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Page 1: LEGAL AND PROCEDURAL ASPECTS OF ADVISING ... AND PROCEDURAL ASPECTS OF ADVISING CLOSELY HELD CORPORATIONS SHAREHOLDER RELATIONS/VOTING & CONTROL ISSUES Keith H. Berk Horwood, Marcus

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LEGAL AND PROCEDURAL ASPECTS OF ADVISING CLOSELY HELD CORPORATIONS

SHAREHOLDER RELATIONS/VOTING & CONTROL ISSUES

(c)Copyright 1991 by Keith H. Berk. All rights reserved.

NSBAP .DOC

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LEGAL AND PROCEDURAL ASPECTS OF ADVISING CLOSELY HELD CORPORATIONS

SHAREHOLDER RELATIONS/VOTING & CONTROL ISSUES

Keith H. Berk Horwood, Marcus & Braun Chartered

I. VOTING AND CONTROL ISSUES

A. Shareholder Control Issues

1. Major corporate actions (i.e., mergers (see Ill. BCA §11.20), sale of substantially all assets, dissolution (see Ill. BCA §12.15), etc.).

2. Election of directors.

3. Absent special provisions in articles of incorporation and except for certain major corporate actions such as mergers, dissolution, etc., majority rules.

4. Majority rule frequently is not satisfactory for closely held businesses.

(a) minority shareholders involved with operation of business.

(b) non-active shareholders.

(C) family groups and/or other affiliated groups.

(d) creditors and others need for continuity of management.

5. Shareholder deadlocks.

B. Charter Provisions

1. Cumulative Voting

(a) Illinois Business Corporation Act grants cumulative voting rights (see Ill. BCA §7.40).

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to

I.

(i) Corporate charter may limit or eliminate such rights.

(b) Delaware General Corporation Law does not statutorily grant cumulative voting rights (see Del. Gen. Corp. Law §214).

(C) Cumulative voting may guarantee certain directorships to minority shareholders.

(d) Formula for ascertaining the minimum number of shares required to make certain of the election of desired number of directors:

Total number of Number of shares entitled Directors desired to vote X +1

Total number of directors + 1

A person or group holding the resulting number of shares can elect the number of directors set forth in the numerator.

2. Quorum Requirements.

(a) increased quorum requirements may insure participation from different families or control groups.

(b) provide minority shareholders forum.

3. Voting Requirements.

(a) increased shareholder approval.

(1) mergers, dissolutions, etc.

(ii) capital and financing matters.

(iii) business expansion/capital expenditures.

(iv) key management compensation.

(b) multiple classes of stock.

(i) certain classes of stock electing directors with super voting rights. See example of charter provisions - Exhibit A .

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(ii) certain classes of stock electing directors with veto powers.

(iii) certain classes of stock with super voting rights on some or all issues.

C. Contractual Arrangements Among Shareholders

1. Shareholder Agreements.

(a) restrictions on transfer of stock.

(i) S corporation election.

(ii) legend on stock certificates.

(b) Intra-family transfers.

(i) voting trusts.

(ii) permitted transfers.

(C) rights of first refusal.

(d) cross buy/sell agreement.

(e) voluntary termination of employment (resignation, termination without cause, etc.).

(i) mandatory/optional sale of stock.

(ii) purchasing party corporation/remaining shareholders.

(iii) valuation of stock.

(iv) payment terms.

(f) involuntary termination of employment (death, disability, retirement).

(i) mandatory/optional sale of stock.

(ii) purchasing party corporation/remaining shareholders.

(iii) valuation of stock.

(iv) payment terms.

(g) put/call provisions.

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2. Voting Trusts (see Ill. BCA §7.65, Del. Gen. Corp. Law §218).

(a) separates value of equity and rights to dividends from voting rights.

(b) Statutory limitations.

(i) not to exceed 10 years.

(ii) disclosure requirements to corporation, public filing, etc.

(C) See example of Voting Trust Agreement - Exhibit B.

3. Voting Agreements (see Ill. BCA §7.70, Del. Gen. Corp. Law §218).

(a) generally limited to certain matters.

(i) election of certain directors.

(ii) certain business opportunities or limitations.

(b) if too general or too broad in scope may not be enforceable because deemed to be a statutorily defective voting trust.

(C) should limit duration and scope.

(d) see example of Shareholder Voting Agreement - Exhibit C.

4. Irrevocable Proxies (see Ill. BCA §7.50, Del. Gen. Corp. Law §212).

(a) separates voting power from stock rights. Similar to a voting trust but generally for a more limited duration.

(1) Ill. BCA limits duration to 11 months, unless otherwise provided in the proxy.

(b) irrevocability requires proxy to be "coupled with an interest " (i.e., proxy held by a pledgee, purchaser, creditors, etc.).

(c) principal/agent relationship.

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5. Management Control

(a) Board of Directors

(i) super voting rights for certain directors.

(ii) veto rights for certain directors.

(iii) super quorum requirements.

(iv) super voting requirements.

(v) director voting agreements.

- not favorably received by courts because of "fiduciary responsibility" of directors and assumption that directors have a duty "to exercise their own best judgement."

(b) Officers

(i) expansion and/or limitation of duties.

D. Creditor and Third Party Control Issues

1. Positive and/or negative loan covenants.

(a) capital expenditures.

(b) hiring/firing of key personnel.

(c) financial covenants.

2. Contractual obligations.

3. Judgements and other governmental and/or court orders.

II. INDEMNIFICATION

A. Business Risks

1. Shareholder derivative suits and other direct shareholder suits.

2. Third party claims.

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B. Director and Officer Insurance.

1. Difficult to obtain for closely held corporations.

2. If obtainable, expensive and not necessarily all inclusive.

C. Statutory Indemnification (see Ill. BCA 8.75, Del. Gen. Corp. Law 1451.

1. Mandatory v. optional indemnification (i.e., "may" v. "shall").

2. Standards for indemnification.

3. Advance of expenses.

D. Hold harmless and other agreements among shareholders.

III. DIVIDENDS AND DISTRIBUTIONS.

A. Cash.

1. Board of directors discretion.

2. Courts generally do not intervene unless power is used to oppress minority shareholders.

3. Most states corporate law limits the payment of dividends if it renders the corporation insolvent or its net assets would be less than zero or less than the maximum amount payable to shareholders having preferential rights in liquidation. See Ill. BCA §9.10, Del. Gen. Corp. Law §173.

4. Personal liability may be imposed upon directors who authorize illegal dividends.

B. Stock.

1. Generally a corporation must have sufficient authorized and unissued shares and sufficient paid in capital or surplus.

2. Illinois BCA does not use traditional concepts of par value and stated value. Therefore, restrictions on transfers on the corporation’s books from surplus to par value do not apply.

3. Stock dividends generally have little significance in closely held corporations.

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IV. MERGERS

A. Mergers. (Ill. BCA §11.05, etc., Del. Gen. Corp. Law §251, etc.)

i. controlling shareholder obligations.

(a) fiduciary duties.

(b) squeeze outs.

(C) business purpose of corporation required (see Singer v. Magnavox Co., 380 A.2d. 969 (Del. 1977)) as compared to business purpose of majority shareholders (See Tanzer V.

International General Industries Inc., 379 A.2d 1121 (Del.Sup.Ct. 1977).

(d) Singer decision overruled in Weinberger v. IJOP, Inc. 457 A.2d 701, 715 (Del. 1983). Delaware Supreme Court in Weinberger overruled business purpose requirement of Singer and held minority shareholders limited to appraisal remedies.

(e) Coggins v. New En gland Patriots Football Club, Inc., 397 Mass. 525, 492 N.E.2d 1112 (1986), the Supreme Judicial Court of Massachusetts held that a freeze out merger is a violation of the majority’s fiduciary duties unless it serves both a legitimate corporate purpose and is fair to minority shareholders.

- Explicitly rejected Weinberger.

- Recision of merger is the ordinary remedy.

(f) Rule 10b-5 requires full and fair disclosure of financial and other matters affecting the merger.

2. Defenses again oppression.

(a) see voting and control issues above.

(b) should be addressed at corporate formation.

V. PRE-EMPTIVE RIGHTS (ILL. BCA §6.50, DEL. GEN. CORP. LAW §102(b) (3)).

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A. Illinois BCA does not statutorily provide for re-emptive rights nor does the Del. Gen. Corp. Law.

1. Charter or other shareholder agreement should address.

2. Alternative is proportionate dilution agreement or charter provision.

VI. OTHER

A. Piercing the Corporate Veil.

1. Capitalization.

2. Corporate formalities.

3. Separation of corporate and personal finances.

B. Securities Matters

1. lO(b) of the Securities Exchange Act of 1934 and Rule lOb-5 thereunder.

(a) must include element of deception or manipulation with respect to the purchase or sale of securities.

C. Stockholders rights to inspect books and records

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TH 15 lORM IS IOR INiORA’iIuNAJ,

PURPOSES ONLY AND SHOULD NOT BE RELIED UPON WITHOUT REVIEW OF LEGAL COUNSEL

EXHIBIT A

Charter Provision Granting Super Voting Rights to Certain Directors

The holders of the Class A Common Stock, constituting a

separate class, shall have the sole right to vote for and elect

five directors of the corporation, who shall be known as Class A

directors, to remove any Class A directors at any time with or

without cause and to fill all vacancies of any Class A directors.

The holders of the Class B Common Stock, constituting a

separate class, shall have the sole right to vote for and elect

one directors of the corporation, who shall be known as the Class

B director, to remove the Class B director at any time with or

without cause and to fill all vacancies of the Class B director.

The following provisions are inserted for the management of

the business and for the conduct of the affairs of the

corporation, and for further definition and regulation of the

powers of the corporation and of its directors and stockholders:

(1) The Board of Directors of the corporation shall consist

of six (6) directors. Each director elected by the holders of

Class A Common Stock pursuant to Article FOURTH hereof shall have

one (1) vote on any matter submitted to the Board of Directors of

the corporation for its action or approval. The director elected

by the holders of Class B Common Stock pursuant to Article FOURTH

hereof shall have - three (3) votes on any matter submitted to the

Board of Directors of the corporation for its action or approval.

(c) Copyright 1991 by Keith H. Berk. All rights reserved.

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Every reference in this Restated Certificate of Incorporation, in

the by-laws of the corporation or in any other act, document or

resolution of the corporation to a majority or other proportion

of the directors shall refer to a majority or other proportion of

the votes of such directors. Election of directors need not be

by ballot unless the by-laws so provide.

(2) The Board of Directors shall have power without the

assent or vote of the stockholders to make, alter, amend or

repeal the by-laws of the corporation.

(3) In addition to the powers and authorities hereinbefore

or by statute expressly conferred upon them, the directors are

hereby empowered to exercise all such powers and do all such acts

and things as may be exercised or done by the corporation;

subject, however, to the provisions of the laws of the State of

Delaware, of this Certificate, and of the by-laws of the

corporation.

4.

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It

I.ISJ..L M

EXHIBIT B

SHAREHOLDER AGREEMENT

THIS SHAREHOLDER AGREEMENT is made this day of ____

1991, at Chicago, Illinois, by and among , an

Illinois corporation (the "Company") , C"_H )

") and (I’ (hereinafter

sometimes referred to collectively as the " Shareholders" and

severally as a " Shareholder"), and ("_U ) (the Shareholders and are hereinafter sometimes

referred to collectively as the "Shareholders" and severally as a

"Shareholder")

ARTICLE I

Recitals and Certain Definitions

1.1 Present Owners. The Shareholders currently own all of

the issued and outstanding shares of the no par value common stock

of the Company, which stock, together with all other shares of

stock of the Company now or hereafter issued, is hereinafter

referred to collectively as the "Stock". As of the date hereof,

the Stock is held as follows:

Shares

Shares

Shares

Shares

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(c) Copyright 1991 by Keith H. Berk. All rights reserved.

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1.2 Purpose of Agreement. The Shareholders desire to promote

their mutual interests, the interests of the Company and the

interests of any future Shareholders by imposing certain

restrictions and obligations on the Shareholders, the Company and

the Stock, all as herein provided and hereby agreed to.

1.3 Stock Covered by Agreement. This Agreement is intended

to, and shall, apply to all shares of the Stock, now and hereafter

issued to the Shareholders.

1.4 Definitions.

(a) "Bankruptcy". The term "Bankruptcy" shall mean the

attachment of the Stock of a Shareholder, the Stock of a

Shareholder being taken in execution, an assignment by a

Shareholder for the benefit of his creditors, an adjudication

of a Shareholder’s bankruptcy or insolvency by a court of

competent jurisdiction, the filing of a voluntary petition in

bankruptcy by a Shareholder; the filing of a petition or

answer by a Shareholder seeking for himself any

reorganization, arrangement, composition, readjustment,

liquidation, dissolution or similar relief under any statute,

law, or regulation, the filing of an answer or other pleading

by a Shareholder admitting or failing to contest the material

allegations of a petition filed against him in any bankruptcy

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proceeding, a Shareholder seeking, consenting to, or

acquiescing in the appointment of a trustee, receiver, or

liquidator of the Shareholder or of all or any substantial

part of his properties, the commencement of any proceeding

against the Shareholder seeking reorganization, arrangement,

composition, readjustment, liquidation, dissolution or similar

relief under any statute, law or regulation, if the proceeding

has not been dismissed within 90 days, or the appointment

without a Shareholder’s consent or acquiescence of a trustee,

receiver, or liquidator of the Shareholder or of all or any

substantial part of his properties if the appointment is not

vacated within 90 days.

(b) "Book Value". The term "Book Value" shall mean the

book value of the Company on the close of the fiscal year

immediately preceding the date of the Termination multiplied

by a fraction, the numerator of which is the number of shares

of the Terminating Shareholder’s or Shareholders’ Stock (and

the Stock of any direct or indirect Permitted Transferees) and

the denominator of which is the number of shares of all of the

Stock. The book value of the Company shall be determined by

the Company’s independent certified public accountants

("CPAs") in accordance with generally accepted accounting

principles consistently applied. Such determination shall be

final and binding upon the parties.

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A,

(C) "Cause". The term "Cause" shall mean:

(1) commission of any dishonest act by a Shareholder in

connection with his employment by the Company or

any act which can be reasonably expected to

adversely affect the business or reputation of the

Company, including, but not limited to,

embezzlement, drunkenness or intoxication on the

job or the use of drugs or alcohol in a manner

which adversely affects job performance; or

diversion of any corporate opportunity of the

Company for the Shareholder’s direct or indirect

benefit; or

failure of the Shareholder to use his best efforts

to perform the duties consistent with his position

with the Company; or

(iv) commission by the Shareholder of any act which

constitutes cause for dismissal of a corporate

officer or employee under company policy or

applicable law.

(d) "Deliver". The term "Deliver" shall mean a Transferring

Shareholder’s delivery to the transfer agent of the Company of

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the Transferring Shareholder’s certificate or certificates for

the shares of Stock being transferred or sold, together with

the certificate or certificates for shares of Stock held by

any direct or indirect Permitted Transferee of the

Transferring Shareholder, duly endorsed in blank so that valid

legal title can be effectively transferred.

(e) "Grout,". The term "Group" shall mean the RKF

Shareholders. The term "Group Members" or "Members" shall

mean all of the Shareholders within the Group.

(f) "Permanent Disability". The term "Permanent Disability"

shall mean the inability of a Shareholder (the "Disabled

Shareholder"), by reason of any medically determinable

physical or mental impairment for a period of ninety ( 90)

days, to carry out and perform the duties and obligations

ordinarily required of him as a director, officer or employee

of the Company or to actively participate in the management of

the business of the Company. The existence of a Permanent

Disability shall be determined following notice ("Initiating

Notice") of the remaining Shareholders or the Disabled

Shareholder to the other(s), as follows:

(i) by written agreement of the remaining Shareholders

and the Disabled Shareholder; or

(ii) by a single physician jointly agreed to in writing

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by the remaining Shareholders and the Disabled

Shareholder within three (3) days after the

Initiating Notice; or

(iii) in the event no single physician is agreed upon, by

the majority vote of three physicians, one chosen

by the Disabled Shareholder, one chosen by the

remaining Shareholders (both appointments to be

made by notice to the other within five (5) days

after the Initiating Notice), and the third chosen

by the first two (2) appointed physicians by notice

to the Disabled Shareholder and the remaining

Shareholders within five (5) days after the

appointment of the later of the first two (2)

appointed physicians. In the event of the failure

to timely appoint a physician pursuant to this

subparagraph (iii), the sole determination of the

one timely appointed physician shall be final and

conclusive upon all parties.

(g) "Permitted Transferee". The term "Permitted Transferee"

shall mean a Shareholder’s lineal descendants and a trust or

trusts for the benefit of a Shareholder, his lineal

descendants and/or any combination thereof, as the trust’s

sole beneficiary or beneficiaries. A legally adopted child is

a lineal descendant.

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(h) "Representative". The term "Representative" shall mean

the legally appointed guardian of a mentally incapacitated

Shareholder or the legally appointed and qualified executor or

personal representative of the estate of a deceased

Shareholder. In the event no such guardian, executor or

personal representative is appointed, then the Representative

shall mean the spouse of such incapacitated or deceased

Shareholder, or if such Shareholder did not have a spouse or

the spouse is not then living, such Shareholder’s then living

lineal descendants, one at a time in descending order of age

but in no event younger than 21 years of age, or if none, such

Shareholders then-living lineal ancestors, one at a time and

in ascending order of age.

(i) "Resignation". The term "Resignation" shall mean the

voluntary termination by a Shareholder, either directly or

indirectly and not by reason of Bankruptcy, Permanent

Disability, Retirement or termination of employment with the

Company with or without Cause.

(j) "Retirement". The term "Retirement" shall mean the

voluntary resignation of employment with the Company by a

Shareholder on or after the date on which the Shareholder

attains age 65.

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M "Termination". The term "Termination" shall mean a

Shareholder’s Resignation, Bankruptcy, Permanent Disability,

Retirement or termination of employment with the Company with

or without Cause.

(1) "Transferring Shareholder". The term "Transferring

Shareholder" shall mean a Shareholder, or the Representative

of such Shareholder, who transfers his shares of Stock

pursuant to Articles IV, V, VI or VII herein.

ARTICLE II

Restrictions on Transfer of Stock

2.1 Prohibition on Transfer. No Shareholder shall sell,

assign, give, transfer, hypothecate, grant a security interest in,

mortgage, pledge or in any other way dispose of or encumber any

shares of Stock except as permitted or required by this Agreement.

The terms "dispose of" and "transfer", as used in this Agreement,

mean and include any disposition or encumbering of the Stock by any

of the foregoing means. Any attempted transfer of Stock not

permitted by this Agreement shall be void and of no effect, and

shall not be recorded in the stock transfer book of the Company.

Nothing contained in this Section 2.1 shall in any manner or

respect prohibit from entering into the Voting Trust

Agreement set forth on Exhibit A attached hereto (the "Trust

Agreement"); provided, however, that all of the provisions of this

Agreement, including, without limitation, this Section 2.1 shall

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apply to the voting trust certificate or certificates now or

hereafter issued to pursuant to the Trust Agreement in the

same manner as they would apply to Stock owned by and,

further provided, that for the purposes hereof, the Stock of

shall be deemed to include Stock transferred to ____, as

trustee, pursuant to the Trust Agreement, and ____, as trustee

under the Trust Agreement, shall be subject to all of the

provisions hereof relating to the Stock of

2.2 S Corporation Election.

(a) In addition to the prohibition on transfer set forth

in Section 2.1 above, no Shareholder shall transfer all or any

part of his Stock at any time if the Company has elected to be

treated as an S Corporation, as from time to time defined by

the Internal Revenue Code of 1986, as amended, and such

transfer would terminate or jeopardize the Company’s election

to be treated as an S corporation. The Company may require

evidence that a transfer of Stock does not terminate or

jeopardize the Company’s election to be treated as an

S Corporation, including an opinion of counsel satisfactory to

it to that effect.

(b) Subject to the limitations in the Illinois Business

Corporation Act of 1983, as amended ("IBCA"), the Shareholders

agree to take all necessary action to cause the Company to pay

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dividends equal to the amount of tax payable by the

Shareholders each year on account of the Subchapter S

election.

2.3 Lecend on Stock Certificates. In furtherance of the

restrictions upon transfer of the Stock and the representations and

warranties of the Shareholders set forth in Section 8. 1, each

certificate representing shares of Stock shall bear the following

legend:

THE SHARES REPRESENTED HEREBY (i) ARE SUBJECT TO THAT CERTAIN SHAREHOLDER AGREEMENT DATED

1991, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE COMPANY, AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THAT AGREEMENT AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME AND (ii) WERE ACQUIRED ON AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. NO TRANSFER OR OTHER DISPOSITION MAY BE MADE OF THESE SHARES UNLESS THEY ARE REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE COMPANY MAY REQUIRE EVIDENCE THAT REGISTRATION IS NOT REQUIRED, INCLUDING AN OPINION OF COUNSEL SATISFACTORY TO IT TO THAT EFFECT.

2.4 Conflicts. Simultaneously with the execution of this

Agreement, the Company and have entered into a Stock Purchase

Agreement (the "Purchase Agreement") which provides, among other

things, that based upon certain events the Company shall purchase

Non-Vested Stock (as defined in the Purchase Agreement) upon

the terms and conditions set forth in the Purchase Agreement (the

"Repurchase Right"). In the event of a conflict between any of the

provisions hereof and the Repurchase Right, the Repurchase Right

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shall control. Whenever this Agreement shall refer to "

Stock" or the "Stock of " such reference shall be deemed to

mean only those shares of Stock which have vested in pursuant

to the Purchase Agreement and shall not include Non-Vested Stock.

ARTICLE III

Intra-Family Transfers

3.1 Intra-Family Transfer Permitted. Any Shareholder may at

any time and from time to time during his lifetime, subject to the

restrictions set forth in Articles II and VIII, transfer all or any

part of his Stock to a Permitted Transferee; provided, however,

that any Shareholder desiring to transfer any Stock to a Permitted

Transferee shall first give notice thereof to the other

Shareholders and shall, at the time of such transfer, if so

requested by within fifteen (15) days after such notice, enter

into a voting trust agreement reasonably satisfactory to and

his legal counsel. Such voting trust shall provide that the

Shareholder transferring such Stock shall have exclusive voting

power with respect to such Stock as trustee of the voting trust

created by such agreement.

3.2 Conditions on Such Transfers. All Stock transferred

pursuant to the preceding Section 3.1 shall nevertheless remain

subject to the terms and conditions of this Agreement and the

Permitted Transferee shall execute an appropriate instrument

agreeing to be bound by the terms and conditions of this Agreement.

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Any Permitted Transferee (immediate or remote) of a Group Member

shall be a member of the Group. Any such Permitted Transferee

(immediate or remote) shall be obligated to sell such Stock

concurrently with, and on the same terms and conditions as, Stock

being sold by the Shareholder who originally transferred the Stock,

or his Representative, as appropriate, under Articles IV, V, VI or

VII and such Permitted Transferee, by executing an instrument

agreeing to be bound by the terms and conditions of this Agreement,

appoints such Shareholder of such Stock or his Representative, as

appropriate, as the Permitted Transferee’s true and lawful attorney

to act on his behalf for the sale of Stock.

ARTICLE IV

Disposition of Stock to Third Parties

4.1 Third-Party Offer. Any Shareholder may at any time

dispose of all, and not less than all, of his Stock and, in

accordance with Section 3.2, the Stock of any direct or indirect

Permitted Transferee of such Shareholder, pursuant to a bona fide

offer (the "Third-Party Offer") in writing signed by the person or

entity to whom the disposition is to be made, which Third-Party

Offer shall identify the offeror and fully set forth the terms and

conditions of such Third-Party Offer.

4.2 Condition Precedent to Such Transfer. Any Shareholder (a

"Disposing Shareholder") desiring to transfer all of his Stock

pursuant to the preceding Section 4.1 shall first offer (the

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"Disposing Shareholder’s Offer") such Stock in writing to the

remaining RXF Group Member or RKF Group Members and then to

, in that order. A Disposing Shareholder’s Offer shall be

for a consideration determined on a per share basis equal to the

same consideration offered in the Third-Party Offer, adjusted as

provided in the second sentence of the succeeding Section 4.3. The

right to receive the Disposing Shareholder’s Offer may be waived in

writing by any one or more of the then remaining Shareholders, such

waiver to be effective only against the waiving party.

4.3 Terms of Offer. The Disposing Shareholder’s Offer shall

be accompanied by a copy of the Third-Party Offer and shall be

irrevocable and remain in effect for a 30-day period, unless

sooner terminated by agreement of the Company and all of the

remaining Shareholders. If the Third-Party Offer is not a cash

offer, the Disposing Shareholder’s Offer shall state a

substantially equivalent cash price. Unless the Disposing

Shareholder’s Offer is sooner rejected by all of the RKF Group

Members, the RXF Group Members shall have the exclusive right to

accept the Disposing Shareholder’s Offer during the first 15-day

period. If none of the RKF Group Members, within the first 15-day

period, accept the Disposing Shareholder’s Offer, then

shall have the exclusive right to accept the Disposing

Shareholder’s Offer for the second 15-day period. In the event

that more than one Group Member accepts the Disposing Shareholder’s

Offer, then unless otherwise agreed to, each accepting Group Member

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may purchase that number of shares of the Disposing Shareholder’s

Stock as is equal to his proportionate ownership of all of the

accepting Group Members’ then respective shares of Stock. Any

acceptance of the Disposing Shareholder’s Offer shall be by written

notice to the Disposing Shareholder.

4.4 ClosincT. Payment and Delivery. The closing of a purchase

of Stock purchased under the preceding Section 4.3 shall occur

within thirty (30) days after the acceptance of the Disposing

Shareholder’s Offer under the preceding Sections 4.2 and 4.3. The

entire purchase price shall be paid by cash or certified or

cashier’s check. Upon receipt by the Disposing Shareholder of the

purchase price, the Disposing Shareholder shall Deliver his Stock.

4.5 Transfer to Third Party. If all of the Shareholders fail

to accept the Disposing Shareholder’s Offer within the 30-day

period, subject to Articles II and VIII hereof, the Disposing

Shareholder may then transfer his Stock during the 30-day period

following the earlier of the rejection of said Offer by all

offerees or the expiration of said Offer without acceptance by any

offerees, but only strictly in accordance with the terms and

conditions of the Third-Party Offer and to the person or entity

named in the Third-Party Offer.

4.6 Conditions on Such Transfers. Any Stock transferred

pursuant to the preceding Section 4.5 shall nevertheless remain

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subject to the terms and conditions of this Agreement and the

transferee shall execute an appropriate instrument agreeing to be

bound by the terms and conditions of this Agreement.

4.7 Transfers by to . Nothing contained in this

Article IV shall in any way prohibit or impair from freely

transferring shares of his Stock to and shall have no

obligation hereunder to make a Disposing Shareholder’s Offer in

connection with such transfers. Any Stock transferred by to

pursuant to this Section 4.7 shall thereafter be subject to

this Agreement. This Section 4.7 shall not be deemed to constitute

a limitation or waiver of any rights of under, or an

amendment of, any agreement, note or other document between the

Company and

ARTICLE V

Option to Sell and Purchase

5.1 Resignation, Bankruptcy, Permanent Disability, Retirement

or Termination With or Without Cause. Subject to Section 5.5, in

the event of the Termination of a Shareholder (hereinafter,

together with all Permitted Transferees (immediate or remote) of

such Shareholder, collectively referred to as the "Terminating

Shareholder"), the remaining RXF Group Members or RXF Group Member

shall have the right, but not the obligation, within thirty (30)

days after the final determination that an event of Termination has

occurred, to purchase all, and not less than all, of the Stock

owned by the Terminating Shareholder and the Terminating

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Shareholder shall have the obligation, if so requested by any RKF

Group Member, to sell all, and not less than all, of the Stock

owned by the Terminating Shareholder to the requesting Group

Members of the RKF Group. If the Group Member or Members of the

RXF Group, within the 30-day period, fail to exercise the right to

purchase, then _ shall have the right, but not the

obligation, within the second 30-day period after a final

determination that an event of Termination has occurred, to

purchase all, and not less than all, of the Stock owned by the

Terminating Shareholder and the Terminating Shareholder shall have

the obligation, if so requested by to sell all, and not

less than all, of the Stock owned by the Terminating Shareholder to

In the event that more than one Group Member of the Group

exercises the right to purchase, then unless otherwise agreed to,

each accepting Group Member, as applicable, may purchase that

number of the shares of the Terminating Shareholder’s Stock as is

equal to his proportionate ownership of all of the exercising Group

Members’ then respective shares of Stock. Any exercise of the

right to purchase the Terminating Shareholder’s Stock must be by

written notice to the Terminating Shareholder, or his

Representative, as applicable. The voting rights of a Terminating

Shareholder’s Stock shall be suspended beginning on the date that

a final determination that an event of Termination has occurred and

continuing until the Stock has been transferred pursuant to this

Article V or pursuant to Articles IV or vi hereof.

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5.2 Purchase Price. The price of the Stock sold under the

preceding Section 5.1 shall equal:

(a) In the event of a Shareholder’s Termination for a

reason other than his Resignation or termination of employment

for Cause, the greater of (i) the purchase price paid to the

Company for such Stock by the Terminating Shareholder or (ii)

(A) sixty percent (60%) of the average gross profit (as set

forth on the income statement of the Company) for the three

(3) full fiscal years ending immediately prior to the date of

sale, as determined by the Company’s regularly retained

certified public accountants in accordance with generally

accepted accounting principles, consistently applied,

multiplied by (B) a fraction, the numerator of which is the

number of shares of the Terminating Shareholder’s or

Shareholders’ Stock (and the Stock of any direct or indirect

Permitted Transferees) and the denominator of which is the

number of shares of all of the Stock.

(b) In the event of the Terminating Shareholder’s

Resignation or the Terminating Shareholder’s termination of

employment with the Company with Cause, the lesser of (i) the

Acquisition Price or (ii) the Book Value of such Stock on the

date of the final determination that such an event of

Termination has occurred.

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5.3 ClosincT. Payment and Delivery. The closing of a purchase

of Stock purchased under the preceding Section 5.2 shall occur

within thirty (30) days after the exercise of the right to purchase

the Stock under the preceding Section 5.1. The entire purchase

price for the Stock shall be paid, at the purchasing Shareholder’s

or Shareholders’ option, by check, by delivery of a non-negotiable

installment note (the "Note") or by a combination thereof. If all

or a part of the purchase price is paid by the Note, the Note shall

be in the form attached hereto as Exhibit B, shall be self

amortizing with equal monthly principal installments, shall bear

interest at an annual rate not less than the prime rate announced

on the date of the Note by the First National Bank of Chicago,

Chicago, Illinois plus one percent (1%) and shall be for a term not

exceeding sixty (60) months. The purchasing Shareholder or

Shareholders shall have the right to prepay any portion of the

principal or interest on the Note at any time and from time to time

without penalty. All such prepayments shall be credited first

against accrued and unpaid interest and any excess against

principal payments in the reverse order of maturity. Upon receipt

by the Terminating Shareholder or his Representative, as

applicable, of the purchase price by check and/or Note, the

Terminating Shareholder or his Representative, as applicable, shall

Deliver the Terminating Shareholder’s Stock.

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5.4 Terminating Shareholder’s Incapacity. If the Terminating

Shareholder lacks legal capacity, due to the Terminating

Shareholder’s Permanent Disability, to carry out the actions

required of the Terminating Shareholder under this Article V, his

Representative shall carry out such actions.

5.5 Status. The parties hereto acknowledge that

is a director of the Company but is not currently an

employee of the Company and it is not anticipated that will

become an employee of the Company at some future date.

Accordingly, the provisions of this Article V regarding

Resignation, Retirement or Termination with or without Cause shall

not be applicable to unless and until he becomes an

employee of the Company. The Company, and

acknowledge that _______ is a principal in which

engages in marketing services activities and nothing hereunder

shall preclude from continuing such affiliation or

& Company from engaging in its business.

ARTICLE VI

Sale of Stock on Death

6.1 Purchase of Shareholder’s Stock. Upon the death of a

Shareholder, other than a Permitted Transferee, the decedent

Shareholder’s Representative shall forthwith offer in writing to

sell all, and not less than all, of such Shareholder’s Stock and,

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in accordance with Section 3.2, the Stock of any direct or indirect

Permitted Transferee of such Shareholder, to the Company, and the

Company shall be obligated to purchase all of said Stock on the

terms and conditions stated in this Article VI. The voting rights

of a decedent Shareholder’s Stock shall be suspended beginning on

the death of the Shareholder and continuing until the Stock has

been sold and transferred pursuant to this Article VI.

6.2 Purchase Price. The price of the Stock sold under the

preceding Section 6.1 shall equal the amount determined in

accordance with Section 5.2(a) except that the relevant fiscal

years shall be the three (3) fiscal years ending immediately

preceding the deceased Shareholder’s death.

6.3 Closinc. Payment and Delivery. The closing of a purchase

of Stock purchased pursuant to this Article VI shall occur within

thirty (30) days after the receipt by the Company of the insurance

proceeds pursuant to Section 6.4, but in no event shall such

closing occur later than one-hundred eighty (180) days after the

date of the death of the Shareholder regardless of whether or not

the Company has received the insurance proceeds pursuant to Section

6.4. The purchase price, to the extent of the greater of (i) the

insurance proceeds received on the death of a Shareholder or (ii)

Ten Thousand Dollars ($10,000), shall be paid by check at the time

of closing. To the extent that the insurance proceeds, if any, are

inadequate to fully satisfy the purchase price, the Company shall

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pay the balance of the purchase price by delivering the Note for

the balance of said purchase price (the difference between the

actual purchase price and the amount paid pursuant to the preceding

sentence). The Note shall be in the form attached hereto as

Exhibit B (except for which shall be in the form attached

hereto as Exhibit Bi), shall be self amortizing with equal monthly

principal installments, shall bear interest at the prime rate of

interest announced on the date of the Note by the First National

Bank of Chicago, Chicago, Illinois plus one percent (1%) and shall

be for a term of thirty-six (36) months. In the event that any

insurance proceeds on the death of a Shareholder are received

subsequent to the closing date pursuant to Section 6.4, all such

amounts, up to the principal and accrued interest due on the Note,

shall be promptly paid to the Representative as a prepayment on the

Note. The Company shall have the right to prepay any portion of

the principal or interest on the Note at any time and from time to

time without penalty. All such prepayments shall be credited first

against accrued and unpaid interest and any excess against

principal payments in the reverse order of maturity. Upon receipt

by the Representative of the purchase price (by check or Note), the

Representative shall Deliver the decedent Shareholder’s Stock.

6.4 Insurance. The Company shall purchase insurance on the

lives of all of the RXF Group Members and, at the discretion of the

Company, on the life of . Each insurance policy shall name

the Company as the sole beneficiary, and shall be in an amount to

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be determined and adjusted by the Board not less often than

annually. In all events the amount of insurance purchased on

behalf of the Group shall be no less than sixty percent (60%) of

the average gross profit of the Company (as determined in

accordance with Section 5.2(a)) multiplied by a fraction, the

numerator of which is the number of Shares owned by the Group (and

the Stock of any direct or indirect Permitted Transferees of the

Group) and the denominator of which is the number of shares of all

of the Stock. The Company shall pay all premiums due on the

policies purchased by it and shall provide proof of payment to the

other Shareholders within five (5) days after the due date of each

premium payment. If such proof is not provided within the said 5-

day period, then any Shareholder may immediately pay the premium in

question, and the Company shall reimburse such Shareholder

immediately for such payment.

6.5 Rights of Ownership in Policies. The Company shall be

the sole owner of policies purchased by it, and, to the extent not

in conflict with or affecting any provision of this Agreement, may

exercise all rights under such policies.

6.6 Use of Insurance Proceeds. The life insurance proceeds

paid upon the death of a Shareholder to the Company shall be used

for the purchase of the Stock of the decedent Shareholder as

provided in this Article vi. All amounts received by the Company

shall be promptly paid to the Representative. If insurance

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purchased by the Company has paid proceeds in an amount greater

than that required to purchase the Stock of the decedent

Shareholder, then the Company may retain such excess proceeds.

6.7 Death’s Priority. If a Shareholder dies at a time when

a disposition of his Stock under Articles IV, V or VII hereof is

pending but not yet closed, all of his Stock shall nevertheless be

sold and purchased under this Article VI and the pending

disposition shall not be consummated.

6.8 Purchase of Permitted Transferee’s Stock. Upon the death

of a Permitted Transferee, his Representative shall sell, assign,

transfer, gift or bequeath any Stock owned by such Permitted

Transferee or in which he has a right to direct the ownership of

pursuant to a trust established for his benefit, to either another

Permitted Transferee of the Shareholder who directly or indirectly

transferred the Stock to him or to the Shareholder who directly or

indirectly transferred the Stock to him. Any persons or entities

receiving such Stock shall execute an instrument agreeing to be

bound by the terms and conditions of this Agreement as a condition

precedent to any transfer of the Stock.

ARTICLE VII

Option to Purchase and Sell Stock

7.1 Purchase Option. Provided that the promissory note from

the Company to _ dated August 30, 1991 in the initial

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principal amount of 1. .

(the "Company Note") has been paid in

full, during the period commencing on the earlier of (a) the fifth

anniversary of the execution hereof and (b) Resignation

("Commencement Date"), and the Company shall have the right to

purchase all, and not less than all, of the Stock owned by

as hereinafter provided (fl___ Option"). Further, at any time

after the earlier of (a) default under the Company Note and (b) the

Commencement Date, shall have the right to demand that

either or the Company purchase all, and not less than all, of

the Stock owned by as hereinafter provided ("

Option"). and the Company shall have the right, but not the

obligation to purchase all, and not less than all, of the Stock

owned by by notifying as hereinafter provided of

his or its exercise of the Option and shall have the

obligation, if so requested by or the Company, to sell all and

not less than all of the Stock owned by _______ to or the

Company. right to purchase Stock must be

exercised by written notice to delivered between November

1st and November 30th of each year. In the event fails to

exercise his right to purchase Stock in any year, then

for that year, the Company may exercise its right to purchase all

and not less than all of Stock by written notice to

delivered between December 1st and December 30th of each

year. shall have the right, but not the obligation to

demand that either or the Company purchase of all, and not

less than all, of the Stock owned by by notifying and

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the Company in writing at any time after the Commencement Date of

his exercise of the Option, and and the Company shall

have the joint and several obligation to purchase all and not less

than all of the Stock owned by . and the Company may

determine, in their sole discretion, which of them will purchase

Stock.

7.2 Purchase Price. The price of the Stock sold under the

preceding Section 7.1 shall equal the amount determined in

accordance with Section 5.2(a) except that the relevant fiscal

years shall be, for purposes of the Option the three (3)

years immediately preceding the date of the notice of the exercise

of the Option, and for purposes of the ____ Option, the

three (3) consecutive fiscal years concluding with the year during

which notice of the exercise of the ____ Option is given.

7.3 Closing, Payment and Delivery. The closing of a purchase

of Stock purchased pursuant to this Article VII shall occur within

thirty (30) days after the determination of the purchase price of

the Stock under the preceding Section 7.2. Twenty-five percent

(25%) of the purchase price shall be paid by certified or cashier’s

check at the time of closing and the balance of the purchase price

by delivery of a non-negotiable secured installment note in the

form of Exhibit C attached hereto (the "Secured Note"). The

Secured Note shall be self-amortizing with equal monthly principal

installments, shall bear interest at the prime rate of interest

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announced on the date of the Secured Note by the First National

Bank of Chicago, Chicago, Illinois plus one percent (1%) payable

monthly and shall be for a term of thirty-six (36) months. The

purchasing party shall have the right to prepay any portion of the

principal or interest on the Secured Note at any time and from time

to time without penalty. All such prepayments shall be credited

first against accrued and unpaid interest and any excess against

principal payments in the reverse order of maturity. The Secured

Note shall be secured by a Security Interest in the Stock of

sold pursuant to this Article VII. The term "Security

Interest" shall mean the right of attorneys, Wildman

Harrold Allen & Dixon, as escrow agent (the "Escrow Agent’) to hold

_ Stock as security for the payment of the Secured Note.

So long as no default exists under the Secured Note, the purchasing

party, if ____, shall be entitled to vote the Stock and receive any

and all cash dividends on the Stock. Upon the occurrence of any

default under the Secured Note, the Escrow Agent shall deliver the

Stock to and will be entitled to vote the Stock and

receive any and all cash dividends on the Stock. In addition,

is authorized to sell, assign or otherwise dispose of the

Stock, or any part thereof, in the event of any default under the

Secured Note, at public or private sale, provided shall

give the purchasing party at least five days’ prior written notice

of the time and place of any public sale or of the time after which

any private sale or any other intended disposition thereof is to be

made. may buy the Stock at any public sale. Proceeds

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realized upon any such disposition, after deduction for the

expenses of holding, preparing for sale, selling or reasonable

attorney’s fees and legal expenses incurred by _______, shall be

applied to the payment of the liabilities and obligations under the

Secured Note, credited first against accrued and unpaid interest

and any excess against principal payments in reverse order of

maturity, _______ will account to the purchasing party for any

surplus realized on such disposition. shall immediately

terminate his Security Interest in and the Escrow Agent shall

deliver to the Purchasing Party twenty-five percent (25%) of the

number of shares of Stock of and any Permitted Transferees

(immediate or remote) sold pursuant to this Article VII upon

receipt from time to time of principal payments equal to,

in the aggregate, twenty-five percent (25%) of the initial

principal amount of the Secured Note; provided, that once a

principal payment is applied toward the partial termination of the

Security Interest such payment shall not be applied toward

subsequent partial terminations of the Security Interest.

Notwithstanding anything to the contrary, if the purchase of Stock

is pursuant to the Option on account of a default under the

Company Note, the entire purchase price shall be paid by certified

or cashier’s check at the time of closing.

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ARTICLE VIII

Shareholder Acknowledgements. Re presentations and Warranties

8.1 Rights as a Shareholder. Each Shareholder acknowledges

that by becoming a Shareholder and entering into this Agreement he

is not entering into or forming a partnership relationship and that

the other Shareholders shall not owe to one another the same or

substantially the same fiduciary duties that partners owe to one

another. Accordingly, except as expressly provided in this

Agreement or in any other agreements between any of the parties

hereto, each Shareholder acknowledges that he shall not, solely by

virtue of his acquisition or ownership of Stock, be entitled among

other things (i) to employment by the Company; (ii) to serve as a

director or officer of the Company; (iii) to receive dividends or

other distributions on his Stock, except as the same may be

declared from time to time by the directors in their sole

discretion; (iv) to have shares of his Stock redeemed by the

Company when shares of Stock of other Shareholders are being

redeemed if the directors shall have determined in good faith that

there exists special circumstances for redeeming shares of Stock

from such other Shareholders; or (v) to sell his shares of Stock

when another Shareholder is selling shares of Stock.

8.2 Compliance with the Securities Act. Each Shareholder

represents and warrants that he acquired his Stock for his own

account for investment and not with a view to any distribution

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thereof so as to cause a violation of the Securities Act of 1933,

as amended (the "Act"), or any rules or regulations thereunder, and

agrees that he will not sell, transfer, distribute or otherwise

dispose of any shares of Stock except (i) pursuant to an effective

registration statement under the Act as then in effect covering

such shares of Stock and such proposed distribution or (ii) upon

first furnishing to the Company an opinion of counsel satisfactory

to it stating that the proposed sale, transfer, distribution or

other disposition is not in violation of the registration

requirements of the Act or of any registration requirements of

applicable state law and such undertakings and agreements with the

Company by the proposed transferee as the Company may reasonably

require to insure continued compliance with the Act.

Each Shareholder acknowledges that his shares of Stock are

restricted securities that are unregistered, and that he must hold

them indefinitely unless they are subsequently registered under the

Act or an exemption from such registration is available; that one

such exemption, Rule 144 under the Act, will not provide a

meaningful way of disposing of the Stock should he decide to do so

at some future date since the procedure under Rule 144 pre-supposes

the existence of an independent public market for the Stock; and

that the Company is under no obligation to register the Stock or to

comply with any such exemption.

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ARTICLE IX

General and Miscellaneous

9.1 Closing. Any closing of the purchase of Stock pursuant

to this Agreement shall be at the offices of the Company, Chicago,

Illinois or at such other place determined by the parties.

9.2 Action by Board of Directors. Any action by the Company

hereunder, including any action to amend, modify or terminate this

Agreement on behalf of the Company shall be taken only upon due

authorization or approval by the Board.

9.3 Eauitable Relief. The parties acknowledge that the

shares of Stock are unique chattels or choses, and also that there

is no ready market for such shares, and that accordingly the breach

of any covenant or obligation hereunder would, or might well,

result in irremediable or incalculable damage. It is therefore

agreed that any such breach or threatened breach shall be

cognizable in a court of equity, in addition to whatever other

remedies may be available therefor.

9.4 Successors and Assigns Bound. This Agreement shall be

binding on the parties hereto and upon their respective heirs,

personal representatives, successors and permitted transferees.

9.5 Implementation of Agreement. The Shareholders and the

Company shall perform all acts, including the execution and

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delivery of all documents, which may be necessary or appropriate in

order to consummate and make fully effective the objectives of this

Agreement.

9.6 Notice. Any notices and other communications required

hereunder shall be in writing and deemed to have been given when

personally delivered or three (3) days after being mailed by

registered or certified mail, postage prepaid:

or to such other address as any party hereto may request by notice

given as aforesaid to the other parties hereto.

9.7 Governing Law. The validity and interpretation of this

Agreement shall be governed by the laws of the State of Illinois.

9.8 Termination. This Agreement and all restrictions on the

transfer of any shares of Stock shall terminate on the occurrence

of any of the following events:

(a) The dissolution of the Company; or

(b) A single Shareholder becoming the owner of all the

shares of Stock of the Company which are then subject to this

Agreement; or

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(C) The execution of a written instrument by the Company

and all of the Shareholders who then own shares of Stock

subject to this Agreement.

9.9 Amendment. This Agreement may be amended or modified

only by a written instrument signed by the Company and all of the

then Shareholders.

9.10 Counterparts. This Agreement may be executed in

identical counterparts, each of which shall constitute an original

instrument and all of which together constitute one original

Agreement.

9.11 Headings. Headings are inserted herein for convenient

reference only, and are to be ignored in construing this Agreement.

9.12 Pronouns. As used herein, all pronouns shall include

the masculine, feminine, neuter, singular and plural thereof

wherever the context and facts require such construction.

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IN WITNESS WHEREOF, this Shareholder Agreement has been signed

and entered into by the parties hereto on and as of the day and

year first above written.

The undersigned hereby agrees to act in accordance with the provisions of Section 7.3 herein.

By:

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THIS FORI! IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT B] RELIED UPON WITHOUT REVIEW OF LEGAL COUNSEL

EXHIBIT ç

VOTING TRUST AGREEMENT

THIS VOTING TRUST AGREEMENT ("Agreement"), made this day of , 1990, by and among common stockholder of hereinafter referred to as " hereinafter referred to as " "), and said

(hereinafter referred to as "the company").

WHEREAS,__ is the owner of shares of the common stock, no par value, of the Company in the amount set opposite his signature hereto (hereinafter referred to as "the Shares"); and

WHEREAS, is a stockholder of the Company; and

WHEREAS, _ desires to allow to exercise control over the election of directors and other matters which are presented for the voting of the Shares owned by

NOW, THEREFORE, it is agreed as follows:

1. Transfer of Stock to . hereby transfers all of his right, title and interest in and to the Shares to and agrees to immediately deposit with the certificate representing the Shares (the "Stock Certificate"). The Stock Certificate shall be properly endorsed or accompanied by such instruments of transfer as to enable to cause the Stock Certificate to be transferred into the name of on the Company’s books and records.

2. Aareement. Copies of this Agreement and of every agreement amending this Agreement shall be filed by immediately upon execution thereof in the principal office of the Company in Chicago, Illinois, and shall be open for inspection by any shareholders of the Company or any beneficiary of the trust created hereby daily during business hours. Neither this Agreement nor any agreement amending this Agreement shall become effective until so filed.

(c) Copyright 1991 by Keith H.Berk. All rights reserved.

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3. to Hold Subject to Agreement. shall hold the Shares so transferred to him for the benefit of

, under the terms and conditions hereinafter set forth.

4. Issuance of New Stock Certificate to . As soon as practicable, the Stock Certificate shall be cancelled by the Company and in its stead a new stock certificate (the "Reissued Certificate") shall be issued to as trustee under this Agreement. The Reissued Certificate shall bear a legend to the effect that, and the Company’s stock ledger book shall state that, the Reissued Certificate is issued pursuant to this Agreement.

5. Voting Trust Certificate. As soon as practicable, shall be issue to a voting trust

certificate for the number of Shares represented by the Stock Certificate transferred by to . The trust certificate shall be in form and substance as set forth in Exhibit A attached hereto.

6. Lost Certificates. In case any voting trust certificate shall become mutilated or be destroyed, stolen or lost, in his discretion may issue a new voting trust certificate of like tenor and denomination in exchange and substitution for and upon cancellation of such mutilated voting trust certificate, or in lieu of and in substitution for the voting trust certificate so destroyed, stolen or lost. The applicant for such substituted voting trust certificate shall furnish to evidence of the destruction, theft, or loss of such voting trust certificate satisfactory to in his discretion. Such applicant shall comply with such other reasonable regulations, including, but not limited to, furnishing

a surety bond or a personal indemnity agreement, and shall pay such reasonable charges as may prescribe.

7. to Vote Stock. It shall be the duty of and he is hereby fully empowered and authorized, to

represent and the Shares transferred to as aforesaid, and to vote upon the said Shares (in person or by proxy) as in the sole judgment of may be in the best interests of the Company and at all meetings of the stockholders of the Company in the election of directors and upon any and all matters and questions which may be brought before such meetings, as fully as might do if personally present.

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8. Liability.

(a) shall use his best judgment in voting upon the Shares, but shall not be liable for any vote cast or consent given in good faith and in the absence of gross negligence.

(b) shall not incur any responsibility or liability by reason of any error of judgment or mistake of law or other mistake, or for any misconstruction of this Agreement, or for any action of any kind taken or omitted hereunder or believed by him to be in accordance with the provisions and intent hereof, except for his own individi lal willful misconduct.

9. Dividends; Additional Shares, shall collect and receive all dividends that may accrue upon the Shares subject to this trust, or other dividends of any nature whatsoever, and shall distribute the same to . If any dividend in respect of the Shares is paid, in whole or in part, in stock of the Company having general voting powers, shall hold such stock subject to the terms of this Agreement and shall be entitled to receive a voting trust certificate for the number of shares received as such dividend. Further, any stock of the Company hereinafter acquired by shall be subject to the terms of this Agreement and shall be entitled to receive a voting trust certificate for such additional stock.

10. Indemnity, shall serve as trustee hereunder without compensation, but shall be entitled to be fully indemnified out of the dividends coming to his hands against all reasonable costs, charges, expenses and other liabilities properly incurred by him in the exercise of any power conferred upon him by this Agreement, and hereby covenants with that in the event the monies and securities in his hands are insufficient for that purpose,

will save harmless and keep indemnified of and from all loss or damage which he may sustain or be put to by reason of anything he may lawfully do in the execution of this trust, and shall, upon demand in writing by pay the costs, charges or other expenses as aforesaid to

11. Sale or Transfer of Trust Certificates. The voting trust certificates issued by pursuant to this Agreement, and the rights represented thereby, may be sold, assigned, pledged, mortgaged, transferred or encumbered, but only in accordance with the terms of any shareholder agreement to which the shareholders of the Company and the Company are parties. Such certificates must be surrendered to by the registered owner thereof (in person or by duly authorized attorney), who will transfer the certificates on his books and

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thereafter treat the transferee as owner thereof for all purposes.

12. Termination of Trust. The trust created hereby shall continue to and shall terminate upon the earlier of:

(a) ten (10) years from the date of execution hereof;

(b) a complete liquidation or dissolution of the Company;

(C) the sale of all or substantially all of the assets of the Company; or

(d) the resignation of

13. as Stockholder and Director. is a shareholder of the Company and may act as a director, officer, agent or member of any committee of the Company and he may, to the extent permitted by law, be or become pecuniarily interested in any matter or transaction involving the Company as fully as though he were not the trustee hereunder.

14. Employment of Agents. - may employ counsel and agents whose reasonable expenses and compensation shall be paid in accordance with Article 10 hereof.

4

15. Amendment. If at any time shall deem it advisable to amend this Agreement, he shall submit his such amendment in writing to for his approval, _ shall have ten (10) days after his receipt of notice of a proposed amendment to accept or reject such amendment by written advice to

If fails to respond to within said 10-day period, he shall be deemed to have accepted such proposed amendment. Upon approval of a proposed amendment by

the proposed amendment shall be and become a part of this Agreement with like force and effect as if originally incorporated herein. Nothing in this Agreement or the voting trust certificate shall be construed to confer upon the right or power in any manner to initiate any amendment of this Agreement, but every such amendment shall be initiated by and shall have the right only to approve or disapprove such amendment in the manner prescribed in this Article 15.

16. Bond or Security, -shall not be required to give any bond or security for the discharge of his duties.

17. Resignation of . may at any time resign as trustee hereunder by delivering his resignation in

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writing to to take effect no later than ten (10) days thereafter. In the event of such resignation the provisions of Article 12 hereunder shall apply.

18. Law Governing the Agreement. This Agreement and all rights of the parties hereunder shall be interpreted, construed and governed in all respects by the laws of the State of Illinois.

19. Notices. All notices to be given by or to _______ or the Company, shall be given in writing and shall be deemed delivered (i) when personally delivered, (ii) one (1) day after deposit with Federal Express or other overnight courier with guaranteed next-day delivery, charges prepaid, or (iii) three (3) days after deposited in the U.S. mail, certified mail, return receipt requested, first class postage prepaid, and addressed to the parties at their respective addresses as reflected in the records of the Company.

20. Severability. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable as to any person or circumstance, such provision shall be ineffective as to such person or circumstance and the remaining substance of such provision, as well as the remaining provisions of this Agreement, shall be enforced according to their terms.

21. Heirs and Assigns. This Agreement shall inure to the benefit of and be binding upon the heirs, legal representatives, administrators, executors, successors, and assigns of and the Company.

22. Headings. The headings herein are solely for convenience of reference and shall not be deemed a part hereof, nor have any bearing on the interpretation or construction of this Agreement.

23. Counterparts. This Agreement may be executed in several counterparts, each of which so executed shall be deemed to be the original, and such counterparts shall together constitute one and the same instrument.

I

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I

*

IN WITNESS WHEREOF, __ and have signed this Agreement and the company has caused this Agreement to be executed by its proper officers, all on the day and year first above written.

STOCKHOLDER: SHARES:

By:

TRUSTEE:

N.

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RELIED UPON Wi’riiJur KLVJ.C.Tf ur LEGAL COUNSEL

EXHIBIT D

SHAREHOLDERS VOTING AGREEMENT

Agreement made as of this -

day of by and between the individuals listed on Schedule I hereto (the "Purchasers’), - (the "Founders") and a Delaware

corporation (the "Company").

WITNES SETH:

WHEREAS, the Founders have organized an Illinois corporation known as and

WHEREAS, prior to the execution of this Agreement has merged into the Company, with the Company being the surviving corporation; and

WHEREAS. the Founders have received shares of Common Stock in the Company pursuant to the merger of into the Company, and are officers, directors and shareholders of the Company; and

WHEREAS. Purchasers have this date purchased shares of Convertible Preferred Stock in the Company, each of which is entitled to one vote per share, as of the date hereof, pursuant to a Preferred Stock Purchase Agreement (the "Agreement"); and

WHEREAS, Purchasers have this date purchased shares of Redeemable Preferred Stock in the Company, none of which is entitled to a vote, pursuant to the Agreement; and

WHEREAS, Founders have this date purchased shares of Redeemable Preferred Stock in the Company each of which is not entitled to vote, pursuant to the Agreement; and

WHEREAS, the Purchasers and the Founders are desirous of providing for the voting of their Common Stock and Convertible Preferred Stock on certain matters, and for certain other courses of conduct.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

(c) Copyright 1991 Keith H. Berk. All rights reserved.

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1. Election of Directors. Pursuant to the Amended Certificate of Incorporation of the Company, the number of directors comprising the Company’s Board of Directors has been fixed at five. Immediately upon execution of this Agreement the parties hereto shall convene a duly constituted Board of Directors meeting and the Founders and their transferees, shall vote for two (2) directors, each of whom is a designee of the Purchasers, each selected by a majority of the holders of the shares of the Convertible Preferred and for whom the holders of the Convertible Preferred may substitute, at any time, one or more equal numbers of replacements. The two designees of the Purchasers shall initially be

The Purchasers and their respective transferees shall vote for two (2) directors each of whom is a designee of the Founders, each selected by a majority of the holders of the shares of the Common Stock and for whom the holders of the Common Stock may substitute one or more equal number of replacements. Initially, the two designees of the Founders shall be . During the term of this Agreement, the Purchasers and their respective transferees shall vote for the Founders’ designees as members of the Board of Directors and the Founders and their transferees shall vote for the Purchasers’ designees as members of the Board of Directors. The Purchasers’ designee directors and Founders’ designee directors shall nominate a fifth director and during the term of this Agreement the Purchasers and the Founders and their respective transferees shall vote for such nominee to serve as a member of the Board of Directors of the Company. Such director will initially be In the event the four designee directors are unable to nominate a fifth director and such deadlock lasts at least ten (10) days after the election of the four directors, the fifth director shall be selected by a majority vote of all of the Common Stock and Covertible Preferred shareholders of the Company voting at a shareholders meeting and there shall be no obligation for Founders and Purchasers to vote their shares for any particular candidate.

The terms of the above paragraph shall continue until such time as the Purchasers hold less than 5% of the issued and outstanding securities of the Company purchased by the Purchasers on the date hereof. If at any time the Purchasers hold less than 5% but more than 1% of the Common Stock of the Company after giving effect to the conversion of the Convertible Preferred, the parties hereto shall vote their shares of Common Stock and Convertible Preferred Stock (or Common Stock received upon conversion of the Convertible Preferred Stock), and their respective transferees shall vote for the election of one director who shall be designated by the Purchaser or their transferees.

2. Additional Directors. If 50% in interest of the Purchasers (or their transferees) give written notice to the

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Founders and the Company that the Company has materially breached any of the covenants set forth in the Agreement and Amended Certificate of Incorporation, within ten days of receipt thereof the parties hereto agree to cause the number of directors to be increased by one, such director to be designated by holders of a plurality in interest of the shares of the Convertible Preferred Stock. In such event, the Founders agree to vote for the director so designated by the holders of the Convertible Preferred Stock.

3. Meetings of Directors. At any time (so long as the Purchasers hold more than 5% of the Common Stock of the Company after giving effect to the conversion of the Convertible Preferred) upon the request of the holders of 51% of the shares of Convertible Preferred Stock, a meeting of the Board of Directors of the Company may be called for any purpose so deemed by such holders of the Convertible Preferred Stock.

4. Additional Purchasers. The parties hereto agree to use their best efforts to cause the Company, and the Company shall require each purchaser of the Company’s capital stock, or securities convertible into capital stock to agree to be bound by this Agreement as if such additional purchaser had executed this Agreement on the date hereof.

5. Termination. This Agreement shall terminate on the first closing of a sale of the Company’s securities pursuant to a registration statement filed under the Securities Act of 1933 with the Securities and Exchange Commission relative to the Company’s securities, with an aggregate offering price to the public of not less than $8,500,000 and five dollars ($5.00) per share (such price to be adjusted if additional shares of Common Stock are issued pursuant to a stock dividend, stock distribution, reclassification, combination or subdivision).

6. Miscellaneous. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, whether so expressed or not. This Agreement may be executed and will be consummated in the State of Illinois and is to be governed by and interpreted under the laws of that state, without giving effect to the principles of conflicts of laws thereof.

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and no amendment, alteration or modification of this Agreement shall be valid unless in each instance such amendment, alteration or modification i s expressed in a written instrument executed by each of the part ies hereto. No waiver of any provision of this Agreement shal 1 be valid unless it is expressed in a written instrument duly executed by the party or

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parties making such waiver. The failure of any party to insist, in any one or more instances, on performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted hereunder or of the future performance of any such term, covenant or condition but the obligation of any party with respect thereto-shall continue in full force and effect.

All notices, requests, consents and other communi-cations hereunder shall be in writing and shall be mailed first class registered, return receipt requested, with postage prepaid as follows:

(i) If to Purchaser,

(ii)If to a Founder,

Alternatively, to such other address as a party hereto supplies to each other party in writing.

This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

The headings of the sections of this Agreement have been inserted for the convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof.

IN WITNESS HEREOF, the undersigned have set their hands as of the above date.

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