Stock Purchase Warrant - Master Graphics Inc., Allan R. Bartel and John P. Miller
STOCK PURCHASE WARRANT
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This Warrant is issued this 22nd day of September, 1997, by MASTER
GRAPHICS, INC., a Delaware corporation (the "Company"), to ALLAN R. BARTEL and
any subsequent assignee or transferee hereof are hereinafter referred to
collectively as "Holder" or "Holders"), JOHN P. MILLER, the sole shareholder of
the Company (the "Shareholder") joins in this Agreement for purposes of the
enforceability of the Rights conferred under Section 7 hereof.
AGREEMENT:
1. Issuance of Warrant; Term. In the event that Company or any of
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Company's successors or assigns (an "Affiliated Entity") shall cause to be made
or shall be the subject of an initial public offering of its stock (an "IPO")
within ten years from the date hereof, Holder shall have the option to acquire
from the Company up to $1,875,000 of shares, with the precise number of shares
being determined based upon the IPO price per share as follows:
$1,875,000 divided by Initial IPO Price Per Share = Maximum Number of
Option Shares
"Initial IPO" price shall mean the price established by the underwriters as
the initial price of the first public stock offering made by the Company.
The shares of Common Stock issuable upon exercise of this Warrant are
hereinafter referred to as the Shares. The option described pursuant to this
Paragraph 1 shall only be exercisable within ten (10) years from the date
hereof, provided that there has been no acquisition or merger of the Company at
the time of the IPO. The exercise of, or the failure to exercise, this Warrant
in conjunction with an IPO shall terminate all other rights of Holder hereunder.
2. Exercise Price. The exercise price (the "Exercise Price") per Share
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for which all or any of the Shares may be purchased pursuant to the terms of
this Warrant shall be the IP0 price of comparable capital stock of the Company.
3. Exercise. This Warrant may be exercised by the Holder hereof (but only
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on the conditions hereinafter set forth) as to all or any increment or
increments upon delivery of written notice of intent to exercise to the Company
at the following address: 2500 Lamar Avenue, Memphis, Tennessee 38114 or such
other address as the Company shall designate in a written notice to the Holder
hereof, together with this Warrant and payment to the Company of the aggregate
Exercise Price of the Shares being purchased. The Exercise Price shall be
payable by delivery of a certified check. Upon exercise of this Warrant as
aforesaid, the Company shall as promptly as practicable, and in any event within
fifteen (15) days thereafter, execute and deliver to the Holder of this Warrant
a certificate or certificate for the total number of whole Shares for which this
Warrant is being exercised in such names and denominations as are requested by
such Holder. If this Warrant shall be exercised with respect to less than all of
the Shares, the remaining Shares covered by this Warrant shall be null
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and void. Holder shall have the right to apply any amounts due or to become due
to him under the terms of the 12% Subordinated Note from the Company to him of
even date herewith toward payment of the amounts due for payment of the Exercise
Price hereunder.
4. Covenants and Conditions. The above provisions are subject to the
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following:
(a) Neither this Warrant nor the Shares have been registered under the
Securities Act of 1933, as amended ("Securities Act") or any state
securities laws ("Blue Sky Laws"). This Warrant has been acquired for
investment purposes and not with a view to distribution or resale and may
not be sold or otherwise transferred without (1) an effective registration
statement for such Warrant under the Securities Act and such applicable
Blue Sky Laws, or (ii) an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to the Company and its counsel, that
registration is not required under the Securities Act or under any
applicable Blue Sky Laws. Transfer of the Shares issued upon the exercise
of this Warrant shall be restricted in the same manner and to the same
extent as the Warrant and the certificates representing such Shares shall
bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES
LAW AND MAY NOT BE TRANSFERRED UNTIL (I) A REGISTRATION
STATEMENT UNDER THE ACT AND SUCH APPLICABLE STATE SECURITIES
LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(11) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY,
REGISTRATION UNDER SUCH SECURITIES ACTS AND SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER
The Holder hereof and the Company agree to execute such other documents and
instruments as counsel for the Company reasonably deems necessary to effect
the compliance of the issuance of this Warrant and any shares of Common
Stock issued upon exercise hereof with applicable federal and state
securities laws.
(b) The Company covenants and agrees that all Shares which may be
issued upon exercise of this Warrant will, upon issuance and payment
therefor, be legally and validity issued and outstanding, fully paid and
nonassessable, free from all taxes, charges and preemptive rights, if any,
with respect thereto or to the issuance thereof. The Company shall at all
times reserve and keep available for issuance upon the exercise of this
Warrant such number of authorized but unissued shares of Common Stock as
will be sufficient to permit the exercise in full of this Warrant.
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5. Transfer and Warrant. Subject to the provisions of Section 4 hereof,
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this Warrant may be transferred, in whole or in part, to any person or business
entity, by presentation of the Warrant to the Company with written instructions
for such transfer. Upon such presentation for transfer, the Company shall
promptly execute and deliver a new Warrant or Warrants in the form hereof in the
name of the assignee or assignees and in the denominations specified in such
instructions. The Company shall pay all expenses incurred by it in connection
with the preparation, issuance and delivery of Warrants under this Section.
6. Warrant Holder Not a Shareholder. Except as otherwise provided
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herein, this Warrant does not confer upon the Holder, as such, any right
whatsoever as a shareholder of the Company.
7. Rights Upon Sale or Merger.
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(a) For and in consideration of the benefits to be derived by him from the
transaction for the purchase of all of the shares of The Argus Press, Inc. and
for other good and valuable considerations the receipt of which is hereby
acknowledged, the Shareholder (John P. Miller) agrees not to enter into any
transaction that would result in the merger or acquisition of the Company or an
Affiliated Entity unless prior to such sale such Shareholder shall give notice
to Holder of its intention to effect such sale in order that Holder may exercise
its rights under this Section 7 as hereinafter described. Such notice shall set
forth the principal terms of the merger of acquisition.
(b) In the event of any acquisition or merger of Company or an Affiliated
Entity, pursuant to which the said Shareholder receives shares of stock of any
company whose stock is traded on any exchange (the "Surviving Entity") during
the ten year period commencing with the date hereof, Holder shall have the
option to acquire from Shareholder for a purchase price per share equal to the
price per share determined in connection with such acquisition or merger, a
maximum number of shares up to that number pursuant to which the purchase price
would equal $l,875,000, with the maximum number of shares which Holder shall
have the option to purchase to be determined as follows:
$1,875,000 divided by Price Per Share of Surviving Entity = Maximum Number of
Option Shares
(c) The option described in this Section 7 shall only be exercisable
within ten (10) years from the date of a merger or acquisition, provided there
has been no IPO at the time of the merger or acquisition. The exercise of, or
the failure to exercise, this Warrant in conjunction with an acquisition or
merger of the Company or an Affiliated Entity shall terminate all other rights
of Holder hereunder.
8. Article and Section Headings. Numbered and titled article and
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section headings are for convenience only and shall not be construed as
amplifying or limiting any of the provisions of this Warrant
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9. Notice. Any and all notices, elections or demands permitted or
required to be made under this Warrant shall be in writing, signed by the party
giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery or telecopy or two (2) business days after the date of mailing (or the
next business day after delivery or telecopy or two (2) business days after the
date of mailing (or the next business day after delivery to such courier
service), as the case may be, shall be the date of such notice, election or
demand. For the purpose of this Warrant:.
The Address of Holder is: Allan R Bartel
338 W. Sibley
Park Ridge, Illinois 60068
with a copy to: Hamblet, Casey, Oremus & Vacin
75 E.Wacker Drive Su 200
Chicago, Illinois 60601
Attention: Michael J. Hamblet
The Address of Company
and Shareholder is: Master Graphics, Inc.
2500 Lamar Avenue
Memphis, TN 38114
Attention: John P. Miller
with a copy to: Black Bobango & Morgan
530 Oak Court Drive, Suite 345
Memphis, TN 38117
Attention: Michael P. Morgan
10. Severability. If any provisions(s) of this Warrant or the application
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thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Warrant and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
11. Entire Agreement. This Warrant between the Company and Holder
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represents the entire agreement between the parties concerning the subject
matter hereof, and all oral discussions and prior agreement are merged herein.
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12. Governing Law and Amendments. This Warrant shall be construed by and
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enforced under the laws of the State of Tennessee applicable to contracts to be
wholly performed in such State. No amendment or modification hereof shall be
effective except in a writing executed by each of the parties hereto.
13. Counterparts. This Warrant may be executed in any number of
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counterparts and by different parties to this Warrant in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Warrant.
14. Jurisdiction and Venue. The Company hereby consents to the
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jurisdiction of the courts of the State of Tennessee and the United States
District Court for the Western District of Tennessee, as well as to the
jurisdiction of all courts from which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its obligations arising under this Agreement or with respect to the transactions
contemplated hereby, and expressly waives any and all objections it may have as
to venue in any of such courts.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first above written.
COMPANY:
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MASTER GRAPHICS, INC.,
a Delaware corporation
By: /s/ John P. Miller
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Title: President
HOLDER: By: /s/ Allan R. Bartel
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ALLAN R. BARTEL
IN WITNESS WHEREOF, the undersigned has executed or caused this Warrant to
be executed as of the day first above written for the purposes of agreeing to
the terms and conditions of Section 7 hereof.
SHAREHOLDER: By:/s/ John P. Miller
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JOHN P. MILLER
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