exv10w11



 






Exhibit 10.11




STOCKHOLDERS’ AGREEMENT

OF

COMPASS AC HOLDINGS, INC.




          THIS STOCKHOLDERS’ AGREEMENT (the “Agreement”) is made as of September 20, 2005, by and
among Compass AC Holdings, Inc., a Delaware corporation (the “Company”), Compass Advanced Partners,
L.P., a Bahamian limited partnership (“Compass”), Madison Capital Funding LLC, a Delaware limited
liability company (“Madison”), Allied Capital Corporation, a Maryland corporation (“Allied” and,
together with Madison, the “Institutional Investors”), John Yacoub, an individual (“John Yacoub”),
Ashraf Yacoub, an individual (“Ashraf Yacoub”), Dan Chouinard, an individual (“Chouinard”), Jim
Hellmer, an individual (“Hellmer”), and Larry McQuinn, an individual (“McQuinn”, and together with
John Yacoub, Ashraf Yacoub, Chouinard and Hellmer, the “Management Stockholders”), and the
Additional Holders from time to time a party hereto.




RECITALS




          WHEREAS, Compass owns beneficially and of record 904,000 shares of the Company’s Series
B Common Stock, $0.01 par value; and




          WHEREAS, Madison and Allied each own beneficially and of record 40,000 shares of the
Company’s Series A Common Stock, $0.01 par value; and




          WHEREAS, the Management Stockholders own beneficially and of record 152,364 shares of the
Company’s Series A Common Stock, $0.01 par value; and




          WHEREAS, Compass, the Institutional Investors and the Management Stockholders hold all of the
issued and outstanding shares of capital stock of the Company, and desire to set forth certain
rights, preferences, privileges, obligations and restrictions accorded to and imposed on the
Stockholders.




          NOW, THEREFORE, in consideration of the forgoing recitals and the mutual promises herein
contained, and for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:




AGREEMENT




     Section 1. Definitions. Whenever used in this Agreement, the following terms
shall have the following respective meanings:



          1.1. “Additional Holder” and “Additional Holders” mean the additional holder or holders, as
the case may be, of Shares that become a party to this Agreement from time to time by signing an
Additional Holder Signature Page in the form attached hereto as Exhibit A. Specifically
excepted from this definition is any holder that is a successor-in-interest to all or some of the
Shares held by Compass, notwithstanding that any successor-in-interest shall sign an Additional
Holder Signature Page (any reference to Compass herein shall be a reference to any



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such successor-in-interest, excluding Section 2.4 which rights shall remain solely vested
in Compass for so long as Compass shall hold Shares).




          1.2. “Affiliate” of any particular Person means any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with such particular Person.




          1.3. “Control” (Including the terms “controls,” “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of a Person, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor, or otherwise.




          1.4. “Original Issue Price” means, for each series of each class of capital
stock of the Company, the per share issue price on the first date on which each respective
series
of capital stock was issued.




          1.5. “Person” means an individual, corporation, partnership, bank, limited
liability company, trust, association, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act).




          1.6. “Securities Act” means the Securities Act of 1933, as amended, or any
similar successor federal statute, all as the same shall be in effect from time to time.




          1.7. “Shares” means the issued and outstanding shares of Series A Common
Stock, Series B Common Stock and such other series of capital stock of the Company which may
from time to time come into existence.




          1.8. “Stockholder” means any person who owns Shares which were not
acquired in violation of this Agreement.




     Section 2. Shares Subject to Agreement; Restrictions.



          2.1. Shares Subject to Agreement. All Shares, whether currently outstanding
or hereafter issued, shall be subject to this Agreement and to all the rights, privileges,
preferences, obligations and restrictions hereof.




          2.2.
No Transfers. Except as provided in this Section 2, no Stockholder shall
sell, assign, convey, transfer, encumber or in any other manner dispose of any or all of the Shares
held or owned by him. Notwithstanding the preceding sentence, a Management Stockholder
may encumber his or her Shares pursuant to a loan, note or other indebtedness if Compass or
the Company is the creditor and the encumberance is in favor of Compass or the Company, as the
case may be. Any sale, assignment, conveyance, transfer, encumbrance or other disposition of
the Shares in violation of this Agreement is void ab initio.




          2.3.
Exempt Transfers. Notwithstanding Section 2.2, a Stockholder may make
an Exempt Transfer. The following transactions shall constitute “Exempt Transfers” as that
term is used in this Agreement: (i) an inter vivos transfer by a Stockholder to his or her
spouse
or lineal descendants; (ii) an inter vivos transfer to a trust for the benefit of such
Stockholder

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and/or the benefit of one or more of his or her spouse or lineal descendants; (iii) a transfer by
will or intestate succession to a Stockholder’s spouse or lineal descendants or such Stockholder’s
executor, administrator or testamentary trustee for the benefit of one or more of such
Stockholder’s spouse or lineal descendants; (iv) a transfer from a trust for the benefit of a
Stockholder and/or one or more of his or her spouse or lineal descendants to such Stockholder’s
spouse and/or lineal descendants; (v) a transfer to any members of the Board of Directors of the
Company that are nominees of Compass; (vi) a transfer to any director, officer or employee of The
Compass Group International LLC; (vii) a transfer to a Person in which a Compass Affiliate is
directly or indirectly the beneficial owner of five percent or more of the equity securities of
such Person, (viii) a transfer by Madison to The New York Life Insurance Company or any of its
majority-owned subsidiaries, provided that Madison shall provide the Company with written notice of
such transfer within sixty (60) days of the transfer, and (ix) a transfer by Allied to an Allied
Affiliate with the prior written consent of Compass, which consent shall not be unreasonably
withheld. The Shares transferred to any such permitted transferee shall remain subject to the
provisions of this Agreement and such permitted transferee shall become a Stockholder for purposes
of this Agreement. Every such transferee shall observe and comply with this Agreement and with all
obligations and restrictions imposed hereby and shall, at the request of Compass or any
Stockholder, execute an Additional Holder Signature Page.




          2.4. Drag Along/Tag Along Rights. Compass shall be permitted to sell, assign, convey,
transfer, encumber or in any other manner dispose of any or all of the Shares held or owned by it,
subject, however, (i) that Shares transferred to any person shall remain subject to the provisions
of this Agreement and such transferee shall become a Stockholder for purposes of this Agreement
and (ii) in the case of sales or other transfers for value, to the following restrictions:





          (a) Disposition Notice. If Compass proposes at any time to sell or otherwise
transfer for value, whether in a single transaction or in a series of transactions,
including any redemption or repurchase of Shares by the Company, but excluding Exempt
Transfers, (i) in the context of Section 2.4(b), substantially all of its Shares,
or (ii) in the context of Section 2.4(c), more than 5% of the then outstanding
Shares of the Company (each a “Proposed Sale”) to any person, Compass shall send written
notice (the “Disposition Notice”) to the other Stockholders specifying the identity and
address of such person, the number of Shares to be sold, the proposed per Share sale price,
the form of consideration to be paid, any other material terms and conditions of the
Proposed Sale, and, for bona fide sales subject to Section 2.4(b), below, whether
Compass is thereby exercising its Section 2.4(b) Drag Along Rights. The Disposition
Notice shall be deemed effective with respect to each such Stockholder in accordance with
Section 7.2.




          (b) Drag Along Rights. In the event that the Proposed Sale is a bona fide
sale or other bona fide transfer for value to a non-affiliated third party (a “Third Party
Purchaser”), Compass shall have the right to require each of the other Stockholders to
sell, and each of the Stockholders hereby agrees to sell, an equal percentage of his
Shares (the “Drag Along Right”) to such Third Party Purchaser on the same terms and
conditions, and at the same time as, the Proposed Sale. If Compass has by way of the
Disposition Notice exercised its Drag Along Rights, then, promptly upon receipt of such
Disposition Notice, each Stockholder (each a “Drag Along Stockholder”) shall deliver to
Compass (or such other person as may be agreed upon



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between Compass and each such Drag Along Stockholder) to be held by Compass (or such other
agreed upon person) in escrow for sale or return upon the terms of this Section
2.4, the certificate or certificates representing the Shares to be sold pursuant to
this Section 2.4(b), duly endorsed or accompanied by executed stock powers,
together with a limited power-of-attorney authorizing Compass to sell such Shares in
accordance with the terms of this Section 2.4(b). To the fullest extent of the law,
the Stockholders and any Additional Holders expressly waive any appraisal rights conferred
under the Delaware General Corporation Law.




          (c) Tag Along Rights. Upon receipt of any Disposition Notice from
Compass, each of the other Stockholders shall have, as a condition to closing the
Proposed Sale, the right to require (the “Tag Along Right”) that the same percentage of
his or its Shares be sold as part of, and upon the same terms and conditions as, the
Proposed Sale. The rights referred to in this Section 2.4(c) shall be exercised
by written
notice to Compass (the “Tag Along Notice”). The Tag Along Notice shall only be
deemed effective if received by Compass from the electing Stockholder (each a “Tag
Along Stockholder”) within the period ending 30 days after the Disposition Notice was
received by such Tag Along Stockholder. Promptly upon giving the Tag Along Notice,
each Tag Along Stockholder shall deliver to Compass (or such other person as may be
agreed upon between Compass and such Tag Along Stockholder) to be held by Compass
(or such other person) in escrow for sale or return upon the terms of this Section
2.4(c), the certificate or certificates representing his Shares to be sold as part of the
Proposed
Sale, duly endorsed or accompanied by executed stock powers, together with a limited
power-of-attorney authorizing Compass to sell such Shares in accordance with the terms
of this Section 2.4.




          (d) Promptly upon the consummation of any Proposed Sale, and, in
any event not later than 5 days after such consummation, Compass shall deliver to each
Drag Along Stockholder or Tag Along Stockholder, as the case may be, the total sale
price of his or its Shares sold as part of the Proposed Sale (after deduction of his
proportionate share, based on number of Shares sold, of the reasonable out-of-pocket
expenses associated with such Proposed Sale), together with evidence of the expenses
associated with, and the completion and time of completion of, such Proposed Sale.




          (e) Notwithstanding anything herein to the contrary, Compass shall
have 90 days from the date of receipt of any Disposition Notice during which to
consummate the Proposed Sale to which such Disposition Notice relates. If, at the end
of
such 90 day period, Compass has not consummated the Proposed Sale, all certificates
representing Shares delivered by either a Drag Along Stockholder or Tag Along
Stockholder, as the case may be, to Compass for sale or other disposition as part of
such
Proposed Sale shall be returned to such Drag Along Stockholder or Tag Along
Stockholder, as the case may be, and the transaction contemplated by the Proposed Sale
shall be deemed to be a new Proposed Sale and shall again be subject to the provisions
of
this Section 2.4.



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          (f) Limitations.




          (i) Notwithstanding anything herein to the contrary, in the event that all of
the Stockholders are required to provide any indemnities in connection with the
Proposed Sale, each Stockholder shall not be liable for more than such Person’s pro
rata share (based upon the amount of consideration received) of any liability for
indemnity, and such liability shall not exceed (A) the total purchase price or
consideration received by such Stockholder for such Person’s Shares in the Proposed
Sale plus (B) such Stockholders’ pro rata share of any escrow established in
connection with any such Proposed Sale.




          (ii) Notwithstanding anything herein to the contrary, the Institutional
Investors shall only be obligated to make representations or warranties in any
such Proposed Sale as to such Person’s (i) title and ownership of the Shares to be
sold by such Person, including the absence of liens or encumbrances on such Shares,
(ii) authorization, execution and delivery of the relevant documents by such
Person, and (iii) the enforceability of the relevant documents against such
Person.



          2.5. Expiration of Restrictions. All restrictions imposed pursuant to this
Section 2 shall terminate:




          (a) at any time upon the written agreement of the Company and all the
Stockholders then signatory to this Agreement as it may be amended or revised from time to
time;




          (b) immediately upon the dissolution of the Company or the bankruptcy or
insolvency of the Company;




          (c) immediately upon the closing of the first underwritten offering by the
Company to the public pursuant to an effective registration statement under the Securities
Act;
provided that such registration statement covers the offer and sale of Common Stock of which
the aggregate net proceeds attributable to sales for the account of the Company exceed
$50,000,000; provided, further, that the Stockholders shall be required to enter into
customary
lock-up agreements in such form as is generally required from company insiders by the lead
underwriter in such offering; or




          (d) upon the acquisition by merger of the Company by an existing publicly
traded company; provided that the Stockholders receive cash or
publicly-tradeable securities
in
exchange for their Shares pursuant to such acquisition.




     Section 3. Pre-Emptive Rights.



          3.1. Rights to Purchase Additional Securities. So long as the restrictions imposed
by Section 2 apply to the Stockholders and have not terminated pursuant to Section 2.5, except
for Excluded Issuances (as defined in Section 3.3 below), if the Company authorizes or issues to
any Person (the “Proposed Purchaser”) any of its Shares or other equity securities, debt
securities containing equity features or other securities or other rights convertible into or




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containing options or rights to acquire any such debt or equity securities (collectively,
“Securities”), the Company shall, within 90 days of such authorization or issuance, offer to sell
by written notice (the “Offer Notice”) to each holder of record of Shares on the date of such
authorization or issuance a portion of such Securities equal to the number of Securities to be so
issued multiplied by the quotient determined by dividing (A) the number of Shares held by such
holder of Shares by (B) the number of Shares then outstanding (calculated assuming that all
convertible securities shall be converted into Shares, to the extent then exercisable, immediately
prior to such issuance). The Offer Notice shall describe the terms of the offering, including,
without limitation, the Securities offered and the price and other terms of sale, and shall set
forth in reasonable detail the payment terms and such
Stockholder’s percentage allotment.




          3.2. Notice of Acceptance. In order to exercise his or its preemptive rights
hereunder, each holder of Shares must deliver a written notice to the Company within 15 days
of
receipt of the Offer Notice, describing his or its election to purchase the Securities. If a
holder of
Shares fails to timely exercise such holder’s rights pursuant to this Section, the Company
shall be
entitled to sell such Securities which any holder of Shares has not elected to purchase to the
Proposed Purchaser following such expiration on terms and conditions no more favorable to the
Proposed Purchaser thereof than those offered to the holders of
Shares.




          3.3. Excluded Issuances. “Excluded Issuances” means any Shares or any
security exercisable, convertible or exchangeable for Shares that may be issued or sold (i)
pursuant to stock options or restricted stock or similar arrangements issued or provided to
managers, consultants, directors and/or key employees of the Company (up to twenty percent
(20%) of the Company’s total outstanding share capital), (ii) other than for cash or cash
equivalents as part of an arms’ length transaction in which the Company is acquiring control
of
an unaffiliated third-party from a person to whom such Shares are issued, (iii) pursuant to a
public offering of the Company’s securities, or (iv) to institutional lenders lending money to
the
Company (but no more than a cumulative aggregate of five percent (5%) of the Company’s total
outstanding share capital).




     Section 4. Legend on Certificates. Each certificate representing Shares shall (unless
otherwise permitted by the provisions of this Agreement be stamped or otherwise imprinted with a
legend (in addition to any legends as may be required pursuant to applicable state securities
laws) substantially similar to the following:




THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED BY A HOLDER UNLESS AND UNTIL THE SECURITIES ARE
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND, IF
REQUIRED BY THE COMPANY, THE HOLDER HAS DELIVERED TO THE COMPANY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.



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THIS CERTIFICATE AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ALL RIGHTS
HEREIN ARE SUBJECT TO AND TRANSFERABLE (INCLUDING WITHOUT LIMITATION BY WAY OF PLEDGE
OR OTHER GRANT OF A SECURITY INTEREST THEREIN) ONLY IN ACCORDANCE WITH THE PROVISIONS
OF THAT CERTAIN STOCKHOLDERS’ AGREEMENT, DATED AS OF SEPTEMBER 20, 2005 AMONG THE
COMPANY’S STOCKHOLDERS. A COPY OF SUCH STOCKHOLDERS’ AGREEMENT, AS MAY BE AMENDED FROM
TIME TO TIME, IS ON FILE AND AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
COMPANY. ANY SALE, PLEDGE, GIFT, BEQUEST, TRANSFER, ASSIGNMENT, ENCUMBRANCE OR OTHER
DISPOSITION OF THIS CERTIFICATE AND THE SECURITIES REPRESENTED HEREBY IN VIOLATION OF
SAID STOCKHOLDERS’ AGREEMENT SHALL BE INVALID.



     Section 5. Covenant Not To Compete.



          5.1. During the period (the “Non-Compete Period”) beginning on the date hereof and ending on
the second anniversary of the closing date of the Disposition or, if an Employment Termination
shall occur prior to the Disposition, the date that is the later to occur of (i) the one year
anniversary of the Employment Termination and (ii) the end of the period during which any severance
payments are paid under any employment agreement with the Company in connection with such
Employment Termination, each Management Stockholder and each Additional Holder that is an employee,
officer or director of the Company agrees and covenants that, in connection with the sale,
assignment, conveyance, transfer, encumbrance or other disposition of all the Shares owned by such
Management Stockholder or Additional Holder (the “Disposition”) or, if such Management Stockholder
or Additional Holder is an officer or employee of the Company or its subsidiaries, such
individual’s termination of employment with the Company or its subsidiaries, as applicable (the
“Employment Termination”), he or she:





          (a) shall not own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or be connected as a stockholder, member, manager,
director, officer, employee, partner, consultant with, any for profit business, firm,
entity or organization, which competes with the Company and its subsidiaries in the
manufacturing, marketing and selling of printed circuit boards (the “Business”) in any
state in the United States or anywhere else in the world (each a
“Competing Concern”); provided, however, the forgoing shall not prohibit such holder from beneficially owning up
to five percent (5%) of the outstanding equity securities of a for profit business, firm,
entity or organization the equity securities of which are traded on a national securities
exchange, the Nasdaq Stock market, or the London Stock Exchange. Each such Stockholder
expressly acknowledges and agrees that such restriction is reasonable with respect to
subject matter. Each such Stockholder expressly acknowledges and agrees that because the
Company and its subsidiaries do business throughout the world, such restriction is
reasonable as to geographic area. Each such Stockholder expressly acknowledges and agrees
that because the Company is likely to continue to conduct a like business during the
Non-Compete Period, such restriction is reasonable as to time.



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          (b) shall not, during the period beginning on the closing date of the
Disposition and ending on the second anniversary thereof, directly or indirectly,




          (i) contact, approach or solicit for the purpose of offering employment to or
hiring (whether as an employee, consultant, agent, independent contractor or
otherwise) or actually hire any person employed by the Company or any of its
subsidiaries at any time prior to the closing date of the disposition or during
the Non-Compete Period, without the prior written consent of Compass;




          (ii) solicit or attempt to induce any customer or other business relation of
the Company or any of its subsidiaries into any business relationship (including
the termination or rescission of the relationship) which might materially harm the
Company or any related, affiliated or subsidiary organization of Company; or




          (iii) participate or concur in any remarks or actions that are disparaging or
detrimental in any way to the business or personal reputation of the Company and
any related, affiliated or subsidiary organization of Company, or any directors,
officers, employees or representatives thereof.



          5.2. Whenever possible each provision and term of this Section 5 will be interpreted
in a manner to be effective and valid but if any provision or term of this Section 5 is
held to be prohibited or invalid, then such provision or term will be ineffective only to the
extent of such prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions or terms of this
Section 5. If any of the covenants set forth in this Section 5 are held to be
unreasonable, arbitrary or against public policy, such covenants will be considered divisible with
respect to scope, time and geographic area, and in such lesser scope, time and geographic area,
will be effective, binding and enforceable against each Seller.




     Section 6. Custody of Shares by Company.



          To facilitate the enforcement of the rights and obligations agreed to herein by the parties,
each Stockholder and each Additional Holder, other than the Institutional Investors, acknowledges
such rights and obligations and agrees that the Company or its designee shall hold each such
Stockholder’s and Additional Holder’s Shares (other than the Institutional Investors’ shares),
for the benefit of such Stockholder, subject to any rights granted to another party as permitted
herein. Each Stockholder and Additional Holder (other than the Institutional Investors) shall
promptly deliver to the Company all stock certificates evidencing the Shares of such holder,
together with a stock power executed in blank in a form acceptable to the Company and its
counsel. So long as the Company shall hold the Shares on behalf of a Stockholder, the Stockholder
shall be entitled to exercise such holder’s right to vote such Shares and shall be entitled to
receive any dividend (ordinary or extraordinary, whether paid in cash or property) or other
distribution with respect to such Shares.




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     Section 7. Miscellaneous.



          7.1.  Effectiveness of Transfers. No Shares shall be transferred on the
Company’s books and records, and transfers of Shares shall be otherwise ineffective, unless
any
such transfer is made pursuant to and in accordance with the terms and conditions of this
Agreement.




          7.2. Notices. Any and all notices or consents required or permitted to be given
under any of the provisions of this Agreement shall be in writing and shall be deemed to have
been received (i) on the date of delivery if delivered in person or by facsimile copy and
confirmed, (ii) on the date received if sent by Federal Express or other similar overnight
delivery
service which requires a signed receipt or (iii) upon three days after the date of mailing, if
mailed
first class by registered or certified mail, return receipt requested, to the party entitled
to receive
the same at the following addresses:




	 	 	 	 	 
	 

	 	Company:
	 	Compass AC Holdings, Inc.
	 

	 	 	 	c/o The Compass Group International, LLC
	 

	 	 	 	61 Wilton Road, 2nd Floor

	 

	 	 	 	Westport, Connecticut 06880
	 

	 	 	 	Attn: I. Joseph Massoud
	 

	 	 	 	Facsimile No.: (203) 221-8253
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Squire, Sanders & Dempsey L.L.P.
	 

	 	 	 	312 Walnut Street, Suite 3500
	 

	 	 	 	Cincinnati, Ohio 45202
	 

	 	 	 	Attention: Stephen C. Mahon
	 

	 	 	 	Facsimile No.: (513) 361-1201
	 
	 	 	 	 
	 

	 	Compass:
	 	Compass Advanced Partners, L.P.
	 

	 	 	 	c/o The Compass Group International, LLC
	 

	 	 	 	24422 Avenida de la Carlota
	 

	 	 	 	Suite 370
	 

	 	 	 	Laguna Hills, California 92653
	 

	 	 	 	Attn: Elias J. Sabo
	 

	 	 	 	Facsimile No.: (949) 420-0771
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Squire, Sanders & Dempsey L.L.P.
	 

	 	 	 	312 Walnut Street, Suite 3500
	 

	 	 	 	Cincinnati, Ohio 45202
	 

	 	 	 	Attention: Stephen C. Mahon
	 

	 	 	 	Facsimile No.: (513) 361-1201
	 
	 	 	 	 
	 

	 	Madison:
	 	Madison Capital Funding LLC
	 

	 	 	 	30 South Wacker Drive, Suite 3700
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Attention: Advanced Circuits Account Manager
	 

	 	 	 	Facsimile No: (312) 596-6950






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	 	with a copy to:
	 	Winston & Strawn LLP
	 

	 	 	 	35 W. Wacker Drive
	 

	 	 	 	Chicago, Illinois 60302
	 

	 	 	 	Attention: John M. Schloerb
	 

	 	 	 	Facsimile No.: (312) 558-5700
	 
	 	 	 	 
	 

	 	Allied:
	 	Allied Capital Corporation
	 

	 	 	 	1919 Pennsylvania Avenue, NW, 3rd floor
	 

	 	 	 	Washington, DC 20006
	 

	 	 	 	Attention George Ferris, Principal
	 

	 	 	 	Facsimile No: (202) 659- 2053
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Dickstein Shapiro Morin & Oshinsky LLP
	 

	 	 	 	2101 L Street, NW
	 

	 	 	 	Washington, DC 20037
	 

	 	 	 	Attn: David P. Parker
	 

	 	 	 	Facsimile No: (202) 887-0689
	 
	 	 	 	 
	 

	 	Management Stockholders:
	 	To the address of each Management Stockholder as set forth on the signature page hereto.
	 
	 	 	 	 
	 

	 	Additional Holders:
	 	As applicable, to the address of each Additional Holder as set forth on the Additional Holder
Signature Page.






          Any party hereto may change his, her or its address for notice by giving notice to the
other parties stating his, her or its new address, all in the manner provided herein. Commencing on
the fifth day after giving such notice, such newly designated address shall be such party’s address
for the purpose of all notices or other communications required or permitted to be given pursuant
to this Agreement




          7.3. Specific Performance. Due to the fact that the Shares cannot be readily
purchased or sold in the open market, and for other reasons, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforced. In the event of a
breach or
threatened breach of any of the terms, covenants and conditions of this Agreement by any of
the
parties hereto, the other parties shall, in addition to all other remedies, be entitled to a
temporary
or permanent injunction, without showing any actual damage, and/or a decree for specific
performance in accordance with the provisions hereof.




          7.4. Entire Agreement. This Agreement cancels and supersedes any and all
oral or written agreements and understandings made between the parties relating to the subject
matter hereof, and contains the entire agreement of the parties with respect to the subject
matter
hereof.




          7.5. Amendments; Termination. This Agreement may not be modified,
amended or, except as herein provided, terminated by a written agreement signed by all of the
parties hereto.




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          7.6. Waiver. Any party may waive compliance by any other with any of the
covenants or conditions herein, but no waiver shall be binding unless executed in writing by
the
party making the waiver. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar, nor shall any
waiver
constitute a continuing waiver. No waiver of any breach or default hereunder shall be
considered
valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach
or
default of the same or similar nature.




          7.7. Assignment. Except as otherwise expressly provided herein, this
Agreement shall be binding upon and inure to the benefit of Compass, its successors and
permitted assigns, and the other Stockholders, their heirs, personal representatives,
successors
and permitted assigns; provided, however, that nothing contained herein shall be construed as
granting any Stockholder the right to transfer his or its Shares except as expressly provided
in
this Agreement.




          7.8. Headings. The headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents hereof.




          7.9. Further Assurances. Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes of this
Agreement.




          7.10. Interpretations. When the context in which words are used in this
Agreement indicates that such is the intent, words used in the singular shall have a
comparable
meaning when used in the plural and vice versa; pronouns stated in the masculine, feminine or
neuter shall include each other gender; and, the term “person” shall include any individual,
partnership, joint venture, corporation, trust, unincorporated organization or government or
any
department or agency thereof.




          7.11. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.




          7.12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the principles of
conflicts of
law of such State.




          7.13. No Effect Upon Lending Relationship. Notwithstanding anything herein to the
contrary, nothing contained in this Agreement shall affect, limit or impair the rights and
remedies of Madison, any of its affiliates or any other lender in their capacity as lenders to
the Company or any of its Subsidiaries pursuant to any agreement under which the Company or such
Subsidiary has borrowed money. Without limiting the generality of the foregoing, neither Madison
nor any such Person, in exercising its rights as a lender, including making its decision on
whether to foreclose on any collateral security, will have any duty to consider (a) its status as
a direct or indirect Stockholder of the Company, (b) the interests of the Company or any of its
Subsidiaries or (c) any duty it may have to any other direct or indirect Stockholder of the
Company, except as may be required under the applicable loan documents.




- 11 -









 








          7.14.
Confidentiality. Each Institutional Investors hereby
acknowledges it
obligations with respect to confidentiality as set forth in Section 10.9 of the Credit Agreement,
which obligations are incorporated by reference herein and made a part hereof to the same extent
as if they were set forth herein in their entirety. Such obligations shall survive the termination
of the Credit Agreement and the Institutional Investors shall be bound by the same for so long as
it shall own any Shares. Each other Stockholder acknowledges that, as a Stockholder of the
Company, he, she or it may become privy to confidential information regarding the Company and its
subsidiaries and the financial condition, business or operations of the Company and its
subsidiaries. Each other Stockholder agrees that he, she or it will maintain in strict confidence
and will not, directly or indirectly, divulge, transmit, publish, release, or otherwise use or
cause to be used in any manner to compete with or contrary to the interests of the Company and its
subsidiaries, any confidential information relating to the Company’s or its subsidiaries’ systems,
operations, processes, computer programs and data bases, records, development data and reports,
cost analyses, flow charts, know how, customer lists, supplier lists, marketing data, personnel
data, or any information relating to sales, financial structure, pricing, or other information of
like nature. Each other Stockholder acknowledges that all information regarding the Company and
its subsidiaries compiled or obtained by or furnished to him, her or it in connection with his,
her or its association with the Company or any subsidiary thereof is confidential information and
the Company’s and such subsidiary’s exclusive property. Upon demand by the Company, any
Stockholder shall surrender to the Company all original and facsimile records, documents, data,
and other materials in his possession pertaining to the Company, except to the extent such
Stockholder is required to retain such information by law or regulatory
authority. Notwithstanding the foregoing, this provision does not apply to the extent, and only to
the extent, such information is clearly obtainable in the public domain.




[Remainder of Page Intentionally Left Blank]





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



	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMPASS AC HOLDINGS, INC.	 	 	 	COMPASS ADVANCED PARTNERS, L.P.	 	 
	 	 	 	 	 	 	By:	 	Navco Management, Inc.,	 	 
	 	 	 	 	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Elias J. Sabo
	 	 	 	 	 	By:
	 	/s/ Elias J. Sabo	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Elias J. Sabo
	 	 	 	 	 	Name:
	 	Elias J. Sabo	 	 
	Title:

	 	President
	 	 	 	 	 	Title:
	 	Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address for notices:	 	 	 	 	 	Address for notices:	 	 
	61 Wilton Road	 	 	 	 	 	61 Wilton Road	 	 
	Westport, Connecticut 06880	 	 	 	 	 	Westport, Connecticut 06880	 	 
	Attention: I. Joseph Massoud	 	 	 	 	 	Attention: I. Joseph Massoud	 	 
	Facsimile: (203) 221-8253	 	 	 	 	 	Facsimile: (203) 221-8253	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	JOHN YACOUB	 	 	 	ASHRAF YACOUB	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John Yacoub
	 	 	 	 	 	By:
	 	/s/ Ashraf Yacoub	
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Address for notices:	 	 	 	 	 	Address for notices:	 	 
	5579 S. Helena St	 	 	 	 	 	5478 S. Helena St	 	 
	Aurora Co 80015	 	 	 	 	 	Centenial Co 80015	 	 
	Facsimile:	 	 	 	 	 	Facsimile:	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	DAN CHOUINARD	 	 	 	JAMES HELLMER	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Dan Chouinard
	 	 	 	 	 	By:
	 	/s/ James Hellmer	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	Address for notices:	 	 	 	 	 	Address for notices:	 	 
	6164 South Fundy G	 	 	 	 	 	5451 S. HOCKBERRY LANE	 	 
	Aurora, Co 80016	 	 	 	 	 	HIGHLANDS RANCH, Co 80129	 	 
	Facsimile:	 	 	 	 	 	Facsimile:	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 	 





- 13 -









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LARRY MCQUINN	 	 	 	MADISON CAPITAL FUNDING LLC  
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BY:	 	/s/ Larry Mcquinn	 	 	 	 	 	By:	/s/ Tom Klinacak	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 Tom Klinacak	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 Managing Director	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Address for notices:	 	 	 	 	 	Address for notices:	 	 
	 	 	9916 S. Ramshead Ct.	 	 	 	 	 	30 South Wacker Drive, Suite 3700
	 	 	Highlands Ranch, Co 80130	 	 	 	 	 	Chicago, Illinois 60606	 	 
	 	 	Facsimile:	 	 	 	 	 	Attn: Advanced Circuits Account Manager	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Facsimile No: (312) 596-6950	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ALLIED CAPITAL CORPORATION	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ George Ferris	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 GEORGE FERRIS	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 PRINCIPAL	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Address for notices:	 	 	 	 	 	 	 	 	 	 
	 	 	1919 Pennsylvania
Avenue, NW, 3rd Floor	 	 	 	 	 	 	 	 	 	 
	 	 	Washington, DC 20006	 	 	 	 	 	 	 	 	 	 
	 	 	Attention George Ferris, Principal	 	 	 	 	 	 	 	 
	 	 	Facsimile No: (202) 659-2053	 	 	 	 	 	 	 	 	 	 






- 14 -









 





EXHIBIT A




ADDITIONAL HOLDER SIGNATURE PAGE


     The undersigned, desiring to become a Stockholder of Compass AC Holdings, Inc., a Delaware
corporation (the “Company”), hereby agrees to all of the terms of the foregoing Stockholders’
Agreement and agrees to be bound by the terms and provisions
thereof.



     Executed by the undersigned as a
Stockholder of the Company.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Series and Number

	 	 	 	 	 	 	 	 	 	 	 	 
	of Shares:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	STOCKHOLDER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Print	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Tax ID No.:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date :
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 






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