Exhibit 10.24
SHAREHOLDERS AGREEMENT
Protocol Resource Management Inc.
August 28, 2000
Shareholders Agreement
SHAREHOLDERS AGREEMENT ("Agreement"), dated August __, 2000 , among
Protocol Resource Management, Inc. a Ontario corporation (the "Company"), Pico
Holdings, Inc. a Delaware corporation or its nominee ("Pico") and Solpower
Corporation, a Nevada corporation ("Solpower") and any other persons or entities
which become parties to this Agreement and each of their respective Permitted
Transferees or Involuntary Transferees, who become Shareholders, as the case may
be, are referred to herein, collectively, as the "Shareholders".
RECITALS
WHEREAS, pursuant to a Share Purchase Agreement dated even date herewith,
Pico and Solpower have acquired all of the outstanding common shares, each with
a par value of $0.01 per share ("Shares"), which Shares are the only capital
shares of the Company, and plan to pursue the business of the Company and have
reached certain understandings with respect to the ownership, voting and
transfer of the Shares of the Company and have agreed to enter into a
Shareholders' Agreement to provide for certain rights and obligations of the
Shareholders to each other and to the Company in respect to the governance of
the Company and the issuance, transfer or disposition of the Shares of the
Company; and
WHEREAS, the Shareholders believe it to be in their best interests and in
the best interests of the Company that they enter into this Agreement providing
for such rights and restrictions with respect to the ownership, transfer and
voting of Shares and governance of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Agreement, the parties hereto agree as follows:
1. RESTRICTIONS ON TRANSFER OF SHARES.
1.1 GENERAL RESTRICTION ON TRANSFER. Prior to the closing of an
underwritten public offering ("IPO") pursuant to an effective registration
statement (a "Registration") under the Securities Act of 1933, as amended (the
"Act"), that covers together with any prior effective Registrations: (i) not
less than 40% of the outstanding Shares of the Company on a fully diluted basis;
and (ii) Shares that, after the closing of such IPO, will be traded on the New
York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market (but
excluding the OTCBB) no Shares now or hereafter owned by any Shareholder or any
Permitted Transferee or any Involuntary Transferee or any interest therein may,
directly or indirectly, be sold, assigned, mortgaged, transferred, pledged,
hypothecated or otherwise disposed of or transferred (hereinafter collectively
referred to as "Transfers" or "Transferred") except pursuant to this Agreement.
1.2 PERMITTED TRANSFEREES.
(a) SCOPE OF TRANSFER. Subject to subsection (c) of this Section 1.2,
a Shareholder may Transfer any Shares or an interest therein or its rights to
subscribe for the same with the prior written consent of the Company's Board of
Directors (the "Board"), which consent shall not be unreasonably withheld to,
(x) a corporation or other entity which is controlled by, under common control
with, or which controls the Shareholders or the equity holders of which are only
such Shareholder or other equity owners of the Shareholder or which is a
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successor by merger, consolidation or reorganization to the Shareholder or (y)
to one or more Shareholders ("Permitted Transferees"). In addition to the
foregoing, any transferee of a Shareholder described above may Transfer Shares
back to such Shareholder or to another Permitted Transferee of such Shareholder.
(b) SECURITY AGREEMENTS. Subject to subsection (c) of this Section
1.2, a Shareholder, with the prior written consent of the Board, consent shall
not be unreasonably withheld, may pledge any or all Shares now or hereafter
owned by it or grant a security interest therein to secure indebtedness of the
Shareholder owing to the Company or a bank or other financial institution, so
long as such indebtedness was incurred either (x) for the purpose of paying all
or part of the purchase price of such Shares (or the shares for which such
Shares were exchanged) or (y) for the purpose of refinancing indebtedness
incurred for such purpose, provided, however, that any transferee pursuant to
this subsection (b) shall acquire only a security interest in such Shares
entitling such transferee to the proceeds from any sale of such Shares made in
compliance with the terms of this Agreement and not title to such Shares or any
other rights incident thereto. The pledge agreements, hypothecation agreements
or other related financing agreements of any Shareholder shall be subject to and
acknowledge the rights of the Company and the other Shareholders set forth
herein.
(c) AGREEMENTS TO BE BOUND. Any Transfer of Shares made pursuant to
subsection (a) or (b) of this Section 1.2 to a Permitted Transferee shall be
permitted and shall be effective only if such Permitted Transferee shall agree
in writing to be bound by the terms and conditions of this Agreement pursuant to
the Joinder to Shareholders Agreement annexed hereto or pursuant to a similar
instrument of assumption reasonably satisfactory to the Company.
2. FAIR MARKET VALUE.
For the purposes of this Agreement, the "Fair Market Value" of any Share
being purchased by or sold to the Company or for which a value needs to be set
hereunder shall be the fair market value of the entire equity interest of the
Shares of the Company taken as a whole, divided by the number of outstanding
Shares, all calculated on a fully diluted basis including any outstanding
warrants and options then exercisable currently or within 60 days without
additional premiums for control or discounts for minority interests or
restrictions on transfer or issuance, and shall be determined as of the date
which is the end of the most recently completed fiscal quarter or such other
date as the Company may determine. Fair Market Value shall be determined by a
nationally recognized valuation firm selected by the Company. The selection of
such firm and the date of the determination shall be reasonably acceptable to
each Shareholder.
3. SALES TO THIRD PARTIES.
3.1 GENERAL. A Shareholder may not sell all or any portion of the
Shares except as otherwise permitted under this Section 3.
3.2 RIGHT OF FIRST REFUSAL.
(a) NOTICE OF PROPOSED TRANSACTION. If a Shareholder (the
"Selling Shareholder") shall have received a bona fide offer or offers from a
third party or parties to purchase all of that person's Shares, then prior to
selling such Shares to such third party or parties such Selling Shareholder
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shall deliver to the Company and each other Shareholder (the "Non-Selling
Shareholders") a notice (the "Sale Notice") signed by such Selling Shareholder
setting forth:
(i) the name of the third party or parties;
(ii) the number of Shares subject to the offer (the
"Offered Shares");
(iii) the prospective purchase price per Share;
(iv) all material terms and conditions contained in the
offer of the third party or parties;
(v) the Selling Shareholder's offer (irrevocable by its
terms for 30 days following receipt) to sell to the
Non-Selling Shareholders all or part of the Shares
covered by the offer of the third party or parties,
for a purchase price per Share, and on other terms and
conditions, not less favorable to the Non-Selling
Shareholders than those contained in the offer of the
third party or parties (an "Offer");
(vi) the number of Shares each Non-Selling Shareholder
shall be entitled to purchase from the Selling
Shareholder pursuant to the Right of First Refusal set
forth in this Section; and
(vii) closing arrangements and a closing date (not less than
45 nor more than 60 days following the date of such
letter) for any purchase and sale that may be effected
by the Non-Selling Shareholders pursuant to this
Section 3.
(b) RIGHTS OF NON-SELLING SHAREHOLDERS. Each Non-Selling
Shareholder shall, within 15 days after receipt of the Sale Notice from the
Selling Shareholder, have the right to elect to purchase that number of Shares
which is equal to the product of the Offered Shares and the fraction determined
by dividing the number of Shares, all calculated on a fully diluted basis
including any outstanding warrants and options then exercisable currently or
within 60 days, then owned by such Non-Selling Shareholder by the aggregate
number of Shares owned by all of the Non-Selling Shareholders, (the "Right of
First Refusal"). Each Non-Selling Shareholder shall have a period of 15 days
after receipt of the Sale Notice from the Selling Shareholder, to give the
Selling Shareholder and the Company written notice of his intention to exercise
the Right of First Refusal. The Selling Shareholder shall notify each
Non-Selling Shareholder whether any Non-Selling Shareholder failed to exercise
the Right of First Refusal and the number of Shares that are still available.
(c) ALLOCATION OF UNEXERCISED RIGHTS. If any Non-Selling
Shareholder elects not to exercise the Right of First Refusal, then the
Non-Selling Shareholders who have elected to exercise the Right of First Refusal
(the "Electing Shareholders") shall be entitled, within 10 days after receipt of
notice from the Selling Shareholder of the number of Shares that any Non-Selling
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Shareholders have elected not to purchase (the "Reoffered Shares"), to purchase
all or any of the Reoffered Shares, provided that, if the Electing Shareholders
in the aggregate elect to purchase more Shares than the number of Reoffered
Shares, the Reoffered Shares shall be allocated pro rata among the Electing
Shareholders who have exercised this right to purchase Reoffered Shares in
proportion to the number of Shares owned by them prior to the Offer.
(d) EFFECTING SALES. If, upon the expiration of 30 days following
receipt by the Non-Selling Shareholders of the Sale Notice described in Section
3.2(a), the Non-Selling Shareholders have not exercised (in whole or in part),
the Right of First Refusal contained herein, the Selling Shareholder may sell to
such third party or parties all of the Shares covered by the Offer which the
Non-Selling Shareholders have not agreed to purchase, for the purchase price and
on the other terms and conditions contained in the Offer. If the Non-Selling
Shareholders shall accept such Offer, the closing of the purchase and sale
pursuant to such acceptance shall take place as set forth in the Sale Notice.
3.3 AGREEMENTS TO BE BOUND. Notwithstanding anything contained in this
Section 3, any sale to a third party or any Involuntary Transfer (as defined in
Section 3.4) to an Involuntary Transferee (as defined in Section 3.4) shall be
permitted under the terms of this Agreement only if such third party or
Involuntary Transferee, as the case may be, shall agree in writing to be bound
by the terms and conditions of this Agreement pursuant to the Joinder to
Shareholders Agreement attached hereto or another instrument of assumption
reasonably satisfactory to the Company.
3.4 INVOLUNTARY TRANSFERS. In the case of any transfer of title or
beneficial ownership of Shares upon default, foreclosure, forfeit, court order,
or otherwise than by a voluntary decision on the part of a Shareholder (an
"Involuntary Transfer"), the Company shall have the right but not the obligation
to purchase such Shares pursuant to this Section 3.4. Upon the Involuntary
Transfer of any Shares, such Shareholder shall promptly (but in no event later
than 10 days after such Involuntary Transfer) furnish written notice (the
"Involuntary Transfer Notice") to the Company indicating that the Involuntary
Transfer has occurred, specifying the name of the person to whom such Shares
have been transferred (the "Involuntary Transferee"), giving a detailed
description of the circumstances giving rise to, and stating the legal basis
for, the Involuntary Transfer. Upon the receipt of the Involuntary Transfer
Notice, and for 90 days thereafter, the Company shall have the right, but not
the obligation, to purchase, and the Involuntary Transferee shall have the
obligation to sell, all (but not less than all) of the Shares acquired by the
Involuntary Transferee for a purchase price equal to the Fair Market Value of
such Shares on the date of transfer to the Involuntary Transferee. The Company's
right to purchase pursuant to this Section 3.4 shall be assignable in whole or
in part to any one or more Shareholders with such rights to be accorded and
exercised in accordance with Section 3.2. In the event that neither the Company
nor the other Shareholders exercise their rights, then the Involuntary
Transferee may elect to remain a Shareholder or seek a third party offer under
Section 3.2 and in accordance with the procedures therein. Any Transfer under
this Section 3.4, and the payments of cash or other consideration, under Section
3.5 or otherwise, shall be implemented and closed within 180 days of the date of
the Transfer Notice.
3.5 TERM OF PAYMENT FOR INVOLUNTARY TRANSFERS. If the Company
exercises its rights pursuant to Section 3.4, the Company may elect to pay the
purchase price to be determined pursuant to Section 2 hereof in cash at closing
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or in installments. The Company shall state in its written notice under Section
3.4 whether it elects to pay in cash in full or in installments, and if in
installments, the specific terms of such installments within the requirements
set forth in this Section 3.5. If the Company fails to state in such written
notice its election to pay in cash in full or in installments, the Company shall
be deemed to have elected to pay in installments with fifty percent (50%) of the
Fair Market Value to be paid as a down payment and the balance of the Fair
Market Value to be evidenced by a promissory note of the Company in the
principal amount of the unpaid balance of the Fair Market Value and payable in
at least five (5) but not more than ten (10) equal semi-annual installments of
principal and interest, with interest thereon at the rate of ten percent (10%)
per annum. Such promissory note shall provide for the acceleration of the due
dates thereof in the event of default in any principal or interest payment, and
shall allow the Company to prepay all or any part of the promissory note at any
time or from time to time without penalty. In the event that the Shares are
acquired by a Shareholder under Section 3.4 then the Fair Market Value shall be
due in cash unless the Involuntary Transferee, in his, her or its sole
discretion, elects to accept payment on the same terms available to the Company
in this Section 3.5 or on other terms agreed to by the parties, but in all
events, subject to this Agreement including the limitations on the Security
Agreement set forth in Section 1.2(b).
4. OPTIONAL PARTICIPATION IN SALES OF COMMON STOCK ("TAG ALONG RIGHTS").
(a) REQUIREMENT OF PARTICIPATION. If any one or more of the
Shareholders (a "Seller") shall at any time desire to Transfer Shares to a third
party other than a Permitted Transferee, in a privately negotiated transaction
and such Shares (together with the aggregate number of Shares of theretofore
Transferred by such Shareholders, excluding Transfers to Permitted Transferees)
equal more than 50% of the outstanding Shares on a fully diluted basis, all
calculated on a fully diluted basis including any outstanding warrants and
options then exercisable currently or within 60 days, measured as of the latest
date on which such Shareholder may deliver or cause to be delivered the Transfer
Notice referred to in Section 4(c), then each Shareholder shall be entitled,
subject to Section 4(e), to participate pro rata in such Transfer at the same
price and on the same terms and conditions applicable to the Seller.
(b) AMOUNT. Each Shareholder shall have the right to Transfer in
a transfer subject to this Section 4 up to a percentage of the number of Shares
owned by such Shareholder equal to the percentage derived by dividing the
aggregate number of Shares specified in the Transfer Notice delivered pursuant
to Section 4(c) by the aggregate number of Shares then owned by Seller.
(c) TRANSFER NOTICE. The Seller shall deliver or cause to be
delivered to each Shareholder a written notice (a "Transfer Notice") of a
proposed Transfer subject to this Section 4 no later than 30 days prior to the
proposed closing thereof. Such notice shall make reference to the Shareholders'
rights hereunder and shall describe in reasonable detail (i) the aggregate
number of Shares to be Transferred by the Seller if none of the other
Shareholders participate, (ii) the aggregate number of Shares then owned by the
Seller, (iii) the person or entity to whom or which such Shares are proposed to
be Transferred, (iv) the terms and conditions of the Transfer, including the
consideration to be paid therefor, (v) the maximum percentage of the Shares to
include in the Transfer and (vi) the proposed date, time and location of the
closing of the Transfer.
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(d) PARTICIPATION NOTICE. Each Shareholder shall exercise its
right to participate in a Transfer of Shares pursuant to this Section 4 by
delivering to the Seller a written notice (a "Participation Notice") stating its
election to do so and specifying the number of Shares, which shall not exceed
the number of Shares determined for such Shareholder pursuant to Section 4(b))
held by him, her or it to be Transferred no later than 15 days after receipt of
the Transfer Notice. Failure to provide a Participation Notice within such
15-day period shall be deemed to constitute an election by such Shareholder not
to exercise its rights pursuant to this Section 4, and the Seller shall have 60
days following the expiration of such 15-day period in which to Transfer the
number of Shares equal to the difference between the number set forth in the
Transfer Notice pursuant to Section 4(c)(i) and the aggregate number of Shares
as to which the Seller has received a Participation Notice, on terms not more
favorable to the Seller than those set forth in the Transfer Notice. Each
Shareholder who has so elected pursuant to a Participation Notice shall
thereupon be required to deliver at such closing the certificate or certificates
representing all (or such lesser number determined pursuant to Section 4(b)) of
the Shares held by him, her or it, duly endorsed for transfer, and shall be
entitled to receive the net proceeds allocable to the Transfer thereof, after
deduction of such Shareholder's proportionate obligations for the reasonable
expenses of Transfer, which obligations shall not exceed an amount proportionate
to the amount of such expenses allocated to the Seller. If, at the end of the
60-day period following the expiration of such 15-day period, the Seller has not
completed the Transfer of Shares, the Seller may not later sell the Shares
pursuant to this Section 4 without again fully complying with the provisions of
this Section 4.
(e) EXCEPTIONS. The obligation and rights of the Shareholders
pursuant to this Section 4 shall not apply to any Transfer by a Seller of Shares
(i) pursuant to a distribution to the public (whether pursuant to a registered
public offering, Rule 144 or otherwise) or (ii) to a third party that is not a
Permitted Transferee in a transaction in which the number of Shares Transferred
does not exceed (together with the aggregate number of Shares theretofore
Transferred in the then current fiscal year by the Seller, excluding Transfers
to Permitted Transferees) 5% of the then outstanding Shares; provided, however,
that such sales of 5% or less of the outstanding Shares shall be aggregated with
previous sales to determine whether the 50% threshold set forth in Section 4(a)
has been met, notwithstanding that such sales may, after such threshold has been
met, be made without giving rise to "tag-along rights" under this Section 4(a)
after such threshold has been met, to the extent permitted in this sentence.
(f) If the provisions of both Section 3 and Section 4 are
applicable to the same transaction, each Shareholder shall be entitled to make
its elections under Section 3 or Section 4 and any Shares sold pursuant to this
Section 4 shall also be subject to the provisions of Section 3.
5. CORPORATE ACTIONS.
5.1 ELECTION OF DIRECTORS AND OFFICERS. Pico and Solpower and their
respective Permitted Transferees or Involuntary Transferees further agree in
their capacity as Shareholders of the Company to cast their votes in such a
manner so as to set the Board of Directors initially at four (4) directors and
to elect two (2) directors designated by Pico and two (2) directors designated
by Solpower (or their respective successors as a result of any Involuntary
Transferees or Permitted Transferees) as members of the Board of the Company.
The Shareholders and the directors elected or designated during the term of this
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Agreement further agree, to the extent permitted, to take such action as is
necessary to cause the persons so designated to be re-elected as Directors and
to cause such nominees to be elected and re-elected as directors. To the extent
the size of the Board of Directors is modified, the Shareholders also agree to
maintain the Board at 50% representation for each of Pico and Solpower for their
successor Shareholders, unless the Board otherwise determines by unanimous vote.
5.2 ADDITIONAL DIRECTORS. Pico and Solpower agree that any persons
elected as directors of the Company shall be required to agree to require all
Shareholders to be bound by this Agreement and to agree personally to the
provisions of Section 5 of this Agreement prior to the date of their election
and whether or not such person becomes a Shareholder subject to this Agreement.
6. APPLICATION OF AGREEMENT TO NEW SHAREHOLDERS AND SHARE CERTIFICATE
LEGEND.
6.1 AGREEMENTS TO BE BOUND. In addition to the provisions of Section
3.3, any transferee of Shares and any holder of additional Shares ("New Shares")
issued by the Company shall be required to accept all the terms and conditions
of this Agreement before the transfer of any Shares or the issuance or transfer
of New Shares and shall agree in writing to be bound thereby pursuant to the
Joinder to Shareholders Agreement attached hereto or another instrument of
assumption reasonably satisfactory to the Company.
6.2 SHARE CERTIFICATE LEGENDS. A copy of this Agreement shall be filed
with the Secretary of the Company and kept with the records of the Company. Each
certificate representing Shares or New Shares owned by the Shareholders shall
bear upon its face the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND OTHER CONDITIONS, AS SPECIFIED IN A SHAREHOLDERS' AGREEMENT DATED
AUGUST ___, 2000, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE ON FILE AT
THE OFFICE OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
SUCH SHARES UPON WRITTEN REQUEST."
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933
ACT"), OR UNDER STATE SECURITIES LAWS, AS APPLICABLE, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND
UNTIL REGISTERED UNDER THE ACT AND APPROPRIATE QUALIFICATIONS UNDER ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, SUCH LAWS AS WELL AS THE
SHAREHOLDERS AGREEMENT, DATED AS OF MARCH 15, 1997, AS AMENDED FROM TIME TO
TIME."
In addition, certificates representing Shares or New Shares owned by
residents of California shall bear the following legend:
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"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
All Shareholders shall be bound by the requirements of such legends to the
extent that such legends are applicable. Upon a registration of any Shares or
New Shares, the certificate representing the registered securities shall be
replaced, at the expense of the Company, with certificates not bearing any
legend, to the extent a legend is no longer required.
7. GENERAL PROVISIONS.
7.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement executed by the Company,
Pico, Solpower, and any other Shareholders who have become parties hereto.
7.2 ASSIGNMENT. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of Permitted Transferees,
third parties and Involuntary Transferees, such Permitted Transferees, third
parties or Involuntary Transferees, as the case may be, shall be deemed the
Shareholder hereunder for purposes of obtaining the benefits or enforcing the
rights of such Shareholder hereunder, provided that no Permitted Transferee,
third party or Involuntary Transferee, as the case may be, shall derive any
rights under this Agreement unless and until such Permitted Transferee, third
party or Involuntary Transferee, as the case may be, has delivered to the
Company a valid undertaking to become, and becomes, bound by the terms of this
Agreement to which the transferring Shareholder is subject.
7.3 TERMINATION. Any party to, or person who is subject to, this
Agreement which ceases to own Shares or any interest therein shall cease to be a
party to, or person who is subject to, this Agreement and thereafter shall have
no rights or obligations hereunder.
7.4 RECAPITALIZATIONS, EXCHANGES, ETC. AFFECTING THE SHARES. Except as
otherwise provided herein, the provisions of this Agreement shall apply to the
full extent set forth herein with respect to (a) the Shares and (b) any and all
New Shares and any other shares of capital stock of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution for the Shares of, by reason of any stock dividend, split, reverse
split, combination, recapitalization, reclassification, merger, consolidation or
otherwise. Except as otherwise provided herein, this Agreement is not intended
to confer upon any person, except for the parties hereto, any right or remedies
hereunder.
7.5 FURTHER ASSURANCES. Each party hereto or person subject hereto
shall do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other part hereto or person subject hereto may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transaction contemplated hereby.
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7.6 GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder and the persons subject hereto shall be governed by, and
construe and interpreted in accordance with, the laws of the State of
California, without giving effect to the choice of law principles thereof.
7.7 INVALIDITY OF PROVISION. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
7.8 NOTICES. All notices and other communications hereunder shall be
in writing and, unless otherwise provided herein, shall be deemed duly given if
delivered personally or by telecopy or mailed by registered or certified mail
(return receipt requested) or by Federal Express or other similar courier
service to the parties at the following addresses or (at such other address for
the party as shall be specified by like notice):
(a) If to Solpower:
Solpower Corporation
0000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to:
Brand Xxxxxx & Xxxxxxx, LLP
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxx
If to Pico:
Pico Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
Telecopier: 000-000-0000
With a copy to:
General Counsel
Pico Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
Telecopier: 000-000-0000
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If to the Company
Protocol Resource Management Inc.
000 Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Attn: Xxxxx X. Xxxxxxx
With a copy to:
Xxxxxx, Xxxxxxxx
Barristers & Solicitors
00 Xxxxxxxx Xxx, Xxx. 000
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxx
(b) if to any other Shareholder, as listed in the joinder of the
Shareholder hereto or, if not so listed, to such Shareholder at the address
reflected in the stock records of the Company, or as such Shareholder shall
designate to the Company in writing.
7.9 HEADINGS; EXECUTION IN COUNTERPARTS. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
7.10 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to the Shares, other than those
expressly set forth or referred to herein.
7.11 INJUNCTIVE RELIEF. The Shares cannot readily be purchased or sold
in the open market, and for that reason, among others, the Company and the
Shareholders will be irreparably damaged in the event this Agreement is not
specifically enforced. Each of the parties therefore agrees that in the event of
a breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of this
Agreement. Such remedies shall, however, be cumulative and not exclusive, and
shall be in addition to any other remedy which the Company or the Shareholders
may have.
7.12 FEES AND EXPENSES. Each party shall be responsible for its own
expenses and fees including attorneys' fees and expenses. If any legal action or
any arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an allege dispute, breach, default or misrepresentation
in connection with any of the provisions of this Agreement each party may seek
to recover reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled,
as may be ordered in connection with such proceeding.
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7.13 TERM. This initial term of Agreement shall terminate upon the
earlier to occur of (a) an IPO as described in Section 1, and (b) ___________,
2005, provided, however, if an IPO has not occurred prior to ____________, 2005,
this Agreement shall be automatically extended for the longer of the period
allowed under the laws of the state in which the Company is then incorporated or
shall be renewed automatically year to year thereafter until terminated by
mutual agreement of the parties to the Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by each of the parties
hereto on the date opposite such party's signature hereto, and shall be
effective as of the date first above written.
SOLPOWER CORPORATION
Date: August 28, 2000 By: /s/ Xxxx Xxxxxxxx
----------------- ------------------------------------
Name: Xxxx Xxxxxxxx
Title: President and Chief Executive
Officer
PICO HOLDINGS, INC.
Date: August 28, 200 By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: CEO
11
EXHIBIT A
JOINDER TO
SHAREHOLDERS AGREEMENT
OF PROTOCOL RESOURCE MANAGEMENT, INC.
By affixing a signature hereto, the undersigned, as a Shareholder of
Protocol Resource Management, Inc. ("Company"), hereby joins in the execution of
the Shareholders Agreement dated _______________, 2000, executed by the Company
and its Shareholders, as amended to the date hereof. Upon acceptance of this
Joinder by the Company, the undersigned shall be a party to said Shareholder
Agreement.
The execution of this Joinder shall be a counterpart execution of the said
Shareholders Agreement, and the undersigned agrees to be bound by all the terms
thereof as though he were an original party thereto.
IN WITNESS WHEREOF, the undersigned has executed this Joinder as of
_____________.
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Signature of Shareholder Number of Shares
ACCEPTANCE
The foregoing Joinder is hereby accepted by the Company as of
______________.
By:
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Title:
Spousal Waiver
____________________ [Name of Spouse] hereby waives and releases any and
all equitable or legal claims and rights, actual, inchoate or contingent which
[he] [she] may acquire with respect to the disposition, voting or control of the
Shares subject to this Agreement, except as set forth in the Shareholders
Agreement, dated as of _______________, 2000, as amended through the date of
this Spousal Waiver. I acknowledge that I have read the Shareholders Agreement
and that I know its contents, including the fact that my spouse has agreed to
limit the ownership, sale and transfer of the Shares of Protocol Resource
Management, Inc. and the disposition of the proceeds of any such sale which, as
a result, applies to any community interest I may have or acquire in the Shares.
Date:
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[Signature of Spouse]
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[Print name]
Address:
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