Exhibit 10.9
SHAREHOLDERS' AGREEMENT
This Agreement is made as of the 6th day of August, 1999, by and among
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individuals residing at ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (referred to herein collectively as "▇▇▇▇▇▇▇▇"),
▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation with an executive office at 185 ▇▇▇▇▇
▇▇▇▇▇ Lane, Williston, Vermont ("eNote"), (▇▇▇▇▇▇▇▇ and eNote are hereinafter
collectively referred to as the "Shareholders", or individually as a
"Shareholder"), and SolutioNet, Ltd., a Delaware corporation (the
"Corporation").
WHEREAS, ▇▇▇▇▇▇▇▇ has sold the 1375 shares in the Corporation to eNote
(the "Initial Shares") pursuant to a stock purchase agreement of approximate
even date herewith, which sale was made under the letter of intent dated April
13, 1999 between eNote and ▇▇▇▇▇▇▇ (a copy of which is attached hereto and
incorporated herein);
WHEREAS, the Shareholders and the Corporation believe it to be
reasonable and desirable and in their interest to set forth the agreements
continued herein;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
1. CURRENT STOCK. The Shareholders hereby acknowledge that they are the
owners of all the issued and outstanding shares of the Corporation, owning in
the aggregate all 2500 authorized and issued shares of the Corporation as
follows:
Number of Percentage Ownership
Shareholder Shares of Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
And
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
as tenants by the entirety 1125 45%
▇▇▇▇▇.▇▇▇, Inc. 1375 55%
Total 2500 100%
2. LIMITATION ON STOCKHOLDINGS.
A. The parties hereto agree that the number of shares in the
Corporation, and the percentage ownership of the issued and outstanding shares
of the Corporation, shall not change or be altered without the prior written
consent of each party. Any transfer or issuance of shares that will result in an
ownership interest different than that set forth above shall be prohibited, and
to the extent that such a prohibited transfer is consummated, it shall be deemed
void and of no effect.
3. PURCHASE OPTION.
A. eNote Purchase Option. For a period of one (1) year after the closing
of purchase by eNote of the Initial Shares (as such date is determined in
accordance with the Stock Purchase Agreement among the parties and referred to
herein as the "Closing Date"), eNote shall have the right and option to require
▇▇▇▇▇▇▇▇ to re-purchase the Initial Shares for an amount equal to the Purchase
Price of $250,000 for such Initial Shares, but only if eNote is named as a
defendant in any litigation arising from (1) it being a shareholder the
Corporation, and (2) such lawsuit arises from facts and circumstances relating
to the Corporation and occurring prior to the date of the closing of the
purchase of the Initial Shares. Payment for repurchase of the Initial Shares
shall be in the form of a promissory note for which said Initial shall serve as
collateral. If requested by eNote, the Corporation shall grant a security
interest in its intellectual property as collateral for such note. The term of
such note shall be as specified by the maker and shall be for not more than ten
(10) years and bear interest at a fixed interest rate of 7% per annum.
▇. ▇▇▇▇▇▇▇▇ Purchase Option. For a period of two (2) years after the
Closing Date of the purchase of the Initial Shares, ▇▇▇▇▇▇▇▇ shall have the
right and option, in their sole and absolute discretion, to re-purchase the
Initial Shares for an amount equal to the Purchase Price of $250,000 for such
Initial Shares if such option is exercised during the first year or for an
amount determined by independent appraisal of the value of the Shares if such
option is exercise during the second year, if (i) ▇▇▇▇▇▇▇▇' employment by eNote
is terminated for any reason; (ii) any of the terms of ▇▇▇▇▇▇▇▇' employment by
eNote are changed in any way detrimental to ▇▇▇▇▇▇▇▇; (iii) eNote becomes
insolvent, is dissolved or liquidated, takes any action related to dissolution
or winding up of the eNote, or enters proceedings under any law relating to
bankruptcy, insolvency, reorganization or relief from debts; (iv) eNote's market
value declines to less than $15,000,000; or (v) ▇▇▇▇▇▇▇▇' level of equity
ownership in eNote (based upon his current level of 250,000 shares to 17,000,000
shares issued and outstanding is diluted by more than thirty percent (30%).
Payment for re-purchase of the Shares shall be in the form of a promissory note
for which the Initial Shares shall serve as collateral. If requested by eNote,
the Corporation shall grant a security interest in its intellectual property as
collateral for such note. The term of such note shall be as specified by the
maker and shall be for not more than ten (10) years and bear interest at a fixed
interest rate of 7% per annum.
4. VOTING COVENANTS AND RESTRICTIONS.
A. Board of Directors. Each Shareholder covenants and agrees that they
will take all actions necessary to vote all shares of Stock which he or it now
owns or may hereafter own (i) to fix the number of directors that constitute the
entire Board of Directors of the Corporation at three (3), and (ii) to elect as
members of the Board of Directors one designee of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III, one
designee of eNote, and one director mutually acceptable to ▇▇▇▇▇▇▇▇ and eNote.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall remain as the President of the Corporation pursuant to
the Consulting Agreement of approximate even date herewith between the
Corporation and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III.
B. The Shareholders and the Corporation covenant and agree that the
Corporation will not, without the prior approval of a majority of the members of
the Board of Directors (which
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majority must include the director designated by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III), take
any of the following actions: (a) change materially the fundamental nature of
the business of the Corporation; (b) appoint or terminate a Chief Executive
Officer or President of the Corporation; (c) amend, alter, modify or repeal the
Certificate of Incorporation or Bylaws of the Corporation (or recommend the same
to the Shareholders, as the case may be); (d) issue, sell, distribute, grant,
repurchase or redeem any equity securities; (e) merge or consolidate with any
person or entity (or recommend the same to the Shareholders, as the case may
be); (f) transfer, pledge or mortgage, or grant a security interest or other
adverse right or encumbrance in all, or substantially all, of the assets of the
Corporation; (g) sell, lease, exchange or transfer, directly or indirectly, in a
single transaction or series of transactions, any material assets of the
Corporation; (h) pay any dividend or make any distribution of assets in respect
of any equity securities; (i) dissolve or liquidate the Corporation or
authorize, permit or seek the liquidation or winding up of the Corporation, or
the relief or protection form debts of the Corporation under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors; or (j) terminate
the Consulting Agreement by and between the Corporation and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
III. Any such action without the approval of the Director appointed or selected
by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III shall be null and void.
C. The Corporation has previously provided employee options to acquire
non-voting stock in the Corporation. No such shares have yet to be issued nor
has the non-voting class yet been established in the Articles of Incorporation.
It is expected that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, currently an employee of the Corporation,
will become an employee of eNote upon the sale of the Initial Shares from
▇▇▇▇▇▇▇▇ to eNote. This would leave not more than 2% of non-voting stock in the
Corporation to be allocated for employee stock options. In the event that eNote
acquires the remaining shares in the Corporation from ▇▇▇▇▇▇▇▇, at the
Corporation's sole discretion, the Corporation shall repurchase all vested
employee shares upon receipt of notice that eNote is exercising its option to
purchase the remaining shares in the Corporation now held by ▇▇▇▇▇▇▇▇.
5. LEGEND ON STOCK CERTIFICATES. Upon the execution of this Agreement, the
certificates of stock subject hereto shall be surrendered to the Corporation and
endorsed as follows:
"This Certificate is subject to the limitations set forth in the
Shareholders Agreement effective as of August 6th, 1999, among ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ III & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.▇▇▇, Inc. and SolutioNet Ltd., a
copy of which is on file in the office of the Corporation."
After endorsement, the Certificate shall be returned to the Shareholders
who shall, subject to the terms of this Agreement, be entitled to exercise all
rights of ownership of such shares, subject to the terms of this Agreement. All
shares hereinafter issued to the Shareholders during the term of this Agreement
shall bear the same endorsement.
6. TERM. This Agreement shall terminate upon the occurrence of any of the
following events, otherwise it shall remain in full force and effect:
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(a) The voluntary agreement of all parties who are then bound
by the terms hereof;
(b) The repurchase by ▇▇▇▇▇▇▇▇ of the Initial Shares from eNote
pursuant to Section 2 above;
(c) The purchase by eNote of all remaining shares held by
▇▇▇▇▇▇▇▇.
7. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not be used to interpret the provisions of this
Agreement.
8. BENEFIT. This Agreement shall be binding upon and shall operate for the
benefit of each of the Shareholders and the Corporation and their respective
executors, administrators, successors and assigns.
9. CORPORATION. The Corporation by its execution of this Agreement agrees
that it shall take all actions as may be necessary or desirable so as to further
the purposes and provisions of this Agreement.
10. SPECIFIC PERFORMANCE. The parties hereto declare that it is impossible
to measure in money the damages that will accrue to a party hereto by reason of
a failure to perform any of the obligations under this Agreement. Therefore, if
any parties hereto shall institute an action or proceeding to enforce the
provisions hereof, any person whom such action or proceeding is brought hereby
waives a claim or defense therein that such party has an adequate remedy at law
and such person shall not urge in any action or proceeding the claim or defense
that such remedy at law exists.
11. AMENDMENTS. This Agreement, including the percentage limitations
contained in Paragraph 2 above, may be only be amended if in writing and signed
by all of the parties hereto.
[Signature Page to follow]
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In Witness Whereof, the parties have executed this Agreement under seal
as of the date first written above.
STOCKHOLDERS
------------------------------- -------------------------------
Witness ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
------------------------------- -------------------------------
Witness ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇.▇▇▇, Inc.
------------------------------- By: ____________________________
Witness duly authorized agent
CORPORATION
SOLUTIONET, LTD.
------------------------------- By: ____________________________
Witness Duly Authorized Agent
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