Exhibit 1
SHAREHOLDERS AGREEMENT
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This Shareholders Agreement ("Agreement") is made and effective as of March
15, 2000, by and among Xxx Xxxx ("Rich"), Xxxxxxx X. Xxxxx ("Xxxxx") and Xxxxxx
X. Xxxxxx ("Xxxxxx," and, together with Rich and Xxxxx, the "Shareholders").
RECITALS
A. The Corporation's authorized capital consists of 10,000,000 shares,
$.01 par value of common stock ("Shares").
B. The Shareholders desire to enter into this Agreement to provide for
certain restrictions, rights, and privileges relating to the Shares.
IN WITNESS WHEREOF, THE PARTIES AGREE AS FOLLOWS:
1. Representations of the Shareholders.
Each Shareholder represents to and agrees with the other Shareholders and
the Corporation that: (a) such Shareholder is the legal holder and beneficial
owner of the Shares currently owned by such Shareholder, as listed on Schedule A
hereto, (b) such Shares are free and clear of all liens, claims, charges,
options and encumbrances other than restrictions on transfer under this
Agreement, and applicable federal and state securities laws, (c) such
Shareholder has the right, power and authority to execute, deliver and perform
its obligations under this Agreement and all requisite corporate or other action
has been taken, and (d) such Shareholder will have the right to transfer such
Shares upon the terms and subject to the conditions of this Agreement.
2. Restrictions on Shares.
All of the provisions of this Agreement shall apply to each Shareholder's
Shares, and all other Shares which may be acquired, issued or transferred
hereafter by any means to any Shareholder from, without limitation, any
additional issuance, purchase, exchange or reclassification of any such Shares,
corporate reorganization, or any other form of recapitalization, consolidation,
merger, share split or share dividend, or which are acquired by any Shareholder
in any other manner.
3. Agreement to Sell Shares.
a. In the event that there is a public offering of Shares in which the
shareholders of the Corporation participate and in which the Shareholders desire
to participate, the Shareholders agree as follows:
(i) the Shareholders will be entitled to elect to participate in such
public offering on a pro rata basis, based on the number of Shares owned by
them, as set forth on Schedule A. In the event that such offering is an
underwritten public offering, if the managing
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underwriter or the Corporation determines the number of Shares owned by the
Shareholders and requested to be included in the registration statement
exceeds the number which can be sold in an orderly manner in such offering
within a price range acceptable to the Corporation and the underwriter or
the Corporation limits or totally excludes the Shares owned by the
Shareholders, the number of Shares shall be which shall be excluded shall
be determined on such pro rata basis; and
(ii) without the consent of Rich, Xxxxx and Xxxxxx shall not be
entitled to sell a greater percentage of their ownership in the
Corporation than Rich sells in such offering. For example, if Rich
sells twenty(20%) percent of his Shares, then Xxxxx and Xxxxxx shall
each be entitled to sell up to twenty (20%) percent of his Shares.
b. Excepts as provided in subsection (a) above, the Shareholders shall be
entitled to sell their Shares without restriction, in compliance with
applicable laws.
4. Legend.
Upon the execution of this Agreement, each Shareholder shall surrender to
the Corporation his, her, or its stock certificate representing the Shares,
which stock certificate shall be imprinted with the following legend:
"The Shares represented hereby are also subject to the terms of a
Shareholders' Agreement, dated as of March 1, 2000, by and among
Evergood Products Corporation, Inc. and certain Shareholders, a copy
of which is on file at the principal office of the Corporation, and
any sale, pledge, gift, transfer, assignment, encumbrance or other
disposition of the shares represented by this certificate in violation
of said Agreement shall be void and of no effect."
5. Term of Agreement.
The Shareholders' duties and obligations under this Agreement shall
terminate upon the earlier of: (i) consummation of a firm commitment
underwritten public offering, pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of the
Shares and (ii) two years from the date hereof.
6. Miscellaneous.
a. Each party hereto acknowledges that he, she, or it has read this
Agreement, understands it, and agrees to be bound by its terms, and further
acknowledges and agrees that it is the complete and exclusive statement of the
agreement and understanding of the parties regarding the subject matter hereof,
which supersedes and merges all prior proposals, agreements and understandings,
oral and written, relating to the subject matter hereof. The parties may, by
mutual consent, amend, modify, supplement and waive any right under this
Agreement in any manner agreed by them in writing at any time.
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b. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, it shall be deemed severable from the remaining
provisions hereof which shall remain in full force and effect. In the event
that any provision is declared invalid or unenforceable, the Shareholders and
the Corporation and agree to substitute for such invalid or unenforceable
provision a new provision which reflects, to the closest extent possible, the
intent of the parties.
c. No waiver of any provision of this Agreement or any breach thereof
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) or any other breach hereunder nor shall such waiver
constitute a continuing waiver. Either party may waive performance of any
provision of this Agreement, the non-performance of which would otherwise
constitute a breach of this Agreement, including but not limited to the non-
performance of any condition precedent to such party's performance, without
affecting the enforceability of this Agreement and the provisions contained
herein.
d. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and permitted assigns of the
parties hereto.
e. The parties agree that the Shareholders shall each have the right to
seek damages or specific performance if any Shareholder fails to perform his,
her, or its obligations under this Agreement. Therefore, if any Shareholder
institutes any action or proceeding to enforce the provisions hereof, the
Shareholder, against whom enforcement is sought, hereby waives any claim or
defense that the plaintiff party has an inadequate remedy at law.
f. Any notice or other communication to be given hereunder shall be in
writing and delivered personally or sent by certified or registered mail,
postage prepaid, if to the Corporation, addressed to the Corporation at its
then-principal business address, and if to any Shareholder, addressed to him or
it at his or its address as it appears in the stock records of the Corporation,
or to such other address as any party may have furnished to the others in
writing. Unless otherwise provided in this Agreement, notice given pursuant to
this section shall be deemed given as of the date of its receipt.
g. This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
h. All representations, warranties and agreements contained herein shall
survive the execution and delivery of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement, which shall
be effective as of the date first above written.
"Shareholders"
/s/ Xxx Xxxx
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Xxx Xxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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SCHEDULE A
Shareholder Number of Shares Percentage Ownership
Xxx Xxxx 1,562,612 34.9%
Xxxxxxx X. Xxxxx 594,061 13.3
Xxxxxx X. Xxxxxx 313,317 7.0
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