would
constitute a breach.

 

10.4        Amendment; Waivers.

 

(a)         Except as expressly provided in this Section 10.4, this Agreement
may be amended, modified or supplemented, and waivers of or consents to
departures from the provisions hereof may be given, from time to time only by a
written instrument approved by the General Partner and a Majority-in-Interest of
the Preferred Limited Partners; provided that any amendment, modification or
waiver that affects the economic rights of the Rollover Securityholders
hereunder with respect to their Preferred Units in any manner that is adverse,
material and disproportionate relative to the economic rights of the Preferred
Units held by Sterling shall require the prior written consent of the Rollover
Securityholders holding a majority of the Preferred Units held by the Rollover
Securityholders; provided that the terms and conditions of any Additional
Securities issued in accordance with this Agreement shall not be deemed to have
adversely affected the Rollover Securityholders.

 

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(b)         Notwithstanding the foregoing, the General Partner shall have the
right, without the consent of any Limited Partner, to amend this Agreement,
including, without limitation, Exhibit A hereto, in such fashion as may be
reasonably required to reflect any of the following transactions: (i) to reflect
the issuance of Additional Securities and/or the admission of Substituted
Partners or Additional Partners in accordance with the terms of this Agreement
(including pursuant to Section 3.2 when the Partners did not exercise their
preemptive rights and to reflect any corresponding modifications of the
Partners’ Units, capital or other provisions of this Agreement as a result of
any additional Capital Contributions pursuant to Sections 3.2(a) and (b)), (ii)
to make changes and additions necessary to reflect the terms of interests issued
pursuant to Section 3.2, (iii) to cure any ambiguity or to correct or supplement
any provision herein that may be inconsistent with any other provision herein,
or (iv) to delete or add any provision in this Agreement required to be deleted
or added by a state “Blue Sky” commissioner or similar such official, which
deletion or addition is deemed by such official to be for the benefit of the
Partners. The Partners hereby specifically consent to an amendment of this
Agreement from time to time in such manner as is reasonably determined in good
faith by the General Partner, upon the advice of counsel for the Partnership, to
be necessary or reasonably helpful to ensure that the allocations of profits and
losses and individual items thereof are given effect for federal income tax
purposes, including any amendments determined by the General Partner, in
consultation with counsel to the Partnership, to be necessary to comply with the
Regulations under Section 704 of the Code, or, on or before the effective date
of final regulations, to provide for (A) the election of a safe harbor under
Regulations Section 1.83-3(1) (or any similar provision) under which the fair
market value of an interest in the Partnership that is transferred in connection
with the performance of services is treated as being equal to the liquidation
value of that interest, (B) an agreement by the Partnership and all of its
Partners to comply with the requirements set forth in such regulations and
Internal Revenue Service Notice 2005-43 (and any other guidance provided by the
Internal Revenue Service with respect to such election) with respect to all
interests in the Partnership transferred in connection with the performance of
services while the election remains effective, and (C) any other related
amendments; provided that, without the consent of a Majority-in-Interest of the
Preferred Limited Partners, no election or amendment shall be made pursuant to
this Section 10.4(b) if the safe harbor, when finalized, is substantially
different from that set forth in Notice 2005-43 and the application of the safe
harbor would result in materially adverse consequences to the Partners.

 

10.5        Arbitration; Submission to Jurisdiction.

 

(a)         Subject to Section 10.3, with respect to disputes, problems or
claims arising out of or in connection with this Agreement (“Disputes”), the
Partners shall, in good faith, use their reasonable best efforts to resolve the
Dispute. If after such efforts the Partners are unable within ten (10) days of
the arising of the Dispute to resolve the Dispute in good faith, they shall
promptly mutually agree upon a qualified, independent third party experienced in
the area in Dispute to resolve such Dispute within thirty (30) days of the date
the Dispute is first submitted to such independent third party. The
determination(s) of such qualified, independent third party shall be final and
binding for purposes of this Agreement. Notwithstanding the foregoing, in the
event (i) such third party is unable to make a determination within said thirty
(30) day period, or (ii) the Partners are unable to agree upon a third party to
resolve the Dispute, either party may submit to final and binding arbitration
before JAMS/Endispute (“JAMS”), with an office located in Chicago, Illinois, or
its successor, pursuant to the Federal Arbitration Act, 9 U.S.C. Sec. 1et sec.
Either party may commence the arbitration process called for in this Agreement
by filing a written demand for arbitration with JAMS, with a copy to the other
party. The arbitration will be conducted in Chicago, Illinois, in accordance
with the provisions of JAMS Streamlined Arbitration Rules and Procedures in
effect at the time of filing of the demand for arbitration. The parties will
cooperate with JAMS and with one another in selecting an arbitrator from JAMS
panel of neutrals, and in scheduling the arbitration proceedings. The provisions
of this Section 10.5(a) with respect to the arbitration before JAMS may be
enforced by any court of competent jurisdiction, and the parties seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorney’s fees, to be paid by the parties against whom enforcement is
ordered. Each party agrees to pay its own legal fees and expenses in the event
of any such arbitration. The parties hereto agree that this Section 10.5(a) has
been included to rapidly and inexpensively resolve any disputes between them
with respect to the matters described above, and that this paragraph shall be
grounds for dismissal of any court action commenced by any party with respect to
a dispute arising out of such matters.

 

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(b)         Consent to Jurisdiction. The parties hereto hereby irrevocably
submit themselves to the exclusive jurisdiction of state courts of the State of
Illinois or the federal courts sitting in the State of Illinois for the purpose
of enforcing any arbitration decision that may be issued pursuant to Section
10.5(a) hereof or obtaining any court order pursuant to Section 10.3. The
parties hereto hereby individually agree that they shall not assert any claim
that they are not subject to the jurisdiction of such courts, that the venue is
improper, that the forum is inconvenient or any similar objection, claim or
argument. Service of process on any of the parties hereto with regard to any
such action may be made by mailing the process to such Persons by regular or
certified mail to the address of such Person specified in Section 10.2.

 

10.6        GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBIT HERETO WILL BE GOVERNED BY
THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.

 

10.7        Notice to Partners of Provisions. By executing this Agreement, each
Partner acknowledges that such Partner has actual notice of (a) all of the
provisions hereof (including the restrictions on Transfer set forth herein), and
(b) all of the provisions of the Certificate of Formation of the Partnership.

 

10.8        Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience of reference only and do not
constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine, or neuter forms, and the singular form of nouns, pronouns,
and verbs shall include the plural and vice versa. The use of the word
“including” in this Agreement shall be by way of example rather than by
limitation. Reference to any agreement, document, or instrument means such
agreement, document, or instrument as amended or otherwise modified from time to
time in accordance with the terms thereof, and, if applicable, hereof. Without
limiting the generality of the immediately preceding sentence, no amendment or
other modification to any agreement, document, or instrument that requires the
consent of any Person pursuant to the terms of this Agreement or any other
agreement will be given effect hereunder unless such Person has consented in
writing to such amendment or modification. The use of the words “or,” “either,”
and “any” shall not be exclusive. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement. Wherever a conflict exists between
this Agreement and any other agreement, this Agreement shall control but solely
to the extent of such conflict.

 

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10.9        Severability. Each provision hereof shall be considered separable.
The invalidity or unenforceability of any provisions hereof in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder
hereof in such jurisdiction or the validity, legality or enforceability hereof,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law. If, for any reason, any provision or provisions
herein are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair or affect the other provisions herein.

 

10.10      Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same document.

 

10.11      Attorneys’ Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and expenses from the non-prevailing party in addition to any
other available remedy.

 

10.12      Agreement With Respect to Partners. With respect to the Partners, it
is agreed that none of their respective parents, subsidiaries, Affiliates,
investors, officers, directors, shareholders, partners, members, employees,
agents, representatives, equity or debt holders, or any of their respective
parents, subsidiaries, Affiliates, investors, officers, directors, members,
shareholders, employees, agents, representatives, equity or debt holders, shall
have any obligation or liability for any reason, under or in any way related to
this Agreement. This paragraph is intended to and shall preclude the Partners
from alleging or pursuing any claim that depends on or is based in the doctrine
of “alter ego”, “piercing the corporate veil” or any other argument or law
seeking to hold any person or entity other than the entities that are
signatories to this Agreement responsible for any obligation that may arise as a
result of this Agreement.

 

10.13      Binding Provisions. This Agreement is binding upon, and inures to the
benefit of, the parties hereto and their respective heirs, executors,
administrators, personal and legal representatives, successors, and permitted
assigns.

 

10.14      Entire Agreement. This Agreement embodies the complete agreement and
understanding among the parties 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.

 

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10.15      Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

 

*      *      *      *      *

 

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IN WITNESS WHEREOF, the undersigned has executed this Limited Partnership
Agreement of Blue Eagle Holdings, L.P. as of the date first written above.

 

General Partner:                     By:                 Limited Partners:      
          , LP               By:         Name:         Title:                  
                  By:                           Name:         Title:        

 

 

 

 

EXHIBIT A

 

(as of _______, 2014) *

 

Name of Partner   Preferred Units   Preferred Base Amount

Sterling Capital Partners IV, L.P.

(Limited Partner)

       

SCP IV Parallel, L.P.

(Limited Partner)

       

Scott Dorfman

(Limited Partner)

       

Larry Hanger

(Limited Partner)

       

Robert Toner

(Limited Partner)

        Totals        

 

[_________] Common Units are reserved for issuance upon exercise of options
issued under the Option Plan.

 

 

 

 

EXHIBIT B

 

Advisory Services Agreement