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Exhibit 10.12
SHAREHOLDERS AGREEMENT
AGREEMENT dated as of September , 1994 among Long Distance
International Inc., a Florida corporation (the "Corporation"); Xxxxxxxx
Xxxxxxxxx ("Xxxxxxxxx"); Xxxxx Xxxxxxxx ("Xxxxxxxx"); and the persons and other
entities executing and delivering this Agreement as shareholders of the
Corporation, whose names are listed on Schedule A annexed to this Agreement
(Xxxxxxxxx, Xxxxxxxx and such other persons and entities, collectively, the
"Shareholders").
Preliminary Statements
A. Each Shareholder owns capital stock of the Corporation in the
amount specified next to the name of the Shareholder on Schedule A (such stock,
the "Stock"). Other shareholders who purchased Common Stock of the Corporation
before the date of this Agreement (the "Existing Shareholders") entered into a
separate shareholders agreement that included preemptive and registration rights
in favor of such shareholders, as well as requirements that they vote their
shares to elect Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxxx as directors and that
shareholders wishing to sell shares first offer them to the Corporation and
other Existing Shareholders.
B. The Shareholders and the Corporation wish to provide for certain
aspects of the management, ownership and operations of the Corporation as set
forth in this Agreement, including provisions for the voting, issuance and
transfer of shares of Stock.
In consideration of the foregoing and the terms, conditions and
covenants of this Agreement, the parties hereto agree as follows.
Section 1 Management
1.1 Board of Directors. Each Shareholder shall vote all of its shares of
Stock and shall take all such other actions as may be necessary to elect and
maintain Xxxxxxxxx and Xxxxxxxx as members of the Board of Directors of the
Corporation; provided, however, that the right of each of Xxxxxxxxx and Xxxxxxxx
to be a member of the Board and the obligations of the Shareholders to vote to
elect either as a director shall terminate as to Xxxxxxxxx or Xxxxxxxx when such
director owns less than five percent (5%) of the issued and outstanding capital
stock of Corporation.
Section 2 Transfers of Stock
2.1 Restriction of Transfer. No transfer or other disposition of shares of
capital stock of the Corporation owned by any Shareholder shall be made by any
Shareholder in contravention of the terms of this Agreement. Dispositions of
shares governed by this Agreement shall include any transfer, gift, sale,
assignment, pledge, hypothecation or other disposition of shares of Stock, with
the exceptions provided in
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Section 2.6 of this Agreement. Any disposition of shares of Stock made in
contravention of this Agreement shall be null, void and of no effect. The
Corporation shall not take any action to effectuate any disposition of Stock in
contravention of this Agreement and shall not record any such transfer on the
books of the Corporation.
2.2 Offer. (a) No Shareholder shall dispose of shares of Stock owned by
such Shareholder to any person or entity until such Shareholder (the "Offering
Shareholder") shall first have offered such shares first to the Corporation and
then to the Existing Shareholders and the other Shareholders listed on Schedule
A (the Shareholders and the Existing Shareholders, collectively, the "Offeree
Shareholders") by notice in writing (the "Offer Notice") and shall otherwise
have complied with this Section 2. Any Offer Notice under this Agreement shall
be given at the same time to the Corporation and the Offeree Shareholders and
shall specify (i) the person or entity to which the shares of Stock, or to which
any interest in such shares, are proposed to be transferred (the "Third Party
Offeror"), (ii) the price, other consideration and other material terms and
conditions of the transaction that the Offering Shareholder proposes to
undertake with the Third Party Offeror and (iii) the number of shares proposed
to be included in or affected by the disposition to the Third Party Offeror.
First the Corporation and then, if the Corporation does not exercise its right
to purchase the offered Stock, the Offeree Shareholders shall have the right to
acquire all (but not less than all) of the Stock or the interests therein
offered by the Offering Shareholder on the terms and conditions set forth in the
Offer Notice. Such right shall be exercisable by the Corporation within
forty-five (45) days after the Offer Notice is given by the Offering Shareholder
and by the Offeree Shareholders within the period from fifty (50) to ninety (90)
days after the Offer Notice is given to such Shareholders. Such right shall be
deemed to be exercised when written notice of such exercise is given by the
Corporation or an Offeree Shareholder to the Offering Shareholder within the
applicable period specified above.
(a) If there is more than one Offeree Shareholder, then each such
Shareholder shall have the right and option to acquire a pro rata portion of the
Stock offered by the Offering Shareholder (such pro rata portion, as defined in
Section 2.2(c), a "Pro Rata Portion"), in the manner provided in this Section 2.
If any of such Offeree Shareholders fails to exercise its right to acquire all
of the Stock that such Shareholder is entitled to acquire under this Section 2
or gives notice to the Offering Shareholder that it will not exercise such
right, then the other Offeree Shareholders shall have the right and option to
acquire Pro Rata Portions of such Stock, in the manner provided in this Section
2. If only one Offeree Shareholder exercises its option to acquire Stock subject
to this Section 2, then such Shareholder shall have the right to acquire all
(and not less than all) of such Stock offered by the Offering Shareholder, in
accordance with this Section 2. To effectuate the offer of Stock to Offeree
Shareholders pursuant to this Section 2.2, if any Offeree Shareholder fails to
exercise its option to acquire such Stock within the fifty to ninety day
exercise period provided in Section 2.2(a) or gives notice to the Offering
Shareholder that it
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will not exercise such right, then the Offering Shareholder shall promptly
notify any other Offeree Shareholders of such failure or such notice of
non-exercise and of the Pro Rata or Portion of Stock that such Offeree
Shareholder failed or declined to acquire. Such other Offeree Shareholders shall
have the right and option, exercisable for twenty (20) days after their receipt
of notice of the availability of such Pro Rata Portion of Stock, to acquire Pro
Rata Portions of the Stock that the Offeree Shareholder failed or declined to
acquire, in accordance with this Section 2. Such option shall be deemed to be
exercised when written notice of such exercise is given by such other Offeree
Shareholders to the Offering Shareholder within such fifteen-day period. Shares
of Stock that are not accepted by Offeree Shareholders for disposition pursuant
to this Section 2.2 may be disposed of to the Third Party Offeror in accordance
with Section 2.3.
(b) A "Pro Rata Portion" shall be the number of shares of Stock
equal to the total number of shares of Stock offered by an Offering Shareholder
multiplied by a fraction, the numerator of which is the number of shares of
Stock owned by the Offeree Shareholder exercising its right to acquire Stock
from an offering Shareholder and the denominator of which is the aggregate
number of shares of Stock owned by all the Offeree Shareholders that exercise
their options to acquire the offered Stock in accordance with this Section 2.
2.3 Transfer to Third Party. If all of the shares of Stock are not
acquired by the Corporation or Offeree Shareholders as provided for in Section
2.2 within the applicable notice period provided for therein, then the Offering
Shareholder may transfer or otherwise dispose of such Stock or interests therein
only to the Third Party Offeror for the consideration and only on the terms and
conditions set forth in the Offer Notice that was given to the Corporation and
the Offeree Shareholders, provided that the Third Party Offeror agrees in
writing to be bound by all of the terms of this Agreement before the
effectuation of any transfer of Stock or interests therein to the Third Party
Offeror and provided that a written instrument evidencing such agreement is
delivered to the Corporation before any such transfer is effected.
2.4 Revival of First Refusal Right. If a transfer or other disposition of
shares of Stock or interests therein to a Third Party Offeror is not consummated
within ninety (90) days after the last to expire of the options of the Offeree
Shareholders to acquire such shares or interests pursuant to this Section 2,
then any transfer or other disposition proposed to be made to such Third Party
Offeror shall again be subject to the rights and options of the Corporation and
the Offeree Shareholders and, subject to the notice requirements provided for in
this Section 2.
2.5 Closing. The closing of any disposition of shares of Stock under this
Section 2 shall take place at the principal offices of the Corporation or at the
offices of the attorneys of the Corporation, or at such other place as may be
agreed upon by the parties to such transaction, within thirty (30) days after
the last written notice that
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is timely hereunder given by the Corporation or the Offeree Shareholders in
exercise of their options to acquire such shares. Such closing shall take place
at a time during regular business hours specified by the Offering Shareholder on
fifteen (15) days' prior written notice to the persons or entities acquiring the
Stock. At the closing, the shares of Stock to be disposed of under this Section
2 shall be delivered by the transferring party to the party entitled to acquire
such shares, duly endorsed in blank or accompanied by duly executed stock
powers, with transfer stamps attached, if required by applicable law. The
acquiror of any Stock transferred under this Section 2 shall, at the closing of
such disposition, pay the acquisition price for the Stock in accordance with the
Offer Notice that was delivered in connection with the disposition of such
Stock.
2.6 Exempted Transfers. The provisions of this Section 2, with the
exception of Section 2.7, shall not apply to any of the following dispositions
of Stock, provided that the transferee or acquiror of Stock disposed of under
this Section 2.6 agrees in writing to be bound by the terms of this Agreement
and to assume the obligations of a Shareholder hereunder upon acquiring such
Stock: (i) any disposition by will or intestacy and any other disposition to an
heir, executor, estate, committee, guardian or other legal representative of a
Shareholder upon the death or legal incapacity of the Shareholder; or (ii) any
disposition to a Family Transferee of a Shareholder (as defined herein). As used
in this Agreement, a "Family Transferee" shall mean (A) a spouse, child, parent,
grandchild or sibling of a Shareholder or (B) a trust established by a
Shareholder, or a trustee, fiduciary, custodian or foundation designated by a
Shareholder, that will hold shares of Stock for the benefit of the Shareholder
or for the benefit of any of the persons described in item (A) above in this
sentence. Notwithstanding the foregoing or any other provisions of this
Agreement, no transfer or disposition of Stock shall be made by any Shareholder
in contravention of Section 2.7.
2.7 S Corporation Status. Notwithstanding any other provision of this
Agreement, no disposition of Stock may be made or effectuated and no other
action may be taken by any Shareholder that would cause the Corporation to lose,
terminate or revoke its election, eligibility, treatment or status as an S
corporation under the Internal Revenue Code of 1986, as amended, or to lose,
terminate or revoke any similar election, eligibility, treatment or status under
applicable state law (such election, eligibility, treatment or status under
state or federal law, as amended from time to time, "S Corporation Status"),
unless (i) the Corporation at the time of such proposed disposition or action
has not elected or chosen S Corporation Status or (ii) the Board of Directors of
the Corporation has decided to waive, revoke or terminate the S Corporation
Status of the Corporation prior to the effective date of the proposed action or
disposition of Stock. Nothing in this Agreement shall give any Shareholder any
right to the benefits or continuation of S Corporation Status of the
Corporation, which may be terminated by the Corporation in its discretion.
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Section 3 Preemptive Rights
3.1 Preemptive Right. Except as provided in Section 3.6, if any issuance
or sale of stock of the Corporation after the date of this Agreement would
adversely affect the proportionate or relative voting or dividend rights of any
Shareholder, then the Corporation shall not issue or sell such stock to any
person or entity until the Corporation shall first have offered to the
Shareholders the amount of such stock provided in this Section 3, in the manner
provided in this Section. Except as provided in Section 3.6, each share of Stock
shall entitle the holder thereof to a preemptive right, for the period and on
the terms provided in this Section, to subscribe for and acquire shares of the
same class of the Corporation or any equity and/or voting shares of any class of
the Corporation that the Corporation proposes to issue or any warrants, options
or rights that the Corporation proposes to grant for the purchase of stock of
the Corporation or for the purchase of any securities of the Corporation that
are convertible into or exchangeable for, or that carry any rights to subscribe
for or acquire, equity and/or voting stock of any class of the Corporation (any
such shares, securities, warrants, options or rights, "Preemption Securities).
3.2 Preemption Notice. Any offer of Preemption Securities to Shareholders
under this Section 3 shall be made by the Corporation by notice in writing (the
"Preemption Notice"), which notice shall specify the price, other-consideration
and other material terms and conditions relating to the Preemption Securities
that the Corporation proposes to issue or sell and the amount of such Preemption
Securities proposed to be issued or sold. Under this Section 3, each Shareholder
shall have the right and option, exercisable for thirty (30) days after such
Shareholder's receipt of a Preemption Notice, (i) to acquire, on the terms
contained in the Preemption Notice, such portion of the Preemption Securities
that the Corporation proposes to issue or sell as would preserve the
proportionate or relative voting and dividend rights of such Shareholder and
(ii) to acquire such Preemption Securities for a purchase price equal to the
price per share at which the Corporation proposes to issue or sell such
Preemption Securities to other persons or entities, without deduction of
expenses of and compensation for the sale, underwriting or purchase of such
Preemption Securities by underwriters or dealers. Such option and right under
this Section shall be deemed exercised when a Shareholder gives written notice
of such exercise to the Corporation. If a Shareholder fails to exercise such
option and right to acquire Preemption Securities hereunder within thirty (30)
days after the Shareholder's receipt of the Preemption Notice, then the
Corporation may issue or sell such Preemption Securities to any other person or
entity at the price or for the consideration set forth in the Preemption Notice,
with deduction of any reasonable and lawful expenses of and compensation for the
sale, underwriting or purchase of such Preemption Securities by underwriters or
dealers.
3.3 Revival of Preemptive Right. If an issuance or sale of Preemption
Securities that was described in a Preemption Notice is not consummated within
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hundred eighty (180) days after the expiration of the thirty-day notice period
provided for in Section 3.2, then any issuance or sale of such Preemption
Securities proposed to be made by the Corporation shall again be subject to the
rights and obligations of the Corporation and the Shareholders and the notice
requirements provided for in this Section 3.
3.4 Closing of Preemption Transaction. The closing of any issuance or sale
of Preemption Securities under this Section shall take place at the principal
offices of the Corporation its counsel. Such closing shall take, place during
regular business hours at the time specified in the Preemption Notice or, if no
such time is specified in such notice, at a time within one hundred eighty (180)
days after expiration of the thirty-day notice period provided for in Section
3.2, which time shall be specified by the Corporation by ten (10) days prior
written notice to the Shareholder acquiring the Preemption Securities. At such
closing, the Corporation-shall deliver the Preemption Securities to be issued or
sold hereunder to the Shareholder entitled to acquire such Preemption
Securities, upon payment by such Shareholder of the full purchase price provided
hereunder for such Preemption Securities, in cash or by certified check, bank
check or wire transfer.
3.5 Agreement Governs. Any Preemption Securities of the Corporation issued
or sold to a Shareholder under this Section 3 shall be subject to the terms of
this Agreement.
3.6 Securities not Subject to Preemption. The provisions of this Section 3
shall not apply to (i) treasury shares; (ii) shares of capital stock or
warrants, options, securities or rights convertible into shares of such stock
that may be issued or sold by the Corporation to employees, directors, officers,
consultants or independent contractors of the Corporation; (iii) shares,
warrants, options, securities or rights that may be issued or sold by the
Corporation in connection with the effectuation of a merger, consolidation or
other business combination, provided that the proportionate or relative voting
and dividend rights of each Shareholder as a holder of voting and equity
securities of the entity surviving such consolidation, merger or combination
shall not be less, in proportion to the voting and dividend rights of the other
Shareholders on account of voting and equity securities of such survivor, than
the proportionate voting and dividend rights of such Shareholder in relation to
such other Shareholders immediately prior to such merger or consolidation.
Section 4 Registration Rights
4.1 Definitions. For purposes of this Section 4:
(a) the term "1933 Act" means the Securities Act of 1933, as
amended;
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(b) the term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the 1933 Act and the declaration or ordering of effectiveness of
such registration statement;
(c) the term "Registrable Securities" means any of the shares or
Stock or any common stock of the Corporation issued as a dividend or other
distribution with respect to, or in exchange or in replacement of, the Stock;
and
(d) the term "Holder" means any Shareholder holding Registrable
Securities and any other person holding Registrable Securities to whom these
registration rights have been transferred pursuant to this Agreement.
4.2 Registration. Subject to Section 4.6, if at any time the Corporation
proposes to register any of its common stock under the 1933 Act in connection
with the public offering of such securities solely for cash on a form that would
also permit the registration of the Registrable Securities, then the Corporation
shall, each such time, promptly give each Holder written notice of such
determination. Upon the written request of any Holder given with in twenty (20)
days after the giving of any such notice by the Corporation, the Corporation
shall use its best efforts to cause to be registered under the 1933 Act all of
the Registrable Securities that each such Holder has requested be registered,
subject to the exceptions and other provisions set forth in this Agreement.
4.3 Obligations of the Corporation. Whenever required under Section 4.2 to
use its best efforts to effect the registration of any Registrable Securities,
the Corporation shall:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become and remain
effective for six (6) months or until all shares registered pursuant to such
registration statement are sold, if earlier;
(b) during such period prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the 1933 Act with respect to the disposition of all securities
covered by such registration statement;
(c) furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
1933 Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;
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(d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such U.S. state jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement, provided
that the Corporation shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such state jurisdictions, and further provided that
(anything in this Agreement to the contrary notwithstanding with respect to the
bearing of expenses) if any jurisdiction in which the securities shall be
qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
shareholders, then such expenses shall be payable by selling shareholders pro
rata, to the extent required by such jurisdiction.
4.4 Furnish Information. It shall be a condition precedent to the
obligations of the Corporation to take any action pursuant to this Section 4
that the Holders shall-furnish to the Corporation such information regarding
them, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Corporation shall reasonably request and
as shall be required in connection with the action to be taken by the
Corporation.
4.5 Expenses Of Registration. All expenses incurred by the Corporation in
connection with a registration pursuant to Section 4.2 (excluding underwriters'
discounts and commissions and fees and disbursements of any counsel for any
Holder), including without limitation all registration and qualification fees,
printers' and accounting fees and fees and disbursements of counsel for the
Corporation, shall be borne by the Corporation; provided, however, that the
Corporation shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 4.2 if the registration request is
subsequently withdrawn; provided that the Holders may withdraw a request made
within forty-five (45) days of the end of the fiscal year of the Corporation if
the audited financial statements of the Corporation for such year and at such
year-end materially and adversely differ from the information known to the
Holders at the time of their request, in which event the Holders shall not be
required to pay any of the expenses of the registration.
4.6 Underwriting Requirements. In connection with any offering involving
an underwriting of shares being issued by the Corporation, the Corporation shall
not be required under Section 4.2 to include in such underwriting any of the
Registrable Securities of any Holder unless such Holder agrees to the inclusion
of such Registrable Securities on the same terms and conditions as the
securities otherwise being sold through the underwriters. Notwithstanding the
foregoing the Corporation shall only be required to include in the offering so
many of the securities of the selling Holders as the underwriter, in its
discretion, believes will not jeopardize the success of the offering, which may
be no securities owned by Holders (the securities so included first to be
apportioned pro rata among the selling Holders-according to the
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total amount of securities owned by said selling Holders or in such other
proportions as shall mutually be agreed to by such selling Holders), provided
that no such reduction shall be made with respect to any securities offered by
the Corporation.
4.7 Delay of Registration. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration of any
securities of the Corporation as the result of any controversy that might arise
with respect to the interpretation or implementation of this Section 4.
4.8 Indemnification. If any Registrable Securities are included in a
registration statement under this Section 4:
(a) To the extent permitted by law, the Corporation shall indemnify
and hold harmless each Holder requesting or joining in a registration, any
underwriter (as defined in the 0000 Xxx) for it, and each person, if any, who
controls such Holder or underwriter within the meaning of the 1933 Act, against
any losses, claims, damages, or liabilities, joint or several to which they may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based on any untrue statement of a material fact by the Corporation, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission by the Corporation to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arise out of any violation by the Corporation of any rule or
regulation promulgated under the 1933 Act applicable to the Corporation and
relating to action or inaction required of the Corporation in connection with
any such registration; and shall reimburse each such Holder, such underwriter,
or controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 4.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Corporation (which consent shall not be unreasonably
withheld), nor shall the Corporation be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto,
in reliance upon and in conformity with information furnished expressly for use
in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each Holder requesting or
joining in a registration shall indemnify and hold harmless the Corporation,
each of its directors, each of its officers who have signed the registration
statement, each
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person, if any, who controls the Corporation within the meaning of the 1933 Act
and each agent and any underwriter for the Corporation (within the meaning of
the 0000 Xxx) against any losses, claims, damages or liabilities to which the
Corporation or any such director, officer, controlling person, agent or
underwriter may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or action in respect thereto) arise out
of or are based upon any untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or omission was made in such registration statement, preliminary or
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Corporation or any such
director, officer, controlling person, agent or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 4.8(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. The failure to notify
an indemnifying party promptly of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section unless such failure materially and adversely affects the rights or
abilities of the indemnifying party to defend such action. The omission so to
notify the indemnifying party will not relieve it of any liability that it may
have to any indemnified party otherwise than under this Section.
Section 5 Termination
5.1 Upon Sale of all Stock. Upon the disposition by a Shareholder of all
of the Stock owned by the Shareholder, such person shall have no further rights
under this Agreement.
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5.2 Upon Certain Other Events. The rights and obligations of the
Corporation and of each Shareholder under this Agreement shall terminate upon
the earliest to occur of (i) the first sale of common stock of the Corporation
that is effected pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission under the 1933 Act covering
the offer and sale of common stock of the Corporation to the public or (ii) any
date on which the Shareholders hold in the aggregate of record or beneficially
less than five percent (5%) of the outstanding shares of the common stock of the
Corporation.
Section 6 Further Action
6.1 General. The Corporation and each Shareholder shall execute, deliver
and perform all such additional documents, agreements, certificates and
instruments and shall take all such further actions as may be necessary or
advisable to effectuate the terms and conditions of this Agreement.
6.2 Ratification of Agreement. Each Shareholder shall use its best efforts
and shall take all actions necessary to cause the Corporation promptly to
ratify, execute and deliver this Agreement on behalf of the Corporation.
Section 7 Miscellaneous
7.1 Governing Law: Jurisdiction. This Agreement shall be governed by and
interpreted and enforced in accordance with the law of the State of Florida
applicable to contracts negotiated, entered into and to be performed solely in
that State, without regard to the choice or conflicts of law principles of such
State. The parties hereby consent to the jurisdiction of the state and federal
courts located in Broward County, Florida, over the parties hereto and over any
actions, proceedings, disputes or claims relating to or arising in connection
with this Agreement.
7.2 Severability. If any part of this Agreement is held to be
unenforceable or invalid under, or in conflict with, the applicable law of any
jurisdiction, then the unenforceable, invalid or conflicting part shall be
narrowed or replaced, to the extent possible, with a judicial construction in
such jurisdiction that effectuates the intent of the parties regarding this
Agreement and the unenforceable, invalid or conflicting part. Notwithstanding
the unenforceability, invalidity or conflict with applicable law of any part of
this Agreement, the remaining parts shall be valid, enforceable and binding on
the parties.
7.3 Binding Effect; Assignment. This Agreement shall be binding upon,
enforceable by and shall inure to the benefit of the Corporation, each
Shareholder and the respective successors, heirs, legal representatives,
administrators and executors, except to the extent provided otherwise in this
Agreement. Except as otherwise permitted in this Agreement, neither this
Agreement nor any rights or obligations
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hereunder may be assigned or delegated by any party hereto without the prior
written consent of the other parties hereto. The Corporation, in its discretion,
shall have the right (i) to have other holders of capital stock of the
Corporation execute and deliver and become bound and benefitted by this
Agreement, after its date of initial execution by the Shareholders hereunder,
and (ii) to amend Schedule A annexed hereto to add the names and shareholdings
of such additional shareholders. Any such shareholders that subsequently execute
and deliver this Agreement shall be deemed to be Shareholders hereunder and
beneficiaries of this Agreement and all rights and obligations hereunder.
7.4 Amendment: Waiver: Entire Agreement. This Agreement may be amended
only by a writing signed by the parties hereto, except that additional
shareholders may be made parties hereto, and Schedule A may be amended to add
their names and shareholdings, by execution and delivery of this Agreement and
an amendment to Schedule A by the Corporation arid such additional shareholders:
This Agreement constitutes the entire agreement among the parties hereto
relating to the transactions contemplated in this Agreement. Neither any failure
nor any delay on the part of any party to this Agreement in exercising any
right, power or privilege hereunder shall operate as a waiver of any rights of
any such party, unless such waiver is made by a writing executed by such party
and delivered to the other parties, nor shall a single or partial exercise of
any right preclude any other or further exercise of any other right, power or
privilege accorded to any party to this Agreement.
7.5 Notices. (a) All notices provided for herein shall be in writing and
shall be delivered by hand, by a leading nationwide, overnight courier or by
deposit in the United States mail, postage prepaid, by registered or certified
mail, return receipt requested, addressed to the Corporation or any Shareholder,
as the case may be, at the following address of such party:
(i) if to the Corporation to:
Long Distance International Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
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(ii) if to a Shareholder to the address of such Shareholder
set forth on Schedule A.
(a) Notices given by mail shall be deemed to be received on the
earlier of the date shown on the proof of receipt of such mail or, unless the
recipient proves that the notice was received later or not received, five (5)
days after the date of mailing thereof. Other notices shall be deemed given on
the date of receipt. Any party hereto and any party's successor permitted
hereunder may change the address specified above by written notice to the other
parties hereto.
7.6 Books of Account. The books of account of the Corporation or copies
thereof shall be kept at its legal address. Each party or its duly authorized
representative or representatives shall have access to the complete books of
account of the Corporation and reasonable supporting documentation at reasonable
times during normal business hours of the Corporation, upon reasonable prior
notice to the Corporation, and shall be entitled to makes photocopies thereof.
7.7 Legend. Each of the certificates representing Stock shall bear a
legend setting forth any restrictions on transfer or other provisions legally
required or otherwise deemed necessary or advisable by the Corporation,
including a legend in substantially the following form, and the Corporation and-
the Subscriber agree to abide by the term set forth in such legend until it is
removed from the certificate in accordance with this Agreement and applicable
law:
"The shares of stock represented by this
certificate are subject to the term and
conditions of a Shareholders Agreement among the
Corporation, Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxx
and other shareholders dated as of _______,
199__, which contains, among other provisions,
restrictions on transfer, sale or other
disposition of the shares and provisions
regarding management of the Corporation. A copy
of such agreement is on file in the offices of
the Corporation."
7.8 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
7.9 Counterparts. This Agreement may be executed in two or more
counterpart copies, each of which shall be an original and all of which together
shall be one and the same agreement.
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IN WITNESS WHEREOF, the Corporation and the Shareholders have
executed and delivered this Agreement as of the date first set forth above.
LONG DISTANCE
INTERNATIONAL INC.
By
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Xxxxxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxx
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