Exhibit 4.3
▇▇▇▇▇▇▇▇▇ SIGN COMPANY
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT") is made as of
September 30, 1998 between ▇▇▇▇▇▇▇▇▇ Sign Company, a Texas corporation (the
"COMPANY"), each of the investors listed on the SCHEDULE OF INVESTORS
attached hereto (the "INVESTORS"), each of the executives listed on the
SCHEDULE OF EXECUTIVES attached hereto (the "EXECUTIVES") and each of the
other stockholders listed on the SCHEDULE OF OTHER STOCKHOLDERS attached
hereto (the "OTHER STOCKHOLDERS" and collectively, with the Investors and the
Executives, the "STOCKHOLDERS"; each, a "STOCKHOLDER".) Capitalized terms
used and not otherwise defined herein are defined in Section 9 hereof.
The Investors are entering into a Senior Subordinated Note,
Preferred Stock and Warrant Purchase Agreement, dated as of the date hereof
(the "PURCHASE AGREEMENT"), pursuant to which the Investors are purchasing
12.0% Senior Subordinated Notes (the "NOTES"), shares of Series A Preferred
Stock and the Investor Warrants. As of the date hereof, each of the
Executives and each of the Other Stockholders owns shares of Common Stock in
the amounts set forth opposite such Executive's name and such Other
Stockholder's name, respectively, on the SCHEDULE OF EXECUTIVES and the
SCHEDULE OF OTHER STOCKHOLDERS.
The Company and the Stockholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition
of the Company's board of directors (the "BOARD"), (ii) assuring continuity
in the management of the Company and (iii) limiting the manner and terms by
which the Common Stock may be transferred. The execution and delivery of
this Agreement is a condition to the Investors' obligations under the
Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. BOARD OF DIRECTORS.
(a) From and after the Closing (as defined in the Purchase
Agreement) and until the provisions of this Section 1 cease to be effective,
each Stockholder shall vote all of his or its Stockholder Shares which are
voting shares and any other voting securities of the Company over which such
Stockholder has voting control and shall take all other necessary or
desirable actions within his or its control (whether in his or its capacity
as a stockholder, director, member of a Board committee or officer of the
Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and
execution of written consents in lieu of meetings), and the Company shall
take all necessary or desirable actions within its control (including,
without limitation, calling special board and stockholder meetings), so that:
(i) subject to Section 1(e) below, the authorized number
of directors on the Board shall be established at five (5) directors,
(ii) the following individuals shall be elected to the
Board:
(A) two (2) representatives (the "INVESTOR
DIRECTORS") designated by holders of a majority of the Investor
Shares (the "MAJORITY INVESTOR HOLDERS"); provided that the
designation of the Investor Directors pursuant to this
subparagraph (ii)(A) shall be in lieu of, and operative only to
the extent that, (i) the holders of the Series A Preferred have
failed to designate (or for any reason, have been prevented from
designating) in accordance with Section 6 of the Certificate of
Designation, Series A, two (2) representatives to serve on the
Board, or (ii) the Investors do not hold a majority of the Series
A Preferred;
(B) two (2) members of the Company's management
designated by the Executives, determined by a vote of the
Executives owning a majority of the Stockholder Shares held by all
Executives (the "EXECUTIVE DIRECTORS"), provided that the initial
Executive Directors shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇;
and
(C) one (1) representative designated by the
Executives (determined on the basis of a vote of a majority of the
Stockholder Shares held by all Executives) and acceptable to the
Majority Investor Holders, provided that the person so designated
is not a member of the Company's management or an employee or
officer of the Company or its subsidiaries of an Affiliate, or
related by blood or marriage to any affiliate, of any of the
Executives or any other member of the Company's management (the
"OUTSIDE DIRECTOR"); provided, further, that the Outside Director
initially shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(iii) the composition of the board of directors of each of
the Company's Subsidiaries, if any (a "SUB BOARD"), shall be the same as
that of the Board;
(iv) the removal from the Board or a Sub Board (with or
without cause) of any representative designated (x) under subparagraph
(ii)(A), shall be at the written request of the Majority Investor
Holders, (y) under subparagraph (ii)(B), shall be at the written request
of the Executives or (z) under subparagraph (ii)(C), shall be at the
written request of the Majority Investor Holders, the Executives or the
Majority Investor Holders and the Executives, collectively, but only upon
such written request and under no other circumstances (in each case,
determined on the basis of a vote of the holders of a majority of the
Stockholder Shares held by such Persons), provided that if any director
elected pursuant to subparagraph (ii)(B) above ceases to be an employee
of the Company and its Subsidiaries, he shall be removed as a director
promptly after his employment ceases and shall have no right to designate
any representative pursuant to this Section 1(a), except
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that, the foregoing not withstanding, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be permitted
to serve as an Executive Director designated pursuant to Section
1(a)(ii)(B) for so long as he continue to hold not less than 5% of the
aggregate outstanding shares of the Company's Common Stock, whether or
not he is employed by the Company; and
(v) in the event that any representative designated
hereunder by the Majority Investor Holders or by the Executives, or by
the Executives with the approval of the Majority Investor Holders, ceases
to serve as a member of the Board or a Sub Board during his term of
office, the resulting vacancy on the Board or the Sub Board shall be
filled by a representative designated and/or approved by the Majority
Investor Holders or the Executives, or by a representative designated
and/or approved by the Majority Investor Holders or the Executives, as
the case may be, as provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings
of the Board, any Sub Board and any committee thereof. So long as any
Investor Director serves on the Board and for 4 years thereafter, the Company
shall, at the request of such Investor Director, maintain directors and
officers indemnity insurance coverage satisfactory to the Investors.
(c) The rights of each Executive under this Section 1 shall
terminate upon such Executive ceasing to be employed by the Company or, if
earlier, at such time as the Executives and their Permitted Transferees (as
defined in Section 4(c) hereof), for any reason, hold in the aggregate less
than 75% of the Stockholder Shares held by the Executives on the date hereof;
provided that, the foregoing not withstanding, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be
permitted to serve as an Executive Director designated pursuant to Section
1(a)(ii)(B) for so long as he continue to hold not less than 5% of the
aggregate outstanding shares of the Company's Common Stock, whether or not he
is employed by the Company.
(d) If any party fails to designate a representative to fill
a directorship pursuant to the terms of this Section 1, the individual
previously holding such directorship shall be elected to such position, or if
such individual fails or declines to serve, the election of an individual to
such directorship shall be accomplished in accordance with the Company's
Bylaws and applicable law; provided that the Stockholders shall vote to
remove such individual if the party which failed to designate such
directorship so directs.
(e) Notwithstanding anything to the contrary contained in
this Section 1, upon the occurrence of an Event of Noncompliance of the type
described in Section 7 of the Certificate of Designation and so long as any
such Event of Noncompliance continues uncured and unwaived, each holder of
Stockholder Shares shall vote all of his or its Stockholder Shares and any
other voting securities of the Company over which it has voting control and
take all other necessary or desirable actions within his or its control, and
the Company shall take all necessary and desirable actions within its
control, in order to cause, at the option of and as directed by Majority
Investor Holders, the removal from the Board of one of the representatives
designated
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pursuant to paragraph 1(a)(ii)(B) and the election to the Board of a
replacement representative designated by the Majority Investor Holders;
provided that, the foregoing notwithstanding, upon the occurrence of an Event
of Noncompliance, the Stockholders shall not be required to vote their
Stockholder Shares to effect the removal and replacement of a representative
in accordance with this Section 1(e) so long as (i) each of two directors
designated to the Board by holders of the Series A Preferred is entitled, in
accordance with Section 7(b)(iii) of the Certificate of Designation, to cast
with respect to each resolution or other matter presented to the Board for
approval, two times the number of votes that each other director is entitled
to cast in with respect to approval of such resolution or other matter, and
(ii) the Investors hold a majority of the Series A Preferred.
(f) Notwithstanding any other provision of this Section 1,
the holders of Series A Preferred shall not be obligated to vote such shares
to elect any person to the Board other than the Investor Directors.
(g) The provisions set forth in Section 1 shall terminate at
such time when the Investors no longer own at least 20% of the Investor
Shares acquired by the Investors under the Purchase Agreement.
2. REPRESENTATIONS AND WARRANTIES. Each Stockholder
represents and warrants that (i) such Stockholder is the record owner of the
number of Stockholder Shares set forth opposite its name on the schedule
attached hereto, (ii) this Agreement has been duly authorized, executed and
delivered by such Stockholder and constitutes the valid and binding
obligation of such Stockholder, enforceable in accordance with its terms, and
(iii) such Stockholder has not granted and is not a party to any proxy,
voting trust or other agreement other than this Agreement. No holder of
Stockholder Shares shall grant any proxy or become party to any voting trust
or other agreement which is inconsistent with, conflicts with or violates any
provision of this Agreement.
3. [Intentionally deleted.]
4. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES.
(a) TRANSFER OF STOCKHOLDER SHARES. No Executive or Other
Stockholder shall sell, transfer, assign, pledge or otherwise dispose of
(whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) any interest in his or its Stockholder
Shares (a "TRANSFER"), except pursuant to the provisions of Section 6, in
connection with a Public Sale, pursuant to the Stock Purchase Option
Agreements (as defined in the Purchase Agreement) or with the prior written
approval of the Majority Investor Holders or, in the case of the Executives,
pursuant to the provisions of this Section 4.
(b) TAG-ALONG RIGHTS. At least thirty 30 days prior to any
Transfer of Stockholder Shares (other than a Public Sale), the Executive
making such Transfer (the
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"TRANSFERRING STOCKHOLDER") shall deliver a written notice (the "SALE
NOTICE") to the holders of Investor Shares, specifying in reasonable detail
the identity of the prospective transferee(s), the number of shares to be
transferred and the terms and conditions of the contemplated Transfer. Each
holder of Investor Shares may elect to participate in the contemplated
Transfer at the same price per share (whether voting or non-voting stock) and
on the same terms by delivering written notice to the Transferring
Stockholder within 30 days after delivery of the Sale Notice. If any holder
of Investor Shares has elected to participate in such contemplated Transfer,
the Transferring Stockholder and each such electing holder shall be entitled
to sell in the contemplated Transfer, at the same price and on the same
terms, a number of Stockholder Shares equal to the product of (i) the
quotient determined by dividing the percentage of Stockholder Shares owned by
such Person by the aggregate percentage of Stockholder Shares owned by the
Transferring Stockholder and the holders of Investor Shares participating in
such sale and (ii) the number of Stockholder Shares to be sold in the
contemplated Transfer.
Each Executive shall use its best efforts to obtain the
agreement of the prospective transferee(s) to the participation of the
holders of Investor Shares in any contemplated Transfer and to the inclusion
of the Investor Warrants and Series A Preferred in the contemplated Transfer,
and no Executive shall transfer any of its Stockholder Shares to any
prospective transferee if such prospective transferee(s) declines to allow
the participation of the holders of Investor Shares or the inclusion of the
Warrants or Series A Preferred. If any portion of the Investor Warrants is
included in any Transfer of Stockholder Shares under this Section 4(b), the
purchase price for the Investor Warrants shall be equal to the full purchase
price determined hereunder for the Stockholder Shares covered by the portion
of the Investor Warrants to be transferred, reduced by the aggregate exercise
price for such shares.
(c) PERMITTED TRANSFERS. The restrictions set forth in this
Section 4 shall not apply with respect to any Transfer of Stockholder Shares
by any Executive pursuant to applicable laws of descent and distribution or
among such Executive's Family Group (collectively referred to herein as
"PERMITTED TRANSFEREES"); provided that the restrictions contained in this
Section 4 shall continue to be applicable to the Stockholder Shares after any
such Transfer and provided further that such transferees of such Stockholder
Shares shall have agreed in writing to be bound by the provisions of this
Agreement affecting the Stockholder Shares so transferred to the same extent
and in the same manner as the transferor thereof was so bound (e.g., any
transferee of Stockholder Shares in a Transfer from an Executive shall be
subject to the obligations of an Executive hereunder).
(d) TERMINATION OF RESTRICTIONS. The restrictions on the
Transfer of Stockholder Shares set forth in this Section 4 shall continue
with respect to each Stockholder Share until the date on which such
Stockholder Share has been transferred in a Public Sale or a Sale of the
Company in accordance with Section 6.
5. LEGEND. Each certificate evidencing Stockholder Shares
and each certificate issued in exchange for or upon the transfer of any
Stockholder Shares (if such shares
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remain Stockholder Shares after such transfer) shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The securities represented by this certificate are
subject to a Stockholders Agreement dated as of
September 30, 1998 among the issuer of such
securities (the "Company") and certain of the
Company's stockholders, as amended and modified from
time to time. A copy of such Stockholders Agreement
shall be furnished without charge by the Company to
the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding as of the date hereof. The legend set forth above shall
be removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with paragraph 9 hereof.
6. DRAG-ALONG RIGHTS.
(a) Simultaneous with or at any time following exercise of
the Investor Warrants, the Majority Investor Holders shall have the right to
seek a Sale of the Company and identify a third party or parties to acquire
(i) all of the issued and outstanding capital stock of the Company (whether
by merger, consolidation or sale or transfer of stock) or (ii) all or
substantially all of the Company's assets on a consolidated basis. The
holder or holders proposing a Sale of the Company (the "PROPOSING
STOCKHOLDERS") shall notify the Company and the other Stockholders (the
"NON-PROPOSING STOCKHOLDERS") prior to initiating contact with any
prospective third party purchaser in connection with such transaction.
(b) ELECTION. The Proposing Stockholders shall deliver
written notice to the Company and the Non-Proposing Stockholders setting
forth in reasonable detail the terms of the proposed Sale of the Company (the
"SALE NOTICE"). Within 20 days following receipt of the Sale Notice (the
"ELECTION PERIOD"), the Non-Proposing Stockholders shall deliver to the
Company and the Proposing Stockholders written notice setting forth such
holders' election (i) to consent to and raise no objections against proposed
Sale of the Company, and if the Sale of the Company is structured as a sale
of stock, to sell their Stockholder Shares on the terms and conditions set
forth in the Sale Notice, or (ii) if such Non-Proposing Stockholders hold
more than 20% of the Stockholder Shares, to deliver a written offer (a
"STOCKHOLDER OFFER"), upon substantially the same terms as described in the
Sale Notice, to acquire the Company (a "STOCKHOLDER TRANSACTION"). If the
Non-Proposing Stockholders have not delivered a Stockholder Offer within such
20-day period, the Proposing Stockholders shall have 180 days after the
expiration of the Election Period to consummate the Sale of the Company, or
during which the Company may enter into an agreement providing for such a
sale, on the terms specified in the Sale Notice. If the Sale of the Company
is not consummated or the Company fails to enter into such an agreement
within such 180-day period, the Proposing Stockholders shall again comply
with the provisions of this Section 6. If the Non-Proposing Stockholders
have delivered a Stockholder
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Offer within the Election Period, the Non-Proposing Stockholders must (A)
obtain an executed definitive and binding agreement to consummate the
Stockholder Transaction and obtain binding commitments regarding the
financing thereof satisfactory in all respects to the Proposing Stockholders
both within 30 days after receipt by the Proposing Stockholders of the
Stockholder Offer and (B) must consummate the Stockholder Transaction within
120 days after receipt by the Proposing Stockholders of the Stockholder
Offer. If any of the conditions set forth in (A) or (B) of the preceding
sentence is not fulfilled, the Other Stockholders must again comply with the
provisions of this Section 6. The consummation of a Sale of the Company or a
Stockholder Transaction pursuant to this Section 6(b) shall be in accordance
with the provisions of the Texas Business Corporation Act.
(c) Upon consummation of the Sale of the Company hereunder,
all holders of Common Stock shall receive the same form and amount of
consideration per share of Common Stock, or if any holders of Common Stock as
such holders are given an option as to the form and consideration to be
received, all holders shall be given the same option.
7. PUT ARRANGEMENTS.
(a) At any time following the fifth anniversary of the date
hereof each holder of Investor Shares shall have the right to require the
Company to repurchase all or any portion of the such holder's Investor Shares
at the Put Price (the "PUT") by delivering a written notice to the Company
and each other holder of Investor Shares specifying the amount thereof to be
purchased (the "PUT NOTICE"). The right to exercise the Put shall inure to
the benefit of all transferees of the Investor Shares (other than transferees
in a Public Sale).
(b) Upon the delivery of the Put Notice, the Company and the
holder or holders of Investor Shares delivering the Put Notice (including
those specified in the last sentence of this Section 7(b), the "REQUESTING
HOLDERS") shall in good faith promptly determine the Put Price as provided
hereunder, and subject to the provisions hereof, within twenty (20) days
after the determination of the Put Price, the Company shall purchase and the
Requesting Holders shall sell the amount of such Requesting Holder's Investor
Shares specified in the Put Notice at a mutually agreeable time and place
(the "PUT CLOSING"). Upon receipt of any Put Notice, any other holder of
Investor Shares may, by written notice delivered to the Company within five
(5) business days after receiving such Put Notice specifying the number of
Investor Shares that such holder elects to include in such Put, elect to
participate in such Put, and upon delivery of such written notice each such
other holder shall be deemed to be a Requesting Holder.
(c) At the Put Closing, the Requesting Holders shall deliver
to the Company certificates and other instruments (if any) representing the
Investor Shares to be repurchased by the Company, and the Company shall
deliver to the Requesting Holders the Put Price by cashier's or certified
check payable to the Requesting Holders or by wire transfer of immediately
available funds to an account designated by the Requesting Holders; provided
that if, as the result of the payment in cash of the Put Price in accordance
with this Section 7(c), there will exist an Event of
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Default (as defined in each of the Purchase Agreement and the Loan Agreement)
and the Company shall have used its best efforts to obtain financing from an
outside source for payment of the Put Price, then the Company may pay the Put
Price by delivery (i) of cash (as provided above) up to the maximum portion
of the Put Price, the payment of which will not result in the occurrence or
existence of an Event of Default and (ii) a promissory note in a principal
amount equal to that portion of the Put Price not being paid pursuant to the
foregoing clause (i), payable in three successive annual installments, with
the first installment due on the first anniversary of the delivery of the Put
Notice, and otherwise containing terms substantially similar to the terms set
forth in the Company's 12% Senior Subordinated Notes. If the Requesting
Holder deliver to the Company all or any portion of the Investor Warrants in
satisfaction of the sale of the Investor's Stockholder Shares hereunder, the
Put Price shall be reduced by the aggregate exercise price of such portion of
the Warrants.
(d) The "PUT PRICE", as of any date, of any Requesting
Holder's Investor Shares to be repurchased hereunder shall be determined
based on a value of the Company's common stock equal to THE GREATER OF (i)
the product of 6.25, MULTIPLIED BY the Company's EBITDA for the trailing
12-month period (as defined in the Purchase Agreement) for its most recently
completed fiscal year as reflected on the Company's audited consolidated
income statement for such fiscal year, MINUS the Company's aggregate
principal amount of, plus accrued and unpaid interest on, outstanding
indebtedness as of such date MINUS the liquidation value of, plus accrued and
unpaid dividends, if any, on, the then outstanding preferred stock of the
Company, and (ii) the Market Value as of such date. The aggregate Put Price
payable to each Requesting Holder shall be equal to the amount which such
holder would receive with respect to the Investor Shares specified by such
holder in such holder's Put Notice in the event of a Sale of the Company for
an aggregate purchase price equal to the value attributable to the Company in
accordance with the foregoing sentence.
In calculating the Put Price, all accounting determinations
shall be made in accordance with generally accepted accounting principles
consistently applied.
(e) The Investors' right to exercise the Put hereunder shall
terminate upon the first to occur of (i) the 10th anniversary of the date of
this Agreement and (ii) a Sale of the Company.
8. TRANSFER. Prior to transferring any Stockholder Shares
(other than in a Public Sale or a Sale of the Company) to any Person, the
transferring Stockholder shall cause the prospective transferee to be bound
by this Agreement and to execute and deliver to the Company and the other
Stockholders a counterpart of this Agreement.
9. DEFINITIONS.
"CERTIFICATE OF DESIGNATION, SERIES A" means the Certification
of Designation, Series A, as approved by the Company's Board of Directors and
filed with the Secretary of the
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State of Texas as of September 30, 1998.
"COMMON STOCK" means the Company's Common Stock, par value $.01
per share.
"FAMILY GROUP" means an Executive's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of the
Executive and/or the Executive's spouse and/or descendants.
"INDEPENDENT THIRD PARTY" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Common Stock on a fully-diluted basis (a "5% OWNER"), who is not controlling,
controlled by or under common control with any such 5% Owner and who is not
the spouse or descendent (by birth or adoption) of any such 5% Owner or a
trust for the benefit of such 5% Owner and/or such other Persons.
"INVESTOR SHARES" means the Stockholder Shares issued to, or
issuable in respect of securities issued to, Continental Illinois Venture
Corporation or MIG Partners VIII at the Closing or thereafter.
"INVESTOR WARRANTS" means the stock purchase warrants issued to
the Investors under the Purchase Agreement exercisable into shares of Common
Stock.
"LOAN AGREEMENT" means the Second Amended and Restated
Revolving Credit and Loan Agreement, dated as of the date hereof, by and
between the Company and Comerica Bank-Texas, a Texas banking association.
"MARKET VALUE" means the fair market value of the Company's
entire common equity determined on a going concern basis as between a willing
buyer and a willing seller and taking into account all relevant factors
determinative of value. In determining the Market Value as of any date, the
Company and the Investors first shall use their respective reasonable best
efforts to agree on such Market Value. In the event that the Company and the
Investors are unable to agree on the Market Value as of such date within 15
days after delivery of the Put Notice, such Market Value shall be determined
by an investment banking firm selected by the Company and acceptable to the
Majority Investor Holders, which firm shall submit to the Company and the
Majority Investor Holders a written report setting forth such determination.
If the parties are unable to agree on an investment banking firm within 20
days after delivery of a Put Notice, a firm shall be selected by lot, after
the Company and the Majority Investor Holders have each eliminated one such
firm. The expenses of such firm shall be borne by the Company, and the
determination of such firm shall be final and binding upon all parties,
except that after the determination of Market Value following the exercise of
the Put, any Requesting Holder may rescind its exercise of such Put.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or
any department, agency or political subdivision
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thereof.
"PUBLIC SALE" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of
Rule 144 adopted under the Securities Act.
"SALE OF THE COMPANY" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to
which such party or parties acquire (i) capital stock of the Company
possessing the voting power under normal circumstances to elect a majority of
the Company's board of directors (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of
the Company's assets determined on a consolidated basis.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"STOCKHOLDER SHARES" means (i) any Common Stock purchased or
otherwise acquired by any Stockholder, (ii) any Common Stock issued or
issuable directly or indirectly upon exercise of the Investor Warrants,
warrants or options held by any Stockholder, (iii) any Common Stock issued or
issuable with respect to the securities referred to in clauses (i) and (ii)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization and (iv) any other shares of any class or series of capital
stock of the Company held by a Stockholder. For purposes of this Agreement,
any Person who holds Investor Warrants shall be deemed to be the holder of
the Stockholder Shares issuable directly or indirectly upon exercise of the
Investor Warrants in connection with the transfer thereof or otherwise and
regardless of any restriction or limitation on the exercise thereof. As to
any particular Stockholder Shares, such shares shall cease to be Stockholder
Shares when they have been (a) effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering
them or (b) distributed to the public through a broker, dealer or market
maker pursuant to Rule 144 under the Securities Act (or any similar provision
then in force).
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the limited liability
company, partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
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gains or losses or shall be or control the managing director or general
partner of such limited liability company, partnership, association or other
business entity.
10. CERTAIN PARTICIPATION RIGHTS. At least 10 days prior to
any repurchase by the Company of any Investor Shares, the Company will
deliver a written notice to the Executives holding Stockholder Shares
specifying in reasonable detail the terms and conditions of the contemplated
repurchase transaction (a "Company Repurchase Notice"). Any Executive may
elect to participate in the contemplated repurchase transaction with respect
to his or her Stockholder Shares by delivering written notice to the Company
within 10 days after delivery of the Company Repurchase Notice. If any
Executive elects to participate in the repurchase transaction, the Company
will repurchase from the holders of the Investor Shares and each electing
Executive, at the same price and on the same terms, a number of Stockholder
Shares equal to the product of (i) the quotient determined by dividing the
number of Stockholders Shares owned by the electing Executive(s) or the
holder of Investor Shares, as the case may be, by the aggregate number of
outstanding Stockholder Shares then owned, collectively, by the Investors and
the Executives, multiplied by (ii) the aggregate number of Stockholder Shares
to be repurchased by the Company in the proposed transaction.
11. TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be void, and the Company shall not record such Transfer
on its books or treat any purported transferee of such Stockholder Shares as
the owner of such shares for any purpose.
12. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this
Agreement shall be effective against the Company or the Stockholders unless
such modification, amendment or waiver is approved in writing by the Company
or the holders of at least a majority of the Stockholder Shares,
respectively. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions
and shall not affect the right of such party thereafter to enforce each and
every provision of this Agreement in accordance with its terms.
13. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other
provision of this Agreement in such jurisdiction or affect the validity,
legality or enforceability of any provision in any other jurisdiction, but
this Agreement shall be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been
contained herein.
14. ENTIRE AGREEMENT. Except as otherwise expressly set
forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings,
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agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
15. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the
Stockholders and any subsequent holders of Stockholder Shares and the
respective successors and assigns of each of them, so long as they hold
Stockholder Shares; provided that the rights of the Investors under paragraph
1 hereof may not be assigned without the prior written approval of any
Executive or Other Stockholder.
16. COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be an original and all of which
taken together shall constitute one and the same agreement.
17. REMEDIES. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically, to
recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights existing in their favor. The parties hereto
agree and acknowledge that money damages would not be an adequate remedy for
any breach of the provisions of this Agreement and that the Company and any
Stockholder may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
18. NOTICES. Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or mailed first
class mail (postage prepaid) or sent by reputable overnight courier service
(charges prepaid) to the Company at the address set forth below and to any
other recipient at the address indicated on the schedules hereto and to any
subsequent holder of Stockholder Shares subject to this Agreement at such
address as indicated by the Company's records, or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices shall be deemed to have been
given hereunder when delivered personally, three business days after deposit
in the U.S. mail and one business day after deposit with a reputable
overnight courier service prepaid for next-business day delivery. The
Company's address is:
▇▇▇▇▇▇▇▇▇ Sign Company
▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
19. GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF TEXAS
SHALL GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEABILITY OF THIS AGREEMENT
AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT
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TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE
STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION
OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
20. BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or legal
holiday in the state in which the Company's chief-executive office is
located, the time period shall automatically be extended to the business day
immediately following such Saturday, Sunday or legal holiday.
21. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
▇▇▇▇▇▇▇▇▇ SIGN COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, V.P.
-------------------------
Its VP, CFO
CONTINENTAL ILLINOIS VENTURE
CORPORATION
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Its Managing Director
MIG PARTNERS VIII
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Its Managing Director
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. St. Onge
------------------------
▇▇▇▇▇▇▇ ▇. St. ▇▇▇▇
SCHEDULE OF INVESTORS
NAME AND ADDRESS NUMBER OF STOCKHOLDER SHARES
---------------- ----------------------------
Continental Illinois Venture Corporation Warrants for 819,310 shares of
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MIG PARTNERS VIII Warrants for 204,827 shares of
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE OF EXECUTIVES
NAME AND ADDRESS NUMBER OF STOCKHOLDER SHARES
---------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 252,243 shares of Common Stock
8350 N. Central Expressway Warrants for 75,113 shares of
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ 61,823 shares of Common Stock
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Warrants for 52,864 shares of
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Option for 48,639 shares of
Common Stock
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 23,183 shares of Common Stock
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Warrants for 21,800 shares of
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Option for 22,956 shares of
Common Stock
▇▇▇▇ ▇▇▇▇▇▇ 15,455 shares of Common Stock
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Warrants for 5,396 shares of
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Option for 23,228 shares of
Common Stock
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 15,455 shares of Common Stock
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ Warrants for 5,396 shares of
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Option for 23,256 shares of
Common Stock
▇▇▇▇▇▇▇ St. ▇▇▇▇ Warrants for 13,208 shares of
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Option for 10,000 shares of
Common Stock