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PREFERRED STOCKHOLDERS AGREEMENT
THIS PREFERRED STOCKHOLDERS AGREEMENT (this "AGREEMENT"), dated as of
September 26, 2001, is entered into by and among Paradigm Capital Equity
Partners, LLC, a Delaware limited liability company ("PARADIGM"), Image Investor
Portfolio, a separate series of Memphis Angels, LLC, a Delaware limited
liability company ("IMAGE"), and the stockholders listed on Schedule A hereto
(herein, together with Image, the "PREFERRED STOCKHOLDERS"), each of which is a
holder of Preferred Stock (as defined) of Internet Pictures Corporation, a
Delaware corporation (the "COMPANY").
RECITALS
1. Certain terms are defined in Section 1 of this Agreement and
will have the meanings specified in Section 1.
2. In connection with the execution of this Agreement, Paradigm has
Transferred, or caused to be Transferred, to the Preferred Stockholders rights
to acquire Preferred Stock.
3. The Preferred Stockholders own all of the issued and outstanding
shares of the Series B Convertible Preferred Stock, $0.001 par value, of the
Company (the "PREFERRED STOCK").
4. The Preferred Stockholders desire to agree upon certain terms
and conditions that will govern the ownership and transfer of the Shares.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and provisions set forth in this Agreement, the parties agree as
follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
"ACCEPTANCE PERIOD" means the fifteen (15) business days from and after
the date of receipt by the Company of a Notice of Intention to Sell.
"AFFILIATE" means with respect to any Person, any other Person (other
than the Company or any Subsidiary of the Company) that directly or indirectly
controls, is controlled by or is under common control with such Person.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"COMMON STOCK" means the common stock, $0.001 par value, of the Company.
"COMPANY" has the meaning set forth in the preamble hereto.
"COMPETITOR" shall mean those persons who compete against the Company by
offering immersive images and digital media formatting and infrastructure
products and services.
"IMAGE" has the meaning set forth in the preamble hereto, together with
its successors and transferees.
"LOCK-UP PERIOD" has the meaning set forth in Section 5.
"NOTICE" has the meaning set forth in Section 3.3.
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"NOTICE OF INTENTION TO SELL" means the written notice specified in
Section 3.1.
"OFFERED SHARES" has the meaning set forth in Section 3.1.
"OTHER STOCKHOLDER" means any Preferred Stockholder other than a
Paradigm Entity, together with their respective heirs, administrators,
executors, successors and assigns, as applicable.
"PARADIGM" has the meaning set forth in the preamble hereto, together
with its successors and transferees.
"PARADIGM ENTITIES" means Paradigm, Image, Memphis Angels, LLC, a
Delaware limited liability company, and Paradigm Holdings, a Delaware
partnership, together with each of their successors and transferees identified
in clauses (i), (ii) and (iv) of Section 2.1(c)..
"PARADIGM SHARES" means any and all Shares held by the Paradigm
Entities.
"PARTICIPATION OFFER" has the meaning set forth in Section 4.1(a).
"PERSON" means any individual, corporation, partnership, limited
liability company, trust, unincorporated association or other entity.
"PREFERRED STOCKHOLDER" means each of the signatories to this Agreement
and each other Person who hereafter becomes the owner of any Shares.
"SALE" has the meaning set forth in Section 4.1(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SELLING STOCKHOLDER" has the meaning set forth in Section 3.1.
"SHARES" means shares of Preferred Stock now or hereafter outstanding
and any securities now or hereafter outstanding (including the Warrants) that
may be exercised, converted or exchanged for Preferred Stock.
"SUBSIDIARY" means any Person of which at least a majority of the voting
stock or voting interests of such Person are owned, directly or indirectly, by
any other Person.
"SUBSTANTIAL SALE" means the sale of the Company or its business to any
Person whether by merger, consolidation, sale of all or substantially all of the
assets or capital stock of the Company or otherwise, which has been approved by
the Board of Directors but shall not include a public offering of equity
securities by the Company or any Subsidiary of the Company.
"TRANSFER" means sale, transfer, assignment, gift, pledge,
hypothecation, encumbrance, or other disposition, whether voluntary or
involuntary, or any contract to do any of the forgoing.
"WARRANTS" means any and all warrants to purchase Shares, whether such
warrants are now or hereafter outstanding.
SECTION 2. RESTRICTIONS ON TRANSFER
2.1 RESTRICTION ON TRANSFER. At no time during the term of
this Agreement may a Preferred Stockholder Transfer any Shares or any interest
in Shares except:
(a) in the case of an Other Stockholder, to the extent
permitted and under the conditions set forth in Sections 3 or 4;
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(b) subject to the restrictions of Section 3.7(b),
that any Other Stockholder may Transfer any of its Shares to (i) any Affiliate
of such Other Stockholder (ii) any Person (other than an Affiliate of such Other
Stockholder) so long as all Transfers to any Persons on a cumulative basis
pursuant to this clause (ii) do not, in the aggregate, exceed 20% of the
aggregate Shares held by such Other Stockholder on the date of this Agreement or
(iii) the partners, members or stockholders, as the case may be, of such Other
Stockholder as part of a distribution by such Other Stockholder;
(c) subject to the restrictions of Section 3.7(b),
that any Paradigm Entity may Transfer any of its Shares to (i) any Affiliate of
any Paradigm Entity, (ii) any other Paradigm Entity, (iii) any Person (other
than a Paradigm Entity) so long as all Transfers to any Persons on a cumulative
basis pursuant to this clause (iii) do not, in the aggregate, exceed 20% of the
aggregate Shares held by Paradigm Entities on the date of this Agreement or (iv)
the partners, members or stockholders, as the case may be, of any Paradigm
Entity as part of a distribution by such Paradigm Entity; and
(d) subject to the restrictions of Section 3.7(b),
that any Paradigm Entity may Transfer any of its Shares to any Person provided
that such Paradigm Entity complies with the provisions of Section 4, if
applicable.
Each Preferred Stockholder agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent against the Transfer of
Shares unless such Transfer is made in full compliance with all provisions of
this Agreement. Any transferee of any Shares must agree in writing to become a
party to, and to be bound by the provisions of, this Agreement.
2.2 SECURITIES LAW RESTRICTIONS. Notwithstanding any other
provision in this Agreement, no Preferred Stockholder may Transfer any Shares
without the registration of the Transfer of such Shares under the Securities Act
unless such Transfer is exempt from the registration requirements under the
Securities Act and applicable state securities laws.
SECTION 3. RIGHT OF FIRST REFUSAL
3.1 INTENTION TO SELL. If any Other Stockholder wishes to sell
all or any portion of the Shares owned by such Other Stockholder to a bona fide
third party for cash (other than a Transfer pursuant to Section 4 or permitted
pursuant to Section 2.1(b)), such Other Stockholder (a "SELLING STOCKHOLDER")
promptly shall deliver to Paradigm a Notice of Intention to Sell setting forth
the number of Shares to be sold (the "OFFERED SHARES"), the proposed purchase
price per Offered Share, the proposed purchaser (including any information
concerning such purchaser and its Affiliates as Paradigm may reasonably request)
and the other terms of sale.
3.2 ACCEPTANCE PERIOD. Upon receipt of a Notice of Intention
to Sell and for the duration of the Acceptance Period, Paradigm or its designee
will have the right and option to elect to purchase all or any portion of such
Offered Shares at the purchase price and on the terms stated in the Notice of
Intention to Sell. On or before the expiration of the Acceptance Period,
Paradigm may give the Selling Stockholder written notice of Paradigm's intention
to exercise its rights to purchase, or cause such designee to purchase, the
Offered Shares.
3.3 NOTICE OF ELECTION TO PURCHASE; FAILURE TO EXERCISE OPTION
TO PURCHASE. If Paradigm or such designee fails to elect to purchase all of the
Offered Shares in accordance with the provisions of Sections 3.1 and 3.2, then,
prior to the expiration of the Acceptance Period, Paradigm shall give written
notice to each Other Stockholder (the "NOTICE") setting forth the number of
Offered Shares remaining available for purchase pursuant to the Notice of
Intention to Sell, and each Other Stockholder will then have the right and
option to, within ten (10) business days after receiving the Notice from
Paradigm, elect to purchase (i) all of such Offered Shares so remaining
available (if there is only one Other Stockholder electing to purchase such
Shares) or (ii) up to its pro rata share of such Offered Shares so remaining
available (if there is more than one Other Stockholder electing to purchase such
Shares), or (iii) such Offered Shares so remaining available in such other
proportions as the Other Stockholders may mutually agree, at the purchase price
and on the terms stated in the Notice of Intention to Sell, such election to be
made by giving written notice to Paradigm within ten (10) business days after
the receipt of the Notice.
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3.4 SELLING STOCKHOLDER'S RIGHTS UPON FAILURE TO EXERCISE
RIGHT TO PURCHASE ALL OFFERED SHARES. If Paradigm and the Other Stockholders
fail to elect to purchase all of the Offered Shares under Sections 3.1, 3.2 and
3.3, then the Selling Stockholder who or which delivered the Notice of Intention
to Sell may sell all (but not less than all) of the Offered Shares to the
purchaser specified in the Notice of Intention to Sell at the price and upon the
same terms set forth in the Notice of Intention to Sell, at any time within
twenty (20) business days after the last date on which any Other Stockholder
will be entitled to make any election pursuant to the provisions of Section 3.3.
The purchaser specified in the Notice of Intention to Sell must, prior to
purchasing the Offered Shares, agree in writing to become a party to, and to be
bound by the provisions of, this Agreement, and the Company will not recognize
any Transfer to such purchaser of Offered Shares until such agreement has been
executed and delivered to Paradigm. If the Offered Shares are not sold by the
Selling Stockholder during such twenty (20) business-day period, the right of
the Selling Stockholder to sell such Offered Shares will expire and such
remaining Offered Shares again will be subject to the restrictions contained in
this Agreement and may not thereafter be Transferred except in compliance with
this Agreement.
3.5 PAYMENT FOR OFFERED SHARES. Payment by Paradigm or the
Other Stockholders for the Offered Shares will be made by certified or official
bank check, payable to the order of the Selling Stockholder of the Offered
Shares against delivery by such seller of (a) a certificate or certificates
representing the Offered Shares so sold, duly endorsed for transfer to the
purchasing party or accompanied by a stock transfer power duly endorsed for
transfer, with all requisite stock transfer taxes paid and stamps affixed and
(b) written representations and warranties of such Selling Stockholder to the
effect that: (i) such Selling Stockholder is the record and beneficial owner of
the Shares being purchased and sold, has good and valid title to the Shares and
the absolute right to transfer the same to the purchaser, and the same, upon
transfer to the purchaser, will be free and clear of all claims, liens, pledges,
restrictions (other than restrictions imposed by this Agreement and restrictions
under federal and state securities laws) or encumbrances of any nature
whatsoever; (ii) such Selling Stockholder has full power, authority or capacity,
as applicable, to perform the terms of this Agreement relating to such purchase
and sale; and (iii) any consent or approval of any governmental authority, court
or third person required to be obtained by such Selling Stockholder to permit
the Transfer of the Shares has been obtained.
3.6 CLOSING DATE. The closing of the sale and delivery of
Offered Shares being purchased and sold pursuant to this Section 3 to Paradigm
(or its designee) or an Other Stockholder, and payment for such Offered Shares,
will be held at a time and place designated by Paradigm as follows:
(a) If Paradigm has elected to purchase, or cause its
designee to purchase, all of the Offered Shares, any date on or prior to the
twentieth (20th) business day after the date on which the Other Stockholder
receives notification of Paradigm's intention to, or cause its designee to, so
purchase; or
(b) In all other cases, any date on or prior to the
twentieth (20th) business day after the last day upon which any Other
Stockholder can elect to purchase Offered Shares pursuant to this Section 3.
3.7 RESTRICTIONS. Notwithstanding the foregoing provisions of
this Section 3 to the contrary, (a) no Other Stockholder shall deliver any
Notice of Intention to Sell if such Other Stockholder did not at the time of
giving such Notice of Intention to Sell have a good faith belief that such
purchaser would purchase all of the Offered Shares at the price and on the terms
contained in the Notice of Intention to Sell and (b) no Preferred Stockholder
shall Transfer any Shares to any Competitor or any employee, shareholder,
officer, director or other Affiliate of any Competitor, without the prior
written consent of the Company.
SECTION 4. TAG-ALONG/CO-SALE RIGHTS
4.1 TAG-ALONG RIGHTS.
(a) If any Paradigm Entity desires to Transfer any
Shares (other than a Transfer pursuant to Section 2.1(c) of this Agreement)
whether by sale, merger or otherwise (a "SALE") and Paradigm does not elect to
or is not entitled to exercise its rights under Section 4.2, then at least
fifteen (15) days prior to the closing of such Sale, Paradigm shall make an
offer (the "PARTICIPATION OFFER") to the Other Stockholders to include in the
proposed Sale a portion of each Other Stockholder's Shares that represents the
same percentage of such Shares as the Shares being Transferred by the Paradigm
Entities represent to all Shares held by the Paradigm Entities.
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(b) The Participation Offer must describe the terms
(including purchase price) and conditions of the proposed Sale and the number of
Shares that an Other Stockholder may Transfer in the proposed Sale and must be
conditioned upon (i) the consummation of the transactions contemplated in the
Participation Offer, and (ii) each Other Stockholder's execution and delivery of
all agreements and other documents as may be reasonably required by the acquiror
in connection with such Sale. If any Other Stockholder accepts the Participation
Offer, the Paradigm Entities will reduce, to the extent necessary, the number of
Shares they otherwise would have Transferred in the proposed Sale so as to
permit those Other Stockholders who have accepted the Participation Offer to
Transfer the number of Shares that they are entitled to Transfer under this
Section 4, and such Other Stockholders shall Transfer the number of Shares
specified in the Participation Offer to the proposed transferee in accordance
with the terms set forth in the Participation Offer.
(c) Any Other Stockholder that desires to exercise its
right to Transfer Shares in the Participation Offer shall deliver notice to
Paradigm within ten (10) days after its receipt of the Participation Offer,
specifying the number of Shares (up to the number of such Shares specified in
the Participation Offer) that such Other Stockholder desires to Transfer in the
Participation Offer, whereupon such Other Stockholder shall be obligated to
Transfer such Shares at the closing of such Sale, if and when it occurs. All
Shares Transferred by the Other Stockholders pursuant to this Section 4.1 must
be Transferred at the same price and terms (including form of consideration) as
the Shares being Transferred by the Paradigm Entities.
4.2 DRAG-ALONG RIGHTS.
(a) In connection with any Sale by any one or more of
the Paradigm Entities of at least 50% of the aggregate Shares held by the
Paradigm Entities on the date of this Agreement, Paradigm has the right to
require each Other Stockholder to Transfer a portion of such Other Stockholder's
Shares that represents the same percentage of such Other Stockholders Shares as
the Shares being Transferred by the Paradigm Entities. All Shares Transferred by
the Other Stockholders pursuant to this Section 4.2 must be Transferred at the
same price and terms (including form of consideration) as the Shares being
Transferred by the Paradigm Entities. All Warrants Transferred by Other
Stockholders pursuant to this Section 4.2 must be Transferred at the same price
(less the applicable exercise price in respect of each such Warrant) and terms
(including form of consideration) as the Shares being Transferred by the
Paradigm Entities.
(b) Paradigm shall give the Company and the Other
Stockholders at least fifteen (15) days' prior written notice of any Sale as to
which Paradigm intends to exercise its rights under Section 4.2(a).
4.3 SALE REQUIREMENTS. All Other Stockholders, if Paradigm
elects to exercise its rights under Section 4.2(a), or the electing Other
Stockholders if such Other Stockholders elect to exercise their rights under
Section 4.1(a), shall (i) take such actions as may be reasonably requested by
Paradigm in connection with consummating the Sale, (ii) vote in favor of,
consent to, and raise no objections against, the Sale or the process pursuant to
which the Sale was arranged, (iii) waive any dissenter's rights and other
similar rights, (iv) if the Sale is structured as a sale of Shares, agree to
sell its Shares on the terms and conditions of the Sale and (v) execute and
deliver such documents as may be reasonably requested by Paradigm in connection
with any Sale, including, without limitation, written consents of stockholders,
proxies, letters of transmittal, purchase agreements and stock powers, in each
case so long as the Paradigm Entities also have executed such documents on no
more favorable a basis than the Other Stockholders. At the closing of such Sale,
the participating Other Stockholders shall deliver certificates for all Shares
(or, in the case of the Warrants, such reasonable and customary transfer
documentation as may be specified by Paradigm) to be Transferred by Other
Stockholders, duly endorsed for transfer, to the purchaser against delivery of
the appropriate purchase price.
4.4 COST OF SALE. In connection with any Sale, Paradigm may,
or may cause the Company or the Company's Subsidiaries to, hire legal counsel
and other professional advisors as it deems necessary or desirable to effectuate
the contemplated transaction on behalf of all of the participating Preferred
Stockholders. In the case of a sale pursuant to Section 4.1, all Preferred
Stockholders participating in such Sale agree to bear their pro rata share
(based upon the number of Shares sold or to be sold) of the reasonable costs of
such Sale to the extent such costs are not otherwise paid by the Company or the
acquiring Person whether or not such Sale closes. Costs incurred by any
Preferred Stockholder on its own behalf (other than the costs of the
professional advisors hired by Paradigm) will not be considered costs of a Sale
and must be paid solely by such Preferred Stockholder.
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4.5 ASSET SALE. In the event that Paradigm determines to
pursue a sale of all or substantially all of the assets of the Company, the
Other Stockholders shall participate therein and take the action contemplated in
this Section 4 to the extent applicable so long as the Other Stockholders are
treated no less favorably than the Paradigm Entities (including form of
consideration) in any such transaction.
4.6 PRICE. For the purposes of this Section 4, unless the
context otherwise requires, the term "PRICE" shall mean all consideration
received by the Paradigm Entities and their Affiliates in connection with a
Sale.
SECTION 5. COMMON STOCK LOCKUP
The Paradigm Entities and each Other Stockholder hereby agree
for a period of 180 days after the date of this Agreement (the "LOCK-UP PERIOD")
that each of them will not Transfer any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock now owned or hereafter acquired
directly by such Person or with respect to which such Person has or hereafter
acquires the power of disposition, otherwise than (i) as a bona fide gift or
gifts, provided the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to partners, members or stockholders of such
Person, provided that the distributees thereof agree in writing to be bound by
the terms of this restriction, or (iii) Transfers of Preferred Stock in
compliance with this Agreement. The foregoing restriction has been expressly
agreed to by each Other Stockholder so as to preclude such Other Stockholder
from engaging in any hedging or other transaction that is designed to or
reasonably expected to lead to or result in a Transfer of Common Stock during
the Lock-up Period, even if such Common Stock would be Transferred by someone
other than such Other Stockholder. Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to any Common Stock or with respect to any
security (other than a broad-based market basket or index) that included,
relates to or derives any significant part of its value from the Common Stock.
Each Other Stockholder also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
Transfer of Common Stock held by such Other Stockholder except in compliance
with the foregoing restrictions.
SECTION 6. LEGEND ON SHARE CERTIFICATES
All certificates representing Shares now or hereafter held by a
Preferred Stockholder will be endorsed with the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS EITHER (A) THEY ARE REGISTERED UNDER THE ACT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR (B) THE COMPANY HAS RECEIVED
EVIDENCE SATISFACTORY TO IT (WHICH MAY INCLUDE AN OPINION OF COUNSEL)
THAT SUCH PROPOSED DISPOSITION IS EXEMPT FROM SUCH REGISTRATION.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A PREFERRED STOCKHOLDERS AGREEMENT DATED AS OF
SEPTEMBER __, 2001. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
CORPORATION'S PRINCIPAL PLACE OF BUSINESS AND MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE CORPORATE SECRETARY OF THE COMPANY."
SECTION 7. DURATION OF AGREEMENT
This Agreement will terminate and be of no further force and
effect upon the first to occur of (a) the date that less than 25% of the Shares
are outstanding, and (b) the date upon which Paradigm and the holders of at
least fifty percent (50%) of the Shares then held by Other Stockholders agree in
writing to terminate this Agreement.
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SECTION 8. BOARD OF DIRECTORS.
On all matters relating to the election of directors of the
Company where the holders of Preferred Stock are entitled to elect directors as
a class, the Preferred Stockholders agree to vote all Shares held by them (or
the holders thereof shall consent pursuant to an action by written consent) so
as to elect members of the Board of Directors as follows: (i) one representative
designated by First Avenue Partners, L/P.; (ii) one representative designated by
NewSouth Capital Management Inc.; and (iii) two representatives designated by
the Paradigm Entities. Any vote taken to remove any director elected pursuant to
this Section 8), or to fill any vacancy created by the resignation, removal or
death of a director elected pursuant to this Section 8, shall also be subject to
the provisions of this Section 8.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF THE PREFERRED STOCKHOLDERS
Each Preferred Stockholder severally represents and warrants to
each other Preferred Stockholder as follows as may be applicable to such
Preferred Stockholder:
(a) If a corporation, the Preferred Stockholder is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of its incorporation and has requisite corporate power and
authority to enter into this Agreement and to undertake the transactions
contemplated in this Agreement;
(b) If a partnership, the Preferred Stockholder is a
partnership duly organized, validly existing, and in good standing under the
laws of the state of its formation and has requisite partnership power and
authority to enter into this Agreement and to undertake the transactions
contemplated in this Agreement;
(c) If a limited liability company, the Preferred
Stockholder is a limited liability company duly organized, validly existing, and
in good standing under the laws of the state of its formation and has the
requisite limited liability company power and authority to enter into this
Agreement and to undertake the transactions contemplated in this Agreement;
(d) If an individual, the Preferred Stockholder is
legally competent to enter into this Agreement and to undertake the transactions
contemplated in this Agreement;
(e) The address of the Preferred Stockholder set forth
on Schedule A is true, correct and complete; and
(f) This Agreement has been duly and validly
authorized, as applicable, executed, and delivered by the Preferred Stockholder
and constitutes the legal, valid, and binding obligation of the Preferred
Stockholder, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent
conveyance and other similar laws and principles of equity affecting creditors'
rights and remedies generally.
SECTION 10. GOVERNING LAW; CONSTRUCTION
This Agreement is governed by and construed in accordance with
the laws of the State of Delaware, without regard to its conflict of law rules.
The headings or titles to Sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading or title of any Section. Unless otherwise specifically stated,
references in this Agreement to Sections or Schedules refer to Sections and
Schedules of this Agreement.
SECTION 11. CONSENT TO JURISDICTION AND SERVICE OF PROCESS
Each Preferred Stockholder irrevocably consents to the
non-exclusive jurisdiction of the state and federal courts located in the State
of Delaware, agrees that any action, suit or proceeding by or among the
Preferred Stockholders (or any of them) or the Company and any Preferred
Stockholder may be brought in any court in the
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State of Delaware, and waives any objection which the Preferred Stockholder may
now or hereafter have to the choice of forum whether personal jurisdiction,
venue, forum non conveniens or on any other ground. Each Preferred Stockholder
hereby irrevocably designates, appoints and empowers the Secretary of the State
of Delaware to receive for and on behalf of such Preferred Stockholder service
of process in the State of Delaware, and each Preferred Stockholder irrevocably
consents to the service of process outside of the territorial jurisdiction of
said courts by mailing copies thereof by registered or certified United States
mail, postage prepaid, to such Preferred Stockholder's last known address as
shown in the records of the Company with the same effect as if the Preferred
Stockholder were a resident of the State of Delaware and had been lawfully
served in such State. Nothing in this Agreement will affect the right to service
of process in any other manner permitted by law. Each Preferred Stockholder
further agrees that final judgment against it or him in any such action or
proceeding will be conclusive and may be enforced in any other jurisdiction
within or outside the State of Delaware by suit on the judgment, a certified or
exemplified copy of which will be conclusive evidence of the fact and the amount
of such judgment.
SECTION 12. BENEFITS OF AGREEMENT; ASSIGNMENT
This Agreement is irrevocable and is binding upon and inures to
the benefit of the parties and their respective successors, permitted assigns,
heirs, executors, administrators, and legal representatives. Except as otherwise
provided in this Agreement, no Preferred Stockholder may assign or delegate any
of its rights or obligations under this Agreement without the prior written
consent of Paradigm.
SECTION 13. NOTICES
(a) All notices, requests, consents, and other
communications required by this Agreement must be in writing, delivered in
person or duly sent by recognized overnight courier or sent by facsimile or by
first-class registered or certified mail, postage prepaid, addressed to Paradigm
or the applicable Preferred Stockholders at the addresses set forth for such
Persons on Schedule A hereto, or to such other address which has been designated
by notice in writing by such party to the others in accordance with the
provisions of this Section 13.
(b) Each party will at all times have an address to
which any communications may be sent. All such notices, requests, consents and
other communications will be deemed to have been received (i) in the case of
personal delivery or facsimile, on the date of such delivery, (ii) in the case
of delivery by recognized overnight courier service, on the first business day
following delivery of such notice to the overnight courier, and (iii) in the
case of mailing, on the third (3rd) business day following such mailing.
SECTION 14. MODIFICATION AND WAIVER
Except as otherwise provided in this Agreement, neither this
Agreement, nor any provision of this Agreement, may be modified, changed,
waived, discharged or terminated except by an instrument in writing signed by
the holders of at least two-thirds of the Shares.
SECTION 15. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties
with respect to matters or understandings involving the ownership, control or
disposition of the Shares, and supersedes in its entirety any and all prior
agreements or understandings, oral or written, among any or all of the
undersigned relating to such ownership, control or disposition.
SECTION 16. SEVERABILITY
If any provision of this Agreement, or the application of such
provision to any Person or circumstance, is adjudged or ruled to be invalid or
unenforceable, the remaining provisions of this Agreement and the application of
such provisions to other Persons or circumstances will not be affected by such
invalidity or unenforceability.
SECTION 17. REMEDIES
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The parties recognize and agree that if Paradigm or any of the
Preferred Stockholders breaches its or his obligations under this Agreement, the
other parties may not have an adequate remedy at law. Such breach will cause
such other parties irreparable harm for which there may be no adequate remedy at
law. If any party institutes an action or proceeding to enforce the provisions
of this Agreement, such party will be entitled to the remedies of specific
performance and injunctive relief, and any such Person against whom such action
or proceeding is brought hereby waives any claim or defense that there is an
adequate remedy at law. The right to obtain an injunction hereunder will not be
considered a waiver of any right on the part of the non-breaching parties to
recover damages and to assert any other claims for remedies which such parties
may have at law or in equity. The non-prevailing party in any such action agrees
to bear any expenses incurred by the prevailing party, including reasonable
attorneys' fees, in enforcing its rights under this Agreement.
SECTION 18. GENDER
Whenever the context requires, pronouns of any gender will be
deemed to include and designate the feminine, masculine or neuter gender.
SECTION 19. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each
of which will be deemed to be an original, but all of which taken together will
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
IMAGE INVESTOR PORTFOLIO,
a separate series of
MEMPHIS ANGELS, LLC,
a Delaware limited liability company
By: PARADIGM CAPITAL EQUITY
PARTNERS, LLC,
(individually and as Manager of
Memphis Angels, LLC)
By: PARADIGM HOLDINGS,
its Managing Member
By: /s/ Xxxxx X. XxXxxx XX
-----------------------
Name: Xxxxx X. XxXxxx XX
Title: Managing Partner
11
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
NATIONAL FIRE & CASUALTY
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
12
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
NEWSOUTH CAPITAL MANAGEMENT, INC.
PROFIT SHARING PLAN
By: /s/ D. Xxxxxxx Xxxxxx
---------------------
Name: D. Xxxxxxx Xxxxxx
Title: Executive Vice President
13
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
PHOTO OP, LLC
By: /s/ D. Xxxxxxx Xxxxxx
---------------------
Name: D. Xxxxxxx Xxxxxx
Title: Chief Manager
14
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
NEWSOUTH SPECIAL EQUITIES, L.P.
By: NewSouth Capital Management, Inc.
General Partner
By: /s/ D. Xxxxxxx Xxxxxx
---------------------
Name: D. Xxxxxxx Xxxxxx
Title: Executive Vice President
15
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
FIRST AVENUE PARTNERS, L.P.
By: FRONT STREET, LLC,
General Partner
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Member
16
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
eBAY INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, Legal Affairs
17
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
/s/ Xxxx X. Xxxxxx
------------------
By: X. Xxxxxx X. Xxxxxx, POA
------------------------
18
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
1935 XXXXXX TRUST
By: /s/ Xxxxx X. Mixer
------------------
Name: Xxxxx X. Mixer
Title: Trustee
19
SIGNATURE PAGE TO PREFERRED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the undersigned have duly executed or caused this
Agreement to be executed as of the day and year first above written.
/s/ Xxxxx Xxxxx
----------------
Xxxxx Xxxxx
20
SCHEDULE A
NATIONAL FIRE & CASUALTY
NEWSOUTH CAPITAL MANAGEMENT, INC. PROFIT SHARING PLAN
PHOTO OP, LLC
NEWSOUTH SPECIAL EQUITIES, INC.
FIRST AVENUE PARTNERS, L.P.
EBAY INC.
XXXX X. XXXXXX
1995 XXXXXX TRUST
XXXXX XXXXX
