SHAREHOLDERS AGREEMENT
Exhibit
10.13
THIS
SHAREHOLDERS AGREEMENT (this “Shareholders
Agreement”)
is
made as of March 30, 2007 by and among Sequiam Corporation, a California
corporation (the “Company”);
Biometrics Investors, L.L.C., a Delaware limited liability company
(“Biometrics”);
and
such other shareholders of the Company that become a party hereto from time
to
time (collectively referred to as the “Shareholders”
and
individually as a “Shareholder”).
Unless otherwise specified herein, all of the capitalized terms used herein
are
defined in Section
4
hereof.
WHEREAS,
Biometrics has agreed to enter into a credit agreement with the Company pursuant
to an Agreement, dated as of the date hereof, by and between the Company and
Biometrics (the “Agreement”);
WHEREAS,
Biometrics is the holder of 2,028,388 of the Company’s common shares, par value
$0.001 per share (the “Common
Shares”);
and
WHEREAS,
the execution and delivery of this Shareholders Agreement is a condition to
Biometrics’ entering into the Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Shareholders Agreement, intending to be
legally bound, agree as follows:
1. Board
of Directors.
(a) From
and
after the date of execution of the Agreement, each Shareholder shall vote all
of
his Shareholder Shares and shall take all other necessary or desirable actions
within his control (whether in his capacity as a shareholder, director, member
of a board committee or officer of the Company or otherwise, and including,
without limitation, attendance at meetings in person or by proxy for purposes
of
obtaining a quorum and execution of written consents in lieu of meetings),
and
the Company shall take all necessary or desirable actions solely within its
control (including, without limitation. calling special board and shareholder
meetings), so that:
(i) the
authorized number of directors on the Board shall be increased from three to
five directors,
(ii) the
two
additional directors that shall be elected to the Board shall be two
representatives designated by Biometrics.
(iii) the
composition of the board of directors of each of the Company’s Subsidiaries (a
“Sub
Board”)
shall
be the same as that of the Board;
(iv) the
removal from the Board or a Sub Board (with or without cause) of any
representative designated under Section
1(a)(ii)
above
shall be at Biometrics’ written request, but only upon such written request and
under no other circumstances; and
(v) in
the
event that any representative designated under Section
1(a)(ii)
ceases
for any
reason to serve as a member of the Board or Sub Board during his or her term
of
office, the resulting vacancy on the Board or Sub Board shall be filled by
a
representative designated by Biometrics.
(b) There
shall be at least [four]
meetings
of the Board during every fiscal year, at least one of which shall be held
in
each 120-day period during the Company’s fiscal year. The Company shall pay all
out-of-pocket expenses incurred by each director in connection with attending
regular and special meetings of the Board, any Sub Board and any committee
thereof.
(c) So
long
as any Director designated under Section
1(a)(ii)
above
serves on the Board and for three years thereafter, the Company shall maintain
directors’ and officers’ indemnity insurance coverage satisfactory to such
Directors, and the Company’s Articles of Incorporation and bylaws shall provide
for indemnification and exculpation of directors to the fullest extent permitted
under applicable law.
(d) In
the
event the aggregate number of Shareholder Shares falls as a result of certain
Shareholder Shares having been (x) effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering
them
or (y) sold to the public through a broker, dealer or market maker pursuant
to
Rule 144 (or any similar provision then in force) under the Securities Act,
then, the Company:
(i) shall
make reasonable efforts to obtain new Shareholders in order to increase the
aggregate number of Shareholder Shares to the level at which it was prior to
the
aggregate number of Shareholder Shares falling; and
(ii) shall
not
be in breach of this Shareholders Agreement and, consequently, there shall
be no
Event of Default under the Agreement or any Other Agreement, if, despite the
Company’s compliance with Section
1(d)(i)
above,
the aggregate number of Shareholder Shares falls below the required number
of
outstanding Common Shares needed, under the Company’s by-laws or otherwise, to
vote for and elect any Director designated under Section
1(a)(ii)
above.
2. Representations
and Warranties.
Each
Shareholder represents and warrants that (i) this Shareholders Agreement has
been duly authorized, executed and delivered by such Shareholder and constitutes
the valid and binding obligation of such Shareholder, enforceable in accordance
with its terms, and (ii) such Shareholder has not granted and is not a party
to
any proxy, voting trust or other agreement which is inconsistent with, conflicts
with or violates any provision of this Shareholders Agreement. No holder of
Shareholder Shares shall grant any proxy or become party to any voting trust
or
other agreement which is inconsistent with, conflicts with or violates any
provision of this Shareholders Agreement.
3. Legend.
Each
certificate evidencing Shareholder Shares and each certificate issued in
exchange for or upon the transfer of any Shareholder Shares (if such shares
remain Shareholder Shares after such transfer) shall be stamped or otherwise
imprinted with a legend in substantially the following form:
“The
securities represented by this certificate are subject to a Shareholders
Agreement dated as of March 30, 2007, among the issuer of such securities (the
“Company”) and certain of the Company’s Shareholders, as amended and modified
from time to time. A copy of such Shareholders Agreement shall be furnished
without charge by the Company to the holder hereof upon written
request.”
The
Company shall imprint such legend on certificates evidencing Shareholder Shares
outstanding as of the date hereof, and the Shareholders shall surrender their
stock certificates to the Company for such purpose. The legend set forth above
shall be removed from the certificates evidencing any shares which cease to
be
Shareholder Shares.
4. Definitions.
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Agreement. As used in this Shareholders Agreement, the following
terms shall have the following meanings:
“Acquired
Common”
has
the
meaning set forth in Section 7.
“Agreement”
has
the
meaning set forth in the preamble.
“Articles
of Incorporation”
means
the Company’s Articles of Incorporation as in effect from time to
time.
“Biometrics”
has
the
meaning set forth in the preamble.
“Board”
or
“Board
of Directors”
means
the Board of Directors of the Company.
“Common
Shares”
has
the
meaning set forth in the preamble.
“Company”
has
the
meaning set forth in the preamble.
“Person”
means
an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
“Securities
Act”
means
the Securities Act of 1933, as amended from time to time.
“Shareholder
Shares”
means
(i) any Common Shares purchased or otherwise acquired by any Shareholder, (ii)
any capital stock or other equity securities issued or issuable directly or
indirectly with respect to the Common Shares referred to in clause (i) above
by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization, and
(iii) any other shares of any class or series of capital stock of the Company
held by a Shareholder, including without limitation the Series A Preferred
and
Series B Preferred; provided that
Shareholder Shares shall not include nonvoting shares described in (iii) for
purposes of Section
1
hereof.
As to any particular shares constituting Shareholder Shares, such shares shall
cease to be Shareholder Shares when they have been (x) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them or (y) sold to the public through a broker, dealer
or
market maker pursuant to Rule 144 (or any similar provision then in force)
under
the Securities Act.
“Shareholder”
or
“Shareholders”
has
the
meaning set forth in the preamble.
“Shareholder
Agreement”
has
the
meaning set forth in the preamble.
“Sub
Board”
has
the
meaning set forth in Section
1(a)(iii).
“Subsidiary”
means,
with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares entitled (without regard to
the
occurrence of any contingency) to vote in the election of directors, managers
or
trustees thereof is at the time owned or controlled, directly or indirectly,
by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the limited liability
company. partnership or other similar ownership interest thereof is at the
time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof,
a
Person or Persons shall be deemed to have a majority ownership interest in
a
limited liability company, partnership, association or other business entity
if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses
or
shall be or control the managing director or general partner of such limited
liability company, partnership, association or other business
entity.
5. Irrevocable
Proxy; Conflicting Agreements.
(a) In
order
to secure each Shareholder’s obligation to vote his Shareholder Shares and other
voting securities of the Company in accordance with the provisions of
Section
1
hereof,
each Shareholder hereby appoints Biometrics as his true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote all of his
Shareholder Shares and other voting securities of the Company for the election
and/or removal of directors and all such other matters as expressly provided
for
in Section
1.
Biometrics may exercise the irrevocable proxy granted to it hereunder at any
time such Shareholder fails to comply with the provisions of this Shareholders
Agreement. The proxies and powers granted by each Shareholder pursuant to this
Section
5
are
coupled with an interest and are given to secure the performance of such
Shareholder’s obligations to Biometrics under this Shareholders Agreement. Such
proxies and powers will be irrevocable for the term of this Shareholders
Agreement and will survive the death, incompetency and disability of such
Shareholder and the respective holders of their Shareholder Shares, except
this
Shareholders Agreement shall not be binding on a subsequent transferee of
Shareholder Shares who purchased the Shareholder Shares pursuant to an effective
registration statement or through a broker, dealer or market maker pursuant
to
Rule 144 (or any similar provision then in force) under the Securities
Act.
(b) Each
Shareholder represents that he has not granted and is not a party to any proxy,
voting trust or other agreement which is inconsistent with or conflicts with
the
provisions of this Shareholders Agreement, and no holder of Shareholder Shares
shall grant any proxy or become party to any voting trust or other agreement
which is inconsistent with or conflicts with the provisions of this Shareholders
Agreement.
6. Transfers
in Violation of Agreement.
Prior
to affecting a transfer of any Shareholder Shares to any person or entity,
the
transferring Shareholder shall cause the prospective transferee to execute
and
deliver to the Company and the other Shareholders a counterpart of this
Shareholders Agreement. Any transfer or attempted transfer of any Shareholder
Shares in violation of any provision of this Shareholders Agreement shall be
void, and the Company shall not record such transfer on its books or treat
any
purported transferee of such Shareholder Shares as the owner of such shares
for
any purpose.
7. Additional
Parties; Joinder.
The
Company may permit any Person who acquires Common Shares or rights to acquire
Common Shares after the date hereof (the “Acquired
Common”)
to
become a party to this Shareholders Agreement and to succeed to all of the
rights and obligations of a “holder of Shareholder Shares” under this
Shareholders Agreement by obtaining an executed joinder to this Shareholders
Agreement from such Person in the form of Exhibit
A
attached
hereto. Upon the execution and delivery of the joinder by such Person, such
Person’s Acquired Common shall be Shareholder Shares hereunder, and such Person
shall be a “holder
of Shareholder
Shares”
under
this Shareholders Agreement with respect to the Acquired Common.
8. Amendment
and Waiver.
Except
as otherwise provided herein, no modification, amendment or waiver of any
provision of this Shareholders Agreement shall be effective against the Company,
Biometrics, or the Shareholders unless such modification, amendment or waiver
is
approved in writing by the Company, Biometrics, and the holders of a majority
of
the Common Shares held by all Shareholders, respectively. The failure of any
party to enforce any of the provisions of this Shareholders 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
Shareholders Agreement in accordance with its terms.
9. Severability.
Whenever possible, each provision of this Shareholders Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Shareholders 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
the validity, legality or enforceability of any other provision of this
Shareholders Agreement in such jurisdiction or affect the validity, legality
or
enforceability of any provision in any other jurisdiction, but this Shareholders
Agreement shall be reformed, construed and enforced in such jurisdiction as
if
such invalid, illegal or unenforceable provision had never been contained
herein.
10. Entire
Agreement.
Except
as otherwise expressly set forth herein, this Shareholders Agreement 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 representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any
way.
11. Successors
and Assigns.
Except
as otherwise provided herein, this Shareholders Agreement shall bind and inure
to the benefit of and be enforceable by the Company and its successors and
assigns, Biometrics and its successors and assigns, and the Shareholders and
any
subsequent holders of Shareholder Shares and the respective successors and
assigns of each of them, so long as they hold Shareholder Shares, except this
Shareholders Agreement shall not be binding on a subsequent transferee of
Shareholder Shares who purchased the Shareholder Shares pursuant to an effective
registration statement or through a broker, dealer or market maker pursuant
to
Rule 144 (or any similar provision then in force) under the Securities
Act.
12. Counterparts.
This
Shareholders Agreement may be executed in multiple counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.
13. Remedies.
The
Company, Biometrics, and the Shareholders shall be entitled to enforce their
rights under this Shareholders Agreement specifically, to recover damages by
reason of any breach of any provision of this Shareholders Agreement and to
exercise all other rights existing in their favor. The parties hereto agree
and
acknowledge that money damages would not be an adequate remedy for any breach
of
the provisions of this Shareholders Agreement and that the Company, Biometrics,
and any Shareholder 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 Shareholders Agreement.
14. Notices.
All
notices, demands and other communications to be given or delivered to
Biometrics, the Company, or the Shareholders under or by reason of the
provisions of this Shareholders Agreement will be in writing and will be deemed
to have been given when personally delivered, sent by reputable overnight
courier, transmitted by facsimile or telecopy (with a confirmation copy sent
via
overnight mail) or mailed by first class mail, return receipt requested, to
the
addresses indicated below (unless another address is so specified in
writing):
|
If
to the Company, to:
|
Sequiam
Corporation
000
Xxxxxxx Xxxx
Xxxxxxx,
XX 00000
Attention: Xxxx
X. Xxxxxxxxxxx
Facsimile: 000-000-0000
|
|
with
a copy to:
|
|
|
Xxxxxxxxx
Traurig, P.A.
000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
|
|
|
Attention: Xxxxxxxx
Xxxxxx, Esq.
Facsimile:
000-000-0000
|
|
|
If
to Biometrics, to:
|
Biometric
Investors, L.L.C.
0000
Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxx
Facsimile:
(000) 000-0000
|
|
with
a copy to:
|
|
|
Xxxxxxx
Xxxxxxxx, Esq.
000
X. Xxxxx Xxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Facsimile:
(000) 000-0000
with
a copy to:
Xxxxxxx
Xxxxxx, Esq.
Drinker
Xxxxxx Xxxxxxx Xxxxxx
000
X. Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
|
|
|
If
to a (the) Shareholder(s), to:
|
To
the address(es) on the Company’s books and records
|
15. Governing
Law; Construction; Forum Selection.
THIS
SHAREHOLDERS AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS
OF
THE STATE OF CALIFORNIA AS TO INTERPRETATION, ENFORCEMENT, VALIDITY,
CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS.
If any
provision of this Shareholders Agreement shall be held to be prohibited by
or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder
of
such provision or remaining provisions of this Shareholders
Agreement.
16. Business
Days.
If any
time period for giving notice or taking action hereunder expires on a day which
is a Saturday, Sunday or legal holiday in the state in which the Company’s
chief-executive office is located, the time period shall automatically be
extended to the business day immediately following such Saturday, Sunday or
legal holiday.
17. Descriptive
Headings.
The
descriptive headings of this Shareholders Agreement are inserted for convenience
only and do not constitute a part of this Shareholders Agreement.
18. No
Strict Construction.
The
parties hereto have participated jointly in the negotiation and drafting of
this
Shareholders Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Shareholders Agreement shall be construed as if
drafted jointly by the parties hereto, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any
of the provisions of this Shareholders Agreement.
(Signature
Pages continue on the next page)
CH02/
22480467.5
IN
WITNESS WHEREOF, the parties hereto have executed this Shareholders Agreement
on
the day and year first above written.
COMPANY:
SEQUIAM
CORPORATION,
a
California corporation
By:
Name:
Title:
BIOMETRICS:
BIOMETRICS
INVESTORS, L.L.C.,
a
Delaware limited liability company
By:
Name:
Xxxxx Xxxxx
Title:
Manager
(Shareholder
Signature Pages continue on next page)
CH02/
22480467.5
[first
name, last name of Shareholder]
[first
name, last name of Shareholder]
[first
name, last name of Shareholder]
[first
name, last name of Shareholder]
[first
name, last name of Shareholder]
EXHIBIT
A
SHAREHOLDERS
AGREEMENT
JOINDER
AGREEMENT
Effective
upon the execution hereof, the undersigned hereby agrees to become a party
to
that certain Shareholders Agreement, dated as of March 30, 2007, by and among
Sequiam Corporation, a California corporation; Biometrics Investors, L.L.C.,
a
Delaware limited liability company; and the Shareholders party thereto from
time
to time (as amended or otherwise modified from time to time, the “Shareholders
Agreement”).
The
undersigned, by executing this counterpart signature page, shall be entitled
to
all of the rights and subject to all of the obligations of Shareholder under
the
Shareholders Agreement.
Date:
_______________________, 200_
______________________________
Signature
______________________________
Printed
Name
