Exhibit 10.12
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT, is made as of June 6, 1996 (the
"Effective Date") by and among MicroVision Medical Systems, Inc., a Delaware
corporation (the "Company"), XL Vision, Inc., a Delaware corporation ("XL"),
each of the stockholders of the Company listed on Schedule I(a) (the
"Investor Stockholders") and each of the stockholders of the Company listed
on Schedule I(b) (the "Management Stockholders"). The Investor Stockholders
and the Management Stockholders are sometimes referred to herein collectively
as the "Preferred Stockholders." XL and the Preferred Stockholders are
sometimes referred to herein collectively as the "Stockholders."
Background
The Preferred Stockholders are acquiring on the Effective Date shares of
Series A Preferred Stock, par value $.01 per share, of the Company
("Preferred Stock"), in accordance with a Stock Purchase Agreement, dated
July 6, 1996. The Preferred Stock is convertible into shares of common
stock, par value $.01 per share, of the Company ("Common Stock"). XL
currently owns all of the outstanding shares of Common Stock of the Company.
It is a condition to the obligations of the parties to consummate the
transactions set forth in the Stock Purchase Agreement that the parties
hereto enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
For convenience, certain terms used in several parts of this Agreement
are listed in alphabetical order and defined or referred to below (such terms
as well as other terms that are defined elsewhere in this Agreement shall be
equally applicable to both singular and plural forms of the terms defined).
"Affiliate" means, with respect to a particular party, any Person
controlling, controlled by or under common control with that party, as well
as any officer, director, partner and majority-owned entity of that party or
of its other Affiliates, and in the case of a natural Person, any member of
such Person's immediate family.
"Agreement" means this Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Common Stock" is defined above in the Background section.
"Company" is defined above in the preamble.
"Effective Date" is defined above in the preamble.
"Fully-Diluted Common Stock" means shares of the Common Stock now or
hereafter issued and outstanding plus any additional shares of Common Stock
that may be issuable upon the conversion, exercise or exchange of any rights
that may be issued and outstanding, including with respect to any Preferred
Stock. As to any Stockholder, such term means the shares of Common Stock
owned by such Stockholder plus the shares of Common Stock issuable to such
Stockholder pursuant to any such rights.
"Management Stockholder" is defined above in the preamble.
"Non-Selling Stockholder" is defined in Section 3.2(a).
"Offer" is defined in Section 3.2(a).
"Offer Notice" is defined in Section 3.2(a).
"Permitted Transfer" means, with respect to a particular Stockholder, any
Transfer to (i) any Affiliate of such a Stockholder, (ii) any Person holding
an equity interest in such a Stockholder, (iii) any investment fund in which
such Stockholder or an Affiliate thereof has an economic interest, (iv) the
spouse or children of such a Stockholder, (v) a trust or fiduciary that acts
for the benefit of any such spouse or children, (vi) the Company, or (vii)
any other Stockholder, and any Transfer that is part of a Public Offering.
"Permitted Transferee" means a Transferee in a Permitted Transfer, other
than the Company.
"Person" means any natural person, corporation, partnership,
proprietorship, association, trust or other legal entity.
"Preferred Stock" is defined above in the Background section.
"Public Offering" means a sale of any Common Stock pursuant to a
registration statement under the Securities Act of 1933, as amended, that
results in the Company receiving net proceeds of at least $10 million and a
minimum $30 million pre-offering valuation of the Company or a rights
offering of the Company's securities to the shareholders of Safeguard
Scientifics, Inc.
"Safeguard" means Safeguard Scientifics (Delaware), Inc.
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"Safeguard Director" is defined in Section 2.1(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Stockholder" is defined in Section 3.2(a).
"Stockholders" is defined above in the preamble.
"Stock" means (i) the Common Stock now or hereafter issued and
outstanding, (ii) the Preferred Stock, (iii) any additional shares of
capital stock of the Company hereafter issued and outstanding, and (iv) any
securities convertible into or exercisable or exchangeable for any of the
foregoing.
"Stock Purchase Agreement" is defined above in the Background section.
"Technology Leaders" means Technology Leaders L.P. and Technology Leaders
II L.P.
"Technology Leaders Directors" is defined in Section 2.1(a).
"Transfer" means any actual or proposed disposition of all or a portion
of an interest (legal or equitable) by any means, direct or indirect,
absolute or conditional, voluntary or involuntary, including by sale,
assignment, transfer, pledge, hypothecation, mortgage or other encumbrance,
court order, operation of law, distribution, settlement, exchange, waiver,
abandonment, gift, alienation, bequest or disposal; and the correlative terms
"Transferred," "Transferring," "Transferor" and "Transferee" have
corresponding definitions.
"XL Stockholder" is defined above in the preamble.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1. Election of Directors.
(a) For so long as Safeguard and Technology Leaders are Preferred
Stockholders, the Preferred Stockholders shall vote all shares of Preferred
Stock, and otherwise use commercially reasonable efforts as stockholders of
the Company, to cause and maintain from time to time the election to the
Board of Directors the following:
(i) one representative designated by Safeguard, which
representative shall initially be _____________________ (the
"Safeguard Director"), and
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(ii) one representative designated by Technology Leaders which
representative shall initially be Xxxxxxxxxxx Xxxxxx (the "Technology
Leaders Director").
(b) Each of the Directors designated in Section 1.1 shall be elected at
any annual or special meeting of the Company's stockholders (or by written
consent in lieu of a meeting of stockholders) and shall serve until his
successor is elected and qualified or until his earlier resignation or
removal. The Company shall cause from time to time the nomination for
election to the Board of Directors of the representatives set forth above.
(c) Safeguard and Technology Leaders shall each have the right to remove
its respective representative for the Board of Directors. In the case of any
such removal, each Stockholder shall vote to remove a Safeguard Director or
Technology Leaders Director as designated by Safeguard or Technology Leaders,
respectively.
(d) In the event of any vacancy on the Board of Directors, each
Stockholder shall vote to fill such vacancy in such manner as to maintain a
Safeguard Director and Technology Leaders Director on the Board of Directors
as described above.
ARTICLE III
TRANSFERS OF SECURITIES
Section 3.1. Transfer Restrictions.
(a) None of the Management Stockholders shall Transfer all or any part
of the Stock owned by such Stockholder except in compliance with the terms of
this Agreement, and any purported Transfer in violation thereof shall be null
and void.
(b) A Management Stockholder shall be able to Transfer its Stock only by
(i) offering to Transfer all, but not less than all, of its Stock under
Section 3.2 below or (ii) a Permitted Transfer under paragraph (c) of this
Section 3.1.
(c) Notwithstanding the other restrictions herein, a Management
Stockholder shall be entitled to Transfer all or any part of the Stock owned
by such Stockholder by means of a Permitted Transfer so long as the proposed
Transferee becomes a party hereto in accordance with Section 3.3.
Section 3.2. Right of First Refusal on Dispositions. If at any time
any Management Stockholder desires to Transfer all, but not less than all, of
the Stock owned by such Stockholder (a "Selling Stockholder") to a third
party (other than by a Permitted Transfer), the following provisions shall
apply:
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(a) The Selling Stockholder shall give written notice (the
"Offer Notice") of the proposed transaction to the Company,
identifying the proposed Transferee and setting forth the terms of the
proposed transaction, which shall be limited to transactions involving
cash against delivery of the Stock. The giving by a Selling
Stockholder of an Offer Notice shall be deemed to be an offer to the
Company Stockholders to Transfer Stock on the same terms and
conditions and at the same price at which the Selling Stockholder is
proposing to Transfer such Stock to such third party (the "Offer").
(b) If the Company desires to purchase any or all of the Stock
offered for sale, it must accept the Offer within 20 days of receipt
of such Offer Notice by giving notice of the acceptance to the Selling
Stockholder. The Company may assign its right to purchase any or all
of the offered Stock to any other person or persons in the Company's
sole discretion.
(c) Settlement for any Stock purchased by the Company shall be
within 30 days of the date of its acceptance of the Offer.
(d) If after compliance with the foregoing provisions, the
Company does not purchase all of the Stock covered by an Offer Notice,
the Selling Stockholder may, within 30 days from the date of the
expiration of the 20-day acceptance period specified in Section
3.2(b), Transfer all, but not less than all, of the remaining Stock to
such third party at the price and on the terms set forth in its Offer
Notice, subject to Section 3.3. If such Stock is not so sold within
such 30-day period, the Selling Stockholder shall not Transfer such
Stock without again giving an Offer Notice under this Section 3.2.
Section 3.3. Joinder to Agreement. Any Transfer that is otherwise
permissible under or in accordance with Section 3.1 or Section 3.2, and any
Transfer by an Investor Stockholder, shall not be effective unless and until
the Transferee executes and delivers to the Company such documentation as the
Company may request to require the Transferee to become a party to this
Agreement. Upon any such Transfer, the Transferee will have a proportionate
share of the rights of his, her or its Transferor as a Stockholder hereunder
and will be bound by the obligations of such Transferor hereunder. The
Company shall not recognize or record in the stock records of the Company any
purported action that violates the restrictions hereof.
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Section 3.4. Buy-back of Management Shares. Upon termination of
employment with the Company or XL for any reason, with regard to employed
Management Stockholders, or termination of association with the Company or XL
for any reason, with regard to Management Stockholders who are directors or
advisory board members (each a "Terminated Management Stockholder"), the
Company shall have the right for a period of 90 days after termination to
purchase all of the Management Shares owned by such Terminated Management
Stockholder at the fair value of such Shares. The fair value shall be
determined in good faith by the Board of Directors.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Duration of Agreement. The rights and obligations of the
Company and each Stockholder under this Agreement shall terminate immediately
prior to the earliest to occur of the following: (a) the consummation of the
first Public Offering, (b) the consummation of the sale of all, or
substantially all, of the Company's assets or capital stock either through a
direct sale, merger, reorganization, consolidation or other form of business
combination in which control of the Company is being transferred or (c) the
written consent to such termination by Investor Stockholders holding
two-thirds of the shares of capital stock held by all Investor Stockholders.
Section 4.2. Legend. Each certificate representing a share of capital
stock beneficially owned by the Stockholders shall bear a legend in
substantially the following form, until such time as the shares of capital
stock, represented thereby are no longer subject to the provisions hereof:
"The sale, transfer or assignment of the securities represented
by this certificate are subject to the terms and conditions of a
certain Stockholders' Agreement dated June __, 1996, as amended
from time to time, among the Company and certain holders of its
outstanding capital stock. Copies of such Agreement may be
obtained at no cost by written request made by the holder of
record of this certificate to the Secretary of the Company."
Section 4.3. Further Actions. Each party hereto shall vote all of the
shares of Stock owned or otherwise held by him or it, or take all actions by
written consent in lieu of a meeting, and execute such documents and take all
such other actions within his or its power that may be necessary in order to
carry out the provisions hereof and the actions contemplated hereby,
including taking actions as Stockholders to cause to comply with the
obligations imposed on the Company hereunder and causing any of such party's
representatives or the Board of Directors to take certain actions.
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Section 4.4. Contents of Agreement. This Agreement sets forth the
entire understanding of the parties hereto with respect to the Transactions
and supersedes all prior agreements or understandings among the parties
regarding those matters.
Section 4.5. Amendment, Parties in Interest, Etc. This Agreement may
be amended, modified or supplemented only by a written instrument duly
executed by the Company, XL, Management Stockholders holding at least
two-thirds of the shares of capital stock held by all Management
Stockholders, and Investor Stockholders holding at least two-thirds of the
shares of capital stock held by all Investor Stockholders. If any provision
of this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
legal representatives, successors and permitted assigns of the parties
hereto. Any term or provision of this Agreement may be waived at any time by
the party entitled to the benefit thereof by a written instrument duly
executed by such party.
Section 4.6. Interpretation. Unless the context of this Agreement
clearly requires otherwise, (a) references to the plural include the
singular, the singular the plural, the part the whole, (b) references to one
gender include all genders, (c) "or" has the inclusive meaning frequently
identified with the phrase "and/or," (d) "including" has the inclusive
meaning frequently identified with the phrase "but not limited to," and (e)
references to "hereunder" or "herein" relate to this Agreement. The section
and other headings contained in this Agreement are for reference purposes
only and shall not control or affect the construction of this Agreement or
the interpretation thereof in any respect. Section, subsection, schedule and
exhibit references are to this Agreement unless otherwise specified.
Section 4.7. Notices. All notices that are required or permitted
hereunder shall be in writing and shall be sufficient if personally delivered
or sent by mail, facsimile message or Federal Express or other delivery
service. Any notices shall be deemed given upon the earlier of the date when
received at, or the third day after the date when sent by registered or
certified mail or the day after the date when sent by Federal Express to, the
address or fax number set forth below, unless such address or fax number is
changed by notice to the other party hereto:
If to the Stockholders, to each Stockholder at the address set forth in
the Company's records.
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If to XL:
Chief Operating Officer
XL Vision, Inc.
00000 000xx Xxxxxxx
Xxxxxxxxx, XX 00000
If to the Company:
President
MicroVision Medical Systems, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: 000-000-0000
Section 4.8. Severability; Governing Law. If any provisions of this
Agreement shall be determined to be illegal or unenforceable by any court of
law, the remaining provisions shall be severable and enforceable to the
maximum extent possible in accordance with their terms. This Agreement shall
be construed and interpreted in accordance with the laws of the State of
Delaware, without regard to its provisions concerning conflict of laws.
Section 4.9. Injunctive Relief. It is acknowledged that it will be
impossible to measure the damages that would be suffered by a party if
another party fails to comply with the provisions of this Agreement and that
in the event of any such failure, each non-breaching party will not have an
adequate remedy at law. Therefore, any party shall be entitled to obtain
specific performance of another party's obligations hereunder and to obtain
injunctive relief. No party shall argue, as a defense to any proceeding for
such specific performance or injunctive relief, that another party has an
adequate remedy at law.
Section 4.10. Counterparts. This Agreement may be executed in one or
more counterparts each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument. Each such
copy shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders'
Agreement to be executed as of the date first above written.
MICROVISION, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------------------------
Title: President
XL VISION, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------------
Title: Chief Executive Officer
[Preferred Stockholders have executed Counterpart Signature Pages to
this Agreement.]
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