99.2
SHAREHOLDERS AGREEMENT BETWEEN
WIN-TEX INTERNATIONAL, INC. AND
XXXXXXX XXXXXXX, ET AL
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT is made and entered into this 17th day of
April, 1992, by and between WIN-TEX INTERNATIONAL, INC., a corporation
organized and existing in accordance with the laws of the State of Texas
(hereinafter also referred to as "Corporation"), XXXXXXX XXXXXXX (hereinafter
also referred to as "xxXxxxx"), XXXXXX X. XXXXX (hereinafter also referred to
as "Stone"), XXXXXXXX X. XXXXXX (hereinafter also referred to as "Xxxxxx"),
XXX XXXXXXXXX XXXXXX (hereinafter also referred to as "Xxxxxx"), XXXXX
XXXXXXX (hereinafter also referred to as "Xxxxxxx") and XXXXXXXX X. XXXXXXX
(hereinafter also referred to as "Xxxxxxx").
W I T N E S S E T H:
WHEREAS, the Corporation desires to sell and each of the individual
parties hereto desire to purchase, shares of common stock of the Corporation
subject to the terms and conditions of this agreement;
WHEREAS, the parties hereto intend for the ownership of the shares of the
Corporation to be as follows:
Xxxxxxxx X. Xxxxxx 20 shares
Xxx Xxxxxxxxx Xxxxxx 20 shares
Xxxxxxx xxXxxxx 20 shares
Xxxxxx X. Xxxxx 20 shares
Xxxxx Xxxxxxx 10 shares
Xxxxxxxx X. Xxxxxxx 10 shares
----
Total 100 shares
WHEREAS, the parties hereto, being all of the shareholders of the
Corporation, believe that it is in their mutual interest
to make provisions for the future disposition of the shares of common stock of
the Corporation owned by them, to the end that continuity of harmonious
management is assured, and a fair process is established by which said shares of
common stock may be transferred, conveyed, assigned or sold;
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS: For the purposes of this Shareholders Agreement, the
following definitions shall apply to the interpretation and construction of the
words and phrases contained herein unless otherwise clearly required by the
context:
a. "Agreement" means this Shareholders Agreement.
b. "Corporation" means WIN-TEX INTERNATIONAL, INC.
c. "Assignment or other Transfer" includes but is not limited to, a
sale, exchange, gift, hypothecation, collateral assignment, subjecting the
ownership interest to a security interest, attachment, judgment creditor
execution, bankruptcy, or other similar occurrence sanctioned by law without the
prior written consent of the other Shareholder(s) and the Corporation.
d. "Shareholder" or "Shareholders" means XXXXXXXX X. XXXXXX,XXX
XXXXXXXXX XXXXXX, XXXXXXX XXXXXXX, XXXXXX X. XXXXX,
- 2 -
XXXXX XXXXXXX, and XXXXXXXX X. XXXXXXX, and their heirs, executors,
administrators, or other legal representatives, and any other person or entity
that may hereafter acquire stock of the Corporation by or from any of them. e.
e. "Stock" means all of the interest of any Shareholder in any and
all of the issued and outstanding common stock of the Corporation which is
now owned, or hereafter acquired, directly or indirectly, by him or her.
2. PURCHASE OF STOCK:
a. Prior to the execution of this Agreement, Xxxxxxxx X. Xxxxxx
has subscribed for, and been issued, 20 shares, Xxx Xxxxxxxxx Xxxxxx has
subscribed for, and been issued, 20 shares, Xxxxxxx xxXxxxx has subscribed
for, and been issued, 20 shares, and Xxxxxx X. Xxxxx has subscribed for, and
been issued, 20 shares, in the amount of One Thousand Two Hundred Fifty and
00/100 Dollars ($1,250.00) per share. The Corporation shall issue ten (10)
shares each to Xxxxxxx and Xxxxxxx, for a total of twenty (20) additional
shares, for the consideration set forth herein. Ocanas, Guzman, xxXxxxx and
Stone shall each pay the sum of $25,000.00 for their subscriptions on the
following schedule:
Later of April 15, 1992 or
execution of Agreement $ 5,000.00
May 1, 1992 5,000.00
June 1, 1992 10,000.00
July 1, 1992 5.000.00
-----------
Total $ 25.000 00
-----------
x. Xxxxxxx and Xxxxxxx shall pay to the Corporation
the sum of Two Hundred Thousand Dollars ($200,000.00) in total,
- 3 -
being $100,000.00 each, for their stock, and, in addition, shall loan the
Corporation an additional $200,000.00 in total, being $100,000.00 each, subject
to the terms and conditions below. Payments of the stock and loan shall be made
on the following schedule:
Later of April 15, 1992 or
execution of Agreement $ 80,000.00
May 1, 1992 80,000.00
June 1, 1992 160,000.00
July 1, 1992 80.000.00
-----------
Total $400.000.00
-----------
c. The terms and conditions of the $200,000.00 loan from Xxxxxxx
and Xxxxxxx to the Corporation shall be as follows: interest shall accrue at
an annual rate equal to the prime interest rate as reported in the Wall
Street Journal, Money Rates, as of the last day of each month, plus two
percent (2%), from the date that all subscribed capital has been paid to the
Corporation until the date of payment, compounded monthly. The net profit of
the Corporation shall be used (i) to pay accrued interest to Xxxxxxx and
Xxxxxxx, and (ii) to repay the loan to Xxxxxxx and Xxxxxxx until the entire
$200,000.00 has been repaid. Payments will be made equally to Xxxxxxx and
Xxxxxxx.
d. In further consideration for their shares, daSilva, Stone,
Xxxxxxx, and Xxxxxxx agree to cause Wintech International Corporation, a
Virginia corporation, to guaranty the lease obligation of the Corporation to
Crow-Global Partners, Ltd., which lease shall be for an initial term not to
- 4 -
exceed ten (10) years, at an initial base rent not to exceed $7,782.40 per month
(plus expense pass-throughs).
e. The issued and outstanding Stock of the Corporation shall be
owned as follows:
Xxxxxx 20 SHARES
Xxxxxx 20 shares
xxXxxxx 20 shares
Stone 20 shares
Xxxxxxx 10 shares
Xxxxxxx 10 shares
f. Share certificates for the foregoing shares shall be issued
promptly after execution of this Agreement.
3. BINDING OBLIGATIONS: This Agreement shall bind the parties hereto and
all persons to whom Stock is, or may be issued, transferred, sold or otherwise
conveyed, including, but not limited to, any transferee or assignee that owns or
holds any Stock of the Corporation as the result of any transfer or assignment
by operation of law or as a result of any assignment or transfer as the result
of any judicial or legal judgment, decree, resolution or determination; and, it
shall be conditional to the issuance, transfer, sale or other conveyance of the
Stock of the Corporation that the person or entity to whom Stock is issued,
transferred, sold or otherwise conveyed, shall become a signatory and party to
this Agreement prior to said issuance, transfer, sale or other conveyance.
4. RESTRICTION ON THE ASSIGNMENT OR OTHER TRANSFER: No Shareholder
shall assign or transfer his or her interest in the
- 5 -
Stock of the Corporation except upon the terms and conditions hereinafter set
forth.
5. SALE OR TRANSFER:
a. TRANSFER FOR VALUE: If any Shareholder desires to sell, convey,
assign, transfer, hypothecate, pledge, or otherwise dispose of any or all of his
or her shares in the Corporation for value, he or she shall first give the
Corporation and each of the other Shareholders of the Corporation written notice
of his or her intention to make such disposition. No such notice shall be given
until Shareholder shall have first obtained a BONA FIDE written offer in good
faith to purchase his or her shares. A copy of the offer setting forth the terms
and conditions of the proposed purchase, with the names and addresses of the
purchaser or purchasers shall be attached to the written notice. Upon receipt of
the notice, the Corporation shall take steps necessary to have the Board of
Directors consider the offer within thirty (30) days. If the Board of Directors
decides to purchase the shares, it shall match the BONA FIDE written offer and
acquire the shares of Shareholder in accordance with the terms and conditions of
the offer. If the Board of Directors decides not to purchase the shares, then,
if the selling Shareholder is xxXxxxx or Xxxxx, the other of them, and if the
selling Shareholder is Xxxxxxx or Xxxxxxx, the other of them shall then have the
option to purchase said shares, which
- 6 -
option must be exercised within fifteen (15) days from the decision of the Board
of Directors, but in no event more than forty-five (45) days from receipt of
notice by the Corporation. In the event that the other Shareholder as described
in the preceding sentence does not exercise his or her secondary right of first
refusal, then the remaining Shareholders desiring to exercise their option to
purchase may also exercise the option of the non-electing Shareholder, on a pro
rata basis based upon Stock issued and outstanding owned by the electing
Shareholders. In the event that the Corporation does not elect to purchase the
shares within thirty (30) days from the giving of the notice, or any of the
other Shareholders do not elect to purchase their pro rata portion of the shares
within thirty (30) days of the Corporation's decision, then Shareholder shall be
free to make the disposition of said shares strictly in accordance with the BONA
FIDE written offer; provided, however, that such disposition shall be made
within ninety (90) days after the other Shareholders decline to execute on their
secondary right of first refusal, and in strict accordance with the terms and
conditions of such BONA FIDE offer and shall be subject to paragraph 24 hereof.
In the event that the shares of Shareholder are not disposed of in accordance
with the BONA FIDE offer within the ninety (90) day period, the provisions of
this Paragraph 5 shall again be applicable and must be complied with.
- 7 -
b. TRANSFER BY GIFT. In view of the importance of each Shareholder's
involvement in the business of the Corporation, no Shareholder shall make any
gift or gratuitous transfer of his or her Stock for five (5) years after the
date of this Agreement.
6. RESTRICTIVE ENDORSEMENT: The Stock of the Corporation included under
the terms of this Agreement shall bear the following legend:
These shares have not been registered under the Securities Act of
1933, as amended, or the securities laws of any State. These shares
may not be transferred except in transactions which are exempt under
the Securities Act and applicable State securities laws or pursuant to
effective registrations thereunder.
These shares are also subject to the terms of a Shareholders Agreement
dated as of 4/17, 1992, which, among other things, sets forth certain
rights, duties and obligations of the Corporation and the holder of
these shares. A copy of the Shareholders Agreement is available for
inspection at the principal office of the Corporation. This
restriction shall be the first lien upon the interest of the
Shareholders hereof. No interest in the Corporation shall be
recognized unless such transfer, in the opinion of counsel for the
Corporation, is made in accordance with the terms of said Agreement.
After endorsement, the certificates of Stock shall be returned to
Shareholder who shall, subject to the terms of
this Agreement, be entitled to exercise all rights of ownership of
such shares. All Stock of the Corporation hereafter issued to Shareholder shall
bear the same endorsement.
- 8 -
7. DEATH OF SHAREHOLDER:
a. Upon the death of a Shareholder, at the option of the
Corporation, which option may be exercised at any time up to one (1) year from
the date of death, the heirs, executors, administrators, representatives or
successors in interest of the Shareholder, as the case shall be, shall tender
said Stock as set forth in subparagraph b. below, and the Corporation shall
redeem said stock for the fair market value of the Shareholder's stock as of the
date of death, determined according to paragraph 8 of this Agreement.
b. As of the exercise of the option by the Corporation, the estate
shall not be deemed to be a shareholder of the Corporation, and the estate shall
hold the share certificates on behalf of the Corporation until said certificates
are redeemed by the Corporation. The fair market value of the Shareholder's
Stock shall be the fair market value of the Corporation multiplied by the
percentage of outstanding shares owned by the Shareholder.
8. DETERMINATION OF FAIR MARKET VALUE: Within thirty (30) days of the
exercise of the option, the estate and the Corporation shall attempt to jointly
agree upon the fair market value of the Shareholder's Stock. If the parties
cannot agree on the fair market value during said thirty (30) day period, the
Corporation shall then cause a qualified appraiser to appraise the Corporation
and determine the fair market value of
- 9 -
the Shareholder's Stock. The appraisal fee shall be divided evenly and paid by
both parties. If either the Corporation or the Shareholder, or both, are
dissatisfied with the appraisal price determined by the appraiser, that party
shall give notice of same to the other within ten (10) days of receipt of the
appraisal and shall select another qualified appraiser within an additional
twenty (20) days of receipt of the appraisal, at the expense of the party
retaining the qualified appraiser. The additional appraiser(s) shall determine
an appraisal price within ninety (90) days of his or her selection. Failure to
comply with the time periods set forth above shall cause the loss of the right
of the non-complying party to designate an additional appraiser. The final
appraisal price shall then be the average of that of the two or three
appraisers, as the case may be. The appraisers appointed under this Agreement
shall consider all opinions and relevant evidence submitted to them by the
parties, or otherwise obtained by them, and shall set forth their determination
in writing, together with their opinions and their considerations on which the
opinions are based, with a signed counterpart to be delivered to each party.
9. PAYMENT OF PURCHASE PRICE: If the purchase price of the Stock pursuant
to this paragraph 8 of this Agreement exceeds $50,000, the Corporation shall
have the right to tender to the Shareholders' estate (i) a down-payment equal to
the sum of $50,000 plus 20% of the purchase price in excess of $50,000,
- 10 -
but in no event more than $100,000, plus (ii) a promissory note for the balance
of the purchase price with equal quarterly installments of principal, and
interest accrued thereon, for five (5) years, with interest at the prime rate as
reported in the Wall Street Journal, money rates, as of the date of death.
10. MANAGEMENT OF CORPORATION:
a. The Shareholders agree to vote for the following persons, and no
other, as directors of the Corporation:
Xxxxxxxx X. Xxxxxx
Xxxxxxx xxXxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxx
In the event of the death, incapacity or resignation of Ocanas
or Xxxxxx, then the other of them shall designate his or her replacement. In
the event of the death, incapacity, or resignation of xxXxxxx or Stone, the
other or others of them, as the case may be, shall designate his replacement.
In the event of the death, incapacity or resignation of Xxxxxxx, then Xxxxxxx
shall designate his replacement.
In the event of the sale of all of the Stock of any Shareholder
who is a director pursuant to this Agreement, then the purchaser thereof
shall be entitled to nominate one (1) substitute director in the place of the
Shareholder who has sold his Stock.
- 11 -
b. The directors shall appoint the following persons, and no others
as officers of the Corporation:
Chairman of the -- Xxxxxxxx X. Xxxxxx
Board and Chief
Executive Officer
President and Chief
Operating Officer -- Xxxxxxx xxXxxxx
Vice President -- Xxxxxxxx X. Xxxxxxx
Secretary -- Xxx Xxxxxxxxx Xxxxxx
Treasurer -- Xxxxx xxXxxxx
c. The Chief Executive Officer shall be responsible for external
relations of the Corporation, and for making all strategic decisions for the
Corporation, subject to the approval of the Board of Directors. Xxxxxx shall
also serve as director of marketing of the Corporation. The President shall be
responsible for day to day management of the Corporation, and shall make all
such decisions, with consultation with the other officers as necessary.
d. Effective April 1, 1992, the Corporation shall pay the Chief
Executive Officer an initial salary of One Thousand Dollars ($1,000.00) per
week, based upon part-time effort. The parties understand and agree that Xxxxxx
may manage his other personal investments, and will not be required to devote
full time to the Corporation. Any increases in compensation must be approved by
the Board of Directors. In addition, the Chief Executive Officer shall be
reimbursed for
- 12 -
reasonable out-of-pocket expenses, subject to approval by the Board of
Directors.
e. Effective April 1, 1992, the Corporation shall pay the President
an initial salary in the amount of One Thousand Six Hundred Dollars ($1,600.00)
per week, based upon less than full time effort. The parties hereto understand
and agree that xxXxxxx may manage his other personal investments, and will
continue his other business interests, some of which are in the same industry,
and will not be required to devote full time to the Corporation. Any increases
in compensation must be approved by the Board of Directors. In addition, the
President shall be reimbursed for reasonable out-of-pocket expenses, subject to
approval by the Board of Directors.
11. NEGATIVE COVENANTS: The Corporation and all of the parties hereto
covenant that for so long as this Agreement is in effect, the Corporation shall
not, nor shall any party cause the Corporation to, do any of the following
without the affirmative consent of a three (3) of the five (5) directors set
forth herein:
(1) ADDITIONAL STOCK. The Corporation shall not authorize any
additional stock or class of securities, issue any additional stock to any
person, or make any material change in its capital structure.
(2) LOANS. The Corporation shall not make any loans, advances, and/or
extensions of credit to, or investment in, any person.
- 13 -
(3) DEBT. The Corporation shall not incur any debt in an amount in
excess of $25,000.00 from any person or group of related persons or $50,000.00
in the aggregate.
(4) REDEMPTIONS. The Corporation shall not redeem, retire, purchase
or otherwise acquire any of its stock, except as expressly permitted under this
Agreement.
(5) MERGER. The Corporation will not merge or consolidate with or
acquire any other company or entity.
(6) INVESTMENTS. The Corporation will not make any investments in the
securities of any other company or entity, other than in the ordinary course of
business.
(7) BUSINESS PURPOSE. The Corporation will not make any material
changes to its business objectives, purposes and operations.
(8) GUARANTEES. The Corporation will not guarantee or in any way
become liable with respect to the obligations or liabilities of any other
person.
(9) ENCUMBRANCES. With the exception of a security interest in
connection with the routine purchase of equipment or supplies from unrelated
third parties, the Corporation will not encumber, pledge, mortgage, grant a
security interest in, assign, sell, lease or otherwise dispose of or transfer,
whether by sale, merger, consolidation, liquidation, dissolution, or otherwise,
any of its assets.
- 14 -
(10) ARTICLES OF INCORPORATION AND BY-LAWS. The Corporation will not
amend, revise or restate its Articles of Incorporation of its By-Laws.
(11) CAPITAL EXPENDITURES. The Corporation shall not incur or make any
capital investments or capital expenditures (including entering into any capital
leases) in excess of $50,000.00 in any one fiscal year.
(12) DEFERRED COMPENSATION PLANS. The Corporation will not adopt or
institute any deferred compensation, retirement, pension or profit sharing plan.
12. RESTRICTIVE COVENANT:
a. In view of the consideration paid by the Shareholders of the
Corporation, the parties agree that the restrictive covenant herein contained is
important to the goodwill value of the Corporation, and part of the bargained
for consideration. All of the parties hereto agree that for so long as he or she
is employed by, or serves as an officer or director of, the Corporation and for
a period of one (1) year after the later of (i) termination of his or her
employment by the Corporation for any reason, or (ii) termination of his or her
status as an officer or director, he or she shall not, anywhere within the State
of Texas, be employed by, serve as a consultant to, serve as an officer,
director, or partner of, or own an interest in (except for a passive investment
interest, where such interest is not more than 1% of the total stock or
- 15 -
equity in such entity) any corporation, partnership, joint venture, limited
liability company, proprietorship, engaged in the printing of lottery tickets or
engaged in providing services to a state lottery.
x. Xxxxxx, Guzman, daSilva, Stone, Xxxxxxx and Xxxxxxx each
represent and warrant to the Corporation and the Shareholders that the foregoing
restriction will not unreasonably interfere with their livelihood or ability to
earn a living in his usual and customary occupation.
c. The Shareholders of the Corporation are express third-party
beneficiaries of the provisions of this Paragraph 12.
d. In the event of any legal process to enforce the provisions of
this Paragraph 12, the prevailing party shall be entitled to reimbursement of
all costs and reasonable attorneys' fees from the non-prevailing party.
13. INDEMNIFICATION:
a. The parties hereto, their successors, transferees, and assigns
mutually agree to indemnify and hold harmless the Corporation and each of the
other parties, their successors and assigns, against and in respect of any and
all damages, claims, causes of action, losses, penalties, liabilities and
expenses (including, without limitation, legal, accounting, and other expenses)
suffered or incurred by the non-responsible party or parties, or their
successors and
- 16 -
assigns which are arising out of or connected with their respective: (i) breach
or violation of this Agreement, or (ii) falsity, misrepresentation in, or breach
of any of the representations, warranties or covenants made in this Agreement.
b. Upon obtaining knowledge thereof, the party seeking
indemnification ("Indemnified Party") shall promptly notify the party
required to provide indemnification ("Responsible Party") in writing, of any
damages, claims, losses, liabilities or expenses which they have determined
has given or could give rise to a right of indemnification under this Section
13 ( "Notice of Claim"). The Notice of Claim shall specify the nature and
details of the claim (including the amount claimed) giving rise to such right
of indemnification. If the claim or demand set forth in the Notice of Claim
relates to a claim or demand asserted by a third party (a "Third Party
Claim"), the Responsible Party shall have the right to employ counsel of
their choice to defend any such claim or demand, and the Indemnified Party
shall have the right to cooperate in the defense of any such Third Party
Claim. Responsible Party shall notify the Indemnified Party in writing within
thirty (30) days after receipt of the Notice of Claim of their decision to
defend in good faith any Third Party Claim. So long as the Responsible Party
is defending in good faith any such Third Party Claim, the Indemnified Party
shall not settle or compromise such Third Party Claim or seek collection with
- 17 -
respect thereto. The Indemnified party shall make available to the Responsible
Party or their representatives all records and other materials reasonably
required by them for their use in contesting any Third Party Claim. If the
Responsible Party does not so elect to defend any such Third Party Claim, the
Indemnified Party shall have no obligation to do so. Except for a Third Party
Claim being defended in good faith, the Responsible Party shall satisfy their
indemnification obligations hereunder in cash within thirty (30) days after
receipt of the Notice of Claim.
14. DEADLOCK:
If any Shareholder shall, in their own subjective judgment, deem it
necessary to terminate their relationship with the other Shareholders as
described herein, they shall follow the following procedure:
a. OFFER TO SELL: In the event that Xxxxxx, or xxXxxxx and Xxxxx,
acting as a group or Xxxxxxx and Xxxxxxx, acting as a group, either group
referred to as Shareholder Group, desires to sell or transfer their Stock,
except in the case of a BONA FIDE offer under paragraph 5 hereof, then that
Shareholder, or Shareholder Group, as the case may be, the Offering Shareholder
or Shareholder Group, shall offer to sell their Stock to the other Shareholder
group, the Receiving Shareholder group. The Offering Shareholder Group shall
deliver to the Receiving Shareholder Group, a notice of
- 18 -
intention to sell their Stock, which notice shall set forth the following:
(i) Total purchase price per share;
(ii) Terms of payment, if other than cash;
(iii) Date of closing; and
(iv) Any other terms or conditions as may be determined by the
Offering Shareholder Group. The notice of intention to sell shall be given by
certified mail, return receipt requested, to the last known address of both
members or the Receiving Shareholder Group.
b. RESPONSE TO OFFER TO SELL: Within sixty (60) days of the receipt
of the notice of intention to sell, as set forth in subparagraph a. hereof, the
Receiving Shareholder Group shall either:
(i) Accept the offer of the Offering Shareholder Group and
thereafter purchase the Stock of the Offering Shareholder Group, on a pro rata
basis, upon the terms and conditions set forth in the notice of intention to
sell; or
(ii) Agree to sell their Stock to the Offering Shareholder Group
upon the terms and conditions set forth in the notice of intention to sell,
which agreement shall be fully binding and legally enforceable against each of
the Offering Shareholder Group who shall thereafter purchase the Stock of
Receiving Shareholder Group upon the terms and conditions set forth in the
notice of intention to sell.
19
c. SALE WITHIN GROUP: Notwithstanding anything herein to the
contrary, at any time, Xxxxxxx and Xxxxxxx may sell, assign, or transfer this
Stock between themselves without restriction; at any time, xxXxxxx and Stone
may sell, assign, or transfer their Stock between themselves without
restriction; and Xxxxxx and Xxxxxx may sell, assign, or transfer their Stock
between themselves without restriction. In the event that any Shareholder of
the Corporation desires to sell or transfer his or her Stock pursuant to this
paragraph 14 , except in the case of a BONA FIDE offer and sale under
paragraph 5 hereof, and the other member of his or her group does not wish to
act in concert, then, the Shareholder wishing to purchase or sell, in this
case this Offering Shareholder, shall deliver to the other member of his
group, the Receiving Shareholder, a notice of intention to sell his/her
Stock, which notice shall set forth the following:
(i) Total purchase price per share;
(ii) Terms of payment, if other than cash;
(iii) Date of closing; and
(iv) Any other terms or conditions as may be determined by the
Offering Shareholder.
The notice of intention to sell shall be given by certified mail, return receipt
requested, to the last known address of the Receiving Shareholder. Within sixty
(60) days of the receipt of the notice of intention to sell, as set forth above
- 20 -
in this subparagraph c. hereof, the Receiving Shareholder shall either:
(i) Accept the offer of the Offering Shareholder and thereafter
purchase the Stock of the Offering Shareholder, upon the terms and conditions
set forth in the notice of intention to sell; or
(ii) Agree to sell his/her Stock to the Offering Shareholder upon
the terms and conditions set forth in the notice of intention to sell, which
agreement shall be fully binding and legally enforceable against the Offering
Shareholder who shall thereafter purchase the Stock of Receiving Shareholder
upon the terms and conditions set forth in the notice of intention to sell.
d. MUTUAL RELEASE: The Receiving Shareholder Group, the Offering
Shareholder Group, and the Corporation, shall release and acquit the others of
any and all claims that they may have against the other, save and except the
obligations set forth in this Agreement with respect to the purchase and sale of
the Stock owned by the Shareholders.
e. CONDUCT OF BUSINESS: Upon the purchase and sale of the shares of
Stock of any Shareholder, the Corporation shall be entitled to utilize the
corporation name to continue to conduct the business of the Corporation upon the
premises utilized by the Corporation at the time of the purchase and sale,
except as otherwise provided by law.
- 21 -
15. REPRESENTATIONS OF SHAREHOLDERS: Each Shareholder, in purchasing the
Stock, understands and agrees that the Stock is not registered under the
Securities Act of 1933 ("Securities Act") or any state securities act. The Stock
is sold to Shareholders pursuant to exemptions from registration and may not be
re-sold unless the Stock is properly registered or subject to an exemption from
registration. By executing and delivering a counterpart of this Agreement, and
by accepting that part of the shares to be purchased pursuant to this Agreement,
each Shareholder hereby represents and warrants to the Corporation that:
a. He or she has had full and free access to any and all information
from the Corporation in order to evaluate the merits and risks of an investment
in the Corporation and has such knowledge and experience in financial and
business matters that he or she is capable of evaluating the merits and risks of
an investment in the Corporation and the purchase of Stock and making an
informed investment decision with respect thereto;
b. He or she understands and has evaluated the merits and risks of
an investment in the Corporation and the purchase of Stock;
c. He or she is a person who is able to bear the economic risks of
an investment in the Corporation and the purchase of Stock in that, among other
facts, he or she can afford to hold his or her Stock for an indefinite period
and can afford a complete loss of an investment in the Corporation.
- 22 -
d. He or she is relying solely on the legal advice of his or her own
legal advisor with respect to an investment in the Corporation and the purchase
of Stock;
e. He or she is acquiring his or her Stock solely for his or her own
account as principal and not with a view to resale or distribution;
f. In connection with his or her purchase of Stock: (i) he or she
has been fully informed as to the circumstances under which he or she is
required to take and hold his or her Stock pursuant to the requirements of the
Securities Act of 1933 (the "Act") and the applicable state securities or "Blue
Sky" law or laws; (ii) he or she has been informed by the Corporation that his
or her Stock is not registered under the Act and may not be transferred,
assigned or otherwise disposed of unless his or her Stock is subsequently
registered under the Act or an exemption from such registration is available;
and (iii) he or she understands that (A) the Corporation is under no obligation
to register his or her Stock under the Act or to comply with any applicable
exemption or exemptions under the applicable state securities or "Blue Sky" law
or laws with respect to his or her Stock and (B) the Corporation will not be
required to supply him or her with any information necessary to enable him or
her to make a casual sale of his or her Stock pursuant to Rule 144 under the Act
(assuming such Rule is applicable and is otherwise available to him or her with
respect to his or her Stock);
- 23 -
g. He or she is an "accredited investor" as defined in Rule 501(a)
of the Securities & Exchange Commission as being a director or executive officer
of the Corporation; and
h. He or she understands that this Agreement contains restrictions
on the transfer, assignment and disposition of his or her Stock and that, in
addition to such restrictions, he or she covenants and agrees that his or her
Stock shall not be sold, assigned, transferred or otherwise disposed of unless
(i) such sale, assignment, transfer or disposition is exempt from registration
under the Act and the applicable state securities or "Blue Sky" law or laws, or
(ii) a registration statement covering his or her Stock is effective under the
Act; and (iii) he or she acknowledges and understands that the business of the
Corporation has a high degree of risk.
16. NO FURTHER STOCK ISSUE: The Shareholders and the Corporation agree
that the Corporation shall not issue or sell any of the authorized but unissued
Stock of the Corporation without the express written consent of at least three
of the directors set forth herein. Any new Shareholder must become a party to
this Agreement as a condition precedent to issuance of shares.
17. ACCESS TO BOOKS AND RECORDS:
a. The Corporation and the Shareholders hereby agree that the
accountant and/or bookkeeper, regularly engaged by the Corporation to keep the
Corporation's books, records and
- 24 -
reports in respect thereto acts for the Corporation and each Shareholder, that,
subject to the requirement for confidentiality, each Shareholder and the estate
of any deceased Shareholder, shall have free and open access to the books and
records of the Corporation, and that as against the Corporation or any
Shareholder or estate of a Shareholder, said accountant may not claim
accountant-client privilege.
b. The Shareholder, or estate as the case may be ("Receiving Party")
agrees to hold said information ("Confidential Information") in strict
confidence, and not disclose it to any other person, except counsel,
accountants, or appraisers who have a need to know and will be bound by the same
obligation of confidentiality. The Receiving Party shall observe at least the
same degree of care as Receiving Party observes with respect to his or her own
proprietary information and trade secrets in the use, storage, and maintenance
of the Confidential Information during the term of this Agreement; but in no
case shall the Receiving Party use less than reasonable and necessary care to
protect said information. Receiving Party acknowledges that the Corporation,
because of the unique nature of the Confidential Information, would suffer
irreparable harm in the event that the Receiving Party breaches its obligation
under this Agreement in that monetary damages would be inadequate to compensate
the Corporation for such a breach. The parties agree that in such circumstance,
the
- 25 -
Corporation shall be entitled, in addition to such monetary relief as may be
applicable, to injunctive relief as may be necessary to restrain any continuing
or further breach by Receiving Party, without showing or proving any actual
damages sustained by the Corporation.
18. SHAREHOLDERS ACKNOWLEDGMENT: Shareholders acknowledge that they had
the opportunity to seek independent legal advice with regard to their rights and
obligations under the Agreement.
19. REPRESENTATIONS AND WARRANTIES: Ocanas, Guzman, xxXxxxx and Xxxxx
represent to Xxxxxxx and Xxxxxxx that they have no knowledge of any lawsuits or
material claims against the Corporation as of the date of this Agreement.
20. NOTICES: All notices provided pursuant to this Agreement shall be
sent certified mail, return receipt requested, to the parties hereto at the
addresses set forth, or any such other address as a party may later designate:
Corporation: Win-Tex International, Inc.
-------------------------------
0000 Xxxxxxxxxx Xx
-------------------------------
Xxxxxx, XX 00000
-------------------------------
Shareholder: Xxxxxxx xxXxxxx
-------------------------------
10312 Custmoor Dr.
-------------------------------
Xx Xxxxxx, XX 00000
-------------------------------
Shareholder: Xxxxxx X. Xxxxx
-------------------------------
0000 Xxxxxx Xx.
-------------------------------
Xxxxxx, XX 00000
-------------------------------
Shareholder: Xxxxxxxx X. Xxxxxx
-------------------------------
0000 Xxxxxxxxx Xx.
-------------------------------
Xxxxxxxxxxx, XX 00000
-------------------------------
- 26 -
Shareholder: Xxx Xxxxxxxxx Xxxxxx
-------------------------------
0000 Xxxxxxxxx Xx.
-------------------------------
Xxxxxxxxxxx, XX 00000
-------------------------------
Shareholder: Xxxxx Xxxxxxx
-------------------------------
00 Xxxx Xxxxxx
-------------------------------
Barlyn Heights, N.J. 11577
-------------------------------
Shareholder: Xxxxxxxx X. Xxxxxxx
-------------------------------
000 Xxxxxxxxxx Xxx.
-------------------------------
Garden City, N.Y. 11530
-------------------------------
Notice shall be deemed given upon the earlier of (i) actual
receipt, or (ii) four (4) days after the date of mailing.
21. MODIFICATION; ENTIRE AGREEMENT: This constitutes the entire Agreement
between the parties. Except as contained herein, there are no representations,
warranties or agreements between the parties relating to the subject matter of
this Shareholders Agreement. No change, alteration, or modification of this
Agreement shall be valid unless the same shall be in writing and signed by all
the parties hereto.
22. APPLICABLE LAW: This Agreement shall be construed, governed and
administered in accordance with the laws of the State of Texas.
23. SEVERABILITY: If any provision of this Agreement is declared void or
invalid by any court of competent jurisdiction, such declaration shall not
invalidate any other provision hereof, which shall remain in full force and
effect as if executed with the void or invalid provision eliminated.
24. BENEFIT: This Agreement shall be binding upon the parties, their
heirs, legal representatives, successors and
- 27 -
assigns. Each transferee or any subsequent transferee of the Stock set forth
herein, or any interest in such shares shall, unless this Agreement expressly
provides otherwise, hold such shares or interest in the shares subject to all
applicable provisions of this Agreement and such transferee shall make no
further transfer except as provided in this Agreement. As conditions precedent
to the transfer of the shares on the books of the Corporation to the name of the
transferee; such transferee shall execute a copy of this Agreement which shall
contain an appropriate restriction on further transferability.
25. CONSTRUCTION: The language in all parts of this Agreement shall in all
cases be construed as a whole, according to its fair meaning, and not strictly
for or against either party.
26. TERM: The term of this Agreement shall be for the lesser of (i) the
existence of the Corporation or (ii) the lives of daSilva, Stone, Xxxxxx,
Xxxxxxx and Xxxxxxx, plus twenty-one (21) years, unless extended by the mutual
written consent of the Shareholders.
IN WITNESS WHEREOF, the parties have set their hands and seals on the day
and date first above written.
WIN-TEX INTERNATIONAL, INC.
By: /s/ Xxxxxxx xxXxxxx (SEAL)
-----------------------------
Xxxxxxx xxXxxxx, President
- 28 -
ATTEST:
/s/ Xxx Xxxxxxxxx Xxxxxx (SEAL)
---------------------------------
Xxx Xxxxxxxxx Xxxxxx, Secretary
/s/ Xxxxxxx xxXxxxx
--------------------------(SEAL)
Xxxxxxx xxXxxxx
/s/ Xxxxxx X. Xxxxx
--------------------------(SEAL)
Xxxxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxxx
--------------------------(SEAL)
Xxxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxx
--------------------------(SEAL)
Xxxxx Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxxx
--------------------------(SEAL)
Xxxxxxxx X. Xxxxxxx
/s/ Xxx Xxxxxxxxx Xxxxxx
--------------------------(SEAL)
Xxx Xxxxxxxxx Xxxxxx
- 29 -
CONSENT IN LIEU OF A
SPECIAL MEETING OF THE SHAREHOLDERS OF
WIN-TEX INTERNATIONAL, INC.
Pursuant to Section 9.10A of the Texas Business Corporation Act, the
undersigned, being all of the shareholders of Win-Tex International, Inc., do
hereby execute this Consent in writing to the following actions taken by them.
RESOLVED: that the following persons be and they hereby are elected to
serve as directors of the corporation to serve until their successors are
elected and qualified:
Xxxxxxxx X. Xxxxxx
Xxxxxxx xxXxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx X. Xxxxx
Xxxxx Xxxxxxx
Effective this 17th day of April, 1992
4/17/92 /s/ Xxxxxxxx X. Xxxxxx
-------------- --------------------------
Date Xxxxxxxx X. Xxxxxx
April 17, 1992 /s/ Xxx Xxxxxxxxx Xxxxxx
-------------- --------------------------
Date Xxx Xxxxxxxxx Xxxxxx
4/17/92 /s/ Xxxxxxx xxXxxxx
-------------- --------------------------
Date Xxxxxxx xxXxxxx
April 17, 1992 /s/ Xxxxxx X. Xxxxx
-------------- --------------------------
Date Xxxxxx X. Xxxxx
4/21/92 /s/ Xxxxx Xxxxxxx
-------------- --------------------------
Date Xxxxx Xxxxxxx
4/21/92 /s/ Xxxxxxxx X. Xxxxxxx
-------------- --------------------------
Date Xxxxxxxx X. Xxxxxxx
CONSENT IN LIEU OF A
SPECIAL MEETING OF THE DIRECTORS OF
WIN-TEX INTERNATIONAL, INC.
Pursuant to Section 9.10B of the Texas Business Corporation Act, as
amended, the undersigned, being all of the directors of Win-Tex International,
Inc., do hereby execute this Consent in writing to the following action taken by
them:
RESOLVED: that the Shareholders Agreement, dated 4-12-92, 1992, is
hereby ratified and approved, and the officers of the corporation are
authorized to do such acts as are necessary to effectuate the provisions of
the agreement.
Effective this 17th day of April, 1992
4/17/92 /s/ Xxxxxxxx X. Xxxxxx
-------------- --------------------------
Date Xxxxxxxx X. Xxxxxx
4/17/92 /s/ Xxxxxxx xxXxxxx
-------------- --------------------------
Date Xxxxxxx xxXxxxx
April 17, 1992 /s/ Xxx Xxxxxxxxx Xxxxxx
-------------- --------------------------
Date Xxx Xxxxxxxxx Xxxxxx
April 17 /s/ Xxxxxx X. Xxxxx
-------------- --------------------------
Date Xxxxxx X. Xxxxx
4/21/92 /s/ Xxxxx Xxxxxxx
-------------- --------------------------
Date Xxxxx Xxxxxxx
