EXHIBIT 10.12
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XxXxxxxx.xxx, Inc.
FIRST REFUSAL AGREEMENT
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This Agreement is made as of October 25, 1999 by and among XxXxxxxx.xxx,
Inc., a Delaware corporation (the "Corporation"), and the undersigned holders of
common stock, $.001 par value ("Common Stock"), of the Corporation (including
holders of options to purchase Common Stock) and each person or entity who
subsequently becomes party hereto pursuant to Paragraph 1.5 or 1.7 hereof (each
individually, a "Shareholder" and, collectively, the "Shareholders").
PREAMBLE
A. Each Shareholder holds the number of shares of Common Stock set forth
below opposite his signature, representing in the aggregate all of the issued
and outstanding shares of Common Stock.
B. The Shareholders and the Corporation desire to provide for the
continuity and maintenance of the proficient management, control and operation
of the business of the Corporation.
C. The Shareholders recognize that to accomplish their objectives they
should restrict the transfer of Shares of the Corporation's equity now or
hereafter owned by the Shareholders ("Shares") and provide for certain other
matters.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, the parties hereto hereby agree as follows:
1. Voluntary Transfers.
1.1. No Shareholder shall assign, exchange, encumber, pledge, transfer, or
otherwise dispose of any Shares in whole or in part except pursuant to the terms
of this Agreement. Any Shareholder (an "Offering Shareholder") may sell any
Shares owned or deemed by the terms of this Agreement to be owned by him to a
bona fide purchaser as provided herein, except that no such sale shall be made
unless and until the Offering Shareholder shall have first made the offers to
sell required by Paragraph 1.2 hereof and such offers shall not have been
accepted in accordance with the provisions of Paragraphs 1.3, 1.4 and 1.5
hereof.
1.2. The Offering Shareholder shall deliver to the Corporation and each
other Shareholder a notice of the Offering Shareholder's intention to sell
Shares setting forth (i) the number of Shares which the Offering Shareholder
intends to sell, (ii) the terms of the intended sale, and (iii) an offer from
the Offering Shareholder to sell to the Corporation and, if such Corporation
fails to accept timely such offer, to the other Shareholders, the Shares which
the Offering Shareholder intends to sell upon terms identical to those set forth
with respect to the proposed sale (the "Shareholder's Offer").
1.3. The Corporation may, at its option, by giving written notice to the
Offering Shareholder within thirty (30) days of the Shareholder's Offer, elect
to accept the Shareholder's Offer and purchase from the Offering Shareholder,
for the total purchase price and upon all of the other terms specified in the
Shareholder's Offer, all (but not less than all) of the Shares referred to in
the Shareholder's Offer.
1.4. If the Corporation shall fail to exercise its option to accept the
Shareholder's Offer in accordance with the foregoing Paragraph 1.3, each other
Shareholder may, at his option, by giving written notice to the Offering
Shareholder within thirty (30) days after the termination of the thirty (30) day
period set forth in the foregoing Paragraph 1.3, elect to accept the
Shareholder's Offer and purchase from the Offering Shareholder for the total
purchase price and upon all of the other terms specified in the Shareholder's
Offer, all (but not less than all) of the Shares referred to in the
Shareholder's Offer. If more than one other Shareholder exercises his option
hereunder, the exercising Shareholders shall be entitled to purchase the Shares
referred to in the Shareholder's Offer pro rata in proportion to the respective
number of Shares then owned by such Shareholders.
1.5. If the Corporation and the other Shareholders shall fail to exercise
their respective options to accept the Shareholder's Offer in accordance with
the foregoing Paragraphs 1.3 and 1.4, the Offering Shareholder may by a bona
fide sale, transfer to a third party the Shares specified in the Shareholder's
Offer, provided, such sale shall be made only in strict accordance with the
terms set forth in the Shareholder's Offer, and provided, further, that the
third party shall, as a condition precedent to the sale of the Shares to him,
become a party to this Agreement by executing and delivering to the Corporation
an Instrument of Adherence in the form of Exhibit A annexed hereto, which
executed Instrument of Adherence shall thereupon become a part of this
Agreement. Notwithstanding anything to the contrary contained herein, the
Offering Shareholder shall have no right to sell any Shares to the third party
if the Corporation's or any other Shareholder's failure to exercise timely their
respective options to purchase pursuant to Paragraphs 1.3 and 1.4 hereof shall
have been caused by the acts or omissions of the Offering Shareholder. If the
Offering Shareholder shall fail to make the transfer provided for hereunder
within thirty (30) days after the expiration of the period specified for
acceptance of the Shareholder's Offer by the other Shareholders under Paragraph
1.4, then all of the Shares referred to in the Shareholder's Offer shall
thereupon become and thereafter be again subject, in the hands of the Offering
Shareholder, to all of the restrictions and provisions of this Agreement.
1.6. If the Corporation or any Shareholder shall timely elect to accept the
Shareholder's Offer, the closing shall be held within a reasonable time, not to
exceed thirty (30) days, after notice of such election shall have been given to
the Offering Shareholder pursuant to Paragraphs 1.3 or 1.4 hereof. The terms of
the Corporation's or any Shareholder's purchase shall be the same a those set
forth in the Shareholder's Offer.
1.7. Any shareholder of the Corporation may become a Shareholder party to
this Agreement by executing an Instrument of Adherence in the form of Exhibit A
annexed hereto, which executed Instrument of Adherence shall become a part of
this Agreement upon acceptance by the Corporation.
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2. Exceptions to Voluntary Transfer Restrictions. ss. 1 shall not bar a
transfer, assignment or sale of Shares by a Shareholder to, or for the benefit
of, such Shareholder's parents, siblings, spouse and issue, spouses of such
Shareholder's issue and any trust for the benefit of, or the legal
representative of, any of the preceding persons (each, an "Immediate Family
Member"), who shall take such Shares subject to all the limitations of this
Agreement. For purposes of this Agreement, such Shares transferred to an
Immediate Family Member during the lifetime of the present owner shall be deemed
to be owned and held by such present owner rather than by the transferee, and
prior to any such transfer, assignment or sale such transferee shall execute an
Instrument of Adherence in the form of Exhibit A annexed hereto, which executed
Instrument of Adherence shall thereupon become a part of this Agreement.
3. Options to Repurchase Shares.
(a) Default or Bankruptcy of a Shareholder. If any Shareholder
(including any Immediate Family Member to whom Shares are transferred), at any
time during the period of his, her or its ownership of Shares of the
Corporation, becomes bankrupt, insolvent or files any debtor's proceedings, or
takes or has taken against him, her or it any proceeding of any kind or
character whatsoever under any provisions of any applicable bankruptcy or
insolvency law seeking any readjustment, arrangement, composition, postponement
or reduction of debts, liabilities or obligations (in the case of an involuntary
proceeding, which is not dismissed or removed within sixty (60) days), or is
subject to a transfer of his, her or its Shares by operation of law, or commits
any breach of the agreements or provisions contained herein (the occurrence of
any such event being hereinafter called a "default"), the Corporation shall have
the option to purchase Shares owned by such Shareholder in default (the
"Defaulting Shareholder"), and by any of such Defaulting Shareholder's Immediate
Family Members to whom Shares were transferred, as hereinafter provided, without
prejudice to any other right or remedy which the Corporation may have under law
or pursuant to this Agreement.
(b) Exercise of Options; Closing. The Corporation may exercise the
option provided under paragraph (a) of this ss.3 by giving written notice of
exercise to the Shareholder (and any of the Shareholder's Immediate Family
Members to whom Shares were transferred) at any time after the right to exercise
such option arises (the "Option Notice"). Upon the giving of such Option Notice,
the Shareholder (and such Immediate Family Members) shall automatically be
deemed to have offered to sell all of his, her or its (and their respective)
Shares, and the Corporation shall be obligated to purchase such shares, with the
closing of the purchase and sale to take place within a reasonable time, not to
exceed ninety (90) days, after such Notice. At the closing, the selling
Shareholder (and any Immediate Family Members to whom Shares were transferred)
shall deliver to the Corporation the certificates representing his, her or its
(and their) Shares, together with a duly executed stock power sufficient to
transfer ownership of the Shares, and the Corporation shall pay for the Shares
at the purchase price and in the manner hereinafter provided.
(c) Purchase Price. The purchase price per Share shall be the book value
of the Corporation (as shown on the books of account of the Corporation kept in
the regular course of its business) divided by the total number of shares of the
Corporation's Common Stock issued and outstanding as of the last day of the
month immediately preceding the month on which the Option Notice is given ("Book
Value").
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(d) Method of Payment. At the closing provided in paragraph (c) hereof,
the Corporation shall pay an amount equal to the Book Value in full in cash or
by certified or bank check of the Corporation.
4. Transfer in Violation of Agreement. If any transfer of Shares is made or
attempted contrary to the provisions hereof, or if Shares are not offered to the
Corporation or the other Shareholders as required hereby, the Corporation or
such Shareholders shall have the right to purchase said Shares from a
transferring Shareholder or his transferee at any time before or after the
transfer, as hereinabove provided. In addition to any other legal or equitable
remedies which it may have, the Corporation may enforce its rights by actions
for specific performance (to the extent permitted by law) and may refuse to
recognize any transferee as one of its shareholders for any purpose, including
without limitation for purposes of dividend and voting rights, until all
applicable provisions hereof have been complied with.
5. Legend on Certificate. In order to effectuate the terms of this
Agreement, each certificate of stock issued to each of the Shareholders
evidencing ownership of Shares shall bear the following legend upon its face:
"The Shares of stock evidenced by this certificate are subject to
certain restrictions on their transfer contained in a certain agreement
to which the Corporation is a party. The Corporation will furnish a
copy of such agreement to the holder of this certificate upon written
request and without charge."
6. Miscellaneous.
6.1. All notices or communications provided for under this Agreement shall
be given in writing and by hand or by registered mail, return receipt requested,
postage prepaid, and shall be addressed
(a) in the case of a Shareholder, to him at his last residence or
business address shown in the records of the Corporation; and
(b) in the case of the Corporation, to the Corporation at its principal
place of business, Attention: President.
Notices given as hereinabove provided shall be deemed effective upon the earlier
of (i) receipt or (ii) four (4) days after deposit in the mails, postage
prepaid. Any party hereto may designate a change of address by written notice to
the other parties given at least ten (10) days before such change is to become
effective for purposes of this Agreement.
6.2. This Agreement shall terminate on the occurrence of any of the
following events:
(a) bankruptcy, receivership, liquidation or dissolution of the
Corporation;
(b) the closing of a firmly underwritten initial public offering of any
common stock of the Corporation;
(c) sale of all or substantially all of the assets of the Corporation;
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(d) as to any individual Shareholder, when he, his Immediate Family
Members to whom Shares have been transferred, and his executors and
administrators no longer own any Shares; or
(e) the execution of a written agreement of all the then remaining
parties effecting such termination.
6.3. This Agreement shall be binding upon, and inures to the benefit of the
parties hereto, their heirs, legal representatives, successors and assigns. The
rights of each Founder under Section 3 shall be personal to him and are not
assignable and shall terminate as to any Founder upon his death.
6.4. If any of the terms, provisions or conditions of this Agreement or the
application thereof in any circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such term,
provision or condition to circumstances other than those to which it is held
invalid or unenforceable shall not be affected thereby, and each of the terms,
provisions and conditions of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
6.5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
6.6. No assent, express or implied, by the Corporation or any Shareholder
to any breach in or default of any agreement or condition herein contained on
the party of any other Shareholder shall constitute a waiver of or assent to any
succeeding breach in or default of the same or any other agreement or condition
hereof.
6.7. In this Agreement, the use of any of the three genders shall be deemed
to include the other two. Furthermore, any notices, consents, offers, or other
actions required by a Shareholder that is not a natural person, shall be deemed
to apply and refer to the trustee or other then authorized individual of such
Shareholder at the time of such notice, consent, offer or other action.
6.8. No amendment or modification of this Agreement shall be valid unless
the same is in writing and signed by the Founders and those other parties hereto
holding a majority of the aggregate issued and outstanding shares of Common
Stock held by all the other parties hereto.
6.9. The headings in this Agreement are for convenience of identification
only, do not constitute a part hereof, and shall not affect the meaning or
construction hereof.
6.10. This Agreement may be executed in one or more counterparts, each of
which when executed shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument. In making proof of this
Agreement it shall not be necessary to produce or account for more than one such
counterpart.
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IN WITNESS WHEREOF, this Agreement has been executed under seal by the
parties hereto as of the day and year first above written.
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
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Title: President
SHAREHOLDER
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Name: Number of Shares
Title:
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