Exhibit 4.10


 


EXECUTION COPY


 


STOCKHOLDERS AGREEMENT


OF


NEFF CORP.


 


This Stockholders Agreement (“Agreement”) is
entered into as of June 3, 2005, by and among Neff Corp., a Delaware corporation (the
“Company”), Iron Merger
Partnership, a Delaware general partnership (“Iron”), New York Life
Capital Partners II, L.P., a Delaware limited partnership (“NY Life
Capital Partners”), New York Life Investment Management Mezzanine Partners,
LP (“NY Life Mezzanine Partners”), NYLIM Mezzanine Partners Parallel
Fund, LP (“NYLIM” and, together with NY Life Capital Partners and NY
Life Mezzanine Partners, each individually, a “NY Life Investor” and
together the “NY Life Investors”), DLJ Investment Partners II, L.P., DLJ
Investment Partners, L.P., DLJIP II Holdings, L.P., TCW/Crescent Mezzanine
Partners III, L.P., TCW/Crescent Mezzanine Trust III and TCW/Crescent Mezzanine
Partners III Netherlands, L.P. (collectively, the “Mezzanine Investors”
and, together with the NY Life Investors, each individually, an “Other
Stockholder,” and together, the “Other Stockholders”), Juan Carlos
Mas (“JC Mas”), Juan Carlos Mas Holdings I, L.P. (“JC Mas Holdings”
and JC Mas, collectively, the “Management Stockholder”). Iron, the Other
Stockholders and the Management Stockholder, are each individually referred to
herein as, a “Stockholder,” and together, the “Stockholders”. These
parties are sometimes referred to herein individually by name or as a “Party” and collectively as the “Parties.”


 


RECITALS:


 


WHEREAS, pursuant to that
certain Subscription Agreement, dated as of the date hereof (the “Subscription
Agreement”), between Iron Merger Sub, Inc. (“Merger Sub”), Iron and the
Other Stockholders, Merger Sub has issued and sold to each of Iron and the
Other Stockholders, and each of Iron and the Other Stockholders has purchased,
the number of shares of Merger Sub’s common stock, par value $0.01 per share (“Merger
Sub Common Stock”), on the terms and conditions set forth in the
Subscription Agreement;


 


WHEREAS, concurrently
with the execution of this Agreement, Merger Sub will consummate the
transactions contemplated by that certain Recapitalization Agreement, dated as
of April 6, 2005 (as amended, the “Recapitalization Agreement”), by and between
Merger Sub and the Company, pursuant to which (i) Merger Sub shall merge with
and into the Company (the “Merger”) and (ii) the outstanding shares of
Merger Sub Common Stock shall be converted into such number of newly issued
shares of Class A Common Stock, par value $0.01 per share, of the Company (“Common
Stock”) equal to the quotient of (x) the Merger Sub Capitalization (as
defined in the Recapitalization Agreement) divided by (y) the Merger
Consideration (as defined in the Recapitalization Agreement);


 


WHEREAS, JC Mas is the
Chief Executive Officer of the Company;


 


WHEREAS, pursuant to the
Recapitalization Agreement, as a result of the Merger, the Management
Stockholder or Juan Carlos Mas Holdings I, L.P. will hold such number of shares
of Common Stock (rounded to the nearest whole share) (the “Rollover Shares”)
equal to (a) $8,000,000 divided by the Merger Consideration less (b) the number
of shares of Common Stock subject to the CEO Option (as defined below); provided,
that the number of 


 

















 


Rollover Shares shall be at least 5.1% of the sum of
(x) the number of shares of Common Stock to be issued to the holders of Merger
Sub Common Stock pursuant to Section 1.10 of the Recapitalization Agreement and
(y) the Rollover Shares;


 


WHEREAS, the Company may
hereafter issue to the Management Stockholder shares of Common Stock, as a
result of the exercise by the Management Stockholder of outstanding, vested
options granted to the Management Stockholder under the terms of the Company
1999 Stock Incentive Plan and the Company 1998 Stock Incentive Plan (the “CEO
Option”) which were not cancelled at the Effective Time (as defined in the
Recapitalization Agreement) pursuant to the terms of the Recapitalization
Agreement;


 


WHEREAS, the Company has
issued (or may hereafter issue) to the Management Stockholder shares of Common
Stock, as a result of the exercise by the Management Stockholder of vested
options to purchase Common Stock (such options collectively, “Vested Options”), which options
were issued (or may hereafter be issued) to such Management Stockholder
pursuant to the 2005 Stock Option Plan of Neff Corp. (the “Stock Option Plan”)
or any other employee benefit, stock purchase or compensation plan hereafter
adopted by the Board (provided, that for the avoidance of doubt the
Vested Options shall not include the CEO Option);


 


WHEREAS, the Company and
the Stockholders desire to enter into this Agreement to provide for certain
matters with respect to the ownership and transfer by the Stockholders of
shares of Common Stock (including the Rollover Shares) owned as of the date hereof
or any other shares of capital stock of the Company hereafter issued to or
acquired by the Stockholders whether as a result of the exercise of Vested
Options or the CEO Option or otherwise (such shares owned by the Stockholders
as of the date hereof or hereafter issued to or acquired by the Stockholders, collectively,
the “Restricted Shares”);
and


 


WHEREAS, capitalized
terms used herein without definition elsewhere in this Agreement are defined in Section 16.


 


AGREEMENT:


 


NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties hereto, intending to be legally bound, hereby
agree as follows:


 


Section 1.               Sales
to Third Parties.


 


(a)           Each of the Other Stockholders and the Management
Stockholder (and their respective Permitted Transferees) hereby agrees that,
until the fifth anniversary of the date of this Agreement, it shall not sell,
assign, transfer, convey, pledge or otherwise dispose of (collectively, “Transfer”)
any Restricted Shares without the prior written consent of the Company, which
consent shall have been authorized by a majority of the members of the Board and
which consent may be (i) withheld in the sole discretion of the Board or (ii)
given subject to reasonable terms and conditions determined by the Board in its
sole discretion. Any Transfer of Restricted Shares after the fifth anniversary
of the date of this Agreement shall be subject to the 


 


2

















 


provisions of Section 1(b). Each of the Other
Stockholders and the Management Stockholder further agrees that in connection
with any Transfer, the Other Stockholders or the Management Stockholder, as the
case may be, shall, if requested by the Company, deliver to the Company an
opinion of counsel in form and substance reasonably satisfactory to the Company
and counsel for the Company, to the effect that the Transfer is not in
violation of this Agreement or the Securities Act of 1933, as
amended (the “Securities Act”). In addition, the Company shall be
satisfied that the Transfer is not in violation of the securities laws of any
state applicable to such Transfer. Any purported Transfer in violation of the
provisions of this Section 1 shall be null and void and shall have no force or
effect.


 


(b)           (i)            If at any time after the fifth
anniversary of the date of this Agreement, any of the Other Stockholders, the
Management Stockholder or any of their respective successors and assigns
through Transfers permitted hereunder or otherwise (the “Selling
Stockholders”) shall have received a bona fide offer
or offers from a third party or parties to purchase any Restricted Shares which
such Selling Stockholders desire to accept, prior to selling any Restricted
Shares to the third party or parties, the Selling Stockholders shall deliver a
letter to Iron (the “Offer Notice”) signed by such Selling Stockholders,
setting forth: (A) the name of the third party or parties; (B) the prospective
purchase price per share of the Restricted Shares; (C) all material terms and
conditions contained in the offer of the third party or parties; and (D) such
Selling Stockholders’ offer (irrevocable by its terms for 60 days following the
date of the delivery of such Offer Notice (such 60-day period, the “Offer
Period”)) to sell to the Iron all (but not less than all) of the Restricted
Shares covered by the offer of the third party or parties, for a purchase price
per share and on other terms and conditions not less favorable to Iron than
those contained in the offer of the third party or parties (an “Offer”).


 


(ii)           Upon receipt of such Offer Notice, Iron shall have an
option to purchase any or all of the Restricted Shares described in the Offer
Notice at the purchase price and upon the terms and conditions specified in the
Offer. If Iron desires to exercise the option set forth in the preceding
sentence, it shall deliver a notice (an “Election Notice”) to the
Selling Stockholders, at any time during the Offer Period, which Election
Notice shall specify the number of Restricted Shares subject to the Offer to be
acquired.


 


(iii)          If Iron delivers an Election Notice, then Iron shall
be obligated to purchase, and, subject to Section 1(b)(iv) below, the Selling
Stockholders shall be obligated to sell to Iron, the Restricted Shares
described in such Election Notice at the purchase price per share and on other
terms and conditions indicated in the Offer, except that the closing of such
purchase and sale shall occur on a closing date selected by Iron; provided,
however, that, such closing date shall be not less than 5 days nor more
than 90 days following the date of the Election Notice.


 


(iv)          If Iron does not deliver an Election Notice to the
Selling Stockholders within the Offer Period or the Election Notices delivered
in the aggregate relate to less than all of the Restricted Shares subject to
the Offer, then the Selling Stockholders may, during the period beginning on
the 61st day following the receipt of the Offer Notice by Iron and
ending on the 90th day following the receipt of the Offer Notice by
Iron, sell to the third party or parties all (but not less than all) of the
Restricted Shares covered by the Offer, for the purchase price and on the other
terms and conditions contained in the Offer.


 


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(v)           Iron shall be permitted to assign its rights (in whole
or in part) to purchase any or all of the Restricted Shares in the Offer Notice
to (A) the Company and/or any one or more Principal Stockholders and (B) the NY
Life Investors and their Permitted Transferees or the Mezzanine Investors and
their Permitted Transferees pursuant to Section 1(b)(vi).


 


(vi)            In the event that Iron exercises its right to purchase Restricted Shares
described in the Offer Notice or has assigned such right to one or more
Principal Stockholders (but not in the event of an assignment of such right to
the Company), Iron shall offer the NY Life Investors, each of their
respective Permitted Transferees,
the Mezzanine Investors and each
of their respective Permitted Transferees (each, a “Secondary
Offeree”), provided that such Secondary Offeree is not a Selling
Stockholder pursuant to such Offer, the
right (on the same terms and conditions and utilizing the same
procedures as apply to Iron’s rights under this Section 1(b) as if
such provisions had been incorporated mutis
mutandis herein) to purchase that portion of Restricted Shares
specified in the Election Notice which equals the proportion that the number of
Restricted Shares then held by such Secondary Offeree bears to the total number of Restricted
Shares then held by the Secondary Offerees and the Principal
Stockholders in the aggregate.


 


(c)           Notwithstanding the foregoing but subject to Section
1(d) below, nothing in this Section 1 shall prevent the Transfer of any
Restricted Shares by any Stockholder to the Company or a Permitted Transferee. In
addition, the provisions of this Section 1 shall not apply to any Transfer of
Restricted Shares pursuant to a Piggyback Registration Right.


 


(d)           In addition to the restrictions set forth elsewhere in
this Agreement, any Transfer of Restricted Shares by a Stockholder to a
transferee (including a Permitted Transferee) shall be permitted only if the transferee
shall agree in writing to be bound by the terms and conditions of this
Agreement by executing a signature page in the form attached as Exhibit A
hereto. Upon the execution of the signature page in the form attached as Exhibit
A hereto, such transferee shall be deemed to be a Stockholder for all
purposes of this Agreement having the same rights and obligations as were
applicable to the Transferor, except as otherwise provided herein and except
that, (A) in the case of a Transfer by the Management Stockholder to a Permitted
Transferee, all provisions that relate to termination of employment of the
Management Stockholder and the effects thereof shall continue to apply to the Management
Stockholder with respect to any Restricted Shares not transferred by the
Management Stockholder, (B) in the case of a Transfer in compliance with this
Agreement by the Management Stockholder to a Person other than a Permitted Family
Member or a trust for the benefit of Permitted Family Members, Sections 2 and 3
of this Agreement shall cease to apply to the Restricted Shares so transferred following
such Transfer, but shall continue to apply to the Management Stockholder with
respect to any Restricted Shares not transferred by the Management Stockholder,
(C) in the case of a Transfer of Restricted Shares by Iron made in compliance
with this Agreement, such transferees shall be considered Principal
Stockholders (and not Iron) for purposes of this Agreement, provided, however,
that if Iron so designates or if the transferee acquires all of the remaining
Restricted Shares held by Iron, in each such case, such transferee or
transferees shall be considered Iron for purposes of this Agreement and shall
have the rights and obligations of Iron under this Agreement and (D) the rights
to cause the Company to register Restricted Securities pursuant to a Demand
Registration in accordance with Section 6 shall not be automatically 


 


4

















 


transferred or assigned in connection with a Transfer
of Restricted Shares, unless (i) such registration rights are expressly
assigned (but only with all related obligations) by a Stockholder to a
transferee, (ii) the Company is, within a reasonable time after such Transfer, notified
of the amount of Restricted Securities with respect to which such registration
rights are being assigned and (iii) the aggregate number of Demand
Registrations entitled to be requested by Iron, New York Life and the
Management Stockholder, as applicable, pursuant to Section 6(a)(i) shall not be
increased as a result of such Transfer.


 


Section 2.               Company’s
Rights to Repurchase Shares.


 


(a)           With respect to all Restricted
Shares held by the Management Stockholder and his Permitted Transferees, during
the period beginning on the date of the Management Stockholder’s Termination of
Employment (as defined below) and ending on the nine month anniversary of the
later of (A) the date of such Termination of Employment or (B) the date of the
exercise of the CEO Option or any Vested Options (together, the “Stock
Options”) held by the Management Stockholder as of the date of such
Termination of Employment, the Company shall have the option to elect to repurchase
Restricted Shares held by the Management Stockholder or his Permitted
Transferees other than Rollover Shares (“Call Right”); provided, however, that,
notwithstanding the foregoing, in no event shall the Company purchase any
Restricted Shares pursuant to the Call Right prior to the day immediately
following the six month anniversary of the date the Management Stockholder
first purchased such Restricted Shares (whether pursuant to the exercise of
Stock Options or otherwise). The Call Right may be exercised more than once,
but must be exercised with respect to all (but not less than all) of the Restricted
Shares outstanding on the date of any Call Notice (as defined below). The
repurchase price payable by the Company upon exercise of the Call Right (“Call
Repurchase Price”) shall be the Fair Market Value (as defined below) of the
Restricted Shares subject to the Call Right on the date of the Call Notice; provided,
however, that, notwithstanding the foregoing, in the event of the
Management Stockholder’s Termination of Employment for Cause, or due to his
resignation, the Call Repurchase Price shall be the lesser of (A) Fair Market
Value and (B) the purchase price paid by such Management Stockholder for such
Restricted Shares, if applicable. The Call Right shall be exercised by written
notice (“Call Notice”)
to the Management Stockholder given in accordance with Section 15(f) of this
Agreement on or prior to the last date on which the Call Right may be exercised
by the Company.


 


(b)           In addition, the Company shall have a Call Right
effective immediately prior to any Change in Control that occurs following the
date hereof at a price per share determined pursuant to Section 2(a).


 


(c)           The repurchase of Restricted Shares pursuant to the
exercise of a Call Right shall take place on a date specified by the Company,
but in no event following the later of (i) the 60th day following
the date of the Call Notice or (ii) the 10th day following the
receipt by the Company of all necessary governmental approvals. On such date,
the Management Stockholder and his Permitted Transferees shall transfer the
Restricted Shares subject to the Call Notice to the Company, free and clear of
all liens and encumbrances, by delivering to the Company the certificates
representing the Restricted Shares to be purchased, duly endorsed for transfer
to the Company or accompanied by a stock power duly executed in blank, and the
Company shall pay to the Management Stockholder the Call Repurchase Price in
cash. The 


 


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Management Stockholder shall use all commercially
reasonable efforts to assist the Company in order to expedite all proceedings
described in this Section 2.


 


Section 3.               Management
Stockholders’ Rights to Sell Shares.


 


(a)           With respect to all Restricted Shares held by the
Management Stockholder and his Permitted Transferees (other than (A) the
Rollover Shares and (B) the Restricted Shares held by the Management
Stockholder and his Permitted Transferees pursuant to the exercise of the CEO
Option), during the period beginning on the date of the Management Stockholder’s
Termination of Employment by the Company without Cause or due to death or
Disability and ending on the nine month anniversary of the later of (i) the
date of such Termination of Employment or (ii) the date of the exercise of any
Vested Options held by the Management Stockholder as of the date of such
Termination of Employment, the Management Stockholder (or his representative or
estate, if applicable) shall have the right to elect to require the Company to
repurchase, in a single transaction, no less than all of the Restricted Shares
held by the Management Stockholder and his Permitted Transferees (other than
(A) the Rollover Shares and (B) the Restricted Shares held by the Management
Stockholder and his Permitted Transferees pursuant to the exercise of the CEO
Option) (“Vested Option Put Right”);
provided, however, that, notwithstanding the foregoing, in no
event shall the Company purchase any Restricted Shares pursuant to the Vested
Option Put Right prior to the day immediately following the six month
anniversary of the date the Management Stockholder first purchased such
Restricted Shares (whether pursuant to the exercise of Stock Options or
otherwise).


 


(b)           With respect to all Restricted Shares held by the
Management Stockholder and his Permitted Transferees purchased pursuant to the
exercise of the CEO Option, during the period beginning on the later (such
later date, the “CEO Option Put Date”) of (i) the date of the Management
Stockholder’s Termination of Employment by the Company without Cause or due to
death or Disability or (ii) the fifth anniversary of the date of this Agreement
and ending on the nine month anniversary of the later of (x) the CEO Option Put
Date or (y) the date of the exercise of that portion of the CEO Option held by
the Management Stockholder as of the date of such Termination of Employment,
the Management Stockholder (or his representative or estate, if applicable)
shall have the right to require the Company to repurchase, in a single
transaction, no less than all of the Restricted Shares held by the Management
Stockholder and his Permitted Transferees pursuant to the exercise of the CEO
Option (“CEO Option Put Right”,
and together with the Vested Option Put Right, the “Put Right”); provided,
however, that, notwithstanding the foregoing, in no event shall the
Company purchase any Restricted Shares pursuant to the CEO Option Put Right
prior to the day immediately following the six month anniversary of the date
the Management Stockholder first purchased such Restricted Shares.


 


(c)           The repurchase price payable by the Company upon
exercise of the Put Right (“Put Repurchase Price”) shall be the Fair
Market Value of the Restricted Shares subject to the Put Right on the date of
the Put Notice. The Put Right shall be exercised by written notice (“Put
Notice”) to the Company given in accordance with Section 15(f) of this
Agreement on or prior to the last date on which the Put Right may be exercised
by the Management Stockholder.


 


(d)           Subject to Section 5 below, the repurchase of
Restricted Shares pursuant to the exercise of a Put Right shall take place on a
date specified by the Company, but (subject to 


 


6

















 


Section 5(b)) in no event following the later of the
60th day following the date of the Put Notice or the 10th
day following the receipt by the Company of all necessary governmental
approvals. On such date, the Management Stockholder and his Permitted
Transferees shall transfer the Restricted Shares subject to the Put Notice to
the Company, free and clear of all liens and encumbrances, by delivering to the
Company the certificates representing the Restricted Shares to be purchased,
duly endorsed for transfer to the Company or accompanied by a stock power duly
executed in blank, and the Company shall pay to the Management Stockholder the
Put Repurchase Price. The Management Stockholder and the Company shall use
their respective commercially reasonable efforts to expedite all proceedings
described in this Section 3.


 


Section 4.               Involuntary
Transfers.


 


(a)           In the case of any transfer of title or beneficial
ownership of Restricted Shares upon default, foreclosure, forfeit, divorce, court
order or otherwise, other than by a voluntary decision on the part of a Stockholder
(each, an “Involuntary Transfer”), the Stockholder shall promptly (but
in no event later than two days after the Involuntary Transfer) furnish written
notice (the “Involuntary Transfer Notice”) to the Company indicating
that the Involuntary Transfer has occurred, specifying the name of the entity
to whom the shares were transferred (the “Involuntary Transferee”),
giving a detailed description of the circumstances giving rise to, and stating
the legal basis for, the Involuntary Transfer.


 


(b)           Upon the receipt of the Involuntary Transfer Notice,
and for 60 days thereafter, the Company shall have the right to elect to repurchase,
and the Involuntary Transferee shall have the obligation to sell, all (but not
less than all) of the Restricted Shares acquired by the Involuntary Transferee
for a repurchase price equal to the Fair Market Value of such shares of Common
Stock as of the date of the Involuntary Transfer (the “Involuntary Transfer
Repurchase Price” and such right, the “Involuntary Transfer Repurchase
Right”). The Involuntary Transfer Repurchase Right shall be exercised by
written notice (the “Involuntary Transfer Repurchase Notice”) to the
Involuntary Transferee given in accordance with Section 15(f) of this Agreement
on or prior to the last date on which the Involuntary Transfer Repurchase Right
may be exercised by the Company.


 


(c)           Subject to Section 5 below, the repurchase of
Restricted Shares pursuant to the exercise of the Involuntary Transfer
Repurchase Right shall take place on a date specified by the Company, but in no
event following the later of the 60th day following the date of the
date of the Involuntary Transfer Repurchase Notice or the 10th day
following the receipt by the Company of all necessary governmental approvals. On
such date, the Involuntary Transferee shall transfer the Restricted Shares
subject to the Involuntary Transfer Repurchase Notice to the Company, free and
clear of all liens and encumbrances, by delivering to the Company the
certificates representing the Restricted Shares to be purchased, duly endorsed
for transfer to the Company or accompanied by a stock power duly executed in
blank, and the Company shall pay to the Involuntary Transferee the Involuntary
Transfer Repurchase Price. The Involuntary Transferee and the Stockholder from
whom the Restricted Shares were transferred shall use all commercially
reasonable efforts to assist the Company in order to expedite all proceedings
described in this Section 4. If the Involuntary Transferee does not transfer
the Restricted Shares to the Company as required, the Company will cancel such
Restricted Shares and deposit the funds in a non-interest bearing account and
make payment upon delivery.


 


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Section 5.               Repurchase
Limitation.


 


(a)           Notwithstanding anything to the contrary herein,
except as otherwise provided by Section 5(c), the Company shall not be
permitted to purchase any Restricted Shares held by any Stockholder or
Involuntary Transferee upon exercise of the Put Right or the Involuntary
Transfer Repurchase Right if the Board reasonably determines that:


 


(i)            the purchase of Restricted Shares
would render the Company or its subsidiaries unable to meet their obligations
in the ordinary course of business at any time during the one year period
commencing on the date such purchase of Restricted Shares would otherwise be
required taking into account any pending or proposed transactions, capital
expenditures or other budgeted cash outlays by the Company which are reasonably
likely to be consummated or paid, as the case may be, within such one year
period, including, without limitation, any proposed acquisition of any other
entity by the Company or any of its subsidiaries which is reasonably likely to
be consummated within such one year period;


 


(ii)           the Company is prohibited from
purchasing the Restricted Shares by applicable law restricting the purchase by
a corporation of its own shares;


 


(iii)          the purchase of Restricted Shares would constitute a
breach of, default, or event of default under, or is otherwise prohibited by,
the terms of any loan agreement, indenture or other agreement or instrument to
which the Company or any of its subsidiaries is a party (the “Financing
Documents”) and the Company is not able to obtain the requisite consent of
any of its lenders to the purchase of Restricted Shares or in the reasonable
opinion of the Board, the purchase of the Restricted Shares would be
detrimental in view of the financial condition (presented or projected) of the
Company; or


 


(iv)          the purchase of Restricted Shares would be prohibited
by the terms of the Company’s charter or bylaws; provided, however,
that after the date of this Agreement, the Company shall not amend the Company’s
charter or bylaws to explicitly prohibit the purchase of Restricted Shares
hereunder; and provided, further, however, that this
clause (iv) shall not be deemed to limit the issuance by the Company of
Securities that by their terms limit the ability of the Company to redeem or repurchase
its Securities.


 


The events described in
(i) through (iv) above each constitute a “Repurchase Limitation.”


 


(b)           In the event of a Repurchase Limitation, the Company
shall notify in writing the Management Stockholder or Involuntary Transferee
who exercised the Put Right or with respect to whom the Involuntary Transfer
Repurchase Right has been exercised (a “Limitation Notice”). The Limitation Notice shall specify the
nature of the Repurchase Limitation. The Management Stockholder shall have ten
days after delivery by the Management Stockholder of the Limitation Notice to
withdraw the exercise of its Put Right. The Company shall thereafter repurchase
the Restricted Shares described in an Involuntary Transfer Repurchase Notice or
a Put Notice that is not withdrawn, in accordance with Section 5(c) and Section
5(d).


 


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(c)           With respect to a Limitation Notice relating to the
Company’s Involuntary Transfer Repurchase Right or a Put Right that is not
withdrawn by the Management Stockholder pursuant to Section 5(b), the Company
shall repurchase the Restricted Shares described in the Involuntary Transfer
Repurchase Notice soon as reasonably practicable after all Repurchase
Limitations cease to exist (or the Company may elect, but shall have no
obligation, to cause its nominee to repurchase the Restricted Shares while any Repurchase
Limitations continue to exist); provided, however that if some,
but not all of the Restricted Shares to be repurchased, can be so repurchased
without creating a Repurchase Limitation, then the Company shall consummate
such repurchase to the fullest extent it is able without causing a Repurchase Limitation
in accordance with the terms of this Agreement (without giving effect to this
Section 5). In the event the Company suspends its obligations to repurchase the
Restricted Shares pursuant to a Repurchase Limitation, (i) the Company shall
provide written notice to the Management Stockholder or Involuntary Transferee
as soon as practicable after all Repurchase Limitations cease to exist (the “Reinstatement Notice”); (ii) the
Fair Market Value of the Restricted Shares subject to the Put Notice or Involuntary
Transfer Repurchase Notice shall be equal to the greater of the Fair Market
Value of the Restricted Shares as of the date of the date of the Involuntary
Transfer Repurchase Notice, as the case may be, and the Fair Market Value determined
as of the date the Reinstatement Notice is delivered to the Management
Stockholder or the Involuntary Transferee, which Fair Market Value shall be
used to determine the Repurchase Price or Involuntary Transfer Repurchase Price
in the manner described above; and (iii) the repurchase shall occur on a date
specified by the Company within 10 days following the determination of the Fair
Market Value of the Restricted Shares to be repurchased as provided in clause
(ii) above.


 


(d)           Notwithstanding anything in this Section 5 to the
contrary, in the event of a Repurchase Limitation, then, in the sole discretion
of the Board, the Company may purchase the Restricted Shares subject to the Put
Right or Involuntary Transfer Repurchase Right, as applicable, and, in lieu of
cash consideration, issue a promissory note to such Management Stockholder or
Involuntary Transferee, as applicable, in the amount of the Put Repurchase
Price or Involuntary Transfer Purchase Price, as applicable, the terms of which
promissory note shall be acceptable to the Company’s senior lenders and shall
not result in a breach or violation of any of the Financing Documents. The
promissory note shall (i) bear simple interest at the prime rate as published
in the Wall Street Journal on the
date such payment is due and owing from such date to the date such payment is
made and (ii) have such other reasonable terms and conditions as may be
determined by the Company. All payments of interest accrued under the
promissory note shall be paid only at the date of payment by the Company of the
principal amount of such promissory note.


 


(e)           With respect to a Put Right that is subject to a
Repurchase Limitation that has not been withdrawn by the Management Stockholder
in accordance with Section 5(b), if the Company does not elect to repurchase
the Restricted Shares pursuant to the provisions of Section 5(d) within twenty days
following the date of receipt by the Management Stockholder of the Limitation
Notice, then such Put Notice shall be deemed to be withdrawn for purposes of
this Agreement.


 


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Section 6.               Demand
Registrations.


 


(a)           Number
of Registrations.


 


(i)            Demand Rights. Commencing on the date that is six
(6) months after the effective date of the IPO, holders of Restricted Securities
shall be entitled to make a written request (a “Demand”) of the Company
to register all or part of their Restricted Securities under the Securities Act
(a “Demand Registration”) in an amount equal to at least (1)  with respect to any Stockholder, other than
the Management Stockholder and its Permitted Transferees, $10 million of Restricted
Securities or (2) with respect to the Management Stockholder and its Permitted
Transferees, the lesser of (x) $10 million of Restricted Securities or (y) (A) in
the case of the first Demand Registration initiated by the Management
Stockholder, 50% of Restricted Securities then held, in the aggregate, by the
Management Stockholder and its Permitted Transferees or (B) in the case of the
second Demand Registration initiated by the Management Stockholder, 100% of
Restricted Securities then held by the Management Stockholder and its Permitted
Transferees, provided, however, that not more than an aggregate
of:  (A) four (4) Demand
Registrations initiated by one or more Principal Stockholders, (B) two (2)
Demand Registrations initiated by one or more NY Life Investors, (C) two (2)
Demand Registrations initiated by the Management Stockholder and (D) two (2)
Demand Registrations initiated by one or more Mezzanine Investors, may be made
pursuant to the rights granted by this Section 6(a)(i), provided, further,
that the Company shall not be forced to effectuate (i) more than one (1) Demand
Registration (pursuant to this Section 6(a)(i) or any other similar agreement)
in any three hundred sixty (360) day period or (ii) a Demand Registration in
the event that the Company is in the process of filing, or has filed, a
registration statement for an Underwritten Offering pursuant to which the
Company has delivered or will deliver a Piggy Back Notice, so long as (A) with
respect to a Demand Registration that involves an Underwritten Public Offering,
the Company files such registration statement pursuant to the Piggy Back Notice
within one hundred twenty (120) days following the date the Demand Registration
is requested and (B) with respect to a Demand Registration that does not
involve an Underwritten Public Offering, the Company files such registration
statement pursuant to the Piggy Back Notice within one hundred eighty (180)
days following the date the Demand Registration is requested


 


(ii)           Selection of Underwriter. Any Demand Registration hereunder
shall be on any appropriate form under the Securities Act permitting
registration of such Restricted Securities for resale by the Stockholders in
the manner or manners designated by them, including, without limitation,
pursuant to one or more underwritten offerings. The selection of investment
bankers and managers, if any, shall be made by the Company, provided, however,
that the investment bankers and managers so selected shall be reasonably
satisfactory to the Initiating Stockholder. If requested, the Company shall
enter into an underwriting or purchase agreement with an investment banking
firm in connection with a Demand Registration, containing representations,
warranties, indemnities and agreements then customarily included in
underwriting or purchase agreements by such underwriter with respect to
secondary distributions of securities.


 


10

















 


(b)           Registration. The Company shall file a registration statement with
respect to each Demand Registration and use its commercially reasonable efforts
to cause the same to be declared effective as promptly as practicable following
such Demand, but not later than one hundred twenty (120) days thereafter. Before
filing a registration statement or any prospectus naming the selling
Stockholders, or any amendments or supplements thereto, the Company will
furnish to counsel for the selling Stockholders copies of all documents
proposed to be filed. Unless all of the Restricted Securities covered by the
registration statement have earlier been sold or withdrawn from sale, the
Company shall keep any such Registration Statement effective for a period of at
least one hundred eighty (180) days after such registration statement is first
declared effective plus a period equal to (x) any period during which the selling
Stockholders are prohibited from making sales because of any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court plus (y) any Demand Suspension Period (as
defined below) (the “Demand Period”), and a registration will not count
as a Demand Registration unless it is declared effective by the Commission and
remains effective until the earlier of (1) such time as all of the Restricted Securities
included in such registration have been sold or disposed of or withdrawn from
sale by the selling Stockholders or (2) the expiration of their Demand Period; provided,
however, that if the registration remains effective for a shorter
period, such registration will count as a Demand Registration if the Initiating
Stockholder has sold an aggregate of at least seventy percent (70%) of its Restricted
Securities included in such registration. In addition, a request for
registration shall not be deemed to constitute a Demand Registration if the
registration has been declared effective by the Commission and afterwards:  (i) the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such Demand Registration are not satisfied other than by reason of some
act or omission by the selling Stockholders; (ii) the Company voluntarily
takes any action that would result in the selling Stockholders not being able
to sell such Restricted Securities covered thereby during the Demand Period;
(iii) after it has become effective, such Demand Registration becomes subject
to any stop order, injunction or other order or requirement of the Commission
or other governmental agency or court and such order, injunction or requirement
is not promptly withdrawn or lifted, and such Demand Registration has not
otherwise remained effective for the Demand Period (including effective periods
both before and after the order, injunction or requirement is made or imposed);
or (iv) such Demand Registration does not involve an underwritten offering
and the selling Stockholders determine not to proceed following any delay
imposed hereunder by the Company pursuant to the immediately following
sentence; provided, however, that prior to such a delay under
clauses (iii) or (iv), the Initiating Stockholder has not sold more than
seventy percent (70%) of the Restricted Securities included in such registration.
Notwithstanding the foregoing, the Company may, at any time, delay the filing
or delay or suspend the effectiveness of the Demand Registration or, without
suspending such effectiveness, instruct the selling Stockholders not to sell
any securities included in the Demand Registration, if the Board shall have
determined in good faith (as evidenced by a certificate signed by an executive
officer of the Company delivered to the selling Stockholders) that proceeding
with the Demand Registration at such time may have a material adverse effect on
the Company or the Company shall have determined upon the advice of counsel
that it would be required to disclose any actions taken by the Company in good faith
and for valid business reasons, including without limitation, the acquisition
or divestiture of assets, which disclosure may have a material adverse effect
on the Company or on such actions (a “Demand Suspension Period”), by
providing the selling 


 


11

















 


Stockholders with written notice of such Demand
Suspension Period. The Company shall use its commercially reasonable efforts to
provide such notice at least ten (10) days prior to the commencement of such a
Demand Suspension Period; provided, however, that in any event
the Company shall provide such notice no later than the commencement of such
Demand Suspension Period; provided, further, that in no event
shall the Demand Suspension Periods (A) with respect to a Demand Registration
that involves an Underwritten Public Offering exceed one hundred twenty (120)
days in any three hundred sixty (360) day period (including for these purposes
any delay permitted by clause (ii) of the last proviso contained in Section
6(a)(i)) and (B) with respect to a Demand Registration that does not involve an
Underwritten Public Offering exceed one hundred eighty (180) days in any three
hundred sixty (360) day period (including for these purposes any delay
permitted by clause (ii) of the last proviso contained in Section 6(a)(i)); and
provided, further, that in the event that a Demand Suspension
Period was instituted by the Company in order to prevent disclosure of
non-public information, such Demand Suspension Period shall end upon the
earlier to occur of (i) ten (10) days following the disclosure to the public by
the Company of the relevant non-public information and (ii) the last day of the
relevant periods described above.


 


The Company further
agrees to supplement or amend such registration statement with respect to such
Demand Registration, as required by the registration form utilized by the
Company or by the instructions applicable to such registration form or by the
Securities Act for the registration of securities or as reasonably requested
(which request shall result in the filing of a supplement or amendment subject
to approval thereof by the Company, which approval shall not be unreasonably
withheld) by any selling Stockholder or any managing underwriter of Restricted Securities
to which such Demand Registration relates, and the Company agrees to (i) furnish
to the selling Stockholders (and any managing underwriter) copies, in
substantially the form proposed to be used and/or filed, of any such supplement
or amendment as promptly as practicable prior to its being used and/or filed
with the Commission and (ii) use commercially reasonable efforts to provide
such supplement or amendment to the selling Stockholders (and any managing
underwriter) within three business days prior to its being used and/or filed
with the Commission.


 


(c)           Inclusion of Restricted Securities. Any written request for a Demand
Registration shall specify the number of Restricted Securities requested to be
registered and the intended methods of disposition thereof. Within ten (10)
days after receipt of such Demand, the Company shall give written notice of
such registration request to all holders of Restricted Securities which have
not made the Demand, and the Company shall include in such registration all Restricted
Securities with respect to which the Company has received written requests for
inclusion therein within fifteen (15) days after the date on which such notice
is given. Each such request shall also specify the aggregate number of Restricted
Securities requested to be registered. The Company may also include in such
Demand Registration shares of Common Stock for the account of the Company and
any other Persons who hold shares of Common Stock.


 


(d)           Priority on Demand Registrations. If a Demand Registration is an
underwritten registration and the managing underwriters of such offering
determine in their good faith judgment and advise the company in writing that
the aggregate number of (i) Restricted Securities of the selling Stockholders
exercising their rights to participate in the Demand Registration on a demand
basis pursuant to this Section 6 (or pursuant to any other similar 


 


12

















 


agreement with the Company); (ii) shares of Common
Stock of the Company; and (iii) shares of Common Stock of any other Persons
entitled to participate in such Demand Registration, in each case proposed to
be included in such registration statement, exceeds the maximum number of shares
of Common Stock that can reasonably be expected to be sold within a price range
acceptable to the Company and the selling Stockholders, then the number of
shares to be included in such registration shall include (i) first, 100% of the
Restricted Securities proposed to be sold by the Initiating Stockholder
(together with all other additional holders of the Company’s securities
(including the Stockholders) exercising their rights to participate in such
Demand Registration pursuant to this Agreement or any other agreement), such
amount to be allocated pro rata among all such holders based upon the number of
issued and outstanding securities of the class to be registered that are owned
by each applicable holder as of the date of the Demand, and (ii) second, 100%
of the shares of Common Stock proposed to be sold by the Company. Any request
for registration with respect to which such a market “cutback” with respect to
such selling Stockholders occurs shall be deemed to constitute a Demand
Registration for all purposes of this Section 6; provided, however,
that if any such market “cutback” occurs with respect to a Demand Registration
and the Initiating Stockholder is not able to sell at least seventy percent
(70%) of the Restricted Securities which the Initiating Stockholder proposed to
sell pursuant to such Demand Registration, then such request for registration
will not count against the number of Demands to which the Initiating Stockholder
is entitled pursuant to this Section 6.


 


(e)           Compliance. Notwithstanding any other provisions hereof, the
Company agrees that (i) any registration statement filed in connection
with a Demand Registration, and all amendments thereto, and any prospectus
forming a part thereof, and all supplements thereto, will comply in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any registration statement filed in connection with a
Demand Registration will not, and any amendments thereto will not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any prospectus forming part of
any registration statement filed in connection with a Demand Registration will
not, and all supplements to such prospectus will not, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in the light of the circumstances under which
they are made, not misleading.


 


Section 7.               Piggyback
Registration Rights.


 


(a)           Participation. Subject to Section 7(b), if at any time after
the date hereof the Company has an Underwritten Offering, whether or not for
its own account, then the Company shall give prompt notice (the “Piggyback
Notice”) to the Stockholders and the Stockholders shall be entitled to
include in such registration statement the Restricted Securities held by them. The
Piggyback Notice shall offer the Stockholders the right, subject to Section 7(b)
(the “Piggyback Registration Right”), to register such number of shares
of Restricted Securities as each Stockholder may request and shall set forth
(i) the anticipated filing date of such registration statement and
(ii) the number of shares of Common Stock that is proposed to be included
in such registration statement. Subject to Section 7(b), the Company shall
include in such registration statement such shares of Restricted Securities for
which it has received written requests to register such shares within 15 days
after the Piggyback Notice has been given.


 


13

















 


(b)           Underwriter’s Cutback. Notwithstanding the foregoing, if
a registration pursuant to this Section 7 involves an Underwritten
Offering (other than in the case of a Demand Registration requested by an Initiating
Stockholder pursuant to Section 6, in which case the provisions with respect to
priority of inclusion in such Underwritten Offering set forth in Section 6(d)
shall apply) of any class of Restricted Securities and the managing underwriter
or underwriters of such proposed Underwritten Offering are of the view that the
total or kind of securities which the Company and any other persons or entities
intend to include in such offering would be reasonably likely to adversely
affect the price, timing or distribution of the securities offered in such
offering, then such Underwritten Offering shall include (i) first, 100% of the
securities the Company proposes to sell (unless the Company agrees to reduce
the securities to be sold by the Company), and (ii) second, the amount of
securities which all holders of securities of the Company (including the
Stockholders) have requested to be included in such registration pursuant to
this Agreement or any other similar agreement with the Company that the
managing underwriter or underwriters believes can be sold without such adverse
effect referred to above, such amount to be allocated pro  rata
among all such holders of securities of the Company based upon the number of
issued and outstanding securities of the class to be registered that are owned
by each applicable holder as of the date of the Piggyback Notice.


 


(c)           Company Control. The Company may decline to file a registration
statement after giving the Piggyback Notice, or withdraw a registration
statement after filing and after such Piggyback Notice, but prior to the
effectiveness of the registration statement, provided that the Company
shall promptly notify each Stockholder in writing of any such action and provided
further that the Company shall bear all reasonable expenses incurred by
each such Stockholder or otherwise in connection with such withdrawn
registration statement. Notwithstanding any other provision herein, except as
set forth in Section 6(a)(ii), the Company shall have sole discretion to select
any and all underwriters that may participate in any Underwritten Offering.


 


(d)           Participation in Underwritten Offerings. No Person may participate in any
Underwritten Offering hereunder unless such Person (i) agrees to sell such
Person’s securities on the basis provided in any underwriting arrangements
approved by the Persons entitled to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-ups and other documents required for such
underwriting arrangements. Nothing in this Section 7(d) shall be construed to
create any additional rights regarding the piggyback registration of Restricted
Securities in any Person otherwise than as set forth herein.


 


(e)           Expenses.


 


(i)            All expenses incident to the Company’s
performance of or compliance with Section 6 and Section 7 of this Agreement,
including, without limitation, all registration, qualification and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other persons retained by the Company (all such expenses being
herein called “Registration Expenses”), shall be borne by the Company, 


 


14

















 


and the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or qualifying the securities
to be registered for trading on each system on which similar securities issued
by the Company are from time to time qualified or on the NASD automated
quotation system, provided, however, that each holder of shares
of Common Stock shall pay all applicable underwriting fees, discounts and
similar charges with respect to the Restricted Securities sold by such holder
pursuant to such registration statement.


 


(ii)           In connection with each Demand
Registration and each registration pursuant to this Section 7, in addition to
the Company’s counsel, the Company shall reimburse the holders of Restricted
Securities included in such registration for the reasonable fees and
disbursements of one counsel (which counsel shall be selected by holders of a
majority of the Restricted Securities included in the applicable registration)
to represent all of the holders of Restricted Securities.


 


(f)            Termination of Registration Rights. No Stockholder shall be entitled
to exercise any right provided in Section 6 or Section 7 after the earlier of
(i) five (5) years following the date of an IPO, unless such Stockholder
constitutes an Affiliate (as reasonably determined by the Company pursuant to
Rule 144) of the Company, (ii) such time as Rule 144 (other than Rule 144(k))
or another similar exemption under the Securities Act is available for the sale
of all such Stockholder’s Restricted Securities during a three (3) month period
without registration and such Stockholder beneficially owns less than 1% of the
Company’s outstanding shares of Common Stock or (iii) such time as Rule 144(k)
or another similar exemption under the Securities Act is available for the sale
of all of such Stockholder’s Restricted Securities.


 


Section 8.               Registration
Procedures.


 


(a)           Obligations With Respect to Registration. If and whenever the Company is
required to register any Restricted Securities under the Securities Act pursuant
to this Agreement, the Company shall, as promptly as practicable:


 


(i)            furnish to each selling Stockholder
such number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus and prospectus supplement, as
applicable), in conformity with the requirements of the Securities Act, and
such other documents as such selling Stockholder may reasonably request in
order to facilitate the disposition of the Restricted Securities by such
selling Stockholder;


 


(ii)           use its reasonable efforts to
register or qualify such Restricted Securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
the selling Stockholders shall reasonably request, and do any 


 


15

















 


and all
other acts and things which may be reasonably necessary or advisable to enable
the selling Stockholders pursuant to such registration statement to consummate
the disposition in such jurisdictions of the Restricted Securities, except that
the Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section, it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;


 


(iii)          use its reasonable efforts to cause
such Restricted Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the selling Stockholders thereof to consummate
the disposition of such Restricted Securities;


 


(iv)          use its reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable (but not more than
18 months) after the effective date of the registration statement, an earnings
statement which shall satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations promulgated thereunder;


 


(v)           use its reasonable efforts to cause
all such Restricted Securities to be listed on any securities exchange on which
the Company Common Stock is then listed, if such Restricted Securities are not
already so listed and if such listing is then permitted under the rules of such
exchange, and provide a transfer agent and registrar for such Restricted
Securities covered by such registration statement no later than the effective
date of such registration statement;


 


(vi)          in the case of an Underwritten
Offering, take such actions as (x) the Initiating Stockholder or (y) the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Restricted Securities;


 


(vii)         in the case of an Underwritten
Offering, use its reasonable efforts to obtain a “cold comfort” letter or
letters from the Company’s independent public accountants in customary form and
covering matters of the type customarily covered by “cold comfort” letters as
the Initiating Stockholder shall reasonably request; and


 


(viii)        in the case of an Underwritten
Offering, make available for inspection by representatives of the Initiating
Stockholder, by any underwriter participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant or
other agent retained by the Initiating Stockholder or any such underwriter, at
the offices where normally kept, during reasonable business hours, all
pertinent financial and other records, corporate documents and properties of
the Company, and cause all of the Company’s officers and accountants to supply
all information reasonably requested by the Initiating Stockholder or any such
underwriter, attorney, accountant or agent in connection with such registration
statement as shall be necessary, in the opinion of their respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act; provided,
however, that the foregoing shall not require the Company to provide
access to (or copies of) any 


 


16

















 


competitively
sensitive information relating to the Company or its subsidiaries or their
respective businesses; provided  further, however that (i) the
Initiating Stockholder and the underwriters and their respective counsel, accountants
and other agents shall have entered into a confidentiality agreement reasonably
acceptable to the Company and (ii) the Initiating Stockholder and the
underwriters and their respective counsel, accountants and other agents shall
use their reasonable best efforts to minimize the disruption to the Company’s
business and coordinate any such investigation of the books, records and
properties of the Company and any discussions with the Company’s officers and
accountants so that all such investigations occur at the same time and all such
discussions occur at the same time; and provided, further that
any information that is delivered to the Initiating Stockholder or the
underwriters or their respective counsel, accountants and other agents shall be
kept confidential unless (i) disclosure of such information is required by
court or administrative order, (ii) disclosure of such information, in the
opinion of counsel to any such inspecting party, is necessary to avoid or
correct a misstatement or omission of a material fact in the registration
statement, prospectus or any supplement or post-effective amendment thereto or
disclosure is otherwise required by law or (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such inspecting party; without limiting the
foregoing, no such information shall be used by any such inspecting party as
the basis for any market transactions in securities of the Company or its
subsidiaries in violation of law.


 


(b)           The Company may require each selling Stockholder of
Restricted Securities as to which any registration is being effected to furnish
the Company with such information regarding such selling Stockholder and
pertinent to the disclosure requirements relating to the registration and the
distribution of such Restricted Securities as the Company may from time to time
reasonably request in writing.


 


(c)           Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act pursuant to Sections
6 or 7, the Company hereby indemnifies and agrees to hold harmless, to the full
extent permitted by law, the holders of any Restricted Securities covered by
such registration statement, each affiliate of such holders and their
respective general and limited partners (and the directors, officers,
affiliates and controlling Persons thereof), each other Person who participates
as an underwriter in the offering or sale of such securities and each other
Person, if any, who controls such seller or any such underwriter (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
(collectively, the “Indemnified Parties”), from and against any and all
losses, claims, damages or liabilities, joint or several, and expenses to which
such Indemnified Party may become subject under the Securities Act, common law
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof, whether or not such Indemnified
Party is a party thereto) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary, final or summary prospectus contained therein,
any form of prospectus or any amendment or supplement thereto or (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except to the extent that the same arise out of or are based upon information
furnished in writing to the Company by such 


 


17

















 


Indemnified Party or the related holder of Restricted
Securities for use therein (or, in the case of any preliminary, final or
summary prospectus, form of prospectus or amendment or supplement thereto,
necessary to make the statements made, in the light of the circumstances under
which they were made, not misleading); provided, that the Company shall
not be liable to any Indemnified Party in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity
with information with respect to such Indemnified Party furnished in writing to
the Company by such Indemnified Party for use in the preparation thereof; provided,
further, that the Company shall not be liable to any Indemnified Party
to the extent that any such losses, claims, damages or liabilities arise out of
or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any preliminary prospectus if (x) such Indemnified
Party or the related holder of Restricted Securities failed to send or deliver
(if it had a duty to do so) a copy of the prospectus with or prior to the
delivery of written confirmation of the sale by such Indemnified Party or the
related holder of Restricted Securities to the Person asserting the claim from
which such losses, claims, damages or liabilities arise and (y) the prospectus
would have corrected such untrue statement or alleged untrue statement or such
omission or alleged omission. For purposes of the last proviso to the
immediately preceding sentence, the term “prospectus” shall not be deemed to
include the documents incorporated by reference therein.


 


(d)           Indemnification by the Holders of Restricted
Securities. In
the event of any registration of any securities of the Company in which a
holder of Restricted Securities is participating, such holder of Restricted
Securities hereby indemnifies and agrees to hold harmless, to the full extent
permitted by law, the Company and its affiliates, directors, officers, agents
and employees, each Person who controls the Company (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act) and the
affiliates, directors, officers, agents or employees of such controlling
persons (collectively, the “Indemnified Company Parties”), from and
against all losses, claims, damages or liabilities, joint or several, and
expenses to which such Indemnified Company Party may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof, whether
or not such Indemnified Company Party is a party thereto) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement, preliminary, final or summary
prospectus contained therein, any form of prospectus or any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (in the case of any preliminary,
final or summary prospectus, any form of prospectus or amendment or supplement
thereto, necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading), to the extent, but
only to the extent, that such untrue statement or alleged untrue statement is
contained in, or such omission or alleged omission is required to be contained
in, any information furnished in writing by such holder of Restricted
Securities to the Company for use in such registration statement, preliminary,
final or summary prospectus, form of prospectus or any amendment or supplement
thereto; provided,  however, that such holder of Restricted
Securities shall not be liable in any such case to the extent that the holder
has furnished to the Company in writing within a reasonable period of time
prior to the filing of 


 


18

















 


any such registration statement, preliminary, final or
summary prospectus, form of prospectus or amendment or supplement thereto
information expressly for use in such registration statement, preliminary,
final or summary prospectus, form of prospectus or any amendment or supplement
thereto which corrected or made not misleading information previously furnished
to the Company, and the Company failed to include such information therein. Notwithstanding
the foregoing, no holder of Restricted Securities being registered pursuant to
Sections 6 or 7 will be required to indemnify the Company for any amount
in excess of the total price at which the Restricted Securities of such holder
were sold to the public (less underwriting discounts and commissions, if any).


 


(e)           Conduct of Indemnification Proceedings. If any Person shall be entitled to
indemnity hereunder (an “indemnified party”), such indemnified party
shall give prompt notice to the party or parties from which such indemnity is
sought (the “indemnifying parties”) of the commencement of any action, suit,
proceeding or investigation or written threat thereof (a “Proceeding”)
with respect to which such indemnified party seeks indemnification or
contribution pursuant hereto; provided, however, that the failure
to so notify the indemnifying parties shall not relieve the indemnifying
parties from any obligation or liability except to the extent that the
indemnifying parties have been materially prejudiced by such failure. The
indemnifying parties shall have the right, exercisable by giving written notice
to an indemnified party promptly after the receipt of written notice from such
indemnified party of such Proceeding, to assume, at the indemnifying parties’
expense, the defense of any such Proceeding with counsel reasonably
satisfactory to such indemnified party; provided, however, that
an indemnified party or parties (if more than one such indemnified party is
named in any Proceeding) shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless: (1) the indemnifying parties agree to pay such fees and
expenses; (2) the indemnifying parties fail promptly to assume the defense of
such Proceeding or fail to employ counsel reasonably satisfactory to such
indemnified party or parties; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such indemnified party or
parties and the indemnifying parties or an affiliate of the indemnifying parties
or such indemnified parties, and there may be one or more defenses available to
such indemnified party or parties that are different from or additional to
those available to the indemnifying parties, in which case, if such indemnified
party or parties notifies the indemnifying parties in writing that it elects to
employ separate counsel at the expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying parties, it being
understood, however, that, unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any such
Proceeding and any substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified
party or parties. Whether or not such defense is assumed by the indemnifying
parties, such indemnifying parties or indemnified party or parties will not be
subject to any liability for any settlement made without its or their consent
(which consent shall not be unreasonably withheld or delayed). The indemnifying
parties shall not consent to entry of any judgment or enter into any settlement
which (i) provides for other than monetary damages without the consent of the
indemnified party or parties (which consent shall not be unreasonably withheld
or delayed) or (ii) that does not


 


19

















 


include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party or parties of a release, in
form and substance satisfactory to the indemnified party or parties, from all
liability in respect of such Proceeding for which such indemnified party would
be entitled to indemnification hereunder.


 


(f)            Contribution. If recovery is not available under the foregoing
indemnification provisions of this Section 8 for any reason other than as
expressly specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution to liabilities and expenses
except to the extent that contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative fault
of each party in connection with the actions which resulted in the indemnified
losses, the relative benefits received by each party from the offering of the
Company securities (taking into account the portion of the proceeds received by
each), the parties’ relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any misstatement or omission and any other equitable considerations
appropriate under the circumstances. The amount paid or payable by a party
under this Section 8(f) as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.


 


The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(f) were determined by pro  rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.


 


(g)           Non-Exclusivity. The indemnification obligations of the parties under
Sections 8(b) through (f) shall be in addition to any liability which any party
may otherwise have to any other party.


 


(h)           Rule 144. The Company covenants that following an IPO, it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder
(or, if the Company is not required to file such reports, it will, upon the
request of any holder of Restricted Securities, make publicly available such
information), all to the extent required from time to time to enable such
holder to sell Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the Commission. Notwithstanding
anything contained in this Section 8(h), the Company may deregister under Section
12 of the Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.


 


20

















 


Section 9.               Bring-Along
Rights.


 


(a)           If a Principal Stockholder at any time, or from time
to time, proposes to Transfer Restricted Shares to one or more persons that are
not Affiliates of the Principal Stockholders (a “Third Party Purchaser”), then such Principal Stockholder
shall have the right (a “Bring-Along
Right”), but not the obligation, to require each of the Other
Stockholders, the Management Stockholder and each of their respective
successors and assigns through Transfers permitted hereunder or otherwise (each
a “Required Seller” and collectively, the “Required Sellers”) to
tender for purchase to the Third Party Purchaser, on the same terms and
conditions as apply to Principal Stockholders, a number of Restricted Shares that,
in the aggregate, equals the lesser of (A) the number derived by multiplying
(1) the total number of Restricted Shares of such class owned by such Required
Sellers; by (2) a fraction, the numerator of which is the total number of Restricted
Shares of such class to be sold by Principal Stockholders in connection with
the transaction or series of related transactions and the denominator of which
is the total number of the then outstanding Restricted Shares held by Principal
Stockholders; or (B) the number of Restricted Shares of such class as a Principal
Stockholder shall designate in the Bring-Along Notice (as defined below). Notwithstanding
the foregoing, the obligation of the Required Sellers with respect to the
Bring-Along Rights are subject to the satisfaction of the following
conditions:  (i) all holders of a class
of securities receive the same consideration per share, and to the extent that
any such holder is provided an election as to the form or type of consideration
to be received, all holders of such class of security are provided the same
election, (ii) none of the Required Sellers shall be required to make any
representations or warranties with respect to the Principal Stockholders or any
other Required Seller; provided, however, that this clause (ii)
shall not be deemed to prohibit the Required Sellers from being responsible (through
indemnification provisions or otherwise) for any representations, warranties
and agreements made on behalf of the Company so long as the conditions
contained in clauses (iv) and (v) below are satisfied, (iii) none of the
Required Sellers shall be required to make any representations or warranties
with respect to such Required Seller beyond its power and authority to sell the
Restricted Securities owned by such Required Seller and its title to the Restricted
Securities owned by such Required Seller, (iv) none of the Required Sellers
shall have any indemnification obligation with respect to any class of
securities sold in such transaction which is disproportionate with the indemnity
obligations of Principal Stockholders, and (v) none of the Required Sellers
shall have any indemnification obligation with the respect to any
representations, warranties and agreements made on behalf of the Company in
excess of the net proceeds received by such Required Seller in such transaction.


 


(b)           If a Principal Stockholder elects to exercise its Bring-Along
Right under this Section 9 with respect to the Restricted Shares held by any of
the Required Sellers, such Principal Stockholder shall notify such Required
Sellers in writing (the “Bring-Along
Notice”). Each Bring-Along Notice shall set forth: (i) the proposed
amount and form of consideration and terms and conditions of payment offered by
the Third Party Purchaser(s) and a summary of any other material terms
pertaining to the Transfer (“Third
Party Terms”); and (ii) the number of Restricted Shares that the
Principal Stockholder elects such Required Sellers to sell in the Transfer. The
Bring-Along Notice shall be given at least ten days before the closing of the
proposed Transfer.


 


21

















 


(c)           Upon the receipt of a Bring-Along Notice, the Required
Sellers shall be obligated to sell the number of Restricted Shares and Stock
Options set forth in its Bring-Along Notice on the Third Party Terms.


 


(d)           At the closing of the Transfer to any Third Party
Purchaser(s) pursuant to this Section 9, the Third Party Purchaser(s) shall
remit to the Principal Stockholders and the Required Sellers the consideration
for the total sales price of the Restricted Shares held by the Principal
Stockholders and the Required Sellers sold pursuant hereto minus any
consideration to be escrowed or otherwise held back in accordance with the
Third Party Terms (the “Holdback Amount”) (which Holdback Amount shall be allocated pro rata among the Principal
Stockholders and the Required Sellers based on the number of Restricted Shares
held by each).


 


Section 10.             Tag-Along
Rights.


 


(a)           Except as otherwise provided by Section 10(d), if a
Principal Stockholder at any time proposes to Transfer any Restricted Shares to
a Third Party Purchaser (other than
another Principal Stockholder), then each of the Other Stockholders, the
Management Stockholder and each of their respective successors and assigns
through Transfers made in compliance with the terms and conditions of this
Agreement (each a “Tag-Along Offeree” and collectively, the “Tag-Along
Offerees”) shall have the right (the “Tag-Along Right”) to require
that the proposed Third Party
Purchaser purchase from the Tag-Along Offerees, on the same terms and
conditions as apply to Principal Stockholders, up to the number of Restricted Shares of such class equal to the
number derived by multiplying (x) the total number of Restricted Shares of such
class that the proposed Third Party Purchaser has agreed or committed to
purchase, by (y) a fraction, the numerator of which is the total number of
Restricted Shares of such class owned by such Tag-Along Offeree, and the
denominator of which is the aggregate number of Restricted Shares of such class
owned by the Principal Stockholders, the Tag-Along Offerees and any other
stockholders with similar tag-along rights pursuant to other agreements with
the Company. For the avoidance of doubt, it is intended that the Tag-Along
Right always be exercised on a class by class basis, and the intent of this computation
is to accord to each of the Tag-Along Offerees the right to sell the same
percentage of its direct and indirect holdings of Restricted Shares of such
class as a Principal Stockholder is entitled to sell in such transaction.


 


(b)           A Principal Stockholder shall notify the Tag-Along
Offerees in writing in the event such Principal Stockholder proposes to make a
Transfer or series of Transfers giving rise to a Tag-Along Right at least fifteen
(15) business days prior to the date on which such Principal Stockholder expects
to consummate such Transfer (the “Sale Notice”) which notice shall
specify the number of Restricted Shares which the Third Party Purchaser intends
to purchase in such Transfer. The Tag-Along Right may be exercised by any
Tag-Along Offerees by delivery of a written notice to the Principal Stockholder
(the “Tag-Along Notice”) within ten (10) business days following receipt
of the Sale Notice from such Principal Stockholder. The Tag-Along Notice shall
state the number of Restricted Shares that such Tag-Along Offeree proposes to
include in such Transfer to the proposed Third Party Purchaser (not to exceed
the number as determined above). In the event that the proposed Third Party
Purchaser does not purchase the specified number of Restricted Shares from the
Tag-Along Offerees on the same terms and conditions as specified in the Sale
Notice, then such Principal Stockholder shall not be permitted to sell any Restricted
Shares to the proposed Third Party Purchaser unless such


 


22

















 


Principal Stockholder purchases from any Tag-Along
Offerees such specified number of Restricted Shares on the same terms and
conditions as specified in such Sale Notice.


 


(c)           At the closing of the Transfer to any Third Party
Purchaser pursuant to this Section 9, the Third Party Purchaser shall remit to the
Principal Stockholders and any Tag-Along Offeree that has exercised its
Tag-Along Rights the consideration for the total sales price of the Restricted Shares
held by the Principal Stockholders and such Tag-Along Offeree sold pursuant to
the terms herein minus any Holdback Amount (which Holdback Amount shall
be allocated pro rata among the Principal Stockholders and the Tag Along
Offerees based on the number of Restricted Shares held by each), against
delivery of certificates for the Restricted Shares, duly endorsed for Transfer,
and the compliance by such Tag-Along
Offeree with any other conditions to closing generally applicable to Principal
Stockholders.


 


(d)           In the event of a Transfer subject to Section 9, the
provisions of Section 9, and not those of this Section 10, shall control with
respect to Restricted Shares subject to the exercise by Iron of a Bring-Along
Right, and this Section 10 shall only apply to that number of Restricted Shares
that are entitled to be included in a Tag-Along Notice and that are not subject
to a Bring-Along Notice (if any).


 


Section 11.             Cooperation.


 


(a)           In the event of (i) the exercise by Iron of a
Bring-Along Right pursuant to Section 9 or (ii) the exercise by the
Tag-Along Offerees of a Tag-Along Right pursuant to Section 10, each of the
Other Stockholders and the Management Stockholder shall, to the extent
permitted by applicable law, consent to and not take any affirmative action to
prevent the transaction, and if the transaction is structured as a sale of
stock, each of the Other Stockholders and the Management Stockholder shall take
all actions that the Board reasonably deems necessary or desirable in
connection with the consummation of the transaction. Without limiting the
generality of the foregoing, each of the Other Stockholders and the Management
Stockholder agrees, to the extent permitted by applicable law, to
(A) consent to and not to take any affirmative action to prevent the
transaction; (B) execute any stock purchase agreement, merger agreement or
other agreement entered into with the Third Party Purchaser with respect to the
transaction setting forth the Third Party Terms and any ancillary agreement (including,
without limitation, a stockholders agreement, investor rights agreement or
similar agreement) with respect thereto so long as the Principal Stockholders
are also required to do so; (C) vote the Restricted Shares held by it or him in
favor of the transaction; and (D) refrain from the exercise of dissenters’
appraisal rights with respect to the transaction. Notwithstanding the
foregoing, (i) this Section 11 shall not be deemed to require the consent of
the Other Stockholders or the Management Stockholder, or any other action by
the Other Stockholders or the Management Stockholder, to the extent such
consent or other action by the Other Stockholders or the Management Stockholder
adversely affect such Other Stockholder or the Management Stockholder in a
manner that is different from its effect on the Principal Stockholders, (ii)  none of the Other Stockholders or the
Management Stockholder, as the case may be, shall be required to make any
representations or warranties with respect to the Principal Stockholders or any
other Stockholder; provided, however, that this clause (ii) shall
not be deemed to prohibit the Other Stockholders or the Management Stockholder
from being responsible (through indemnification provisions or otherwise) for
any representations, warranties and agreements made on behalf of 


 


23
















 


the Company so long as the conditions contained in
clauses (iv) and (v) below are satisfied, (iii) none of the Other Stockholders
and the Management Stockholder shall be required to make any representations or
warranties with respect to such Stockholder beyond its power and authority to
sell the Restricted Securities owned by such Stockholder and its title to the
Restricted Securities owned by such Stockholder, (iv) none of the Other
Stockholders and the Management Stockholder shall have any indemnification
obligation with respect to any class of securities sold in such transaction
which is disproportionate with the indemnity obligations of Principal
Stockholders, and (v) none of the Other Stockholders and the Management
Stockholder shall have any indemnification obligation with the respect to any
representations, warranties and agreements made on behalf of the Company in
excess of the net proceeds received by such Stockholder in such transaction. For
the avoidance of doubt, the granting of rights to persons pursuant to any
ancillary agreement described above that are not Parties hereto immediately
prior to such grant (x) to provide such parties with rights that are superior
to the rights of the Other Stockholders and the Management Stockholder
hereunder and/or (y) to provide such additional persons with rights that would
result in a change in the rights of the Principal Stockholders which (when
taken together with related changes) results in an impairment on the ability of
the Principal Stockholders to control the Company or its successor, in each
such case, shall not be deemed for purposes of this Section 11(a) to adversely
affect the Stockholders in a manner that is different from its effect on the
Principal Stockholders.


 


(b)           If the Company or the holders of the Company’s
securities enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) promulgated under the Securities Act, may be
available with respect to the negotiation or transaction (including a merger,
consolidation, or other reorganization), each Stockholder that is not an
accredited investor (as defined in Rule 501 of the Securities Act) shall, if
requested by the Company, appoint a purchaser representative (as defined in
Rule 501 of the Securities Act) reasonably acceptable to the Company. If the
purchaser representative is designated by the Company, the Company shall pay
the fees of the purchaser representative, but if any Stockholder appoints
another purchaser representative, the Stockholder shall be responsible for the
fees of the purchaser representative so appointed.


 


(c)           Each Stockholder shall bear its pro-rata share of the
costs of any transaction in which it sells Restricted Shares (based upon the
net proceeds received by such Stockholder in such transaction) to the extent
such costs are incurred for the benefit of all holders of Common Stock and are
not otherwise paid by the Company or the acquiring party.


 


Section 12.             Board
of Directors; Basic Financial Information and Reporting.


 


(a)           Each Stockholder agrees to cast all votes in respect
of Restricted Shares held by such Stockholder entitled to vote for the election
of the Board whether at any annual or special meeting, by written consent or
otherwise, as follows:


 


(i)            Number of Directors. Each such Stockholder will vote to
fix the number of members of the Board at 4 or as may be agreed to by
Stockholders holding at least a majority of the Restricted Shares.


 


24

















 


(ii)           Election of Directors. Each Stockholder will vote to elect
as members of the Board any designee or designees selected by Iron.


 


(iii)          Removal of Directors. None of the directors designated by
Iron pursuant to Section 12(a)(ii) may be removed without the consent of Iron.


 


(b)           Special Observation Rights. For so long as each NY Life Investor
and its Permitted Transferees beneficially own, in the aggregate, at least 20%
of the Restricted Shares held by such NY Life Investor on the date immediately
following the date of this Agreement, the Company covenants and agrees that an
observer (which observer is either an employee, officer or partner of a NY Life
Investor or any of its Permitted Transferees or its general partner) designated
by each NY Life Investor and each of its Permitted Transferees (each, an “Observer”)
may be present at all meetings of the Board or any committees thereof,
including any telephonic meetings, and that the Company will give the Observers
notice of such meetings, by telecopy or by such other means as such notices are
delivered to the members of the Board, not later than the earlier of (a) the
same time notice is provided or delivered to the Board and (b) 24 hours prior
to the time of such proposed meeting; provided, however, that the
Observers may be excluded from any meeting or portion thereof if the Company
reasonably believes, upon advice of counsel, that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information, or in the event the Board intends to
discuss or vote upon any matter in which a NY Life Investor has a material
business or financial interest (other than by reason of interest as a holder of
Restricted Shares). Board materials that are sent to the directors in their
capacity as such, whether or not in connection with a meeting of the Board,
including copies of all minutes, consents, correspondence and other material
shall be sent to the Observers simultaneously by the Company by means
reasonably designed to insure timely receipt by such Observers; provided,
however, that the Company may exclude from the materials sent to the
Observers any materials relating directly and substantially to any matter in
which a NY Life Investor has a material business or financial interest (other
than by reason of interest as a holder of Restricted Shares) or any materials
that the Company reasonably believes, upon the written advice of counsel,
should be excluded to preserve the attorney-client privilege or to protect
highly confidential proprietary information. Each NY Life Investor and its
Permitted Transferees shall have the right to designate an alternate to attend
and observe any meeting on behalf of the Observer designated by each of them, provided
that such alternate is either an employee, officer or partner of such NY Life Investor
or any of its Permitted Transferees or its general partner and such alternate
shall be entitled to participate in the same manner as the Observers set forth
above. The Company shall reimburse one Observer designated pursuant to this Section
12(b) for its reasonable expenses incurred in attending meetings of the Board
and all committees thereof. Notwithstanding anything in this Agreement to the
contrary, in no event shall the NY Life Investors and their Permitted
Transferees have the right to appoint more than four (4) Observers, in the
aggregate, at any one time, pursuant to this Section 12(b).


 


(c)           Basic Financial Information and Reporting.


 


(i)            For so long as any Stockholder and
its Permitted Transferees beneficially own, in the aggregate, at least 20% of
the Restricted Shares held by such Stockholder on the date immediately
following the date of this Agreement, the Company will furnish such Stockholder
(A) as soon as practicable after the end of each fiscal 


 


25

















 


month,
and in any event within 30 days thereafter, monthly unaudited consolidated financial
statements; (B) as soon as practicable after the end of each of the first
three fiscal quarters for each year, and in any event within 45 days
thereafter, a quarterly unaudited consolidated financial statement balance
sheet of the Company and its subsidiaries as of the end of the fiscal quarter
and a consolidated statement of income and a consolidated statement of cash
flows of the Company and its subsidiaries for such fiscal quarter; and (C) as
soon as practicable after the end of each fiscal year, and in any event within
one hundred and twenty (120) days thereafter, an audited consolidated balance
sheet of the Company and its subsidiaries as of the end of such fiscal year,
and a consolidated statement of income and a consolidated statement of cash
flows of the Company and its subsidiaries for such fiscal year certified by an
independent public accounting firm. In addition, for so long as any Stockholder
beneficially owns at least 20% of the Restricted Shares held by such
Stockholder on the date immediately following the date of this Agreement, the
Company will provide such Stockholder with (A) a copy of its annual budget when
it is provided to the Board and (B) a copy of any other financial information
required to be provided to any lender pursuant any Financing Documents or
required to be filed with the Commission.


 


(ii)           For so long as the Management
Stockholder beneficially owns any Common Stock, whether or not JC Mas is
employed by the Company, the Company shall provide its unaudited quarterly
financial statements and audited financial statements described in Section
12(c)(i) above to the Management Stockholder upon its request. The Management
Stockholder hereby acknowledges and agrees that it will not discuss or disclose
any financial statements provided to him pursuant to this Section 12(c)(ii)
with anyone for any reason at any time, without the prior written consent of
the Board, except as may be required by applicable law or legal process.


 


Section 13.             Preemptive
Rights. Subject to the terms and conditions specified in this Section 13,
the Company hereby grants to each Stockholder (and their respective successors
and assigns resulting from Transfers that are made in compliance with the terms
of this Agreement) a right to participate in future issuances by the Company of
its Securities (as defined below). Each time the Company proposes in the future
to issue any shares of, or securities convertible into or exercisable for any
shares of, any of its capital stock (the “Securities”) to one or more of
the Company’s Affiliates, the Company shall give each Stockholder an
opportunity to purchase or subscribe for its pro rata share
of the newly issued Securities in accordance with this Section 13.


 


(a)           Participation Notice. At least twenty (20) days prior to
the proposed date of issuance of the Securities, the Company shall deliver a
notice by certified mail (“Participation Notice”) to each Stockholder
stating (i) its bona fide intention to
issue Securities, (ii) the number and type of Securities to be issued, and
(iii) the price and terms (including, without limitation, any requirement
to purchase additional securities of the Company or participate in a financing
transaction in order to purchase or subscribe for the Securities to be issued),
if any, upon which it proposes to issue such Securities.


 


(b)           Offer Periods; Terms of Sale. At any time prior to the close of
business on the seventh day after its receipt of delivery of the Participation Notice,
each Stockholder may elect to purchase or obtain, at the price and on the terms
specified in the Participation Notice, up


 


26

















 


to that portion of such Securities (the “Pre-emptive
Percentage”) specified in the Participation Notice (if any) which equals
the proportion that the number of shares of Common Stock, issued and held, or
issuable upon conversion and exercise of all convertible or exercisable securities
then held, by such Stockholder bears to the total number of shares of Common Stock
then outstanding (assuming full conversion and exercise of all convertible or
exercisable securities). The purchase or subscription by the Stockholders
pursuant to this Section 13 shall be on the same price and other terms and
conditions, including the date of sale or issuance, as are applicable to the
purchasers or subscribers of the additional Securities whose purchases or
subscriptions give rise to the preemptive rights described in this Section 13,
which price and other terms and conditions shall be as stated in the relevant Participation
Notice.


 


(c)           Expiration of Offer Periods. The Company may, during the
180-day period following the receipt of the Participation Notice by each of the
Stockholders, issue the remaining unsubscribed portion of the Securities to any
Person or Persons at a price not less than, and upon terms no more favorable to
the offeree than, those specified in the Participation Notice. If the Company
does not enter into an agreement for the sale of the Securities within such
period, or if such sale is not consummated by the earlier to occur of (A) the
90th day after the execution of an agreement for the sale of the
Securities and (B) the 180th day following the receipt of the Participation
Notice by each of the Stockholders, the right provided under this Section 13
shall be deemed to be revived and such Securities shall not be issued unless
first reoffered to the Stockholders in accordance with this Section 13.


 


(d)           Exceptions. The preemptive rights set forth in this Section 13
shall not be applicable to:


 


(i)            the issuance or sale of Securities
to employees (and their affiliated entities), consultants or directors of the
Company or any of its subsidiaries pursuant to a stock option plan, restricted
stock plan, stock purchase plan or any other equity incentive plan, arrangement
or agreement;


 


(ii)           the issuance of Common Stock upon
the exercise or conversion of any convertible or exercisable Securities
outstanding on the date hereof or issued after the date hereof
in compliance with the provisions of this Section 13;


 


(iii)          the issuance of Securities to the
public pursuant to an Underwritten Offering (including an IPO);


 


(iv)          the issuance of Securities as consideration for (A) any
business combination or acquisition transaction involving the Company or any of
its subsidiaries or (B) any joint venture or strategic
partnership;


 


(v)           the issuance of Securities in
exchange for debt securities;


 


(vi)          the issuance of Securities in
connection with the Recapitalization Agreement;


 


27

















 


(vii)         the issuance of Securities to
lenders, bond purchasers or other financial institutions in connection with a
financing transaction involving the Company or any of its subsidiaries; and


 


(viii)        the issuance of Securities pursuant
to a stock split, stock dividend, combination, reorganization, recapitalization
or similar event.


 


(e)           Post-Issuance Notice. Notwithstanding the requirements
of this Section 13, the Company may proceed with any issuance of Securities
prior to having complied with the provisions of Section 13; provided that the
Company shall:


 


(i)            provide to each Stockholder who
would have been eligible to participate in such issuance of Securities pursuant
to this Section 13 (x) with prompt notice of such issuance and (y) the
Participation Notice described in Section 13(a);


 


(ii)           offer to issue to each Stockholder
such number of Securities of the type specified in the Participation Notice as
may be requested by such Stockholder (not in any event to exceed the
Pre-emptive Percentage that such Stockholder would have been entitled to
pursuant to Section 13 multiplied by the sum of the (x) aggregate number of
Securities issued pursuant to this Section 13 with respect to such issuance and
(y) the aggregate number of Securities issued or to be issued pursuant to this Section
13(e) with respect to such issuance of Securities); and


 


(iii)          keep such offer open for a period of
twenty (20) days, during which period, each such Stockholder may accept such
offer by sending a written acceptance to the Company committing to purchase an
amount of such Securities (not in any event to exceed the Pre-emptive
Percentage that such Stockholder would have been entitled to pursuant to Section
13 multiplied by the sum of the (x) aggregate number of Securities issued
pursuant to this Section 13 with respect to such issuance and (y) the aggregate
number of Securities issued pursuant to this Section 13(e) with respect to such
issuance of Securities).


 


Section 14.             Termination.
This Agreement shall terminate on the earlier to occur of:


 


(a)           The date the Company consummates an IPO, provided,
that (i) Sections 6, 7, 8(a) and 8(h) shall survive the termination of this
Agreement pursuant to this Section 14(a) for so long as any Restricted
Securities are outstanding and (ii) Sections 8(b) through (f) shall survive
termination of this Agreement pursuant to this Section 14(a) for three years
following the last date upon which any Restricted Securities are outstanding;
or


 


(b)           The complete liquidation of the Company or an
agreement for the sale, lease or other disposition by the Company of all or
substantially all of the Company’s assets.


 


28

















 


Section 15.             Miscellaneous.


 


(a)           Legends. Each certificate representing the Restricted Shares
shall bear the following legends (or legends with substantially similar
effect):


 


“THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR THE SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS NEFF CORP.
(THE “COMPANY”) RECEIVES AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.”


 


“THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND OTHER CONDITIONS, AS SPECIFIED IN A SHAREHOLDERS’ AGREEMENT, DATED AS OF JUNE
3, 2005, BY AND AMONG THE COMPANY AND THE OTHER PARTIES NAMED THEREIN, AS AMENDED
FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE COMPANY AND
WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”


 


(b)           Successors and Assigns. Subject to Section 1, this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective legal representatives, heirs, legatees, successors and
assigns and shall also apply to any Restricted Shares acquired by any
Stockholder after the date hereof.


 


(c)           Specific Performance. Each Party, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, shall be entitled to specific performance of the Party’s
rights under this Agreement. Each Party agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by the
Party of the provisions of this Agreement and each Party hereby agrees to waive
the defense in any action for specific performance that a remedy at law would
be adequate.


 


(d)           Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware.


 


(e)           Interpretation. The headings of the Sections contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not affect the meaning or interpretation of
this Agreement.


 


29

















 


(f)            Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given and received when delivered by overnight courier or hand delivery, when
sent by telecopy, or five days after mailing if sent by registered or certified
mail (return receipt requested) postage prepaid, to the Parties at the
following addresses (or at such other address for any Party as shall be
specified by like notices delivered by such Party, provided that notices of a
change of address shall be effective only upon receipt thereof).


 


(i)            If to the Company at:


 


Neff Corp.


3750 N.W. 87th
Avenue


Suite 400


Miami, Florida 33178


Attention:  Chief Executive Officer


Fax: (305) 513-4155


 


with copies to Iron at the address set forth below and:


 


Latham & Watkins LLP


885 Third Avenue


New York, New York


Attention: Robert Kennedy


Fax: (212) 751-4864


 


(ii)           If to Iron at:


 


Iron Merger
Partnership


c/o Odyssey Investment Partners, LLC

21550 Oxnard Street, Suite 570

Woodland Hills, CA 91367


Fax: (818) 737-1101


Attention: William F. Hopkins


 


with a copy to Latham
& Watkins LLP, at the address set forth above.


 


(iii)          If to any NY Life Investor at:


 


New
York Life Capital Partners II, L.P.


c/o
NYLCAP Manager LLC


51
Madison Avenue


New
York, New York 10010


Attention:  James Barker and Paul Roberts


Room
3009


Fax:  (212) 576-5591


 


30

















 


with
copies to:


 


Arnold
& Porter LLP


399
Park Avenue


New
York NY 10022-4690


Attention:
Christine D. Rogers


Fax:
(212) 715-1399


 


(iv)          If to any of DLJ Investment Partners
II, L.P., DLJ Investment Partners, L.P. or DLJIP II Holdings, L.P. at:


 


c/o DLJ Investment
Partners II, Inc.


11 Madison Avenue 

New York, NY 10010


Fax: (212) 448-3415


Attention: Charles Harper


 


with a copy to:


 


Cahill
Gordon Reindel LLP


80 Pine Street


New York, NY 10005


Fax: (212) 269-5420


Attention:  John Schuster


 


(v)           If to any of TCW/Crescent Mezzanine
Partners III, L.P., TCW/Crescent Mezzanine Trust III or TCW/Crescent Mezzanine
Partners III Netherlands, L.P. at:


 


c/o TCW/Crescent
Mezzanine Management III, L.L.C.

11100 Santa Monica Blvd

Suite 2000

Los Angeles, CA 90025

Fax: (310) 235-5967

Attention: Tyrone Chang


 


with a copy to Cahill
Gordon Reindel LLP,
at the address set forth above.


 


(vi)          If to the Management Stockholder, to
the address set forth on the Management Stockholder’s signature page hereto.


 


(g)           Recapitalization, Exchange, Etc. Affecting the Company’s
Stock. The
Company may effect, and nothing in this Agreement shall prevent the Company
from effecting, any recapitalization, corporate reorganization, “corporate
inversion” involving the creation of one or more holding companies and/or
holding company subsidiaries, or similar transaction. The provisions of this
Agreement shall apply, to the full extent set forth herein, with respect to any



 


31

















 


and all shares of Common Stock and all of the other
shares of capital stock of the Company or any successor or assignee of the
Company (whether by merger, consolidation, sale of assets, business combination
or otherwise) that may be issued in respect of, in exchange for, or in substitution
of such Common Stock and shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, recapitalizations, and the
like occurring after the date hereof.


 


(h)           Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to constitute one and the same agreement.


 


(i)            Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality, and enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any way impaired
thereby.


 


(j)            Amendment. This Agreement may be amended, modified, extended,
supplemented or terminated and the provisions hereof may be waived by
resolution of the Board; provided that the amendment, modification,
extension, supplement, termination or waiver has been approved by the Principal
Stockholders; provided, further, that no amendment, modification,
extension, supplement, termination or waiver may be made which adversely affects
any particular Stockholder in a manner that is different from its effect on the
other Stockholders or the Principal Stockholders, without the consent of such
Stockholder so adversely treated. At any time hereafter, additional
Stockholders may be made parties hereto by executing a signature page in the
form attached as Exhibit A hereto, which signature page shall be
countersigned by the Company and shall be attached to this Agreement and become
a part hereof without any further action of any other Party hereto. For the
avoidance of doubt, in connection with any merger, consolidation, sale of
assets or business combination involving the Company or an equity investment in
the Company, any amendment, modification, extension, supplement, termination or
waiver of this Agreement to add an additional Stockholder as a party to this
Agreement and (i) to provide such additional Stockholder with rights that are
superior to the rights of the Other Stockholders and the Management
Stockholder, so long as the existing rights of such Stockholders under this
Agreement are not altered, in any material respect, and/or (ii) to provide such
additional Stockholder with rights that would result in a change in the rights
of the Principal Stockholders which (when taken together with related changes)
results in an impairment on the ability of the Principal Stockholders to
control the Company or its successor, in each such case, shall not be deemed
for purposes of this Section 15(j) to either (x) adversely affect any
particular Stockholder in a manner that is different from its effect on the other
Stockholders or (y) adversely affect the Stockholders in a manner that is
different from its effect on the Principal Stockholders.


 


(k)           Tax Withholding. The Company shall be entitled to require payment in
cash or deduction from other compensation payable to any Stockholder of any
sums required by federal, state, or local tax law to be withheld with respect
to the issuance, vesting, exercise, repurchase, or cancellation of any
Restricted Share or any option to purchase Restricted Shares.


 


32

















 


(l)            No Employment Rights. Nothing contained in this
Agreement (i) obligates the Company or any Affiliate of the Company to employ
the Management Stockholder in any capacity whatsoever; or (ii) prohibits or
restricts the Company or any Affiliate of the Company from terminating the
employment, if any, of the Management Stockholder at any time or for any reason
whatsoever and the Management Stockholder hereby acknowledges and agrees that,
except as may otherwise be set forth in any written agreement between the
Company and such Management Stockholder, neither the Company nor any other
person has made any representations or promises whatsoever to such Management
Stockholder concerning his employment or continued employment by the Company or
any Affiliate of the Company.


 


(m)          Offsets. The Company shall be permitted to offset and reduce
from any amounts payable to a Stockholder the amount of any indebtedness or
other obligation or payment owing to the Company by the Stockholder.


 


(n)           Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
subject matter hereof and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement shall
constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.


 


(o)           Actions to Effectuate Agreement. Each Stockholder agrees to take
all actions within its power (including voting Restricted Shares) to give
effect to the terms of this Agreement. In the event of any inconsistency
between this Agreement, on the one hand, and the Certificate of Incorporation
or Bylaws of the Company, on the other hand, the provisions of this Agreement
shall control, and each Stockholder shall vote its Restricted Shares in such
manner as to effectuate any and all amendments to the Certificate of
Incorporation or Bylaws of the Company that may be necessary in order to bring
the Certificate of Incorporation and Bylaws of the Company into conformity with
the provisions of this Agreement. The vote of any Stockholder in violation of
the provisions of this Agreement shall be void and shall be ignored by the
Company. Subject to Section 11, in connection therewith, each Stockholder by
signing this Agreement grants an irrevocable proxy of perpetual duration with
full power of substitution to Iron for purposes of voting all Restricted Shares
subject to this Agreement at any meeting of stockholders or in any action by
written consent of stockholders in any manner necessary to give effect to the
provisions of this Agreement, but not to amend this Agreement, it being
acknowledged that such proxy is coupled with an interest under this Agreement.


 


(p)           Lock-up Period. If the Company proposes to register shares of any
class of Restricted Shares under the Securities Act pursuant to a primary Underwritten
Offering, each Stockholder hereby agrees that, if so requested by any
representative of the underwriters (the “Managing Underwriter”), such
Stockholder shall not Transfer (except for Transfers pursuant to Sections 6, 7,
9 or 10) any Restricted Shares of the class to be registered for such period as
shall be determined by the Managing Underwriter, which period shall not last
more than 180 days following the consummation of an Initial Public Offering (or
90 days following the consummation of any other Underwritten Offering that
registers Restricted Shares); provided, that the Transfer restrictions
described in this Section 15(p) shall only apply to the extent that the Principal
Stockholders are subject to similar Transfer restrictions in connection with
such 


 


33

















 


offering, in each case to the extent such Principal Stockholder
holds Restricted Shares to be registered as of the date of the consummation of
such offering.


 


Section 16.             Defined
Terms.


 


As used in this
Agreement, the following terms shall have the meanings ascribed to them below:


 


(a)           “Affiliate” shall
mean, with respect to any individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature (each, a “Person”), any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person where “control”
shall have the meaning given such term under Rule 405 of the Securities Act; provided,
that, in no event shall the Company, any of its subsidiaries or any Stockholder
be considered an “Affiliate” of the Principal Stockholders.


 


(b)           “Agreement”
shall have the meaning set forth in the preamble.


 


(c)           “Board” shall mean the board of directors of
the Company.


 


(d)           “Bring-Along Notice” shall have the meaning set
forth in Section 9(b).


 


(e)           “Bring-Along Right” shall have the meaning set
forth in Section 9(a).


 


(f)            “Call Notice” shall have the meaning set forth
in Section 2(a).


 


(g)           “Call Repurchase Right” shall have the meaning
set forth in Section 2(a).


 


(h)           “Call Right” shall have the meaning set forth
in Section 2(a).


 


(i)            “Cause” shall have the meaning set forth in the
Employment Agreement.


 


(j)            “CEO Option” shall have the meaning set forth
in the recitals.


 


(k)           “CEO Option Put Date” shall have the meaning
set forth in Section 3(b).


 


(l)            “CEO Option Put Right” shall have the meaning
set forth in Section 3(b).


 


(m)          “Change in Control” shall have the meaning set
forth in the Employment Agreement.


 


(n)           “Commission” shall mean the United States Securities
and Exchange Commission.


 


(o)           “Common Stock” shall have the meaning set forth
in the recitals.


 


(p)           “Company” shall have the meaning set forth in
the preamble.


 


(q)           “Demand” shall have the meaning set forth in
Section 6(a)(i).


 


34

















 


(r)            “Demand Period” shall have the meaning set
forth in Section 6(b).


 


(s)           “Demand Registration” shall have the meaning
set forth in Section 6(a)(i).


 


(t)            “Demand Suspension Period” shall have the
meaning set forth in Section 6(b).


 


(u)           “Disability” shall have the meaning set forth
in the Employment Agreement.


 


(v)           “Election Notice” shall have the meaning set
forth in Section 1(b)(ii).


 


(w)          “Employment Agreement” shall mean that certain
Employment Agreement by and between Merger Sub and JC Mas, dated as of April 6,
2005.


 


(x)            “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


 


(y)           The “Fair Market Value” of Restricted Shares,
as of any date of determination, shall be determined by the Board as follows:


 


(i)            If the Common Stock is listed on one or more National
Securities Exchanges (within the meaning of the Exchange Act), each share of
Common Stock to be repurchased shall be valued at the average of the closing
prices of a share of Common Stock on the principal exchange on which the shares
are then trading for the period of ten consecutive trading days ending on the
most recent trading day preceding such date of determination;


 


(ii)           If the Common Stock is not traded on a National
Securities Exchange but is quoted on Nasdaq or a successor quotation system and
the Common Stock is listed as a National Market Issue under the NASD National
Market System, each share of Common Stock to be repurchased shall be valued at
the average of the mean between the closing representative bid and asked prices
for a share of Common Stock for the period of ten consecutive trading days
ending on the most recent trading day preceding such date of determination as
reported by Nasdaq or such successor quotation system; or


 


(iii)          If the Common Stock is not publicly traded on a
National Securities Exchange and is not quoted on Nasdaq or a successor
quotation system, the Fair Market Value of the Common Stock shall be determined
in good faith by the Board in its sole discretion, with reference to the most
recent valuation of the Common Stock requested by the Board and performed by an
independent valuation consultant or appraiser of nationally recognized standing
(which may be the Company’s independent accounting firm) selected by the Board
in consultation with the Company’s Chief Executive Officer, which valuation
shall be performed at least annually, and with such adjustment to the appraisal
by said independent valuation consultant or appraiser to the date of the
exercise of the Call Right, Put Right or Involuntary Transfer Repurchase Right,
as applicable, as the Board, acting in good faith, in its sole discretion deems
appropriate.


 


35

















 


(z)            “Financing Documents” shall have the meaning
set forth in Section 5(a)(iii).


 


(aa)         “Holdback Amount” shall have the meaning set
forth in Section 9(d).


 


(bb)         “IPO” shall mean the first underwritten public
offering of Common Stock pursuant to an effective registration statement filed
by the Company with the Commission (other than on Forms S-4 or S-8 or
successors to such forms) under the Securities Act.


 


(cc)         “Indemnified Company Parties”  shall have the meaning set forth in Section
8(d).


 


(dd)         “Indemnified Parties”  shall have the meaning set forth in Section
8(c).


 


(ee)         “indemnified party”  shall have the meaning set forth in Section
8(e).


 


(ff)           “Initiating Stockholder” shall mean the
Stockholder or Stockholders that initiate a Demand Registration.


 


(gg)         “Involuntary Transfer” shall have the meaning
set forth in Section 4(a).


 


(hh)         “Involuntary Transferee” shall have the meaning
set forth in Section 4(a).


 


(ii)           “Involuntary Transfer Notice” shall have the
meaning set forth in Section 4(a).


 


(jj)           “Involuntary Transfer Repurchase Notice” shall
have the meaning set forth in Section 4(b).


 


(kk)         “Involuntary Transfer Repurchase Price” shall
have the meaning set forth in Section 4(b).


 


(ll)           “Involuntary Transfer Repurchase Right” shall
have the meaning set forth in Section 4(b).


 


(mm)       “Iron” shall have the meaning set forth in the
preamble.


 


(nn)         “JC Mas” shall have the meaning set forth in
the preamble.


 


(oo)         “JC Mas Holdings” shall have the meaning set
forth in the preamble.


 


(pp)         “Limitation Notice” shall have the meaning set
forth in Section 5(b).


 


(qq)         “Management Stockholder”  shall have the meaning set forth in the
preamble.


 


(rr)           “Managing Underwriter” shall have the meaning
set forth in Section 15(p).


 


36

















 


(ss)         “Merger” shall have the meaning set forth in
the recitals.


 


(tt)           “Merger Sub” shall have the meaning set forth
in the recitals.


 


(uu)         “Merger Sub Common Stock” shall have the
meaning set forth in the recitals.


 


(vv)         “Mezzanine
Investors”  shall have the meaning
set forth in the recitals.


 


(ww)       “NY
Life Capital Partners” shall have the meaning set forth in the preamble.


 


(xx)          “NY
Life Investor” shall have the meaning set forth in the preamble.


 


(yy)         “New Life Mezzanine Partners”
shall have the meaning set forth in the preamble.


 


(zz)          “NYLIM” shall have the
meaning set forth in the preamble.


 


(aaa)       “Observer” shall have the meaning set forth in
Section 12(b).


 


(bbb)      “Offer” shall have the meaning set forth in
Section 1(b)(i).


 


(ccc)       “Offer Notice” shall have the meaning set forth
in Section 1(b)(i).


 


(ddd)      “Offer Period” shall have the meaning set forth
in Section 1(b)(i).


 


(eee)       “Other Stockholders” shall have the meaning set
forth in the preamble.


 


(fff)         “Participation Notice” shall have the meaning
set forth in Section 13(a).


 


(ggg)      “Party” shall have the meaning set forth in the
preamble.


 


(hhh)      “Permitted Family Members” shall have the
meaning set forth in the definition of “Permitted Transferee”.


 


(iii)          “Permitted Transferee” with respect to any
Stockholder, shall mean any person or entity that is (a) an Affiliate of such
Stockholder or (b) in the case of the Management Stockholder only, (i) any
member of the Management Stockholder’s immediate family (the “Permitted
Family Members”), (ii) trusts or other entities established for the benefit
of Permitted Family Members and (iii) upon the Management Stockholder’s death,
the Management Stockholder’s executors, administrators, testamentary trustees,
legatees and beneficiaries; provided that, in the case of subclauses (i) and
(ii), the Management Stockholder retains the sole and exclusive right to vote
or dispose of any Restricted Shares transferred to the Permitted Family Member
or a trust for the benefit of Permitted Family Members.


 


(jjj)          “Piggyback Notice” shall have the meaning set
forth in Section 7(a).


 


37

















 


(kkk)       “Piggyback Registration Right” shall have the
meaning set forth in Section 7(a).


 


(lll)          “Pre-emptive Percentage” shall have the meaning
set forth in Section 13(b).


 


(mmm)    “Principal Stockholders” shall mean (i) Iron,
(ii) any general or limited partner or member of Iron (an “Iron Partner”),
(iii) any corporation, partnership, limited liability company or other entity
that is an Affiliate of Iron or any Iron Partner (including without limitation
any applicable coinvest vehicle established following the date hereof)
(collectively, the “Iron Affiliates”), (iv) any managing director,
member, general partner, director, limited partner, officer or employee of (A) Iron,
(B) any Iron Partner or (C) any Iron Affiliate, or the heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of any of the
foregoing Persons referred to in this clause (iv) (collectively, the “Iron
Associates”), (v) any trust, the beneficiaries of which, or corporation,
limited liability company or partnership, the stockholders, members or general
or limited partners of which, include only Iron Stockholders, Iron Partners, Iron
Affiliates, Iron Associates, their spouses or their lineal descendants; and
(vi) a voting trustee for Iron or one or more Iron Affiliates, Iron Partners or
Iron Associates; provided that in no event shall the Company or any
subsidiary be considered an Iron Partner, Iron Affiliate, or Iron Associate and
provided, further, that an underwriter or other similar
intermediary engaged by the Company in an offering of the Company’s debt or
equity securities or other instruments shall not be deemed a Principal
Stockholder with respect to such engagement.


 


(nnn)      “Proceeding” 
shall have the meaning set forth in Section 8(e).


 


(ooo)      “Put Notice” shall have the meaning set forth
in Section 3(c).


 


(ppp)      “Put Repurchase Price” shall have the meaning
set forth in Section 3(c).


 


(qqq)      “Put Right” shall have the meaning set forth in
Section 3(b).


 


(rrr)         “Recapitalization Agreement” shall have the
meaning set forth in the Recitals.


 


(sss)       “Registration Expenses”  shall have the meaning Section 7(e)(i).


 


(ttt)         “Reinstatement Notice” shall have the meaning
set forth in Section 5(c).


 


(uuu)      “Repurchase Limitation” shall have the meaning
set forth in Section 5(a).


 


(vvv)      “Required Sellers” shall have the meaning set
forth in Section 9(a).


 


(www)    “Restricted Securities” shall mean all Restricted
Shares; provided, however, that any Restricted Securities shall
cease to be Restricted Securities when (A) a registration statement with
respect to the sale of such Restricted Securities has been declared effective
under the Securities Act and such Restricted Securities have been disposed of
in accordance with the plan of distribution set forth in such registration
statement, (B) such Restricted Securities are distributed pursuant to Rule 144
(or any similar provision then in force) 


 


38

















 


under the Securities Act or (C) such Restricted
Securities shall have been otherwise transferred and new certificates for them
not bearing a legend restricting further transfer under the Securities Act
shall have been delivered by the Company; and provided, further,
that any securities that have ceased to be Restricted Securities shall not
thereafter become Restricted Securities and any security that is issued or
distributed in respect of securities that have ceased to be Restricted
Securities is not a Restricted Security.


 


(xxx)        “Restricted Shares” shall have the meaning set
forth in the recitals.


 


(yyy)      “Rollover Shares” shall have the meaning set
forth in the recitals.


 


(zzz)        “Sale Notice” shall have the meaning set forth
in Section 10(b).


 


(aaaa)     “Secondary Offeree” shall have the meaning set
forth in Section 1(b)(vi).


 


(bbbb)    “Securities” shall have the meaning set forth
in Section 13.


 


(cccc)     “Securities Act” shall have the meaning set
forth in Section 1(a).


 


(dddd)    “Selling Stockholders” shall have the meaning
set forth in Section 1(b)(i).


 


(eeee)     “Stockholder” or “Stockholders” shall
have the meanings set forth in the preamble.


 


(ffff)        “Stock Option Plan” shall have the meaning set
forth in the recitals.


 


(gggg)    “Stock Options” shall have the meaning set
forth in Section 2(a).


 


(hhhh)    “Subscription Agreement” shall have the meaning
set forth in the recitals.


 


(iiii)         “Tag-Along Notice” shall have the meaning set
forth in Section 10(b).


 


(jjjj)         “Tag-Along Offerees” shall have the meaning set
forth in Section 10(a).


 


(kkkk)     “Tag-Along Right” shall have the meaning set
forth in Section 9(a).


 


(llll)         “Termination
of Employment” shall mean the time when the employee-employer
relationship between the Management Stockholder and the Company or one of its
subsidiaries is terminated for any reason, with or without Cause, including,
but not by way of limitation, a termination by resignation, discharge,
Disability, death or retirement, but excluding a termination where there is a
simultaneous reemployment by the Company or one of its subsidiaries. The
committee appointed to administer the Stock Option Plan (the “Committee”)
or the Board shall determine the effect of all matters and questions relating
to Termination of


 


39

















 


Employment, including, but
not by way of limitation, all questions of whether a particular leave of
absence constitutes a Termination of Employment.


 


(mmmm) “Third Party Purchaser” shall have the meaning
set forth in Section 9(a).


 


(nnnn)    “Third Party Terms” shall have the meaning set
forth in Section 9(b).


 


(oooo)    “Transfer” shall have the meaning set forth in
Section 1(a).


 


(pppp)    “Underwritten Offering” means a sale of shares
of Common Stock to an underwriter for reoffering to the public pursuant to an
effective registration statement filed by the Company with the Commission
(other than on Form S-4 or S-8 or successors to each form) under the Securities
Act.


 


(qqqq)    “Vested Option Put Right” shall have the
meaning set forth Section 3(a).


 


(rrrr)        “Vested Options” shall have the meaning set
forth in the recitals.


 


40

















 


IN WITNESS WHEREOF, the
undersigned have executed this Agreement on the date first written above.


 


	
   

  	
  NEFF
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
   

  	
  IRON MERGER PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ODYSSEY INVESTMENT
  PARTNERS 

  
	
   

  	
  FUND III, LP, Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ODYSSEY INVESTMENT
  PARTNERS, LLC, 

  
	
   

  	
  its manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ODYSSEY INVESTMENT
  PARTNERS, LLC, 

  
	
   

  	
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


42

















 


	
   

  	
  NEW YORK LIFE CAPITAL
  PARTNERS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   NYLCAP MANAGER LLC, its Investment 

  
	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW YORK LIFE
  INVESTMENT 

  
	
   

  	
  MANAGEMENT MEZZANINE
  PARTNERS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By: NYLIM Mezzanine GenPar LP, its General 

  
	
   

  	
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By: NYLIM Mezzanine GenPar GP, LLC, its 

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Kevin A. Smith

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NYLIM MEZZANINE
  PARTNERS PARALLEL 

  
	
   

  	
  FUND, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By: NYLIM Mezzanine GenPar LP, its General 

  
	
   

  	
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By: NYLIM Mezzanine GenPar GP, LLC, its 

  
	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Kevin A. Smith

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  



 


43

















 


	
   

  	
  JUAN CARLOS MAS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JUAN CARLOS MAS
  HOLDINGS I, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Residence Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


44

















 


	
   

  	
  DLJ INVESTMENT PARTNERS,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DLJ INVESTMENT PARTNERS
  II, INC.,

  
	
   

  	
   

  	
  as its managing general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJ INVESTMENT PARTNERS
  II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  DLJ INVESTMENT PARTNERS
  II, INC.,

  
	
   

  	
   

  	
  as its managing general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DLJIP II HOLDINGS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  DLJ INVESTMENT PARTNERS
  II, INC.,

  
	
   

  	
   

  	
  as its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


45

















 


	
   

  	
  TCW/CRESCENT MEZZANINE PARTNERS
  III,

  
	
   

  	
   

  	
  L.P.

  
	
   

  	
  TCW/ CRESCENT MEZZANINE
  TRUST III

  
	
   

  	
  TCW/ CRESCENT MEZZANINE
  PARTNERS III 

  
	
   

  	
   

  	
  NETHERLANDS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  TCW/Crescent Mezzanine
  Management III, 

  L.L.C., its Investment Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TCW Asset Management
  Company, its Sub-

  Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


46

















 


EXHIBIT A


 


FORM


OF


SIGNATURE PAGE


TO THE

STOCKHOLDERS AGREEMENT OF NEFF CORP.


 


By execution of this
signature page,                  
hereby agrees to become a party to, be bound by the obligations of, and receive
the benefits of, that certain Stockholders Agreement of Neff Corp. dated as of June
3, 2005 by and among Neff Corp., Iron Merger Partnership, New York Life Capital
Partners II, L.P., Juan Carlos Mas, Juan Carlos Mas Holdings I, L.P., and
certain other parties named therein, as amended from time to time thereafter.


 


	
   

  	
   

  
	
   

  	
  [Name of Stockholder]

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted:

  
	
   

  	
   

  
	
   

  	
  NEFF CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: