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EXHIBIT 10.9
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement"), is made and effective
as of September 29 1995 by and among NEW META LICENSING CORPORATION, a Delaware
corporation (the "Corporation"), and each of the undersigned (collectively
referred to as the "Original Shareholders" and individually as an "Original
Shareholder") (any person, partnership, association, trust, corporation,
limited liability company, or other entity acquiring any Shares (defined below)
in accordance with the terms and conditions of this Agreement or otherwise, and
any transferee that acquires any Shares from any such person or entity, and the
heirs, executors, administrators, successors and assigns of any such person or
entity, is referred to as an "Additional Shareholder" and collectively are
referred to as the "Additional Shareholders," and together with the Original
Shareholders are referred to as the "Shareholders"):
WITNESSETH:
WHEREAS, on September 22, 1995, the Certificate of Incorporation of
New Meta Licensing Corporation was filed by the Secretary of State for the
State of Delaware (the "Certificate");
WHEREAS, pursuant to the Certificate the authorized capital stock of
the Corporation consists solely of Ten Million (10,000,000) shares of Voting
Common Stock $.01 par value (the "Voting Common"), Three Million (3,000,000)
shares of Non-Voting Common Stock $.01 par value and Three Million (3,000,000)
shares of Preferred Stock $.01 par value (collectively the "Shares");
WHEREAS, the Corporation has issued an aggregate of Four Million
(4,000,000) shares of its Voting Common to its parent corporation, Metanetics
Corporation ("Metanetics"), and the undersigned. There are no shares of
Non-Voting Common Stock or Preferred Stock issued or outstanding;
WHEREAS, Metanetics has redeemed the Voting Common Stock in Metanetics
owned by Yung Fu Xxxxx ("Xxxxx"), Xxxxxx X. Xxxx ("Xxxx"), Xxxx Xxx ("Xxx") in
exchange for an equal number of share of the Corporation's Voting Common owned
by Metanetics;
WHEREAS, the individual signatories hereto are executives of the
Corporation, Metanetics and/or Metanetics' parent corporation, Telxon
Corporation ("Telxon") (the "Telxon Transferees");
WHEREAS, the purchase of Shares by the Telxon Transferees remains on
the date hereof subject to ratification by Telxon's Board of Directors (the
"Executive Sale"); and
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WHEREAS, the parties hereto desire to enter into this Agreement to
govern the transfer of Shares and certain matters of corporate governance.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement,
intending to be legally and equitably bound, hereby agree as follows:
ARTICLE 1. GOVERNING LAW
This Agreement shall be governed under, and in accordance with the
laws of the State of Delaware, without regard to conflict of laws principles.
ARTICLE 2. MANAGEMENT
(a) GENERAL. The Corporation shall have a Board of Directors
comprised of up to five (5) directors, but no fewer than three (3) directors
(in the event the Board is deadlocked its Chairman shall cast the deciding
vote); however, subject to applicable law governing the responsibilities and
liabilities of directors, which shall in any event take precedence, the Board's
power and authority shall be restricted such that it may take no action which
conflicts with the terms hereof or which is reserved to the Shareholders
hereunder. Except as otherwise provided in this Agreement or as required by
applicable law, all matters requiring action by the Shareholders shall be
determined by a Two Thirds (2/3) majority vote based on the number of shares of
Voting Common then owned by them. The Shareholders acknowledge and agree that
the intellectual property of the Corporation has been assigned to Metanetics
which has in turn granted back an exclusive license of the intellectual
property to the Corporation. The Shareholders agree that the Directors of the
Corporation shall be the following persons until their successors are elected
in accordance with this Agreement, the Certificate and the Corporation's
By-laws:
Yung Fu Xxxxx
Xxxxxx X. Xxxx
LazerData designee
Xxxxx X. Xxxxx (Chairman)
Xxxxxx X. Xxxxxx
Notwithstanding the foregoing, the LazerData designee shall be named from time
to time soley by LazerData Corporation ("Lazer"), so long as Lazer then owns at
least 5% of the issued and outstanding shares of the Corporation's capital
stock, by delivering written notice duly executed by an officer of Lazer to the
Secretary of the Corporation, for inclusion in the Corporation's minutes. In
the event the Board establishes an Executive Committee, then so long as
LazerData has the right to designate a Board member pursuant to this Article
2(a), such Board member shall have the right to sit on Such Committee.
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(b) BY-LAWS. The Corporation's By-laws shall continue in full
force and effect from and after the date hereof. To the extent that the terms
and conditions of this Agreement conflict with the Corporation's By-Laws, the
terms and conditions of this Agreement shall control.
(c) ACTION BY WRITTEN CONSENT. Any vote, approval, authorization
or other action to be taken by the Shareholders or directors of the Corporation
may be taken without a meeting, without prior notice and without a vote if a
consent or consents in writing, setting forth the action so taken, shall be
signed by Two Thirds (2/3) of the Shareholders entitled to vote on matters put
before the Shareholders, or Two Thirds (2/3) of the directors entitled to vote
on matters put before the directors, as the case may be. The original of such
consent(s) shall be entered in the record of minutes of the proceedings of the
shareholders or directors, as applicable, of the Corporation.
ARTICLE 3. TRANSFER OF SHARES
(a) PROHIBITION ON TRANSFER. No Shareholder shall sell, exchange,
give, transfer, assign, pledge, encumber, hypothecate, or otherwise dispose of
any Shares, or any legal, beneficial or other interest in any Shares, whether
now owned or hereafter acquired, whether voluntarily, involuntarily, by
operation of law, or otherwise, including by way of intestacy, will, gift,
bankruptcy, execution, or seizure and sale by legal process (such events
separately and collectively are referred to as a "Transfer"), except as
provided in this Agreement. The rights and obligations set forth in this
Article 3 are subject in their entirety to the rights and obligations set forth
in Article 4.
(b) CORPORATION RIGHT OF FIRST REFUSAL. In the event that a
Shareholder at any time desires to Transfer all or any portion of his Shares to
any third party (the "Offeror"), he must first offer to Transfer his Shares to
the Corporation. Such offer must be upon the same terms and conditions as he
proposes to Transfer such Shares to the Offeror, which terms and conditions
shall be set forth in a written notice of offer (the "Notice of Offer"). The
Notice of Offer shall state with particularity the terms upon which the
Transfer of the Shares is proposed to be made, including, without limitation,
the purchase price to be paid for the Shares, if any, the time and method of
payment, and if payment is to be made other than in cash, the rate of interest
to be paid on the non-cash portion of said purchase price (collectively the
"Offer Price and Terms"). The Corporation shall have a period of thirty (30)
days after receipt of the Notice of Offer within which to accept or reject in
writing said offer of Transfer. Should the Corporation accept such offer, it
shall forthwith acquire the tendered Shares at the Offer Price and Terms.
Failure of the Corporation to respond in writing to a Notice of Offer within
such thirty (30) day period shall be deemed a rejection of said offer.
(c) ORIGINAL SHAREHOLDER RIGHT OF FIRST REFUSAL. Should any of
the subject Shares remain un-acquired by the Corporation at the expiration of
the period specified in Article 3(b), the tendering Shareholder shall offer to
Transfer his Shares to the Original Shareholders (excluding the tendering
Shareholder if he is an Original Shareholder), if any, pro-rata to their Share
interests, respectively at the Offer Price and Terms. The Original
Shareholders shall have a period of thirty (30) days after receipt of the
Notice of Offer within which to accept or reject
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in writing said offer of Transfer. Should any Original Shareholder accept
such offer, he shall forthwith acquire the tendered Shares at the Offer Price
and Terms. Failure of any Original Shareholder to respond in writing to a
Notice of Offer within such thirty (30) day period shall be deemed a rejection
of said offer. Should any, but not all, of the subject Shares remain
un-acquired following the expiration of such thirty (30) day period, the
remaining Original Shareholders electing to acquire tendered Shares shall have
an additional Seven (7) day period to acquire the unsold Shares, pro rata to
their Share interests, respectively (as between themselves).
(d) ADDITIONAL SHAREHOLDER RIGHT OF FIRST REFUSAL. Should any of
the subject Shares remain un-acquired by the Original Shareholders at the
expiration of the periods specified in Article 3(c), or should there be no
Original Shareholders at the time the subject Shares are offered, the tendering
Shareholder shall offer to Transfer his Shares to the Additional Shareholders
(excluding the tendering Shareholder if he is an Additional Shareholder), if
any, pro rata to their Share interests, respectively. The Additional
Shareholders shall have a period of fifteen (15) days after receipt of the
Notice of Offer within which to accept or reject in writing said offer of
Transfer. Should any Additional Shareholder accept such offer, he shall
forthwith acquire the tendered Shares at the Offer Price and Terms. Failure of
any Additional Shareholder to respond in writing to a Notice of Offer within
such fifteen (15) day period shall be deemed a rejection of said offer. Should
any, but not all, of the subject Shares remain un-acquired following the
expiration of such fifteen (15) day period, the remaining Additional
Shareholders electing to acquire tendered Shares shall have an additional Seven
(7) day period to acquire the unsold Shares, pro rata to their Share interests,
respectively (as between themselves).
(e) TRANSFER AND TAG ALONG. If all of the tendered Shares are not
acquired by either the Corporation, the Original Shareholders and/or the
Additional Shareholders, within the time periods provided for in Articles 3(b),
(c) and (d), respectively, the tendering Shareholder may Transfer the remaining
un-acquired Shares to the Offeror; provided, however, that if the tendering
Shareholder holds more than five percent (5%) of the then issued and
outstanding Shares, then each of the non-tendering Original Shareholders who
hold less than five percent (5%) of the then issued and outstanding Shares may
participate with the tendering Shareholder in such Transfer, at the Offer Price
and Terms, pro rata to their respective Share interests (as between themselves
and the tendering Shareholder). Any such Original Shareholder that desires to
participate in the Transfer shall have a period of fifteen (15) days after
receipt of the Notice of Offer within which to notify the tendering Shareholder
in writing of his election to participate in the Transfer. The tender
Shareholder's Transfer must be completed within fifteen (15) days following the
last day on which the last party could have acquired the Shares under Article
3(d), and must be at the Offer Price and Terms set forth in the applicable
Notice of Offer.
(f) ALTERATION OF TERMS. Each time the Offer Price and Terms are
altered in any fashion, including, but not limited to, changes in the identity
of the proposed Offeror or the consideration to be paid for the Shares to be
Transferred, or in the event that a Transfer is not completed within the time
period provided for in Article 3(e), then the subject Shares shall be
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re-offered to the Corporation, Original Shareholders and Additional
Shareholders in accordance with Article 3(b), (c) and (d), respectively, as if
a totally new transaction were proposed.
(g) PERMITTED TRANSFER. A non-entity Original Shareholder is
permitted to Transfer his Shares during his life without first offering his
Shares to the Corporation, Original Shareholders or Additional Shareholders in
accordance with Article 3(b), (c) and (d), respectively if, but only if, the
Transfer is to a trust created by the Original Shareholder for his benefit, or
his spouse's benefit or the benefit of his lineal descendants, or to a
corporation wholly owned by the Original Shareholder or his or her spouse. In
the event of such a permitted Transfer, the transferor shall promptly furnish
written notice thereof to the Corporation and the transferee shall thereupon
succeed to and may exercise any and all rights formerly held by the selling
Original Shareholder, and shall be bound by the terms, conditions and
restrictions contained in this Agreement. Such a transferee shall be deemed to
be an Additional Shareholder. Concurrently with such permitted Transfer, the
transferee shall execute a written agreement to be bound by the terms and
provisions of this Agreement, in form and substance satisfactory to counsel for
the Corporation. A corporate Original Shareholder is permitted to Transfer its
Shares without first offering its Shares to the Corporation, Original
Shareholders or Additional Shareholders in accordance with Article 3(b), (c)
and (d), respectively, if, but only if, the Transfer is to a corporation of
which at least 80% of the issued and outstanding shares of its capital stock
are owned by the Original Shareholder, or if at least 80% of the issued and
outstanding shares of the Original Shareholder's capital stock are owned by the
Transferee, and each such transferee may similarly Transfer such Shares to
similarly controlled or controlling affiliate corporations. Each such
Transferee shall be deemed to be an Original Shareholder. Any transfer
hereunder shall not be effective until such agreement is accepted by counsel
for the Corporation and the transferee shall have executed and delivered that
agreement to the Corporation.
(h) ADDENDUM. Before the holdings of the successor in interest
of any Shareholder shall be honored by the Corporation or accepted upon its
stock register and before any right, title or interest whatsoever therein shall
vest in such successor, and before the Corporation shall issue or agree to
issue any previously unissued (or reissue or agree to reissue from treasury)
Shares of, or any securities convertible into or exercisable for, stock of the
Corporation, the Corporation shall require, as a condition to the issuance of a
stock certificate or other instrument evidencing such stock or other security,
that said successor in interest or the person to whom any such previously
unissued (or reissued) Shares or other securities are to be issued, as the case
may be, execute and deliver to the Secretary of the Corporation an Addendum to
this Agreement in substantially the following form with appropriate insertions:
ADDENDUM
Pursuant to the SHAREHOLDER AGREEMENT (the "Agreement") dated
September ___, 1995 by and among New Meta Licensing
Corporation, a Delaware corporation (the "Corporation") and
its Shareholders, the undersigned, now the holder of
__________ shares of _______ stock, with $.01 par
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value, of the Corporation evidenced by certificate(s) numbered
__________, does hereby become a party to the Agreement
entitled to the rights, and subject to the obligations, as set
forth therein with the same force and effect as though he had
executed said Agreement as an initial signatory party thereto.
The undersigned acknowledges that he has read said Agreement
and is familiar with and understands its terms.
Dated this _____ day of __________, 199__.
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(signature of new shareholder)
Whether or not such Addendum is executed, each such successor in interest or
new holder of Shares or other security shall in any event be bound by, and
shall perform the obligations imposed by, this Agreement with the same force
and effect as if such successor in interest had signed this instrument.
ARTICLE 4. TRANSFER OF SHARES AFTER DEATH OF
A SHAREHOLDER OR TERMINATION OF EMPLOYMENT
OF AN EMPLOYEE SHAREHOLDER
(a) GENERAL. Notwithstanding anything in this Agreement to the
contrary, all Shares shall be subject to Article 4, whether such Shares are
owned by the an Original Shareholder, Additional Shareholder or any transferee
of a Shareholder, or an immediate or subsequent transferee thereof.
(b) CORPORATION'S CALL OPTION. Upon the death of any Shareholder,
the voluntary or involuntary termination of employment of a Shareholder who is
employed by the Corporation, Metanetics or Telxon or any involuntary transfer
of the Shares of any Shareholder, including transfers by reason of dissolution,
liquidation, change in control, levy or execution, in connection with a divorce
or dissolution proceeding, by judicial sale, sale by a receiver or in any
bankruptcy or insolvency proceeding (individually an "Involuntary Event" and
collectively "Involuntary Events"), the Corporation shall have an option to
purchase the Shares of such Shareholder's Shares for an amount equal to the
Applicable Value (defined below) (if the Corporation is unable for any reason
to exercise any right under this Section 4(b), then Telxon shall succeed to
such rights). The Corporation shall have a period of thirty (30) days after
receipt of notice of the Involuntary Event giving rise to its right to purchase
such Shares to exercise this option in writing. If such Involuntary Event is
the death of a Shareholder, then said thirty (30) day exercise period shall not
begin to run until an executor or administrator of the deceased Shareholder's
estate has been appointed by a court of competent jurisdiction. Should the
Corporation exercise this option, it shall forthwith acquire the subject Shares
at a price equal to the Applicable Value. This option shall automatically
expire if not exercised within such thirty (30) day period. Nothing herein is
intended to or shall be construed as an
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implied promise of employment or continued employment of any Shareholder by
either the Corporation or Telxon.
(c) TELXON'S VOTING TRUST. At any time and from time to time,
from and after the date hereof, Telxon shall have the right to require the
Telxon Transferees to place any or all of their Shares in a voting trust the
form and substance of which shall be determined by Telxon.
(d) APPLICABLE VALUE. "Applicable Value" shall be determined as
follows:
(i) If the Involuntary Event giving rise to the
Corporation's right to exercise its call option is the death of a
Shareholder, then the Applicable Value shall be Fair Market Value
(defined below);
(ii) If the Involuntary Event giving rise to the
Corporation's right to exercise its call option is the termination of
a Shareholder's employment by the Corporation, Metanetics and/or
Telxon, if applicable, for other than gross misconduct, then the
Applicable Value shall be Fair Market Value;
(iii) If the Involuntary Event giving rise to the
Corporation's right to exercise its call option is the termination of
a Shareholder's employment by the Corporation, Metanetics and/or
Telxon, if applicable, for gross misconduct or voluntary separation by
the Shareholder for any reason, then the Applicable Value shall be
Fair Market Value for the Fixed portion of the Shareholder's Shares
and the lower of Fair Market Value or cost on the Un-Fixed portion.
(A) One fifth (1/5) of the Shares owned on the
date hereof by Xxxxxx X. Xxxx, Xxxx Xx Xxxxx and Xxxx Xxx,
respectively, shall "Fix" on each of the next five (5)
anniversaries of the date of this Agreement.
(B) One third (1/3) of the Shares owned on the
date hereof by the Telxon Transferees, respectively, shall
"Fix" on each of the next three (3) anniversaries of the date
of this Agreement.
(iv) If the Involuntary Event giving rise to the
Corporation's right to exercise its call option is any other
Involuntary Event, then the Applicable Value shall be Fair Market
Value.
(e) FAIR MARKET VALUE. "Fair Market Value" shall be either (i)
the per share price paid by purchasers in the most recent private placement of
Shares, the aggregate proceeds from which exceeded One Million Dollars
($1,000,000), or if no such private placement has taken place within the last
one (1) year (ii) Fair Market Value shall be determined by Xxxxxxxxx and Xxxxx
or any other investment banking firm mutually agreed upon by the parties to the
transaction, as of the date of the Involuntary Event giving rise to the
valuation, without regard to the Corporation's loss or replacement of any
Shareholder/employee. The fees and costs incurred with such investment banking
firm shall be paid by the purchaser; provided, however
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that the seller shall pay a portion of such fees and costs in proportion to his
or her ownership of the then issued and outstanding Shares. In the event that
either seller or purchaser is dissatisfied with the valuation then a
dissatisfied party may obtain its own valuation from a qualified, nationally
recognized investment banking firm, which must be completed within sixty (60)
days after completion of the initial valuation. If no valuation obtained by a
dissatisfied party varies from the initial valuation by more than 10%, then the
two or three valuations, as the case may be, shall be averaged and that average
shall be the Fair Market Value of the Shares. The cost of a dissatisfied
party's valuation shall be paid by the dissatisfied party. If the valuation
obtained by any dissatisfied party varies from the initial valuation by more
than 10%, then the valuation issue shall be submitted to the American
Arbitration Association for its determination of value in accordance with its
commercial arbitration rules; provided that such valuation shall be based
solely on the valuations already obtained pursuant to this Section, and in no
event shall exceed the greatest such valuation nor be less than the lowest such
valuation. The cost of the arbitration shall be paid equally by seller and
purchaser.
ARTICLE 5. REGISTRATION RIGHTS
(a) DEFINITIONS. As used in this Article 5, the following terms
have the following meanings:
"Commission" means the United States Securities and Exchange
Commission.
"IPO" means an underwritten, firm commitment, public offering
by New Meta Licensing Corporation of its Voting Common Stock.
"NASD" means the National Association of Securities Dealers,
Inc.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government, or any agency or
political subdivision thereof.
"Registrable Securities" means (a) Voting Common; and (b) any
stock or other securities of the Corporation acquired by a Shareholder
in a stock split or reclassification of, or a stock dividend or other
distribution on or in substitution or exchange for, or otherwise
acquired in connection with the securities described in clause (a)
above.
"Rule 144" means Rule 144 promulgated under the Securities Act
or any successor rule thereto or Rule 144A or any other rule
promulgated under the Securities Act complementary thereto.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
(b) INCIDENTAL REGISTRATION. Each time the Corporation shall
determine to proceed with the actual preparation and filing of a registration
statement under the Securities Act in connection with the proposed offer and
sale for money of any of its securities by it or any of its
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security holders (other than a registration statement on Forms X-0, X-0 or
other limited purpose form), the Corporation will give written notice of its
determination to each Shareholder. Upon the written request of a Shareholder
given within thirty (30) days after receipt of any such notice from the
Corporation, the Corporation will cause the Shareholder's Registrable
Securities to be included in such registration statement. Nothing herein shall
prevent the Corporation from, at any time, abandoning or delaying such
registration. If any registration pursuant to this section shall be
underwritten, in whole or in part, the Corporation may require that, and any
holder of the Registrable Securities shall be entitled, upon request, to have
the Registrable Securities included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters.
(c) REGISTRATION PROCEDURES. If and whenever the Corporation
attempts to effect the registration of any Registrable Securities under the
Securities Act pursuant to the provisions hereof, the Corporation will:
(i) prepare and file with the Commission a registration
statement with respect to such securities, and use its best efforts to
cause such registration statement to become and remain effective for
such period as may be reasonably necessary to effect the sale of such
securities, but not to exceed nine months;
(ii) prepare and file with the Commission such amendments
to such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration
statement effective for such period as may be reasonably necessary to
effect the sale of such securities, but not to exceed nine months;
(iii) furnish to the Shareholder such registration and to
the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such
underwriters may reasonably request in order to facilitate the public
offering of such securities;
(iv) use its best efforts to register or qualify the
securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as the Shareholder
may require;
(v) notify the Shareholder, promptly after it shall
receive notice thereof, of the time when such registration statement
has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
(vi) notify the Shareholder promptly of any request by the
Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(vii) prepare and file with the Commission, promptly upon
the request of the Shareholder, any amendments or supplements to such
registration statements or prospectus which, in the opinion of counsel
for the Shareholder, is required under the
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Securities Act or the rules and regulations thereunder in connection
with the distribution of the Registrable Securities by the
Shareholder;
(viii) prepare and promptly file with the Commission and
promptly notify the Shareholder of the filing of such amendment or
supplement to such registration statement or prospectus, as may be
necessary to correct any statements or omissions if, at the time when
a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as a result of
which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or fail to state
any material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading;
(ix) advise the Shareholder, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal, if
such stop order should be issued;
(x) not file any amendment or supplement to such
registration statement or prospectus to which the Shareholder shall
have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or the rules and regulations
thereunder, after having been furnished with a copy thereof at least
five (5) business days prior to the filing thereof, unless in the
opinion of counsel for the Corporation the filing of such amendment or
supplement is reasonably necessary to protect the Corporation from any
liabilities under any applicable federal or state law; and
(xi) at the request of the Shareholder, furnish on the
effective date of the registration statement and, if such registration
includes an underwritten public offering, at the closing provided for
in the underwriting agreement: (a) opinions, dated such respective
dates, of the counsel representing the Corporation for the purposes of
such registration, addressed to the underwriters, if any, and to the
Shareholder, covering such matters as such underwriters and the
Shareholder may reasonably request; and (b) letters, dated such
respective dates, from the independent certified public accountants of
the Corporation, addressed to the underwriters, if any, and to the
Shareholder, covering such matters as such underwriters and the
Shareholder may reasonably request, in which letters such accountants
shall state (without limiting the generality of the foregoing) that
they are independent certified public accountants within the meaning
of the Securities Act and that in the opinion of such accountants the
financial statements and other financial data of the Corporation
included in the registration statement or any amendment or supplement
thereto comply in all material respects with the applicable accounting
requirements of the Securities Act.
(d) EXPENSES. The Corporation shall bear all fees, costs and
expenses of any registration hereunder, including but not limited to all
registration, filing and NASD fees,
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printing expenses, fees and disbursements of counsel and accountants for the
Corporation and the Shareholder and all legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified, except that underwriting discounts and commissions and transfer
taxes for the Shareholder shall be borne by the Shareholder.
(e) INDEMNIFICATION. The Corporation will defend, indemnify and
hold harmless the Shareholder and any underwriter (as defined in the Securities
Act) for the Shareholder and each person, if any, who controls the Shareholder
or such underwriter within the meaning of the Securities Act, from and against
any and all loss, damage, liability, cost and expense to which the Shareholder
or any such underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement 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, in light of the circumstances in which they were made, not misleading;
provided, however, that the Corporation will not be liable in any such case to
the extent that any such loss, damage, liability, cost or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by the
Shareholder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(f) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Corporation
will not take any action, or permit any change within its control to occur,
with respect to the Registrable Securities, which would adversely affect the
ability of the Shareholder to include such securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration.
(g) ASSIGNMENT. The rights under this Article 5 are fully
assignable by the Shareholders, and shall inure to the benefit of the
Shareholders and their respective successors and assigns.
(h) RULE 144. From the first date that any Shareholder's
Registrable Securities are registered pursuant to the terms hereof, or such
earlier date as of which a registration statement filed by the Corporation
pursuant to the Securities Exchange Act of 1934 (as amended, the "1934 Act"),
relating to any class of the Corporation's securities shall become effective,
and until the Original Shareholders shall own less than an aggregate of two (2)
percent of any class or series of equity securities of the Corporation, the
Corporation shall comply with all of the reporting requirements of the 1934
Act, whether or not it shall be required to do so, and shall comply with all
other public information reporting requirements of the Commission which are
conditions to the availability of Rule 144 for the sale of the Voting Common
Stock. The Corporation shall cooperate with the Shareholder in supplying such
information as may be necessary for it to complete and file any information
reporting forms presently or hereafter required by the Commission as a
condition to the availability of Rule 144.
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ARTICLE 6. MISCELLANEOUS
(a) In the event that Telxon's Board of Directors fails to ratify
the Executive Sale, then each of the undersigned acknowledges and agrees that
the Executive Sale will be voided ab initio and the Corporation will promptly
adopt an incentive stock option plan, pursuant to which options to acquire the
same respective number of Shares that were to be acquired by the Telxon
Transferees in the Executive Sale will be issued to the Telxon Transferees at
an exercise price of $.50 per Share.
(b) The parties hereto agree that, except as may otherwise be
consented to by the Shareholders in accordance with Article 2(c), the
Corporation shall not issue or agree to issue any previously unissued (or
reissue or agree to reissue from treasury) Shares of, or any securities
convertible into or exercisable for, Shares. In the event that the Corporation
intends to or agrees to issue any previously unissued (or reissues or agrees to
reissue from treasury) Shares, or any securities convertible into Shares, to
any third party (the "Offeree"), it must first offer to sell such Shares to the
Original Shareholders, if any, pro-rata to their Share interests, respectively,
upon the same terms and conditions as it proposes to sell such Shares to the
Offeree, which terms and conditions shall be set forth in a written notice of
offer (the "Notice"). The Notice shall state with particularity the terms upon
which the sale of the Shares is proposed to be made, including, without
limitation, the purchase price to be paid for the Shares and the time and
method of payment (the "Terms"). The Original Shareholders shall have a period
of seven (7) days after receipt of the Notice within which to accept or reject
in writing said offer. Failure of any Original Shareholder to respond in
writing to a Notice within such seven (7) day period shall be deemed a
rejection of said Offer. Original Shareholders electing to acquire such Shares
shall have three (3) days from the date of accepting said offer to acquire such
Shares.
(c) In order to effectuate the terms and restrictions of this
Agreement, each certificate of stock evidencing Shares owned by the
Shareholders or issued by the Corporation shall bear the following legend:
OWNERSHIP, ENCUMBRANCE, PLEDGE, ASSIGNMENT,
TRANSFER, OR OTHER DISPOSITION OF THIS
CERTIFICATE OF STOCK, OR ANY SHARES ISSUED IN
LIEU THEREOF, ARE SUBJECT TO RESTRICTIONS
CONTAINED IN AN AMENDED AND RESTATED SHAREHOLDER
AGREEMENT DATED AND EFFECTIVE AS OF THE ___ DAY
OF SEPTEMBER, 1995, BY AND AMONG THE CORPORATION
AND ITS SHAREHOLDERS, A COPY OF WHICH IS ON FILE
IN THE OFFICE OF THE SECRETARY OF THE
CORPORATION. A COPY OF THE SHAREHOLDER
AGREEMENT AND THE CORPORATION'S BY-LAWS WILL BE
MAILED BY THE CORPORATION TO ANY SHAREHOLDER
WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER
WRITTEN REQUEST THEREFOR.
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THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") AND APPLICABLE
STATE SECURITIES LAWS ("STATE LAWS") AND HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT REGISTERING THE SHARES UNDER THE ACT
AND STATE LAWS OR (ii) A TRANSACTION PERMITTED
BY RULE 144 OR RULE 145 UNDER THE ACT OR
EQUIVALENT STATE LAWS FOR WHICH THE ISSUER HAS
RECEIVED REASONABLY SATISFACTORY EVIDENCE OF
COMPLIANCE WITH THE PROVISIONS OF SUCH
APPLICABLE RULE OR (iii) AN OPINION OF COUNSEL
SATISFACTORY TO ISSUER THAT SUCH SHARES ARE
EXEMPT FROM THE REGISTRATION PROVISIONS OF THE
ACT AND STATE LAWS OR (iv) A NO-ACTION LETTER
FROM THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION AND THE STATE DIVISION OF SECURITIES
THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR STATE LAWS."
(d) If a Shareholder or his executor, administrator, or transferee
shall be in default under any of the terms and conditions of this Agreement, or
if any Shares are held in any manner contrary to the terms and conditions of
this Agreement, the Corporation may avail itself of all remedies afforded at
law or in equity, and, in addition, no dividends shall be paid upon the Shares
with respect to which such default exists and the holder of such Shares shall
not be entitled to vote.
(e) Failure of the Corporation or remaining Shareholders to
acquire Shares as to which notice has been given hereunder or for which a right
or option to acquire has become exercisable, and the Transfer of any Shares to
any transferee or any subsequent transferee, shall not be deemed to release
said Shares from any of the restrictions herein contained. All restrictions
imposed in this Agreement shall apply to any future Transfer of Shares, whether
acquired through voluntary acts or by operation of law. Any purported Transfer
of Shares in violation of this Agreement will not affect the beneficial
ownership of such Shares, nor shall such Transfer be recognized in the books
and records of the Corporation. The Shareholder, or his successor, making the
purported Transfer will retain the right to vote, the right to receive
dividends and liquidated proceeds upon, and any other rights under, his Shares.
Neither the Corporation, nor any director or officer of the Corporation, nor
any transfer agent shall be liable for any refusal to Transfer any Shares or
issue any new certificates when it or he in good faith believes that such
Transfer or issuance would be in violation of this Agreement.
(f) The Shares shall cease to be subject to this Agreement upon
(i) the merger of the Corporation with or into any other corporation in an arms
length transaction, (ii) the
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consolidation of the Corporation with any other corporation in an arms length
transaction, (iii) the sale of all of the issued and outstanding Shares of the
Corporation to a single purchaser, (iv) the sale of substantially all of the
Corporation's assets (v) an IPO (as defined in Article 5).
(g) Section and Article headings are not to be considered part of
this Agreement; they are included solely for convenience and are not intended
to be full or accurate descriptions of the contents hereof.
(h) All of the terms and words used in this Agreement, regardless
of the number and gender in which they are used, shall be deemed and construed
to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context of this Agreement or any Article
or clause herein may require, the same as if such words had been fully and
properly written in the number and gender.
(i) This Agreement constitutes the entire agreement between the
parties with respect to the within subject matter, and supersedes all prior
agreements or understandings with respect thereto.
(j) All clauses of this Agreement are distinct and severable. If
any clause shall be held to be unenforceable or overly broad, a court of
competent jurisdiction is hereby authorized to modify such clause so as to
render the terms, provisions and restrictions hereof enforceable to the maximum
extent permitted by law.
(k) This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which, when taken together,
shall constitute one and the same instrument.
(l) Notices required hereunder shall be deemed to have been given
when mailed, by certified mail, addressed to the Shareholders as set forth in
the Share Journal of the Corporation, or as set forth in any notice of change
of address previously given in writing by the addressee to the addressor, and
to the Corporation at its principal offices, with a copy to Xxxxxx X Xxxxxxx,
Esq., Xxxxxxx Xxxxx Xxxxxx Xxxxxxxx, 000 Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxx 00000.
(m) The terms, provisions and restrictions set forth in this
Agreement shall be binding upon the Shareholders of the Corporation and their
respective heirs, executors, administrators, personal representatives,
successors and assigns, and upon the Corporation and any successors-in-interest
to the Corporation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first appearing above.
NEW META LICENSING CORPORATION
By: /s/ Xxxxx X. Xxxxx
President
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