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EXHIBIT 10.19
STOCKHOLDERS' AND REGISTRATION RIGHTS AGREEMENT
This Stockholders Agreement (this "Agreement") is made on February
24, 1999 by and among EMERGE VISION SYSTEM, INC., a Delaware corporation, with
its principal offices located at 00000 000xx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000
("eVS) and CIN, LLS (formerly Cattle Management Network, LLC) ("CIN"), together
with any Permitted Transferee (as defined below) which may become a party to
this Agreement hereafter are, for so long as they are stockholders of eVS,
collectively referred to herein as the "Stockholders" or individually a
"Stockholder.")
BACKGROUND
In partial consideration for the execution and delivery by eVS of
the Asset Purchase Agreement by and between eVS and CIN (the "Asset Purchase
Agreement"), CIN has agreed to enter into this Agreement.
The parties have determined that it is in the best interests of eVS
and the Stockholders to provide for certain rights and restrictions on the
future disposition of eVS's common stock, par value $0.01 per share (the "Common
Stock"), and various other matters set forth herein.
NOW, THEREFORE, in consideration of the agreements and mutual
promises and covenants set forth herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE 1
RESTRICTIONS ON TRANSFER OF SHARES
1.1 Restrictions on Stockholders. Until such time as eVS's Common Stock is
the subject of an underwritten firm commitment initial public offering pursuant
to an effective registration statement under the Securities Act of 1933 covering
the offer and sale by eVS of its Common Stock in which the aggregate net
proceeds exceed ten (10) million dollars (a "Qualified Initial Public Offering")
or as expressly provided in this Agreement or in the Asset Purchase Agreement,
no Stockholder shall sell, assign, transfer, give, bequeath, devise, donate or
otherwise dispose of, or pledge, deposit or otherwise encumber, in any way or
manner whatsoever, whether voluntary or involuntary (all of the foregoing
hereinafter referred to as "transfer"), any legal or beneficial interest in any
of the shares of eVS's Common Stock (collectively, the "Shares") now or
hereafter
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owned (of record or beneficially) by such Stockholder except as expressly
provided in this Agreement and in accordance with its terms and conditions.
1.2 Certain Excluded Transfers. The provisions of Articles I and 2 of this
Agreement shall not apply to the transfer of Shares by a Stockholder to a
Permitted Transferee, provided that the transfer is accomplished in accordance
with applicable federal and state securities laws and the Permitted Transferee
executes a copy of this Agreement as a Stockholder. As used herein, "Permitted
Transferee" means:
(a) in the case of any Stockholder who is a natural person, such--
Individual's spouse or issue (in each case natural or adopted), any trust for
the benefit of such Individual or his/her spouse or issue, or any corporation or
partnership in which the direct or beneficial owner of all of the equity
interest is such Individual, spouse or issue or any trust for the benefit of
such persons;
(b) in the case of any Stockholder who is a natural person, the
heirs, trustees, executors, administrators or personal representatives upon the
death or incompetency of such person;
(c) in the case of a Stockholder other than a trust that is not a
natural person, any Controlled Affiliate (as hereinafter defined) of such
Stockholder; and
(d) in the case of a Stockholder that is a trust, any beneficiaries
of such Trust or successor Trust, and Controlled Affiliate of a beneficiary of
such Trust or successor Trust;
(e) any person or entity that takes such shares pursuant to a sale
in connection with a Qualified Initial Public Offering (as hereinafter defined)
of such shares, which shares shall no longer be subject to this Agreement;
(f) in the case--of a limited liability company, to its members in
accordance with their interests in the limited liability company.
"Controlled Affiliate" means, with respect to any person, a corporation,
partnership or other business association in which such person holds, directly
or indirectly, fifty percent (50%) or more of the outstanding capital stock or
other equity interests, of such corporation, partnership or other business
association. In determining the fifty percent (50%) test, Xx. Xxxxx, his spouse
and his issue shall be considered one person. An estate or trust of a deceased
individual Stockholder shall be considered the same as the deceased person for
the fifty percent (50%) test until such estate or trust is distributed.
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ARTICLE 2
STOCKHOLDER'S LIMITED RIGHT TO DISPOSE OF SHARES
2.1 Offer to Sell Shares. Except as otherwise provided in Articles 1 and 2
of this Agreement, if any Stockholder shall at any time desire to sell all or
any of such Stockholder's Shares, such Stockholder (the "Selling Stockholder")
shall first prepare a written offer (the "Offer") to sell such Shares (the
"Offered Shares") setting forth the ,-proposed date of the sale, the proposed
price per Share, and the other terms and conditions upon which the sale is
proposed to be made. Such notice shall also specify whether a Third Party
Purchaser (as hereinafter defined) has made an offer to acquire such Shares. The
Selling Stockholder shall then transmit a copy of the Offer to eVS. Within two
(2) business days of receipt of the Offer, eVS shall transmit a copy of the
Offer to the Stockholders other than the Selling Stockholder.
2.2 Option of eVS. Transmittal of the Offer to eVS by the Selling
Stockholder shall constitute an offer by the Selling Stockholder to sell the
Selling Stockholder's Offered Shares to eVS at the price and upon the terms set
forth in the Offer. For a period of fifteen (15) days after the submission of
the Offer to eVS, eVS shall have the option, exercisable by written notice to
the Selling Stockholder with a copy to each of the other Stockholders, to accept
the Selling Stockholder's Offer as to all or any part of the Selling
Stockholder's Offered Shares. Such notice shall state the number of Shares eVS
will purchase, if any, and the number of Offered Shares available to be
purchased.
2.3 Option of Offeree Stockholders. In the event that eVS does not
exercise its option with respect to any or all of the Offered Shares in
accordance with Section 2.2, the Selling Stockholder, upon notice from eVS of
eVS's decision not to accept the Offer as to any or all of the Offered Shares
(or upon expiration of the fifteen-day option period referred to in Section 2.2
if eVS fails to give notice as aforesaid), shall be deemed to have offered in
writing to sell all, but not less than all, of its remaining Offered Shares
(those not purchased by eVS) to the Stockholders, as a group ("Offeree
Stockholders") at the price and upon the terms set forth in the Offer. For a
period of fifteen (15) days after such Offer to the Offeree Stockholders, the
Offeree Stockholders shall have the option, exercisable by written notice to the
Selling Stockholder with a copy to eVS and to each of the other Offeree
Stockholders, to accept the Offer as to the remaining Offered Shares. Each
Offeree Stockholder who exercises this option shall agree, by doing so, to
purchase that proportionate part of the remaining Offered Shares which the
number of Shares owned by such Offeree Stockholder bears to the total number of
Shares owned by all Offeree Stockholders (or in such other proportions as the
Offeree Stockholders may agree among themselves). In the event that one or more
of the Offeree Stockholders does not exercise its option in accordance with
Section 2.3, the Offeree Stockholders who exercised their options pursuant to
Section 2.3 shall have a further option for a period of five (5) additional days
following the expiration of the fifteen-day period set forth in
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Section 2.3 to accept the Offer as to the then remaining Offered Shares, and
each such Offeree Stockholder who exercises this further option shall agree, by
doing so, to purchase that proportionate part of the then remaining Offered
Shares, which the number of Shares owned by such Offeree Stockholder bears to
the total number of Shares owned by all of the Offeree Stockholders exercising
their option pursuant to this Section 2.3 (or in such other proportions as such
Offeree Stockholders may agree among themselves).
2.4 Sale to Third Party Purchaser. If, at the end of the option periods
described in Sections 2.2 and 2.3 (the "Option Periods"), options have not been
exercised by eVS and/or the Offeree Stockholders to purchase all of the Offered
Shares, then the Selling Stockholder shall be free, subject to the co-sale
provisions of Section 3 hereof, for a period of thirty (30) days thereafter to
sell any or all of the Offered Shares as to which options have not been
exercised (the "Remaining, Shares") to a third party purchaser (the "Third Party
Purchaser") at the price and upon the terms and conditions set forth in the
Offer, and on condition that such Third Party Purchaser executes a copy of this
Agreement as a Shareholder. If such Remaining Shares are not so sold within the
aforesaid thirty-day period, then the Selling Stock-holder shall not be
permitted to sell such Remaining Shares without again complying with this
Article 2.
ARTICLE 3
SECURITIES LAWS
3.1 Notwithstanding the compliance with any other Section of this
Agreement, Shares may not be offered, sold or transferred, in whole or in part,
in the absence of an effective registration statement under the Securities Act
of 1933, as amended or any successor statute thereto (the "Act"), and all
applicable state securities laws, or an opinion of counsel acceptable to eVS to
the effect that such registration is not required. As long as any Shares subject
to this Agreement which are proposed to be transferred are not covered by an
effective registration statement under the Act, eVS may place the following
legend (or a legend which is substantially similar to the following legend)
upon, and issue appropriate stock transfer instructions with respect to, the
certificate or certificates representing Shares transferred hereunder:
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS, AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED, OR ASSIGNED EXCEPT: (I) PURSUANT TO REGISTRATIONS UNDER
APPLICABLE SECURITIES LAWS; OR (II) IF, IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE
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CORPORATION, THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS WITHOUT REGISTRATION.
ARTICLE 4
PURCHASE PRICE, TERMS AND SETTLEMENT
4.1 Purchase Price. The purchase price per Share and the terms of payment
shall be the price per Share contained in the Offer.
4.2 Time: Date, Location. Settlement for the purchase of Shares by eVS or
by a Stockholder pursuant to the provisions of Article 2, shall be made within
thirty (30) days following, the date of exercise of the last option exercised.
Ail settlements for the purchase and sale of Shares shall, unless otherwise
agreed to by all of the purchasers and sellers, be held at the principal
executive offices of eVS during regular business hours. The precise date and
hour of settlement shall be fixed by the purchaser or purchasers (within the
time limits proscribed in this Agreement), or in the event the purchasers fail
to agree, by the President of eVS, by notice in writing, to the seller given at
least five (5) days in advance of the settlement date specified.
4.3 Certificates. At settlement, the stock certificate or certificates
representing the Shares being sold shall be delivered by the seller to the
purchaser or purchasers, duly endorsed for transfer or with executed stock
powers attached, with any necessary documentary and transfer tax stamps affixed
by the seller, free and clear of all liens, claims and encumbrances except for
the terms of this Stockholders Agreement.
4.4 Stockholders Agreement. The purchaser, if not already a Stockholder
hereunder, shall execute a copy of this Agreement as an additional Stockholder.
4.5 Authority. The seller, if a personal representative of a Stockholder,
shall, upon request of a purchaser, provide prior to the date of settlement,
evidence reasonably satisfactory to the purchaser of the seller's legal status
as personal representative of such Stockholder.
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ARTICLE 5
REGISTRATION RIGHTS
5.1 Piggyback Registration Rights. Whenever eVS proposes to register any
Common Stock for eVS's own or others' account under the Securities Act of 1933
(the "1933 Act") for a public offering for cash, other than a registration
relating to employee benefit plans, eVS shall give each holder of Registrable
Securities (as hereinafter defined) written notice of eVS's intent to do so.
Upon the written request of any such holder given within thirty (30) days after
receipt of such notice, eVS will use eVS's reasonable efforts to cause to be
included in such registration all of the Registrable Securities that such holder
requests to be registered. If eVS is advised in writing in good faith by any
managing underwriter of the securities being offered pursuant to any
registration statement under this Article 5 that the number of shares to be sold
pursuant to such registration statement is greater than the number of such
shares that can be offered without adversely affecting the offering, then eVS
shall first register the shares sought to be registered by eVS for its own
account; second, eVS shall register the number of shares offered for the account
of the stockholders of eVS who are parties to a certain Registration Rights
Agreement dated as of July 18, 1997, as amended, whereby such stockholders may
exercise piggyback registration rights pursuant to Section 2(a) of such
agreement (the "Existing Rights"); third, eVS shall resister as many of the
shares of Registrable Securities as the underwriters will include in the
registration, reducing pro rata the number of shares offered for the accounts of
holders of Registrable Securities (based upon the number of Shares proposed to
be sold pursuant to such registration statement by each such holder) to a number
deemed satisfactory by such managing .underwriter if all of the Registrable
Securities can not be included. In the event of such a limitation, shares of
persons not having registration rights will not be included in the registration
statement unless all Registrable Securities requested to be included in the
registration statement have been included. Following the execution hereof, eVS
agrees to use its commercially reasonable efforts to obtain the consent of the
holders of the Existing Rights to treat holders of Registrable Securities pari
passu with the holders of Existing Rights for the purposes of the underwriter
cutback provisions set forth above.
5.2 Definition of Registrable Securities. "Registrable Securities" means
the Shares, any shares of Common Stock or other capital stock of eVS received by
the holders of Shares as a stock dividend or other distribution with respect to
such Shares and any other shares of the capital stock of eVS now owned or
hereafter acquired by the holder of Shares.
5.3 Registration Procedures. All expenses incurred in connection with the
registrations under this Article 5 (including all registration, filing, listing,
qualification, printer's and accounting fees, but excluding underwriting
commissions and discounts) shall be borne by eVS. If and whenever eVS is under
an obligation pursuant to this Article 5 to effect or use eVS's reasonable
efforts to effect a registration of any
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Registrable Securities, eVS shall: (a) use eVS's reasonable efforts to prepare
and file with the Commission as soon as reasonably practicable, a registration
statement with respect to the Registrable Securities and use eVS's reasonable
efforts to cause such registration to promptly become and remain effective for a
period of at least one hundred twenty (120) days (or such shorter period during
which holders shall have sold all Registrable Securities that they requested to
be registered); (b) use eVS's reasonable efforts to register and qualify the
Registrable Securities covered by such registration statement under applicable
state securities laws as the holders shall reasonably request for the
distribution of the Registrable Securities; (c) provide a transfer agent for the
Common Stock no later than the effective date of the first registration of any
Registrable Securities; (d) list such Registrable Securities on any national
securities exchange or The Nasdaq Stock Market's National Market, or if the
Common Stock is unable to be so listed, use eVS's reasonable efforts to qualify
the Registrable Securities for inclusion on any other automated quotation system
of the National Association of Securities Dealers, Inc.; and (e) take such other
actions as are reasonable or necessary to comply with the requirements of the
Act and the regulations thereunder, or the reasonable request of any holder,
with respect to the registration and distribution of the Registrable Securities.
eVS is not obligated to effect registration or qualification under this Article
5 in any jurisdiction requiring eVS to qualify to do business (unless eVS is
otherwise required to be so qualified) or to execute a general consent to
service of process.
5.4 Holdback Agreement. If eVS at any time shall resister shares of Common
Stock under the 1933 Act (including any registration pursuant to Article 5) for
sale to the public, then Stockholders shall not sell publicly, make any short
sale of, grant an option for the purchase of, or otherwise dispose publicly of,
any shares of Registrable Securities (other than those shares of Common Stock
included in such registration pursuant to Article 5) without the prior written
consent of eVS or the managing underwriter of the offering for a period
designated by eVS in writing to the holders of shares of Registrable Securities,
which period shall not begin more than ten (10) days prior to the effectiveness
of the registration statement pursuant to which such public offer will be made
and shall not last more than one hundred eighty (180) days after the effective
date of such registration statement; provided that Stockholders shall not be
obligated to refrain from any of the foregoing for a period that is greater than
the minimum period required of any executive officer or director of eVS or
person holding, or having the right or option to acquire equity securities
representing more than five percent (5%) of the equity securities of eVS or if
any such person is not so required.
5.5 Underwriting Arrangement. In connection with each registration
pursuant to Article 5 covering an underwritten public offering, eVS and each
participating holder agree to enter into a written agreement with the managing
underwriter in such form and containing such provisions as are reasonably
acceptable to each such participating holder and are customary in the securities
business for such an arrangement between such underwriter and companies of eVS's
size and investment stature.
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5.6 Notification. eVS shall notify each holder of Registrable Securities
covered by any registration statement of any event that results in the
prospectus included in such registration statement, as then in effect,
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
5.7 Furnishing of Documents. At the request of any participating holder,
evS will furnish to each underwriter, if any, and participating holders, a legal
opinion of its counsel and a "cold comfort" letter from its independent
certified public accountants, each in customary form and substance, at such time
or times as such documents are customarily provided in the type of offering
involved. As expeditiously as possible, eVS shall furnish to each participating
holder such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the 1933 Act, and
such other documents as the participating holder may reasonably request in order
to facilitate the public sale or other disposition of the Registrable Securities
owned by the participating holders.
5.8 Indemnification and Contribution.
(a) In the event of a registration of any of the Registrable
Securities under the 19-'I' ) Act pursuant to Article IV, eVS will indemnify
and hold harmless each Stockholder, and each other person, if any, who controls
such Stockholder within the meaning of the 1933 Act, and each employee, officer
and trustee of such Stockholder against any losses, claims, damages or
liabilities, joint or several, to which each such controlling person, employee,
officer or trustee may become subject under the 19')'i Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Registrable Securities was registered under the 1933 Act pursuant to Article 5,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such Stockholder, and each such controlling person, employee, officer
or trustee for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that eVS will not be liable in any such case if
and to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Stockholder or any such controlling person, employee, officer or trustee in
writing specifically for use in such registration statement or prospectus.
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(b) In the event of a registration of any of the Registrable
Securities under the 193i Act pursuant to Article 5, each Stockholder will
indemnify and hold harmless eVS, each person, if any, who controls eVS within
the meaning of the 1933 Act, officer of eVS who signs the registration
statement, director of eVS, underwriter and person who controls any underwriter
within the meaning of the 1933 Act, against all losses, claims, damages or
liabilities, joint or several, to which eVS or such officer, director,
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement
under which such Registrable Securities was registered under the 1933 Act
pursuant to Article 5, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse eVS and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that such Stockholder will be liable hereunder in
any such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such Stockholder, as such, furnished
in writing to eVS by such Stockholder specifically for use in such registration
statement or prospectus.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve the indemnifying party from any
liability which the indemnifying party may have to such indemnified party other
than under this Section 5 and shall only relieve the indemnifying party from any
liability which the indemnifying party may have to such indemnified party under
this Section 5 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and the indemnified party shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent the indemnifying party shall wish, to assume and under-take
the defense thereof with counsel satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume and undertake the defense thereof,
the indemnify, party shall not be liable to such indemnified party under this
Section 5 for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses
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available to the indemnified party which are different from or additional to
those available to the indemnifying party or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, then the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the 1933 Act in any case in which either: (i) any holder of
Registrable Securities exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 5 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last night of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the 1933 Act may be required on the part of any such selling holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 5; then, and in each such case, eVS and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) as is appropriate to reflect the
relative fault of eVS and such holder in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as the relative benefit received by eVS and such holder as a result of the
offering in question, it being understood that the parties acknowledge that the
overriding equitable consideration to be given effect in connection with this
provision is the ability of one party or the other to correct the statement or
omission which resulted in such losses, claims, damages or liabilities, and that
it would not be just and equitable if contribution pursuant hereto were to be
determined by pro rata allocation or by any other method of allocation that does
not take into consideration the foregoing equitable considerations; provided
that, in any such case: (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered by such holder pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section I 11(f) of the 0000 Xxx) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
(e) Removal of Legends, Etc. Notwithstanding anything herein to the
contrary, the restrictions imposed by Articles 2 on the transferability of any
Shares shall cease and terminate when: (a) any such Shares are sold or otherwise
disposed of in accordance with the intended method of disposition by the seller
or sellers thereof set forth in a registration statement or such other method
that does not require that the securities transferred bear the legend set forth
in Section 8.2 hereof; or (b) the holder of such Shares has met the requirements
for transfer pursuant to subparagraph (k) of Rule 144 (as amended from time to
time) promulgated by the Commission under the 1933 Act.
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Whenever the restrictions imposed by Articles 2 hereof have terminated, a holder
of a certificate for such Shares as to which such restrictions have terminated
shall be entitled to receive from eVS, without expense, a new certificate not
bearing the restrictive legend set forth in Section 8.2 hereof and not
containing any other reference to the restrictions imposed by this Agreement.
(f) Changes in Common Stock. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend, combination
or reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, then appropriate adjustment shall be
made in the provisions hereof so that the rights and privileges granted hereby
shall continue with respect to the Common Stock as so changed.
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(g) Preparation of Registration Statements. Whenever eVS is
registering any Common Stock under the 1933 Act and a holder of Registrable
Securities is selling any securities under such registration determines that it
may be Act, eVS will allow such holder and its counsel to participate in the
preparation of the registration statement, will include in the registration
statement such information as such holder may reasonably request and will take
all such other action as such holder may reasonably request.
(h) Transferability of Registration Rights. The registration rights
described in Sections 5.1 and 5.2 are not transferable by the holders of
Registrable Securities to any person to whom such holder transfers Registrable
Securities without the written consent of eVS.
ARTICLE 6
BRING ALONG PROVISIONS
6.1 Bring Along,.Right. If the holders of at least a majority of the
outstanding shares of eVS's common stock approve in writing the sale of eVS to
any person or entity that is not an Affiliate of eVS, provided that, with
respect to such sale, the shares of stock within a class are all treated equally
(an "Approved Sale"), each Stockholder who does not exercise dissenter's and
appraisal rights (if any) with respect to the Approved Sale will consent to,
vote for and raise no objections against, and if the Approved Sale is structured
as a sale of stock, will agree to sell and be permitted to sell all of such
Stockholder's shares on the same terms and conditions approved by the holders of
a majority of the shares of eVS's common stock. Each Stockholder who is
participating in such sale will take all necessary and desirable actions as may
be reasonable requested by eVS in connection with the consummation of an
Approved Sale.
For purpose of this Section, the term "Affiliate" means any person
or entity either (i) in which eVS owns, directly or indirectly, at least 20% of
the voting control of or equity in and any other entity that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control by eVS, (i) which owns shares of eVS common stock prior to
such Approved Sale, or (iii) which owns shares of an entity identified in clause
(i) above prior to such Approved Sale.
6.2 Termination of Bring Along Right. The provisions of this Article
6 shall terminate with respect to the shares upon the consummation of a
Qualified Initial Public Offering.
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6.3 Execution of Documents, Costs. Each Stockholder shall, in connection
with an Approved Sale, at the request of eVS and without further cost or expense
to eVS, and without further cost and expense to eVS, execute and deliver such
other instruments as may reasonably be requested in order to consummate the
Approved Sale. Each Stockholder shall bear its pro rata share of the reasonable
costs and expenses incurred of any Approved Sale to the extent such costs and
expenses are incurred for the benefit of all selling Stockholders and are not
otherwise paid by eVS or the acquiring party. Costs incurred by a Stockholder on
its own behalf will not be considered costs of the Approved Sale hereunder.
ARTICLE 7
[RESERVED]
ARTICLE 8
ADDITIONAL PROVISIONS
8.1 Copy of Agreement to Be Kept on File. eVS shall keep on file at its
principal executive offices, and will exhibit to any Stockholder or his or her
duly authorized representative at any and all reasonable times, an executed copy
of this Agreement and all amendments thereto to
8.2 Stock certificates to Be Xxxx and. All certificates hereafter issued
by eVS shall be marked with the following legend.
THIS CERTIFICATE REPRESENTS SECURITIES WHICH ARE
RESTRICTED AND WHICH ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
STOCKHOLDERS AGREEMENT DATED FEBRUARY 24, 1999 BY AND AMONG EMERGE
VISION SYSTEMS, INC. ("EVS") AND THE STOCKHOLDERS IDENTIFIED THEREIN
(A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF EVS) AND THE
RIGHTS, PRIVILEGES AND OPTIONS THEREIN CONTAINED. NO SALE, TRANSFER,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS
CERTIFICATE OR ANY OF THE SECURITIES REPRESENTED THEREBY SHALL BE
MADE EXCEPT IN
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COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID AGREEMENT.
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8.3 Termination of Certain Provisions. The provisions of Articles 1, 2, 4,
and 6 and Sections 8.2 and 8.5 of this Agreement shall terminate and be of no
further force and effect upon the closing of an underwritten, firm commitment
initial public offering statement under the 1993 Act, covering the offer and
pursuant to an effective registration sale by eVS of its Common Stock in which
the aggregate net proceeds to eVS exceed Ten Million Dollars (a "Qualified
Initial Public Offering.").
8.4 Rights, Obligation and Remedies. Rights and obligations under, and the
remedies to enforce, this Agreement are joint and several as to eVS and each of
the Stockholders with each being completely free to enforce any or all of the
rights or obligations under this Agreement against any of the others with or
without the concurrence or joinder of any of the others. The Shares are unique,
and recognizing that the remedy at law for any breach or threatened breach by a
party hereto of the covenants and agreements set forth in this Agreement would
be inadequate and that any such breach or threatened breach would cause such
immediate and permanent damage as would be irreparable and the exact amount of
which would be impossible to ascertain, the parties hereto agree that in the
event of any breach or threatened breach of any such covenant or agreement, in
addition to any and all other legal and equitable remedies which may be
available, any party hereto may specifically enforce the terms of this Agreement
and may obtain temporary and/or permanent injunctive relief without the
necessity of proving actual damage by reason of any breach or threatened breach
hereof and, to the extent permissible under the applicable statutes and rules of
procedure, a temporary injunction may be granted immediately upon the
commencement of any such suit and without notice.
8.5 Subsequent Stockholder to become Bound. Before any person or entity
not a party to this Agreement to whom transfers of Shares may be made hereunder,
may be entitled to become a Stockholder of eVS, such person or entity shall be
required first to execute and deliver to eVS an agreement pursuant to which such
person or entity agrees to be bound by all of the terms and conditions of this
Agreement (as it may have then been amended), and the failure of any such person
or entity to execute such agreement shall preclude such person or entity from
becoming a Stockholder of eVS.
8.6 Amendment, Modification and Termination. This Agreement maybe amended,
modified or terminated, or any provision or requirement hereof waived, at
anytime by an agreement in writing among eVS, the holders of a majority of the
outstanding Shares on a fully diluted basis and their Permitted Transferees;
provided that if this Agreement is amended, modified or terminated without the
unanimous consent of the Stockholders, all Stockholders that are not a party to
such agreement shall be given prompt notice of such amendment, modification or
termination. Any such amendment or waiver shall be effective with respect to all
parties to this Agreement.
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8.7 No Waiver. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
8.8 Governing Law and Jurisdiction. This Agreement shall be governed by
and interpreted under the laws of the State of Delaware, without giving effect
to the principles of conflicts of law of any jurisdiction. In the event that a
party to this Agreement perceives the existence of a dispute with the other
party concerning any right or duty provided for herein, the parties will, as
soon as practicable, confer in an attempt to resolve the dispute. If the parties
are unable to resolve such dispute amicably, then the parties hereby submit to
the exclusive jurisdiction of and venue in the state and federal courts located
in the State of Delaware with respect to any and all disputes concerning the
subject of, or arising out of this Agreement.
8.9 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person or sent overnight
delivery by Federal Express or by certified or registered mail, return receipt
requested, or telexed in the case of non U.S. residents, and shall be deemed to
have been given when hand delivered, one (1) day after mailing when mailed by
overnight courier (e.a., Federal Express or Express Mail) or five (5) days after
mailing by registered or certified mail, as follows (provided that notice of
change of address shall be deemed given only when received):
If to eVS, to: With a required copy to:
eMerge Vision Systems, Inc.
000000 000xx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President
Fax Number: (000) 000-0000 Fax Number:
If to Stockholder, to:
CIN, LLC
or to such other names or addresses as a party to this Agreement, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section 8.9.
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8.10 Binding Nature of Agreement and No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns, except that-
no party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other parties hereto, except by means
of transfers permitted by Articles I or 2.
8.11 Counterparts, Headings and Exhibits. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. The headings
used in this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement. All
Schedules and Exhibits hereto are hereby incorporated in this Agreement and made
a part hereof
8.12 Integration. This Agreement, the Stock Purchase Agreement and the
Purchase Agreement embody the entire agreement and understanding among the
parties hereto and thereto supersede all prior agreements and understandings
relating to the subject matter hereof or thereof.
8.13 Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, then such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
8.14 Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and holidays;
provided that if the final day of any time period falls on a Saturday, Sunday or
holiday on which U.S. Federal banks are or may elect to be closed, then the
final day shall be deemed to be the next day which is not a Saturday, Sunday or
such holiday.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the date first above written.
EMERGE VISION SYSTEMS, INC.
By: /s/: Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Chief Executive Officer
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THE STOCKHOLDERS:
CIN, LLC
By: /s/: Xx. Xxxxx Xxxxx
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Xx. Xxxxx Xxxxx
