Exhibit 10.4
SHAREHOLDERS AGREEMENT
OF
COLORADO BUSINESS LEASING INC.
THIS AGREEMENT (the "Agreement") is made and entered into the 29th day of
March, 1996 (the "Effective Date") by and among The Women's Bank, N.A. (the
"Bank"); Xxxxxxx X. Xxxx, Xx., Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxx
(individually an "Employee Shareholder" and collectively the "Employee
Shareholders") (sometimes herein, the Bank and the Employee Shareholders are
collectively referred to as the "Shareholders"); and Colorado Business Leasing
Inc., a Colorado corporation (the "Company"), with respect to all shares of the
Company's capital stock now or hereafter outstanding, for the purpose of
protecting the Company and the Shareholders in the event of a transfer of the
shares of any Shareholder or his successor in interest as provided for in this
Agreement. The Shareholders together own all of the outstanding shares of the
Company's stock (collectively and in any amount, the "Shares") as of the
Effective Date.
IT IS HEREBY AGREED:
ARTICLE I
SHARE CERTIFICATES
Upon execution of this Agreement, each Shareholder shall have placed on the
certificates representing his Shares the legend set forth in Article IX of this
Agreement. None of the Shares shall be transferred, encumbered or in any way
alienated except under the terms of this Agreement. Each Shareholder shall have
the right to vote his Shares and receive the dividends paid on them until the
Shares are sold or transferred as provided in this Agreement.
ARTICLE II
TRANSFER RESTRICTIONS
SECTION 2.1. EMPLOYEE SHAREHOLDERS. (A) OFFER FROM THIRD PARTY. No
Employee Shareholder shall transfer, encumber or in any way dispose of any of
his Shares or any right or interest in them, except to another Employee
Shareholder or the Bank as set forth herein, without obtaining the prior written
consent of the Bank and the other Employee Shareholders.
(B) TERMINATION OF EMPLOYMENT OF EMPLOYEE SHAREHOLDER. In the event that
an Employee Shareholder's employment with the Company terminates for any reason
or no reason, including death, the Company shall provide written notice, in
accordance with Section 12.5 of this Agreement, to the other Employee
Shareholders, who shall have the option to purchase the
Shares of the terminating Employee Shareholder at the price determined in
accordance with Article VI of this Agreement. Within 15 days after giving the
notice, any non-terminating Employee Shareholder desiring to acquire any part or
all of the Shares shall deliver to the Secretary of the Company a written
election to purchase the Shares or a specified number of them. If the total
number of Shares specified in the elections exceeds the number of available
Shares, each Employee Shareholder shall have priority, up to the number of
Shares specified in his notice of election to purchase such proportion of the
available Shares as the number of the Company's Shares that he holds bears to
the total number of the Company's Shares held by all Employee Shareholders
electing to purchase. The Shares not purchased on such a priority basis shall be
allocated in one or more successive allocations to those Employee Shareholders
electing to purchase more than the number of Shares to which they have a
priority right, up to the number of Shares specified in their respective
notices, in the proportion that the number of Shares held by each of them bears
to the number of Shares held by all of them.
If the option is not exercised by the other Employee Shareholders as to all
of the Shares of the terminating Employee Shareholder, notice shall be given
immediately by the Company in accordance with Section 12.5 of this Agreement to
the Bank, who shall have the option to purchase any Shares not purchased by the
other Employee Shareholders at the price determined in accordance with Article
VI of this Agreement. Within 15 days after giving the notice, if the Bank
desires to acquire any part or all of the remaining Shares, it shall deliver to
the Secretary of the Company a written election to purchase the remaining Shares
or a specified number of them.
Within the earlier to occur of (i) the twentieth day after the mailing of
the notice to the Bank, or (ii) the twentieth day after the Employee
Shareholders agree to acquire all of the Shares, the Secretary of the Company
shall notify each Employee Shareholder and/or the Bank of the number of Shares
as to which his or its election was effective and the Employee Shareholder and
the Bank shall meet the terms and conditions of the purchase within 10 days
thereafter.
If the Bank and the non-terminating Employee Shareholders do not purchase
all of the Shares of the terminating Employee Shareholder, the remaining Shares
not purchased by them may be held by the terminating Employee Shareholder
pursuant to the terms of this Agreement.
SECTION 2.2. BANK. Except as provided elsewhere in this Agreement, the
Bank shall not transfer, encumber or in any way dispose of any of its Shares or
any right or interest in them without obtaining the prior written consent of all
Employee Shareholders, unless the Bank shall first have given written notice to
the Company, in accordance with Section 12.5 of this Agreement, of its intention
to do so and complied with the remaining provisions of this Agreement. The
notice shall be accompanied by an executed counterpart of any document of
transfer, which must name the proposed purchaser and specify the number of
Shares to be transferred, the price per Share, and the terms of payment.
Promptly on receipt of the notice, the Secretary of the Company shall forward a
copy of the notice and the executed counterpart to each Employee Shareholder,
who shall have the option to purchase such Shares at the price and on the same
terms and conditions specified in the notice and any accompanying transfer
documents. Within 15 days after giving the notice, any Employee Shareholder
desiring to acquire any part or all of the Shares offered shall deliver to the
Secretary of the Company a written election to
purchase the Shares or a specified number of them. If the total number of Shares
specified in the elections exceeds the number of available Shares, each Employee
Shareholder shall have priority, up to the number of Shares specified in his
notice of election to purchase such proportion of the available Shares as the
number of the Company's Shares that he holds bears to the total number of the
Company's Shares held by all Employee Shareholders electing to purchase. The
Shares not purchased on such a priority basis shall be allocated in one or more
successive allocations to those Employee Shareholders electing to purchase more
than the number of Shares to which they have a priority right, up to the number
of Shares specified in their respective notices, in the proportion that the
number of Shares held by each of them bears to the number of Shares held by all
of them.
Within 20 days after the mailing of the notice to the Employee
Shareholders, the Secretary of the Company shall notify each Employee
Shareholder of the number of Shares as to which his election was effective and
the Employee Shareholder shall meet the terms and conditions of the purchase
within 10 days thereafter.
Notwithstanding the above, if the Employee Shareholders do not elect to
purchase all the Shares set forth in the notice, they shall have no right to
purchase any of the Shares set forth in the notice, and all the Shares set forth
in the notice may be transferred to the purchaser named in the notice at any
time within 50 days from the date of the original notice to the Company from the
Bank and on the same terms specified in the notice. The purchaser shall hold
the Shares pursuant to all the provisions of this Agreement. No transfer of the
Shares shall be made after the end of the 50-day period, nor shall any change in
the terms of transfer be permitted without a new notice of intention to transfer
and compliance with the requirements of this Section 2.2.
SECTION 2.3. SALE OF CONTROLLING BLOCK. Notwithstanding the remaining
provisions of this Agreement, in the event that the Bank or any other
Shareholders collectively owning at least 50 percent of the Shares (the
"Controlling Group") desires to sell 50 percent or more of the Shares (the
"Controlling Block") in one or a series of sales, such sales shall be made in
compliance with this Section 2.3 and the remaining applicable provisions of this
Agreement. In the event that the Controlling Group desires to sell, transfer,
encumber or in any other way dispose of at least 50 percent of the total number
of Shares, it shall provide written notice to the Company with an executed
counterpart of any document of transfer, which must name the proposed purchaser
and specify the number of Shares to be transferred, the price per Share, and the
terms of payment. Promptly upon receipt of the notice, the Secretary of the
Company shall promptly forward a copy of the notice and the executed counterpart
to each other Shareholder, who shall have the option to purchase all, but not
less than all, of the offered Shares at the price specified in the notice and
any accompanying transfer documents and on the same other terms stated in the
notice and accompanying transfer documents. Within 15 days after giving the
notice, if any Employee Shareholder desires to acquire any part or all of the
Shares, he shall deliver to the Secretary of the Company a written election to
purchase the Shares or a specified number of them. If the total number of Shares
specified in the elections exceeds the number of offered Shares, each non-
selling Shareholder shall have priority, up to the number of Shares specified in
his notice of election to purchase such proportion of the offered Shares as the
number of the Company's Shares that he holds bears to the total number of the
Company's Shares held by all
non-selling Shareholders electing to purchase. The Shares not purchased on such
a priority basis shall be allocated in one or more successive allocations to
those non-selling Shareholders electing to purchase more than the number of
Shares to which they have a priority right, up to the number of Shares specified
in their respective notices, in the proportion that the number of Shares held by
each of them bears to the number of Shares held by all of them.
Within the twentieth day after the non-selling Shareholders agree to
acquire all of the offered Shares, the Secretary of the Company shall notify
each non-selling Shareholder of the number of Shares as to which his election
was effective and each non-selling Shareholder shall meet the terms and
conditions of the purchase within 10 days thereafter.
If the non-selling Shareholders do not purchase all the Shares set forth in
the notice of intention to transfer, they may not purchase any of such Shares,
and each non-selling Shareholder shall be required to join in such sale of the
Controlling Block so that all of the Shares will be transferred to the
purchaser(s). Each Shareholder shall receive a share of the net purchase price
relating to the sale of all of the Shares based upon the proportion of the
number of Shares held by such Shareholder in relation to the total of Shares
held by all of the Shareholders. For example, in the event that the Bank elects
to sell all of the Shares to a third party in exchange for proceeds of
$1,000,000 net of the costs relating to the sale, then an Employee Shareholder
who owns five percent of the Shares shall be required to sell and transfer all
of his Shares to the purchaser and such Employee Shareholder shall receive
$50,000 for such sale.
SECTION 2.4. PROVISIONS OF SECTION 2.3 SHALL PREVAIL. In the event that
any of the provisions of Sections 2.1 or 2.2 conflict with any of the provisions
of Section 2.3, the provisions of Section 2.3 shall prevail.
SECTION 2.5. LIMITATION ON OWNERSHIP AND ISSUANCE OF STOCK. At all times
during the term of this Agreement, the Bank shall always own at least 80 percent
of the Shares, unless the Bank consents otherwise in writing. As a result, all
parties acknowledge and agree that this ownership limitation creates additional
transfer restrictions on the Shares and may prevent the Company from issuing
additional Shares of common stock.
SECTION 2.6. TRANSFER OF SHARES TO EMPLOYEE SHAREHOLDERS. Notwithstanding
the remaining provisions of this Agreement, all Employee Shareholders may
transfer, pledge and encumber any or all of their Shares to any other Employee
Shareholder during the term of this Agreement, and such Shares shall remain
subject to the terms of this Agreement.
ARTICLE III
SALE OF BANK
In the event that the Bank sells all or substantially all of its assets or
is acquired in another manner including but not limited to consolidation, merger
or share exchange, then the acquiror of the Bank must purchase all of the Shares
from all of the Employee Shareholders at a price determined in accordance with
Article VI of this Agreement.
ARTICLE IV
OBLIGATIONS OF TRANSFEREES
Each transferee and all subsequent transferees of Shares or any interest in
such Shares shall, unless this Agreement expressly provides otherwise, hold such
Shares or interest in the Shares subject to all of the provisions of this
Agreement and shall make no further transfers except as provided in this
Agreement. Each transferee shall execute a counterpart to this Agreement as a
condition precedent to the transfer of Shares to the transferee and to the
transferee becoming a Shareholder. Each transferee and subsequent transferee
shall be deemed to be a party to this Agreement even if he does not execute a
counterpart to this Agreement.
ARTICLE V
PURCHASE ON DEATH OF EMPLOYEE SHAREHOLDER
Each Shareholder shall instruct his executor to provide prompt written
notice to the Company in the event of the Shareholder's death.
In the event of the death of a Shareholder, Section 2.1 (b) shall control.
ARTICLE VI
FAIR VALUE OF SHARES
The purchase price to be paid for Shares pursuant to this Article VI shall
be the fair value of such Shares as mutually agreed upon by the Shareholders. In
the event the Shareholders do not agree on the fair value of the Shares, the
holder(s) of a majority of the outstanding Shares shall determine, in good
faith, the fair value of such Shares. Fair value of the Shares shall be
determined at least as often as once per year.
ARTICLE VII
PAYMENT AND TRANSFER OF SHARES
On the occurrence of any event that leads to the purchase of Shares under
this Agreement, the consideration to be paid for the Shares shall be paid to the
transferring Shareholder or his estate, as the case may be. The decedent's
personal representative shall apply for and obtain all necessary court approvals
and confirmations of the sale of the decedent's Shares under this Agreement. In
all events, consideration for the Shares shall be delivered as soon as
practicable to the person entitled to it and the parties shall cause the
certificates representing the purchased Shares to be properly endorsed and shall
issue new certificates in the names of the purchaser or purchasers.
ARTICLE VIII
ADMINISTRATIVE REQUIREMENTS
The Company agrees to apply for and use its best efforts to obtain all
governmental and administrative approvals required in connection with the
purchase and sale of Shares under this Agreement. The Shareholders agree to
cooperate in obtaining the approvals and to execute any and all documents that
may be required to be executed by them in connection with the approvals. Any
required governmental approvals shall be considered a condition precedent to the
acquisition of any Shares pursuant to this Agreement. The party or parties
required to obtain such approvals shall have a reasonable period of time to
obtain such approvals, and to the extent necessary, any time periods set forth
in the Agreement shall automatically be extended to permit either the Company or
any Shareholder to obtain any necessary approval(s).
ARTICLE IX
LEGENDS ON SHARE CERTIFICATES
Each Share certificate, when issued, shall have conspicuously endorsed on
its face the following words: "Sale, transfer, or hypothecation of the Shares
represented by this certificate is restricted by the provisions of a
Shareholders Agreement, dated ___________________, 1996, a copy of which may be
inspected at the principal office of the Company and all the provisions of which
are incorporated by reference in this certificate." A copy of this Agreement
shall be delivered to the Secretary of the Company.
ARTICLE X
TERMINATION OF AGREEMENT
This Agreement shall terminate on the occurrence of the first of the
following events:
i) The written agreement of all parties;
ii) The dissolution, bankruptcy or insolvency of the Bank or the
Company;
iii) Fifty years after the Effective Date; or
iv) At such time as only one Shareholder of the Company remains, the
Shares of all other Shareholders having been transferred or
redeemed.
ARTICLE XI
SHAREHOLDER XXXXX
Each Shareholder agrees to include in his Will a direction and
authorization to his executor to comply with the provisions of this Agreement
and to will his Shares in accordance with this Agreement; however, the failure
of any Shareholder to do so shall not affect the validity or enforceability of
this Agreement.
ARTICLE XII
MISCELLANEOUS MATTERS
SECTION 12.1. AGREEMENT TO PERFORM NECESSARY ACTS. Each party to this
Agreement agrees to perform any further acts and execute and deliver any
documents that may be reasonably necessary to carry out the provisions of this
Agreement.
SECTION 12.2. AMENDMENTS. The provisions of this Agreement may be waived,
altered, amended or repealed, in whole or in part, only by the written consent
of all parties to this Agreement.
SECTION 12.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on
and shall inure to the benefit of the parties to it and their respective heirs,
legal representatives, successors and permitted assigns.
SECTION 12.4. VALIDITY OF AGREEMENT. It is intended that each section and
article of this Agreement shall be viewed as separate and divisible and in the
event that any section or article shall be held to be invalid, the remaining
sections and articles shall continue to be in full force and effect.
SECTION 12.5. NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given or within three days after mailing, if mailed to the
party to whom notice is to be given, by first class mail, and properly addressed
to the party at his address set forth on the signature page of this Agreement or
any other address that any party may designate by written notice to the others.
SECTION 12.6. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of Colorado.
SECTION 12.7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 12.8. DEFINITIONS. Whenever used in this Agreement, the singular
shall include the plural and vice versa, and the use of any gender shall include
all genders and the neuter.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
COMPANY:
COLORADO BUSINESS LEASING, INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
(address of principal By: /s/ Xxxxxxx X. Xxxx, Xx.
office of corporation) -------------------------------------------
Xxxxxxx X. Xxxx, Xx., President
BANK:
THE WOMEN'S BANK, N.A.
000 Xxxxxxxxxxx Xxxxxx
P.O. Box 8779
Xxxxxx, Xxxxxxxx 00000
(address of principal By: /s/ Xxxxxxxx X. Xxxxxx
office of corporation) -------------------------------------------
Xxxxxxxx X. Xxxxxx, Director
EMPLOYEE SHAREHOLDERS:
00000 Xxxx 00xx Xxxxxx
Xxxxxx, XX 00000 /s/ Xxxxxxx X. Xxxx, Xx.
(address) -------------------------------------------
Xxxxxxx X. Xxxx, Xx.
0000 Xxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000 /s/ Xxxxx X. Xxxxxx
(address) -------------------------------------------
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxxx Xxx
Xxxxxxxxx, XX 00000 /s/ Xxxxxx X. Xxxxxxx
(address) -------------------------------------------
Xxxxxx X. Xxxxxxx
