EXHIBIT 10.17
PROMOTIONAL SHARES LOCK-IN AGREEMENT
I. This Promotional Shares Lock-In Agreement ("Agreement"), which was
entered into on the 5th day of November, 1997, by and between Advantage
Marketing Systems, Inc. ("Issuer"), whose principal place of business is
located in Oklahoma City, Oklahoma, and Xxxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxxx ("Security Holder") witnesses that:
A. The Issuer has filed an application with the Securities
Administrator of the State of Oklahoma ("Administrator") to
register certain of its EQUITY SECURITIES for sale to public
investors who are resident of Oklahoma ("Registration");
B. The Security Holder, in addition to the ownership of shares of
common stock or similar securities and/or possesses convertible
securities, warrants, options or rights which may be converted
into, or exercised to purchase shares of common stock or similar
securities of Issuer, is the owner of 4,000 shares of common stock
and 2,000 1997-A Warrants of Issuer held in an Individual
Retirement Account with Xxxxxxx Xxxxxx & Co., Inc. (the
"PROMOTIONAL SHARES"); and
C. As a condition to Registration, the Issuer and Security Holder
("Signatories") agree to be bound by the terms of this Agreement.
II. THEREFORE, the Security Holder agrees not to sell, pledge, hypothecate,
assign, grant any option for the sale of, or otherwise transfer or dispose
of, whether or not for consideration, directly or indirectly, and all
certificates representing stock dividends, stock splits, recapitalizaitons,
and the like, that are granted to, or received by, the Security Holder
while the PROMOTIONAL SHARES are subject to this Agreement, other than a
transfer resulting from the transfer of the Individual Retirement Account
to a bank, broker-dealer, savings and loan or other institution qualified
to hold, maintain and administer individual retirement accounts, during the
period beginning on the date that the Registration is declared effective
by the Administrator and ending of 36 months thereafter.
III. THEREFORE, the Signatories agree and will cause the following:
A. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is not a Promoter, which results in the
distribution of the Issuer's assets or securities ("Distribution"),
while this Agreement remains in effect that:
1. All holders of the Issuer's EQUITY SECURITIES will initially
share on a pro rata, per share basis in the Distribution, in
proportion to the amount of cash or other consideration that they
paid per share for their EQUITY SECURITIES (provided that the
Administrator has accepted the value of the other consideration),
until the shareholders who purchased the Issuer's EQUITY
SECURITIES pursuant to the public offering (the "Public
Shareholders") have received, or have had irrevocably set aside
for them, an amount that is equal to 100 percent of the public
offering's price per share times the number of shares of EQUITY
SECURITIES that they purchased pursuant to the public offering
and which they still hold at the time of the Distribution,
adjusted for stock splits, stock dividends, recapitalization and
the like; and
2. All holders of the Issuer's EQUITY SECURITIES shall thereafter
participate on an equal, per share basis times the number of
shares of EQUITY SECURITIES they hold at the time of the
Distribution, adjusted for stock splits, stock dividends,
recapitalization and the like.
3. The Distribution may proceed on lesser terms and conditions than
the terms and conditions stated in paragraphs 1 and 2 above if a
majority of the EQUITY SECURITIES that are not held by Security
Holder, officers, directors, or Promoters of the Issuer, or their
associates or affiliates vote or consent by consent procedure, to
approve the lesser terms and conditions.
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B. In the event of a dissolution, liquidation, merger, consolidation,
reorganization, sale or exchange of the Issuer's assets or securities
(including by way of tender offer), or any other transaction or
proceeding with a person who is not a Promoter, which results s
Distribution while this Agreement remains in effect, the PROMOTIONAL
SHARES shall remain subject to the terms of this Agreement.
C. Notwithstanding any other provision contained herein, the PROMOTIONAL
SHARES may be transferred by will, the laws of descent and
distribution, the operation of law, or by order of any count of
competent jurisdiction and proper venue.
D. The PROMOTIONAL SHARES of a deceased Security Holder may be
hypothecated to pay the expenses of the deceased Security Holder's
estate. The hypothecated the PROMOTIONAL SHARES shall remain subject
to the terms of this Agreement. The PROMOTIONAL SHARES may not be
pledged to secure any other debt.
E. Notwithstanding any other provision contained herein, the PROMOTIONAL
SHARES may be transferred by gift to the Security Holder's family
members, provided that the PROMOTIONAL SHARES shall remain subject to
the terms of this Agreement.
F. With the exception of paragraph A.3 above, the PROMOTIONAL SHARES
shall have the same voting rights as similar EQUITY SECURITIES not
subject to this Agreement.
X. Xxxxxxx Xxxxxx & Co., Inc. and each successor holder of the Individual
Retirement Account shall be provided an executed copy of this
Agreement.
H. The term of this Agreement shall begin on the date that the
Registration is declared effective by the Administrator ("Effective
Date") and shall terminate:
1. 36 months thereafter following the Effective Date; or
2. On the date the Registration has been terminated if no securities
were sold pursuant thereto; or
3. If the Registration has been terminated, the date that checks
representing all of the gross proceeds that were derived
therefrom and addressed to the public investors have been placed
in the U.S. Postal Service with first class postage affixed; or
4. On the date the PROMOTIONAL SHARES become "Covered Securities" as
defined under the National Securities Markets Improvement Act of
1996.
J. This Agreement to be modified only after written notice of the
Administrator.
IV. THEREFORE, the Issuer will cause the following:
A. A manually signed copy of this Agreement signed by the Signatories to
be filed with the Administrator prior to the Effective Date;
B. Copies of this Agreement and a statement of the per share initial
public offering price to be provided to the Issuer's stock transfer
agent;
C. Appropriate stock transfer orders to be placed with the Issuer's stock
transfer agent against the sale or transfer of the shares covered by
this Agreement prior to it expiration, except as may otherwise be
provided in this Agreement;
X. Xxxxxxx Xxxxxx & Co., Inc. shall be provided an executed copy of this
Agreement.
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Pursuant to the requirements of this Agreement, the Signatories have entered
into this Agreement, which may be written in multiple counterparts and each of
which shall be considered an original. The Signatories have signed the
Agreement in the capacities, and on the dates, indicated.
IN WITNESS WHEREOF, the Signatories have executed this Agreement.
ADVANTAGE MARKETING SYSTEMS, INC.
By: /s/ XXXX X. XXXX
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Xxxx X. Xxxx, Chief Executive Officer
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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