EXHIBIT 4.4
AMENDED AND RESTATED
BUILD-A-BEAR WORKSHOP, INC.
STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT ("Agreement"), made as
of the 21st day of September, 2001, by and among Build-A-Bear Workshop, Inc., a
Delaware corporation, hereinafter referred to as the "Corporation", and the
individuals, hereinafter sometimes referred to collectively as "Stockholders" or
individually as "Stockholder," set forth on Schedule 1 hereto:
WITNESSETH:
WHEREAS, the Stockholders own the shares of capital stock of the
Corporation as indicated on EXHIBIT A attached to this Agreement and
incorporated herein by reference, which shares constitute all of the outstanding
capital stock of the Corporation as of the date hereof (hereinafter referred to
as "Shares"); and
WHEREAS, the Stockholders previously entered into a Stockholders'
Agreement dated April 3, 2000, as amended on April 10, 2001 (the "Original
Agreement"); and
WHEREAS, Xxxxxx X. Xxxxxxxx and Windsor Capital, Inc., a Missouri
corporation ("Windsor") conveyed all of their respective Shares (the
"Transferred Shares") to the Xxxxxx X. Xxxxxxxx Revocable Trust dated July 23,
1986 (the "Trust"); and
WHEREAS, the Corporation's business is such that it is in its best
interests that its Shares be closely-held by persons knowledgeable about the
Corporation's business, and the Corporation and Stockholders desire to provide
for continuity and harmony in the management of the Corporation; and
WHEREAS, it is in the best interests of the Stockholders and the
Corporation that management of the Corporation be conducted in an orderly manner
with the consensus of the Stockholders as hereinafter provided.
NOW, THEREFORE, the Stockholders and the Corporation agree as follows:
1. Scope of Agreement; Restrictions on Transfer; Effectiveness.
1.1 Scope; Restrictions on Transfer. From and after the date hereof, none
of the Stockholders will sell, assign, pledge, or otherwise transfer, any
interest in any Shares except pursuant to the provisions of this Agreement. This
Agreement shall apply to all transfers of Shares (now owned or hereafter
acquired) by the Stockholders, whether voluntary, involuntary or by operation of
law, resulting from death or otherwise and all exchanges or conversions of
Shares
in a merger, consolidation or mandatory share exchange. Xxxxx/Xxx and SSI shall
cause all of their respective members or shareholders, as the case may be (the
"Indirect Stockholders"), to be bound by the terms and conditions of Sections 1
through 8, 10, 12 and 15 of this Agreement with respect to transfers of their
membership interests in Xxxxx/Fox and/or shares in SSI, as the case may be (such
membership interests or SSI shares to be Shares for purposes of the transfer
restrictions herein), provided that such transfer restrictions in Sections 1
through 8 shall not apply to transfers to other Indirect Stockholders.
1.2 Supersedes. Upon the execution of this Agreement by holders of not
less than 90% of the Shares of the Corporation, this Agreement shall supersede
the Original Agreement.
2. Option Upon Voluntary Transfer.
2.1 Notice of Intention to Transfer. If a Stockholder intends to transfer
Shares of which he, she or it is owner to any person other than to the
Corporation or as a permitted transfer as provided in SECTION 2.4 hereof, such
Stockholder shall give written notice to the Corporation and the other
Stockholders of the proposed terms (including sales price), conditions and
manner of disposition, the number of Shares to be disposed of and the person(s),
firm(s) or corporation(s) to whom the selling Stockholder proposes to transfer
such Shares. The notice, in addition to stating the fact of the intention to
transfer Shares, shall state: (i) the number of Shares to be transferred; (ii)
the name, business and residence address of the proposed transferee; and (iii)
whether or not the transfer is for valuable consideration, and, if so, the
amount of the consideration and the other terms of sale.
2.2 Corporation Option to Purchase. Within thirty (30) days of the
Corporation's receipt of the notice of the proposed transfer, the Corporation
may exercise an option (hereby granted by each Stockholder) to purchase all or
any of the Shares proposed to be transferred for the sales price and terms
thereof as set forth in the notice, and upon the other terms provided
hereinafter.
2.3 Stockholders' Option to Purchase. If the Corporation does not exercise
its option to purchase all or any portion of such Shares, the remaining
Stockholders within sixty (60) days of the Corporation's receipt of the notice
of the proposed transfer, shall have an option (hereby granted by each
Stockholder) to purchase all unpurchased Shares, pro rata according to their
respective percentages of Common Stock, par value $.01 per share (the "Common
Stock") (without regard to the selling Stockholder's Shares and assuming all of
the Shares which are convertible into Common Stock had been so converted as of
the date of such determination), provided however, that if any such Stockholder
elects to exercise her or his option to purchase pursuant to this Section 2.3,
such Stockholder shall exercise it with respect to all but not less than all of
her or his respective pro rata portion. If the remaining Stockholders do not
exercise their respective options to purchase all of such Shares, then any
Stockholder who has exercised his or her option to purchase his or her pro rata
share of the remaining Shares may exercise an option to purchase all of its pro
rata portion of such unpurchased Shares, subject to SECTION 4.2 hereof. The
process in the immediately preceding sentence shall continue until all of the
unpurchased
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Shares have been purchased or until no Stockholder desires to purchase any
remaining unpurchased Shares.
2.4 Transfer to Revocable Trust; Permitted Transfers. Notwithstanding any
other provision of this Agreement, a Stockholder may transfer Shares to an
Affiliate (as hereinafter defined), or to a revocable trust established for his
or her benefit, of which he or she is the sole trustee at the time of the
transfer; provided, however, that any such Shares so transferred shall remain
subject to this Agreement, and the Stockholder shall remain obligated under this
Agreement. In the event Shares are transferred by a Stockholder to his or her
revocable trust, such Stockholder and his or her revocable trust shall be
treated as a single Stockholder for purposes of this Agreement.
3. Option Upon Involuntary Transfer.
If other than by reason of a Stockholder's death, disability or
dissolution of marriage, Shares are transferred by operation of law to any
person other than to the Corporation (such as, but not limited to, a
Stockholder's trustee in bankruptcy or a purchaser at any creditor's or court
sale), the Corporation or the remaining Stockholders, within seventy (70) days
of the Corporation's receipt of actual notice of the transfer may exercise an
option (hereby granted by each Stockholder) to purchase all but not less than
all of the Shares so transferred in the same manner and upon the same terms as
provided in SECTION 2, with respect to Shares proposed to be transferred.
4. Exercise of Options and Effect of Non-Exercise of Options.
4.1 Notice. The Corporation and the Stockholders who exercise options
granted in SECTIONS 2 OR 3 shall do so by delivering written notice of their
exercise of the options within the time provided in said Sections to the
proposed transferor or to the transferee in the case of SECTION 3.
4.2 Non-Exercise. If the purchase options are forfeited or not exercised
in the aggregate for all the Shares proposed to be transferred in compliance
with SECTIONS 2 or SECTION 3, then, in the case of a proposed transfer under
SECTION 2, the Shares may be transferred, within ten (10) days after the
expiration of the option period granted to the other Stockholders, to the
transferee named in the notice required by SECTION 2, and upon the terms therein
stated, which Shares when so transferred shall be subject to the terms of this
Agreement. In the case of a transfer of Shares under SECTION 2 or SECTION 3, the
Shares shall, in the hands of the transferee, be subject to the terms of this
Agreement.
4.3 Requirements. No transfer pursuant to SECTION 2 shall be valid if the
transfer is not within the aforesaid ten (10) day period, or is not for the
consideration or upon the terms or to the transferee stated in the notice
required of the transferring Stockholder by SECTION 2. In such a case the Shares
shall remain subject to this Agreement.
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4.4 Shares Reacquired. In the event a transferor in a SECTION 2 transfer
reacquires all or any portion of the transferred Shares, the Shares shall be
subject to this Agreement as if no transfer had been made.
4.5 Vote. A proposed transferor of Shares under SECTION 2, as a
Stockholder or a director, or both, of the Corporation, shall vote in favor of
the Corporation's exercise of the purchase options granted to it by this
Agreement at any meeting of Stockholders or directors called for such purpose.
5. Purchase Price.
5.1 Voluntary Transfer. For purposes of any purchase of all of a
Stockholder's Shares pursuant to SECTION 2 the purchase price shall be as set
forth in the notice given as provided in SECTION 2.
5.2 Involuntary Transfer. For purposes of any purchase of all of a
Stockholder's Shares pursuant to SECTION 3, the purchase price of Shares shall
be lesser of (i) the price determined by all the Stockholders of the Corporation
pursuant to EXHIBIT B of this Agreement or (ii) the price per share at which
Shares were transferred pursuant to the most recent transaction giving rise to
an option granted in SECTION 3 of this Agreement.
6. Payment of the Purchase Price and Other Payments.
6.1 Cash Payment. The purchase price for Shares purchased pursuant to
SECTION 2 and shall be paid in cash at the closing, except that at the option of
Clark, Klocke, Vent and Xxxxx, if such persons are the purchasing party or
parties, fifty percent (50%) of the purchase price may be deferred and at least
fifty percent (50%) shall be paid at closing. The aggregate amount deferred by
Clark, Klocke, Vent and Xxxxx shall not exceed $500,000 in the aggregate. The
purchase price for Shares purchased pursuant to SECTION 2 shall be paid on such
terms as set forth in the notice provided therein.
6.2 Promissory Note. The deferred portion of the price, if any, shall be
evidenced by the promissory note of the purchasing party, shall be in
substantially the form set forth in EXHIBIT C to this Agreement, shall bear
interest at the semi-annual applicable federal rate (as determined pursuant to
regulations promulgated under the Internal Revenue Code of 1986, as amended in
effect on the date of closing) plus two percent (2%) and shall be payable in
equal monthly installments for a period not to exceed five (5) years.
Notwithstanding the foregoing, in no event shall the cumulative deferred portion
of the purchase price owed collectively by Clark, Klocke, Vent and Xxxxx
outstanding at any time and pursuant any purchase under SECTION 2 exceed
$500,000.
6.3 Pledge Agreement. All Shares purchased pursuant to this Agreement and
financed by a note shall be pledged to the selling Stockholder as security for
the payment of the note by a Collateral Pledge Agreement, in the form attached
hereto as EXHIBIT D.
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7. The Closing.
7.1 Time of Closing. In the case of a purchase of Shares under SECTIONS 2
OR 3, the closing of the sale and purchase shall take place twenty (20) days
after the delivery to the selling Stockholders of written notice by the last of
the purchasing party or parties to deliver such notice of its, his or their
exercise of the option or options to purchase said Stockholder's Shares.
7.2 Absence of Liens. All Shares shall be delivered to the Corporation or
purchasing Stockholder free and clear of all liens, claims and encumbrances
excepting only those for which provision is expressly made in this Agreement.
7.3 Sequence of Closings. The sale and purchase of Shares which the
remaining Stockholders have elected to purchase pursuant to SECTION 2 or SECTION
3 hereof shall take place immediately prior to the sale and purchase of Shares,
if any, which the Corporation has elected to purchase.
8. Compliance with Agreement.
8.1 Legend on Certificates. All Shares now or hereafter owned by the
Stockholders of the Corporation shall be subject to the provisions of this
Agreement and the certificates representing Shares, including Shares in the
hands of permitted transferees, shall bear the following legend:
"THE SALE, TRANSFER OR ENCUMBRANCE OF THIS CERTIFICATE IS
SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
DATED AS OF SEPTEMBER 21, 2001 BETWEEN THE CORPORATION AND
CERTAIN HOLDERS OF SHARES OF THE CAPITAL STOCK OF THE
CORPORATION. A COPY OF THIS AGREEMENT IS ON FILE IN THE OFFICE
OF THE SECRETARY OF THE CORPORATION AND MAY BE OBTAINED FROM
THE COMPANY UPON REQUEST. THE AGREEMENT PROVIDES, AMONG OTHER
THINGS, FOR CERTAIN OBLIGATIONS TO SELL AND TO PURCHASE THE
SHARES EVIDENCED BY THIS CERTIFICATE, FOR A DESIGNATED
PURCHASE PRICE. BY ACCEPTING THE SHARES EVIDENCED BY THIS
CERTIFICATE THE HOLDER AGREES TO BE BOUND BY SAID AGREEMENT."
Omission of such legend shall not, however, vitiate the effect of this Agreement
in any respect as against any person with actual or constructive notice of the
existence of this Agreement.
8.2 Additional Parties to Agreement. Before any Shares are issued or
transferred of record on the books of the Corporation in the future to any
person or entity whatsoever other than a signatory to this Agreement, such
person or entity shall be required to become a party to this Agreement.
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8.3 Pledge of Shares. No Stockholder may pledge his, her or its Shares
without the consent of the Board of Directors.
9. Drag-Along Rights; Pre-Emptive Rights.
9.1 Drag-Along Rights. In the event that (i) (a) Xxxxxx Xxxxx ceases to be
President, Chairman or an employee of the Corporation, (b) Xxxxx ceases to own
all of the capital stock of SSI, or (c) SSI ceases to own the Shares it
currently owns, and (ii) all of Walnut, Windsor and Xxxxxxxxx arrange for a bona
fide third-party to purchase or otherwise acquire all of the shares of the
Corporation, then Walnut, Windsor and Xxxxxxxxx shall give written notice to the
Stockholders of the terms of the offer and the Stockholders shall agree to
transfer and hereby agree to transfer all of the Shares in the Corporation
pursuant to the same terms as Walnut, Windsor and Xxxxxxxxx are bound.
9.2 Pre-Emptive Rights. (a) The Corporation hereby grants to each
Stockholder the right to purchase his, her or its pro rata share of Additional
Shares (as defined below) that the Corporation may, from time to time, propose
to sell and issue. Each Stockholder's pro rata share, for purposes of this
preemptive right, is such Stockholder's pro rata share of Common Stock (which
number shall be determined as if all of the Shares which are convertible into
Common Stock had been so converted as of the date of such determination).
(b) "Additional Shares" shall mean any shares or other securities of the
Corporation, whether now authorized or not, and rights, options or warrants to
purchase said shares or other securities of the Corporation, and securities of
any type whatsoever that are, or may become, convertible into or exchangeable
for said Shares (or other securities of the Corporation), provided that
"Additional Shares" shall not include (i) up to 2,200,000 shares of Common Stock
or other securities, or rights, options or warrants to purchase said shares of
Common Stock or other securities of the Corporation, securities of any type
whatsoever that are, or may become, convertible into or exchangeable for said
shares of Common Stock sold or granted to employees or advisors of the
Corporation pursuant to an Employee Stock Plan approved by the Board of
Directors of the Corporation, (ii) securities of the Corporation issued and sold
pursuant to a registration statement filed under the Securities Act of 1933, as
amended (the "Securities Act"), (iii) Shares or other securities of the
Corporation, options or warrants to purchase the Shares or other securities of
the Corporation and securities of any type whatsoever that are, or may become,
convertible or exchangeable for said Shares issued in connection with
acquisitions by the Corporation; (iv) the Xxxxx Shares and the Optional Increase
(as defined in the Series D Stock Purchase Agreement between the Corporation and
the Purchasers named therein, dated September 21, 2001 (the "Stock Purchase
Agreement")) or (v) up to $10,000,000 of the Company's Series E Preferred Stock
(as defined in the Stock Purchase Agreement).
(c) In the event that the Corporation proposes to undertake an issuance of
Additional Shares, the Corporation shall give each Stockholder written notice (a
"Sales Notice") of the Corporation's intention, describing the type of
Additional Shares, the price and the general terms upon which the Corporation
proposes to issue the same. Each Stockholder shall have twenty (20) business
days from the date of receipt of any such Sales Notice (unless a shorter period
is consented to by the President and greater than fifty percent (50%) of the
shares of
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Common Stock (which number shall be determined as if all of the Shares which are
convertible into Common Stock had been so converted as of the date of such
determination)) to agree to purchase his, her or its pro rata share of such
Additional Shares for the price and upon the general terms specified in the
Sales Notice by giving written notice to the Corporation and stating therein the
quantity of Additional Shares to be purchased. In the event that a Stockholder
initially fails to exercise in full his, her or its preemptive rights within
said period, the Corporation shall promptly advise those Stockholders who have
exercised such right who may then purchase the Additional Shares as to which
Stockholders have not exercised such right, pro rata based upon their respective
percentage of the Common Stock of the Corporation as provided in paragraph (a)
of this SECTION 9.2 or as they otherwise may agree among themselves. The process
in the immediately preceding sentence shall continue until all of the Additional
Shares have been purchased or until no Stockholder desires to purchase any
remaining unpurchased Shares. This right of over-allotment must be exercised by
notice to the Corporation within five (5) business days after the Stockholder's
receipt of notice that all Stockholders have not exercised their preemptive
rights in full.
(d) In the event that the Stockholders collectively fail to exercise in
full the preemptive right as aforesaid, the Corporation shall have 90 days
thereafter to sell (or enter into an agreement pursuant to which the sale of
Additional Shares covered thereby shall be closed, if at all, within thirty (30)
days from the date of said agreement) the Additional Shares respecting which the
Stockholders' rights were not exercised at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Corporation's Sales Notice. In the event the Corporation has not sold the
Additional Shares within said 90 day period (or sold and issued Additional
Shares in accordance with the foregoing within thirty (30) days from the date of
said agreement), the Corporation shall not thereafter issue or sell any
Additional Shares without first offering such Shares to the Stockholders in the
manner provided in this SECTION 9.2. The failure by any Stockholder to exercise
his, her or its preemptive rights with respect to any Additional Shares on any
occasion shall not affect its right to purchase Additional Shares hereunder on
any subsequent occasion.
(e) If a Stockholder gives the Corporation notice, in accordance with the
foregoing provisions of this SECTION 9.2, that such Stockholder desires to
purchase any Additional Shares, payment therefor shall be made by check or wire
transfer within ten (10) business days after giving the Corporation such notice,
or at the option of the Corporation, upon the closing date for the sale of such
Additional Shares to other persons as contemplated by SECTION 9.2 above.
10. Termination.
10.1 Events. This Agreement and all restrictions on transfer of Shares
created hereby shall terminate on the occurrence of any of the following events:
(a) The bankruptcy or dissolution of the Corporation.
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(b) A single Stockholder becoming the owner of all of the Shares of
the Corporation, which are then subject to this Agreement.
(c) The execution of a written instrument by the Corporation and the
Stockholders who are party to this Agreement and who collectively own not less
than ninety percent (90%) of the Corporation's Shares of Common Stock (which
number shall be determined as if all of the Shares which are convertible into
Common Stock had been so converted as of the date of such determination), which
terminates the same.
(d) The closing of a sale of Shares of the Corporation's Common Stock
in a firm-commitment underwritten public offering registered under the
Securities Act in which gross proceeds to the Corporation (prior to
underwriter's discounts and commissions and other expenses) are at least
$25,000,000 and (i) at any time prior to the third anniversary of the date
hereof, the offering is managed by a nationally recognized underwriter, (ii)
between the third and fourth anniversary of the date hereof, the price per share
is at least $15 (appropriately adjusted for stock splits, recapitalizations and
the like) and (iii) thereafter the price per share is at least $20.
10.2 Effect. The termination of this Agreement for any reason shall not
affect any right or remedy existing hereunder prior to the effective date of its
termination.
11. Management of the Corporation.
11.1 Composition of the Board. The Corporation shall have a Board of
Directors comprised of seven (7) members. With respect to each of the Trust,
Walnut, KCEP and Xxxxxxxxx ("Senior Stockholders") for so long as each holds
fifty percent (50%) or more of such Senior Stockholder's originally acquired
preferred stock of the Corporation ("Senior Preferred Shares") then each such
Senior Stockholder shall designate one member of the Board of Directors;
provided, however, that in the case of the Trust, the Trust may only nominate
Xxxxxx X. Xxxxxxxx, his wife or Xxxxxxxxxxx Xxxxxxxx as such director. In the
event that one or more such Senior Stockholder's ceases to hold 50% of such
Senior Stockholder's Senior Preferred Shares then such Senior Stockholder shall
not designate a successor director at the expiration of such directors term and
such successor director shall be designated by a majority of the then-elected
board of directors. SSI shall designate two directors, one of whom shall be
Xxxxxx Xxxxx. One director's seat shall remain vacant until the date upon which
the Company issues the Series E Preferred Stock or the date upon which the Board
of Directors unanimously agrees to fill such seat, provided that the person
designated to fill such seat shall not be an Affiliate of any of the other
members.
11.2 Agreement to Vote Shares. Each of the Stockholders shall at all times
exercise their respective voting power to support each of the other Stockholders
in appointing directors to the Board in accordance with this SECTION 11 and
shall cause each of his nominated directors to exercise their respective voting
power to elect the Xxxxxx Xxxxx as the Corporation's Chairman, President, and
Chief Executive Officer so long as Xxxxxx Xxxxx is in compliance with the terms
and conditions of the Employment Agreement with the Corporation. Each
Stockholder hereby agrees at all times during which this Agreement remains in
effect to vote any Pledged
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Shares (as hereinafter defined) held by such Stockholder in the same manner as
the holders of greater than fifty percent (50%) of the Shares on all matters on
which such Stockholder is entitled to vote. For purposes of this Section 11.2
"Pledged Shares" shall mean all shares of Common Stock that are pledged to, or
used as collateral for or secure any loan or other obligation by a Stockholder
to the Corporation.
11.3 Removal and Vacancy of Directors. In the event any Stockholder wishes
to remove a director who has been elected as such Stockholder's nominee, the
other Stockholders shall vote for such removal. In the event a vacancy in the
office of a director so elected is caused by death, disability, retirement or
removal of a director other than Xxxxxx Xxxxx, the vacancy shall be filled by
appointing or electing the nominee of the Stockholder whose previous nominee is
deceased, retired or removed. In the event of the death or disability of Xxxxxx
Xxxxx, such vacancy shall be filled by a vote of greater than fifty percent
(50%) of the Senior Preferred Shares. In the event any Stockholder wishes to
remove an officer who has been elected as his or her nominee, the other
Stockholders shall cause the directors they have nominated to vote for such
removal. In the event a vacancy in the office of an officer so elected is caused
by death, retirement or removal of such officer other than Xxxxxx Xxxxx, the
vacancy shall be filled by appointing or electing the nominee of the Stockholder
whose previous nominee is deceased, retired or removed.
11.4 Required Votes. Except as provided in this Agreement or the Bylaws of
the Corporation, all actions by the Board shall be by (i) simple majority of the
Board members present either in person or by telephone at a duly called meeting
at which a quorum is present or (ii) by written unanimous consent.
11.5 Interested Directors. Persons nominated for the position of director
shall not be deemed disqualified to serve by reason of their being officers,
directors or stockholders of any of the Stockholders or their Affiliates. Except
as otherwise provided herein, no director shall be deemed to have an interest in
a matter and thereby disqualified to vote or serve on the ground that such
director is a nominee of one of the Stockholders if the matter under
consideration involves commercial, financial or other relationships between the
Corporation and any of the Stockholders or their Affiliates.
11.6 Committees. The Directors designated by Xxxxxxxxx, Walnut and Windsor
shall each have the option to be appointed to any committees of the Board of
Directors, whether now existing or hereinafter created (but consistent with the
fiduciary duties of the members of the Board of Directors). No executive or
other committee consisting of less than all of the members of the Board of
Directors shall be established with the maximum powers of the Board of Directors
permitted under Delaware law to be delegated to a Board committee.
11.7 Observer Rights. Each Director shall be entitled to have one
representative attend in a nonvoting observer capacity at all meetings of the
Board of Directors; provided, however, that the Corporation shall not be
required to pay the expenses of any such observer incurred with respect to
attending any meeting of the Board of Directors and reserves the right to
exclude such representative from access to any meeting or portion thereof if the
Corporation
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reasonably believes that such exclusion is reasonably necessary to preserve the
attorney-client privilege, to protect highly confidential proprietary
information or for other similar reasons.
12. Arbitration.
Any dispute between the Stockholders as to the interpretation of this
Agreement shall be settled by arbitration in accordance with the following
procedures:
12.1 The party desiring to arbitrate an issue (the "Commencing Party")
shall send a notice to the other Stockholders (the "Responding Parties")
specifying in reasonable detail the issue to be arbitrated. The parties shall
thereafter agree as to the arbitrator to be used to decide the issue, but if the
parties do not agree on one arbitrator within three weeks of the Commencing
Party's sending such notice, or if the arbitrator selected by the parties is
unable or unwilling to serve as an arbitrator for any reason, the head of the
American Arbitration Association in St. Louis, Missouri shall select a single
arbitrator.
12.2 Within five business days after selection, the arbitrator shall set a
date for the arbitration proceedings which shall be not later than 30 days
thereafter. The arbitration shall be conducted at such location in the St. Louis
Metropolitan area as may be selected by the arbitrator.
12.3 The decision entered by the arbitrator shall be final and binding on
all parties to arbitration.
12.4 Each party shall bear its respective arbitration expenses. The
Commencing Party shall pay fifty percent (50%) of the arbitrator's charges and
expenses and the Responding Parties shall collectively pay fifty percent (50%)
of the arbitrator's charges and expenses, pro rata according to their respective
Share percentages.
13. Financial Statements and Other Information. The Corporation shall
maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP (it being understood that monthly financial statements are
not required to have footnote disclosures). The Corporation shall deliver to the
Stockholders each of the financial statements and other reports described below:
13.1 Monthly and Quarterly Financial Information. As soon as available and
in any event within forty-five (45) days after the end of each month, the
Corporation shall deliver (i) the balance sheet of the Corporation, as at the
end of such month and the related statements of income, stockholders' equity and
cash flow for such month and for the period from the beginning of the then
current fiscal year of the Corporation to the end of such month (and, with
respect to financial statements delivered for months that are also the last
month of any fiscal quarter, accompanied by the related consolidated and
consolidating statements of income, stockholders' equity and cash flow for such
fiscal quarter) and (ii) a schedule of the material outstanding Indebtedness for
borrowed money of the Corporation describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid
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interest with respect to each such debt issue or loan. Notwithstanding
the foregoing to the contrary, from and after January 1, 2002, the financial
information required to be delivered pursuant to this paragraph shall be
delivered as soon as available following the end of each fiscal month, but in no
event later than thirty (30) days after the end of such fiscal month.
13.2 Year-End Financial Information. As soon as available and in any event
within one hundred twenty (120) days after the end of the fiscal year of the
Corporation, the Corporation shall deliver (i) the balance sheets of the
Corporation as at the end of such year and the related statements of income,
stockholders' equity and cash flow for such fiscal year, (ii) a schedule of the
material outstanding Indebtedness for borrowed money of the Corporation
describing in reasonable detail each such debt issue or loan outstanding and the
principal amount and amount of accrued and unpaid interest with respect to each
such debt issue or loan, and (iii) a report with respect to the financial
statements from a "Big Five" firm of certified public accountants selected
by the Corporation, which report shall be issued pursuant to an audit conducted
by such firm of certified public accountants in conformity with generally
accepted accounting standards. The Corporation shall use commercially reasonable
efforts to ensure that such report shall contain an "Unqualified" opinion (as
such term is defined in AU Section 508.10 of the American Institute of Certified
Public Accountants Professional Standards).
13.3 Accountants' Reports. Promptly upon receipt thereof, the Corporation
shall deliver copies of all significant reports submitted by the Corporation's
firm of certified public accountants in connection with each annual, interim or
special audit or review of any type of the financial statements or related
internal control systems of the Corporation made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their services.
13.4 Management Reports. The Corporation will deliver within forty-five
(45) days after the end of each fiscal month a management report (i) describing
the operations and financial condition of the Corporation for the month then
ended and the portion of the current fiscal year then elapsed (or for the fiscal
year then ended in the case of year-end financials), (ii) setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the most recent
projections for the current fiscal year and (iii) discussing the reasons for any
significant variations. The information above shall be presented in reasonable
detail and shall be certified by the chief financial officer of the Corporation
to the effect that such information fairly presents the results of operations
and financial condition of the Corporation as at the dates and for the periods
indicated.
13.5 Projections. No earlier than sixty (60) days prior nor later than
thirty (30) days after the end of each fiscal year beginning with the current
fiscal year, the Corporation shall prepare and deliver to Stockholders
projections of the Corporation for the next succeeding fiscal year, on a month
to month basis and for the following four (4) fiscal years on a quarter to
quarter basis, including a balance sheet as of the end of each relevant period
and income statements and statements of cash flows for each relevant period and
for the period commencing at the beginning of the fiscal year and ending on the
last day of such relevant period.
11
13.6 Events of Default, Etc. Promptly upon the Corporation's obtaining
knowledge of any of the following events or conditions, the Corporation shall
deliver copies of all notices given or received by the Corporation with respect
to any such event or condition and a certificate of the Corporation's chief
executive officer specifying the nature and period of existence of such event or
condition and what action the Corporation has taken, is taking and proposes to
take with respect thereto: (i) any condition or event that constitutes a
material breach of any provision of this Agreement; (ii) any notice that any
Person has given to the Corporation, or any other action, taken with respect to
a claimed default in any agreement evidencing indebtedness or any other material
agreement to which the Corporation is a party; or (iii) any event or condition
that could reasonably be expected to result in any Material Adverse Effect on
the Condition of the Corporation.
13.7 Litigation. Promptly upon the Corporation's obtaining knowledge of
(i) the institution of any action, suit, proceeding, governmental investigation
or arbitration against or affecting the Corporation or any property of the
Corporation not previously disclosed by the Corporation to the Stockholders or
(ii) any material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting the
Corporation or any property of the Corporation which, in each case, is
reasonably possible to have a Material Adverse Effect on the Condition of the
Corporation, the Corporation will promptly give notice thereof to the
Stockholders and provide such other information as may be reasonably available
to them to enable the Stockholders and their counsel to evaluate such matter.
14. Representations and Warranties. Each Stockholder represents and
warrants to the Corporation and the other Stockholders as follows:
14.1 The execution, delivery and performance of this Agreement by such
Stockholder will not violate any provision of law, any order of any court or
other agency of government, or any provision of any indenture, agreement or
other instrument to which such Stockholder or any of its or his properties or
assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
such Stockholder.
14.2 This Agreement has been duly executed and delivered by such
Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable in accordance with its terms.
14.3 The Shares set forth in EXHIBIT A opposite the name of such
Stockholder constitute all the shares of the capital stock of the Corporation
owned by such Stockholder or that such Stockholder has acquired or may acquire
pursuant to any stock purchase or other subscription agreements.
15. General Provisions.
12
15.1 Governing Law. This Agreement shall be construed pursuant to the laws
of the State of Delaware, without regard to principles of conflict of laws.
15.2 Definitions. Unless the context otherwise requires, the words
"Stockholder" and "Stockholders" shall for all purposes of this Agreement mean
and include (i) all of the individual parties hereto and (ii) all persons to
whom any Shares may hereafter be transferred. "Affiliate" or "Affiliates" shall
mean with respect to any Stockholder, any individual, partnership, limited
partnership, limited liability company, corporation, trust, real estate
investment trust, estate, association and other business or not for profit
entity ("Person") (ii) (a) who directly or indirectly controls, is controlled
by, or is under common control with the Stockholder; (b) who owns or controls
fifty percent (50%) or more of the Stockholder's outstanding voting securities
or equity interests; (c) in whom such Stockholder owns or controls fifty percent
(50%) or more of the outstanding voting securities or equity interests; (d) who
is a director, partner, member, manager, executive officer or trustee of the
Stockholder; (e) in whom the Stockholder is a director, partner, member,
manager, executive officer or trustee; or (f) who has any relationship with the
Stockholder by blood, marriage or adoption, not more remote than first cousin.
15.3 Remedies for Breach. The Shares are unique chattels and each party to
this Agreement shall have the remedies which are available to him or it for the
violation of any of the terms of this Agreement, including, but not limited to,
the equitable remedies for specific performance and injunctive relief.
15.4 Notices. All notices provided for by this Agreement shall be made in
writing (i) either by actual delivery or (ii) by the mailing of the notice in
the United States mail to the last known address of the party entitled thereto,
registered or certified mail, return receipt requested, courier service or
personal delivery and shall be deemed to have been duly given or made and to
have become effective when delivered in hand to the party to which directed,
when delivered by courier if delivered by commercial overnight courier service,
or if sent by first-class registered mail, postage prepaid and properly
addressed, at the earlier of (a) the time when received by the addressee or (b)
the fifth business day following the dispatch thereof.
15.5 Amendment. This Agreement may be amended or altered at any time if
the amendment or alteration is both ratified by the Board of Directors of the
Corporation and consented to in writing by Stockholders who are parties to this
Agreement and who collectively own not less than seventy-five percent (75%) of
the Corporation's Shares.
15.6 Descriptive Headings. Titles to Sections are for information purposes
only.
15.7 Binding Effect. This Agreement is binding upon and inures to the
benefit of the Corporation, its successors, assigns, and transferees, and to the
Stockholders and their respective heirs, personal representatives, successors
and permitted assigns and transferees including any successor entity by merger
or consolidation to the Corporation, unless
13
Stockholders who own not less than two-thirds of the Corporation's Senior
Preferred Shares (as defined in the Certificate of Incorporation) approve the
merger or consolidation.
15.8 Conflict With Bylaws. If any terms or provisions in this Agreement
conflict with or are inconsistent with the terms of the Bylaws of the
Corporation, then the terms of this Agreement shall control.
14
SIGNATURE PAGES FOR
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the Corporation and the Stockholders have executed
this Agreement on the day and year above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
BUILD-A-BEAR WORKSHOP, INC.
By /s/ Xxxxxx Xxxxx
-----------------------------
Xxxxxx Xxxxx, President
STOCKHOLDERS:
SMART STUFF, INC.,
a Missouri corporation
/s/ Xxxxxx Xxxxx
-------------------------------
By: Xxxxxx Xxxxx
XXXXX/XXX, L.L.C.
a Missouri limited liability company
/s/ Xxxxxx Xxxxx
-------------------------------
By: Xxxxxx Xxxxx, its Manager
XXXXX/FOX II, L.L.C.
a Missouri limited liability company
/s/ Xxxxxx Xxxxx
-------------------------------
By: Xxxxxx Xxxxx, its Manager
/s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx
Xxxxxx X. Xxxxxxxx Revocable Trust dated
July 23, 1986
Xxxxxx X. Xxxxxxxx Rev. Tr.
-----------------------------------
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
/s/ Xxxxx X. Xxxxx, XX
---------------------------
Xxxxx X. Xxxxx, XX
/s/ Xxxxx Vent
Xxxxx Vent
HYCEL PARTNERS V, L.L.C.,
a Missouri limited liability company
/s/ Xxxx X. Xxxxxxxx
-------------------------------
By: Xxxx X. Xxxxxxxx, Manager
----------------------------
WALNUT CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: Walnut Capital Management Group, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxx
-----------------------
Manager
WALNUT INVESTMENT PARTNERS, L.P.,
a Delaware limited partnership
By: Walnut Investments Holding Company, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxx
------------------------
Manager
2
KCEP VENTURES II, L.P.,
a Missouri limited partnership
By: KCEP II, L.C., its general partner
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx, its Managing Director
XXXXXXXXX PARTNERS IV, L.P.,
a Delaware limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
XXXXXXXXX PARTNERS IV-A, L.P.,
a Delaware limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
3
XXXXXXXXX PARTNERS IV-B, L.P.,
a Delaware limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
XXXXXXXXX PARTNERS IV OFFSHORE, LP.
a Cayman limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: Managing General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
XXXXXXXXX PARTNERS IV SPECIAL PURPOSE, L.P.
a Cayman limited partnership
By: Xxxxxxxxx Managing Partner IV, L.L.C.
Its: Managing General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
4
The following persons are executing this
document solely with respect to the Sections 1
through 12, 14 and 15 of this Agreement:
/s/ Xxxxxxxx Xxxxx
------------------------------
Xxxxxxxx Xxxxx
/s/ Xxxxxxxxxxx Xxxxxxxx
------------------------------
Xxxxxxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
5
SCHEDULE 1
STOCKHOLDERS
Smart Stuff, Inc., a Missouri corporation ("SSI");
Xxxxxx X. Xxxxxxxx Revocable Trust dated July 23, 1986 (the "Trust")
Xxxxxx Xxxxx ("Xxxxx");
Xxxxx X. Xxxxx, XX ("Xxxxx");
Xxxxx Vent ("Vent");
Hycel Partners V, L.L.C., a Missouri limited liability company ("Hycel");
Walnut Capital Partners, L.P., a Delaware limited partnership and Walnut
Investment Partners, L.P., a Delaware limited partnership
(collectively, "Walnut");
KCEP Ventures II, L.P., a Missouri limited partnership ("KCEP");
Xxxxxxxx Xxxxx ("Xxxxx");
Xxxxxxxxxxx Xxxxxxxx;
Xxxxxx Xxxxxx;
Xxxxx/Fox, L.L.C., and Xxxxx/Xxx II, L.L.C., each a Missouri limited
liability company (collectively, "Xxxxx/Fox"); and
Xxxxxxxxx Partners IV, L.P., Xxxxxxxxx Partners IV-A, L.P., and Xxxxxxxxx
Partners IV-B, L.P., each a Delaware limited partnership, Xxxxxxxxx
Partners IV Offshore, L.P. a Cayman Island limited partnership and
Xxxxxxxxx Partners IV Special Purpose, L.P. a Cayman Island limited
partnership (collectively, "Xxxxxxxxx").
EXHIBIT A
SHARES OWNED BY THE STOCKHOLDERS
STOCKHOLDER CLASS SHARES OWNED
----------------------------------------------- ------------- ---------------------------
SSI C 3,418,306
Trust C 911,383
A 1,264,278
B 190,963
Common 84,791
Xxxxx Common 274,815
Xxxxx C 64,500
A 3,230
B 4,881
D 18,409
Vent C 64,500
A 3,230
B 4,881
D 18,409
Common 20,491
Hycel A 160,782
B 306,783
D 131,148
Common 23,572
Walnut Capital Partners, L.P. A 913,199.85
B 1,380,418.4
Common 93,863.8
Walnut Investment Partners, L.P. D 677,869
KCEP A 231,708
B 350,115
D 426,230
Common 10,352
2
C 65,276
Xxxxx A 3,269
B 4,940
D 18,631
Xxxxxxxxxxx Xxxxxxxx C 474,124
Xxxxxx Xxxxxx Common 4,940.2
A 48,063.15
B 72,653.6
Xxxxx/Fox, L.L.C. A 171,200
B 258,686
D 65,574
Xxxxx/Xxx II, L.L.C. D 147,541
Xxxxxxxxx A 707,992
B 1,069,786
D 1,305,738
3
EXHIBIT B
DETERMINATION OF THE PURCHASE PRICE
1. The price of Shares to be purchased under this Agreement shall be their
Fair Market Value as of the end of the Corporation's fiscal quarter immediately
preceding the event giving rise to the purchase and sale.
2. The term "Fair Market Value" as used in paragraph 1 of this EXHIBIT B
shall be an amount which bears the same proportion to the amount of the Net
Worth of the Corporation as the number of Shares to be purchased bears to the
total number of the Corporation's Shares outstanding.
3. The Net Worth of the Corporation shall be the price at which the
Corporation would be sold to a willing buyer by willing seller. The Net Worth of
the Corporation shall be determined by agreement of the Board of Directors of
the Corporation (with the transferring Stockholder not participating) and the
transferring Stockholder. If the Corporation and the transferring Stockholder
are unable to agree as to the Net Worth of the Corporation, then the Net Worth
of the Corporation shall be determined by one or more qualified business
appraisers selected in the following manner:
a. The Corporation and the transferring
Stockholder shall attempt jointly to select an
appraiser within 30 days after the event giving rise
to the purchase and sale. If an appraiser is so
selected in a timely manner, the appraisal shall be
binding on all parties.
b. If the Corporation and the transferring
Stockholder are unable jointly to select an appraiser
in a timely manner, the Corporation shall select an
appraiser within 40 days of the event giving rise to
the purchase and sale and shall notify the
transferring Stockholder of its selection within one
business day thereafter. The Corporation shall pay
the costs of such appraisal and shall provide the
transferring Stockholder with a copy of such
appraisal within one business day after receipt of
the appraisal by the Corporation. Unless the
transferring Stockholder submits to the Corporation
not later than 5 business days thereafter written
notice that the transferring Stockholder objects to
the appraisal, such appraisal shall be binding on all
the parties.
c. If the transferring Stockholder delivers
to the Corporation timely written notice of objection
to the Corporation's appraisal as above provided, the
transferring Stockholder shall select an appraiser
within 5 business days after the date of the
Stockholder's written objection, and shall notify the
Corporation of such selection within one business day
thereafter. The Transferring Stockholder shall pay
the costs of such appraisal obtained by the
transferring Stockholder. The transferring
Stockholder shall provide the Corporation with a copy
of such appraisal within one business day after
receipt of the appraisal by the transferring
Stockholder. If the transferring Stockholder declines
or fails to make a timely selection of an appraiser,
then the single appraisal obtained by the Corporation
as above provided shall be binding on all parties.
d. If the two appraisals differ in value by
less than 15%, the average of the two appraisals
shall be binding on all parties.
e. If the two appraisals differ in value by
more than 15%, the appraisers who made the two
appraisals shall select a third appraiser, and shall
notify the transferring Stockholder and the
Corporation of such selection within one business day
thereafter. The cost of the third appraisal shall be
split evenly between the Transferring Stockholder and
the Corporation. The third appraiser shall select one
of the two previously prepared appraisals, and such
selection shall be binding on all parties.
2
EXHIBIT C
PROMISSORY NOTE
$ ______________ ______________, ______
For value received, the undersigned promises to pay to __________ or order
the sum of $____ at________, with interest at ________ percent (__%) per annum,
in installments payable as follows: Monthly payments in the sum of $_______,
the first payment to be made on the _____ day of ___________________, _____ and
a like amount on the ____ day of each succeeding month thereafter with the final
payment on the then outstanding principal balance to be made on the _____ day
___________________,____.
This Note and all installments are to bear interest after maturity thereof
at the rate of ______ percent (__%) per annum. The interest on each installment,
and the interest on the unpaid balance of the principal sum are to be paid at
the maturity of each installment.
If default is made in the payment of any installment whether interest or
principal, when due, then all the remaining installments shall, at the option of
the holder, become due and payable at once. In addition, in the event of a sale
of assets by the Maker, other than in the ordinary course of business, or as
trade-ins or other sale or exchange for the purpose of replacing any such
assets, or the sale of Shares by the current stockholders to a new stockholder,
or the issuance of new stock by the Maker to someone other than the current
stockholders, the Holder may, at the Holder's option, declare this Note
immediately due and payable to the extent of the proceeds received by the Maker
upon such sale.
In case suit shall be brought on this Note, the Maker agrees to pay the
Holder's reasonable attorney's fees and Court costs. All signers, endorsers,
guarantors and parties to this instrument hereby waive demand, protest and
notice of nonpayment and agree to all extensions and partial payments before or
after maturity.
By:
--------------------------------
, President
-------------------
ATTEST:
--------------------------------
, Secretary
---------------------
EXHIBIT D
COLLATERAL PLEDGE AGREEMENT
In consideration of, and as collateral security for the payment of, the
liabilities of ___________________ (the "Pledgor"), to ___________________ (the
"Pledgee") evidenced by or arising in connection with (1) a certain
Stockholders' Agreement entered into between Pledgor and Pledgee on April 3,
2000, and (2) a certain Promissory Note of even date herewith executed by the
Pledgor and payable to Pledgee' and all renewals and extensions of such
liabilities (herein collectively called the "Liabilities"), Pledgor hereby
assigns, pledges and delivers to Pledgee ____________ shares of the
________________ stock of Build-A-Bear Workshop, Inc. and grants Pledgee a
continuing security interest in said shares, together with all proceeds thereof,
substitutions therefor and rights associated therewith (referred to collectively
herein as the "Collateral"), all of which the Pledgor owns free of liens or
claims of any kind and has the right to pledge to Pledgee.
Pledgor hereby agrees that the Collateral shall constitute security for
any and all of the Liabilities. Pledgor authorizes Pledgee to cause any
Collateral to be transferred, in such manner and at such time(s) as Pledgee may
determine, into the names of Pledgee or Pledgee's nominees and this instrument
shall constitute Pledgee's authority to make such transfer(s).
Pledgor agrees that:
(1) Pledgor will execute, endorse and deliver all documents which Pledgee
may reasonably require to secure Pledgee's interests under this Collateral
Pledge Agreement.
(2) Pledgor shall have no right to call, exchange, convert or otherwise
change or alter the form of the Collateral without the consent of Pledgee so
long as any portion of the Liabilities remain unpaid. Any dividend, increase or
distribution paid in cash out of the earnings of the issuer of any stock
constituting a part of the Collateral shall be released to Pledgor by Pledgee
unless such Collateral is transferred into the name of Pledgee or Pledgee's
nominee, and Pledgor shall retain all voting rights with respect to such
Collateral, except in the case of a default as defined herein. Any instruments,
securities, rights or the like which an owner of the Collateral has the right to
receive by way of stock split-up, stock dividend, warrants or other increase in
the Collateral (except dividends as set forth above) will be delivered to
Pledgee and Pledgee may, without notice or demand, take such action as is
necessary to assure Pledgor's direct receipt thereof.
(3) The following events shall severally be considered events of default:
(a) material misrepresentation of any fact or warranty stated or made to Pledgee
by Pledgor, (b) failure by Pledgor to perform any term or provision of this or
any other agreement with Pledgee, (c) default in the payment of any sum due on
any of the Liabilities, (d) Pledgor's insolvency, adjudication of bankruptcy,
making an assignment for the benefit of creditors or
suffering appointment of a receiver or seeking relief under any debtor's relief
law, (e) seizure of the Collateral by lawful execution or the sale or
encumbrance thereof (except as provided herein), failure to pay any tax thereon
when due (except any tax contested in good faith) or default on any debt or
security instrument constituting part of the Collateral , (f) material default
under the Stockholder's Agreement. Upon any such event of default all of the
Liabilities shall, at the option of Pledgee, become immediately due and payable
and Pledgee may without notice or demand (i) offset any obligations of Pledgee
to Pledgor against any of the Liabilities and (ii) forthwith realize upon the
Collateral or any part thereof and receive the proceeds therefrom, and may also,
without demand, advertisement or notice, sell at public or private sale, or at
any exchange or broker's board, at such prices and upon such terms and
conditions as Pledgee may deem best, either for cash or on credit, or for future
delivery, any part or all of such Collateral. Pledgee shall have the right at
any such sale, public or private, to purchase the whole or any part of such
Collateral so sold, provided that any excess of such Collateral or proceeds
thereof over the amount of the Liabilities shall be returned to the Pledgor.
(4) In addition, Pledgee shall have all rights of a secured party under
the Missouri Uniform Commercial Code and shall first be entitled to apply the
proceeds of collection, disposition or other realization on the Collateral to
reasonable attorneys' fees and legal expenses incurred by Pledgee in the
collection of any Liabilities, and thereafter as required by law.
(5) If notice of default or of intended disposition is required by law,
then such notice, if mailed, shall be deemed reasonably and properly given if
mailed by or on behalf of Pledgee to the principal business address of Pledgor
at least ten (10) days before the time of such disposition. If in the opinion of
Pledgee any Collateral cannot be disposed of in a commercially reasonable manner
without registration under applicable securities laws, Pledgor will take or
cause to be taken such action as is necessary to effect proper registration, and
if Pledgor shall refuse to take such action, Pledgee, at his or her sole
election, but without any obligation to do so, may take such action as he or she
deems warranted to effect or attempt to effect compliance with any applicable
law and any cost incurred by Pledgee in connection therewith or in enforcing
Pledgor's agreement will be considered a cost incurred in disposition of the
Collateral.
(6) Pledgee's rights hereunder shall continue unimpaired notwithstanding
foreclosure or other disposition of any part of the Collateral, the availability
of additional Collateral, any release of or substitution for any of the
Collateral, any act or omission impairing Pledgee's lien on the Collateral or
the lien of any underlying security constituting part of the Collateral,
including failure to perfect the same, any extension (including extension of
time for payment), renewal, substitution, alteration, compromise, settlement,
surrender or other such agreement or action transferring, modifying or varying
the terms of or otherwise affecting any of the Liabilities or any part of the
Collateral, including any act or omission releasing any party primarily or
secondarily liable on the Collateral or on any of the Liabilities. No failure by
Pledgee to exercise or delay in exercising any of his or her rights hereunder
shall constitute a waiver thereof by Pledgee and no single or partial exercise
of any right shall preclude the further exercise thereof or the exercise of any
other right from time to time. All rights granted to Pledgee hereunder are
cumulative and not in substitution of any other rights at law or equity with
2
respect to the Collateral or the collection of the Liabilities. Pledgor hereby
waives notice of any and all actions, forbearance's and omissions of any rights
contemplated by this section and consents to be bound thereby as effectively as
if Pledgor had agreed thereto in advance.
(7) Pledgee may assign or negotiate and deliver any of the Collateral to
any transferee of any of the Liabilities and Pledgee shall thereafter be
relieved of any responsibility for the Collateral so transferred and all rights
of Pledgee hereunder shall inure to his or her transferees.
(8) This Agreement shall be governed by Missouri law and the rights and
obligations hereunder shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, assigns, legatees, transferees and
legal representatives.
---------------------------------------------
Pledgor
3
