EXHIBIT 10.10
DMX ACQUISITION CORP.
STOCKHOLDERS AGREEMENT
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THIS AGREEMENT is made as of February 26, 1993, between DMX Acquisition
Corp., a Delaware corporation (the "Company"), the State Board of Administration
of Florida ("SBA"), Liberty Investment Partnership I, a Florida general
partnership ("LIP-I"), Liberty Capital Partners, Inc., a Delaware corporation
("Liberty"), Xxxxxxxx-Xxxxxxxx, Inc, ("Xxxxxxxx-Xxxxxxxx"), Xxxxxxx X. Xxxxxxx
("Xxxxxxx"), Xxxxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxxxx X. Kitchen ("Kitchen")
and Xxxxxx X. Xxxxxxx III ("Xxxxxxx" and collectively with Xxxxxxxx-Xxxxxxxx,
Xxxxxxx, Xxxxxxx and Kitchen, the "RH Investors"), each of the investors listed
on the Stockholders Schedule attached hereto (the "Investors") and each of the
executives listed on the Stockholders Schedule attached hereto (the
"Executives"), SBA and LIP-I are collectively referred to as the "Purchasers,"
and the Purchasers, the RH Investors, the Investors and the Executives are
collectively referred to as the "Stockholders" and individually as a
"Stockholder," Capitalized terms used herein are defined in paragraph 12 hereof.
The Company, the Stockholders and Liberty 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 and ownership of the Company and (iii) limiting the manner and terms
by which the Stockholders may transfer securities of the Company.
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. Prior Agreements, The Company, the Investors and the Executives are
parties to the Investment Agreement, dated as of September 4, 1991 (the
"Investment Agreement"), and the Shareholders' Agreement, dated as of September
4, 1991 (the "Shareholders' Agreement"), and desire that this Agreement
supersede certain provisions of the Investment Agreement and the Shareholders'
Agreement in its entirety. Upon the execution and delivery of this Agreement by
the Company, the provisions of Sections 7.1, 7.2, 7.3F 7.4p 7.5, 8.1, 8.2, 8.3,
9.9 and 9.10 of the Investment Agreement and all of the provisions of the
Shareholders' Agreement shall be superseded by this Agreement, and each Investor
and each Executive shall exercise all rights such Person may have under the
Investment Agreement and the Shareholders' Agreement so that the provisions of
this Agreement shall be fully performed and effectuated and that the operation
of the Investment Agreement and the Shareholders' Agreement shall not conflict
with or be inconsistent with the provisions of this Agreement, The Company
agrees to use its best efforts to cause each party to the Investment Agreement
and/or Shareholders' Agreement that has not become a party to this Agreement to
duly execute this Agreement as soon as possible and upon the due execution of
this Agreement by such parties the Shareholders' Agreement and the Sections of
the Investment Agreement returned to above shall terminate and shall be of no
further force or effect.
2. Board of Directors.
(a) From and after the date of this Agreement and until the
provisions of this paragraph 2 cease to be effective, each Stockholder shall
vote all of his Stockholder Shares that can be voted at the time of a particular
vote, notwithstanding the definition of Stockholder Shares, and any other voting
securities of the Company over which such Stockholder has voting control and
shall take all other reasonably necessary or desirable actions within his
control (whether in his 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 reasonably necessary and desirable actions within its
control (including, without limitation, calling special board and stockholder
meetings), so that:
(i) the authorized number of directors on the Board shall be
established at nine directors;
(ii) except as otherwise provided herein, the following
individuals shall be elected to the Board
(A) five representatives designated by Liberty (the
"Liberty Directors"), two of which shall be officers or employees of
Liberty and three of which shall be Qualified Representatives, shall
serve for one year terms and shall at the time of each election be
independent directors as reasonably determined in good faith by the
Executives holding a majority of the Stockholder Shares held by all
Executives at such time and by the Investor Director, provided, that
Xxx Xxxxxxxx shall serve as one of such three Qualified
Representatives for a one-year term commencing on the date hereof (and
shall not during such term be subject to removal pursuant to (iii)
below)
(B) one representative designated by the Investors,
determined by a vote of the Investors owning a majority of the
Stockholder Shares held by all Investors and who shall be reasonably
acceptable to Liberty at the time of each election (the "Investor
Director"), provided, that until the first annual meeting of the
Company's stockholders occurring on or after January 31, 1994, Xxxxxxx
X. Xxxxx shall serve as the Investor Director; and
(C) three of the Company" s officers 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 until the first annual meeting of the
Company's stockholders, Xxxxxx X. Xxxxxxxxxx, G. Xxxxxxx Xxxxxxx and
Xxxxxx X. Xxxxxxx shall serve as the Executive Directors;
(iii) the removal from the Board (with or without cause) of any
representative designated hereunder by Liberty, the Investors or the
Executives shall be at Liberty's, the Investors' or the Executives' written
request, respectively, (solely with respect to the representatives
designated by them) but only upon such written request and under no other
circumstances (in the case of the Investors and the Execu tives, 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)(C) above ceases to be an officer of the
Company, he shall be removed as a director promptly thereafter;
(iv) in the event that any representative designated hereunder
by Liberty, the Investors or the Executives ceases to serve as a director
during his term of office, the resulting vacancy on the Board shall be
filled by a representative designated by Liberty, the Investors or the
Executives, respectively, as provided hereunder; and
(v) the Board shall have at all times an audit committee, a
compensation committee and a nominating committee as standing committees,
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof. In addition, the Company may pay to each Liberty
Director who is not an officer or director of Liberty an annual fee of up to
$20,000. So long as any Liberty Director serves on the Board and for four years
thereafter, the Company shall maintain directors indemnity insurance coverage
reasonably satisfactory to Liberty in an amount of up to $5,000,000 prior to the
initial public offering of the Company's Common Stock registered under the
Securities Act and thereafter in an amount reasonable for a public company of
its size.
(c) The number of directors Liberty may designate under subparagraph
(a)(ii) above shall be reduced as set forth in the table below according to the
aggregate number of the Stockholder Shares the Purchasers and their Permitted
Transferees hold as a percentage of the aggregate number held by such Persons on
the date hereof:
Percentage of Original
Number of Directors Stockholder Shares Held
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5 80% or more
4 60% or more but less than 80%
3 40% or more but less than 60%
2 20% or more but less than 40%
1 10% or more but less than 20%
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Any reduction of directors shall first be applied to the Liberty Directors who
are not officers or employees of Liberty.
(d) The rights of the Investors under this paragraph 2 shall
terminate at such time as the Investors and their Permitted Transferees hold in
the aggregate less than 50% of the shares of the Stockholder Shares held by such
Persons on the date hereof,
(e) The rights of the Executives under this paragraph 2 shall
terminate at such time as the Executives and their Permitted Transferees hold in
the aggregate less than 50% of the shares of the Stockholder Shares held by such
Persons on the date hereof, provided that at such time, all directors which were
previously designated by the Executives shall be designated by Liberty and
approved by the Investor Director.
(f) The provisions of this paragraph 2 shall terminate automatically
and be of no further force and effect upon the tenth anniversary of the date of
this Agreement unless extended by the parties hereto in accordance with Section
218 of the Delaware General Corporation Law.
(g) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this paragraph 2. the election of an
individual to such directorship shall be accomplished in accordance with the
Company's bylaws and applicable law,
3. Irrevocable Proxy. In order to secure the obligations to vote
Stockholder Shares and other voting securities of the Company in accordance with
the provisions of paragraph 2 hereof, each Stockholder hereby appoints Liberty
as his or its true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote all of his Stockholder Shares and other voting securities
of the Company for the election and/or removal of directors and all such other
matters as expressly provided for in paragraph 2, Liberty may exercise the
irrevocable proxy granted to it hereunder at any time any Stockholder fails to
comply with the provisions of paragraph 2 of this Agreement. In order to secure
the obligations to vote Liberty's Stockholder Shares and other voting securities
of the Company in accordance with the provisions of paragraph 2 hereof, Liberty
hereby appoints each Person who is serving as the Investor Director (for so long
as any such Person is serving in such capacity) as its true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote all of its
Stockholder Shares and other voting securities of the Company for the election
and/or removal of directors and all such other matters as expressly provided for
in paragraph 2. Such Person may exercise the irrevocable proxy granted to it
hereunder at any time Liberty fails to comply with the provisions of paragraph 2
of this Agreement. The proxies and powers granted by each Stockholder pursuant
to this paragraph 3 are coupled with an interest and are given to secure the
performance of each such Stockholder's obligations under this Agreement. Such
proxies and powers shall be irrevocable for the term set forth in paragraph 2(f)
of this Agreement and shall survive the death, incompetency, disability,
bankruptcy or dissolution of such Stockholder and the subsequent holders of its
Stockholder Shares, except for transferees in connection with a Public Sale.
4. Representations and warranties. Each Stockholder represents and
warrants
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that (i) such Stockholder is the record owner of the number and type of
Stockholder Shares set forth opposite its name on the Stockholders Schedule
attached hereto, (ii) this Agreement has been duly authorized, executed and
delivered by such Stockholder and is a 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 which is inconsistent with, conflicts with or violates any
provision of 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.
5. Retention of Stockholder Shares. Until September 1, 1994, no Investor
or its Permitted Transferees, and until the Senior Debt has been repaid in full
and the Company and its Subsidiaries may no longer borrow Senior Debt from SBA
under the Senior Loan Agreement, no Executive or its Permitted Transferees,
shall sell, transfer, assign, pledge or otherwise dispose of any Stockholder
Shares held by such Investor or its Permitted Transferees or Executive or its
Permitted Transferees on the date hereof or hereafter acquired, except pursuant
to a Sale of the Company or a Public Sale; provided that nothing contained in
this paragraph 5 shall prohibit any Investor or Executive from transferring
Stockholder Shares as permitted by paragraph 6(d) hereof.
6. Restrictions on Transfer of Stockholder Shares.
(a) Transfer of Stockholder Shares. No Stockholder shall sell,
transfer, assign, pledge or otherwise dispose of (a "Transfer") any interest in
any Stockholder Shares except pursuant to the provisions of this paragraph 6.
pursuant to the provisions of paragraph 7 or 10 hereof (an "Exempt Transfer") or
pursuant to a Public Sale. Each Stockholder agrees not to consulate any Transfer
(other than an Exempt Transfer or a Public Sale) until 30 days after the later
of the delivery to the Company and the other Stockholders of such Stockholder's
Offer Notice or Sale Notice (if any), unless the parties to the Transfer have
been finally determined pursuant to this paragraph 6 prior to the expiration of
such 30-day period (the "Election Period").
(b) First Offer Right. At least 30 days prior to making any Transfer
of any Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
transferring Stockholder (the "Transferring Stockholder") shall deliver a
written notice (an "Offer Notice") to the Company and the other Stockholders
(the "Other Stockholders"). The Offer Notice shall disclose in reasonable detail
the proposed number of Stockholder Shares to be transferred and the proposed
terms and conditions of the Transfer, and if the Transferring Shareholder has
identified or had any discussions with any prospective transferee the Offer
Notice shall also disclose the identity of the prospective transferees) (the
purchase price specified in any Offer Notice shall be payable solely in cash at
the closing of the transaction or installments over time, and no Stockholder
Shares may be pledged), First, the Company may elect to purchase all (but not
less than all) of the Stockholder Shares specified in the Offer Notice at the
price and on the terms specified therein by delivering written notice of such
election to the Transferring Stockholders and the Other Stockholders as soon as
practical but in any event within ten days after the delivery of the Offer
Notice. If the Company has not elected to purchase all of the Stockholder Shares
within such ten-day period, the Other Stockholders may elect to purchase all
(but not less than all) of such Stockholder Shares at the price
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and on the terms specified in the Offer Notice by delivering written notice of
such election to the Transferring Stockholder as soon as practical, but in any
event within 20 days after delivery of the Offer Notice. If the Other
Stockholders have in the aggregate elected to purchase more than the number of
Stockholder Shares being offered by the Transferring Stockholder, the
Stockholder Shares shall be allocated among the Other Stockholders electing to
purchase shares according to each such Stockholder's Pro Rata Share, If the
Company or any Other Stockholders have elected to purchase Stockholder Shares
from the Transferring Stockholder, the transfer of such shares shall be
consummated as soon as practical after the delivery of the election notice(s) to
the Transferring Stockholder, but in any event within 15 days after the
expiration of the Election Period. To the extent that the Company and the Other
Stockholders have not elected to purchase all of the Stockholder Shares being
offered, the Transferring Stockholder may, within 90 days after the expiration
of the Election Period and subject to the provisions of subparagraph (c) below,
transfer all such Stockholder Shares to one or more third parties at a price no
less than 95% of the price per share specified in the offer Notice and on other
terms no more favorable to the transferees thereof than offered to the Company
and the Other Stockholders in the Offer Notice. Any Stockholder Shares not
transferred within such 90-day period shall be reoffered to the Company and the
Other Stockholders prior to any subsequent Transfer. Each Stockholder's "Pro
Rata Share" shall be based upon such Stockholder's proportionate ownership of
all Stockholder Shares on a fully-diluted basis.
(c) Participation Rights. At least 30 days prior to any Transfer of
Stockholder Shares (other than an Exempt Transfer or a Public Sale), the
Stockholder making such Transfer (the "Transferring Stockholder") shall deliver
a written notice (the "Sale Notice") to the Company and the other Stockholders
(the "Other Stockholders"), specifying in reasonable detail the identity of the
prospective transferees), the number of shares to be transferred and the terms
and conditions of the Transfer. The Other Stockholders may elect to participate
in the contemplated Transfer by delivering written notice to the Transferring
Stockholder within 15 days after delivery of the Sale Notice. If any Other
Stockholders have elected to participate in such Transfer, the Transferring
Stockholder and such Other Stockholders 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 Stock
holder and the Other Stockholders participating in such sale and (ii) the number
of Stockholder Shares to be sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100 Stockholder
Shares by the Transferring Stockholder, and if the Trans ferring
Stockholder at such time owns 30% of all Stockholder Shares and if one
Other Stockholder elects to participate and owns 20% of all
Stockholder Shares, the Transferring Stockholder would be entitled to
sell 60 shares (30% / 50% x 100 shares) and the Other Stockholder
would be entitled to sell 40 shares (20% / 50% x 100 shares).
Each Stockholder shall use best efforts to obtain the agreement of the
prospective transferees) to the
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participation of the Other Stockholders in any contemplated Transfer and to the
inclusion of the Preferred Stock and the Warrants in the contemplated Transfer,
and each Stockholder shall not transfer any of its Stockholder Shares to any
prospective transferee if such prospective transferee declines to allow the
participation of the Other Stockholders or the inclusion of the Preferred Stock
or the Warrants. If any portion of the Warrants is included in any Transfer of
Stockholder Shares under this subparagraph 6(c), the purchase price for the
Warrants shall be equal to the full purchase price determined hereunder for the
Stockholder Shares covered by the portion of the Warrants to be transferred,
reduced by the aggregate exercise price for such shares.
(d) Permitted Transfers. The restrictions set forth in this paragraph
6 shall not apply with respect to any Transfer of Stockholder Shares by any
Stockholder (i) to the Company, (ii) to any other Stockholder (or to a Person
that is a Permitted Transferee of such Stockholder) (iii) in the case of an
individual, pursuant to applicable laws of descent and distribution or among
such individuals Family Group or (iv) in the case of Liberty or the Investors,
to any of the Affiliates of Liberty or the Investors or any of the employees,
partners, officers or directors of Liberty or the Investors, respectively
(collectively referred to herein as "Permitted Transferees"); provided that the
restrictions contained in this paragraph 6 shall continue to be applicable to
the Stockholder Shares after any such Transfer and provided further that the
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 and by the provisions of the Registration Agreement of even date
herewith by and among the Company and the parties hereto (the "Registration
Agreement").
In addition, the restrictions on transfer set forth in this paragraph 6
shall not apply with respect to any Transfer of Stockholder Shares by SBA in
connection with the assignment or disposition of all or any portion of the
Senior Debt or the Subordinated Debt; provided that any transferee thereof has
agreed in writing to be bound by the provisions of this Agreement affecting the
Stockholder Shares so transferred (a "Permitted Transferee").
(e) Termination of Restrictions. The restrictions on the Transfer of
Stockholder Shares set forth in this paragraph 6 shall continue with respect to
each Stockholder Share until the first to occur of (i) the date on which such
Stockholder Share has been transferred in a Public Sale or (ii) a Qualified
Public offering.
7. Sale of Company.
(a) Third Party Transaction. At any time after the date of this
Agreement, any holder or holders of more than 75% of the Stockholder Shares, and
at any time after February 28, 1995, any holder or holders of more than 51% of
the Stockholder Shares, shall have the right to seek a Sale of the Company and
produce an Independent Third Party or Independent Third 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 "Other Stockholders") prior to
commencing any actions in connection with such transaction.
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(b) Election. The Proposing Stockholders shall deliver written notice
to the Company and the Other Stockholders setting forth in reasonable detail the
terms of the proposed Sale of the Company (the "Sale Notice"). Within 15 days
following delivery of the Sale Notice (the "Election Period"), each Other
Stockholder shall deliver to the Company and the Proposing Stockholders written
notice setting forth such holder's election (i) to consent to and raise no
objections against the transaction described in the Sale Notice, 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
Other Stockholder or 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 Other Stockholders have not delivered a Stockholder Offer
within the Election Period, the Proposing Stockholders shall have 180 days after
the expiration of the Election Period to consulate the Sale of the Company on
the terms specified in the Sale Notice. If the Sale of the Company is not
consummated within such 180-day period, the Proposing Stockholders shall comply
with the provisions of this paragraph 7 for any subsequent Sale of the Company,
If the Other Stockholders have delivered a Stockholder Offer within the Election
Period, the Other Stockholders must (A) obtain an executed definitive and
binding agreement to consummate the Stockholder Transaction and obtain binding
commitments from reputable sources for the financing thereof both within 30 days
after delivery to the Proposing Stockholder of the Stockholder Offer and (B)
consummate the Stockholder Transaction within 120 days after delivery to the
Proposing Stockholder of the Stockholder Offer. If any condition set forth in
(A) or (B) of the preceding sentence is not fulfilled, the Other Stockholders
shall comply with the provisions of this paragraph 7 for any subsequent Sale of
the Company.
(c) Conditions to Obligation. The obligations of the Other
Stockholders to participate in or make an alternative offer to any Sale of the
Company hereunder are subject to the satisfaction of the following conditions:
(i) upon consummation of the Sale of the Company hereunder, all holders of
Common Stock or Preferred Stock shall receive the same form and amount of
consideration per share of Common Stock or Preferred Stock, respectively
(including for this purpose amounts allocated to noncompetition, consulting and
other arrangements), or if the holders of Common Stock or Preferred Stock are
given an option as to the form and consideration to be received, all such
holders shall be given the same option; (ii) the consideration per share of
Common Stock (assuming the conversion of all convertible securities and the
exercise of all rights to acquire Common Stock including Executive Options) to
be paid upon consummation of the Sale of the Company shall equal or exceed a
cash amount of $10.00 (as such price is equitably adjusted for subsequent stock
splits, stock combinations, stock dividends and recapitalizations) and (iii)
none of the Other Stockholders shall be required to agree to indemnify or hold
harmless the acquiring party with respect to an amount in excess of the not cash
proceeds paid to such Other Stockholder in the Sale of the Company.
8. Legend. Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stock holder Shares after such transfer) shall be
stamped or otherwise imprinted with a legend in
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substantially the following form:
"The securities represented by this certificate are subject to a
Stockholders Agreement dated as of February 26, 1993, 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 11 hereof.
9. Transfer. Prior to transferring any Stockholder Shares (other than
in an Exempt Transfer or a Public Sale) 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 and the Registration Agreement.
10. Repurchase Option.
(a) In the event any Executive ceases to be employed by the Company
and its Subsidiaries prior to February 25, 1995, other than as a result of such
Executive's death or disability as determined by the Board in its good faith
judgment (a "Termination"), the Shareholder Shares owned by such Executive
(whether held by Executive or one or more of Executive's transferees) (each, an
"Executive Share") shall be subject to repurchase by the Company and the
Stockholders pursuant to the terms and conditions set forth in this paragraph 10
(the "Repurchase Option").
(b) In the event the Termination is as a result of the dismissal of
Executive without Cause or the resignation of Executive with Good Reason, only
the Executive Shares acquired upon exercise of the Executive's Executive Options
shall be subject to repurchase hereunder, and the purchase price for each
Executive Share shall be the greater of Original Cost or Book Value for such
share; provided, however, that if such Termination is without Cause, such
Executive Shares shall be subject to repurchase hereunder only if such
repurchase is approved by a majority of the Board (with the affirmative vote of
at least one Executive Director). In addition, in the event of such a
Termination, the Executive's unexercised Executive Options shall expire within
90 days.
(c) In the event the Termination is as a result of the dismissal of
Executive for Cause or the resignation of Executive without Good Reason, all of
the Executive's Executive Shares shall be subject to repurchase hereunder, and
the purchase price for each Executive Share will be Executive's Original Cost
for such share (with shares having the lowest cost subject to repurchase prior
to shares with a higher cost), In addition, in the event of such a Termination,
the Executive's unexercised Executive Options shall expire immediately upon such
Termination.
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(d) The Board may elect to purchase all or any portion of the
Executive Shares that become subject to the Repurchase option by delivering
written notice (the "Repurchase Notice") to the holder or holders of such
Executive Shares within 180 days after the Termination, or such longer period as
is required to determine the reason for the Termination (the "Option Period").
The Repurchase Notice shall set forth the number of such Executive Shares to be
acquired from each holder, the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction. The number of
shares to be repurchased by the Company shall first be satisfied to the extent
possible from the Executive Shares held by Executive at the time of delivery of
the Repurchase Notice. If the number of Executive Shares then held by Executive
is less than the total number of Executive Shares the Company has elected to
purchase, the Company shall purchase the remaining shares elected to be
purchased from the other holder(s) of Executive Shares under this Agreement, pro
rata according to the number of Executive Shares held by such other holder(s) at
the time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share). The number of Executive Shares to be
repurchased hereunder will be allocated among Executive and the other holders of
such shares (if any) pro rata according to the number of shares to be purchased
from such persons.
(e) If for any reason the Company does not elect to purchase all of
the Executive Shares that become subject to the Repurchase Option pursuant to
the Repurchase Option, the Stockholders shall be entitled to exercise the
Repurchase option for the shares the Company has not elected to purchase (the
"Available Shares"). As soon as practicable after the Company has determined
that there shall be Available Shares, but in any event within 45 days after the
expiration of the Option Period, the Company shall give written notice (the
"Option Notice") to the Stockholders setting forth the number of Available
Shares and the purchase price for the Available Shares. The Stockholders may
elect to purchase any or all of the Available Shares by giving written notice to
the Company within 30 days after the Option Notice has been given by the
Company. If the Stockholders elect to purchase an aggregate number of shares
greater than the number of Available Shares, the Available Shares shall be
allocated among the Stockholders based upon the number of shares requested to be
purchased by each Stockholder, As soon as practicable, and in any event within
ten days after the expiration of the 30-day period set forth above, the Company
shall notify each holder of Executive Shares subject to the Repurchase Option as
to the number of shares being purchased from such holder by the Investors (the
"Supplemental Repurchase Notice"). At the time the Company delivers the
Supplemental Repurchase Notice to the holder(s) of such shares, the Company
shall also deliver written notice to each Stockholder setting forth the number
of shares such Stockholder is entitled to purchase, the aggregate purchase price
and the time and place of the closing of the transaction.
(f) The closing of the purchase of Executive Shares pursuant to the
Repurchase Option shall take place on the date designated by the Company in the
Repurchase Notice or Supplemental Repurchase Notice, which date shall not be
more than 60 days nor less than five days after the delivery of the later of
either such notice to be delivered. The Company and/or the Stockholders will
pay for the Executive Shares to be purchased pursuant to the Repurchase Option
by delivery of, in the case of each Stockholder, a check or wire transfer of
funds and, in the case of
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the Company, (i) a check or wire transfer of funds, (ii) a subordinate note or
notes payable in up to, three equal annual installments beginning on the first
anniversary of the closing of such purchase and bearing interest (payable
quarterly) at a rate per annum equal to the prime rate announced from time to
time by Citibank, N.A. or (iii) both (i) and (ii) , in the aggregate amount of
the purchase price for such shares; provided that the Company shall use
reasonable efforts to make all such repurchases with a check or wire transfer of
funds, Any notes issued by the Company pursuant to this paragraph 10(e) shall be
subject to any restrictive covenants to which the Company is subject at the time
of such purchase.
(g) The right of the Company and the Stockholder to repurchase
Executive Shares pursuant to this paragraph 10 shall terminate upon the first to
occur of the Sale of the Company or a Qualified Public Offering.
(h) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Executive Shares by the Company shall be subject
to applicable restrictions contained in the Delaware General Corporation Law and
in the Company's and its Subsidiaries debt and equity financing agreements. If
any such restrictions prohibit the repurchase of Executive Shares hereunder
which the Company is otherwise entitled or required to make, the Company may
make such repurchases as soon as it is permitted to do so under such
restrictions.
10A. Executive Options.
(a) The Company, the Investors and the Executives hereby agree that
promptly after the date hereof, the Executive Options shall be amended to
conform to the provisions of this paragraph 10A.
(b) An aggregate of 333,333 shares of Common Stock remain subject to
unexercised Executive Options, Notwithstanding anything to the contrary
contained in plans and agreements related to the Executive options, the
Executive Options shall become exercisable in accordance with the following
schedule:
For the fiscal year ending in February 1994
-------------------------------------------
Option Shares
TARGET Become Exercisable
------ -----------------
EBITA of at least $20 million 166,667
EBITA of at least $18.5 million 83,334
(pro rate number of shares for EBITA between $18.5 million and $20 million)
For the fiscal year ending in February 1995
-------------------------------------------
-11-
TARGET Option Shares
------ Become Exercisable
------------------
EBITA of at least $22 million 166,666
EBITA of at least $20 million 83,334
(pro rate number of shares for EBITA between $20 million and $22 million)
(c) If any Executive Options have not become exercisable pursuant to
subparagraph (b) above, the Executive Options shall become exercisable on a
cumulative basis in accordance with the following schedule:
For the two consecutive fiscal years ending in February 1995
------------------------------------------------------------
Cumulative Option
Shares Become
TARGET Exercisable
------ -----------------
Cumulative EBITA of at least $42 million 333,333
Cumulative EBITA of at least $38.5 million 166,667
(pro rate number of shares of EBITA between $38.5 million and $42 million)
(d) All exercisable option shares shall be allocated among the
holders of Executive Options on a pro rata basis. For purposes of this
Agreement, "EBITA" shall mean the net after-tax income of the Company and its
Subsidiaries for the fiscal year in question plus all interest expense,
provision for income taxes and amortization of intangibles for such year,
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied.
(e) Notwithstanding the provisions of subparagraph (b) above, all of
the Executive Options shall become exercisable immediately upon the occurrence
of any one of the following events prior to February 26, 1998:
(i) a Sale of the Company which results in a price per share of
Common Stock on a fully-diluted basis (assuming conversion of all
convertible securities and exercise of all then exercisable rights to
acquire Common Stock, including all of the Executive Options) of at least
$15 (as such amount is equitably adjusted for subsequent stock splits,
stock combinations, dividends and recapitalizations);
(ii) a Sale of the Company pursuant to the provisions of
-12-
paragraph 7 hereof (provided that none of the Executives are Proposing
Stockholders) which results in a price per share of Common Stock on a
fully-diluted basis (assuming conversion of all convertible securities and
exercise of all then exercisable rights to acquire Common Stock, including
all of the Executive Options) of at least $10 (as such amount is equitably
adjusted for subsequent stock splits, stock combinations, stock dividends
and recapitalizations) and if the Company's EBITA for the twelve-month
period immediately preceding the delivery of the Sale Notice under
paragraph 7 is at least $20 million.
(iii) the consummation of an underwritten public offering of the
Common Stock registered under the Securities Act and following such
offering the closing price of the Common Stock (or if there is no closing
price, the average of the closing bid and ask prices) is at least $15 per
share (as such amount is equitably adjusted for subsequent stock splits,
stock combinations, stock dividends and recapitalizations) for 60
consecutive trading days; or
(iv) the payment in full of all of the obligations owed under
the Senior Loan Agreement (and any refinancings or replacements thereof)
and the Subordinated Loan Agreement (and any refinancings or replacements
thereof) and the termination of all obligations to advance funds
thereunder.
11. First Refusal Rights.
(a) Except for issuances of (i) Common Stock issued to the Company's
employees upon exercise of stock options (provided that this exception shall
apply only with respect to stock options for no more than 250,000 shares of
Common Stock in the aggregate, as equitably adjusted for stock dividends, stock
splits, combinations of shares or recapitalizations occurring after the date
hereof), (ii) Common Stock issued upon the conversion of the Preferred Stock or
the exercise of the Warrants, (iii) Common Stock issued to the seller in
connection with the acquisition of another company or business, (iv) Common
Stock issued pursuant to a public offering registered under the Securities Act,
(v) warrants and the Common Stock issuable thereunder (and securities issuable
pursuant thereto) granted or sold in connection with the refinancing of the
Senior Debt and/or Subordinated Debt to the lender or lenders providing the new
debt, if the Company authorizes the issuance or sale of any equity securities or
any securities containing options or rights to acquire any equity securities
(other than as a dividend on the outstanding Common Stock) or (vi) Preferred
Stock issued upon exercise of the Series A Warrants or the Warrants, the Company
shall first offer to sell to each holder of Stockholder Shares a portion of such
equity securities of the Company equal to the quotient determined by dividing
(1) the number of shares of Stockholder Shares held by such holder by (2) the
total number of shares of Stockholder Shares. Each holder of Stockholder Shares
shall be entitled to purchase such stock or securities at the most favorable
price and on the most favorable terms as such stock or securities are to be
offered to any other Persons; provided that if all Persons entitled to purchase
or receive such stock or securities are required to also purchase other
securities of the Company, the holders of Stockholder Shares exercising their
rights pursuant to this paragraph shall also be required to purchase the same
strip of securities (on the same terms and
-13-
conditions) that such other Persons are required to purchase. The purchase price
for all stock and securities offered to the holders of the Stockholder Shares
shall be payable in cash or, to the extent otherwise required hereunder, notes
issued by such holders.
(b) In order to exercise its purchase rights hereunder, a holder of
Stockholder Shares must within 15 days after receipt of written notice from the
Company describing in reasonable detail the stock or securities being offered,
the purchase price thereof, the payment terms and such holder's percentage
allotment deliver a written notice to the Company describing its election
hereunder. If all of the stock and securities offered to the holders of
Stockholder Shares is not fully subscribed by such holders, the remaining stock
and securities shall be reoffered by the Company to the holders purchasing their
full allotment upon the terms set forth in this paragraph, except that such
holders must exercise their purchase rights within five days after receipt of
such reoffer.
(c) Upon the expiration of the offering periods described above, the
Company shall be entitled to sell such stock or securities which the holders of
Stockholder Shares have not elected to purchase during the 90 days following
such expiration on terms and conditions no more favorable to the purchasers
thereof than those offered to such holders. Any stock or securities offered or
sold by the Company after such 90-day period must first be reoffered to the
holders of Stockholder Shares pursuant to the terms of this paragraph.
(d) The rights of the holders of Stockholder Shares under this
paragraph shall terminate upon a Qualified Public Offering.
(e) The rights of the holders of Stockholder Shares under this
paragraph 11 may be amended and waived with respect to all such Persons by the
holders of a majority of the Stockholder Shares.
12. Definitions.
"Affiliate" of any Person means any other Person controlling, controlled by
or under common control with such Person and any partner of a Stockholder which
is a partnership.
"Board" has the meaning set forth in the preamble.
"Book Value" of each Executive Share shall be equal to the quotient
determined by dividing (A) the excess of Company's assets over its liabilities
as of the end of the fiscal year immediately preceding the date of Executive's
Termination, determined on a consolidated basis in accordance with generally
accepted accounting principles, consistently applied, less the liquidation value
of all outstanding preferred stock, by (B) the total number of shares of Common
Stock outstanding on a fully-diluted basis (including in such calculation the
aggregate conversion price and exercise price of all outstanding convertible
securities, options and warrants). Notwithstanding the foregoing, the
calculation of Book Value will be made without taking into account (i) the
allocation of the cost of the "acquired enterprise" to the assets acquired and
the liabilities assumed required or
-14-
permitted by Accounting Principles Board Opinions No. 16 and No, 17 as a result
of the Acquisition (as defined in the Senior Loan Agreement) or (ii) the
amortization of goodwill, debt discount or financing costs related to such
acquisition, and the excess of the cost of the "acquired enterprise" over the
historical book value of the acquired assets immediately prior to the
acquisition shall be allocated to and classified as goodwill solely for such
purposes hereunder.
"Cause" means with respect to any Executive (a) the Executive committing
any act of fraud or embezzlement in the performance of his duties or is
convicted of a felony, (b) the Executive's dishonesty or serious misconduct in
relation to any aspect of the business of the Company or its subsidiaries, or
other conduct by the Executive calculated or likely to bring himself, the
Company or its Subsidiaries into disrepute or to materially damage or materially
affect prejudicially the interests of the Company or its Subsidiaries, which
other conduct, if remediable, is not remedied by such Executive within 90 days
after his receipt of notice from the Company advising him of such conduct and
instructing him on what he must do to remedy such conduct, or (c) the
Executive's insubordination or failure to follow the reasonable directions of
the Board which causes material damage to the Company or its Subsidiaries and
such damage, if curable, remains uncured 90 days after receipt by such Executive
of notice thereof from the Company and instructions on what the Executive must
do to cure such conduct. Should the Executive dispute whether his dismissal is
for Cause, then after a period of 30 days, during which the Company and the
Executive shall negotiate in good faith to settle the dispute, the parties shall
enter immediately into binding arbitration pursuant to the rules of the American
Arbitration Association, the costs of which shall be borne by the non-prevailing
party.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Company" has the meaning set forth in the preamble.
"Executive Directors" has the meaning set forth in paragraph 2(a).
"Executive Options" means the stock options granted to the Executives on
September 4, 1991 which have not been exercised as of the date hereof (which
stock options are exercisable into an aggregate of 333,333 shares of Common
Stock).
"Executives" has the meaning set forth in the preamble.
"Family Group" means an individual's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of the individual
and/or the individual's spouse and/or descendants or any of them.
"Good Reason" means with respect to any Executive circumstances whereby
such Executive, without Cause, is removed from or not reelected as an officer of
the Company or Datamax and does not remain employed by the Company or Datamax
(i) in an executive capacity, reporting directly to the chief executive officer
of the Company or Datamax and in charge of a principal business function such
as, but not limited to, engineering or product development or
-15-
manufacturing, and (ii) at a salary at least equal to his then current salary.
Should any Executive dispute for any purpose under this Agreement whether or not
he resigned with Good Reason, then after a period of 30 days, during which the
Company and the Executive shall negotiate in good faith to settle the dispute,
the Company and the Executive shall enter immediately into binding arbitration
pursuant to the rules of the American Arbitration Association, the costs of
which shall be borne by the non-prevailing party.
"Independent Third Party" means any Person who, immediately prior to the
contemplated transaction, does not own in excess of 5% of the Company's 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 or any Affiliate of such
Person.
"Investor Director" has the meaning set forth in paragraph 2(a).
"Investors" has the meaning set forth in the preamble.
"Liberty" has the meaning set forth in the preamble.
"Liberty Directors" has the meaning set forth in paragraph 2(a).
"Permitted Transferee" has the meaning set forth in paragraph 6(d) hereof.
"Person" means an individual, a partnership, a corporation, 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
thereof.
"Preferred Stock" means the Series A Preferred and the Series B Preferred.
"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.
"Qualified Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of shares of the Company's Common
Stock having an aggregate offering value of at least $18 million and a price per
share of Common Stock of at least $10 (as adjusted for stock dividends, stock
splits, combinations of shares or recapitalizations occurring after the date
hereof).
"Qualified Representative" shall mean any person who (A) is not a Related
Person; and (B) does not have, nor any member of such person's family whether by
marriage or otherwise have, any beneficial interest in, directly or indirectly,
any Related Entity.
-16-
"Related Entity" shall mean (i) Liberty Investment Partnership II (ii)
Liberty Capital Partners, Inc., (iii) the State Board of Administration of
Florida, (iv) any entity (other than an Investor) which owns, directly or
indirectly, any equity or debt securities of the Company or any of its
subsidiaries and (v) any entity which is an affiliate of any of the entities
referred to in clauses (i), (ii), (iii) or (iv) above.
"Related Person" shall mean any person who is a director, officer,
employee, partner, shareholder of, or holder of any debt or equity interest in a
Related Entity.
"RH Investors" has the meaning set forth in the preamble.
"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) 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 determined on a consolidated
basis.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Senior Debt" means all of the indebtedness owed by the Company and its
Subsidiaries to SBA under the Senior Loan Agreement, dated as of February 26,
1993 (the "Senior Loan Agreement"), and the related agreements and instruments
entered into in connection therewith, each as amended, modified and supplemented
from time to time.
"Series A Preferred" means the Company's Series A Preferred Stock, par
value $.01 per share.
"Series A Warrants" means the stock purchase warrants issued on September
4, 1991, exercisable into shares of Series A Preferred.
"Series B Preferred" means the Company's Series B Preferred Stock, par
value $.01 per share.
"Series B Warrants" means the stock purchase warrants issued on February
26, 1993, exercisable into shares of Series B Preferred.
"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 Warrants and the Series A Warrants, (iii) any
Common Stock issued or issuable directly or indirectly upon conversion of the
Preferred Stock, (iv) any Common Stock issued or issuable upon exercise of the
Executive Options and (v) any Common Stock issued or issuable with respect to
the securities referred to in clauses (i), (ii)f (iii) or (iv) above by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes
of this Agreement, any Person who holds Warrants, Series A Warrants,
-17-
Preferred Stock or Executive Options shall be deemed to be the holder of the
Stockholder Shares issuable directly or indirectly upon exercise or conversion
thereof, regardless of any restriction or limitation on the exercise or
conversion thereof, and such securities shall be subject to the provisions of
this Agreement as Stockholder Shares. 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).
"Stockholders" has the meaning set forth in the preamble.
"Subordinated Debt" means all of the indebtedness owed by the Company
and its Subsidiaries to SBA under the Subordinated Loan Agreement, dated as of
February 26, 1993, and the related agreements and instruments entered into in
connection therewith, each as amended, modified and supplemented from time to
time.
"Subsidiary" means, with respect to any Person, any corporation,
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 partnership, association or other
business entity, a majority of the 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 partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
"Transfer" has the meaning set forth in paragraph 5(a).
"Warrants" means the Series B Warrant and the stock purchase warrants
exercisable into shares of Common Stock issued to the Purchasers in connection
with the incurrence of the Senior Debt and the Subordinated Debt and the
issuance to the Purchasers of the Series B Preferred and the Common Stock.
13 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.
14 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
made or be effective against the Company, Liberty or any Stockholder unless such
modification, amendment or waiver
-18-
is approved in writing (i) in the case of the Company, by the Company, (ii) in
the case of Liberty, by Liberty, (iii) in the case of the Purchasers and their
Permitted Transferees, by the Purchasers and their Permitted Transferees holding
a majority of the Stockholder Shares held by such Persons, (iv) in the case of
the Investors and their Permitted Transferees, by the Investors and their
Permitted Transferees holding a majority of the Stockholder Shares held by such
Persons, (v) in the case of the Executives and their Permitted Transferees, by
the Executives and their Permitted Transferees holding a majority of the
Stockholder Shares held by such Persons, and (vi) in the case of the RH
Investors and all other Persons, by the holders of a majority of the Stockholder
Shares, 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.
15 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
any other provision or 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.
16 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, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
17 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, Liberty 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.
18 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.
19 Remedies. The Company, Liberty 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, Liberty or 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.
-19-
20 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 or Liberty at their respective address set forth below
and to any other recipient at the address indicated on the Stockholder Schedule
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 days after deposit
in the U.S. mail and one day after deposit with a reputable overnight courier
service. The Company's address and Liberty's address are as follows:
The Company Liberty
(prior to June 1, 1993)
DMX Acquisition Corp.
0000 Xxxxxxx Xxxxxxxx Xxxx. Liberty Capital Partners, Inc.
Xxxxxxx, Xxxxxxx 00000 000 Xxxx Xxxxxx
Xxxxxxxxx: President 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
(on and after June 1, 1993)
Liberty Capital Partners, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: President
21 Governing Law. The corporate law of the State of Delaware 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 Florida, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
22 Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
23 Affiliate Transactions. The Company hereby agrees not to and the
Company hereby agrees not to permit any of its subsidiaries to, enter into any
transaction with any Person who is a Stockholder of the Company or holder of any
security of the Company or any Affiliate of such Stockholder or holder or any
Person who is an officer, director, partner or employee of such Stockholder or
holder unless such transaction is approved by the Board.
-20-
24 Issuances of Preferred Stock. The Company shall not, without the
prior written consent of the holders of Series B Warrants representing a
majority of the shares of Series B Preferred issuable upon exercise of the
Series B Warrants, issue any shares of Series A Preferred at a price per share
lower than the exercise price in effect immediately prior to such issuance under
the Series A Warrants and the Company shall not, without the prior written
consent of the holders of Series A Warrants representing a majority of the
Series A Preferred issuable upon exercise of the Series A Warrants, issue any
shares of Series B Preferred at a price per share lower than the exercise price
in effect immediately prior to such issuance under the Series B Warrants.
* * * * * *
-21-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
DMX ACQUISITION CORP.
By______________________________________
Its ____________________________________
STATE BOARD OF ADMINISTRATION OF FLORIDA
By______________________________________
Its Attorney-in-Fact
LIBERTY INVESTMENT PARTNERSHIP I
By______________________________________
Its ____________________________________
LIBERTY CAPITAL PARTNERS, INC.
By______________________________________
Its ____________________________________
XXXXXXX A.M. BURDEN & CO.
By______________________________________
Its ____________________________________
________________________________________
X. Xxxxxxx Hartmah, Jr.
________________________________________
Xxxxxx X. Xxxxxxxxx
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
DMX ACQUISITION CORP
By______________________________________
Its ____________________________________
STATE BOARD OF ADMINISTRATION
OF FLORIDA
By______________________________________
Its Attorney-in-Fact
LIBERTY INVESTMENT
PARTNERSHIP I
By______________________________________
Its General Partner
LIBERTY CAPITAL PARTNERS, INC.
By______________________________________
Its ____________________________________
XXXXXXX A.M. BURDEN & CO.
By______________________________________
Its ____________________________________
________________________________________
G. Xxxxxxx Xxxxxxx, Xx.
________________________________________
-23-
Xxxxxx X. Xxxxxxxxx
________________________________________
Xxxxxx X. Xxxxxxx
XXXXXX & XXXX XXXX
REAL PROPERTY TRUST
By______________________________________
Its ____________________________________
BALBOA PARTNERS
By______________________________________
Its ____________________________________
XXXX INVESTMENTS
By______________________________________
Its ____________________________________
TAHOE PARTNERS
By______________________________________
Its ____________________________________
ZIFF INVESTORS PARTNERSHIP, L.P.
By______________________________________
Its ____________________________________
________________________________________
Xxxxx X. Xxxxx
-24-
________________________________________
Xxxxxx X. Xxxxxxxxx
________________________________________
Xxxxxx X. Xxxxxxx
XXXXXX & XXXX XXXX
REAL PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Xxxxxxx X. Xxxxxxxxx
BALBOA PARTNERS
By______________________________________
Its ____________________________________
XXXX INVESTMENTS
By______________________________________
Its ____________________________________
TAHOE PARTNERS
By______________________________________
Its ____________________________________
ZIFF INVESTORS PARTNERSHIP, L.P.
By______________________________________
Its ____________________________________
-25-
________________________________________
Xxxxx X. Xxxxx
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
________________________________________
Xxxxx X. Xxxxx -- SEP
Pensco Pension Services, Inc.
by:_____________________________________
JFI, L.P.
By______________________________________
Its ____________________________________
________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
XXXXXXX X. XXXXXXXX
-26-
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Xxxxxxxxxxx X. X'Xxxxx
________________________________________
Xxxxxx X. Xxxxxxx
________________________________________
Xxxxxx X. Xxxxx, XX
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
________________________________________
Xxxxx X. Xxxxx -- SEP
________________________________________
Xxxx X. Xxxx
JFI, L.P.
By______________________________________
Its ____________________________________
-27-
________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
XXXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By______________________________________
Its ____________________________________
________________________________________
Xxxxxxxxxxx X. X'Xxxxx
________________________________________
Xxxxxx X. Xxxxxxx
________________________________________
Xxxxxx X. Xxxxx, XX
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By______________________________________
Its ____________________________________
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
-28-
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxx X. Xxxxx -- SEP
_________________________________________
Xxxx X. Xxxx
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
XXXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxxxxxxx X. X'Xxxxx
_________________________________________
Xxxxxx X. Xxxxxxx
-29-
_________________________________________
Xxxxxx X. Xxxxx, XX
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxx X. Xxxxx -- SEP
_________________________________________
Xxxx X. Xxxx
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
-00-
XXXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxxxxxxx X. X'Xxxxx
_________________________________________
Xxxxxx X. Xxxxxxx
_________________________________________
Xxxxxx X. Xxxxx, XX
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
XXXXXXX A, XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxx X. Xxxxx -- SEP
_________________________________________
Xxxx X. Xxxx
JFI, L.P.
-31-
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxxxxxxx X. X'Xxxxx
_________________________________________
Xxxxxx X. Xxxxxxx
_________________________________________
Xxxxxx X. Xxxxx, XX
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
XXXXXXX X. XXXXXXX TRUST dated
December 11, 1992
By_______________________________________
Its _____________________________________
_________________________________________
-32-
Xxxxx X. Xxxxx -- SEP
_________________________________________
Xxxx X. Xxxx
JFI, L.P.
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxx Xxxxxxxxx
XXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
XXXXXXX X. XXXXXXXX
SEPARATE PROPERTY TRUST
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxxxxxxx X. X'Xxxxx
_________________________________________
Xxxxxx X. Xxxxxxx
_________________________________________
Xxxxxx X. Xxxxx, XX
-33-
_________________________________________
Xxxxxx X. Autem
_________________________________________
Xxxxx X. Xxxxxx
_________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By_______________________________________
Its _____________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
_________________________________________
Xxxxxx X. Xxxxxxx III
-34-
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
__________________________________________
Xxxxxx X. Autem
__________________________________________
Xxxxx X. Xxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
THE XXXXXXXX XXXXXXXX COMPANY, INC.
By______________________________________
Its ______________________________________
_________________________________________
Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxxx X. Xxxxxxx
_________________________________________
Garrison M. Kitchen
__________________________________________
Xxxxxx X. Xxxxxxx III
STOCKHOLDER SCHEDULE
--------------------
Number of Stockholder Shares
-------------------------------------
Name and Address Common Preferred Options Warrants
---------------- ------ --------- ------- --------
State Board of Administration 425,000 500,000 2,017,031
of Florida
Liberty Capital Partners, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Liberty Investment 75,000 75,490
Partnership I, L.P.
Liberty Capital Partners, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
(in each case, on or
after August 1, 1993)
Liberty Capital Partners, Inc.
Americas Towers, 34th Floor
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RH Investors:
------------
The Xxxxxxxx-Xxxxxxxx Company, Inc. 37,500
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx 10,000
The Xxxxxxxx-Xxxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Xxxxxxxx X. Xxxxxxx 7,500
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
-42-
Name and Address Common Preferred Options Warrants
---------------- ------ --------- ------- --------
Garrison M. Kitchen 3,750
The Xxxxxxxx-Xxxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxx III 3,750
Xxxxxx X. Xxxxxxx, Xx.
0000 XxxxxxxXxxx center
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Investors:
---------
Xxxxxxx A.M. Burden & Co. 62,500 100,001 100,001
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxx & Xxxx Xxxx 124,373 124,998
Real Property Trust
X. X. Xxxx Co., Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 44,000 44,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Balboa Partners 41,667 41,667
X. X. Xxxx Co., Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxx Investments 41,667 41,667
X. X. Xxxx Cool Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Tahoe Partners 41,666 41,666
X. X. Xxxx Co., Inc.
000 Xxxx Xxxxxx Xxxx
-43-
Name and Address Common Preferred Options Warrants
---------------- ------ --------- ------- --------
Xxxxxx, XX 00000
Ziff Investors Partnership, L.P. 25,000 25,000
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxx 19,000 19,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxx Trust 17,000
Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx Trust 17,000
Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Xxxxx X. Xxxxx -- SEP 16,001 16,0001
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxx X. Xxxx 12,000 12,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
JFI, L.P. 9,000 9,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx Xxxxxxxxx 5,000 5,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxxxx 4,500 4,500
-44-
Name and Address Common Preferred Options Warrants
---------------- ------ --------- ------- --------
Separate Property Trust
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx 4,500 4,500
Separate Property Trust
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxxxxxxx X. X'Xxxxx 3,500 3,500
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxxx 2,500 2,500
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxx, XX 2,500 2,500
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxxx X. Autem 2,000 2,000
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Xxxxx X. Xxxxxx 625
Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Chapel 500 500
Rainwater, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
-45-
Name and Address Common Preferred Options Warrants
---------------- ------ --------- ------- --------
Xxxxxx X. Xxxxxxx 300
Xxxx X. Xxxxxxx 300
Executives:
----------
Xxxxxx X. Xxxxxxxxxx 193,622 28,600 111,111
Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
G. Xxxxxxx Xxxxxxx 159,623 28,600 111,111
Datamax Corporation
0000 Xxxxxxx xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 193,623 28,599 111,111
Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
-46-
