Exhibit 4.12
STOCK PURCHASE WARRANT
This Warrant is issued this 16th day of December, 1997, by MASTER GRAPHICS,
INC., a Delaware corporation (the "Company") and JOHN P. MILLER ("Shareholder"),
to Wendell Burns (Wendell Burns and any subsequent assignee or transferee hereof
is hereinafter referred to as "Holder").
AGREEMENT:
1. ISSUANCE OF WARRANT; TERM. In the event that (a) Company or any of
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Company's successors or assigns (an "Affiliated Entity") shall cause to be made
or shall be involved in a public offering of its stock (an "IPO") within ten
(10) years from the date hereof, and (b) there has been no acquisition or merger
of the Company prior to the time of the IPO as described in Paragraph 7
hereunder, Holder shall have the right to acquire from the Company Common Stock
of the Company at a price equal to the IPO price, with the maximum number of
shares which Holder shall have the right to purchase to be determined as
follows:
$1,117,105 divided by Initial IPO Price Per Share = Maximum Number of
Option Shares
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 during the ten (10) year period commencing
with the date of the successful completion of the IPO (the "Exercise Period").
The exercise of, or the failure to exercise, this Warrant during the Exercise
Period 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 IPO price.
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 part 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 either (a) delivery of
a certified check, or (b) cancellation of an amount equal to the Exercise Price
of amounts otherwise due Wendell Burns from the Company under that certain
promissory note of even date herewith in the original principal amount of
$1,217,105.00. Upon exercise of this Warrant as aforesaid, the Company shall as
promptly as practicable, and in any event with fifteen (15) days thereafter,
execute and deliver to the Holder of this Warrant a certificate or certificates
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 Company shall issue a new warrant for the remaining Shares
covered by this Warrant.
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 (i) 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
(II) 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 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 validly 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.
5. TRANSFER OF 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 SHAREHOLDER. Except as otherwise provided herein,
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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) Shareholder shall not 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 Shareholder receives shares of
stock of any company (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 $1,250,000, with the maximum number of shares which Holder
shall have the option to purchase to be determined as follows:
$1,117,105 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. REGISTRATION.
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(a) The Company and Holder agree that if at any time after the date hereof
the Company shall propose to file a registration statement with respect to
any of its Common Stock, it will give notice in writing to such effect to
the Holder at least thirty (30) days prior to such filing, and, at the
written request of Holder, made within ten (10) days after the receipt of
such notice, will include therein at the Company's cost and expense
(including the fees and expenses of counsel to such holder(s), but
excluding underwriting discounts, commissions and filing fees attributable
to the Shares included therein) such of the Shares as such holder(s) shall
request; provided, however, that if the offering being registered by the
Company is underwritten and if the representative of the underwriters
certifies in writing that the inclusion therein of the Shares would
materially and adversely effect the sale of the securities to be sold by
the Company thereunder, then the Company shall be required to include in
the offering only that number of securities, including the Shares, which
the underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro
rata among all selling shareholders according to the total amount of Shares
included in the offering be less than the number of securities included in
the offering by any other single selling shareholder unless all of the
Shares are included in the offering).
(b) Whenever the Company undertakes to effect the registration of any
of the Shares, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement covering such
Shares and use its best efforts to cause such registration statement
to be declared effective by the Commission as expeditiously as
possible and to keep such registration effective until the earlier of
(A) the date when all Shares covered by the registration statement
have been sold or (B) two hundred seventy (270) days from the
effective date of the registration statement; provided, that before
filing a registration statement or prospectus of any amendment or
supplements thereto, the Company will furnish to each Holder of Shares
covered by such registration statement and the underwriters, if any,
copies of all such documents proposed to be filed (excluding exhibits,
unless any such person shall specifically request exhibits), which
documents will be subject to the review of such Holder and
underwriters, and the Company will not file such registration
statement or any amendment thereto or any prospectus of any supplement
thereto (including any documents incorporated by reference therein)
with the Commission if (A) the underwriters, if any, shall reasonably
object to such filing or (B) if information in such registration
statement or prospectus concerning a particular selling Holder has
changed and such Holder or the underwriters, if any, shall reasonably
object.
(ii) Prepare and file with the Commission such amendments and
post-effective amendments to such registration statement as may be
necessary to keep such registration statement effective during the
period referred to in Section
10(b)(i) and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement, and cause the prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to be filed
with the Commission pursuant to Rule 424 under the Securities Act.
(iii) Furnish to the selling Holder(s) such numbers of copies of
such registration statement, each amendment thereto, the prospectus
included in such registration statement (including each preliminary
prospectus, (each supplement thereto and such other documents as they
may reasonably request in order to facilitate the disposition of the
Shares owned by them.
(iv) Use its best efforts to register and qualify under such
other securities laws of such jurisdiction as shall be reasonably
requested by any selling Holder and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
selling Holder to consummate the disposition of the Sellers owned by
such Holder, in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to transact business or to file a general
consent to service or process in any such states or jurisdictions.
(v) Promptly notify each selling Holder of the happening of
any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein no
misleading and, at the request of any such Holder, the Company will
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Shares, such prospectus
will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not
misleading.
(vi) Provide a transfer agent and registrar for all such Shares
not later than the effective date of such registration and statement.
(vii) Enter into such customary agreement (including
underwriting agreements in customary form for a primary offering) and
take all such other actions as the underwriters, if any, reasonably
request in order to expedite of facilitate the disposition of such
Shares (including, without limitation, effecting a stock split or a
combination of shares).
(viii) Make available for inspection by any selling Holder or any
underwriter participating in any disposition pursuant to such
registration statement and any attorney accountant or other agent
retained by any such selling
Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
officers, directors, employees and independent accountants of the
Company to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with
such registration statement.
(ix) Promptly notify the selling Holder (s) and the
underwriters, if any, of the following events and (if requested by any
such person) confirm such notification in writing: (A) the filing of
the prospectus or any prospectus supplement and the registration
statement and any amendment or post-effective amendment thereto and,
with respect to the registration statement or any post effective
amendment thereto, the declaration of the effectiveness of such
documents, (B) any requests by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information, (C) the issuance or threat of issuance by the
Commission of any stop order suspending the effectiveness of the
registration statement of the initiation of any proceedings for that
purpose and (D) the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threat of initiation of any
proceeding for such purposes.
(x) Make every reasonable effort to prevent the entry of any
order suspending the effectiveness of the registration statement and
obtain at the earliest possible moment the withdrawal of any such
order, if entered.
(xi) Cooperate with the selling Holder(s) and the underwriters,
if any, to facilitate the timely preparation an delivery of
certificates representing the Shares to be sold and not bearing any
restrictive legends, and enable such Shares to be in such lots and
registered in such names as the underwriters may request at least
two(2) business days prior to any delivery of the Shares to the
underwriters .
(xii) Provide a CUSIP number for all the Shares not later than
the effective date of the registration statement.
(xiii) Prior to the effectiveness of the registration statement
and any post effective amendment thereto and at each closing of an
underwritten offering, (A) make such representations and warranties to
the selling Holder (s) and the underwriters, if any, with respect to
the Shares and the registration statement as are customarily made by
issuers in primarily underwritten offerings; (B) use its best efforts
to obtain "cold comfort"letters and updates there of from the
Company's independent certified public accountants addressed to the
selling Holders and the underwriters, if any, such letters to be in
customary form and covering matters of customarily covered in "cold
comfort" letters by underwriters in connection with primary
underwritten offerings; (C) deliver such documents and certificates as
may be reasonably requested (1) by the holders of majority of the
Shares being sold, and (2) by the underwriters, if any, to evidence
compliance with class (A) above and with any customary conditions
contained in the underwriting agreement or other agreement entered
into by the Company; and (D) obtain opinions of counsel to the Company
and updates thereof (which counsel and which opinions shall be
reasonably satisfactory to the underwriters, in any), covering the
matters customarily covered in opinions requested by the selling
Holders and under writers or their counsel. Such counsel shall also
state that no facts have come to the attention of such counsel which
cause them to believe that such registration statement, the prospectus
contained therein, or any amendment or supplement thereto, as of their
respective effective or issue dates, contains any untrue statement of
any material fact or omits to state any material fact necessary to
make the statements therein not misleading (except that no statement
need be made with respect to any financial statement, notes thereto or
other financial data or other expertized material contained therein).
If for any reason the Company shall so notify the Holders of the
Shares and shall use its best efforts to remove expeditiously all
impediments to the rendering of such opinion.
(xiv) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than forty
five (45) days after the end of any twelve-month period (or ninety
(90) days , if such period is a fiscal year) (A) commencing at the end
of any fiscal quarter in which the Shares are sold to underwriters in
such an offering, beginning with the first month of the first fiscal
quarter of the Company commencing after the effective date of the
registration statement, which statements shall cover such twelve-month
periods.
(c) The Company's obligation under this Section 8 above with respect
to each holder of Shares are expressly conditioned upon such holder's
furnishing to the Company in writing such information concerning such
holder and the terms of such holder's proposed offering as the Company
shall reasonably request for inclusion in the registration
statement. If any registration statement including any of the Shares is
filed, then the Company shall indemnify each holder thereof (and each
underwriter for such holder and each person, if any, who controls such
underwriter for such holder ad each person, if any, who controls such
underwriter within the meaning of the Securities Act) from any loss, claim,
damage or liability arising out of, based upon or tin any way relating to
any untrue statement of a material fact contained in such registration
statement or any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except for any such statement or omission based on information furnished in
writing by such holder of the Shares expressly for use in connection with
such registration statement; and such holder shall indemnify the Company
(and each of its officers and directors who has signed such registration
statement, each director, each person, if any, who controls the Company
within the meaning of the Securities Act, each underwriter for the Company
and each person, if any, who controls such underwriter within the meaning
of the Securities Act) and each other such holder against any loss, claim,
damage, or liability arising from any such statement or omission which was
made in reliance upon information furnished in writing to the Company by
such holder of the Shares expressly for use in connection with such
registration statement.
(d) For purpose of this Section 8, all of the Shares shall be deemed
to be issued and outstanding.
9. ARTICLE AND SECTION HEADINGS. Numbered and titled article and section
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headings are for convenience only and shall not be construed as amplifying or
limiting any of the provisions of this Warrant.
10. NOTICE. Any and all notices, elections or demands permitted or
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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: Wendell Burns
1907 Crutchfield Street
Chattanooga, Tennessee 37406
with a copy to: Baker, Donelson, Bearman & Caldwell
1800 Republic Centre
633 Chestnut Street
Chattanooga, TN 37450-1800
Attention: Kenneth C. Beckman, Esq.
The Address of Company is: Master Printing Holding Co.
2500 Lamar Avenue
Memphis, TN 38114
Attention: John Miller
with a copy to: Black Bobango & Morgan
530 Oak Court Drive, Suite 345
Memphis, TN 38117
Attention: Michael P. Morgan
11. 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 bylaw.
12. 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.
13. GOVERNING LAW AND AMENDMENTS. This Warrant shall be construed 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.
14. COUNTERPARTS. This Warrant may be executed in any number of
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counterparts and be 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.
15. 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: MASTER GRAPHICS, INC.,
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a Delaware corporation
By: /s/ John P. Miller
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Title: President
HOLDER: /s/ Wendell Burns
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Wendell Burns
IN WITNESS WHEREOF, the undersigned has executed or caused this Warrant to
be executed as of the date first above written for the purpose of agreeing only
to the terms and conditions of Section 7 hereof.
SHAREHOLDER: /s/ John P. Miller
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John P. Miller