Exhibit 10.8
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT is made and entered into as of the 30th day
of September, 1999, by and among Zengine, Inc., a Delaware corporation (the
"COMPANY"), Miami Computer Supply Corporation, an Ohio corporation (the
"PARENT"), each of the Persons listed on Schedule A hereto (collectively, the
"INVESTORS"), and each of the Persons who may from time to time be awarded stock
options and will execute a supplemental signature page to this Agreement as a
condition to such award and be listed on Schedule B hereto, as amended from time
to time (the "OPTION HOLDERS").
WHEREAS, the Parent, the Investors and the Option Holders are
collectively referred to as the "STOCKHOLDERS" and individually as a
"STOCKHOLDER."
WHEREAS, the Stockholders are the holders of all of the issued and
outstanding shares of common stock of the Company, no par value per share (the
"COMMON SHARES").
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of
September 30, 1999 (the "STOCK PURCHASE AGREEMENT"), the Company will sell
133,333 Common Shares to each of the Investors.
WHEREAS, the Company and the Stockholders desire to enter into this
Agreement for the purposes of, among others, specifying and limiting the manner
and terms upon and by which the Common Shares shall or may be transferred in
certain circumstances.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties to this Agreement hereby agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings, whether used in the singular or the plural:
"ADDITIONAL SHARES" has the meaning set forth in Section 5 hereof.
"AFFILIATE" means, with respect to any person, any entity controlling,
controlled by or under common control with such designated person. For the
purposes of this definition "CONTROL" shall have the meaning specified as of the
date of this Agreement for that word in Rule 405 promulgated by the Securities
and Exchange Commission under the Securities Act.
"BOARD OF DIRECTORS" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which banks are authorized by applicable Federal law to close.
"COMMON SHARES" has the meaning set forth in the recitals.
"COMPANY" means Zengine, Inc., a Delaware corporation.
"COMPELLED HOLDERS" has the meaning set forth in Section 4 hereof.
"COMPELLED SALE" has the meaning set forth in Section 4 hereof.
"COMPELLED SALE NOTICE" has the meaning set forth in Section 4 hereof.
"COMPELLING HOLDERS" has the meaning set forth in Section 4 hereof.
"CONTROL TRANSFER" means one or a series of related transactions as a
result of which (i) any Third Party, or group of Third Parties acting in
concert, acquires, directly or indirectly, a majority of the Company's Common
Shares (on a Fully-Diluted Basis), (ii) the Company consolidates with or merges
into or with, or effects any plan of share exchange with, any Person and after
giving effect to such consolidation, merger or plan of share exchange any Third
Party or group of Third Parties acting in concert owns, directly or indirectly,
a majority of the shares of common stock of the Person (on a Fully-Diluted
Basis) surviving such consolidation, merger or share exchange or (iii) all or
substantially all of the assets of the Company are sold, leased, exchanged or
otherwise transferred as an entirety to any Third Party or group of Third
Parties acting in concert.
"COVERED SECURITIES" means, without duplication, (A) the Common Shares
purchased or otherwise acquired by the Stockholders which as of a date of
determination are outstanding, (B) the Underlying Shares (or the instrument
pursuant to which such Underlying Shares are issuable, including, without
limitation, any stock options) which as of such date are outstanding (or, in the
case of such instrument, may at such time be exercised), and (C) any equity
securities referred to in clauses (A) and (B) above issued or issuable directly
or indirectly with respect to the Common Shares, which as of such date are
outstanding, by way of share dividend or share split or in connection with a
combination of shares, recapitalization, merger, consolidation, plan of share
exchange or other reorganization. For purposes of this Agreement, a Person will
be deemed to be a holder or owner of Covered Securities, whenever such Person
has the right, other than pursuant to the terms of this Agreement, to acquire
such Covered Securities (by conversion, exercise of warrant or option or
otherwise, but disregarding any legal restrictions (other than imposed pursuant
to this Agreement) upon the exercise of such right), whether or not such right
has been exercised.
"DULY ENDORSED" means duly endorsed in blank by the Person or Persons
in whose name a share certificate is registered or accompanied by a duly
executed share assignment separate from the certificate.
"FAIR MARKET VALUE" per Common Share means, as of any date, the fair
market value per Common Share as of the end of the immediately preceding
calendar quarter, calculated on a Fully-Diluted Basis and determined as follows:
(i) in the event the Common Shares are publicly traded, then the closing price
on the last trading day of the immediately preceding calendar quarter; (ii) in
the event the Common Shares are not publicly traded, then the Fair Market Value
shall be determined in good faith by the Board of Directors.
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"FULLY-DILUTED BASIS" means all outstanding Common Shares and all
Underlying Shares.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INVESTORS" has the meaning set forth in the recitals.
"MAXIMUM COMPELLED SALE" has the meaning set forth in Section 4 hereof.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association or organization, joint venture, government or department or agency
thereof, or other entity of whatever nature.
"PUBLIC SALE" means any sale of securities pursuant to a registered
public offering under the Securities Act or any public distribution of
securities pursuant to Rule 144 effected through a broker or dealer.
"PURCHASE NOTICE" has the meaning set forth in Section 2.2 hereof.
"QUALIFIED PUBLIC OFFERING" means the first sale to the public of
Common Shares pursuant to an effective registration statement under the
Securities Act under which (a) the aggregate price to the public of the Common
Shares actually sold to the public in such first sale, less the amount of
underwriters' and brokers' commissions and expense allowances paid by the
Company in connection with the original sale of such Common Stock, is
$25,000,000 or more, and (b) results in the Common Shares being listed on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Stock Market.
"REQUIRED PERCENTAGE" means more than 40%.
"RULE 144" means Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act as such rule may be amended from time to
time, or any similar rule then in force.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITIES AND EXCHANGE COMMISSION" means the Securities and Exchange
Commission and any federal governmental body or agency succeeding to the
functions thereof.
"STOCK PURCHASE AGREEMENT" has the meaning set forth in the recitals.
"STOCKHOLDER" has the meaning set forth in the recitals.
"STOCKHOLDER TRANSFER NOTICE" has the meaning set forth in Section 2.2
hereof.
"TAG ALONG ACCEPTANCE" has the meaning set forth in Section 3(b)
hereof.
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"TAG-ALONG NOTICE" has the meaning set forth in Section 3(a) hereof.
"TAG-ALONG NOTICE PERIOD" has the meaning set forth in Section 3(b)
hereof.
"TAG-ALONG OFFER" has the meaning set forth in Section 3(a) hereof.
"TAG-ALONG OFFEREE" has the meaning set forth in Section 3(a) hereof.
"TAG-ALONG OFFEREE SECURITIES" has the meaning set forth in Section
3(c) hereof.
"TAG-ALONG OFFEROR" has the meaning set forth in Section 3(a) hereof.
"TAG-ALONG SECURITIES" has the meaning set forth in Section 3(a)
hereof.
"THIRD PARTY" means a Person who was not (i) a party to this Agreement,
(ii) a transferee of a transferor who was, or whose predecessor in interest was,
a party to this Agreement, (iii) an Affiliate of the Company or any Stockholder
or (iv) an employee of the Company on the date such person became a Stockholder.
"TRANSFER" means any sale, assignment, pledge, hypothecation or other
transfer.
"UNDERLYING SHARES" means all Common Shares issuable upon exercise of
any then outstanding options (including any stock options), warrants,
convertible or exchangeable securities or other similar instruments or rights;
PROVIDED, that the Common Shares so issuable shall only be included in
"Underlying Shares" to the extent any such option, conversion or exchange is
fully exercisable, convertible or exchangeable with respect to such Common
Shares at the time the determination of the number of "Underlying Shares" is
made.
SECTION 2. TRANSFER RESTRICTIONS.
SECTION 2.1. NOTICE OF PROPOSED TRANSFER. If, prior to any transfer or sale
of any Common Shares, the holder desiring to effect such transfer or sale shall
deliver a written notice to the Company describing briefly the manner of such
transfer or sale (and certifying as to whether the proposed transferee is a
citizen of the United States) and a written opinion of counsel for such holder
(PROVIDED that such counsel, and the form and substance of such opinion, are
reasonably satisfactory to the Company) to the effect that such transfer or sale
may be effected without the registration of such securities under the Securities
Act, the Company shall thereupon permit or cause its transfer agent (if any) to
permit such transfer or sale to be effected.
SECTION 2.2. COMPANY RIGHT OF FIRST REFUSAL. Notwithstanding any provision
to the contrary in this Agreement, no Stockholder shall sell, assign, convey,
deliver or otherwise transfer any of its Common Shares without prior notice to
the Company and the expiration of the time period set forth in this Section 2.2.
In such notice ("STOCKHOLDER TRANSFER NOTICE"), the Stockholder desiring to sell
its Common Shares shall provide: (i) the number of shares to be sold; (ii) the
name, address, business or occupation of the proposed acquiror and whether, in
the judgement of the Stockholder, the proposed acquiror competes with the
business of the
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Company; (iii) information with respect to the offered price and terms of the
proposed sale of the shares; and (iv) the proposed closing date of such sale.
Within five (5) Business Days after receipt of the Stockholder Transfer Notice,
the Company shall notify (the "PURCHASE NOTICE") the Stockholder who desires to
sell its Common Shares as to whether the Company will buy such shares on the
same terms and at the same price as offered by the proposed acquiror. If the
Purchase Notice is not so received by the Stockholder within the time period set
forth above, it may thereafter consummate the sale of such shares. If the
Purchaser Notice is so received, the Stockholder shall be obligated to sell such
shares to the Company and the closing of such sale of the Stockholder's Common
Shares shall occur on a date mutually agreed upon by the parties, but not later
than ten (10) Business Days after the delivery of the Purchase Notice.
SECTION 2.3. TERMINATION OF RESTRICTIONS. (a) Notwithstanding the foregoing
provisions of this Section 2, the restrictions imposed by this Section 2 upon
the transferability of Common Shares shall terminate as to any particular Common
Share when (i) such security shall have been effectively registered under the
Securities Act and sold by the holder thereof in accordance with such
registration, or (ii) prior to such transfer a written opinion to the effect
that such restrictions are no longer required or necessary under any federal or
state securities law or regulation shall have been received by the Company from
counsel for the holder thereof (PROVIDED that such counsel, and the form and
substance of such opinion, are reasonably satisfactory to the Company) or
counsel for the Company, or (iii) such security shall have been sold without
registration under the Securities Act in compliance with Rule 144, or (iv) the
Company is reasonably satisfied that the holder of such security shall, in
accordance with the terms of subsection (k) of Rule 144, be entitled to sell
such security pursuant to such subsection, or (v) a letter or an order shall
have been issued to the holder thereof or the Company by the staff of the
Securities and Exchange Commission or such Commission stating that no
enforcement action shall be recommended by such staff or taken by such
Commission, as the case may be, if such security is transferred without
registration under the Securities Act in accordance with the conditions set
forth in such letter or order and such letter or order specifies that no
subsequent restrictions on transfer are required.
(b) Whenever the restrictions imposed by this Section 2 shall terminate,
as hereinabove provided, the holder of any Common Share then outstanding as to
which such restrictions shall have terminated, shall be entitled to receive from
the Company, without expense to such holder, one or more new certificates for
Common Shares not bearing the restrictive legends set forth in this Section 2.
SECTION 2.4. IMPROPER TRANSFER. Any attempt to Transfer any Covered
Securities which is not in accordance with this Agreement shall be null and void
AB INITIO, and the Company shall not give any effect to such attempted Transfer
in the share records of the Company.
SECTION 3. TAG ALONG RIGHTS.
(a) If a Stockholder or group of Stockholders (the "TAG-ALONG OFFEROR")
determines to Transfer a number of Covered Securities equal to or greater than
the Required Percentage of Covered Securities of the Company on a Fully-Diluted
Basis (the "TAG-ALONG SECURITIES"), including a Control Transfer pursuant to
which the Compelling Holders exercise their rights to
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require the Compelled Holders to sell Covered Securities pursuant to Section 4,
the Tag-Along Offeror shall provide written notice (the "TAG-ALONG NOTICE"), to
the other Stockholders (each a "TAG-ALONG OFFEREE") in the manner set forth in
this Section 3. The Tag-Along Notice shall identify the proposed transferee or
transferees, the Tag-Along Securities (including an identification of the class
or classes of Covered Securities), the Tag-Along Offeree's rights pursuant to
this Section 3 (the "TAG-ALONG OFFER"), the estimated expenses associated with
the sale, a description of the price and the principal terms and conditions of
the Tag-Along Offer and, in the case of a Tag-Along Offer in which the
consideration payable for Tag-Along Securities consists in part or in whole of
consideration other than cash, a description of the non-cash component of the
consideration, together with the Tag-Along Offeror's reasonable estimate of the
fair market value of such non-cash component.
(b) The Tag-Along Offerees shall have the right and option, exercisable as
set forth below, to accept the Tag-Along Offer for up to such number of Covered
Securities in respect to which the Tag-Along Offer is made, as determined in
accordance with the provisions of this Section 3. Subject to the last sentence
of Section 3(d) hereof, the terms of any sale of such Covered Securities by a
Tag-Along Offeree pursuant to the exercise of its option under this Section 3
shall be the same terms as those for the sale of Covered Securities by the
Tag-Along Offeror as set forth in the Tag-Along Notice; PROVIDED, that any
general indemnity given by the sellers, applicable to liabilities not specific
to a particular seller, to the purchasers in connection with such sale shall be
apportioned among all the sellers according to the consideration to be received
by each seller, PROVIDED, that the maximum indemnity or liability of each seller
shall be limited to the amount of proceeds received by it from such sale. If a
Tag-Along Offeree desires to exercise such option, he shall provide the
Tag-Along Offeror with written irrevocable notice (the "TAG-ALONG ACCEPTANCE"),
specifying, subject to Section 3(c) hereof, the number of Tag-Along Securities
as to which he or it is accepting the Tag-Along Offer within ten (10) Business
Days after the date on which the Tag-Along Notice is given (the "TAG-ALONG
NOTICE PERIOD"). If any Tag-Along Offerees so accept (in whole or in part) the
Tag-Along Offer, the Tag-Along Offerees shall each, upon the earlier of (i)
three (3) Business Days prior to the consummation of the sale or other
disposition of the Tag-Along Securities pursuant to the Tag-Along Offer or (ii)
ten (10) Business Days following the expiration of the Tag-Along Notice Period,
deliver to the Company, to be held by the Company for sale or return upon the
terms of this Section 3, the certificate or certificates representing the
Covered Securities to be sold or otherwise disposed of pursuant to such Offer by
such Tag-Along Offerees, Duly Endorsed, together with a limited power of
attorney authorizing the Tag-Along Offeror to sell or otherwise dispose of such
Covered Securities pursuant to the terms of the Tag-Along Offer.
(c) The Tag-Along Offeree shall have the right to sell, pursuant to the
Tag-Along Offer, the number of Covered Securities (the "TAG ALONG OFFEREE
SECURITIES") equal to the greater of: (i) the number specified in such Person's
Tag-Along Acceptance, or (ii) the number of Covered Securities equal to the
product of (x) the total number or principal amount of Covered Securities
(including Underlying Shares) held by such Tag-Along Offeree, times (y) a
fraction, the numerator of which shall be the total number or principal amount
of Covered Securities (including Underlying Shares) to be sold by the Tag-Along
Offeror pursuant to such Tag-Along Offer, and the denominator of which shall be
the total number or principal amount of the then outstanding Covered Securities
(including Underlying Shares) held by such Tag-Along Offeror.
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(d) Promptly after the consummation of the sale or other disposition of
the Tag-Along Securities pursuant to the Tag-Along Offer, the Tag-Along Offeror
shall notify the Tag-Along Offeree thereof and shall remit to the Tag-Along
Offeree the total sales price of the Tag-Along Offeree Securities sold or
otherwise disposed of pursuant thereto (after deduction of the proportionate
share of the expenses associated with such sale, based on the number or amount
of the Tag-Along Offeree Securities in relation to the total number or amount of
Covered Securities being sold pursuant to the Tag-Along Offer).
(e) If at the termination of the Tag-Along Notice Period any Tag-Along
Offeree shall not have accepted the Tag-Along Offer, such Tag-Along Offeree will
be deemed to have waived any and all of its rights under this Section 3 with
respect to the sale or other disposition of any Covered Securities pursuant to
such Tag-Along Offer as described in the Tag-Along Notice. The Tag-Along Offeror
shall have 120 days (or such longer period not exceeding 180 days as may be
necessary to comply with any applicable provisions of the HSR Act) in which to
sell the Tag-Along Securities and Tag-Along Offeree Securities not otherwise
excluded pursuant to the previous sentence, at a price not higher than that
contained in the Tag-Along Notice to the Tag-Along Offeror and on terms not
materially more favorable to the Tag-Along Offeror than were contained in the
Tag-Along Notice. If, at the end of such 120 day period (or such longer period,
as aforesaid) the Tag-Along Offeror has not completed the sale of all the
Tag-Along Securities, the Tag-Along Offeror shall return to the Tag-Along
Offeree all certificates representing the Covered Securities which the Tag-Along
Offeree delivered for sale or other disposition pursuant to this Section 3 and
this Section 3 shall again apply to offers and sales of Tag-Along Securities.
(f) Notwithstanding anything contained in this Section 3, there shall be
no liability on the part of the Tag-Along Offeror to any Person if the sale of
Tag-Along Securities pursuant to this Section 3 is not consummated for whatever
reason. The Tag-Along Offeror shall have full and absolute discretion to effect
or not to effect a sale of Covered Securities pursuant to this Section 3.
SECTION 4. RIGHTS TO COMPEL SALE.
(a) If any Stockholders holding at least the Required Percentage of Common
Shares of the Company on a Fully-Diluted Basis (the "COMPELLING HOLDERS")
propose to make a Control Transfer (whether pursuant to a share sale, plan of
share exchange, merger, consolidation, or sale, lease, exchange or transfer of
all or substantially all of the assets of the Company) (the "COMPELLED SALE"),
then the Compelling Holders shall have the right, exercisable as set forth
below, to require each of the other Stockholders (the "COMPELLED HOLDERS") to
sell the number of Covered Securities (including Underlying Shares) then held by
them calculated as follows:
(i) The number or principal amount of Covered Securities which the
Compelling Stockholders may require each Compelled Holder to sell shall be
determined by the Compelling Stockholders, but shall be no greater than the
product of (A) the total number of Covered Securities (including Underlying
Shares) held by such Compelled Holders times (B) a fraction, the numerator
of which shall be the total number or principal amount of Covered
Securities (including Underlying Shares) proposed to be
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sold by such Compelling Holders, and the denominator of which shall be the
total number of the then outstanding Covered Securities then held by such
Compelling Holders (such product, the "MAXIMUM COMPELLED SALE"); PROVIDED,
that if the number of Covered Securities that a Compelled Holder is
required to sell pursuant to this Section 4 is less than the Maximum
Compelled Sale, any such Compelled Holder shall retain Tag-Along Rights
pursuant to Section 3 as to the number of Covered Securities equal to the
difference between the Maximum Compelled Sale and the number of Covered
Securities required to be sold by such Compelled Holder, and may give
notice to exercise such Tag-Along Rights within five Business Days after
receiving notice of the Compelled Sale and of the fact that the amount of
his Compelled Securities are less than the Maximum Compelled Sale.
(ii) Subject to the last sentence of Section 4(b)(iii) hereof, the
consideration to be received by the Compelled Holders for Covered
Securities sold pursuant to this Section 4 shall be the same consideration
per security to be received by the Compelling Holders, and the terms and
conditions of such sale by the Compelled Holders shall be the same as those
upon which the Compelling Holders sell their Covered Securities; PROVIDED,
that any general indemnity given by the sellers, applicable to liabilities
not specific to a particular seller, to the purchasers in connection with
such sale shall be apportioned among all the sellers according to the
consideration received by each seller; PROVIDED, that the maximum indemnity
or liability of each Compelled Holder shall be limited to the amount of
proceeds received by it from such sale.
(b) The Compelling Holders shall provide written notice (the "COMPELLED
SALE NOTICE") of such Compelled Sale to the other Stockholders as follows:
(i) The Compelled Sale Notice shall contain written notice of the
exercise of the Compelling Holders' rights pursuant to Section 4(a) hereof,
setting forth the consideration per share to be paid by the purchaser in
such Control Transfer (and in the event the consideration consists in part
or in whole of consideration other than cash, a description of the non-cash
component of the consideration, together with the Compelling Stockholders'
reasonable estimate of the Fair Market Value of such non-cash component),
the other terms and conditions of the Compelled Sale, and the number of
Covered Securities with respect to which such Compelling Holders are
exercising their rights under this Section 4. Within fifteen (15) Business
Days following the date of the Compelled Sale Notice, each Compelled Holder
shall deliver to the Company (as agent for such Compelled Holders), to be
held for sale or return upon the terms of this Section 4, the certificate
or certificates representing Covered Securities held by such Compelled
Holder, Duly Endorsed, together with a limited power-of-attorney
authorizing the Compelling Holders or any one of them to sell or otherwise
dispose of the Covered Securities to be sold pursuant to such Compelled
Sale. In the event that a Compelled Holder should fail to deliver such
certificate or certificates as aforesaid, the Company shall cause the books
and records of the Company to show that such Covered Securities are bound
by the provisions of this Section 4(b) and that such Covered Securities
shall be Transferred only to the purchaser in such Control Transfer upon
surrender for Transfer by the Compelled Holder thereof.
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(ii) If, within 120 days (or such longer period not exceeding 180 days
as may be necessary to comply with any applicable provisions of the HSR
Act) after the Compelling Holders give the Compelled Sale Notice, they have
not completed the sale of all the Covered Securities to be sold in such
Compelled Sale, such Compelling Holders shall return to each of the
Compelled Holders all certificates representing securities that such
Compelled Holder delivered for sale pursuant hereto.
(iii) Promptly after the consummation of the sale of Covered
Securities of the Compelling Holders and Compelled Holders pursuant to this
Section 4, the Compelling Holders shall give notice thereof to the
Compelled Holders, shall remit to the Compelled Holders the total sales
price of the Covered Securities of the Compelled Holders sold pursuant
thereto (after deduction of the Compelled Holders' proportionate share of
the expenses associated with such sale, based on the number or amount of
Covered Securities sold by the Compelled Holders in relation to the total
number or amount of Covered Securities being sold pursuant to this Section
4).
SECTION 5. PREEMPTIVE RIGHTS.
During the term of this Agreement, each of the Investors shall have the
right to purchase equity securities from the Company in order to maintain its
proportionate ownership interest in the Company in the event that the Company
proposes to issue any Common Shares or other classes of equity securities
("ADDITIONAL SHARES"); PROVIDED, HOWEVER, that said right shall not apply to the
issuance of equity securities in connection with a Qualified Public Offering.
The Company shall not issue Additional Shares without first complying with the
procedure set forth below:
(a) Each Investor shall have the right to purchase its
proportionate number of Additional Securities, or such other number of
any Additional Shares which the Company may, from time to time, propose
to sell and issue at the same price per share as proposed to be sold by
the Company so that after such sale each Investor still owns its
proportional number of Covered Securities on a Fully Diluted Basis. For
purposes of this Section 5, each Investor's "proportionate number"
means 6.25%.
(b) In the event the Company proposes to undertake an
issuance of Additional Shares, it will give each Investor written
notice of its intention to do so prior to the date of any issuance,
describing the Additional Shares and the price and terms upon which the
Company proposes to issue the same, and setting forth the number of
Shares which each Investor is entitled to purchase, the aggregate
purchase price therefor and the proposed purchasers thereof. Each
Investor will have ten (10) Business Days from the date of receipt of
such notice to agree to purchase up to his proportionate number of such
Additional Shares, for the price and upon the terms specified in the
notice by giving written notice to the Company and stating therein the
quantity of Additional Shares to be purchased.
(c) In the event an Investor fails to exercise such
pre-emptive right within said ten (10) Business Day period the Company
will have ninety (90) days thereafter to sell
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(or enter into a binding and unconditional agreement pursuant to which the
sale of Additional Shares covered thereby will be and is consummated within
ninety (90) days from the date of said agreement) the Additional Shares as
to which such Investor's right was not exercised, at a price and upon such
other terms no more favorable to the purchasers thereof than those
specified in the Company's notice to the Investors. In the event the
Company has not sold such Additional Shares within said ninety (90) day
period (or sold and issued Additional Shares in accordance with the
foregoing within ninety (90) days from the date of said agreement), the
Company will not thereafter issue or sell any Additional Shares without
first offering such Additional Shares to such Investor in the manner
provided in this Section 5.
SECTION 6. LEGEND.
Each certificate evidencing Covered Securities and each certificate
issued in exchange for or upon the transfer of any Covered Securities (if such
securities remain Covered Securities upon such transfer) will be stamped or
otherwise imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED AS OF SEPTEMBER 30, 1999, BY AND
AMONG ZENGINE, INC. AND THE STOCKHOLDERS THEREOF, AS THE SAME MAY
BE AMENDED FROM TIME TO TIME, PURSUANT TO THE TERMS OF WHICH THE
TRANSFER OF SUCH SECURITIES IS RESTRICTED. SUCH AGREEMENT ALSO
PROVIDES FOR VARIOUS OTHER LIMITATIONS AND OBLIGATIONS, AND ALL
OF THE TERMS THEREOF ARE INCORPORATED BY REFERENCE HEREIN. A COPY
OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
The legend set forth in this Section 6 shall be removed from the
certificates evidencing any Covered Securities (i) which cease to be Covered
Securities or (ii) in connection with a termination of this Agreement.
SECTION 7. TRANSFER OR ISSUANCE.
(a) Prior to transferring any Covered Securities (other than in a Public
Sale or a Control Transfer) to any Person, the transferring Stockholder will
cause the prospective transferee to execute and deliver counterparts of this
Agreement to the Company and to the Investors.
(b) Prior to the issuance of any Common Shares or any right with respect
thereto to any Person who is not a party to this Agreement, the Company will
cause such Person to execute and deliver counterparts of this Agreement to the
Company and to the Investors.
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SECTION 8. REPRESENTATION AND WARRANTY OF STOCKHOLDERS.
Each of the Stockholders hereby represents and warrants (a) that it is
not a party to any contract or agreement (other than subscription agreements or
agreements with its Affiliates), including any voting trust or other voting
arrangement, whereby any of the Covered Securities or any interest therein held
by such party on the date hereof is to be offered, sold, assigned, pledged,
hypothecated, or otherwise transferred (as used in this Section 8 only, a
"TRANSFER"), and (b) that no such party has any present intention so to transfer
any Covered Securities or any interest therein to any Person.
SECTION 9. NON-CONTRAVENTION AGREEMENT AND TERM.
SECTION 9.1. CONTRADICTORY CHARTER TERMS. During the term of this agreement
as provided in Section 9.2 hereof, each of the Stockholders agree not to vote
for the approval of any amendment to the certificate of incorporation or By-laws
of the Company which would be contradictory to or hinder or delay the effect of
the provisions of this Agreement.
SECTION 9.2. TERM. The agreements provided for in this Agreement will
expire upon the earlier of: (a) the third anniversary date of this Agreement, or
(b) the consummation of a Qualified Public Offering.
SECTION 10. MISCELLANEOUS.
SECTION 10.1. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or the Stockholders, unless such modification,
amendment or waiver is approved in writing by the Company if it is to be
effective against the Company, or by the holders of the 51% of the Covered
Securities if it is to be effective against the Stockholders; PROVIDED, that (i)
an amendment, modification or waiver which adversely affects some holders of a
class of the Company's securities, as such, without affecting similarly all
holders of that class of securities, may not be made without the consent of all
such Stockholders who are adversely affected; (ii) no approval shall be required
in the case of any specific class of Stockholders whose rights would not be
affected by such amendment, modification or waiver and (iii) no amendment or
modification or waiver of Sections 2, 3, 4, 5, 7, 9, or 10.1, including the
defined terms used therein, shall be valid without the approval in writing of
each of the Investors. The failure of any party to enforce any of the provisions
of this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms. Notwithstanding the
foregoing, the Company may amend this Agreement from time to time without the
consent of the Stockholders to remove Stockholders that cease to own Common
Shares or stock options and to add new Stockholders who acquire Common Shares or
stock options upon compliance with Section 7 hereof.
SECTION 10.2. SEVERABILTY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision
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of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained herein
and the remainder of this Agreement shall be interpreted so as to best
reasonably effect the intent of the parties hereto.
SECTION 10.3. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein and without limiting the terms and provisions of the Stock Purchase
Agreement, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
SECTION 10.4. SUCCESSORS AND ASSIGNS. (i) This Agreement will bind and
inure to the benefit of and be enforceable by the Company and its successors and
assigns and the Stockholders, any subsequent holders of Covered Securities and
the respective heirs, administrators, executors, representatives, successors and
permitted assigns of each of them, so long as they hold Covered Securities.
(ii) By subscribing to this Agreement each Person that becomes a holder of
Covered Securities hereby agrees, as of the date such Person becomes a holder of
Covered Securities, to be bound by all of the terms and provisions hereof, which
provisions shall be binding upon the heirs, executors, administrators,
successors and permitted assigns of such Person.
SECTION 10.5. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
SECTION 10.6. REMEDIES. The Stockholders will be entitled to enforce their
rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages will not be an adequate remedy
for any breach of the provisions of this Agreement and that any Stockholder may
in its sole discretion apply to a court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violation of the provisions of this Agreement.
SECTION 10.7. NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed effective and given upon actual delivery if
presented personally, one Business Day after the date sent if sent by prepaid
telegram, overnight courier services (specifying one-day delivery), telex or by
facsimile transmission, or five Business Days if mailed by certified or
registered mail, return receipt requested and postage prepaid, which shall be
addressed to the following addresses:
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If to the Company:
0000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: President
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxx Xxxx, Xxxxxxx & Xxxxxxx LLP
000 00xx Xxxxxx X.X., 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Investors:
To the addresses listed on Exhibit A
with a copy to:
Xxxxxxx and Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Fenwick & West
____________________________
____________________________
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any other Stockholders, the address set forth under such Stockholder's
name on the stock ledger of the Company, or such other address or to the
attention of such other person as the recipient party shall have specified by
prior written notice to the sending party.
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SECTION 10.8. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
SECTION 10.9. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
THE COMPANY: STOCKHOLDERS:
ZENGINE, INC. WILBLAIRCO ASSOCIATES
By: /s/ XXXXXX X. XXXXXXXX By: /s/ XXXX XXXXX
----------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx Xxxxx
Title: President Title: Partner
AT HOME CORPORATION
By:
------------------------------
Name:
Title:
MIAMI COMPUTER SUPPLY CORPORATION
By: /s/ XXX X. XXXXXXX
------------------------------
Name: Xxx X. Xxxxxxx
Title: Vice President and CFO
/s/ XXXXXX X. XXXXXXXX
------------------------------
Xxxxxx Xxxxxxxx
/s/ XXXXX XXXXXXXXX
------------------------------
Xxxxx Xxxxxxxxx
/s/ XXXXXXXXXXX XXXXXX
------------------------------
Xxxxx Xxxxxx
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SCHEDULE A
INVESTORS
Wilblairco Associates
c/o Xxxx X. Xxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
At Home Corporation
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
SCHEDULE B
OPTION HOLDERS
XXXXXXX X. XXXXXX - 100,000 OPTIONS
