Exhibit 99(c)(10)
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") made as of this 10th
day of August, 1999, by and among, COMC, Inc., an Illinois corporation (the
"Company"), Xxxx X. Xxxxxxxx ("JA"), Xxxxxxx X. Xxxxx and Xxxxxx Xxxxx as
Trustees for The Xxxxx Family Trust and ("MB"), Xxxxxxx X. Xxxxxxx and Xxxxxxxx
Xxxxxxx as Trustees for The Lincoln Family Trust ("CL") and Xxxxxxxxxxx X. Xxxxx
("CRS," and together with JA, MB and CL, the "Stockholders").
W I T N E S S E T H
WHEREAS, simultaneously with the execution and delivery of
this Agreement, CRS shall purchase 200,000 shares of the common stock, $.01 par
value (the "Common Stock") of COMC, Inc., an Illinois corporation (the
"Company") pursuant to the Stock Purchase Agreement, dated as of the date
hereof, by and among JA, the Company and CRS (the "Stock Purchase Agreement");
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Company shall grant CRS an option to purchase 2,463,896
shares of the Common Stock of the Company pursuant to an option agreement (the
"CRS Option");
WHEREAS, simultaneously with the execution and delivery of
this Agreement, MB and CL are restructuring notes issued to them by the Company
pursuant to a senior subordinated note, a loan agreement and a guaranty (the
"Note Restructure Agreements") by and between the Company and each of them, and
are each being issued an option to purchase aggregate of 376,623 shares of the
Company (together with the CRS Option, the "Option Agreements");
WHEREAS, JA currently owns 3,349,052 shares of Common stock
and MB and CL each beneficially own ___________ shares of Common Stock [both as
individuals and] through The Xxxxx Family Trust and The Lincoln Family Trust,
respectively;
WHEREAS, CRS has the power to vote on behalf of certain
individuals with respect to 815,000 shares of Common Stock pursuant to a Voting
Proxy, dated August 10, 1999, among CRS and such individuals.
WHEREAS, the execution and delivery of this Agreement is a
condition precedent to the performance of the obligations of CRS under the Stock
Purchase Agreement;
WHEREAS, the parties hereto wish to provide for certain rights
and procedures upon certain proposed issuances of securities of the Company and
sales of the Company's securities.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
ELECTION OF BOARD OF DIRECTORS
1. Election; Removal. Except as set forth below, during the
term of this Agreement, all shares of capital stock held by each Stockholder,
whether now owned or hereafter acquired, shall be voted in accordance with the
provisions hereof on all of the following matters of which the stockholders of
the Company vote:
(a) Each of the Stockholders shall have the right to designate
candidates for nomination to be elected as members of the Board as
follows: (i) JA shall have the right to designate one candidate, (ii)
MB shall have the right to designate one candidate; (iii) CL shall have
the right to designate one candidate; (iv) CRS shall have the right to
designate one candidate and (v) JA, MB, CL and CRS shall, by majority
vote, have the right to designate one candidate. Each Stockholder
hereby agrees (x) to be present in person or by proxy at any meeting of
stockholders to elect directors for purposes of establishing a quorum
and (y) to vote all of such Stockholder's shares of capital stock for,
or give such Stockholder's written consent to, the election of each of
the foregoing candidates, subject to and in accordance with the terms
of this Agreement. In the event that the Board of Directors is elected
by cumulative voting, then each of the Stockholders shall divide his
votes equally among, each of the five above designees or equally among
each of the five Stockholders' individual designees, respectively, if
agreed upon by all of the Stockholders.
(b) In the case of any vacancy in the Board of Directors, the
Board of Directors agrees to nominate the designee of the Stockholder
whose designee created such vacancy. In the event that such
Stockholder, his heirs or assigns, or any other substitute designated
by him does not name a designee within 90-days of a notice of such
vacancy, then the then-current Board of Directors may fill such vacancy
until the next annual meeting of stockholders of the Company.
(c) Within five (5) days after a record date is set for any
annual meeting for the election of directors or for mailing of any
consent solicited for such purpose, the Secretary of the Company shall
give to each person or entity entitled to designate candidate(s)
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notice of any upcoming election of directors and the anticipated date
thereof and request that each person or entity so entitled to designate
candidate(s) take all necessary action to designate its candidate(s)
(the "Notice of Election"). The Stockholders agree to cause the Company
to send the notice of record date by certified mail at least 30 days
prior to such record date. Each person or entity entitled to designate
candidate(s) shall notify the Secretary of the Company of such person's
or entity's candidate(s) within fifteen (15) days of receipt of the
Notice of Election. A failure by a person or entity entitled to
designate candidate(s) to provide such notification shall be deemed to
be a designation by such person or entity of the same candidate(s), if
any, as were last designated by such person or entity. Any designation
pursuant to this Article I shall be made in writing.
(d) Subject to governing law, the Company agrees to cause the
Stockholders' designees to be nominated for election to the Board of
Directors of the Company at each annual meeting of its stockholders and
shall use its best efforts to cause the stockholders of the Company to
elect such nominees to the Board of Directors at each annual meeting of
its stockholders.
(e) Each Stockholder hereby agrees to cast such Stockholder's
votes for, or give such Stockholder's written consent to, the removal
of a designee on the Board at any time upon receipt of instructions in
writing to such effect, signed by the person or entity who has
designated that candidate, in accordance with Section 8.35 of the BCA.
2. Transferees. Except in the event of a Public Transaction
(as defined below), each Stockholder hereby agrees that it shall be a condition
to any transfer of any securities of the Company now owned or hereafter acquired
by such Stockholder that the transferee thereof agrees in writing to sign a
counterpart signature page to this Agreement and be bound by the provisions
hereof. The Stockholders agree that they will not transfer any of their
securities, including a transfer involving a Public Transaction, if the total
voting power of the securities represented by this Agreement falls below 65% of
the total voting power of the Company. For the purposes of this Agreement, a
"Public Transaction" shall be defined as a transfer of Common Stock of the
Company that are (a) registered under the Securities Act of 1933 pursuant to an
effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering such shares of Common Stock or (b)
publicly sold pursuant to Rule 144 of the Securities Act.
3. Directors of Subsidiaries. The Company and the Stockholders
shall take all such action as may be necessary to cause the persons who are
directors of the Company to be elected as the directors of each subsidiary of
the Company.
4. Expenses. The Company will reimburse each director for his
or her reasonable out-of-pocket travel expenses incurred in attending any
meeting of the Board.
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ARTICLE II
RESTRICTION ON STOCKHOLDER SALES
1. No Sale Unless to a Stockholder. No shares may be sold,
pledged, assigned or transferred (any such transaction is herein referred to as
a "Transfer") by any of the Stockholders (the "Selling Stockholder") unless such
shares are offered to and purchased by the other Stockholders on a pro rata
basis, based on the fully diluted shares of capital stock owned by such
Stockholders.
2. Stockholders' Right to Purchase. In the event of a proposed
sale by a Stockholder pursuant to this Article II, each of the Stockholders
shall have fifteen (15) days from the date of receipt of any such notice to
agree to purchase from the Selling Stockholder a pro rata portion of the shares,
based on the fully diluted shares owned by such Stockholder, being sold by the
Selling Stockholder for the price and upon the terms specified in the written
notice by giving written notice to the Selling Stockholder or to elect not to
exercise such right. The Stockholders shall each have a right of over-allotment
such that for each Stockholder that fails to exercise its right to purchase its
portion of the shares, each participating Stockholder shall be entitled to
purchase a pro rata portion of the shares which the non-purchasing Stockholder
elected not to purchase. Such right of over-allotment shall be exercised with
respect to any non-purchasing Stockholder by giving written notice to the
Selling Stockholder within five (5) days from the date of the non-purchasing
Stockholder's failure to exercise its rights hereunder.
3. Exempt Transactions. Notwithstanding anything herein to the
contrary, the foregoing restriction on Transfers shall not apply to:
(a) a sale, assignment or transfer (i) to a Selling
Stockholder's estate, (ii) to a revocable family trust created for the
benefit of the Stockholder and/or his spouse or issue or (iii) in the
case of any employee, to the Company upon leaving employment in
accordance with any stock purchase or disposition agreement pursuant to
which the employee initially purchased the stock from the corporation;
or
(b) any Transfer such that, following such Transfer, the
aggregate voting power held by the Stockholders remains greater than
65% of the outstanding capital stock of the Company (collectively,
"Exempt Transactions").
4. Transfers in Bankruptcy or Divorce. In the event that any
shares held by any of the Stockholders are required to be transferred as a
result of any legal proceeding (including, but not limited to bankruptcy,
divorce and any attachment proceedings), then Stockholder shall, to the extent
permitted by applicable laws, require the transferee or assignee to sign a
counterpart signature page to this Agreement and become an additional
Stockholder and party to this Agreement bound by all the terms and provisions of
this Agreement.
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ARTICLE III
STOCKHOLDERS' RIGHT OF PARALLEL SALE
If any Selling Stockholder at any time proposes to sell,
assign or transfer shares of Common Stock pursuant to an Exempt Transaction
pursuant to Article II, Section 3(b), then such Selling Stockholder shall, as a
condition precedent to any such sale, assignment or transfer, afford the other
Stockholders the right to sell shares of the Company's capital stock held by the
Stockholders as follows:
1. Notice by the Selling Stockholder. The Selling Stockholder
shall give written notice to the Stockholders at least 15 days prior to any such
proposed sale, assignment or transfer of any of the shares, and such notice
shall specify (i) the number of shares which the Selling Stockholder desires to
sell, (ii) the percentage of Common Stock then held by such Selling Stockholder
represented by the shares the Selling Stockholder proposes to sell (the "Sales
Percentage"), (iii) the identity of the proposed purchaser of such shares, (iv)
the time within which the Selling Stockholder proposes to sell such shares and
(v) the material terms, including the price, of the proposed sale.
2. Stockholders' Option. Each of the Stockholders shall notify
the Selling Stockholder in writing, within 15 days after receipt of the Selling
Stockholder's notice, whether such Stockholder desires to sell any of his shares
of Common Stock concurrently with the sale of shares by the Selling Stockholder
in accordance with the terms and provisions of this Article III. Failure to
provide such written notice by any Stockholder after actual receipt of notice
from the Selling Stockholder within said 15 day period shall, for the purpose
hereof, be deemed to constitute a refusal by that Stockholder to sell any of his
shares of Common stock concurrently with the sale of shares by the Selling
Stockholder. Concurrently with the delivery of the notice referred to in
subparagraph (a) above, the Selling Stockholder shall offer each other
Stockholder the opportunity to sell to the proposed purchaser a percentage of
such shares equal to a percentage that such Stockholder owns of the total shares
held by all of the Stockholders. As a result, the number of Shares to be sold by
the Selling Stockholder shall be reduced by the number of shares elected to be
sold by the Stockholders electing this right of parallel sale. This
Stockholders' right shall exist only to the extent that the aggregate voting
power held by the Stockholders remains greater than 65% of the outstanding
capital stock of the Company after the sale of shares. In the event that the
shares being sold pursuant to this Article III would reduce the number of shares
represented by this Agreement below 65% of the total outstanding capital stock
of the Company, the selling Stockholders shall exclude such number of shares
from the sale, on a pro rata basis, that would create a voting power represented
by this Agreement that remains greater than 65% of the total outstanding capital
stock of the Company.
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3. Agreements and Commitments from Purchaser. It is agreed and
understood that the Selling Stockholder shall obtain the same agreements and
commitments from the purchaser of the other shares of Common Stock to be sold by
the Stockholders as he has obtained from the purchaser of the shares proposed to
be sold by him, her or it, including the time of purchase, the purchase price
and the other terms and conditions upon which the purchase of the Selling
Stockholder's shares is to be made. In the event that the Selling Stockholder
cannot obtain agreements or commitments from the purchaser or other purchasers
to purchase that percentage of the other Stockholders' shares then held by the
Stockholders who elect to participate which is equal to the Sales Percentage as
set forth in Subsection (b) above, then the Selling Stockholder shall reduce the
number of Shares which he proposes to sell and allow the Stockholders to sell a
number of their shares, so that the Selling Stockholder and the Stockholders
shall be entitled to sell a pro rata percentage of shares of capital stock as
described above. If the Selling Stockholder is unable to provide the
Stockholders with an opportunity to participate as set forth herein, no sale by
the Selling, Stockholder shall be consummated.
4. No Obligation to Sell. The Stockholders shall not be
obligated to sell any of their shares pursuant to any notice furnished in
accordance with the provisions of this Article III or otherwise. Nothing herein
shall be deemed to require that any Selling Stockholder consummate the proposed
sale, assignment or transfer of the subject shares, notwithstanding the giving
of notice to the Stockholders hereunder of such proposed sale or the intent of
any Stockholder to sell his shares hereunder.
5. Timing of Parallel Sale. Any sale of shares by the
Stockholders pursuant to the provisions of this Article III shall be made either
concurrently with or prior to the sale of shares by the Selling Stockholder.
ARTICLE IV
TERM OF AGREEMENT
This Agreement shall terminate upon the earlier of (a) a
closing and receipt of funds by the Company from a firm commitment under written
registered public offering of the Common Stock of the Company, provided that
such offering results in an aggregate of $25,000,000 or more in gross proceeds
to the Company and (b) three years from the date hereof. This Agreement may also
be terminated upon the unanimous written consent of the Stockholders.
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ARTICLE V
MISCELLANEOUS
1. Amendments and Waiver. This Agreement may be amended only
by written instruments signed by the Company and all of the Stockholders;
provided, however, that (i) this Agreement may not be amended to deprive CRS, MB
or CL, without their consent, of their respective rights under Article I to
designate nominees for election as directors and to require the Stockholders to
vote their shares in favor of the election of such nominees; and (ii) this
sentence and the next sentence of this Section may not be amended without the
prior consent of all Stockholders. No waiver of any right or remedy provided for
in this Agreement shall be effective unless it is set forth in writing signed by
all of the Stockholders. No waiver of any right or remedy granted in one
instance shall be deemed to be a continuing waiver under the same or similar
circumstances thereafter arising.
2. Binding Effect, Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns, including any transferee of
the Common Stock; provided, however, that the Company is given written notice by
an Stockholder at the time of or within a reasonable time after such transfer or
assignment, stating the name and address of such transferee or assignee and
identifying the securities being transferred or assigned; provided further, that
such transferee and spouse thereof (if required) shall sign a counterpart
signature page to this Agreement and become an additional Stockholder and party
to this Agreement bound by all the terms and provisions of this Agreement. As
used herein the term "Stockholders" shall include their respective successors,
assigns and transferees of their Common Stock.
3. Injunctive Relief. It is acknowledged that it will be
impossible to measure the damages that would be suffered by the parties hereto
if any party fails to comply with the provisions of this Agreement and that in
the event of any such failure, the other parties hereto will not have an
adequate remedy at law. The nondefaulting parties shall, therefore, be entitled
to obtain specific performance of the defaulting party's obligations hereunder
and to obtain immediate injunctive relief. No party shall urge, as a defense to
any proceeding for such specific performance or injunctive relief that the
nondefaulting parties have an adequate remedy at law.
4. Expenses. The Company shall pay the legal fees and expenses
incurred in connection with the transactions contemplated by the Stock Purchase
Agreement, the Note Restructure Agreements, the Option Agreements, the
Registration Rights Agreement and any employment agreements. In connection with
the drafting and execution of this Agreement, the Stockholders shall share all
fees and expenses equally. In connection with the resolution of any dispute
arising from this Agreement the unsuccessful party shall pay all fees and
expenses, including reasonable attorneys fees, in connection with the resolution
of the dispute.
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5. Dispute Resolution. Any and all controversies, claims or
disputes arising out of or relating to this Agreement, or the breach thereof,
shall be solely and exclusively settled by arbitration in accordance with the
Commercial Arbitration Rules then in effect (the "Arbitration Rules") of the
American Arbitration Association. The arbitration shall take place in
California, and the arbitrator shall be appointed by the mutual consent of the
parties. If the parties are unable to agree upon the appointment of an
arbitrator, then the arbitration shall take place before a panel of three
arbitrators selected in accordance with the Arbitration Rules. The arbitrator
appointed by the parties or such panel, as the case may be, is sometimes
referred to herein as the "Arbitrator." Each party hereby irrevocably consents
to the sole and exclusive jurisdiction and venue of the state and Federal courts
located in California, in connection with any matter arising out of the
foregoing arbitration or this Agreement, including but not limited to
confirmation of the award rendered by the Arbitrator and enforcement thereof by
entry of judgment thereon or by any other legal remedy. Service of process in
connection with any such arbitration or any proceeding to enforce an arbitration
award may be made in any manner permitted by applicable law.
6. Notice. As the terms "notice" or "notices" are used herein
as between the parties, such term shall mean a written document, explaining the
reason for the notice, and the same shall be mailed by United States Postal
Service Via Certified Mail, Return Receipt Requested, addressed as follows:
If to the Company: COMC, Inc.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Fax No.: _______________
with a copy to: Xxxx Xxxxx, Esq.
Xxxxxx Xxxxx, Inc.
1901 Avenue of the Stars
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax No.: 000-000-0000
If to Stockholders: to the respective address set forth on
Schedule I attached hereto,
Such notice shall be deemed to have been given on the date placed in the U.S.
Mails, and sent by fax to counsel, whether actually received by the addressee or
not. The parties shall, as a matter of convenience and courtesy, send each party
receiving notice a copy of said notice by facsimile or other electronic means,
or by courier, Federal Express, or similar service, but such notifications shall
not be deemed lawful "notice" as required hereby. The parties may, from time to
time, amend the above addresses and names by written notice to the other party.
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7. Further Documentation. Each party hereto shall execute and
deliver such other agreements and instruments as from time to time that the
parties collectively agree are advisable or appropriate to effect the intent and
purpose of this Agreement.
8. Section Headings. The captions to the Articles and Sections
in this Agreement are for reference only and shall not affect the meaning or
interpretation hereof.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive domestic laws of the State of
California, without application of the conflicts of laws principles thereof.
10. Complete Agreement. Except as set forth herein, this
Agreement contains the complete agreement between the parties and controls and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral, which conflicts with, or may have related to, the
subject matter hereof in any way.
11. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner so as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement. If any provision contained in
this Agreement is determined to be invalid, illegal or unenforceable as written,
a court of competent jurisdiction shall, at any party's request, reform the
terms of this Agreement to the extent necessary to cause such otherwise invalid
provisions to be enforceable under applicable law.
12. Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first set forth above.
COMC, INC. THE LINCOLN FAMILY TRUST
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx, Trustee
Title: CEO
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxx
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Xxxx X. Xxxxxxxx Xxxxxxxxxxx X. Xxxxx
THE XXXXX FAMILY TRUST
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxx, Trustee
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SCHEDULE I
Xxxx X. Xxxxxxxx
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Phone:
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Xxxxxxxxxxx X. Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Phone: 000-000-0000
The Xxxxx Family Trust
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Attention: Xxxxxxx X. Xxxxx
Phone:
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The Lincoln Family Trust
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Attention: Xxxxxxx X. Xxxxxxx
Phone:
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