SHAREHOLDERS AGREEMENT
SHAREHOLDERS
AGREEMENT
THIS
AGREEMENT is made as of the date last below written by and among FARMERGY,
INC.
(the “Company”),
Xxxx
Xxxxx, Xxxxx Xxxx and Solar Night Industries, Inc. (collectively the
“Shareholders”
or
individually each a “Shareholder”).
The
following recitals form the basis of this Agreement and are made a material
part
hereof:
A. The
Shareholders own the respective number of shares of the Common Stock of the
Company set forth on Exhibit
A
to this
Agreement, as may be amended, which shares constitute all of the current equity
securities of the Company (together with any other equity securities of the
Company which hereafter may be owned by Shareholders, the “Shares”);
and
B. The
Shareholders and the Company desire to make certain provisions relating to
the
rights of the Shareholders to purchase, transfer, encumber or otherwise acquire
or dispose of the Shares.
NOW,
THEREFORE, in consideration of the premises and of the mutual agreements herein
contained, the parties hereto, each intending to be legally bound hereby, agree
as follows:
| 1. |
Restrictions
on Transfer and Issuance.
|
(a) General
Restriction on Transfer.
No
Shareholder shall voluntarily or involuntarily sell, assign, transfer, give,
bequeath, devise, donate or otherwise dispose of, or pledge, or otherwise
encumber, in any manner, (each a “Transfer”)
any of
the Shares now or hereafter owned by such Shareholder except as expressly
provided in this Agreement and in accordance with its terms and
conditions.
(b) Permitted
Transfer.
Notwithstanding any other provision of this Agreement, a Shareholder may
Transfer Shares if such Transfer is made to a revocable inter-vivos trust with
respect to which the Shareholder is the grantor and sole trustee, or from such
an inter-vivos trust which is a Shareholder to its grantor, without consent
of
the other Shareholders. For all purposes hereunder, a grantor of a revocable
living trust and such trust shall be considered the same person. Any Shares
Transferred pursuant to this Section shall continue to be subject to the
provisions of this Agreement as if owned by the Shareholder from whom such
Shares were originally Transferred.
2. Right
of First Refusal.
(a) Bona
Fide Offer to Purchase Shares.
If any
Shareholder desires to Transfer all or any of such Shareholder’s Shares, such
Shareholder (the “Selling
Shareholder”)
shall
first obtain a bona
fide
written
offer, which such Shareholder desires to accept (the “Offer”)
to
purchase any of such Shareholder’s Shares for a fixed price. The Offer shall set
forth its date, the proposed price per Share, and the other terms and conditions
upon which the purchase is proposed to be made, as well as the name and address
of the prospective purchaser (the “Transferee”).
The
Selling Shareholder shall transmit copies of the Offer to the Company and to
the
other Shareholder(s) within 10 days after the Selling Shareholder’s receipt of
the Offer.
(b) Option
of the Company.
Transmittal of the Offer to the Company by the Selling Shareholder shall
constitute an offer by the Selling Shareholder to sell all of such Shareholder’s
Shares to the Company at the price and upon the terms set forth in the Offer,
except that the closing of any such sale shall be in accordance with Section
8
hereof. For a period of 30 days after the submission of the Offer to the
Company, the Company shall have the option, exercisable by written notice to
the
Selling Shareholder, to accept the Selling Shareholder’s offer as any or all of
the Selling Shareholder’s Shares, or the Company’s option pursuant to this
Subsection 3(b) shall lapse.
(c) Options
of Offeree Shareholders.
In the
event that the Company does not exercise its option with respect to all of
the
Shares in accordance with Subsection 3(b), the Selling Shareholder shall, within
five (5) days following the earlier of: (i) notice from the Company of the
Company’s decision not to accept the Selling Shareholder’s offer as to all of
the Selling Shareholder’s Shares or (ii) expiration of the 30-day option period
referred to in Subsection 3(b), give notice to the other Shareholder(s) of
the
Company’s action or failure to take action. By the giving of such notice, the
Selling Shareholder shall be deemed to have offered in writing to sell all
of
the Selling Shareholder’s remaining Shares (those not to be sold to the Company)
to the other Shareholder(s) (“Offeree
Shareholders”)
at the
price and upon the terms set forth in the Offer, except that the closing of
any
such sale shall be in accordance with Section 8 hereof. For a period of 30
days
after such offer by the Selling Shareholder to the Offeree Shareholder(s),
the
Offeree Shareholder(s) shall have options, exercisable by written notice to
the
Selling Shareholder to accept the Selling Shareholder’s Offer as to any
remaining Selling Shareholder’s Shares. The Selling Shareholder’s Shares shall
be allocated to and purchased by the Offeree Shareholders pro
rata
in the
proportion that such Offeree Shareholder’s Shares bears to the Shares of all
Shareholder(s) (or in such other proportions as the surviving Shareholders
may
agree upon among themselves).
(d) Acceptance
of the Offer.
If, at
the end of the option periods described in Subsections 2(b) and 2(c) options
have not been exercised by the Company and/or the Offeree Shareholders to
purchase any of the Selling Shareholder’s Shares, then any exercise of such
options shall be null and void and the Selling Shareholder shall be free for
a
period of 40 days thereafter to close the sale of any of Selling Shareholder’s
remaining Shares to the Transferee at the price and upon the terms and
conditions set forth in the Offer. If the sale of such Shares is not closed
within the aforesaid 40-day period, the Selling Shareholder shall not be
permitted to sell such Shares without again complying with this Section
3.
3. Closing.
Unless
otherwise agreed to by the parties or otherwise provided for herein, the closing
of the sale and purchase of any Shares pursuant to the provisions of this
Agreement (“Closing”)
shall
take place at the primary offices of the Company at 10:00 a.m. on the following
applicable date, or at such other time and place as all parties to the Closing
unanimously agree:
| (a) |
In
the event of a purchase pursuant to Section 4 hereof, no later than
60
days after the appointment of a personal representative or administrator
for the deceased Shareholder’s estate;
or
|
2
| (b) |
In
the event of a purchase under any other Section of this Agreement,
no
later than 60 days after the sooner to occur of the expiration or
exercise
of the Shareholder’s option to purchase pursuant to such Section.
|
| 4. |
Right
of Co-Sale.
|
(a) To
the
extent the Company and the Shareholders do not exercise their respective rights
of refusal as to all of the Shares owned by a Selling Shareholder pursuant
to
Section 3, then each Shareholder (a "Tag Along Seller" for purposes of this
Section 4) which notifies the Selling Shareholder in writing within thirty
(30)
days after receipt of the Transfer Notice referred to in Section 3, shall have
the right to participate in such sale of Shares on the same terms and conditions
as specified in the Transfer Notice. Such Tag Along Seller's notice to the
Selling Shareholder shall indicate the number of Shares the Tag Along Seller
wishes to sell under his, her or its right to participate. To the extent one
or
more of the Shareholders exercise such right of participation in accordance
with
the terms and conditions set forth below, the number of Shares that the Selling
Shareholder may sell in the Transfer shall be correspondingly
reduced.
(b) Each
Tag
Along Seller may sell all or any part of that number of Shares equal to the
product obtained by multiplying (i) the aggregate number of Shares covered
by
the Transfer Notice by (ii) a fraction, the numerator of which is the number
of
shares of Common Stock owned by the Tag Along Seller on the date of the Transfer
Notice and the denominator of which is the total number of shares of Common
Stock owned by the Selling Shareholder and all Tag Along Sellers combined on
the
date of the Transfer Notice.
5. Stock
Certificates to be Marked with Legend.
All
certificates representing Shares now outstanding or hereafter issued by the
Company shall be marked with the following legend for so long as the owner
or
the Shares are subject to any provision of this Agreement:
|
“THE
SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE
TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER
OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH
AGREEMENT GRANTS TO THE COMPANY AND OTHER SHAREHOLDERS OF THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SHARES
AND CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE
COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH
A
COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. THE SHARES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION
OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.”
|
3
6. Subsequent
Shareholders to Become Bound.
Before
any person or entity not a party to this Agreement, including any person or
entity to whom transfers of Shares may be made hereunder, may be entitled to
be
a Shareholder of the Company, such person or entity shall be required first
to
execute and deliver to the Company an agreement pursuant to which such person
or
entity agrees to be bound by all of the terms and conditions of this Agreement
(as it may have then been amended), thereby becoming a party to this Agreement
as though named herein as a “Shareholder,” and the failure of any such person or
entity so to do shall preclude such person or entity from becoming a Shareholder
of the Company. The Company shall update Exhibit
A
attached
hereto upon the addition of any Shareholders.
| 7. |
Termination
of Agreement.
|
(a) Termination
Events.
This
Agreement and all restrictions on Transfer created hereby shall terminate on
the
occurrence of any of the following events: (i) the
bankruptcy or dissolution of the Company, (ii) a single Shareholder becoming
the
owner of all of the Shares of the Company which are then subject to this
Agreement, or (iii) the written consent of the Company and all of the
Shareholders.
(b) Option
to Purchase Policies Upon Termination.
Upon
the termination of this Agreement, each Shareholder shall have the right within
30 days after termination to purchase from the Company any insurance policy
or
policies on such Shareholder’s life or insuring such Shareholder from disability
owned by the Company, for cash in the amount equal to the interpolated terminal
reserve and any dividend credits outstanding as of the date of the termination
of this Agreement, less any indebtedness against such policies, plus the
proportionate part of the gross premium last paid before such date which covers
the period extending beyond that date. This right may be exercised at any time
by the payment of the purchase price to the Company, and, if the right is not
so
exercised within the time allowed, it shall lapse. Upon receipt of the purchase
price, the Company shall execute and deliver to the purchasing Shareholder
all
instruments necessary to transfer the policies to the purchasing Shareholder.
If
the policy or policies have no outstanding cash surrender value, then the
purchasing Shareholder shall be entitled to receive the policy or policies
without cost to that Shareholder (except for the payment of any unearned portion
of any premium that may have been paid thereon). Notwithstanding the foregoing,
the insurance policies which the various parties may from time to time have
the
right to purchase from the Company pursuant to the provisions of this Section
shall not include any insurance policy owned by the Company and held or
designated by the Company for use for some definite purpose other than funding
the purchase of Shares pursuant to this Agreement.
4
(c) Effect
of Termination. The
termination of this Agreement for any reason shall not affect any right or
remedy existing hereunder prior to the effective date of termination
hereof.
| 8. |
Miscellaneous.
|
(a) Indulgences.
Neither
the failure nor any delay on the part of either party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver
of
such right, remedy, power or privilege with respect to any other occurrence.
No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling
Law.
This
Agreement and all questions relating to its validity, interpretation,
remediation and enforcement (including, without limitation, provisions
concerning limitations of actions) shall be governed by and construed in
accordance with the domestic laws of the State of Missouri, notwithstanding
any
choice-of-laws doctrines of such jurisdiction or any other jurisdiction which
ordinarily would cause the substantive law of another jurisdiction to apply,
without the aid of any canon, custom or rule of law requiring construction
against the draftsman.
(c) Notices.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when delivered (personally, by courier service such
as
FedEx, or by other messenger) or when deposited in the United States mails,
registered or certified mail, postage prepaid, return receipt requested, to
the
Company at its primary business address, and to the Shareholders at each
Shareholders mailing address as listed with the records of the Company. Any
party may alter the address to which communications or copies are to be sent
by
giving notice of such change of address to the other parties in conformity
with
the provisions of this Section for the giving of notice.
(d) Binding
Nature of Agreement.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
(e) Assignments
Prohibited.
No
party shall assign or suffer or permit an assignment, by operation of law or
otherwise, of its rights or obligations under or interest in this Agreement
without the prior written consent of the other party.
(f) Entire
Agreement.
This
Agreement together with the related agreements referred to herein contains
the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.
5
(g) Amendments
and Modifications.
This
Agreement may not be amended or modified other than by an agreement in writing
signed by all of the parties.
(h) Specific
Enforcement.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of
this Agreement and to enforce specifically the terms and provisions of this
Agreement.
(i) Further
Assurances.
Each
party agrees (a) to furnish upon request to each other party such further
information, (b) to execute and deliver to each other party such other
documents, and (c) to do such other acts and things, all as the other party
may
reasonably request for the purpose of carrying out the intent of this
Agreement.
(j) Xxxxx;
Spousal Consents.
Each
Shareholder shall insert in such Shareholder’s will or revocable living trust,
or execute a codicil or amendment thereto, directing and authorizing the
personal representative or trustee to cause the estate of the Shareholder to
fulfill and comply with all the provisions of this Agreement. Each married
Shareholder shall obtain the consent and approval of such Shareholder’s spouse
to the provisions of this Agreement.
(k) Agreement
Drafted by Attorney Representing the Company. The
Shareholders each acknowledge that the law firm of Sauerwein, Simon, Xxxxxxxxx
& Xxxx, P.C. prepared this Shareholder Agreement in a capacity as counsel to
the Company and that each Shareholder: (i) has
been
advised that a conflict may exist among the interests of different Shareholders
regarding this agreement; and (ii) has had the opportunity to seek the advice
of
independent counsel.
(l) Shareholder
Agreement Regarding Xxxx Xxxxx; Salary. Commencing
January 1, 2007, Xxxx Xxxxx’x annual salary as an employee of the Company shall
initially be set at $75,000, and may be increased or decreased only upon the
vote of all of the Shareholders.
(m) Shareholder
Agreement Regarding Board of Directors.
At all
times during the term of this Agreement, the Shareholders shall vote their
Shares to elect Xxxxx Xxxx, Xxxx Xxxxx and Xxxxx Xxxxx as members of the Board
of Directors and shall not vote to remove any of such.
(n) Officers.
The
Shareholders shall be entitled to appoint officers to the Company, provided
that
if there is any change in the President of the Company all of the Shareholders
shall be required to approve such change.
(o) Additional
Capital Contributions. No
Shareholder shall have any obligation to contribute any further capital to
the
capital to the Company.
6
IN
WITNESS WHEREOF, the parties have executed this Agreement as of October 13
2006.
COMPANY: FARMERGY,
INC.
By:
Xxxx
Xxxxx, President
SHAREHOLDERS: __________________________________________
Xxxx
Xxxxx
__________________________________________
Xxxxx
Xxxx
__________________________________________
Xxxxx
Xxxxx, President
7
Exhibit
A
Shareholders
|
Shareholder
|
Number
of Shares Owned
|
|
| 1. Xxxxx Xxxx |
40,000
|
|
| 2. Xxxx Xxxxx |
40,000
|
|
| 3. Solar Night Industries, Inc. |
20,000
|
8
