EXHIBIT 10.13
DESIGNATED SHAREHOLDERS' AGREEMENT
This Designated Shareholders' Agreement (this "Agreement") is entered into
by and among IMSL, Inc., a Texas corporation (the "Company"), Xxxxxxx X. Xxxxxxx
and Xxxxxxxx X. Xxxxxxx (collectively, "Xxxxxxx") and each of the undersigned
shareholders of the Company (collectively, "Designated Shareholders").
RECITALS
Each Designated Shareholder is a key employee, contractor or member of the
Board of Directors of the Company and in connection with such employment or
engagement has been issued Class A Common Stock, $0.10 par value per share, of
the Company ("Common Stock"), which number of shares of Common Stock currently
held by each Designated Shareholder is set forth below such Designated
Shareholder's name on the signature pages hereof. In addition, the Designated
Shareholders have been granted certain options to acquire additional shares of
Common Stock, which number of option shares currently held by each Designated
Shareholder is set forth below such Designated Shareholder's name on the
signature pages hereof. As a further inducement for the Designated Shareholders
to continue in their employment by and/or relationship with the Company, the
Company and the Johnsons, principal shareholders of the Company, desire to
afford such Designated Shareholders certain rights and benefits in the event
that (a) either Xxxxxxx transfers all or a designated portion of his or her
Common Stock or (b) the Company seeks to register shares of Common Stock for
distribution to the public.
In consideration of the premises, and of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
SECTION 1. CERTAIN DEFINITIONS
In addition to those terms defined in the recitals, the following terms
shall have the following respective meanings:
(a) "COMMISSION" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(b) "EXCHANGE ACT" shall mean the Securities Exchange Act of l934, or
any successor thereto, and the rules and regulations promulgated thereunder, all
as the same shall be amended from time to time.
(c) "HOLDER" shall mean (i) Xxxxxxx, (ii) any Designated Shareholder
who owns any Registrable Securities, (iii) all heirs, executors, personal
representatives, successors and assigns (including any successive successors and
assigns) of Xxxxxxx who acquire Registrable Securities, directly or indirectly,
from either Xxxxxxx by a Permitted Transfer and (iv) all heirs,
executors and personal representatives of any deceased Designated Shareholder
who become holders of Common Stock of the Company as a result of the death of a
Designated Shareholder.
(d) "XXXXXXX SHARES" shall mean (i) all shares of Common Stock owned
of record by either Xxxxxxx, (ii) any shares of Common Stock issued to either
Xxxxxxx by way of stock dividend or stock split or in connection with a
combination of shares, conversion, recapitalization, merger, consolidation or
other reorganization, and (iii) any other shares of Common Stock hereafter
acquired by either Xxxxxxx. As to any particular shares constituting Xxxxxxx
Shares, such shares will cease to be Xxxxxxx Shares when they have been
transferred (other than by Permitted Transfers) in compliance with Section 2
hereof.
(e) "PARTICIPATION NOTICE" means a written notice by a Holder of his
desire to sell Registrable Securities in a registration by the Company.
(f) "PERMITTED TRANSFERS" shall mean any transfer of Xxxxxxx Shares by
either Xxxxxxx (i) to his or her spouse, siblings or descendants; (ii) to any
trust for the benefit of either Xxxxxxx, his or her spouse, siblings or
descendants; or (iii) for estate planning or testamentary purposes.
(g) "PERSON" shall mean a corporation, association, partnership,
organization, business, individual, government or political subdivision thereof
or governmental agency.
(h) "PUBLIC SALE" shall mean any sale of the Company's Common Stock to
the public pursuant to a public offering registered under the Securities Act, or
pursuant to the provisions of Rule 144 (or any successor rule) adopted under
the Securities Act.
(i) THE TERMS "REGISTER," "REGISTERED" AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement.
(j) "REGISTRABLE SECURITIES" shall mean (i) the Common Stock, (ii) any
shares of Common Stock issued as a dividend upon or in exchange for the Common
Stock and (iii) any Common Stock issued upon the exercise of any options to
acquire Common Stock, or subject to options which are vested and therefore
issuable upon exercise of such options; provided, however, that shares
constituting the Common Stock shall cease to be Registrable Securities when (y)
a registration statement covering those shares has been declared effective and
such shares have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement or (z) they are distributed to
the public pursuant to Rule 144 (or any successor provisions) promulgated under
the Securities Act.
(k) "REGISTRATION NOTICE" means a written notice by the Company to the
Holders of its intent to file a registration statement with the Commission.
-2-
(l) "SECURITIES ACT" means the Securities Act of 1933, or any
successor thereto, and the rules and regulations promulgated thereunder, all as
the same shall be amended from time to time.
(m) "DESIGNATED SHAREHOLDER REPRESENTATIVE" means the heirs, executors
or personal representatives of any deceased Designated Shareholder who, as the
case may be, become holders of Common Stock of the Company as a result of the
death of a Designated Shareholder.
(n) "TRANSFER" shall mean any sale, assignment, pledge or other
disposition of any interest in Common Stock, other than a bona fide pledge to a
lending institution for value.
SECTION 2. RIGHT TO JOIN IN SALE
2.1 GENERAL RIGHT. Anything in this Agreement to the contrary
notwithstanding, if either Xxxxxxx proposes, in a single transaction or a series
of related transactions, to Transfer any Xxxxxxx Shares (other than Transfers
permitted under Section 2.3 below), then they shall refrain from effecting such
Transfer unless, prior to the consummation thereof, each Designated Shareholder
(or the Designated Shareholder's Representative) shall have been afforded the
opportunity to join in such Transfer on a pro rata basis, as hereinafter
provided.
2.2 PROCEDURE. Prior to the consummation of any Transfer subject to this
Section 2, Xxxxxxx shall cause the Person that proposes to acquire Xxxxxxx
Shares in a Transfer subject to this Section 2 (the "Proposed Purchaser") to
offer (the "Purchase Offer") in writing to each Designated Shareholder (or the
Designated Shareholder's Representative) to purchase shares of Common Stock
owned by such Designated Shareholder (or the Designated Shareholder's
Representative), such that the aggregate number of shares of Common Stock which
may be so purchased from each Designated Shareholder (or the Designated
Shareholder's Representative) (the "Disposition Amount") shall be computed in
accordance with the following formula:
Disposition Amount = [P / (M + PA)] X T
M Equal to the Xxxxxxx Shares held by Xxxxxxx and his and her
transferees pursuant to Permitted Transfers.
P Equal to the shares of Common Stock owned or issuable upon the
exercise of all options held by each Designated Shareholder (or the Designated
Shareholder's Representative) (such Designated Shareholder or Designated
Shareholder's Representative being referred to in this Section 2.2 as a
"Disposing Shareholder").
PA Equal to the aggregate number of shares of Common Stock owned by
all Designated Shareholders and Designated Shareholder Representatives plus all
shares of Common Stock issuable upon the exercise of all options held by all
Designated Shareholders and Designated Shareholder Representatives.
-3-
T Equal to the total number of shares to be purchased by the Proposed
Purchaser.
Each purchase from a Disposing Shareholder shall be made at the same
consideration per share and on such other terms and conditions as the Proposed
Purchaser has offered to purchase Xxxxxxx Shares to be sold by Xxxxxxx. In the
event that any sale of shares by Xxxxxxx and the Disposing Shareholders is
accomplished in a series of related transactions for varying consideration per
share, the shares of the Disposing Shareholders shall be acquired at the same
times, in the same manner as the Xxxxxxx Shares sold by Xxxxxxx, and for the
same consideration, and the number of shares sold for any specific consideration
per share in any one of the series of transactions by each of the Disposing
Shareholders shall be equal to (i) the total number of shares to be purchased by
the Proposed Purchaser at any specific consideration per share in any one of a
related series of transactions, times (ii) the Disposition Amount for each such
Disposing Shareholder, divided by (iii) the aggregate number of shares to be
purchased by the Proposed Purchaser in all of the related series of
transactions. Each Disposing Shareholder shall have at least 10 days from the
receipt of the Purchase Offer in which to accept such Purchase Offer, and the
closing of such purchase shall occur within 30 days after such acceptance or at
such other time as such Disposing Shareholder and the Proposed Purchaser may
agree. If any Disposing Shareholder shall decline to Transfer all or any portion
of its Disposition Amount, other Disposing Shareholders shall have the right to
include additional shares of Common Stock in the transfer to the extent of the
deficiency in such Disposing Shareholders Disposition Amount, as mutually agreed
by such other Disposing Shareholders or, failing agreement, in the proportion
which P for each such other Disposing Shareholder bears to the sum of the shares
of Common Stock owned by all such other Disposing Shareholders (including Common
Stock issuable upon the exercise of all Options held by all such Disposing
Shareholders). If Disposing Shareholders shall decline to transfer all or any
portion of the Disposition Amount allocable to such Disposing Shareholders
hereunder, Xxxxxxx shall have, the right to include additional Xxxxxxx Shares in
the Transfer to the extent of the deficiency. If, in connection with any sale of
Common Stock by a Disposing Shareholder pursuant to this Section 2.2, the
Disposing Shareholder shall have given notice of exercise of options held by
such Disposing Shareholder with shares of Common Stock issuable pursuant to such
exercise to be delivered upon consummation of such sale, and if for any reason
(other than breach or default by the Disposing Shareholder) the sale and
purchase of Common Stock contemplated by the Purchase Offer is not consummated
with respect to the shares of Common Stock offered for sale by the Disposing
Shareholder, then at the Disposing Shareholders option the notice of exercise of
option by the Disposing Shareholder shall be deemed withdrawn and of no force
and effect.
In the event that a Transfer subject to this Section 2 is to be made to a
Proposed Purchaser who is not a party to this Agreement, Xxxxxxx shall notify
the Proposed Purchaser that the Transfer is subject to this Section 2 and shall
ensure that no Transfer is consummated without the Proposed Purchaser first
complying with this Section 2.
2.3 EXCLUDED TRANSFERS. The provisions of Section 2 do not apply to a
Transfer in the following circumstances:
-4-
(a) Permitted Transfers;
(b) Transfers by either Xxxxxxx (or by any transferees pursuant to a
Permitted Transfer), not excluded from Section 2.1 by clause (a) above, to
Persons other than Xxxxxxx of up to an aggregate of three percent 3% per annum
(during each year commencing with the date of execution of this Agreement) of
the Xxxxxxx Shares issued and outstanding at the commencement of each annual
period, such right to be noncumulative; and
(c) Transfers pursuant to a Public Sale.
All shares of Common Stock Transferred pursuant to Section 2.3(b) and
2.3(c) shall be no longer bound by the terms and provisions of this Agreement.
2.4 LEGEND. Each certificate evidencing Xxxxxxx Shares and each
certificate issued in exchange for or upon the transfer of any Xxxxxxx Shares
(if such shares remain Xxxxxxx Shares as defined herein upon such transfer) will
be stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF THE DESIGNATED SHAREHOLDERS' AGREEMENT, DATED EFFECTIVE AS OF
__________1992, AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY"), XXXXXXX X.
XXXXXXX, XXXXXXXX X. XXXXXXX AND CERTAIN OF THE COMPANY'S SHAREHOLDERS. A COPY
OF SUCH DESIGNATED SHAREHOLDERS' AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
Xxxxxxx will cause the Company to imprint such legends on certificates
evidencing Xxxxxxx Shares outstanding either prior to or concurrent with the
effective date hereof. The legend set forth above shall be removed from the
certificates evidencing any shares which cease to be Xxxxxxx Shares pursuant to
Section 4(a) hereof.
2.5 TRANSFER. Prior to any Permitted Transfer of Xxxxxxx Shares and as a
condition precedent to the effectiveness of any such Permitted Transfer, Xxxxxxx
will cause such transferee to execute and deliver to the Company and the
Shareholders an appropriate amendment to or counterpart of this Agreement.
2.6 HOLD HARMLESS. The Designated Shareholders agree and acknowledge that
(a) neither Xxxxxxx is acting as an agent or fiduciary for either the Designated
Shareholders nor any purchaser of the Common Stock in connection with any
Transfer, (b) neither Xxxxxxx shall be liable or responsible for the truth,
veracity, breach or completeness of any information, representations or
warranties made or given by the Designated Shareholders to any purchaser of the
Common Stock in connection with any Transfer, or by any purchaser of the Common
Stock to any of the Designated Shareholders in connection with any Transfer, (c)
the terms of any Transfer in which the Designated Shareholders participate shall
be deemed fair to the Designated
-5-
Shareholders absent a showing by clear and convincing evidence of bad faith or
fraud on the part of either Xxxxxxx in connection with any such Transfer.
SECTION 3. REGISTRATION RIGHTS
3.1 RIGHTS. If, at any time, the Company proposes to file a registration
statement in connection with the public offering of shares of Common Stock to be
sold by the Company for its own account or for the account of any Holder or any
other person under the Securities Act, prior to such filing the Company shall
give each Holder a Registration Notice. Within 15 business days after receipt
by any Holder of a Registration Notice, such Holder shall have the right to
deliver to the Company a Participation Notice of such Holder's desire to sell
Registrable Securities under such registration. The Participation Notice shall
state the number of Registrable Securities which the Holder desires to be
included and disposed of in such registration; provided, however, such Holder's
right to registration of such Registrable Securities shall be subject to any
limitations in the number thereof which may be required by the underwriters
pursuant to Section 3.4 hereof. The Company shall use all reasonable efforts to
promptly cause all such Registrable Securities to be registered along with the
other securities to be registered for the account of the Company provided, that
(a) the Company shall not be required to give notice or include such Registrable
Securities in any such registration if the proposed registration is primarily
(i) a registration of a stock option or other employee incentive compensation
plan or of securities issued or issuable pursuant to any such plan, (ii)
securities issued or issuable pursuant to a dividend or interest reinvestment
plan, or other similar plan, or (iii) a registration of securities proposed to
be issued in exchange for securities or assets of, or in connection with a
merger or consolidation with, another corporation; (b) the Company shall not be
required to include the Registrable Securities of a Holder in any such
registration if the Holder fails to timely provide the Company with all
information which is in the possession of and relates to such Holder and which
is necessary in connection with such registration and take all such action as
may be reasonably required in order not to delay the registration and offering
of securities by the Company; and (c) the Company may, in its sole discretion
and without the consent of the Holders, withdraw such registration statement and
abandon any such proposed offering, notwithstanding any Holder's request to
participate therein in accordance with this Section 3.1. The Registrable
Securities proposed to be registered under any registration statement under this
Section 3.1 will be offered for sale upon the same terms as like securities
offered for sale by the Company in such registration. If, in connection with
the registration for sale of Common Stock, any Holder who shall have given a
Participation Notice and also given notice of exercise of options held by such
Holder with the intent to include shares of Common Stock issuable pursuant to
such options in such registration, and if for any reason (other than breach or
default by such Holder) the registration and sale of Common Stock is not
consummated with respect to the shares of Common Stock proposed for registration
and sale by such Holder, then at such Holder's option the notice of exercise of
option by such Holder shall be deemed withdrawn and of no force or effect.
3.2 OBLIGATIONS OF THE COMPANY. Whenever required under Section 3.1 hereof
to use all reasonable efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
-6-
(a) Prepare and file with the Commission a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become and remain effective; provided, however,
that the Company shall have no obligation to maintain the effectiveness of any
registration statement filed hereunder or to cause the information therein to
remain current for more than 90 days following such registration statement's
effective date.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to keep such registration
statement effective in order to dispose of the securities registered thereunder
in the manner described in the underwriting agreement executed in connection
therewith and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement;
provided, however, that the Company shall have no obligation to maintain the
effectiveness of any registration statement filed hereunder or to cause the
information therein to remain current for more than 90 days following such
registration statement's effective date.
(c) Furnish to the Holders registering securities in such registration
such numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by the Holders.
(d) Use all reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or "Blue Sky"
laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to rile a general consent to service of
process in any such jurisdictions.
(e) Use all reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable (but not more than eighteen months) after the
effective date of the registration statement, an earnings statement which shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder.
(f) Use all reasonable efforts to list such Registrable Securities on
any securities exchange on which the Common Stock of the Company is then listed,
if such Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange, and to provide a transfer agent
and registrar for such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement.
(g) Enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions as Holders of a
majority of shares of
-7-
such Registrable Securities or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities.
(h) Make available for inspection by any Holder of Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
Holder or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant or
agent in connection with such registration statement.
The Company may require each Holder of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such Holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
3.3 EXPENSES OF REGISTRATION. All expenses incurred in connection with a
registration pursuant to Section 3.1 hereof (excluding only underwriters'
discounts and commissions applicable to Registrable Securities), including
without limitation all registration, qualification, and listing fees, printing
fees and expenses, accounting fees and expenses, and fees and disbursements of
counsel for the Company, shall be borne by the Company. Each Holder of
Registrable Securities shall pay the underwriters' discounts and commissions
applicable to the securities sold by such Holder. In addition, each selling
Holder shall pay its own legal fees and expenses of separate counsel, and costs
for experts or professionals employed by it or on its behalf, in connection with
the registration of Registrable Securities.
3.4 UNDERWRITING REQUIREMENTS.
(a) In connection with any offering involving an underwriting of
shares being issued by the Company, the Company shall not be required to include
any of the Holders' Registrable Securities in such underwriting unless the
Holders accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by the Company.
(b) If a registration pursuant to Section 3.1 hereof involves an
underwritten offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering, so
as to be likely to have an adverse effect on such offering as contemplated by
the Company (including the price at which the Company proposes to sell such
securities), then the Company will include in such registration (i) first, 100%
of the securities the Company proposes to sell, (ii) second, to the extent of
the number of Registrable Securities requested to be included in such
registration which, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above, the number of Registrable
Securities which the Holders have requested to be included in such registration,
such amount to
-8-
be allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder
(provided that any shares thereby allocated to any such Holder that exceed such
Holder's request will be reallocated among the remaining requesting Holders in
like manner).
(c) If a registration pursuant to Section 3.1 hereof involves Common
Stock of one or more Holders but does not include Common Stock of the Company,
then the Holders shall be entitled to include such number of Registrable
Securities which the Holders have requested to be included in such registration,
with such amount to be allocated pro rata among all requesting Holders on the
basis of the relative number of shares of Registrable Securities then held by
each such Holder.
3.5 INDEMNIFICATION.
(a) In the event of registration of any of the Registrable Securities
under the Securities Act, the Company will, and hereby does, indemnify and hold
harmless the seller of such Registrable Securities, each underwriter of such
Registrable Securities, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the registration statement, or any amendment or
supplement to such registration statement, preliminary prospectus or financial
prospectus or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter, and each such controlling person for any legal or any other
expenses reasonably incurred by such seller, underwriter, or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that and such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or omission made in such
registration statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by or
on behalf of such seller or underwriter specifically for use in preparation
thereof.
(b) In the event of any registration of any of the Registrable
Securities under the Securities Act, each seller of the Registrable Securities,
severally and not jointly, will, and hereby does, indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any),
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
-9-
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the registration statement, or any
amendment or supplement to such registration statement, preliminary prospectus
or final prospectus or arise out of or are based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, if the statement or omission was
made in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by or on behalf of such seller
specifically for use in connection with the preparation of such registration
statement, prospectus, amendment or supplement.
(c) Each party entitled to indemnification under this Section 3.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and
shall, unless in the reasonable judgment of such Indemnified Party a conflict of
interest between such Indemnified Party and the Indemnifying Party may exist in
respect of such claim, permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel
chosen by the Indemnifying Party to conduct the defense of such claim or
litigation shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 3.5 except to the
extent that the Indemnifying Party has been prejudiced by such late or deficient
notice. After the Indemnifying Party has assumed the defense of such claim or
litigation, the Indemnifying Party will not be liable to such Indemnified Party
for any legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the Indemnifying Party abandons the defense of such claim
or litigation. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
3.6 LOCKUP AGREEMENT. In connection with any registration hereunder, upon
the request of the Company or the underwriters managing any underwritten
offering of securities, each Holder agrees not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) from the effective date of
such registration as the Company or the underwriters may specify.
3.7 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees that he will not sell, dispose of or otherwise
transfer any of the Registrable Securities except (i) upon registration of such
shares under the Securities
-10-
Act, (ii) pursuant to Rule 144 under the Securities Act or such comparable rules
as shall from time to time be in effect, or (iii) in a transaction exempt from
the registration requirements of the Securities Act.
(b) Each certificate representing the Registrable Securities shall
bear a conspicuous legend in form approved by the Company reflecting in
substance that such shares have been acquired for investment and have not been
registered under the Securities Act and may be transferred only upon receipt by
the issuer of an opinion of counsel acceptable to the issuer that the transfer
will not violate the Securities Act.
3.8 REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit a Holder
to sell securities of a company to the public without registration, the Company
agrees to use all reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Company or to the extent otherwise
required on the part of the Company under applicable provisions of the Exchange
Act;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) Furnish to the Holders, so long as the Holders own any Registrable
Securities, forthwith upon request, a written statement by the Company that it
has complied with the reporting requirements of Rule 144 (at any time after
ninety (90) days after the effective date of the first registration statement
filed by the Company) and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as may be reasonably requested in availing
Holders of any rule or regulation of the Commission permitting the selling of
any such securities without registration.
3.9 EFFECT ON FUTURE GRANTS OF REGISTRATION RIGHTS. In the event that
following the effective date of this Agreement the Company shall enter into one
or more agreements with any holder or prospective holder of any securities of
the Company which provides for the granting to such holder of registration
rights, then, unless such registration rights are made either senior or
subordinate to the rights of Holders hereunder, the registration rights granted
under this Agreement shall be deemed to be pari passu with such other
registration rights with the attendant effect that a Holder shall only be
entitled to include such number of Registrable Securities which the Holder has
requested to be included in any such registration in proportion to which the
relative number of shares of Registrable Securities then held by such Holder
bears to the total amount of Registrable securities sought to be registered
(provided that any shares thereby
-11-
allocated to any such Holder that exceed such Holder's request will be
reallocated among the remaining requesting Holders in like manner).
SECTION 4. MISCELLANEOUS
4.1 TERMINATION. The provisions of Sections 2 and 3 of this Agreement will
terminate upon the earlier of (i) the written agreement of an authorized officer
of the Company, the Xxxxxxx'x (and all transferees of Permitted Transfers) and
the Designated Shareholders (or the Designated Shareholders' Representatives, as
the case may be), (ii) as to each Designated Shareholder at such time as such
Designated Shareholder (A) ceases to hold of record any shares of Common Stock
by reason other than death or (B) ceases to be an employee or contractor of the
Company or otherwise serve as an officer or director of the Company by reason
other than death, or (iii) the tenth (10th) anniversary of the effective date
hereof. If not sooner terminated, the provisions of Section 2 of this Agreement
shall terminate at such time as (i) shares of Common Stock of the Company are
publicly traded on an exchange or in the over-the-counter market, or (ii)
Xxxxxxx holds less than 33% of the issued and outstanding shares of Common Stock
of the Company.
4.2 ADJUSTMENTS. In the event that the Company shall declare a stock split,
stock dividend or other distribution of capital stock in respect of, or issue
capital stock in replacement of or exchange for, shares of Common Stock, (i)
such shares shall be subject to this Agreement and the provisions of this
Agreement providing for calculations based on the number of shares of Common
Stock shall include the shares issued in respect of the Common Stock, and (ii)
the numbers for shares shall be equitably adjusted as appropriate to give effect
to such event.
4.3 AMENDMENTS. This Agreement may be amended, or any matter may be
consented to, only by an instrument in writing executed by an authorized officer
of the Company, Xxxxxxx and the Designated Shareholders (or the Designated
Shareholders' Representatives, as the case may be), except for any Designated
Shareholders as to whom the Agreement has terminated.
4.4 RELATIONSHIPS AND RIGHTS OF THE HOLDERS. The Holders agree that,
notwithstanding that certain rights of each Holder herein may be affected by
similar rights of other Holders, the Holders shall, in respect of the ownership
of the Registrable Securities, not be related as, or deemed to be, a
partnership, joint venture, or other "group" for the purpose of acquiring,
holding, voting, or disposing of securities of the Company.
4.5 HEADINGS. The headings, captions, and arrangements used herein are,
unless specified otherwise, for convenience only and shall not be deemed to
limit, amplify, or modify the terms hereof, nor affect the meaning thereof.
4.6 NOTICES. Each notice relating to this Agreement shall be in writing and
validly given if (a) personally delivered, (b) delivered and confirmed by
telecopier or like instantaneous transmission service, (c) delivered by Federal
Express or other overnight courier delivery service or (d) deposited in the
United States mail, first class, postage prepaid, registered or certified,
return receipt requested, addressed as follows:
-12-
If to the Company:
IMSL, Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxx 00000-0000
Attention: President
If to Xxxxxxx:
Xxxxxxx and Xxxxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
If to a Shareholder:
Addressed to the Shareholder at the address reflected on the signature
pages hereof.
Notice given by instantaneous transmission device or overnight courier
delivery service shall be effective as of confirmation of receipt by the
recipient or delivery by the courier at the address for notice herein stated.
Notice given by mail in the manner specified shall be conclusively deemed given
three (3) days before the date postmarked or upon receipt, whichever is sooner.
Any party may change its address for the purpose of notices by notice given as
herein provided.
4.7 GOVERNING LAW. THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
4.8 INVALID PROVISIONS. If any provision hereof is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
hereof, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision.
4.9 SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, executors and personal representatives and permitted successors and
assigns. In addition, and whether or not any express assignment shall have been
made, the provisions of this Agreement which are for the benefit of the parties
hereto other than the Company shall also be for the benefit of and enforceable
by any transferee of a Permitted Transfer. Unless otherwise expressly provided
by the Board of
-13-
Directors of the Company in writing or as expressly provided herein upon the
death of a Designated Shareholder, the rights provided to the Designated
Shareholders in Sections 2 and 3 hereof are not assignable nor otherwise
transferable by the Designated Shareholders (whether by operation of law or
otherwise). Any attempt to assign or transfer this Agreement or all or any of
the rights hereof contrary to the terms hereof shall be null and void and of no
force and effect.
4.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and it shall not be
deemed necessary in making proof of this Agreement to produce or account for
more than one counterpart signed by the party to be charged thereby.
4.11 SPECIFIC ENFORCEMENT. The parties hereby declare that it is impossible
to measure in money the damages which will accrue to a party hereto by reason of
a breach of, or a failure to perform any of, the obligations under this
Agreement. Therefore, in addition to all rights and remedies contained in this
Agreement and to which the parties hereto are entitled at law, it is understood
and agreed that any party hereto shall have the right to enforce specifically by
an action in equity the terms of this Agreement.
-14-
IN WITNESS HEREOF, this Agreement has been duly executed and delivered
EFFECTIVE as the 15th day of December, 1992.
COMPANY:
IMSL, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Printed Name:
---------------------
Title:
----------------------------
XXXXXXX:
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
# Shares of Common Stock
Currently Held of Record: 403,000
By:/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxxx X. Xxxxxxx
# Shares of Common Stock
Currently Held of Record: 300,000
-15-
SHAREHOLDERS:
By:/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Address: 00 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
# Shares of Common Stock
Currently Held of Record: 20,000
# Option Shares: 57,222*
________________________________________
* Includes 20,000 existing options and
options issuable on consummation of
Precision Visuals, Inc. acquisition (5,000
shares), and pursuant to bonus/retention
plan (22,222 shares) and 1993 performance
incentive (10,000 shares).
By:/s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx
Address: 12039 Xxxxxxxxxx
Xxxxxxxx, Xxxxx 00000
# Shares of Common Stock
Currently Held of Record: 24,250
# Option Shares: 20,000
By:/s/ Xxx Charter
-------------------------------------
Xxx Charter
Address: 000 Xxxxxxxxx
Xxxxxxxx, XX 00000
# Shares of Common Stock
Currently Held of Record: None
# Option Shares: 72,500
-16-
By:/s/ Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxx
Address: 000 Xxxxxxxxxxxx Xx.
Xxxxxxx, XX 00000
# Shares of Common Stock
Currently Held of Record: None
# Option Shares: 70,000
-17-
