EXHIBIT 9.1
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STOCKHOLDERS' AND VOTING AGREEMENT
by and among
XXXXXX.XXX, INC.
and
THE STOCKHOLDERS THAT
ARE SIGNATORIES HERETO
DATED AS OF MAY ____, 2004
TABLE OF CONTENTS
Page
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Section 1. Definitions.................................................................1
Section 2. Methodology for Calculations................................................3
Section 3. Voting Agreement............................................................3
Section 4. Restrictions on Transfers of Stock..........................................3
Section 5. Tag-Along Rights............................................................4
5.1. Tag-Along.........................................................................4
5.2. Tag-Along Obligations.............................................................4
5.3. Closing...........................................................................4
5.4. Limitations.......................................................................5
Section 6. Certain Covenants...........................................................5
6.1. Financial Statements, Other Information and Access................................5
6.2. Management Reports.....................................ERROR! BOOKMARK NOT DEFINED.
6.4 Board and Committee Notice Requirement............................................7
6.5 Action by the Board of Directors..................................................7
6.6 Reimbursement of Certain Expenses.................................................7
6.7 Directors' Indemnification; Insurance.............................................8
Section 7. Conflicting Agreements......................................................8
Section 8. Legend......................................................................8
Section 10. Duration of Agreement......................................................10
Section 11. Further Assurances.........................................................10
Section 12. Amendment and Waiver.......................................................10
Section 13. Severability...............................................................10
Section 14. Entire Agreement; Effect on Prior Agreement................................10
Section 15. Successors and Assigns.....................................................11
Section 16. Counterparts...............................................................11
Section 17. Remedies...................................................................11
Section 18. Notices....................................................................11
Section 19. Governing Law, Consent to Jurisdiction.....................................12
Section 20. Miscellaneous..............................................................12
Section 21. Construction...............................................................12
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STOCKHOLDERS' AND VOTING AGREEMENT
THIS STOCKHOLDERS' AND VOTING AGREEMENT (the "Agreement") is made as of
______________, 2004 by and among XXXXXX.XXX, INC., a Delaware corporation (the
"Company"), and each of the Stockholders of the Company executing one of the
signature pages attached hereto.
W I T N E S S E T H :
WHEREAS, as of the date hereof, Xxxxxx X. Xxxxxxxx, Stortford Holding
Limited, Scarborough Ltd., and Target Growth Fund (the "Investors") own an
aggregate of [___________] shares of the Company's Common Stock, par value
$.0001 per share (the "Common Stock"); and
WHEREAS, Xxxxx Xxxxxxxx, Xxxxx Holdings LLC, Xxxxxxx Xxxxxxxx Family
Limited Partnership, and the Xxxxx Xxxxxxxx Family Partnership, Ltd.
(collectively the "Typaldos Parties") are receiving _________ shares of Common
Stock pursuant to an Agreement and Plan of Merger ("Merger Agreement") among the
Company, CDK Merger Corp. and Miletos, Inc., a Delaware corporation (of which
250,000 are Contingent Shares and 2,000,000 shares are subject to the Miletos
Escrow, each as defined in the Merger Agreement).
WHEREAS, Xxxx Xxxxxxxx (together with the Typaldos Parties referred to
as the "Miletos Parties") will assume the role of President of the Company and
will receive Common Stock Equivalents (defined below) as part of his
compensation.
WHEREAS, the parties hereto deem it to be in their best interests to
enter into an agreement establishing and setting forth their agreement with
respect to certain rights and obligations associated with ownership of shares of
capital stock of the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
Section 1. Definitions. As used herein, the following terms shall have the
following meanings:
"Affiliate" means (i) with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person and (ii) with respect to any individual,
shall also mean the spouse, parent, sibling, child, step-child, or grandchild of
such Person, or the spouse thereof.
"By-laws" means the By-laws of the Company as in effect on the date hereof, as
they may be amended from time to time hereafter.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the Common Stock, par value $.0001 per share of the Company
and any equity securities issued or issuable with respect to the Common Stock in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.
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"Common Stock Equivalents" means any warrants, options or other securities
convertible into, or exchangeable or exercisable for, shares of Common Stock.
"Company" has the meaning assigned to it in the Preamble.
"Permitted Transfer" means, with respect to any Person, (i) a Transfer to a
trust for the benefit of such Person's spouse or issue or to a family
partnership, limited liability company or similar entity of which the members
are solely such Person, or such Person's spouse or issue and as to which such
Person exercises voting control, (ii) a Transfer to an Affiliate of such Person,
(iii) a Transfer between Stockholders, or (iv) if such Person is a limited or
general partnership, a Transfer to its partners in connection with a
distribution of securities held by such Person to its partners.
"Person" means any individual, corporation, limited liability company, limited
or general partnership, joint venture, association, joint-stock company, trust.
unincorporated organization or government or any agency or political
subdivisions thereof
"Public Sale" means a Transfer pursuant to a bona fide underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act, pursuant to Rule 144 under the Securities Act, or pursuant to
any other provisions of the Securities Act or rules thereunder where subsequent
Transfers would not be subject to Transfer restrictions thereunder.
"Registration Agreement" means the Registration Rights Agreement, dated as of
the date hereof, between the Company and the other parties thereto as it may be
amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholders" means the parties to this Agreement (other than the Company) and
any other subsequent holder of Stock who agrees to be bound by the terms of this
Agreement.
"Stock" means (i) any shares of Common Stock and (ii) any Common Stock
Equivalents, in each case, whether owned on the date hereof or acquired
hereafter by a Stockholder.
"Subsidiary" means with respect to any Person, (i) any corporation, partnership
or other entity of which shares of capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other similar managing body of such corporation, partnership or other entity are
at the time owned by such Person, or (ii) the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries by such
Person.
"Transfer" as to any Stock, means to sell or in any way directly or indirectly
transfer, assign, distribute, pledge, encumber or otherwise dispose of, either
voluntarily or involuntarily.
"Voting Shares" means any securities of the Company the holders of which are
generally entitled to vote for members of the Board.
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Section 2. Methodology for Calculations. Except as otherwise provided in
this Agreement, for purposes of calculating (i) the amount of outstanding Common
Stock as of any date, (ii) the amount of Common Stock owned by a Person
hereunder and (iii) related percentages, all Common Stock Equivalents shall be
treated as having been converted, exchanged or exercised.
Section 3. Voting Agreement. Each Stockholder shall vote all of its Voting
Shares and shall take all other necessary or desirable actions within its
control (including, without limitation, attending all meetings in person or by
proxy for purposes of obtaining a quorum, executing all written consents in lieu
of meetings and voting to remove members of the Board, as applicable), and the
Company shall take all necessary and desirable actions within its control to
cause to be elected to the Board of Directors the person designated from time to
time by the Investors (including any person designated as a successor to fill
any vacancy arising by reason of the resignation, death, removal or inability to
serve of any designee of the Investors) pursuant to their rights set forth in
Sections 6.1 to 6.7, below.
Section 4. Restrictions on Transfers of Stock.
(a) No Miletos Stockholder shall Transfer any Stock prior to the first
anniversary of the execution of this Agreement, whether owned on the date hereof
or acquired hereafter, without first, if applicable, complying with the
provisions of Section 5 hereof if, after giving effect to such Transfer, such
Miletos Stockholder shall have Transferred in the aggregate an amount of Common
Stock in excess of 5% of the outstanding Common Stock held by such Miletos
Stockholder as of the date hereof, except that (i) any Miletos Stockholder may
Transfer Stock in connection with the bona fide merger of the Company or bona
fide sale of all or substantially all of the assets or equity securities of the
Company, (ii) any Miletos Stockholder may Transfer Stock in connection with a
Permitted Transfer, and (iii) any Miletos Stockholder may make the Transfers
required or permitted by the Miletos Escrow and (iv) any Transfer pursuant to a
Public Sale, provided such sale under this clause (iv) is within the limitations
set forth in paragraph 4(c), below.
(b) Except in connection with a Public Sale or as otherwise permitted
under Section 4(c), any Transfer by a Stockholder of Stock to any transferee
(including any transferee that is an Affiliate of a transferor) who is not a
Stockholder shall upon consummation of, and as a condition to, such Transfer
execute and deliver to the Company (which the Company shall then deliver to all
other Stockholders) an agreement in form and substance satisfactory to the
Company pursuant to which it agrees to be bound by the terms of this Agreement
for the benefit of the parties hereto and such transferee shall thereafter be
deemed to be a Stockholder for all purposes of this Agreement.
(c) The restrictions on Transfers set forth in Section 4(a) of this
Agreement shall not apply to a Transfer (a) a Transfer pursuant to a Tag Along
Notice (defined in the Stockholders Agreement); or (b) a Transfer pursuant to
Rule 144 or an effective registration statement provided, (i) during the period
commencing 90 days after the Closing Date and ending 90 days thereafter such
Transfer shall not exceed 20% of the number of shares owned by each Miletos
Stockholder as set forth on the signature page hereto (the "Commencement
Amount"), (ii) during the period commencing 180 days after the Closing Date and
ending 90 days thereafter shall not exceed 20% of the Commencement Amount, and
(iii) during the period commencing 270 days and ending 90 days thereafter such
Transfers shall not exceed 25% of the Commencement
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Amount, provided, the limitations set forth in this paragraph 4(c) shall not
apply to an underwritten offering of Shares of Common Stock in which the
managing underwriter is willing to include stock owned by the Miletos
Stockholders and would yield not less than $5 million of gross proceeds for the
Company. The numerical limitations above shall be absolute for each period.
(d) Any Transfer or attempted Transfer of Stock in violation of any
provision of this Agreement shall be void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stock as the
owner of such Stock for any purpose.
Section 5. Tag-Along Rights.
5.1. Tag-Along. No Miletos Party shall Transfer more than [5%] shares
of Common Stock or Common Stock Equivalents, other than in connection with a
distribution to its stockholders, (as such number may be adjusted to reflect any
stock split, combination, dividend or other similar transaction) owned by such
Miletos Party in a single transaction or series of related transactions without
complying with the terms and conditions set forth in this Section 5.
5.2. Tag-Along Obligations. The Miletos Parties (the "Tag-Along
Initiator") desiring to Transfer any shares of Stock shall give not less than 20
days prior written notice of such intended Transfer to each Investor ("Tag-Along
Offeree") and to the Company. Such notice (the "Tag-Along Notice") shall set
forth the terms and conditions of such proposed Transfer, including the name of
the proposed transferee, the number of shares proposed to be transferred by the
Tag-Along Initiator (the "Tag-Along Shares"), the purchase price per share
proposed to be paid therefor and the payment terms and type of transfer to be
effectuated. Within 10 days after delivery of the Tag-Along Notice by the
Tag-Along Initiator to each Tag-Along Offeree and to the Company, each Tag-Along
Offeree shall, by written notice to the Tag-Along Initiator and the Company,
have the opportunity and right to sell to the transferee in such proposed
Transfer (upon the same terms and conditions as the Tag-Along Initiator) up to
that number of shares of such Stock owned by the Tag-Along Offeree as shall
equal the product of (x) a fraction, the numerator of which is the number of
shares of such Stock owned by the Tag-Along Offeree as of the date of the
Tag-Along Notice and the denominator of which is the aggregate number of shares
of such Stock owned as of the date of the Tag-Along Notice by the Tag-Along
Initiator and all of the Tag-Along Offerees, times (y) the number of shares of
such Stock owned as of the date of the Tag-Along Notice by the Tag-Along
Offeree; provided, however, that the number of shares of Stock to be sold by any
Tag-Along Offeree shall not exceed the same proportion as the number of shares
of Stock to be Transferred by the Tag-Along Initiator bears to the number of
shares of Stock held by the Tag-Along Initiator. The amount of Tag-Along Shares
to be sold by any Tag-Along Initiator shall be reduced to the extent necessary
to provide for such sales of shares by Tag- Along Offerees. No Person may
Transfer shares in any transaction that is subject to this Section 5 unless the
transferee agrees to be bound by and complies with the terms of this Agreement.
5.3. Closing. At the closing of any proposed Transfer in respect of
which a Tag-Along Notice has been delivered, the Tag-Along Initiator together
with all Tag-Along Offerees electing to sell shares, shall deliver, free and
clear of all liens, to the proposed transferee certificates evidencing the
shares to be sold thereto duly endorsed with transfer powers and shall
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receive in exchange therefore the consideration to be paid or delivered by the
proposed transferee in respect of such shares as described in the Tag-Along
Notice.
5.4. Limitations. The provisions of this Section 5 shall not apply to
(x) any Public Sale, or (y) any Permitted Transfer by a Stockholder.
Section 6. Certain Covenants.
6.1. Financial Statements, Other Information and Access. (a) The
Company shall deliver to each Investor:
(i) within 50 days after the end of each quarterly period (other
than the last quarterly period) in each fiscal year,
statements of consolidated operations and cash flows and a
statement of consolidated stockholder's equity of the
Company and its Subsidiaries for the period from the
beginning of the then current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of the
Company and its Subsidiaries as of the end of such quarterly
period, setting forth in each case in comparative form
figures for the corresponding period or date in the
preceding fiscal year, all in reasonable detail and
certified by the Chief Financial Officer of the Company,
subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (iii)
below of a copy of the Quarterly Report on Form 10-Q of the
Company for such quarterly period filed with the Commission
shall be deemed to satisfy the requirements of this clause
(i);
(ii) within 105 days after the end of each fiscal year,
statements of consolidated operations and cash flows and a
statement of changes in consolidated stockholder's equity of
the Company and its Subsidiaries for such year, and a
consolidated balance sheet of the Company and its
Subsidiaries as of the end of such year, setting forth in
each case in comparative form the corresponding figures from
the preceding fiscal year, all in reasonable detail and
examined and certified, without qualification by independent
public accountants of recognized national standing selected
by the Company; provided, however, that delivery pursuant to
clause (iii) below of a copy of the Annual Report on Form
10-K of the Company for such fiscal year filed with the
Commission shall be deemed to satisfy the requirements of
this clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports
it sends to its stockholders and copies of all such
registration statements (without exhibits), other than
registration statements relating to employee benefit or
dividend reinvestment plans, and all such regular and
periodic reports as it shall file with the Commission; and
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(iv) with reasonable promptness, such other information and
financial data concerning the Company as any Person entitled
to receive information under this Section 6.1 may reasonably
request, provided the information and financial data it can
be provided at reasonable cost and expense.
(b) The Company will permit each Investor and its representatives,
upon reasonable advance notice, to visit and inspect, during normal business
hours and at the Investor's expense, any of the properties of the Company and
its Subsidiaries, to examine the corporate books and make copies or extracts
therefrom and to discuss the affairs, finances and accounts of the Company and
its Subsidiaries with the senior management officers of the Company as well as
the accountants of the Company; provided, that, without the Company's consent,
which shall not be unreasonably withheld, the Investors' right to visit and
inspect the Company's properties shall not exceed four times a year.
(c) Each Investor agrees to hold in confidence and not use or disclose
any "confidential information" provided to or learned by it in connection with
its rights under this Agreement, and will inform its agents of their agreement
in this regard. The term "confidential information" means material marked
"confidential" by the Company or such information is disclosed orally, if
proceeded by a statement that such information is confidential information and
such statement is reduced to writing within 5 business days and notice is given
to the party receiving the information, but does not include information that
(a) is or becomes generally available to the public other than as a result of
disclosure by the Investor in violation of this Agreement; (b) was available to
the Investor on a nonconfidential basis prior to its disclosure to the Investor;
(c) was already lawfully in the Investor's possession; (d) becomes available to
the Investor on a nonconfidential basis from a source other than the Company,
provided that, to the Investor's knowledge, such source is not bound by
confidentiality agreements with the Company; or (e) is independently developed
by the Investor.
6.2 Right of the Investors to Designate Directors. (a) The Company and
the Miletos Parties shall cause one person designated by the Investors to be
nominated, and shall use its best efforts to cause such person to be elected
(which, in the case of the Miletos Parties, shall include their affirmative vote
in favor of Investors' nominee), to the Board of Directors of the Company
effective, without any further action, within five days after such person is
designated and at each annual meeting of stockholders occurring thereafter (any
person designated by the Investors pursuant to this Section 6.2 from time to
time, a "Investor Designee"). In connection with any annual meeting of
shareholders at which the term of the Investor Designee is to expire, the
Company will take all necessary action to include the Investor Designee as one
of management's nominees for director and use the same efforts to cause such
Investor Designee to be elected to the Board of Directors of the Company as are
used with respect to management's other nominees. In the event of any vacancy
arising by reason of the resignation, death, removal or inability to serve of
any Investor Designee, the Investors shall be entitled to designate a successor
to fill such vacancy for the unexpired term. The Company further agrees that the
Investors shall be entitled to designate a non-voting observer to attend and
participate in (but not to vote at) all meetings of the Board of Directors of
the Company and any committee of the Board (the "Non-voting Observer"). The
Non-voting Observer shall have the same access to information concerning the
business and operations of the Company and its Subsidiaries and at the same time
as directors of the Company, and shall be entitled to participate in discussions
and consult with the Board of Directors of the Company without voting. The
Investor Designee shall
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be subject to the reasonable approval of the Company except if the Investor
Designee is Xxxxxx Xxxxxxxx or Xxxxxx X. Xxxxxx, MBA, X.X. or a bona fide
employee of, or regular consultant to, Investors or any of their Affiliates (in
which case such approval shall not be necessary).
(b) The Company and the Investors acknowledge that the provisions of
this Agreement, including 6.2(a) are intended to provide the Investors with
"Contractual Management Rights" within the meaning of ERISA and the regulations
promulgated thereunder.
6.3 Board and Committee Notice Requirement. In addition to any
requirements specified in the By-Laws of the Company, the Company shall notify
the Investors, the Investor Designee and the Non-voting Observer, by telecopy,
of (a) every meeting (or action by written consent) of the Board of Directors of
the Company and (b) every meeting (or action by written consent) of the board of
directors of any Subsidiary and of any committee of the Board of Directors of
the Company or any Subsidiary, at least three days in advance of such meeting
(or distribution of written consents).
6.4 Action by the Board of Directors. Without the approval of the Board
of Directors of the Company that includes the affirmative vote of the Investor
Designee, the Company shall not, in a single transaction or a series of related
transactions, at any time after the date hereof, directly or indirectly: (a)
issue any equity securities at a price per share of Common Stock (or, in the
case of Common Stock Equivalents (as defined in Section 1), having a conversion
price per share of Common Stock) less than 80% of the Market Price of the Common
Stock, (b) acquire, sell, lease, transfer or otherwise dispose of any assets
other than in the ordinary course of business consistent with past practice, (c)
make any capital expenditure in excess of $100,000 per fiscal year or not in
accordance with the annual budget approved by the Company's Board of Directors
including the affirmative vote of the Investor Designee for the then current
fiscal year, (d) amend, supplement, modify or repeal any provision of the
Certificate of Incorporation or By-Laws of the Company or take any other action,
including, without limitation, the adoption of a stockholders' rights plan or
similar plan, or the consummation of a capital stock repurchase or redemption,
(e) modify, extend or renew the agreements set forth on Schedule 6.4(e) thereto,
(f) enter into any material transaction with Xxxxxxx Xxxxxxxx or his Affiliates,
(g) issue any equity securities having superior voting rights or dividend or
liquidation preference over Common Stock for consideration other than tangible
property at fair market value or cash, or (h) until the Company shall have
raised not less than $3 million of equity financing after the Closing Date at a
minimum average price per share of $1.75, make any expenditure or commitment
that deviates in any material respect from the budget annexed hereto as Schedule
6.5(h). For the purpose of this Section 6.4, "Market Price" means the average of
the daily mid-points between the closing bid and asked prices for the Company's
Common Shares as reported in the Over-the-Counter Bulletin Board, for the twenty
(20) most recent trading days for which such information is available preceding
the date of determination as shown by Bloomberg LP or a similar service.
6.5 Reimbursement of Certain Expenses. The Company shall, upon
request therefor, promptly reimburse the Investor Designee (and, to the extent
that the Investor Designee shall not attend or charge therefor, the Non-voting
Observer) for all reasonable expenses incurred by him in connection with his
attendance at meetings of the Board of Directors or of committees of the Board
of Directors and any other activities undertaken by him in his capacity as a
director of the Company or any Subsidiary or observer, as applicable to the same
extent as the Company would reimburse any other director in respect of such
activities. The foregoing shall be in addition to,
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and not in lieu of (or in duplication of), any indemnification or reimbursement
obligations of the Company under the Certificate of Incorporation or By-Laws of
the Company or by Law. The Non-voting Observer shall be entitled to
indemnification from the Company to the maximum extent permitted by Law as
though he or she were a director of the Company or the Subsidiary.
6.6 Directors' Indemnification; Insurance. (a) To the extent
commercially available, the Company shall at all times maintain directors' and
officers' liability insurance comparable in terms and coverage to that
maintained on the date hereof, and the Investor Designee shall be covered under
such insurance.
(b) The Certificate of Incorporation, By-laws and other organizational
documents of the Company shall at all times, to the fullest extent permitted by
law, provide for indemnification of, advancement of expenses to, and limitation
of the personal liability of, the members of the Board of Directors of the
Company, and to any Non-Voting Observer as though he or she were a director of
the Company. Such provisions may not be amended, repealed or otherwise modified
in any manner adverse to any member of the Board of Directors or Non-Voting
Observer of the Company until at least six years following the date that the
Investor Designee is no longer a member of the Board of Directors of the
Company.
(c) The Investor Designee and any Non-Voting Observer is intended to
be a third-party beneficiary of the obligations of the Company pursuant to this
Section 6.7, and the obligations of the Company pursuant to this Section 6.7
shall be enforceable by the Investor Designee and the Non-voting Observer.
Section 7. Conflicting Agreements. Each Stockholder represents and warrants
that such Stockholder has not granted and is not a party to any proxy, voting
trust or other agreement which is inconsistent with or conflicts with any
provision of this Agreement, and no holder of Stock shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with
or conflicts with any provision of this Agreement.
Section 8. Legend.
(a) Each Stockholder and the Company shall take all such action
necessary (including exchanging with the Company certificates representing
shares of Stock issued prior to the date hereof) to cause each certificate
representing outstanding shares of Stock beneficially owned by such Stockholder
to bear a legend containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR
OTHERWISE DISPOSED OF (i) UNLESS (A) REGISTERED UNDER SUCH ACT AND ANY
APPLICABLE STATE SECURITIES AND "BLUE SKY" LAWS OR (B) AN OPINION OF COUNSEL
SATISFACTORY TO XXXXXX.XXX, INC. (THE "COMPANY") THAT SUCH REGISTRATION IS NOT
NECESSARY HAS BEEN DELIVERED TO THE COMPANY OR (ii) UNLESS SOLD PURSUANT TO AND
IN COMPLIANCE WITH RULE 144 OF SUCH ACT AND APPLICABLE SECURITIES OR "BLUE SKY"
LAWS."
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"IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND TO THE VOTING AGREEMENTS SET FORTH IN THE
STOCKHOLDERS' AND VOTING AGREEMENT DATED AS OF __________, 2004 BY THE COMPANY
AND THE PARTIES THERETO, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE
COMPANY."
(b) The requirement that the above securities legend be placed upon
certificates evidencing shares of Stock shall cease and terminate upon the
earliest of the following events: (i) when such shares are transferred in an
underwritten public offering, (ii) when such shares are transferred pursuant to
Rule 144 under the Securities Act or (iii) when such shares are transferred in
any other transaction if the seller delivers to the Company an opinion of its
counsel, which counsel and opinion shall be reasonably satisfactory to the
Company to the effect that such legend is no longer necessary in order to
protect the Company against a violation by it of the Securities Act upon any
sale or other disposition of such shares without registration thereunder. The
requirement that the above legend regarding this Agreement be placed upon
certificates evidencing shares of Stock shall cease and terminate upon the sale
of such shares of Stock pursuant to a Public Sale. Upon the consummation of any
event requiring the removal of a legend hereunder, the Company, upon the
surrender of certificates containing such legend, shall, at its own expense,
deliver to the holder of any such shares as to which the requirement for such
legend shall have terminated, one or more new certificates evidencing such
shares not bearing such legend.
Section 9. Representations and Warranties.
(a) Each party hereto represents and warrants to the other parties
hereto as follows:
(i) It has full power and authority to execute, deliver and
perform its obligations under this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by it, and constitutes a valid and
binding obligation of it, enforceable against it in
accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally.
(iii) The execution, delivery and performance of this Agreement by
it does not (x) violate, conflict with, or constitute a
breach of or default under its organizational documents, if
any, or any material agreement to which it is a party or by
which it is bound or (y) violate any law, regulation, order,
writ, judgment, injunction or decree applicable to it.
(iv) No consent or approval of, or filing with, any governmental
or regulatory body is required to be obtained or made by it
in connection with the transactions contemplated hereby.
(v) It is not a party to any agreement which is inconsistent
with the rights of any party hereunder or otherwise
conflicts with the provisions hereof.
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(b) Each Stockholder represents and warrants to the Investors that
Schedule 9(b) hereto sets forth a list of all securities of the Company
(including, without limitation, shares of capital stock, convertible securities,
debentures, etc.) held of record or beneficially owned by such Stockholder
immediately after the date hereof. All such securities are free and clear of any
liens, encumbrances, rights of first refusal or other rights of third parties of
any nature with respect thereto.
(c) Each Stockholder represents and warrants that, except as set
forth on Schedule 9(b) hereto and other than this Agreement, the Miletos Escrow
and the Registration Agreement, such Stockholder is not a party to any contract
or agreement, written or oral, with respect to the securities of the Company
(including, without limitation, any voting agreement, voting trust,
stockholder's agreement, registration rights agreement, etc.).
Section 10. Duration of Agreement. The rights and obligations of a Stockholder
under this Agreement shall terminate at such time as such Stockholder no longer
is the beneficial owner of any shares of Stock. This Agreement shall terminate
the earlier of two years after the date hereof, or at such time as the Investors
own shares of Common Stock that constitute a percentage of the outstanding
shares of Common Stock owned by Investors on the date of determination which is
less than half of the percentage of the Company's outstanding shares of Common
Stock owned by them on the effective date of this Agreement.
Section 11. Further Assurances. At any time or from time to time after the
date hereof, the parties agree to cooperate with each other, and at the request
of any other party, to execute and deliver any further instruments or documents
and to take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
Section 12. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or any Stockholder unless such modification,
amendment or waiver is approved in writing by the Company, and Stockholders,
excluding the Miletos Parties, owning at least a majority of the outstanding
shares of Stock and the Miletos Parties. The failure of any party to enforce any
of the provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
Section 13. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 14. Entire Agreement; Effect on Prior Agreements. Except as otherwise
expressly set forth herein, this document and the other documents dated the date
hereof embodies the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or
10
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. Without limiting the generality of the
foregoing, to the extent that any of the terms hereof are inconsistent with the
rights or obligations of any Stockholder under any other agreement with the
Company, the terms of this Agreement shall govern.
Section 15. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and each Stockholder and their respective
successors, assigns, heirs and personal representatives, so long as they hold
Stock. Except pursuant to a Permitted Transfer or a Transfer of Stock in
compliance with Section 5, no Stockholder shall have the right to assign its
rights and obligations under this Agreement, without the consent of each of the
other Stockholders.
Section 16. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
Section 17. Remedies. Each Stockholder shall be entitled to enforce its rights
under this Agreement specifically to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that each
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
Section 18. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the signature pages hereto and to any
subsequent holder of Stock subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given hereunder when
delivered personally, three days after deposit in the U.S. mail and one day
after deposit with a reputable overnight courier service. The Company's address
is:
XXXxxx.xxx, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
11
The Stockholders' address for notice purposes is:
The address set forth below their respective names on the signature pages
hereto;
In the case of the Miletos Parties, with a copy to:
Xxxxxx XxXxxxxxxx & Marcus, P.A.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: G. Xxxxxx Xxxxxx, Esq.
In the case of Investors, with a copy to:
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Section 19. Governing Law, Consent to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of law thereof.
Section 20. Miscellaneous. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
This Agreement is intended to be a voting agreement among stockholders as
permitted by Section 218(c) of the Delaware General Corporation Law.
Section 21. Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders'
and Voting Agreement on the day and year first above written.
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
SCARBOROUGH LTD.
By: /s/ Xxxxx Xxxxx
-------------------------------
Name:
Title:
Address:
STORTFORD HOLDING LIMITED
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Trustee
Address: 9
Columbus Centre
Pelican Drive
Road Town, Tortola BVI
TARGET GROWTH FUND, LTD.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name:
Title: Authorized signatory
Address: Chancery Hall
00 Xxxx Xxxxxx
Xxxxxxxx XX 12 Bermuda
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxx
13
/s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx by Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx by Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx by Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx by Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxx
PATRAS HOLDINGS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
,Managing Member
XXXXXXX XXXXXXXX
FAMILY LIMITED PARTNERSHIP
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
,Managing Partner
14
XXXXX XXXXXXXX
FAMILY PARTNERSHIP, LTD
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
,Managing Partner
XXXXXX XXXXXXXXXX & MARCUS, P.A
By:
------------------------------------
,Managing Partner
15
SCHEDULE 6.4 (E)
Consulting Agreement dated _____, 2004 between the Company and Xxxxxxx Xxxxxxxx.
Employment Agreement dated _____, 2004 between the Company and Xxxx Xxxxxxxx.
Miletos Escrow Agreement
Agreement and Plan of Merger
16
SCHEDULE 6.4 (H)
BUDGET
17
SECURITIES HOLDINGS
INVESTORS: STOCKHOLDER COMMON EQUIVALENTS TOTAL
---------------------- ------ ----------- -----
Xxxxxx X. Xxxxxxxx 1,081,261 -0- 1,081,261
Target Growth Fund Ltd. 770,000 -0- 770,000
Stortford Holding Limited 537,810 -0- 537,810
Scarborough Limited 385,000 -0- 385,000
COMMON
MILETOS PARTIES LESS ESCROW ESCROW CONTINGENT EQUIVALENTS TOTAL
--------------- ----------- ------ ---------- ----------- -----
Xxxxxxx Xxxxxxxx 500,000 50,592 0 0 0
Xxxxx Xxxxxxxx 733,639 75,588 16,361 0 825,588
Xxxxx Holdings LLC 1,956,371 201,568 43,629 0 2,201,568
Xxxxxxx Xxxxxxxx
Family Limited Partnership 450,129 46,377 10,038 0 506,544
Xxxxx Xxxxxxxx 0 0 0 0 0
Family Partnership Ltd.
Xxxxxxx Xxxxxxxx 733,639 75,588 16,361 0 825,588
Xxxxxx Xxxxxxxx 733,639 75,588 16,361 0 825,588
Xxxxxx Xxxxxxxx 733,639 75,588 16,361 0 825,588
Xxxx Xxxxxxxx 978,185 100,784 21,815 0 1,100,784
Xxxx Xxxxxxxx 0 0 0 1,380,00 1,380,000
Xxxxxx XxXxxxxxxx & Xxxxxx, P.A 1,876,328 0 0 0 1,876,328
18
