Exhibit 10.8
QUANTUM MAGNETICS, INC.
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement") is made and entered into
this 10th day of April, 1997, by and among Quantum Magnetics, Inc., a California
corporation (the Company"), those certain holders of the Company's Common
Stock listed on Exhibit A hereto (the "Key Shareholders") and the person or
entity listed on Exhibit B hereto (the "Investor").
WITNESSETH:
WHEREAS, the Key Shareholders are the beneficial owners of an aggregate
of five million seventy eight thousand three hundred seventy five (5,078,375)
shares of the capital stock of the Company; and
WHEREAS, the Company proposes to sell shares of its Series D Preferred
Stock (the "Series D Preferred Stock") to the Investor pursuant to terms of
the Series D Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement");
WHEREAS, in connection with the consummation of the transactions
contemplated by the Purchase Agreement (the "Financing"), the Company, the
Key Shareholders and the Investor have agreed to provide for the future
voting of their shares of the Company's capital stock as set forth below.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
VOTING
1.1 COMMON SHARES; INVESTOR SHARES.
(a) The Key Shareholders each agree to hold all shares of voting capital
stock of the Company registered in their respective names or beneficially
owned by them as of the date hereof, and any and all other securities of the
Company legally or beneficially acquired by each of the Key Shareholders
after the date hereof, (hereinafter collectively referred to as the "Key
Shareholder Shares") subject to, and to vote the Key Shareholder Shares in
accordance with, the provisions of this Agreement.
(b) The Investor agrees to hold all shares of voting capital stock of
the Company now owned or hereinafter acquired by it (including but not
limited to all shares of Common Stock issued upon conversion of the Series D
Preferred Stock) registered in its name or beneficially
1.
acquired by the Investor after the date hereof (hereinafter collectively
referred to as the "Investor Shares") subject to, and to vote the Investor
Shares in accordance with, the provisions of this Agreement.
1.2 VOTING.
(a) At each election of directors in which the holders of Common Stock
and holders of Preferred Stock, voting together as a single class, are
entitled to elect directors of the Company, the Key Shareholders and the
Investor shall consult each other and shall vote their respective shares of
the Company's voting stock such that (i) two directors will be nominees of
the holders of a majority in interest of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Common Stock, voting
together as a single class on an as-if-converted basis; (ii) two directors
shall be the nominee of the holders of the Series A Preferred and Series C
Preferred voting together as a single class on an as-if-converted basis,
(iii) two directors shall be the nominee of the holders of a majority in
interest of Series B Preferred and Common Stock, voting together as a single
class on an as-if-converted basis; and (iv) one director shall be the nominee
of the holders of the Series D Preferred, voting as a separate class.
(b) Except as otherwise permitted pursuant to Section 1.2(c) hereof,
during the period beginning upon the Series D Closing (as defined in the
Purchase Agreement) and ending eight months thereafter, at any time from that
day forth in which the holders of Common Stock and holders of Preferred
Stock, voting together as a single class, are entitled to elect directors of
the Company, the Key Shareholders and Investors shall consult each other and
shall vote their respective shares of the Company's voting stock such that,
if at any time during the aforesaid eight-month period, the Company (i) seeks
out, is approached by a third party with, or otherwise receives an offer to
enter into a joint development agreement or relationship, a license or other
transfer of technology rights, or any other technology development
relationship with a third party, for the development of any explosive
detection system for use in the field of aviation security or drug detection
with a third party, (ii) seeks to increase or decrease the authorized number
of shares of the Common Stock of the Company, (iii) takes any action which
results in the creation (by reclassification or otherwise) of any new class
or series of shares having rights, preferences or privileges senior to or on
a parity with the Series D Preferred, (iv) takes any action which results in
the redemption of any shares of Common Stock (other than pursuant to employee
agreements), (v) takes any action which results in any merger, other
corporate reorganization, sale of control, or any transaction in which all or
substantially all of the assets of the Company are sold, (vi) takes any
action which results in any sale, lease, assignment, transfer or other
conveyance out of the ordinary course of business of assets of the Company or
any corporation more than 50% of whose outstanding voting stock is owned by
the Company ("Subsidiary") which involves an aggregate consideration of more
than 50% of the book value of the Corporation's consolidated assets, or any
merger, reorganization or recapitalization of the Corporation resulting in a
change in control of equity securities holding more than 50% of the voting
power of the Company's equity securities, or make any agreement or become
obligation to do so, unless the obligations of the Company under such
agreement are expressly conditioned upon the approval required hereby, the
holders of the Common Stock, Series A Preferred, Series
2.
B Preferred and Series C Preferred shall vote their shares as directed by the
holders of a majority of the Series D Preferred with respect to such
transaction or, in the event that no shareholder vote is required, shall
direct their respective board representatives to vote in accordance with the
recommendation of the board representative of the Series D Preferred.
(c) The parties agree that this Shareholder Agreement shall not require
them to vote their shares or direct their representatives on the Company's
Board of Directors so as to prevent the Company from engaging in a merger,
acquisition or sale of substantially all of the assets of the Company in
which the shareholders of the Company do not own a majority of the
outstanding shares of the surviving corporation.
1.3 LEGEND.
(a) Concurrently with the execution of this Agreement, there shall be
imprinted or otherwise placed, on certificates representing the Key
Shareholder Shares and the Investor Shares the following restrictive legend
(the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS AGREEMENT WHICH PLACES CERTAIN
RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON
ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND
SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF
SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF
THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO QUANTUM
MAGNETICS, INC. AT ITS PRINCIPAL PLACE OF BUSINESS."
(b) The Company agrees that, during the term of this Agreement, it
will not remove, and will not permit to be removed (upon registration of
transfer, reissuance of otherwise), the Legend from any such certificate
and will place or cause to be placed the Legend on any new certificate
issued to represent Key Shareholder Shares or Investor Shares
theretofore represented by a certificate carrying the Legend.
1.4 SUCCESSORS. The provisions of this Agreement shall be binding upon the
successors in interest to any of the Key Shareholder Shares or Investor
Shares. The Company shall not permit the transfer of any of the Shareholder
Shares or Investor Shares on its books or issue a new certificate
representing any of the Shareholder Shares or Investor Shares unless and
until the person to whom such security is to be transferred shall have
executed a written Agreement, substantially in the form of this Agreement,
pursuant to which such person becomes a party to this Agreement and agrees to
be bound by all the provisions hereof as if such person were a Key
Shareholder or Investor, as applicable.
1.5 OTHER RIGHTS. Except as provided by this Agreement, each Key
Shareholder and Investor shall exercise the full rights of a shareholder with
respect to the Key Shareholder Shares and the Investor Shares, respectively.
3.
ARTICLE II
TERMINATION
2.1 This Agreement shall continue in full force and effect from the date
hereof through the earliest of the following dates, on which it shall
terminate in its entirety:
(a) the date of the closing of a firmly underwritten public offering of
the Company's Common Stock pursuant to a registration statement filed with,
and declared effective under the Securities Act of 1933, as amended; or
(b) at such time as the Investors hold less than One Hundred Thousand
(100,000) shares of Preferred Stock (as adjusted for stock splits and the
like); or
(c) ten (10) years from the date of this Agreement; or
(d) the date as of which the parties hereto terminate this Agreement by
written consent of a majority in interest of the Investors and a majority in
interest of the Key Shareholders.
ARTICLE III
MISCELLANEOUS
3.1 OWNERSHIP. Each Key Shareholder represents and warrants to the Investor
that (a) he or she now owns the Key Shareholder Shares free and clear of
liens or encumbrances, and has not, prior to or on the date of this
Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than one which has expired or
terminated prior to the date hereof, and (b) such Key Shareholder has full
power and capacity to execute, deliver and perform this Agreement, which has
been duly executed and delivered by, and evidences the valid and binding
obligation of, such Key Shareholder enforceable in accordance with its terms.
3.2 FURTHER ACTION. If and whenever the Key Shareholder Shares are sold,
the Key Shareholders or the personal representative of the Key Shareholders
shall do all things and execute and deliver all documents and make all
transfers, and cause any transferee of the Key Shareholder Shares to do all
things and execute and deliver all documents, as may be necessary to
consummate such sale consistent with this Agreement.
3.3 SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party
hereto or to their heirs, personal representatives, or assigns by reason of a
failure to perform any of the obligations under this Agreement and agree that
the terms of this Agreement shall be specifically enforceable. If any party
hereto or his heirs, personal representatives, or assigns institutes any
action or proceeding to specifically enforce the provisions hereof, any
person against whom such action or proceeding is brought hereby waives the
claim or defense therein that such party or such personal
4.
representative has an adequate remedy at law, and such person shall not offer
in any such action or proceeding the claim or defense that such remedy at law
exists.
3.4 GOVERNING LAW. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State
of California as such laws apply to agreements among California residents
made and to be performed entirely within the State of California.
3.5 AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by the Company, a majority in interest of the Investors and a
majority in interest of the Key Shareholders.
3.6 SEVERABILITY. If any provision of this Agreement is held to be invalid
or unenforceable, the validity and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
3.7 SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
3.8 ADDITIONAL SHARES. In the event that subsequent to the date of this
Agreement any shares or other securities (other than any shares or securities
of another corporation issued to the Company's shareholders pursuant to a
plan of merger) are issued on, or in exchange for, any of the Key Shareholder
Shares or Investor Shares by reason of any stock dividend, stock split,
consolidation of shares, reclassification or consolidation involving the
Company, such shares or securities shall be deemed to be Key Shareholder
Shares or Investor Shares, as the case may be, for purposes of this Agreement.
3.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which
together shall constitute one and the same agreement.
3.10 WAIVER. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights
or remedies of any other party hereto or with respect to any subsequent
breach.
3.11 ATTORNEY'S FEES. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party shall be
entitled to all costs and expenses of maintaining such suit or action,
including reasonable attorneys' fees.
3.12 ENTIRE AGREEMENT. This Agreement, the Purchase Agreement and the
Related Agreements (as such term is defined in the Purchase Agreement)
constitute the entire agreement of the parties concerning the matters set
forth herein, and supercede all prior and contemporaneous agreements and
understandings. In the event of a conflict between this Agreement and the
Purchase Agreement and/or the Related Agreements as to any matter set forth
herein, the terms of this Agreement shall control.
5.
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders Agreement as of the date first above written.
COMPANY: INVESTOR:
QUANTUM MAGNETICS, INC. INVISION TECHNOLGIES, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------------- ------------------------------
Xxxx Xxxxxx, President Xxxxxx Xxxxxxxx, CEO
KEY SHAREHOLDERS:
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx
----------------------------------------
Xxxx X. Xxxxxxx, Trustee of the Xxxx X.
Xxxxxxx Trust dated 5/20/94
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Ice
----------------------------------------
Barton G. Ice
/s/ Xxxxxxx Ice
----------------------------------------
Xxxxxxx Ice, Trustee of the Xxxxxxxx Xxxxxxx
Ice Testamentary Trust, dated 12/20/82
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx,
Trustee Under Trust Dated 6/24/82
6.
/s/ Xxxxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxxxx X. Xxxxx,
Trustee Under Trust Dated 6/24/82
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx
Quantum Design
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
Title: Chief Operating Officer
/s/ Xxxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxxx X. Xxxxxxx
TVM Eurotech Limited Partnership
By: TVM Techno Venture Management Limited Partnership,
Its: General Partner
By: TVM Management Corporation,
Its: General Partner
By: /s/ Xxx X. Xxxx
----------------------------
Title: Treasurer
----------------------------
TVM Intertech Limited Partnership
By: TVM Techno Venture Management Limited Partnership,
Its: General Partner
By: TVM Management Corporation,
Its: General Partner
By: Xxx X. Xxxx
----------------------------
Title: Treasurer
----------------------------
7.
TVM Techno Venture Enterprises No. Ii Limited Partnership
By: TVM Techno Venture Management Limited Partnership,
Its: General Partner
By: TVM Management Corporation,
Its: General Partner
By: Xxx X. Xxxx
----------------------------
Title: Treasurer
----------------------------
TVM Techno Venture Investors No. 1 Limited Partnership
By: Xxx X. Xxxx
----------------------------
Title: General Partner
TVM Zweite Beteilgung-Us Limited Partnership
By: TVM Techno Venture Management Limited Partnership,
Its: General Partner
By: TVM Management Corporation,
Its: General Partner
By: Xxx X. Xxxx
----------------------------
Title: Treasurer
----------------------------
/s/ Xxxxx Xxx
----------------------------------------
Xxxxx Xxx
/s/ Xxxxxx Xxxxx
----------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxx
Signal Ventures
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Title: Partner
----------------------------
8.
EXHIBIT A
LIST OF KEY SHAREHOLDERS
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES OF
NAME/ADDRESS OF SERIES A PREFERRED OF SERIES B PREFERRED OF SERIES C PREFERRED COMMON STOCK
------------------------ --------------------- --------------------- --------------------- -------------------
Xxxxxx X. Xxxxxxx 34,907 60,000 636,073
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Xxxxx Xxx 20,000 201,566
00000 Xxxxxxxx Xxxxxx
Xxxx
Xxx Xxxxx, XX 00000
Xxxx X. Xxxxxxx, 166,000 50,000 20,000
Trustee of the
Xxxx X. Xxxxxxx Trust
dated 5/20/94
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Barton G. Ice 25,000 213,611 84,400
c/o Xxxx X. Xxxxx
Company
Xxx Xxxxxxxxxxx Xxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxx and 16,667 35,601 20,000 35,000
Xxxxxxxxx X. Xxxxx
Trustees Under Trust
Dated 6-24-82
0000 Xxxxxxx Xxxxx
Xx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx 236,566
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxx 20,000
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
Quantum Design, Inc. 869,036 125,001
00000 Xxxxxxxx Xxxxxx
Xxxx
Xxx Xxxxx, XX 00000
Xxxxxx Xxxxx 201,566
00000 Xxxxxxxx Xxxxxx
Xxxx
Xxx Xxxxx, XX 00000
9.
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES OF
NAME/ADDRESS OF SERIES A PREFERRED OF SERIES B PREFERRED OF SERIES C PREFERRED COMMON STOCK
------------------------ --------------------- --------------------- --------------------- -------------------
Signal Ventures 66,667 213,611 99,120
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX
00000
Xxxxxxx Xxxxxxxx 235,228
00000 Xxxxxxxx Xxxxxx
Xxxx
Xxx Xxxxx, XX 00000
Xxxxxxxx X. Xxxxxxx 142,088
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
TVM Eurotech Limited 186,667 60,000
Partnership
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
TVM Intertech Limited 186,667 60,000
Partnership
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
TVM Techno Venture 280,000 90,000
Enterprises
No. II Limited
Partnership
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
TVM Techno Venture 17,333
Investors
No. 1 Limited
Partnership
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
TVM Zweite 280,000 90,000
Beteilgung-US
Limited Partnership
000 Xxxx Xxxxxx, Xxxxx
0000
Xxxxxx, XX 00000
TOTAL 1,225,001 497,730 1,502,556 1,853,088
10.
EXHIBIT B
LIST OF INVESTORS
INVESTOR SERIES D PREFERRED
-------- ------------------
InVision Technologies, Inc. 1,185,700
11.
