I. XXXXXXX IIERTZ
and
XXXX XXXXXXX
and
HERGO, ERGONOMIC SUPPORT SYSTEMS, INC.
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SHAREHOLDERS AGREEMENT
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SHAREHOLDERS AGREEMENT
AGREEMENT, dated and entered into the day of , 1991 among I. XXXXXXX
XXXXX, residing at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, hereinafter
referred to as "HERTZ", and XXXX XXXXXXX, residing at 00-00 000xx Xxxxxx, Xxxxx
Xxxxxxx, Xxx Xxxx 00000, hereinafter referred to as the "Shareholders", and
between them and HERGO, ERGONOMIC SUPPORT SYSTEMS, INC., a New York Corporation
hereinafter referred to as the "Corporation".
W I T N E S S E T H :
WHEREAS, the Shareholders are the owners of all of the outstanding and
issued capital stock of the Corporation as follows:
Shareholder Shares
----------- ------
I. XXXXXXX XXXXX 150
XXXX XXXXXXX 50
and;
WHEREAS, the Shareholders and the Corporation consider it to be in
their best interests to impose certain conditions, restrictions and obligations
with respect to ownership, transfer or other disposition of shares of the
capital stock of the Corporation among other things; and
WHEREAS, the Shareholders desire to promote their mutual interests and
the interest of the Corporation by imposing certain restrictions and
obligations on themselves, the Corporation and the shares of the Corporation;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and mutual covenants hereinafter set forth, the Shareholders and
Corporation hereby agree as follows:
OFFICERS & DIRECTORS
1. The Board of Directors of the Corporation shall consist of the
individual parties to this Agreement, or their nominee, the Chairman of whom
shall be I. XXXXXXX XXXXX.
The officers shall be as follows:
President - I. XXXXXXX XXXXX
Executive Vice President - XXX X. XXXXX
Vice-President & Secretary - XXXX XXXXXXX
Treasurer - XXXXX XXXXXXXXXXX
VOTING
2. (a) A quorum of Directors is required to transact business at a
meeting of Directors. To constitute a quorum, a minimum of fifty-one (51%) per
cent of shares must be present at a meeting. The President and any Director may
call special meetings of the Board of Directors. Written notice of the special
meeting must be given at least two (2) weeks prior to the meeting to each
Director at his or her business address or other address as specified in the
Agreement. The business to be transacted at the meeting must be specified in
the notice. A vote by a majority of Directors present at a meeting for which
there is a quorum will be deemed an act of the Board of Directors unless
otherwise stated in this Agreement.
(b) The Shareholders agree that so long as each of them remains a
shareholder of the Corporation, he will vote his shares for the election of the
others as officers and directors of the Corporation, and will vote at all
meetings of the shareholders of the Corporation so as to carry out and make
effective the terms and provisions of this Agreement.
RESTRICTION OF THE TRANSFERABILITY OF SHARES
3. The Shareholders each agree not to sell, assign, transfer,
hypothecate, pledge, encumber or give away or otherwise dispose of any of his
shares of the Corporation that he now or hereafter may hold or own, nor, shall
any such shares be transferable except under and pursuant and in compliance
with the terms and conditions of this Agreement, and the Corporation agrees
that it will not transfer or recognize any transfer of said shares except in
compliance therewith.
DISPOSITION OF SHARES DURING LIFETIME
4. Should any of the Shareholders desire to sell or otherwise dispose of his
shares to the Corporation, each agrees that in such event he shall offer to
sell all (but not less than all) of his shares to the Corporation, and the
Corporation agrees that it shall accept such offer and purchase all of such
shares at the purchase price as hereinafter set forth. The offering Shareholder
shall indicate his desire to sell by notifying the Corporation in writing that
he desires to sell all of his shares of the Corporation. Immediately upon
receipt of such notification, the Corporation shall send a written notice to
such offering shareholder that it agrees to purchase such shares. Such notice
(the "acceptance notice") shall also state that the Corporation has authorized
its accountant to calculate the price per share of the shares to be purchased
as of the date of receipt of the notification from the offering shareholder of
his desire to sell, and shall further state that notification of such price
shall be sent to such offering shareholder within thirty (30) days from the
date of the mailing of such acceptance notice.
RIGHTS AND OBLIGATIONS OF THE CORPORATION TO PURCHASE
SHARES ON DEATH OR INCOMPETENCY
5. Upon the death or declaration of judicial incompetency of any of
the Shareholders hereto, the personal representative or representatives of such
deceased or judicially declared incompetent shareholder shall immediately, upon
issuance and receipt of Letters Testamentary, Letters of Administration or the
Appointment of a Committee or other representative, deliver to the Corporation,
proof of same and the Corporation shall, within sixty (60) days after receipt
of such proof, purchase, and the estate of the deceased shareholder or the
Committee or other representative of a judicially declared incompetent
shareholder shall sell all of the shares in the Corporation owned by the
deceased or judicially declared incompetent Shareholder at the time of his
death or declaration of judicial incompetency, at the purchase price
hereinafter set forth. Not less than ten (10) days prior to said sale, the
Corporation shall notify the estate of the deceased shareholder or the
committee or other representative of a judicially declared incompetent
shareholder of the purchase price for each share as calculated by its
accountant.
PURCHASE PRICE FOR SALE OF SHARES DURING
LIFETIME OR UPON DEATH OR INCOMPETENCY
6. The purchase price of each share purchased under the provisions of
this Agreement shall be its book value as of the last day of the month prior to
the month in which notification of the desire to sell is mailed to the
Corporation, or the last day of the month prior to the month in which the death
or declaration of judicial incompetency of any of the shareholders, as the case
may be. For purposes of this Agreement the book value of the shares shall be
determined by the regular accountant employed by the Corporation, in accordance
with standard accounting procedures consistently applied, but
a) goodwill and other intangible property shall be deemed to be of
no value and shall be excluded and not taken into consideration;
b) furniture, furnishings, fixtures, machinery, equipment, etc., on
hand at the time of making the last balance sheet of the Corporation, shall be
taken as of the value, at which time same shall appear in such balance sheet;
c) current accounts receivable shall be taken in at face value
thereof, less discount (if the accounts shall be carried at gross upon the
books);
d) all merchandise whatsoever and wheresoever the same may be, and
whether in process of manufacture, in transit, or otherwise, shall be taken in
at the cost or market value, whichever shall be lower at that time;
e) any securities acquired by the Corporation shall be taken in at
the market value thereof;
f) federal, state and municipal taxes and assessments shall be
apportioned and charged as a liability as of the end of such month.
g) the value of any insurance policy carried on the life of any
employee, officer or director shall be its cash surrender value.
CONSUMMATION OF SALE OF SHARES
7. Simultaneously with the payment of the first installment of the
purchase price, as hereinafter set forth in Schedule "A", the selling
shareholder or the personal representative or representatives of a deceased
shareholder or judicially declared incompetent shareholder, shall endorse all
of the shares to be sold and purchased hereunder and shall deliver the same in
escrow to the attorney for the Corporation with the appropriate amount of
federal and state documentary stamps affixed thereto, together with, in the
case of death, the appropriate tax waiver from the Estate Tax Division of the
State Tax Commission of the state where decedent resided, and a certificate of
discharge of property from lien of Federal Estate Tax with respect to the
estate tax on decedent's estate covering the shares purchased by the
Corporation. The attorney for the Corporation shall then present the duly
endorsed shares held by him in escrow to the Corporation, which shall reendorse
such shares in blank, and said attorney shall retain such shares in escrow
after
issuing a receipt therefor to the Corporation, until such time as such shares
shall have been fully paid for. Upon payment in full of the purchase price, the
shares, together with all endorsements thereof, if in a separate instrument,
held in escrow, shall be delivered to the Corporation. Title to the shares
shall be deemed to have passed to the Corporation upon payment of the first
installment of the purchase price.
In the event of a sale during a shareholder's lifetime, such
shareholder, if an officer, director or employee of the Corporation, shall
simultaneously deliver, with the payment of the first installment of the
purchase price, his resignation as such officer, director or employee,
effective immediately.
CLOSING AND PAYMENT OF FIRST INSTALLMENT OF PRICE
8. The closing for the sale of shares purchased by the Corporation
shall take place at the principal office of the Corporation at the time and on
the applicable date specified in the further notice sent by the Corporation to
the selling shareholder, or to the personal representative or representatives
of the deceased or judicially declared incompetent shareholder, as the case may
be, after the Corporation shall have been notified of the price per share, as
calculated by the accountant for the Corporation, which specified date shall be
no sooner than five (5) days, nor later than ten (10) days, exclusive of
Saturday, Sundays and holidays, from the date of sending of such further
notice; provided, however, that such date shall be after the qualification of
the personal representative or representatives of the deceased or judicially
declared incompetent shareholder. In the event the Corporation shall receive
the price per share from the accountant before such qualification of the
personal representative or representatives of a deceased or judicially declared
incompetent shareholder, the date of closing and further notice to be sent by
the Corporation, (which notice shall be sent within five (5) days after receipt
of proof of the issuance of Letters Testamentary, Letters of Administration or
the appointment of Committee or other representatives) shall be as hereinabove
in this paragraph provided.
The calculation of the price shall be made by the accountant regularly
employed by the Corporation and certified to by him to the Corporation as
having been computed as provided for above.
DEFAULT IN PAYMENT OF PURCHASE PRICE BY CORPORATION
9. Should the Corporation default in making any payment of the
purchase price hereunder and default continues for ten (10) days after notice
thereof, the Corporation shall forthwith be dissolved and liquidated and
distribution of the assets promptly made. In the event of such liquidation and
dissolution, any monies theretofore paid to the selling shareholder, or the
personal representative or representatives of a deceased shareholder, or
judicially declared incompetent shareholder, on account of the purchase price
shall be credited against any amounts to be received by such selling
shareholder or personal representative or representatives, as a result of such
liquidation and dissolution.
INSUFFICIENT SURPLUS
10. If at any time the surplus of the Corporation be legally
insufficient under the laws of the State of New York to enable the Corporation
to make any payments hereunder with respect to the shares which it is obligated
to purchase, then the shareholders hereto agree that they or their personal
representative or representatives shall reduce the capital of the
Corporation-in order to create a sufficient surplus to enable said payments to
be made. Anything to the contrary notwithstanding, in lieu of effecting a
reduction in capital of the Corporation any of the shareholders may elect to
contribute to the Corporation a sufficient amount of cash to enable the
Corporation to make such payments.
INSOLVENCY
11. If at any time when the Corporation would be obligated to purchase
the shares of a offering shareholder or deceased or judicially declared
incompetent shareholder under this Agreement, the Corporation is insolvent or
would thereby be made insolvent, the
Corporation shall, in lieu of the "acceptance Notice" set forth in paragraph
"4" hereof, notify the offering shareholder or the personal representative, or
representatives of a deceased or judicially declared incompetent shareholder,
in writing, that the Corporation is insolvent or would be made insolvent by the
purchase of said shares and that it is legally precluded from making such
purchase. If the Corporation is legally prevented from reacquiring said shares,
the remaining shareholders shall be deemed to have been given the option of
purchasing the shares of the offering shareholder, or deceased, or judicially
declared incompetent shareholder, at the same terms and upon the same
conditions as the Corporation would have been entitled to make such purchase,
in proportion to their then stock holdings in the Corporation. Such option
shall be exercised within ten (lo) days after the mailing of the notice of
insolvency by the Corporation. In the event the surviving shareholders shall
refuse or neglect to exercise the said option within the time prescribed, the
offering shareholder or personal representative or representatives of a
deceased or judicially declared incompetent shareholder shall be entitled to
require the Corporation to be dissolved and the remaining shareholders shall be
obligated to perform all acts and do all things necessary to effectuate such
dissolution.
DISPOSITION OF LOANS UPON SALE OF SHARES
DURING LIFE OR UPON DEATH
12. Upon the Corporation purchasing shares from a stockholder or the
personal representative or representatives of a deceased or judicially declared
incompetent shareholder, it is agreed:
a) That the loans due from the Corporation to the selling or
deceased, or judicially declared incompetent shareholder, whether or not due by
their terms at such time, shall be paid by the Corporation on the date the
first installment of the purchase price is due to the selling shareholder or
the personal representative or representatives of a deceased or judicially
declared incompetent shareholder;
b) That any loans due from the selling or deceased or
judicially declared incompetent shareholder to the Corporation, whether or not
due by their terms at such time, shall be paid to the Corporation on the date
the first installment of the purchase price is due to the selling shareholder,
or the personal representative or representatives of a deceased or judicially
declared incompetent shareholder, and such payment may be made by the
Corporation setting off the amount due to it against the first installment due.
RATIFICATION OF AGREEMENT BY CORPORATION
13. At the;first meeting of the shareholders, to be held on or after
the date hereof, this Agreement shall be submitted to the meeting and a
resolution shall be adopted whereby the Corporation shall accept, ratify and
confirm the Agreement and agree to be bound thereby. Any and all by-laws of the
Corporation shall conform to the provisions of this Agreement and shall not be
in conflict therewith; if any conflict exists or arises hereafter, the
provisions of this Agreement shall control.
DEFINITION OF SHARES AND LEGEND TO APPEAR THEREON
14. The term "shares" as used herein shall be deemed to refer to all
the shares of the Corporation owned by the shareholders at the time of
execution of this Agreement and any shares hereafter issued in exchange
therefor by way of reclassification of shares, merger, consolidation,
reorganization, recapitalization, or otherwise and any additional shares issued
to the respective individual parties hereto by reason of dividends paid by
share distributions or increase in the outstanding shares or otherwise.
Each of the respective individual parties hereto agrees to submit
the certificates for shares now owned by them to the Corporation for imprinting
of the following legend thereon:
"This certificate and the share or shares it represents is held
subject to the provisions of an Agreement dated the, a copy
of which Agreement is on file and may be examined at the office
of the Corporation."
The affirmative vote of a majority of the shares of the Corporation
shall be required to increase or decrease the authorized number of, change the
designations, preferences, qualifications, limitations, restrictions, special
or relative rights of any of the shares or merge or consolidate the Corporation
with or into any other corporation, or sell, lease or convey all or
substantially all of the assets of the Corporation, or dissolve, liquidate or
wind up its affairs, voluntarily or as the case may be.
NOTICES
15. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered
in person, telegraphed or mailed by certified or registered mail, postage
prepaid:
If to the Corporation to:
HERGO, ECONOMIC SUPPORT SYSTEMS, INC., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000;
If to I. XXXXXXX XXXXX, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000;
If to XXXX XXXXXXX, 00-00 000xx Xxxxxx, Xxxxx Xxxxxxx, Xxx Xxxx
00000.
AMENDMENTS
16. This Agreement may be amended or modified only by a written
instrument executed by the individuals.
SECTION AND OTHER HEADINGS
17. The section and other headings contained in this Agreement are for
reference purposes only, and shall not effect in any way the meaning or
interpretation of this Agreement.
BROKERAGE COMMISSION
18. The parties covenant to and with each other, that they have not
retained any broker or other representative or agreed to pay any fee or
commission to any agent, finder or broker, either in the nature of a finder's
fee or originator's fee or otherwise in connection with the subject matter of
this Agreement.
PARTIES IN INTEREST. ETC.
19. This Agreement shall inure to the benefit of and be binding upon
the parties named herein and their respective heirs, successors and assigns.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
other person any rights or remedies under or by reason of this Agreement.
GOVERNING LAW
20. This Agreement shall be construed and enforced in accordance with
the laws of the State of New York.
COUNTERPARTS
21. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
SEPARABILITY
22. If any of the aforesaid covenants or provisions are held to be
invalid for any reason, it is agreed that all remaining covenants shall still
be considered valid and in force.
23. The parties acknowledge that this Agreement, as well as other
documents in connection therewith, were prepared by XXXXXX & XXXXXX, a New York
attorney, who was retained by HERGO, ERGONOMIC SUPPORT SYSTEMS, INC. and acted
solely as its attorney.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the
day and year first above written.
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XXXX XXXXXXX
HERGO, ERGONOMIC SUPPORT SYSTEMS, INC.
By:
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I. XXXXXXX XXXXX, President
State of New York )
)
County of New York )
On the 2nd day of April, 1993 before me personally came XXXX XXXXXXX
and I. XXXXXXX XXXXX to me known to be the individuals described in and who
executed the foregoing instrument and acknowledged that they executed the same.
--------------------------
Notary Public
State of New York )
)
County of New York )
On the 2nd day of April, 1993 before me personally came I. XXXXXXX
XXXXX to me known, who by me being duly sworn, did depose and say that she
resides at 000 Xxxxx Xxxxxx that she is the President of HERGO, ERGONOMIC
SUPPORT SYSTEMS, INC., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the board of directors of said corporation, and that he signed his
name thereto by like order.
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Notary Public
SCHEDULE "A"
PAYMENTS FOR PURCHASE OF STOCK
Fifty per cent (50%) of the purchase price in cash or by good,
certified check in such amount, drawn payable to the selling shareholder or the
representative of a deceased or judicially Odeclared incompetent shareholder,
upon closing.
The balance of 50% thereof, in two equal annual payments, the first of
which shall be one year from date of closing and the second two years from date
of closing. The aforesaid payments shall be evidenced by two promissory notes
duly executed by the Corporation or the purchasing shareholders, whichever the
case may be, to the order of the selling shareholders or the representative of
a deceased or judicially declared incompetent shareholder.
Each note shall bear interest at the rate of % per annum, and contain
a provision that upon default in payment of note number one, and if such
default shall continue for thirty (30) days, the remaining note shall forthwith
become due and payable, without notice thereof being required.
The maker of the foregoing notes shall have the privilege of prepaying
either or both of same.
