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Exhibit 10.8
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (this "Agreement") is made on July 29,
1998, by and among EMERGE VISION SYSTEMS, INC., a Delaware corporation, with its
principal offices located at 00000 000xx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000
("eVS"), the individuals designated as STS Stockholders in Schedule A (the "STS
Stockholders"), who are the former shareholders of STS Agriventures, Ltd., and
the entities designated as Nutri-Charge Stockholders in Schedule A (the
"Nutri-Charge Stockholders"), who are the former partners of Nutri-Charge
Partnership when the partnership was sold to eVS for eVS stock, (the STS
Stockholders and Nutri-Charge Stockholders, together with any Permitted
Transferee (as defined below) which may become a party to this Agreement
hereafter are, for so long as they are stockholders of eVS, collectively
referred to herein as the "Stockholders" or individually a "Stockholder.")
BACKGROUND
In partial consideration for the execution and delivery by eVS of
the Stock Purchase Agreement by and between eVS, the STS Stockholders and STS
Agriventures, Ltd. (the "Stock Purchase Agreement"), the STS Stockholders
have agreed to enter into this Agreement.
In partial consideration for the execution and delivery by eVS of
the Purchase Agreement by and between eVS, the Nutri-Charge Stockholders and
Nutri-Charge (the "Purchase Agreement"), the Nutri-Charge Stockholders have
agreed to enter into this Agreement.
The parties have determined that it is in the best interests of eVS
and the Stockholders to provide for certain rights and restrictions on the
future disposition of eVS's common stock, par value $0.01 per share (the "Common
Stock"), and various other matters set forth herein.
NOW, THEREFORE, in consideration of the agreements and mutual
promises and covenants set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE 1
RESTRICTIONS ON TRANSFER OF SHARES
1.1. Restrictions on Stockholders. Until such time as eVS's Common Stock
is the subject of a Qualified Initial Public Offering (as hereinafter defined),
or as expressly provided in this Agreement or in the Purchase Agreement, no
Stockholder shall sell, assign, transfer, give, bequeath, devise, donate or
otherwise dispose of, or pledge, deposit or otherwise encumber, in any way or
manner whatsoever, whether voluntary or involuntary (all of the foregoing
hereinafter referred to as "transfer"), any legal or beneficial interest in any
of the shares of eVS's Common Stock (collectively, the "Shares") now or
hereafter owned (of record or beneficially) by such Stockholder except as
expressly provided in this Agreement and in accordance with its terms and
conditions.
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1.2. Certain Excluded Transfers. The provisions of Articles 1 and 2 of
this Agreement shall not apply to the transfer of shares by a Stockholder which
are not Restricted Shares (as defined in the Purchase Agreement) to a Permitted
Transferee, provided that the Permitted Transferee executes a copy of this
Agreement as a Stockholder. As used herein, "Permitted Transferee" means:
(a) in the case of any Stockholder who is a natural person, such
Individual's spouse or issue (in each case natural or adopted), any trust for
the benefit of such Individual or his/her spouse or issue, or any corporation or
partnership in which the direct or beneficial owner of all of the equity
interest is such Individual, spouse or issue or any trust for the benefit of
such persons;
(b) in the case of any Stockholder who is a natural person, the
heirs, trustees, executors, administrators or personal representatives upon the
death or incompetency of such person;
(c) in the case of a Stockholder other than a trust that is not a
natural person, any Controlled Affiliate (as hereinafter defined) of such
Stockholder; and
(d) in the case of a Stockholder that is a trust, any beneficiaries
of such Trust or successor Trust, and Controlled Affiliate (as hereinafter
defined) of a beneficiary of such Trust or successor Trust;
(e) any person or entity that takes such shares pursuant to a sale
in connection with a Qualified Initial Public Offering (as hereinafter defined)
of such shares, which shares shall no longer be subject to this Agreement;
(f) Xxxxxxx X. Xxxxxxx or Xxxx X. Xxxxxxx with the same rights as if
they were a Stockholder; and
(g) XL Vision, Inc. ("XLV") pursuant to the Put Option (as defined
in the Purchase Agreement).
"Controlled Affiliate" means, with respect to any person, a corporation,
partnership or other business association in which such person holds, directly
or indirectly, fifty percent (50%) or more of the outstanding capital stock or
other equity interests of such corporation, partnership or other business
association. In determining the fifty percent (50%) test Xxxx Xxxxxxx, his
spouse and his issue shall be considered one person. In determining the fifty
percent (50%) test Xxxxxxx Xxxxxxx, his spouse and his issue shall be considered
one person. An estate or trust of a deceased individual Stockholder shall be
considered the same as the deceased person for the fifty percent (50%) test
until such estate or trust is distributed.
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ARTICLE 2
STOCKHOLDER'S LIMITED RIGHT TO DISPOSE OF SHARES
2.1. Offer to Sell Shares. Except as otherwise provided in the Stock
Purchase Agreement and Articles 1 and 2 of this Agreement, if any Stockholder
shall at any time desire to sell all or any of such Stockholder's Shares, such
Stockholder (the "Selling Stockholder") shall first prepare a written offer (the
"Offer") to sell such Shares (the "Offered Shares") setting forth the proposed
date of the sale, the proposed price per Share, and the other terms and
conditions upon which the sale is proposed to be made. Such notice shall also
specify whether a Third Party Purchaser (as hereinafter defined) has made an
offer to acquire such Shares. The Selling Stockholder shall then transmit a copy
of the Offer to eVS. Within two (2) business days of receipt of the Offer, eVS
shall transmit a copy of the Offer to the Stockholders other than the Selling
Stockholder.
2.2. Option of eVS. Transmittal of the Offer to eVS by the Selling
Stockholder shall constitute an offer by the Selling Stockholder to sell the
Selling Stockholder's Offered Shares to eVS at the price and upon the terms set
forth in the Offer. For a period of ten (10) days after the submission of the
Offer to eVS, eVS shall have the option, exercisable by written notice to the
Selling Stockholder with a copy to each of the other Stockholders, to accept the
Selling Stockholder's Offer as to all or any part of the Selling Stockholder's
Offered Shares. Such notice shall state the number of Shares eVS will purchase,
if any, and the number of Offered Shares available to be purchased.
2.3. Option of Offeree Stockholders. In the event that eVS does not
exercise its option with respect to any or all of the Offered Shares in
accordance with Section 2.2, the Selling Stockholder, upon notice from eVS of
eVS's decision not to accept the Offer as to any or all of the Offered Shares
(or upon expiration of the fifteen-day option period referred to in Section 2.2
if eVS fails to give notice as aforesaid), shall be deemed to have offered in
writing to sell all, but not less than all, of its remaining Offered Shares
(those not purchased by eVS) to the Stockholders, as a group ("Offeree
Stockholders") at the price and upon the terms set forth in the Offer. For a
period of fifteen (15) days after such Offer to the Offeree Stockholders, the
Offeree Stockholders shall have the option, exercisable by written notice to the
Selling Stockholder with a copy to eVS and to each of the other Offeree
Stockholders, to accept the Offer as to the remaining Offered Shares. Each
Offeree Stockholder who exercises this option shall agree, by doing so, to
purchase that proportionate part of the remaining Offered Shares which the
number of Shares owned by such Offeree Stockholder bears to the total number of
Shares owned by all Offeree Stockholders (or in such other proportions as the
Offeree Stockholders may agree among themselves). In the event that one or more
of the Offeree Stockholders does not exercise its option in accordance with
Section 2.3, the Offeree Stockholders who exercised their options pursuant to
Section 2.3 shall have a further option for a period of five (5) additional days
following the expiration of the fifteen-day period set forth in Section 2.3 to
accept the Offer as to the then remaining Offered Shares, and each such Offeree
Stockholder who exercises this further option shall agree, by doing so, to
purchase that proportionate part of the then remaining Offered Shares, which the
number of Shares owned by such Offeree Stockholder bears to the total number of
Shares owned by all of the Offeree Stockholders exercising their option pursuant
to
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this Section 2.3 (or in such other proportions as such Offeree Stockholders may
agree among themselves).
2.4. Sale to Third Party Purchaser. If, at the end of the option periods
described in Sections 2.2 and 2.3 (the "Option Periods"), options have not been
exercised by eVS and/or the Offeree Stockholders to purchase all of the Offered
Shares, then the Selling Stockholder shall be free, subject to the co-sale
provisions of Section 3 hereof, for a period of thirty (30) days thereafter to
sell any or all of the Offered Shares as to which options have not been
exercised (the "Remaining Shares") to a third party purchaser (the "Third Party
Purchaser") at the price and upon the terms and conditions set forth in the
Offer, and on condition that such Third Party Purchaser executes a copy of this
Agreement as a Shareholder. If such Remaining Shares are not so sold within the
aforesaid thirty-day period, then the Selling Stockholder shall not be permitted
to sell such Remaining Shares without again complying with this Article 2.
ARTICLE 3
COME ALONG PROVISIONS
3.1. Come Along Right. If at any time holders of a majority of the
outstanding shares of Common Stock held by stockholders of the Company (the
"Majority Stockholders") propose to transfer substantially all of the shares of
the Common Stock held by them (other than to the public for cash pursuant to a
registration statement filed under the Securities Act) to a prospective
purchaser ("Acquiror"), then the Majority Stockholders shall notify each
Stockholder, in writing, of such offer and its terms and conditions. Upon
receipt of such notice, each Stockholder shall have the right to sell to the
Acquiror, that number of shares of Common Stock equal to the product attained by
multiplying (a) the number of shares of Common Stock the Acquiror proposes to
purchase, times (b) the quotient derived by dividing (i) the number of shares of
Common Stock held (or deemed to be held) by the Stockholders exercising the
Election under this Section by (ii) the total number of shares of Common Stock
held (or deemed to be held) by the Majority Stockholders and all Stockholders
exercising the Election under this Section. Each Stockholder's right to sell
pursuant to this Section 3.1 can be exercised by delivery of a written notice to
the Majority Stockholders within twenty (20) days following the delivery of the
notice to the Stockholders of the proposed sale to the Acquiror by the Majority
Stockholders.
3.2. Termination of Come Along Right. The provisions of this Article 3
shall terminate upon the consummation of a Qualified Public Offering.
ARTICLE 4
PURCHASE PRICE, TERMS AND SETTLEMENT
4.1. Purchase Price. The purchase price per Share and the terms of payment
shall be the price per Share contained in the Offer.
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4.2. Time; Date; Location. Settlement for the purchase of Shares by eVS or
by a Stockholder pursuant to the provisions of Article 2, shall be made within
thirty (30) days following the date of exercise of the last option exercised.
All settlements for the purchase and sale of Shares shall, unless otherwise
agreed to by all of the purchasers and sellers, be held at the principal
executive offices of eVS during regular business hours. The precise date and
hour of settlement shall be fixed by the purchaser or purchasers (within the
time limits proscribed in this Agreement), or in the event the purchasers fail
to agree, by the President of eVS, by notice in writing to the seller given at
least five (5) days in advance of the settlement date specified.
4.3. Certificates. At settlement, the stock certificate or certificates
representing the Shares being sold shall be delivered by the seller to the
purchaser or purchasers, duly endorsed for transfer or with executed stock
powers attached, with any necessary documentary and transfer tax stamps affixed
by the seller, free and clear of all liens, claims and encumbrances except for
the terms of this Stockholders Agreement.
4.4. Stockholders Agreement. The purchaser, if not already a Stockholder
hereunder, shall execute a copy of this Agreement as an additional Stockholder.
4.5. Authority. The seller, if a personal representative of a Stockholder,
shall, upon request of a purchaser, provide prior to the date of settlement,
evidence reasonably satisfactory to the purchaser of the seller's legal status
as personal representative of such Stockholder.
ARTICLE 5
REGISTRATION RIGHTS
5.1. Piggyback Registration Rights. Whenever eVS proposes to register any
Common Stock for eVS's own or others' account under the Securities Act of 1933
(the "1933 Act") for a public offering for cash, other than a registration
relating to employee benefit plans, eVS shall give each holder of Registrable
Securities (as hereinafter defined) written notice of eVS's intent to do so.
Upon the written request of any such holder given within thirty (30) days after
receipt of such notice, eVS will use eVS's reasonable efforts to cause to be
included in such registration all of the Registrable Securities that such holder
requests to be registered. If eVS is advised in writing in good faith by any
managing underwriter of the securities being offered pursuant to any
registration statement under this Article 5 that the number of shares to be sold
pursuant to such registration statement is greater than the number of such
shares that can be offered without adversely affecting the offering, then eVS
shall first register the shares sought to be registered by eVS for its own
account; second, eVS shall register the number of shares offered for the account
of the stockholders of eVS who are parties to a certain Registration Rights
Agreement dated as of ____________, 1997 as to which such stockholders exercise
piggyback registration rights pursuant to Section 2(a) of such agreement (the
"Existing Rights"); third, eVS shall register as many of the shares of
Registrable Securities as the underwriters will include in the registration,
reducing pro rata the number of shares offered for the accounts of holders of
Registrable Securities (based upon the number of Shares proposed to be sold
pursuant to such registration statement by each such holder) to a number deemed
satisfactory by such managing underwriter if
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all of the Registrable Securities can not be included. In the event of such a
limitation, shares of persons not having registration rights will not be
included in the registration unless all Registrable Securities requested to be
included in the registration have been included. Following the execution hereof,
eVS agrees to use its commercially reasonable best efforts to obtain the consent
of the holders of the Existing Rights to treat holders of Registrable Securities
pari passu with the holders of Existing Rights for the purposes of the
underwriter cutback provisions set forth above.
5.2. Definition of Registrable Securities. "Registrable Securities" means
the Shares, any shares of Common Stock or other capital stock of eVS received by
the holders of Shares as a stock dividend or other distribution with respect to
such Shares and any other shares of the capital stock of eVS now owned or
hereafter acquired by the holder of Shares.
5.3. Registration Procedures. All expenses incurred in connection with the
registrations under this Article 5 (including all registration, filing, listing,
qualification, printer's and accounting fees, but excluding underwriting
commissions and discounts) shall be borne by eVS. If and whenever eVS is under
an obligation pursuant to this Article 5 to effect or use eVS's reasonable
efforts to effect a registration of any Registrable Securities, eVS shall: (a)
use eVS's reasonable efforts to prepare and file with the Commission as soon as
reasonably practicable, a registration statement with respect to the Registrable
Securities and use eVS's reasonable efforts to cause such registration to
promptly become and remain effective for a period of at least one hundred twenty
(120) days (or such shorter period during which holders shall have sold all
Registrable Securities that they requested to be registered); (b) use eVS's
reasonable efforts to register and qualify the Registrable Securities covered by
such registration statement under applicable state securities laws as the
holders shall reasonably request for the distribution of the Registrable
Securities; (c) provide a transfer agent for the Common Stock no later than the
effective date of the first registration of any Registrable Securities; (d) list
such Registrable Securities on any national securities exchange or The Nasdaq
Stock Market's National Market, or if the Common Stock is unable to be so
listed, use eVS's reasonable efforts to qualify the Registrable Securities for
inclusion on any other automated quotation system of the National Association of
Securities Dealers, Inc.; and (e) take such other actions as are reasonable or
necessary to comply with the requirements of the Act and the regulations
thereunder, or the reasonable request of any holder, with respect to the
registration and distribution of the Registrable Securities. eVS is not
obligated to effect registration or qualification under this Article 5 in any
jurisdiction requiring eVS to qualify to do business (unless eVS is otherwise
required to be so qualified) or to execute a general consent to service of
process.
5.4. Holdback Agreement. If eVS at any time shall register shares of
Common Stock under the 1933 Act (including any registration pursuant to Article
5) for sale to the public, then Stockholders shall not sell publicly, make any
short sale of, grant an option for the purchase of, or otherwise dispose
publicly of, any shares of Registrable Securities (other than those shares of
Common Stock included in such registration pursuant to Article 5) without the
prior written consent of eVS or the managing underwriter of the offering for a
period designated by eVS in writing to the holders of shares of Registrable
Securities, which period shall not begin more than ten (10) days prior to the
effectiveness of the registration statement pursuant to which such public offer
will be made and shall not last more than one hundred eighty (180) days after
the effective
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date of such registration statement; provided that Stockholders shall not be
obligated to refrain from any of the foregoing for a period that is greater than
the minimum period required of any executive officer or director of eVS or
person holding, or having the right or option to acquire equity securities
representing more than five percent (5%) of the equity securities of eVS or if
any such person is not so required.
5.5. Underwriting Arrangement. In connection with each registration
pursuant to Article 5 covering an underwritten public offering, eVS and each
participating holder agree to enter into a written agreement with the managing
underwriter in such form and containing such provisions as are reasonably
acceptable to each such participating holder and are customary in the securities
business for such an arrangement between such underwriter and companies of eVS's
size and investment stature.
5.6. Notification. eVS shall notify each holder of Registrable Securities
covered by any registration statement of any event that results in the
prospectus included in such registration statement, as then in effect,
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
5.7. Furnishing of Documents. At the request of any participating holder,
eVS will furnish to each underwriter, if any, and participating holders, a legal
opinion of its counsel and a "cold comfort" letter from its independent
certified public accountants, each in customary form and substance, at such time
or times as such documents are customarily provided in the type of offering
involved. As expeditiously as possible, eVS shall furnish to each participating
holder such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the 1933 Act, and
such other documents as the participating holder may reasonably request in order
to facilitate the public sale or other disposition of the Registrable Securities
owned by the participating holders.
5.8. Indemnification and Contribution.
(a) In the event of a registration of any of the Registrable
Securities under the 1933 Act pursuant to Article IV, eVS will indemnify and
hold harmless each Stockholder, and each other person, if any, who controls such
Stockholder within the meaning of the 1933 Act, and each employee, officer and
trustee of such Stockholder against any losses, claims, damages or liabilities,
joint or several, to which each such controlling person, employee, officer or
trustee may become subject under the 1933 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 was registered under the 1933 Act pursuant to Article 5,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such Stockholder, and each such controlling person, employee, officer
or trustee for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that eVS
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will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Stockholder or any such controlling person,
employee, officer or trustee in writing specifically for use in such
registration statement or prospectus.
(b) In the event of a registration of any of the Registrable
Securities under the 1933 Act pursuant to Article 5, each Stockholder will
indemnify and hold harmless eVS, each person, if any, who controls eVS within
the meaning of the 1933 Act, officer of eVS who signs the registration
statement, director of eVS, underwriter and person who controls any underwriter
within the meaning of the 1933 Act, against all losses, claims, damages or
liabilities, joint or several, to which eVS or such officer, director,
underwriter or controlling person may become subject under the 1933 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 the registration statement
under which such Registrable Securities was registered under the 1933 Act
pursuant to Article 5, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse eVS and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that such Stockholder will be liable hereunder in
any such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such Stockholder, as such, furnished
in writing to eVS by such Stockholder specifically for use in such registration
statement or prospectus.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve the indemnifying party from any
liability which the indemnifying party may have to such indemnified party other
than under this Section 5 and shall only relieve the indemnifying party from any
liability which the indemnifying party may have to such indemnified party under
this Section 5 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and the indemnified party shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent the indemnifying party shall wish, to assume and undertake
the defense thereof with counsel satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume and undertake the defense thereof,
the indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there
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may be reasonable defenses available to the indemnified party which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, then the indemnified party shall have
the right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the 1933 Act in any case in which either: (i) any holder of
Registrable Securities exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 5 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the 1933 Act may be required on the part of any such selling holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 5; then, and in each such case, eVS and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) as is appropriate to reflect the
relative fault of eVS and such holder in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as the relative benefit received by eVS and such holder as a result of the
offering in question, it being understood that the parties acknowledge that the
overriding equitable consideration to be given effect in connection with this
provision is the ability of one party or the other to correct the statement or
omission which resulted in such losses, claims, damages or liabilities, and that
it would not be just and equitable if contribution pursuant hereto were to be
determined by pro rata allocation or by any other method of allocation that does
not take into consideration the foregoing equitable considerations; provided
that, in any such case: (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered by such holder pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) will be entitled to contribution from any person
or entity who was not guilty of such fraudulent misrepresentation.
5.9. Removal of Legends, Etc. Notwithstanding anything herein to the
contrary, the restrictions imposed by Articles 3 on the transferability of any
Shares shall cease and terminate when: (a) any such Shares are sold or otherwise
disposed of in accordance with the intended method of disposition by the seller
or sellers thereof set forth in a registration statement or such other method
that does not require that the securities transferred bear the legend set forth
in Section 3.2 hereof; or (b) the holder of such Shares has met the requirements
for transfer pursuant to subparagraph (k) of Rule 144 (as amended from time to
time) promulgated by the Commission under the 1933 Act. Whenever the
restrictions imposed by Articles 3 hereof have terminated, a holder of a
certificate for such Shares as to which such restrictions have terminated shall
be entitled to receive from eVS, without expense, a new certificate not bearing
the restrictive legend set forth in Section 3.2 hereof and not containing any
other reference to the restrictions imposed by this Agreement.
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5.10. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, then appropriate adjustment shall be
made in the provisions hereof so that the rights and privileges granted hereby
shall continue with respect to the Common Stock as so changed.
5.11. Preparation of Registration Statements. Whenever eVS is registering
any Common Stock under the 1933 Act and a holder of Registrable Securities is
selling any securities under such registration or determines that it may be a
controlling person under such 1933 Act, eVS will allow such holder and its
counsel to participate in the preparation of the registration statement, will
include in the registration statement such information as such holder may
reasonably request and will take all such other action as such holder may
reasonably request.
5.12. Transferability of Registration Rights. The registration rights
described in Sections 5.1 and 5.2 are transferable by the holders of Registrable
Securities to any person to whom such holder transfers Registrable Securities,
only with the consent of eVS.
5.13. No Registration in Canada. eVS is under no obligation to register
any of its Common Stock in Canada.
ARTICLE 6
BRING ALONG PROVISIONS
6.1. Bring Along Right. If the holders of at least a majority of the
outstanding shares of eVS's common stock approve in writing the sale of eVS to
any person or entity that is not an Affiliate of eVS, provided that, with
respect to such sale, the shares of stock within a class are all treated equally
(an "Approved Sale"), each Stockholder who does not exercise dissenter's and
appraisal rights (if any) with respect to the Approved Sale will consent to,
vote for and raise no objections against, and if the Approved Sale is structured
as a sale of stock, will agree to sell and be permitted to sell all of such
Stockholder's shares on the same terms and conditions approved by the holders of
a majority of the shares of eVS's common stock. Each Stockholder who is
participating in such sale will take all necessary and desirable actions as may
be reasonable requested by eVS in connection with the consummation of an
Approved Sale.
For purpose of this Section, the term "Affiliate" means any person
or entity either (i) in which eVS owns, directly or indirectly, at least 20% of
the voting control of or equity in and any other entity that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control by eVS, (i) which owns shares of eVs common stock prior to
such Approved Sale, or (iii) which owns shares of an entity identified in clause
(i) above prior to such Approved Sale.
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6.2. Termination of Bring Along Right. The provisions of this Article 6
shall terminate with respect to the shares upon the consummation of a Qualified
Initial Public Offering.
6.3. Execution of Documents; Costs. Each Stockholder shall, in connection
with an Approved Sale, at the request of eVS and without further cost or expense
to eVS, and without further cost and expense to eVS, execute and deliver such
other instruments as may reasonably be requested in order to consummate the
Approved Sale. Each Stockholder shall bear its pro rata share of the reasonable
costs and expenses incurred of any Approved Sale to the extent such costs and
expenses are incurred for the benefit of all selling Stockholders and are not
otherwise paid by eVS or the acquiring party. Costs incurred by a Stockholder on
its own behalf will not be considered costs of the Approved Sale hereunder.
ARTICLE 7
[RESERVED]
ARTICLE 8
ADDITIONAL PROVISIONS
8.1. Copy of Agreement to Be Kept on File. eVS shall keep on file at its
principal executive offices, and will exhibit to any Stockholder or his or her
duly authorized representative at any and all reasonable times, an executed copy
of this Agreement and all amendments thereto.
8.2. Stock Certificates to Be Marked with Legend. All certificates
hereafter issued by eVS shall be marked with the following legend:
THIS CERTIFICATE REPRESENTS SECURITIES WHICH ARE
RESTRICTED AND WHICH ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
STOCKHOLDERS AGREEMENT DATED JULY 29, 1998 BY AND AMONG EMERGE
VISION SYSTEMS, INC. ("EVS") AND THE STOCKHOLDERS IDENTIFIED THEREIN
(A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF EVS) AND THE
RIGHTS, PRIVILEGES AND OPTIONS THEREIN CONTAINED. NO SALE, TRANSFER,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS
CERTIFICATE OR ANY OF THE SECURITIES REPRESENTED THEREBY SHALL BE
MADE EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID
AGREEMENT.
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8.3. Termination of Certain Provisions. The provisions of Articles 1, 2,
3, 4, and 6 and Section 8.2 of this Agreement shall terminate and be of no
further force and effect upon the closing of an underwritten, firm commitment
initial public offering pursuant to an effective registration statement under
the 1933 Act, covering the offer and sale by eVS of its Common Stock in which
the aggregate net proceeds to eVS exceed Ten Million Dollars (a "Qualified
Initial Public Offering").
8.4. Rights, Obligations and Remedies. The rights and obligations under,
and the remedies to enforce, this Agreement are joint and several as to eVS and
each of the Stockholders with each being completely free to enforce any or all
of the rights or obligations under this Agreement against any of the others with
or without the concurrence or joinder of any of the others. The Shares are
unique, and recognizing that the remedy at law for any breach or threatened
breach by a party hereto of the covenants and agreements set forth in this
Agreement would be inadequate and that any such breach or threatened breach
would cause such immediate and permanent damage as would be irreparable and the
exact amount of which would be impossible to ascertain, the parties hereto agree
that in the event of any breach or threatened breach of any such covenant or
agreement, in addition to any and all other legal and equitable remedies which
may be available, any party hereto may specifically enforce the terms of this
Agreement and may obtain temporary and/or permanent injunctive relief without
the necessity of proving actual damage by reason of any breach or threatened
breach hereof and, to the extent permissible under the applicable statutes and
rules of procedure, a temporary injunction may be granted immediately upon the
commencement of any such suit and without notice.
8.5. Subsequent Stockholders to Become Bound. Before any person or entity
not a party to this Agreement to whom transfers of Shares may be made hereunder,
may be entitled to become a Stockholder of eVS, such person or entity shall be
required first to execute and deliver to eVS an agreement pursuant to which such
person or entity agrees to be bound by all of the terms and conditions of this
Agreement (as it may have then been amended), and the failure of any such person
or entity to execute such agreement shall preclude such person or entity from
becoming a Stockholder of eVS.
8.6. Amendment, Modification and Termination. This Agreement may be
amended, modified or terminated, or any provision or requirement hereof waived,
at any time by an agreement in writing among eVS, the holders of [EIGHTY]
percent [(80%)] of the outstanding Shares on a fully diluted basis, the holders
of eighty percent (80%) of the Shares held by STS Stockholders and their
Permitted Transferees and the holders of eighty percent (80%) of the Shares held
by the Nutri-Charge Shareholders and their Permitted Transferees; provided that
if this Agreement is amended, modified or terminated without the unanimous
consent of the Stockholders, all Stockholders that are not a party to such
agreement shall be given prompt notice of such amendment, modification or
termination. Any such amendment or waiver shall be effective with respect to all
parties to this Agreement.
8.7. No Waiver. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
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8.8. Governing Law and Jurisdiction. This Agreement shall be governed by
and interpreted under the laws of the Commonwealth of Pennsylvania, without
giving effect to the principles of conflicts of law of any jurisdiction. In the
event that a party to this Agreement perceives the existence of a dispute with
the other party concerning any right or duty provided for herein, the parties
will, as soon as practicable, confer in an attempt to resolve the dispute. If
the parties are unable to resolve such dispute amicably, then the parties hereby
submit to the exclusive jurisdiction of and venue in the state and federal
courts located in the Eastern District of the Commonwealth of Pennsylvania with
respect to any and all disputes concerning the subject of, or arising out of,
this Agreement.
8.9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person or sent overnight
delivery by Federal Express or by certified or registered mail, return receipt
requested, or telexed in the case of non-US. residents, and shall be deemed to
have been given when hand delivered, one (1) day after mailing when mailed by
overnight courier (e.g., Federal Express or Express Mail) or five (5) days after
mailing by registered or certified mail, as follows (provided that notice of
change of address shall be deemed given only when received):
If to eVS, to: With a required copy to:
eMerge Vision Systems, Inc. Xxxxxx Xxxxxxxx LLP
00000 000xx Xxxxxxx 0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000 Eighteenth & Arch Streets
Attention: Xxxxx Xxxxxxx, President Xxxxxxxxxxxx, XX 00000-0000
Fax Number: (000) 000-0000 Attention: Xxxx X. Xxxxxxxx, III, Esquire
Fax Number: (000) 000-0000
If to Stockholders, to:
Xxxxxx Xxxxxxx Xx. Xxxxxxx X. Xxxxxxx
P.O. Box 197 0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxx Xxxx, Xxxxxxx
X0X 0X0
Xxxxx Xxx, C.P.A. Xxx Xxxxxxxx
P.O. Box 88 Box 5351
Henderson, NE 68371 Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx X. Xxxxxxxx Xxx Xxxxxxxx
0000 Xxxxxx Xxxxx Xxx 0000
Xxx Xxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
X0X 0X0 X0X 0X0
Xxxxxx Xxxxxxxx
-00-
00
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
With a required copy to:
Xxxxx Xxxxxxxx, Esquire Xxxxxx X. Xxxxxxxxx, Esquire
P.O. Box 311 Duhamel Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxxxx Glass
2nd Floor
Xxx Xxxxx, Esquire 0000 00xx Xxxxxx
000 X. 00xx Xxxxxx, #000 Xxx Xxxx, Xxxxxxx
X.X. Xxx 00000 X0X 0X0
Xxxxxxx, XX 00000-0000
or to such other names or addresses as a party to this Agreement, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section 8.9.
8.10. Binding Nature of Agreement and No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns, except that
no party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other parties hereto, except by means
of transfers permitted by Articles 1 or 2.
8.11. Counterparts, Headings and Exhibits. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. The headings
used in this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement. All
Schedules and Exhibits hereto are hereby incorporated in this Agreement and made
a part hereof.
8.12. Integration. This Agreement, the Stock Purchase Agreement and the
Purchase Agreement embody the entire agreement and understanding among the
parties hereto and thereto supersede all prior agreements and understandings
relating to the subject matter hereof or thereof.
8.13. Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, then such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
8.14. Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and holidays;
provided that if the final day of any time period falls on a Saturday, Sunday or
holiday on which U.S. Federal
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banks are or may elect to be closed, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or such holiday.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the date first above written.
EMERGE VISION SYSTEMS, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
------------------
Title: President & C.E.O.
------------------
THE STOCKHOLDERS:
J Technologies, LLC
By:
--------------------------------------
Xxxxx Xxxxxxx, member
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx, Co-Trustee of the Xxxxxxx
Family Irrevocable Trust dated June 11,
1998
/s/ Xxxxx Xxx
-----------------------------------------
Xxxxx Xxx, Co-Trustee of the Xxxxxxx
Family Irrevocable Trust dated June 11,
1998
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/s/ X. Xxxxxxx
--------------------------------------
Xx. Xxxxxxx X. Xxxxxxx
/s/ X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxx Xxxxxxxx
--------------------------------------
Xxx Xxxxxxxx
/s/ X. Xxxxxxxx
--------------------------------------
Xxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx
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SCHEDULE A
Nutri-Charge Stockholders
NAME & ADDRESS NUMBER OF SHARES OF eVS
-------------- -----------------------
J Technologies, LLC 1,000,000 shares
a South Dakota limited liability company
Attention, Xxx Xxxxx,
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Xxxxxx Xxxxxxx and Xxxxx Xxx, Co-Trustees, 1,000,000 shares
The Xxxxxxx Family Irrevocable Trust dated June 11, 1998
X.X. Xxx 000
Xxxxxxxx, XX 00000
STS Stockholders and Xxxxxx Xxxxxxxx
NAME & ADDRESS NUMBER OF SHARES OF eVS
-------------- -----------------------
Xx. Xxxxxxx X. Xxxxxxx 32,130 shares
0000 Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxx
X0X 0X0
Xxxxxx X. Xxxxxxxx 24,570 shares
0000 Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxx
X0X 0X0
Xxx Xxxxxxxx 3,150 shares
Xxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
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Xxx Xxxxxxxx 3,150 shares
Xxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxx Xxxxxxxx 7,000 shares
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
X0X 0X0
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