EXHIBIT 9.0
AVATAR SYSTEMS, INC.
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (the "Agreement") dated and effective as
of the 10th day of July, 2000, is made by and between AVATAR SYSTEMS, INC., a
Texas corporation (the "Company"), whose principal office address is 0000 XXX
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, CYBERTEC HOLDINGS, PLC, a Public
Limited Company incorporated under the Companies Xxx 0000 in England and Wales,
whose registered office is at Xxxxxxxxxx Xxxxx, Xxxxx Xxxx Xxxxxx, Xxxxxxx XX0
0XX, XX ("Cybertec"), XXXXXX X. XXXXXX, XX., an individual resident of the State
of Texas ("Xxxxxx"), XXX XXXXX, an individual resident of the State of Texas
("X. Xxxxx"), XXXXX XXXXX, an individual resident of the State of Texas ("X.
Xxxxx"), XXXXXXX X. XXXXXXX, an individual resident of England ("Xxxxxxx"), and
MERCHANT CAPITAL HOLDINGS, LTD., a British Virgin Islands corporation whose
address is Trident Xxxxxxxx, Wickhams Cay, X.X. Xxx 000, Xxxx Xxxx, Xxxxxxx BVI
("MCH"). For purposes of this Agreement, Cybertec, MCH and Xxxxxxx shall be
referred to individually as an "Investor" and collectively as the "Investors,"
and Xxxxxx, X. Xxxxx and X. Xxxxx shall be referred to individually as a
"Stockholder" and collectively, as the "Stockholders."
The Company and Cybertec are parties to the Stock Purchase Agreement of
even date herewith (the "Purchase Agreement"). Pursuant to the Purchase
Agreement, the parties hereto received Warrants from the Company to purchase
shares of the Company's Common Stock. The parties desire to enter into this
Agreement to provide for the rights of first refusal and co-sale rights
contained herein and to provide for certain restrictions on Transfer of the
Stock (as defined in Section 9.11(b)) of the Company and voting agreements
between the parties to this Agreement. Unless otherwise defined, capitalized
terms in this Agreement shall have the same meaning as in the Purchase
Agreement.
INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
agreements stated below and in the Purchase Agreement, the parties hereby agree
as follows:
1. Right of First Refusal.
1.1 Grant. The Company is hereby granted a right of first
refusal with respect to any proposed transfer of Stock of the Company
by a Stockholder or Investor in the following order of priority: The
Company shall have the first right to purchase any Stock proposed to be
Transferred to a third party by a Stockholder or Investor ("Selling
Shareholder"). In the event the Company elects not to exercise its
first refusal rights with respect to all or any portion of such
proposed Transfer, then the Company agrees to waive such rights with
respect to such portion in favor of the other Investors' and
Stockholders' first refusal and co-sale rights under this Agreement.
SHAREHOLDERS' AGREEMENT - Page 1
1.2 Notice of Intended Disposition. In the event a Selling
Shareholder desires to accept a bona fide third-party offer for the
Transfer of any or all of his Stock (the shares subject to such offer
to be hereafter called the "Selling Shareholder's Target Shares"), the
Selling Shareholder shall promptly deliver to the Company written
notice of the intended disposition ("Selling Shareholder's Disposition
Notice") and the basic terms and conditions thereof, including the
identity of the proposed purchaser.
1.3 Exercise of Right by Company.
(a) The Company shall, for a period of thirty (30)
days following receipt of the Selling Shareholder's
Disposition Notice, have the right to purchase all, or a
portion of, Selling Shareholder's Target Shares upon
substantially the same terms and conditions specified in the
Selling Shareholder's Disposition Notice, subject to the
following conditions: Such right shall be exercisable by
written notice (the "Company's Exercise Notice") delivered to
the Selling Shareholder and the other Investors and
Stockholders prior to the expiration of the thirty (30) day
exercise period. The Selling Shareholder shall not participate
in the Company's decision whether or not to purchase such
Selling Shareholder's Target Shares. If such right is
exercised with respect to all the Selling Shareholder's Target
Shares specified in the Selling Shareholder's Disposition
Notice, then the Company shall effect the purchase of such
Selling Shareholder's Target Shares, including payment of the
purchase price, not more than ten (10) business days after the
delivery of the Company's Exercise Notice; and at such time
the Selling Shareholder shall deliver to the Company the
certificates representing the Selling Shareholder's Target
Shares to be purchased, each certificate to be properly
endorsed for Transfer. If such right is exercised with respect
to only a portion of the Selling Shareholder's Target Shares
specified in the Selling Shareholder's Disposition Notice,
then this right to purchase shall be contingent upon the other
Investors' and Stockholders' election to purchase the
remaining balance of the Selling Shareholder's Target Shares.
The Company shall notify the other Investors and Stockholders
of its intent to purchase only a portion of the Selling
Shareholder's Target Shares within the thirty (30) day
exercise period specified above. The Company's purchase of
such Selling Shareholder's Target Shares shall be consummated,
if at all, at the time the other Investors' and Stockholders'
exercise of their purchase rights in accordance with Section
1.5 herein. In the event the other Investors and Stockholders
do not elect to purchase the remaining Selling Shareholder's
Target Shares, the Company, other Investors and Stockholders
shall be deemed to have waived their right of first refusal
for purchase of the remaining Selling Shareholder's Target
Shares; provided, the Selling Shareholder's Target Shares are
transferred in accordance with the provisions of Section 1.6
herein.
SHAREHOLDERS' AGREEMENT - Page 2
(b) Should the purchase price specified in the
Selling Shareholder's Disposition Notice be payable in
property other than cash or evidences of indebtedness, the
Company shall have the right to pay the purchase price in the
form of cash equal in amount to the value of such property. If
the Selling Shareholder and the Company cannot agree on such
cash value within ten (10) days after the Company's receipt of
the Selling Shareholder's Disposition Notice, the valuation
shall be made by an appraiser of recognized standing selected
by the Selling Shareholder and the Company or, if they cannot
agree on an appraiser within twenty (20) days after the
Company's receipt of the Selling Shareholder's Disposition
Notice, each shall select an appraiser of recognized standing
and if the two appraisals result in valuations within 10% of
each other, the average value shall be used. In the event the
two appraisals differ by more than 10% of each other, the two
appraisers shall jointly designate a third appraiser whose
valuation shall be averaged with the next closest valuation to
determine the cash value. The cost of such appraisal(s) shall
be shared equally by the Selling Shareholder and the Company.
The closing shall then be held on the later of (i) the fifth
business day following the delivery of the Company's Exercise
Notice, or (ii) the fifth business day after such cash
valuation shall have been made.
1.4 Non-Exercise of Right. In the event the Company's Exercise
Notice is not given by the Company to the Selling Shareholder and the
other Investors and Stockholders within thirty (30) days following the
date of the Company's receipt of the Shareholder's Disposition Notice,
the Company shall be deemed to have waived its right of first refusal;
provided, the Selling Shareholder's Target Shares are transferred in
accordance with the provisions of Section 1.6 herein.
1.5 Exercise of Right by Investors and Stockholders. Subject
to the rights of the Company, the other Investors and Stockholders
shall, for a period (the "Exercise Period") of the shorter of (i) sixty
(60) days from receipt of the Selling Shareholder's Disposition Notice
or (ii) thirty (30) days from receipt of written notice of Company's
election either to waive its right of first refusal or to purchase only
a portion of the Selling Shareholder's Target Shares, whichever is
shorter, have the right to purchase the Selling Shareholder's Target
Shares not covered by the Company's Exercise Notice, upon substantially
the same terms and conditions specified in the Selling Shareholder's
Disposition Notice, subject to the following conditions. Such right
shall be exercisable by written notice (the "Exercise Notice")
delivered to the Selling Shareholder and the Company prior to the
expiration of the Exercise Period, and the other Investors and
Stockholders shall effect the purchase of such Selling Shareholder's
Target Shares, including payment of the purchase price, not more than
five (5) business days after the delivery of the Exercise Notice; and
at such time the Selling Shareholder shall deliver to the purchasing
Investors and Stockholders the certificates representing the Selling
Shareholder's Target Shares to be purchased, each certificate to be
properly endorsed for transfer.
1.6 Non-Exercise of Right. Subject to any applicable co-sale
rights of the Investors described in Section 2 below, if the Company
and the Investors and Stockholders do not exercise their respective
rights and purchase the Selling Shareholder's Target Shares, as
provided above, the Selling Shareholder shall have a period of thirty
(30) days thereafter in which to sell or otherwise dispose of the
Selling Shareholder's Target Shares to the third-party transferee
identified in the Selling Shareholder's Disposition Notice upon terms
and conditions (including the purchase price) no more favorable to the
third-party transferee than those specified in the Selling
Shareholder's Disposition Notice. The third-party transferee shall
acquire the Selling Shareholder's Target Shares subject to this
Agreement. In the event the Selling Shareholder does not notify the
other Investors and Stockholders or consummate the sale or disposition
of the Selling Shareholder's Target Shares within the respective
periods described above, the Company's, other Investors' and
Stockholders' first refusal rights shall continue to be applicable to
any subsequent disposition of the Selling Shareholder's Target Shares
by the Selling Shareholder until such right lapses in accordance with
Section 9.1 hereof.
SHAREHOLDERS' AGREEMENT - Page 3
1.7 Allocation Among Purchasing Investors and Stockholders.
The right of first refusal granted hereunder to the Investors and
Stockholders shall be allocated among such parties pro rata based on
their respective aggregate holdings of the Stock (which includes such
shares of common stock to be issued upon the exercise of all
outstanding options or warrants held by Investors and Stockholders).
1.8 Partial Exercise of Right. In the event that the Company
and/or the Investors and Stockholders do not exercise the right of
first refusal pursuant to this Section 1 with respect to all Selling
Shareholder's Target Shares described in a particular Selling
Shareholder's Disposition Notice, then such right shall not apply to
any Selling Shareholder's Target Shares described in such Selling
Shareholder's Disposition Notice.
1.9 No Other Transfers of Stock. Except as permitted in
Section 1 and 3, no Stockholder or Investor shall Transfer Stock to any
Person until the earlier of the termination of this Agreement pursuant
to Section 9.1 hereof or one year after the completion of a merger of
the Company into, or the acquisition of the Company by, a public
non-operating U.S. company (the "Public Company"). The merger of the
Company into or acquisition by a Public Company is referred to herein
as the "Public Merger."
2. Co-Sale Rights of Investors.
2.1 Notice of Offer. The provisions of Section 1.2 requiring a
Selling Shareholder to give notice of any intended Transfer of Stock
are incorporated into this Section 2. Prior to the completion by the
Company of a Qualified Offering, if one or more Stockholders desire to
accept a bona fide third-party offer for the Transfer of more than five
percent (5%) of the aggregate number of shares of Stock held by the
Stockholders (assuming the exercise of all outstanding options or
warrants and the conversion of convertible securities held by the
Stockholders) in one or a series of transactions, (the shares subject
to such offer shall hereafter be called the "Subject Shares"), the
Stockholders shall promptly deliver to Investors written notice of the
intended disposition (the "5% Disposition Notice") and the basic terms
and conditions thereof, including the identity of the proposed
purchaser ("Purchaser"). The 5% Disposition Notice shall also identify
a Stockholder who shall act as the representative of the Stockholders
in connection with such intended disposition (the "Representative").
SHAREHOLDERS' AGREEMENT - Page 4
2.2 Grant of Co-Sale Rights. Each Investor shall have the
right, exercisable upon written notice delivered to the Representative
within 20 days after such Investor's receipt of the 5% Disposition
Notice, to participate in the sale of the Subject Shares on the same
terms and conditions as those set forth in the 5% Disposition Notice.
If an Investor does not provide notice to the Stockholders within such
20-day period, such Investor shall be deemed to have elected not to
participate in such transaction. The Investors would have the right to
sell a percentage of their Stock, pro rata, based on the ratio of the
number of shares each Investor proposed to sell to the total number of
shares proposed to be sold. To the extent one or more of the Investors
exercises such right of participation and to the extent the purchaser
is unwilling to purchase all shares offered, the number of shares of
the Subject Shares that the Stockholders may sell in the transaction
shall be correspondingly reduced. The right of participation of the
Investors shall be subject to the terms and conditions set forth in
this Section 2.2.
(a) To the extent an Investor elects not to sell the
full number of shares such Investor is entitled to sell,
pursuant to this Section 2.2, the other Investors' rights to
participate in the sale shall be increased pro ratably to a
corresponding number of shares.
(b) Each Investor may effect participation in the
sale by delivering to the Representative for transfer to the
purchaser one or more certificates, properly endorsed for
transfer, which represent:
(i) the number of shares of Common Stock
which each Investor elects to sell pursuant to this
Section 2.2; or
(ii) that number of shares of Common Stock
that is at such time issuable upon exercise of any
warrant or option held by such Investor into the
number of shares of Common Stock that such Investor
has elected to sell pursuant to this Section 2.2;
provided, however, that if the purchaser objects to
the delivery of a warrant in lieu of Common Stock,
such Investor must exercise the warrant, as
applicable, and subject to the terms of the warrant,
and deliver Common Stock as provided in clause (i)
above.
2.3 Payment of Proceeds. The stock certificates which the
Investors deliver to the Representative pursuant to Section 2.2 shall
be transferred by the Representative to the Purchaser in consummation
of the sale of the Stock pursuant to the terms and conditions specified
in the 5% Disposition Notice to the Investors, and the Representative
shall promptly thereafter remit to each Investor that portion of the
sale proceeds to which each Investor is entitled by reason of his
participation in such sale, together with a new certificate for any
unsold Stock.
2.4 Non-Exercise. The exercise or non-exercise of the rights
of Investors hereunder to participate in one or more sales of Stock
made by the Stockholders shall not adversely affect their rights to
participate in subsequent Stock sales by the Stockholders.
3. Exempt Transfers. Notwithstanding the foregoing, the first
refusal and co-sale rights of the Investors and Stockholders shall not apply to
any Transfer (i) as a result of the Public Merger of the Company or (ii) by a
corporate Stockholder or Investor to a parent, wholly-owned subsidiary, or
officer or director of such entity or limit the Transfer by an individual
Stockholder or Investor, directly or beneficially, to a family member, or to a
trust, company or partnership controlled directly or indirectly by the
Stockholder or Investor or his family entity; provided that the transferee shall
furnish the Stockholders, the Investors and the Company with a written agreement
to be bound by and comply with all provisions of this Agreement.
SHAREHOLDERS' AGREEMENT - Page 5
4. Preemptive Rights.
4.1 Each Stockholder and Investor shall have preemptive rights
to purchase their pro rata share of any securities offered or issued by
the Company from time to time until the earlier to occur of (i) the
termination of this Agreement pursuant to Section 9.1 hereof or (ii)
completion of the Public Merger, at which time such preemptive rights
shall terminate. The issuances of employee stock options that are
granted in the future or the Public Merger will not trigger this right.
The determination of the number of shares to which an Investor and
Stockholder are entitled to purchase in any securities offering by the
Company shall be the product of (i) the fraction as determined by the
amount of Stock (assuming outstanding option and warrants are
exercised) owned by each such party, as the numerator, over the number
of outstanding shares of Common Stock (on a fully diluted basis), as
the denominator, multiplied by (ii) the number of securities offered.
The Investors and Stockholders shall purchase such securities on the
same terms as the offering to other investors.
4.2 The Company shall give written notice to the Investors and
Stockholders of its intention to sell or issue any securities. The
Stockholders and Investors shall have ten (10) business days to
exercise in whole, not in part, their preemptive rights. If not
exercised, the preemptive right shall lapse. The purchaser of Stock
pursuant to this Agreement shall, upon purchasing Stock from the
Company or from the Stockholders and/or the Investors, furnish to the
Investors, the Stockholders and the Company with a written agreement to
be bound by and comply with all provisions of this Agreement.
5. Legend Requirements.
5.1 Legend. Each certificate representing the Stock (including
outstanding warrants and option and any securities issued upon exercise
of such options or warrants) owned by the Stockholders and Investors
shall bear the following legend:
"These securities may not be sold, assigned,
transferred, pledged or otherwise disposed of, except in
accordance with the terms and conditions of certain agreements
between the Company and its stockholders, copies of which are
on file at the principal office of the Company."
5.2 Removal. The Section 5.1 legend shall be removed upon
termination of this Agreement pursuant to Section 9.1.
6. Voting Agreements.
6.1 Election of Directors. From the date of this Agreement
until the completion of the Qualified Offering, unless this Agreement
is sooner terminated, Cybertec shall nominate two candidates and the
Stockholders shall nominate three candidates for election to the Board
of Directors of the Company which shall in no event consist of more
than five members unless the written consent of Cybertec is obtained.
On the Closing Date of the Purchase Agreement, the shareholders of the
Company shall elect a new Board of Directors of the Company. Cybertec
will nominate Xxxxxxx and Xxxxxxxx Xxxx as its nominees for election
and the Stockholders will nominate X. Xxxxx and X. Xxxxx and Xxxxxx as
its nominees for election. The group of candidates so nominated by
Cybertec and the Stockholders shall be called the "Nominated Group".
Each party hereto agrees to support and vote his shares of Common Stock
of the Company in favor of the election of each of the persons in the
Nominated Group to the Company's Board of Directors.
SHAREHOLDERS' AGREEMENT - Page 6
6.2 Election of Officers. Each Shareholder who is a director
of the Company agrees to support and vote in favor of the election of
Xxxxxx as President and Chief Executive Officer as long as such
person's position with the Company shall not be subject to termination
for cause, as hereinafter defined in Section 6.3.
6.3 Definition of Cause. For purposes of this Section 6,
"cause" shall be deemed to include (but shall not be limited to)
employment in any capacity with a competitor of the Company, dishonesty
with respect to the Company, substantial malfeasance or nonfeasance of
duty to the Company, unauthorized disclosure of confidential
information of the Company, a material breach of an obligation imposed
under any provision of this Agreement, and other conduct substantially
prejudicial to the business of the Company. The good faith
determination of the Board of Directors as to the existence of cause
shall be conclusive on the affected party.
6.4 Shareholder Vote. All directors of the Company shall be
permitted to vote on resolutions at properly constituted meetings of
the Board of Directors (which shall be defined as meetings called in
accordance with the Bylaws of the Company) and which do not violate the
applicable provisions of the Texas Business Corporation Act (the
"TBCA"). If at a meeting of the Board of Directors a resolution is
neither approved or rejected because of a tie vote (as the result of
the absence of a director or otherwise), then such resolution shall be
presented at a properly constituted meeting of the shareholders of the
Company. Each shareholder will have one vote for each share of Common
Stock owned, whether in person or by proxy.
7. Additional Agreements.
7.1 Public Merger. It is the intention of the parties hereto
that the Company complete the Public Merger as soon as possible after
the Closing of the transactions contemplated by the Purchase Agreement.
Cybertec, with the advice and assistance of the Company, will be
exclusively responsible for coordinating all activities relating to the
Public Merger, including, but not limited to, locating a Public Company
which Cybertec believes to be a suitable candidate for the Public
Merger with the Company. The Company will pay all costs relating to the
Public Merger, including payment of consideration to the control
shareholders of the Public Company. Cybertec shall have the right to
approve the legal counsel, accountants, investment banker/brokers and
other professionals necessary for the acquisition of the Public Company
and the subsequent Public Merger. Notwithstanding the foregoing, the
retention by the Company of any attorneys, accountants, brokers or
other professionals or the entering into of any contract by the Company
for the acquisition of the Public Company or any documents necessary to
consummate the Public Merger shall require the approval of the
Company's Board of Directors and, if required by law, the shareholders
of the Company. Cybertec will not engage in any activity on behalf of
the Company relating to the acquisition of the Public Company or the
Public Merger without first obtaining the approval of the Board of
Directors of the Company.
SHAREHOLDERS' AGREEMENT - Page 7
7.2 Personal Guarantees of Bank Debt. The parties hereto
acknowledge the existence of personal guarantees made by X. Xxxxx, X.
Xxxxx and Xxxxxx, shareholders and directors of the Company, for
certain indebtedness owed by the Company to Bank One, N.A., Dallas,
Texas under a loan agreement dated August 26, 1998 and amended and
restated as of July 7, 2000 (the "Bank Debt"). The parties hereto agree
that, except for the Public Merger, before the Company issues any
securities to the public in a public offering or before the exercise of
any outstanding warrants or options now owned or hereafter acquired by
the parties hereto, or before filing a registration statement pursuant
to the Investors' Rights Agreement between the parties, the personal
guarantees of X. Xxxxx, X. Xxxxx and Xxxxxx relating to the Bank Debt
must be released or the Bank Debt paid with any proceeds from a public
or other securities offering.
8. Confidentiality.
8.1 Each party hereto covenants and agrees with each of the
other parties not to use or disclose to any other person any
information, other than information available in the public domain,
data or accounting, methodology ("Confidential Material") which the
other party (the "Disclosing Party") or which may come into the
possession of a party (the "Receiving Party") as a result of the
cooperation between the parties contemplated in this Agreement. This
covenant and agreement shall apply even if the Confidential Material is
not designated as confidential or is not otherwise indicated as being
of a confidential character or is disclosed verbally and not in writing
or other material form. The provisions of this Section 8 shall apply to
any Confidential Material relating to any proposed or consummated
acquisitions by the Company. No party to this Agreement shall make any
public announcement or any disclosure of the relationship with the
other parties without the other parties' express written consent as to
the exact form of such announcement or disclosure, unless compelled to
do so by court order.
8.2 Each party hereto further agrees with the other parties
not to use for its own business purposes any information of whatever
nature disclosed to the party by other parties hereto concerning such
party's business contacts, including information relating to proposed
business opportunities, other than information available in the public
domain. The agreements and covenants of this Section 8 shall continue
for three years after the termination date of this Agreement.
SHAREHOLDERS' AGREEMENT - Page 8
9. Miscellaneous Provisions.
9.1 Termination. The date of termination of this Agreement
(the "Termination Date") shall be the earliest of any of the following
events:
(a) The written agreement of all parties hereto to
terminate this Agreement;
(b) The dissolution, bankruptcy or insolvency of
Company;
(c) The date the Company completes a Qualified
Offering or two years from the date of this Agreement,
whichever first occurs; and
(d) As to the preemptive rights as set forth in
Section 4 herein, upon the earlier to occur of (i) the
termination of this Agreement or (ii) completion of the Public
Merger.
9.2 Filing of Agreement. A duplicate copy of this Agreement
shall be filed in the minute book of the Company.
9.3 Notices. Unless otherwise provided, all notices, consents
or other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly
given (i) when delivered personally, (ii) three business days after
being mailed by first-class mail, postage prepaid, or (iii) one
business day after being sent by a reputable overnight delivery
service, postage or delivery charges prepaid, to the parties at their
respective addresses stated on the signature page of this Agreement.
Notices may also be given by facsimile and shall be effective on the
date transmitted if confirmed within 24 hours thereafter by a signed
original sent in the manner provided in the preceding sentence. Any
party may change its address for notice and the address to which copies
must be sent by giving notice of the new addresses to the other parties
in accordance with this Section 9.3, except that any such change of
address notice shall not be effective unless and until received.
9.4 Severability. In the event one or more of the provisions
of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed and interpreted in
such manner as to be effective and valid under applicable law.
9.5 Waiver or Modification. Any amendment or modification of
this Agreement shall be effective only if evidenced by a written
instrument executed by the Company, the Stockholders and the Investors.
9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without
regard to the principles of conflicts of law of any jurisdiction. Any
legal action, suit or proceeding arising out of or relating to this
Agreement may be instituted in any state or federal court of competent
jurisdiction in the State of Texas, and each party waives any objection
which such party may now or hereafter have to the laying of the venue
in the County of Dallas of any such action, suit or proceeding, and
irrevocably submits to the jurisdiction of any such court.
SHAREHOLDERS' AGREEMENT - Page 9
9.7 Attorneys' Fees. In the event of any dispute involving the
terms hereof, the prevailing parties shall be entitled to collect legal
fees and expenses from the other party to the dispute.
9.8 Further Assurances. Each party agrees to act in accordance
herewith and not to take any action which is designed to avoid the
intention hereof.
9.9 Successors and Assigns. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and
be binding upon, their respective successors, assigns and legal
representatives.
9.10 Entire Agreement. This Agreement and the other
Transaction Agreements (as defined in the Purchase Agreement) including
the Warrants constitute the entire agreement with respect to the
subject matter hereof among the parties, and no party shall be liable
or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein
or therein.
9.11 Definitions.
(a) "Common Stock" means the Company's common stock,
$1.00 par value.
(b) "Stock" means for purposes of this Agreement all
shares of capital stock of the Company owned by the Investors
and Stockholders, options and warrants held by each Investor
and Stockholder, any shares of capital stock of the Company
which are issuable upon exercise of any options or warrants
held by Investors and Stockholders and any shares of capital
stock, options or warrants purchased by Investors and
Stockholders from time to time from the Company or other
shareholders of the Company.
(c) "Person" includes without limitation any natural
person, joint venture, corporation, partnership, limited
liability company, trust, estate, association, government or
governmental entity (including, but not limited to, any
subdivision, branch or agency thereof) or any other entity.
(d) "Qualified Offering" means the completion of a
public offering of the Company's securities under the
Securities Act of 1933, as amended (the "Act") which results
in net proceeds to the Company of at least $10 million.
(e) "Transfer" means the disposing of or parting with
all or a portion of an interest (legal or equitable) by any
means, direct or indirect, absolute or conditional, voluntary
or involuntary, including, but not limited to, by sale,
assignment, court order, operation of law, equitable or other
distribution after divorce or separation, settlement,
exchange, waiver, abandonment, gift, alienation, bequest or
disposal.
SHAREHOLDERS' AGREEMENT - Page 10
IN WITNESS WHEREOF, the parties have executed this Shareholders'
Agreement on the day and year indicated above.
THE COMPANY:
AVATAR SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx., President
Address:
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Telephone No.:
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INVESTORS:
CYBERTEC HOLDINGS, PLC
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Managing Director
Address:
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Telephone No.:
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Facsimile No.:
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MERCHANTS CAPITAL HOLDINGS, LTD.
By: /s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx, Managing Director
Address:
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Telephone No.:
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Facsimile No.:
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SHAREHOLDERS' AGREEMENT - Page 11
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
Address:
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Telephone No.:
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Facsimile No.:
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STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxx, Xx.
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XXXXXX X. XXXXXX, XX.
Address:
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Telephone No.:
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Facsimile No.:
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/s/ Xxx Xxxxx
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XXX XXXXX
Address:
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Telephone No.:
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Facsimile No.:
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/s/ Xxxxx Xxxxx
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XXXXX XXXXX
Address:
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Telephone No.:
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Facsimile No.:
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SHAREHOLDERS' AGREEMENT - Page 12
