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EXHIBIT 10.8
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of May 22, 1997, is by and among
SAGAPONACK PARTNERS, L.P., a California limited partnership, and SAGAPONACK
INTERNATIONAL PARTNERS, L.P., a Cayman Islands limited partnership
(individually, an "Investor" and, together, the "Investors"), and XXX X. XXXX,
XXXXXX X. XXXXX, XXXX X. XXXXXXX, XXX X. XXXXXXXXX, XXXXXX XXXX-XXXXX, THE
XXXXX FAMILY REVOCABLE TRUST DATED 8/19/96, XXXXXX X. XXXXX AND XXXXX X. XXXXX,
TRUSTEES and THE XXXXXXX X. & XXXX X. XXXXXX TRUST DATED 7/14/86, XXXX X.
XXXXXX, TRUSTEE (Cook, Crane, Bronfin, Ainsworth, Xxxx-Xxxxx, The Xxxxx Family
Revocable Trust and The Xxxxxxx X. & Xxxx X. Xxxxxx Trust hereinafter referred
to collectively as the "Shareholders" and individually as a "Shareholder").
I. BACKGROUND
1. Xxxxxx General Corporation, a California corporation (the
"Company") is authorized to issue 7,304,520 shares (the "Shares") of common
stock of the Company ("Common Stock") and 2,625,432 warrants to purchase Common
Stock sold on or about the date hereof to an Investor (the "Warrant"); and
2. Each Shareholder is the record and beneficial owner of the
number of issued and outstanding Securities appearing opposite his name in
Exhibit A to this Agreement, free and clear of all options, liens, encumbrances
or charges of any kind except as set forth in this Agreement; and
3. The parties deem it in the best interests of the Company to
provide for the election of directors as herein provided and delivery of this
Shareholders Agreement is a condition to the investment to be made by an
Investor concurrently herewith.
II. AGREEMENT
In consideration of the agreements and mutual covenants set forth
herein, the parties agree as follows:
1. BOARD OF DIRECTORS.
(A) SHAREHOLDERS VOTE. The Company may, from time to
time, nominate persons to become members of the Company's Board of Directors
pursuant to the terms of a subsection of Section 1(a), (b), (d), (e) and (f) of
the Company Agreement, dated the date hereof, between the Investors and the
Company (the "Company Agreement"). Such persons so nominated shall be
hereinafter called, individually, a "Nominated Person" and, collectively, the
"Nominated Persons". Each Shareholder hereby agrees that he/it will cause all
shares of
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Common Stock registered in the name of such Shareholder to be voted, and will
otherwise take or cause to be taken all such other action as may be necessary,
so that each Nominated Person will be elected as a member of the Company's
Board of Directors so long as the Investors vote their shares of Common Stock
for such Nominated Persons and cause all other shares of Common Stock under
their direct or indirect control to be voted for such Nominated Persons. The
obligations set forth in the immediately preceding sentence shall not apply to
subsequent holders of shares of Common Stock held by a Shareholder if such
shares were sold to such subsequent holder in a bona fide third-party sale.
Notwithstanding the foregoing, the Shareholders will not be obligated to vote
their shares of Common Stock for Nominated Person at any meeting of the
shareholders of the Company if (i) it is conclusively and reasonably determined
that the number of shares of Common Stock owned or controlled by the Investors
represents a majority of the shares of Common Stock present in person or by
proxy and entitled to vote at such meeting, (ii) cumulative voting provisions
in the California Corporation Code shall have not been amended or modified in a
way that requires the Investors to own or control more than a majority of the
Common Stock in order for the Investors to elect a majority of the members of
Company's Board of Directors and (iii) Company's constituent documents shall
not have been amended or modified in a way that requires the Investors to own
or control more than a majority of the common Stock in order for the Investors
to elect a majority of Company's Board of Directors.
2. REPRESENTATIONS. Each Shareholder represents that such
Shareholder is the record and beneficial owner of the number of issued and
outstanding Securities appearing opposite such Holder's name in Exhibit A
attached hereto, free and clear of any option, lien, encumbrance or charge of
any kind whatsoever, except as created by or described in this Agreement and
Shareholders Agreement.
3. EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance an injunctive relief,
may be used to enforce such provisions.
4. MISCELLANEOUS.
(A) NOTICES. Any and all notices, designations, consents,
offers, acceptances, or any other communication provided for herein shall be
given in writing delivered personally (including delivery by courier or by
facsimile if received during normal working hours) or by registered or
certified mail, addressed to a Shareholder at the address indicated for such
Shareholder on the Schedule of Shareholders attached hereto, or to such other
address as may be designated in writing by any such party. Except as otherwise
provided in this Agreement, each such notice shall be deemed given when
delivered or on a date which is 4 days after it is mailed in any post office or
branch post office regularly maintained by the United States Postal Service
(registered or certified, which postage prepaid and properly addressed).
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(B) AMENDMENT. No change in or modification of this
Agreement shall be valid unless the same shall be in writing and signed by an
Investor and Shareholders representing more than 50% of the Common Stock held
by the Shareholders in the aggregate.
(C) WAIVER. No failure or delay on the party of the
parties or any of them in exercising any right, power or privilege hereunder,
nor any course of dealing between the parties or any of them shall operate as a
waiver of any such right, power or privilege nor shall any single or partial
exercise of any such right, power or privilege preclude the simultaneous or
later exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and are not exclusive of any rights or
remedies which the parties or any of them would otherwise have. No notice to
or demand on the company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the other parties or any of them to take any other or
further action in any circumstances without notice or demand.
(D) COUNTERPARTS. This Agreement may be executed in two
or more counterparts each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(E) GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California without regard to principles of conflict of laws.
(F) BENEFIT AND BIDING EFFECT. Except as otherwise
provided in this Agreement, no right under this Agreement shall be assignable
and any attempted assignment in violation of this provision shall be void.
This Agreement shall be binding upon and inure to the benefit of the parties
and their executors, administrators, personal representatives, heirs,
successors and permitted assigns. Except as set forth in this clause (i), this
Agreement does not create and shall not be construed as creating any rights
enforceable by any Person not a party hereto.
(G) TERM. The obligations of the Shareholders hereunder
shall not be effective at such time as the aggregate number of shares of Common
Stock owned by an Investor or under the direct or indirect control of an
Investor is less than 10% of the total outstanding number of shares of Common
Stock.
(H) SEVERABILITY. In the event that any potion of this
agreement shall be held to be invalid or unenforceable to any extent, such
portion shall be enforced to the fullest lawful extent and the remaining parts
hereof shall nevertheless continue to be valid and enforceable as though the
invalid portions were not a part hereof. If any time period set forth herein
is held by a court of competent jurisdiction to be unenforceable, a different
time period that is determined by the court to be more reasonable shall replace
the unenforceable time period.
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IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders Agreement as of the date and year first above written.
Shareholders: /s/ XXX X. XXXX
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XXX X. XXXX
/s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
/s/ XXXX X. XXXXXXX
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XXXX X. XXXXXXX
/s/ XXX X. XXXXXXXXX
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XXX X. XXXXXXXXX
/s/ XXXXXX XXXX-XXXXX
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XXXXXX XXXX-XXXXX
THE CRANE FAMILY REVOCABLE TRUST DATED
8/19/96, XXXXXX X. XXXXX AND XXXXX X.
XXXXX TRUSTEES
/s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
/s/ XXXXX X. XXXXX
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XXXXX X. XXXXX
THE XXXXXXX X. and XXXX X. XXXXXX TRUST
DATED 7/14/86, XXXX X. XXXXXX, TRUSTEE
/s/ XXXXXXX X. XXXXXX ATTORNEY IN FACT
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XXXX X. XXXXXX
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The Investors: SAGAPONACK PARTNERS, L.P.
By: /s/ XXXXX X. XXXXXXXXXX
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Title:
SAGAPONACK INTERNATIONAL PARTNERS, L.P.
By: /s/ XXXXX X. XXXXXXXXXX
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Title:
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Exhibits and Schedules
Schedule 1 Names of Potential Board Members
Exhibit A. Shareholders
Exhibit B. Consent and Acknowledgment of Spouse
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