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EXHIBIT 10.28
SHAREHOLDERS' AGREEMENT
WITH RESPECT TO
SHARES OF
CHAPALA COMMUNICATIONS, INC.
OWNED BY
MIXBAAL, S.A. DE C.V.
AND
DIGITAL TRANSMISSION SYSTEMS, INC.
Dated as of February 5, 1999
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TABLE OF CONTENTS
ARTICLE 1:
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BACKGROUND AND APPLICABILITY ............................................ 1
1.1 Background ........................................................ 1
1.2 Applicability ..................................................... 1
1.3 Rights of a Shareholder to Maintain Percentage Interest in the
Company ......................................................... 1
1.4 Warrant Issued to Sirrom Capital Corporation ...................... 1
ARTICLE 2:
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RESTRICTIONS ON SHARE TRANSFERS: RIGHT OF REFUSAL ....................... 2
2.1 Restrictions on Share Transfer .................................... 2
2.2 Right of Refusal .................................................. 2
(a) Notice of Intended Transfer; Option to Purchase ............. 2
(b) Company's Notice of Election to Purchase .................... 3
(c) Assignment of Company's Rights .............................. 3
(d) Notice of Shareholder's Election to Purchase ................ 3
(e) Purchase and Sale ........................................... 4
2.3 Permitted Transfer by the Proposed Transferor ..................... 4
2.4 Purchase Price .................................................... 5
2.5 Price ............................................................. 5
(a) General ..................................................... 5
(b) Purchase Price Per Share .................................... 5
(c) Alternative - Appraisal ..................................... 6
2.6 Waiver ............................................................ 6
2.7 Exception to Right of First Refusal ............................... 6
ARTICLE 3:
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REPRESENTATION ON THE BOARD OF DIRECTORS ................................ 6
3.1 Number of Directors; Bylaws ....................................... 6
3.2 Election of Directors ............................................. 7
3.3 Shareholders' Obligations; Covenant to Vote ....................... 7
3.4 Company's Obligations ............................................. 7
(a) Stock Issuances, Etc. ....................................... 7
(b) Stock Redemptions, Etc. ..................................... 7
(c) Articles and Bylaws ......................................... 7
(d) Dissolutions, Etc. .......................................... 7
(e) Dividends, Etc. ............................................. 7
(f) Mergers ..................................................... 7
(g) Asset Sales ................................................. 8
(h) Certain Investments ......................................... 8
(i) Certain Liabilities ......................................... 8
(j) Compensation ................................................ 8
(k) Authority to Enter Contracts ................................ 8
(i)
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ARTICLE 4:
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CERTAIN AGREEMENTS INVOLVING THE COMPANY'S SALE........................ 8
4.1 Go-Along Obligations............................................. 8
4.2 Take-Along Rights................................................ 9
4.3 Registration Rights.............................................. 9
ARTICLE 5:
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GENERAL PROVISIONS..................................................... 9
5.1 No Recognition of Transfers Not Made in Accordance with this
Agreement........................................................ 9
5.2 Successors and Assigns........................................... 9
(a) As to Shares............................................... 9
(b) As to Parties.............................................. 9
(c) Definition of Shareholder.................................. 9
(d) Joint Action Required......................................10
5.3 Prohibitions Against Distributions; Exercise of Option or Right
of the Company...................................................10
5.4 Specific Performance.............................................10
5.5 Liabilities......................................................11
ARTICLE 6:
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LEGEND ON SHARE CERTIFICATES...........................................11
6.1 Legend on Share Certificates.....................................11
6.2 Modification.....................................................11
ARTICLE 7:
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TERMINATION............................................................11
7.1 General..........................................................11
7.2 Other Termination Events.........................................11
ARTICLE 8:
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MISCELLANEOUS..........................................................12
8.1 Good Faith Efforts; Further Assurances; Cooperation..............12
8.2 No Partnership Created...........................................12
8.3 Other Restrictions...............................................12
8.4 Notices..........................................................12
8.5 Time is of the Essence; Computation of Time......................13
8.6 Certain Definitions..............................................13
8.7 Rules of Construction............................................14
8.8 Severability.....................................................14
8.9 Remedies Cumulative..............................................14
8.10 Integration; Amendment; Waiver...................................14
8.11 Controlling Law..................................................15
8.12 Counterparts.....................................................15
* * *
(ii)
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THIS IS A SHAREHOLDERS AGREEMENT by and among Digital Transmission
Systems, Inc., a Delaware corporation, ("DTS"), Mixbaal, S.A. de C.V., a
Mexican corporation ("Mixbaal") (DTS and Mixbaal being sometimes each referred
to individually as a "Shareholder" and collectively as the "Shareholders"), and
Chapala Communications, Inc. a Georgia corporation (the "Company"), dated as of
February 5, 1999, and by which such parties, for the reasons specified in
Section 1.1 and the mutual promises contained in this Agreement (the mutuality,
adequacy and sufficiency of which are hereby acknowledged), agree as follows:
ARTICLE 1:
BACKGROUND AND APPLICABILITY
1.1 Background. Currently Mixbaal and DTS are the Company's only
shareholders, each currently owning the following number and percentage
(calculated on a fully diluted basis) of the Company's issued and outstanding
capital stock, including the Company's $.001 par value common shares and $.001
par value preferred shares:
Mixbaal: 4,128,205 common shares 80.5 percent (80.5%)
0 preferred shares
DTS: 0 common shares 19.5 percent (19.5%)
1,000,000 preferred shares
Mixbaal, DTS and the Company consider it to be in their respective best
interests to set forth in writing certain agreements with respect to the
Company shares that each of Mixbaal and DTS own in order to assure harmony and
continuity in the Company's management and for their mutual benefit and
protection.
1.2 Applicability. This Agreement applies to: (a) all of the Company
capital stock owned by a Shareholder at the time this Agreement is executed and
delivered; and (b) all of the Company capital stock subsequently acquired for
any reason and on any basis by a Shareholder (the capital stock described in
the foregoing clauses (a) and (b) being referred to collectively as the
"Shares").
1.3 Rights of a Shareholder to Maintain Percentage Interest in the
Company. Except as set forth in Section 1.4 below, the Company shall not issue
any shares of its capital stock that would result in a reduction of any
Shareholder's aggregate equity interest in the Company, computed on a fully
diluted basis, unless the Company has first provided such Shareholder with a
reasonable opportunity (which opportunity shall include a period of no less
than sixty (60) days in which such Shareholder can exercise its rights) to
purchase additional Company stock on terms and conditions no less favorable to
such Shareholder than those of the issuance giving rise to this right.
1.4 Warrant Issued to Sirrom Capital Corporation.
(a) Notwithstanding any provision in this Agreement to the
contrary, in the event Sirrom Capital Corporation ("Sirrom") exercises its
Warrant dated of even date herewith (the "Sirrom Warrant") to purchase shares
of the Company's Common Stock (the "Sirrom Warrant
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Warrant Shares, DTS shall give back to the Company such number of shares of
Common Stock used by it at no cost to the Company (or Preferred Stock, if not
yet converted into Common Stock) in that DTS will own an aggregate of 9.0% of
the Company's capital stock, on a fully-diluted basis, following such exercise.
In the event Sirrom exercises its put right contained in the Sirrom Warrant (the
"Put"), the Company shall purchase the Warrant in accordance with the Warrant
and DTS, without any further action required by the Company, shall either (i)
give back to the Company such number of shares of Common Stock (or Preferred
Stock, if not yet converted into Common Stock) owned by it, at no cost to the
Company, so that DTS will own an aggregate of 9.0% of the Company's capital
stock, on a fully diluted basis, following such exercise or (ii) pay to the
Company the Put Price (as defined in the Sirrom Warrant.
(b) The terms and provisions of this Agreement shall be subordinate
to the rights of Sirrom granted pursuant to Loan Agreement executed of even
date herewith between Sirrom and the Company.
ARTICLE 2:
RESTRICTIONS ON SHARE TRANSFERS: RIGHT OF REFUSAL
2.1 Restrictions on Share Transfer. No Shareholder may transfer
any or all of his or its Shares, or any interest in them, except in accordance
with this Article 2. Nothing in this Article 2 grants any person the right to
have his or its Shares redeemed; and without limiting the foregoing, the
procedures contemplated by this Article 2 cannot be initiated by an offer to
the Company.
2.2 Right of Refusal. If a Shareholder (a "Proposed Transferor")
desires to transfer any or all of his Shares, or any interest in them:
(a) Notice of Intended Transfer; Option to Purchase. The
Proposed Transferor shall first give notice of such desire contemporaneously to
the Company and the other Shareholders (the "Notice of Intended Transfer"). The
Company shall promptly notify the other Shareholders of the date of its receipt
of the Notice of Intended Transfer. The Notice of Intended Transfer will not
be effective unless it is accompanied by:
(i) a copy of a written offer to the Proposed
Transferor or if an offer is not involved, as in the case of a gift,
a complete description of the proposed transfer (a written offer or
complete description, as appropriate, being a condition of any transfer
of the Shares); provided, however, that if the proposed transfer
(either singly or as part of a series of transfers) involves one
percent (1%) or more of the Company's issued and outstanding stock,
then the terms of the proposed transfer must include an offer by the
transferee to purchase all of the Shares of the other Shareholders on
terms and conditions no less favorable than those applicable to the
purchase of the Shares of the Proposed Transferor (including payments
or other benefits under ancillary agreements or arrangements).
(ii) to the extent not specified in the written offer
or general description, the name and address of the proposed
transferee, the number of Shares affected by the
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(ii) to the extent not specified in the written offer or
general description, the name and address of the proposed transferee, the
number of Shares affected by the proposed transfer, and the terms and
conditions of the proposed transfer (including, if applicable, the per
share price);
(iii) a signed statement of the Proposed Transferor and
the proposed transferee that the proposed transfer is a bona fide
transaction (a bona fide transaction being a condition to the rights of
the Proposed Transferor under this Article 2); and
(iv) a signed agreement of the proposed transferee in
favor of the Company and the other Shareholders providing that he, and the
Shares transferred to him, shall be bound by this Agreement.
The Company shall have the right to purchase any or all of the Shares specified
in the Notice of Intended Transfer, and the other Shareholders shall have the
right to purchase, in proportion to their respective stock ownership
(regardless of the class of stock owned by any Shareholder), any or all of the
Shares specified in the Notice of Intended Transfer that the Company does not
elect to purchase, each at the price and on the terms specified in Section 2.4
and as otherwise provided in this Article 2. Neither the foregoing nor any
other provision of this Agreement permits a Shareholder to compel the Company
to offer to purchase his Shares pursuant to the foregoing solely by reason of
such Shareholder's offer to sell his Shares to the Company.
(b) Company's Notice of Election to Purchase. The Company's
election to purchase shall be exercised by giving notice (a "Company's Notice
of Election to Purchase") of such election to the Proposed Transferor and the
other Shareholders within 30 days following the Company's receipt of the Notice
of Intended Transfer, and the Company's Notice of Election to Purchase shall
specify the number of Shares covered by the Notice of Intended Transfer that
the Company elects to purchase.
(c) Assignment of Company's Rights. The Company may assign
all or any part of its rights under this Article 2 to any person at any time
during the first ten (10) days of such 30-day period. In such event the
assignee shall have such assigned rights of the Company under this Article 2
(such assignment relieving the Company as the primary obligor, but not
extending the time periods, under this Article 2), and all references to the
Company in this Article 2 shall thereafter be deemed references to the Company
or such assignee or some combination of them, as appropriate. Notice of any
such assignment shall be given to the Proposed Transferor and the other
Shareholders.
(d) Notice of Shareholder's Election to Purchase. If within
30 days following the receipt of the Notice of Intended Transfer, the Company
does not elect to purchase all of the Shares covered by the Notice of Intended
Transfer, then within 45 days of the Company's receipt of the Notice of
Intended Transfer, the other Shareholders may elect to purchase by giving
notice (the "Other Shareholders' Notice of Election to Purchase") to the
Proposed Transferor and the Company. The Other Shareholders' Notice of Election
to Purchase shall specify the number of Shares covered by the Notice of
Intended Transfer, but not covered by the Company's Notice of Election to
Purchase, that each other Shareholder elects to purchase. The other
Shareholders' election to
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purchase such Shares is on a pro rata basis (based on the respective stock
ownership of the Shareholders but without regard for the class of shares held
by each Shareholder), unless a Shareholder agrees with another Shareholder for
such other Shareholder to purchase some or all of the other Shareholder's
pro rata portion.
(e) Purchase and Sale. The Proposed Transferor shall sell to
the Company the Shares specified in the Company's Notice of Election to Purchase
and shall sell to the other Shareholders the Shares specified in the Other
Shareholders' Notice of Election to Purchase, but only if the Company or the
other Shareholders or some combination of them have elected to purchase all of
the Shares specified in the Notice of Intended Transfer on the terms and
conditions set forth in Section 2.2(a). Any purchase and sale of Shares by the
Company, the other Shareholders, or any combination of them pursuant to this
Article 2 shall be at the price specified in Section 2.4 and shall be closed on
or before 75 days after the Company's receipt of the Notice of Intended
Transfer. The Company, if it is purchasing Shares, shall select the date, time
and place of closing in the Atlanta, Georgia metropolitan area (at which
closing, any purchase of Shares by the other Shareholders will take place) and
shall give the Proposed Transferor and the other Shareholders notice of such
date, time and place at least 10 days prior to closing. If the Company fails to
make such election (or is not purchasing Shares), then the other Shareholders
shall make such selection and give notice of such date, time and place to the
Company and the Proposed Transferor, as appropriate, at least 5 days prior to
closing.
2.3 Permitted Transfer by the Proposed Transferor. During the
60-day period (the "Sixty-day Period") beginning on the earliest to occur of
the following:
(i) the date the Proposed Transferor receives from the
Company and the other Shareholders waivers of their rights to purchase
under Section 2.2 with respect to the proposed transfer; or
(ii) the expiration of 60 days after the Notice of
Intended Transfer has been received by the Company without the Company,
the other Shareholders or some combination of them having, within that
time, elected to purchase all of the Shares specified in the Notice of
Intended Transfer; or
(iii) the expiration of the time prescribed for closing in
this Article 2 if the Company, the other Shareholders, or some
combination of them have not purchased the Shares specified in the
Notices of Election to Purchase,
the Proposed Transferor may transfer the Shares specified in the Notice of
Intended Transfer, but only to the prospective transferee named in such notice
and only in strict compliance with the general terms stated in it. Any
attempted transfer after the Sixty-day Period or not otherwise in accordance
with the preceding sentence or other provisions of this Agreement shall be void
ab initio and of no force and effect whatsoever, unless the Proposed Transferor
shall first have again complied with this Article 2. Upon such transfer of the
Shares, or any interest in them, to any transferee, such Shares shall continue
to be subject to this Agreement, and no transferee may transfer any or all of
such Shares, or any interest in them, except in accordance with this Agreement.
Notwithstanding
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anything to the contrary contained in this Section 2.3, no Shareholder shall be
permitted to transfer any of its shares to a prospective transferee if such
transferee is a competitor of the Company unless such proposed transfer is
agreed upon by unanimous consent of the Company's Shareholders.
2.4 Purchase Price. The purchase price per Share shall be the price
per Share stated in the Notice of Intended Transfer, provided, however, that if
the proposed transfer does not involve a purchase (or another transaction) in
which the price is determined in good faith in arm's length negotiations with
an independent third party, then the purchase price shall be determined in
accordance with Section 2.5 below. The purchase price shall be payable on terms
no less favorable to the Proposed Transferor than those set forth in the Notice
of Intended Transfer, except that if the purchase price is determined pursuant
to Section 2.5, it shall be payable as provided in that Section and the
references in such Section to the Affected Shareholder shall be references to
the Proposed Transferor.
2.5 Price.
(a) General. The purchase price for the Affected Shareholder's
Shares purchased pursuant to this Section 2.5 shall be the product of (i) the
number of Shares to be purchased from the Affected Shareholder and (ii) the
price per share determined pursuant to Subsections (b) or (c) below, as
appropriate.
(b) Purchase Price Per Share. The purchase price per share of the
Shares shall be the Company's book value (as defined below) on the last day of
its fiscal year ended immediately prior to the event giving rise to the purchase
and sale obligation under this Agreement (or such later date on which an audit
of the Company's financial statements has been performed by the Company's
independent auditors at the request of a Shareholder in connection with the
proposed sale, and such audit shall be solely at the Shareholder's expense)
divided by the number of shares of common stock of the Company on a fully-
diluted basis outstanding on such date. Book value is the Company's book value
reflected on its financial statements, adjusted as follows:
(i) Add the excess of accumulated depreciation on depreciable
property over the amount of depreciation that would have been accumulated
on such property had the straight line method been used and add or deduct,
as appropriate, the federal and state income tax effects of such adjustment
to shareholders' equity on such financial statements;
(ii) Deduct the excess of life insurance proceeds paid to the Company
by reason of the death of any shareholder reflected in such shareholders'
equity over the cash surrender value, if any, of such life insurance at the
next preceding year end;
(iii) Deduct any goodwill reflected on such financial statements; and
(iv) Add the value of any consideration received by the Company for
shares issued between the end of the most recent fiscal year and the date
of the event giving rise to the purchase and sale obligation under this
Agreement and subtract the fair value, as determined on the date of
payment, of any consideration paid for shares purchased or redeemed by the
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Company between the end of the most recent fiscal year and the date of the
event giving rise to the purchase and sale obligation under this Agreement.
Except as provided in subsection (c) below, the computation of purchase price
per share on the basis described above shall be made by the Company's regularly
employed accountants or accounting firm and shall be binding and conclusive upon
the parties.
(c) Alternative--Appraisal. Either the Company or the Affected
Shareholder may, by notice to the other (including any assignee of the Company)
until the last ten (10) days of the 180-day period, give notice of objection to
the determination of the purchase price pursuant to Section 2.5(b) above (the
"Objection Notice") and demand that the purchase price be determined by
appraisal. Such Objection Notice shall designate an appraiser. Within 30 days
after the receipt of such Objection Notice, the recipient may object to the
appraiser designated in the Objection Notice and designate another appraiser,
and failure to designate an appraiser within the time specified shall constitute
acceptance by the recipient of the appraiser designated in the Objection Notice.
If the Company or its assignee, or some combination of them, as appropriate, or
the Other Shareholders designate an appraiser, then the appraiser so designated
and the appraiser designated by the Affected Shareholder or his personal
representative shall select a third appraiser. The appraiser or appraisers, as
the case may be, shall determine the purchase price of the Shares to be
purchased and sold in accordance with this Article 2, and its (or their)
decision shall be binding and conclusive upon the parties. The Company shall pay
the appraisal costs, except that if the purchase price resulting from the
appraisal is not at least ten percent (10%) higher than the price established
pursuant to subsection (b) above, then the person requesting the appraisal shall
pay all of the appraisal costs.
2.6 Waiver. Any or all of the restrictions of this Article 2 may be
waived from time to time by the Shareholders, including permitting a pledge
agreement that provides that the pledgee may sell the pledged shares free from
any of the restrictions of this Agreement and that a purchaser pursuant to a
sale in accordance with such a pledge agreement shall not hold such shares
subject to this Agreement. Such waiver may be on such terms and conditions as
the waiving Shareholders determine.
2.7 Exception to Right of First Refusal. Notwithstanding any
provision contained in this Agreement to the contrary, the parties hereby agree
that Sirrom, upon becoming a party to this Agreement, shall have the right to
sell any or all of its shares of the Company's Common Stock to DTS, Mixbaal or
the Company for a purchase price determined by the parties to such sale
transaction.
ARTICLE 3:
REPRESENTATION ON THE BOARD OF DIRECTORS
3.1 Number of Directors; Bylaws. The Company's Board of Directors
shall at all times during the term of this Agreement consist of at least three
(3) members, and the Company's bylaws shall so provide.
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3.2 Election of Directors. DTS shall designate one (1) director
which shall be approved by Mixbaal S.A. de C.V. and shall have the right to
remove and fill any vacancy with respect to such director. Mixbaal shall, in the
aggregate, designate the remaining members of the board of directors and shall
have the right to remove and fill vacancies with respect to such directors.
3.3 Shareholders' Obligations; Covenant to Vote. Each Shareholder
shall take, or cause the directors designated by it or him to take, such actions
as may be necessary or appropriate to effect the election and removal as a
director of the persons designated by the other Shareholders, all in accordance
with this Article 3. Without limiting the foregoing, each Shareholder (a) shall
use its or his best efforts to take all actions necessary to call, or cause the
Company and the appropriate officers and directors of the Company to call, a
special or annual meeting of the Company shareholders and to vote all Shares
owned or held of record by such Shareholder at any such annual or special
meeting in a manner appropriate to effect this Article 3 and (b) shall sign any
written consent in lieu of a meeting that effects this Article 3.
3.4 Company's Obligations. The Company shall take all actions within
its power so that the Shareholders can effect the foregoing agreements.
3.5 Certain Corporate Actions. In addition to any requirements of
the Company's articles of incorporation, bylaws or applicable law, the following
require the affirmative vote of eighty-five percent (85%) of the Shares:
(a) Stock Issuances, Etc. Any issuance, grant, pledge,
conveyance or other disposition or encumbrance of the Company's capital stock,
or warrants, options or other rights to acquire such stock (including securities
convertible into such stock).
(b) Stock Redemptions, Etc. Any purchase, redemption or
other acquisition or retirement by the Company of any of the then outstanding
shares of its capital stock.
(c) Articles and Bylaws. Any amendment to, modification of
or repeal of any provision of the Company's articles of incorporation or bylaws.
(d) Dissolutions, Etc. The dissolution of the Company; the
adoption of a plan of liquidation of the Company; any motion by the Company to
commence any suit, proceeding or other action (i) under any existing or future
law of any jurisdiction relating to bankruptcy, insolvency, reorganization or
relief of debtors seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for the Company or for
all or any substantial part of its assets, or making a general assignment for
the benefit of its creditors.
(e) Dividends, Etc. Any declaration of any dividend or other
distribution by the Company of any of its cash, stock or other assets with
respect to the Company's capital stock.
(f) Mergers. Any merger or consolidation involving the
Company.
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(g) Asset Sales. Any sale, lease, exchange, transfer or other
disposition, directly or indirectly, in a single transaction or series of
related transactions, of all or substantially all, or a substantial part, of the
Company's assets.
(h) Certain Investments. Any purchase, lease, exchange or
other acquisition of assets (including securities) by the Company, in a single
transaction or a series of related transactions, if such assets constitute or
would constitute substantial assets, except purchases of inventories, supplies
and equipment made in the ordinary and usual course of business. For purposes of
subsection (g) above and this subsection (h), the term "substantial assets"
means the greater of (i) $100,000 or (ii) assets having an estimated fair market
value equal to one-half of the assets of the Company as shown on the Company's
latest quarterly financial statements.
(i) Certain Liabilities. The Company's incurrence (or the
agreement to do so) of any indebtedness for borrowed money (other than trade
payables in the ordinary course and other than pursuant to agreements in effect
on or as of the date of this Agreement), reimbursement agreement or guaranty if
the value of the liability represented thereby exceeds the greater of (i)
$100,000 or (ii) one-half of the estimated fair market value of the assets of
the Company as shown on the Company's latest quarterly financial statements.
(j) Compensation. The compensation of management and senior
level executives of the Company that exceeds by at least 10% the compensation
guidelines set forth in the American Electronics Handbook.
(k) Authority to Enter Contracts. The approval of any
contracts, including any subcontracts, to be entered into by the Company with
consideration, either to be paid by or to be paid to the Company, in excess of
the greater of (i) $100,000 or (ii) one-half of the estimated fair market value
of the assets of the Company as shown on the Company's latest quarterly
financial statements.
ARTICLE 4:
CERTAIN AGREEMENTS INVOLVING THE COMPANY'S SALE
4.1 Go-Along Obligations. If the Board of Directors of the Company
and the Company shareholders having a majority interest determine that it is in
the best interests of the Company shareholders to sell (with "sell" for these
purposes including taxable and non-taxable transactions of whatever form) all or
substantially all of their Company shares to a certain person, otherwise
directly or indirectly consolidate or merge the Company with another person or
engage in any other transaction having a similar result or effect (whether by
transfer of assets or otherwise), then the Shareholders shall: (a) sell or
exchange the Shares or otherwise participate in such transaction on terms and
conditions no less favorable to such Shareholders than the terms and conditions
applicable to other Company shares of the same class and/or series as the Shares
and not dissent therefrom; and (b) amend or cancel the restrictions of this
Agreement in a manner to permit such sale, exchange or participation.
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4.2 Take-Along Rights. The Company will not engage in any
transaction by which it directly or indirectly consolidates or merges with
another person or engages in any other transaction having a similar result or
effect (whether by transfer or assets or otherwise) and no Shareholder shall
sell (with "sell" for these purposes including taxable and non-taxable
transactions in whatever form) all or substantially all of his Shares unless, as
appropriate, either the Company obtains an agreement from the person into which
the Company is consolidating, merging or otherwise combining or engaging in such
other transaction, or such Shareholder proposing to sell obtains an agreement
from the person who is acquiring such shares of such Shareholder proposing to
sell, that obligates such person to permit the other Shareholders to participate
in such transactions or to acquire the Shares of the other Shareholders on terms
and conditions no less favorable to the other Shareholders than the terms and
conditions applicable to other shares of the Company of the same class and/or
series as the Shares. The parties shall amend or cancel the restrictions of this
Agreement in a manner to permit such sale, exchange or participation.
4.3 Registration Rights. In the event the Company undertakes a
public offering of its capital stock, the Shareholders shall have the right to
sell their shares in such offering notwithstanding any other provisions in the
Agreement to the contrary.
ARTICLE 4:
GENERAL PROVISIONS
5.1 No Recognition of Transfers Not Made in Accordance with this
Agreement. The Company shall not at any time permit any transfer to be made on
its books or records of Shares, and shall refuse to recognize any claims of
ownership of any purported transferee of such Shares, that is not made in
accordance with this Agreement.
5.2 Successors and Assigns.
(a) As to Shares. Shares, or any interest in them, transferred to
any person shall continue to be subject to this Agreement without any
requirement that a transferee execute this Agreement or otherwise consent to its
imposition on him and/or his Shares.
(b) As to Parties. This Agreement (i) is binding upon the parties
and their respective legal representatives, heirs, devisees, legatees,
beneficiaries and successors and assigns and (ii) inures to the benefit of the
parties and their respective permitted legal representatives, heirs, devisees,
legatees, beneficiaries and other permitted successors and assigns (and to or
for the benefit of no other person whatsoever), if any.
(c) Definition of Shareholder. Each transferee of any Shares is
considered a Shareholder under this Agreement. If a successor or assign is
already a Shareholder, he is not considered a separate Shareholder for purposes
of this Agreement. Any reference to a Shareholder means each or all of the
Shareholders, each permitted successor and assign of such a Shareholder, and
when appropriate to effect the binding nature of this Agreement for the benefit
of another Shareholder or the Company, any other successor or assign.
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(d) Joint Action Required. If there is more than one
successor and assign to Shares of a person who originally executed and
delivered this Agreement as a Shareholder, then the successors and assigns (and
if he is still a shareholder, the Shareholder) must act jointly as a single
person in exercising their rights as successors and assigns of a Shareholder
(resolving disputes among them by a majority in interest as to the Shares they
own).
5.3 Prohibitions Against Distributions; Exercise of Option or Right
of the Company. If the Company may not lawfully purchase Shares of a
Shareholder as provided in this Agreement (whether pursuant to the Georgia
Business Corporation Act or otherwise), then the Shareholder whose shares are
being purchased (or his personal representative) and the other Shareholders
shall (to the extent practicable)(a) promptly take any and all necessary
measures to vote their respective holdings of the Company shares in favor of any
motion presented at any meeting of the Company's shareholders (or to execute a
unanimous written consent of shareholder) for the purpose of (i) reducing the
Company's stated capital, permitting the Company to purchase its shares out of
capital surplus or taking such other legally permissible corporate actions as
may be necessary or appropriate in order to eliminate or reduce the effect of
any limitation upon the Company's ability to purchase such Shares and (ii)
authorizing all other actions necessary or appropriate to enable the Company to
satisfy such obligations and effect the contemplated transactions and (b) cause
the members of the Board of Directors designated by such Shareholder to take any
necessary or appropriate related actions. If the Company is to take certain
actions or is given certain options or rights under this Agreement and the
Shareholders are the Company's only shareholders, then the Shareholder whose
Shares are not subject to being purchased or to such option or right shall have
the right (as director, officer, shareholder or otherwise) to determine whether
or not the Company will take such actions or exercise such option or right and
shall have the sole right to take such action as an act of the Company,
notwithstanding any provision to the contrary contained in the Company's
articles of incorporation or bylaws. If at the time the Company is to take such
actions or is given such an option or right the Shareholders are not the
Company's only shareholders, then the Shareholder whose Shares are not subject
to being purchased or to such option or right shall have all of the rights of
the Shareholder whose Shares are being purchased (as director, officer,
shareholder or otherwise) to determine whether or not the Company will take such
actions or exercise such option or right, notwithstanding any provision to the
contrary contained in the Company's articles of incorporation or the bylaws. The
Shareholder whose Shares are subject to such rights or options shall cooperate
in every reasonable respect with the taking of such actions or the exercise of
such options or rights.
5.4 Specific Performance. The parties hereby acknowledge that it
is impossible to measure in money the damages that will accrue to a party by
reason of the failure or refusal of any other party to perform any of the
obligations under this Agreement. Because the parties agree that the
obligations under this Agreement are of a special, unique and extraordinary
character and that the remedy at law for any breach of any such obligation will
be inadequate, a party injured by the breach of any such obligation shall be
entitled, in addition to all remedies otherwise available at law or in equity,
to institute an action or proceeding to enforce specifically the provisions of
this Agreement, and the party against whom such action is brought agrees not to
urge in such action or proceeding the claim or defense that a remedy at law
exists.
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5.5 Liabilities. If the Company or any Shareholder obtains from a
Shareholder all of his Shares pursuant to this Agreement, then the acquiror
shall in good faith undertake to obtain the release of such Shareholder from all
contingent liabilities incurred in connection with the Company's business,
including liabilities of such Shareholder as guarantor of, or surety upon, the
Company's obligations.
ARTICLE 6:
LEGEND ON SHARE CERTIFICATES
6.1 Legend on Share Certificates. All share certificates
representing the Shares shall have written on their face or back a legend in
substantially the following form as long as Articles 2 through 5 are in effect:
Certain rights, obligations and restrictions are imposed on
the shares represented by this certificate by an agreement by
and among Mixbaal, S.A. de C.V., Digital Transmission
Systems, Inc. and Chapala Communications, Inc. and any
amendments to it, copies of which are in the records of
Chapala Communications, Inc. The transfer, encumbrance or
other disposition of such shares in contravention of such
agreement is void. Any transferee of such shares shall be
bound by such agreement and any amendments.
6.2 Modification. It is intended that the foregoing legend conform
to the provisions of the Uniform Commercial Act of Georgia and the Georgia
Business Corporation Act, and such legend shall be modified from time to time to
conform to any amendments to applicable sections of such Uniform Commercial Act
or the Georgia Business Corporation Act or to this Agreement.
ARTICLE 7:
TERMINATION
7.1 General. The restrictions and obligations in Articles 2 through
6 shall terminate upon the occurrence of either of the following events:
(a) The voluntary agreement to terminate of all persons who
are then bound by this Agreement.
(b) If 100% of the issued and outstanding Shares are owned
by one person.
(c) If the Company consummates a public offering of its
capital stock.
7.2 Other Termination Events. Notwithstanding the foregoing: (a)
the provisions of this Agreement as to the voting of Shares shall expire on the
twentieth (20th) anniversary of the date of this Agreement; and (b) if this
Agreement is not sooner terminated, the other provisions of this Agreement shall
terminate on December 31, 2038. The parties express their intention, and to the
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extent permitted by applicable law agree, to renew the aspects of this
Agreement relating to voting on or before the twentieth (20th) anniversary of
this Agreement. The termination of restrictions and obligations in Articles 2
through 6 shall not affect rights perfected or obligations incurred under this
Agreement prior to such termination. Upon such termination, each Shareholder
shall surrender to the Company the share certificates representing his Shares,
and the Company shall issue to each of them new share certificates for an equal
number of shares without the legend set forth in Section 7.1.
ARTICLE 8:
MISCELLANEOUS
8.1 Good Faith Efforts; Further Assurances; Cooperation. The
parties shall in good faith undertake to perform their agreements in this
Agreement and cause the purposes of this Agreement to be accomplished promptly
in accordance with the terms hereof. Each party shall do such things as may be
reasonably requested by the other party in order more effectively to accomplish
the purposes of this Agreement. The parties shall cooperate with each other and
their respective counsel and other designees in connection with any steps
required to be taken as part of their rights and obligations under this
Agreement.
8.2 No Partnership Created. The parties do not intend to create by
this Agreement a partnership or a partnership relationship among them, and it is
expressly agreed by the parties: (a) that no such partnership, partnership
arrangement or other agency relationship is, or shall be deemed to have been,
created by this Agreement; and (b) that except as expressly set forth in this
Agreement, no party by reason of this Agreement (i) has the power or authority
to bind any other party contractually or otherwise or (ii) is responsible or
liable for the actions or omissions of any other party, whether acting pursuant
to this Agreement or otherwise.
8.3 Other Restrictions. The provisions of this Agreement shall be
in addition to and not in lieu of any and all restrictions on the transfer of
Company common stock that arise from applicable laws and any other restrictions
on transfers agreed to by or among the parties.
8.4 Notices. Each notice, communication and delivery under this
Agreement: (a) shall be made in writing and signed by the party giving it; (b)
unless delivered in person, shall be given at the address specified below, with
copies as specified below; (c) shall specify the section of this Agreement
pursuant to which given; (d) shall be deemed to be given (i) if delivered in
person, on the date delivered, (ii) if sent by telecopier, on the date of
telephonic confirmation of receipt, or (iii) if mailed first class, by
registered or certified mail, return receipt requested (with postage and other
fees prepaid), on the date mailed; and (e) shall be deemed received (i) if
delivered in person, on the date of personal delivery, (ii) if telecopied, on
the first (1st) business day after transmitted (if the party giving the notice,
or its employee or agent, has no reason to believe that the transmission was not
made or received), or (iii) if so mailed, on the third business day after
mailing. The addresses are as follows:
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If to Mixbaal, to:
Mixbaal, S.A. de C.V.
Blvd. Xxxx Xxxxxxxxx Xxxx Xx. 00-XXX
Xxx Xxxxxxx, Xxxxxxx
Xxxxxxx, XXXXXX 00000
Telecopier No.: 00-0-000-0000
Confirmation No.: 00-0-000-0000
If to DTS, to:
Digital Transmission Systems, Inc.
0000 Xxxxxxxxxx Xxxxxxx, Xxxx. 000
Xxxxxxxx, Xxxxxxx 00000
Telecopier No: 000-000-0000
Confirmation No: 000-000-0000
If to the Company, to:
Xx. Xxxx Xxxxxx Xxxxxxx
President
Chapala Communications, Inc.
0000 Xxxxxxxxxx Xxxxxxx, Xxxx. 000
Xxxxxxxx, Xxxxxxx 00000
Telecopier No: 000-000-0000
Confirmation No: 000-000-0000
Such notice shall be given at such other address or to such other representative
as a party may furnish pursuant to this Section 8.4 to the other parties. If
notice is given pursuant to this Section 8.4 of a permitted successor or assign
of a party, then notice shall thereafter be given as set forth above also to
such successor or assign.
8.5 Time is of the Essence; Computation of Time. Time is of the
essence of each and every provision of this Agreement. If the last day for the
exercise of any privilege or the discharge of any duty under this Agreement
falls upon Saturday, Sunday or any public or legal holiday, whether federal or
of a state in which the person having such privilege or duty resides or has its
principal place of business, then the person having such privilege or duty has
until 5:00 p.m. on the next succeeding regular business day to exercise such
privilege or to discharge such duty.
8.6 Certain Definitions. The parties agree that (whether or not
capitalized or underlined): (a) "applicable law" means each provision of any
constitution, statute, law, rule, regulation, decision, order, decree, judgment,
release, license, permit, stipulation or other official pronouncement enacted,
promulgated or issued by any governmental authority, arbitrator or arbitration
panel; (b)
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"governmental authority" means any legislative, executive, judicial,
quasi-judicial or other public authority, agency, department, bureau, division,
unit, court or other public body or person; (c) "party", "parties", and
variations of such terms mean each or all, as appropriate, of the persons who
have executed and delivered this Agreement, each permitted successor or assign
of such a party, and when appropriate to effect the binding nature of this
Agreement for the benefit of another party, any other successor or assign of
such a party; (d) "person" means any individual, sole proprietorship,
partnership, corporation, joint venture, limited liability company, estate,
trust, unincorporated organization, association, institution, or other entity or
governmental authority; (e) "this Agreement" includes any amendments or other
modifications and supplements, and all exhibits, schedules and other
attachments, to it; and (f) "transfer" and variations of it means (i) any sale,
assignment, conveyance, exchange, pledge, hypothecation, gift, disposition or
other parting with any indicia or aspect of title, ownership or possession
(including voting rights), whether for consideration or gratuitously,
voluntarily, involuntarily or otherwise, of,in or to any or all of the Shares
or any interest in them and/or (ii) any granting, whether for consideration or
gratuitously, voluntarily, involuntarily or otherwise, of a security interest in
any or all of the Shares or any interest in them.
8.8 Rules of Construction. The parties agree that: (a) "including"
and any other words or phrases of inclusion shall not be construed as terms of
limitation, so that references to "included" matters shall be regarded as
non-exclusive, non-characterizing illustrations; (b) when "Section,"
"Subsection" or "Exhibit" is capitalized in this Agreement, such term refers to
such item in or attached to this Agreement; (c) titles and captions of or in
this Agreement and the cover sheet and table of contents of this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any of its provisions; (d)
whenever the context so requires, the singular includes the plural and the
plural includes the singular, and the gender of any pronoun includes the other
genders; (e) each exhibit and schedule referred to in this Agreement and each
attachment to any of them or to this Agreement is hereby incorporated by
reference into this Agreement and is made a part of this Agreement as if set out
in full in the first place that reference is made to it; and (f) acknowledging
that the parties have participated jointly in the negotiation and drafting of
this Agreement, if an ambiguity or question of intent or interpretation arises
as to any aspect of this Agreement, then it shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring any party by virtue of the authorship of any provision of this
Agreement.
8.8 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
8.9 Remedies Cumulative. The rights and remedies specified in any
provision of this Agreement shall be in addition to all other rights and
remedies a party may have under any other agreement or applicable law, including
any right to equitable relief and any right to xxx for damages as a result of a
breach of this Agreement (whether or not such party elects to terminate this
Agreement), and all such rights and remedies shall be cumulative.
8.10 Integration; Amendment; Waiver. This Agreement and the other
agreements contemplated by this Agreement: (a) supersede all prior negotiations,
agreements and undertakings
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between the parties with respect to the subject matter; (b) constitute the
entire agreement between the parties with respect to the subject matter; and (c)
may not be altered or amended except in writing signed by the parties. The
failure of any party at any time or times to require performance of any
provision of this Agreement shall in no manner affect the right to enforce the
same. No waiver by any party to this Agreement of any provision (or of a breach
of any provision) of this Agreement, whether by conduct or otherwise, in any one
of more instances shall be deemed or construed either as a further or continuing
waiver of any such provision or breach or as a waiver of any other provision (or
of a breach of any other provision) of this Agreement.
8.11 Controlling Law. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of Georgia.
8.12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or its terms to account for more
than one of such counterparts. This Agreement may be executed by each party upon
a separate copy, and one or more execution pages may be detached from one copy
of this Agreement and attached to another copy in order to form one or more
counterparts.
DULY EXECUTED AND DELIVERED on February 5, 1999.
-----------
The Shareholders:
MIXBAAL, S.A. DE C.V.
By: JR. XXXX XXXXXX XXXXXXX
-----------------------
Name:
-----------------------
Title: President
-----------------------
DIGITAL TRANSMISSION SYSTEMS, INC.
By: XXXXXX X. SALAZAQ
-------------------------
NAME: Xxxxxx X. Salazaq
-------------------------
Title: Pres CEO
-------------------------
CHAPALA COMMUNICATIONS, INC.
By: JG
-------------------------
Name: Xxxx Xxxxxx Xxxxxxx
-------------------------
Title: President
-------------------------
* * *
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