EXHIBIT 1
SHAREHOLDERS' AGREEMENT
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This SHAREHOLDERS' AGREEMENT (the "Agreement") is made and entered into
as of this l3th day of July, 2000, by and among ▇▇▇▇ ▇'▇▇▇▇▇ ("▇'▇▇▇▇▇"),
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇") and HEALTH AND NUTRITION SYSTEMS INTERNATIONAL, INC.
(the "Company").
1. ▇'▇▇▇▇▇ and Tisi are shareholders of the Company, while Tisi is the
Chief Operating Officer of the Company. ▇'▇▇▇▇▇ owns 799,104 shares of Common
Stock (the "▇'▇▇▇▇▇ Shares") of the Company and owns no other shares or
securities of the Company.
2. ▇'▇▇▇▇▇ and ▇▇▇▇ desire to promote their mutual interest, the
interest of the Company and the orderly management of the affairs of the Company
by providing administrative support for Tisi to continue to undertake his
management functions and by creating certain independent rights and obligations
with respect to the ▇'▇▇▇▇▇ shares and the management of the Company' s affairs.
SECTION I
Recitals
The recitals set forth above are true and correct.
SECTION II
Revocation
Upon execution of this Agreement, the parties hereto wholly revoke all,
if any, previous shareholder voting agreements affecting Common Stock in the
Company entered into by any of the parties.
SECTION III
Voting
3.1 Irrevocable Proxy by ▇'▇▇▇▇▇. In consideration of the foregoing
conditions and in order to promote the well being of the Company, ▇'▇▇▇▇▇ shall
provide to Tisi an irrevocable proxy in the form of Exhibit A hereto (the
"Irrevocable Proxy") granting unto Tisi the right to vote ▇'▇▇▇▇▇'▇ shares of
Common Stock or voting capital stock of the Company for the term provided
hereafter on any matter submitted to a vote or consent by the shareholders of
the Company.
3.2 Specific Performance. Without limiting other applicability of
subsection 5.10 of this Agreement, the specific performance provisions of such
subsection apply to direct and permit a court of competent jurisdiction to
require ▇'▇▇▇▇▇ to vote his shares in such a manner as is necessary to carry out
the agreements, restrictions and provisions of this Agreement.
3.3 Legend on Stock. During the term of this Agreement, each
certificate representing shares or Common Stock or capital stock of the Company
now or hereafter owned by ▇'▇▇▇▇▇ shall bear the following legend:
"THIS CERTIFICATE IS HELD SUBJECT TO A SHAREHOLDERS' AGREEMENT DATED
JULY 13, 2000 (THE "AGREEMENT"), A COPY OF WHICH IS IN THE POSSESSION
OF THE COMPANY AT ITS PRINCIPAL OFFICE. ANY TRANSFER, HYPOTHECATION,
VOTING OR ACQUISITION OF THE COMPANY'S CAPITAL STOCK IS RESTRICTED BY
SUCH AGREEMENT AND ANY CORPORATE ACTION IN VIOLATION OF SUCH AGREEMENT
IS NULL AND VOID. THE AGREEMENT IS AUTOMATICALLY BINDING UPON ANY AND
ALL PERSONS WHO ACQUIRE CAPITAL FROM THE NAMED HOLDER.
3.4 Transfers. ▇'▇▇▇▇▇ acknowledges and agrees that any transferee
receiving shares of Common Stock or capital stock of the Company from ▇'▇▇▇▇▇
shall be required to execute an agreement comparable to or incorporating the
terms and restrictions of this Agreement.
3.5 Issuances of Additional Shares. Any additional shares of Common
Stock or capital stock of the Company acquired or received by ▇'▇▇▇▇▇ during the
term of this Agreement shall be subject to the same restrictions as provided
herein and shall be entitled to the same benefits as provided hereby.
SECTION IV
Term and Termination
4.1 Term. The term of this Agreement shall be two (2) years unless
terminated prior thereto as
provided hereafter.
4.2 Termination. This Agreement shall terminate on occurrence on any of
the following events:
(a) the written agreement by ▇' ▇▇▇▇▇ and ▇▇▇▇ effecting
such termination,
(b) upon sale of substantially all of the assets of the
Company or any merger or consolidation of the Company
in which the Company is not the surviving corporation
or the shareholders of the Company do not constitute
a majority in capital interest of the surviving
corporation,
(c) the consummation of an underwritten public offering
of the Company's securities,
(d) with respect to ▇' ▇▇▇▇▇ only, upon the sale or
disposition of all of his shares of Common Stock or
capital stock in the Company pursuant to the terms of
this Agreement; provided, however, that any
subsequent acquisition of shares of the Common Stock
or capital stock of ▇' ▇▇▇▇▇ shall be subject to the
terms and conditions hereof.
4.3 Effective Termination. The termination of this Agreement for any
reason shall not affect any right or remedy existing hereunder prior to the
effective date of termination.
SECTION V
General Provisions
5.1 Binding Agreement. This Agreement shall be binding upon the
respective heirs, legal representatives, personal representatives, assigns,
transferees and successors of each of the parties.
5.2 Amendment. This Agreement can be amended only by a written
instrument signed by all of the then surviving parties and by the personal
representative of the estate of each deceased party still having an interest in
this Agreement.
5.3 Attorneys' Fees. In connection with any litigation arising out of
this Agreement, the prevailing party shall be entitled to recover all costs
incurred, including attorney's fees.
5.4 Construction. Any construction or interpretation pertaining to the
provisions of this Agreement shall be governed by the laws of the State of
Florida. Any and all legal actions as a result of disputes with regard to this
Agreement or enforcement of this Agreement shall be brought in Palm Beach
County, Florida.
5.5 No Waiver. The failure of any party at any time to require
performance by another party of any provision hereof shall not affect in any way
the full right to require such performance at any time thereafter; nor shall the
waiver by any party of a breach of any provision hereof be taken or held to be a
waiver of the provision itself.
5.6 Captions. The headings contained herein are merely, for the
convenience of the parties and the context of such paragraphs shall control the
respective meanings.
5.7 Survival. All representations, warranties, covenants and agreements
of the parties contained in this Agreement, or in any instrument, or other
writing provided for in it, shall survive the execution hereof.
5.8 Counterparts. 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.
5.9 Notices.
(a) Addresses. All notices, demands or requests provided for or
permitted to be given pursuant to this Agreement must be in writing and shall be
deemed to have been properly given or served by depositing same in the United
States mail, addressed to the Shareholder, postpaid, and registered or
certified, with a return receipt requested at the following address:
▇' ▇▇▇▇▇: ▇▇▇▇ D `▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tisi ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Company ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) Change of Address. By giving to the other parties at least
15 days written notice thereof ▇'▇▇▇▇▇, ▇▇▇▇ and the Company and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
and each shall have the right to specify as its address any other address within
the United States.
5.10 Specific Performance. The parties hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to the personal representatives of a decedent by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if any party
hereof or the personal representatives of ▇' ▇▇▇▇▇ or Tisi shall institute any
action or proceeding to enforce the provisions hereof, any person against whom
such action or proceeding is brought hereby waives the claim or defense therein
that such party or such personal representatives has or have an adequate remedy
at law, and such person shall not urge in any such action or proceeding the
claim or defense that such remedy at law exists.
IN WITNESS WHEREOF, the parties have executed this Agreement this 13th
day of July, 2000.
/s/▇▇▇▇ ▇'▇▇▇▇▇
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▇▇▇▇ ▇'▇▇▇▇▇
/s/▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
(Continuation of Signature Page to Purchase Agreement)
HEALTH AND NUTRITION SYSTEMS INTERNATIONAL, INC.
By: /▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name:
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Its: President
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EXHIBIT A
HEALTH AND NUTRITION SYSTEMS INTERNATIONAL, INC.
IRREVOCABLE PROXY
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KNOW ALL MEN BY THESE PRESENTS, that ▇▇▇▇ ▇'▇▇▇▇▇, a shareholder of
HEALTH AND NUTRITION SYSTEMS INTERNATIONAL, INC. (the "Corporation"), holding
the number of shares of stock of the Corporation listed below, does hereby
appoint ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, or his successor in interest, as provided in that
certain Shareholders' Agreement dated as of July 13, 2000 between ▇▇▇▇ ▇' ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and the Corporation (the "Agreement"), with full power of
substitution, the true and lawful attorney and proxy of the undersigned for an
in his name, place and ▇▇▇▇▇ to attend all meetings of the shareholders of the
Corporation, and to vote or to give his consent in respect to any and all shares
of the capital stock of the Corporation at the time standing in his name, at any
and all meetings of the shareholders or any adjournment, or to express the
consent or dissent of the undersigned without a meeting in respect to any
matters submitted for a vote or consent of the shareholders of the Corporation.
The undersigned hereby affirms that this proxy is coupled with an interest and
is irrevocable, and the undersigned hereby ratifies and confirms all that the
proxy may lawfully do or cause to be done by virtue hereof. The proxy granted
herein shall be subject to the terms and conditions of the Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand this 13th day of
July, 2000.
/s/▇▇▇▇ ▇'▇▇▇▇▇
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▇▇▇▇ ▇'▇▇▇▇▇
600,000
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No. of Shares
STATE OF FLORIDA )
)ss.:
COUNTY OF )
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The foregoing instrument was acknowledged before me this 13th day of
July, 2000 by ▇▇▇▇ ▇'▇▇▇▇▇.
/s/▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
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NOTARY PUBLIC
NOTARY SEAL My Commission Expires: 05/07/2001
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