Exhibit 10(i)
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT ("Agreement") is made and entered into as
of February 15, 2002, by and among HOWTEK, INC., a Delaware corporation (the
"Company"), and XXXXXX XXXXXX, W. XXXXX XXXX, XXXX XXXXXX, W. XXX XXXXXX XXXX
XXXXXX and XXXXX XXXXX (individually, a "Stockholder," and collectively, the
"Stockholders").
WHEREAS, the Company has entered into an Agreement and Plan of Merger
("Merger Agreement") with Intelligent Systems Software, Inc., a Florida
corporation ("ISSI"), pursuant to which ISSI will merge (the "Merger") with and
into the Company and, upon effectiveness of the Merger, the Company will issue
8,400,000 shares of its Common Stock to former stockholders of ISSI; and
WHEREAS, closing of the Merger is conditioned upon the parties hereto
entering into this Agreement; and
WHEREAS, the Stockholders desire to mutually agree to the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the parties
hereto, intending to be legally bound hereby, agrees as follows:
1. Term.
1.1 Term. This Agreement shall become effective concurrently with the
closing of the Merger and shall remain in effect for a period of two years
thereafter unless earlier terminated as herein provided (the "Term").
1.2 Early Termination. This Agreement shall terminate upon the
simultaneous occurrence of both of the following events: (a) the closing price
of the Common Stock as reported by NASDAQ (or such other exchange on which the
Common Stock may hereafter be listed) shall be $10.00 per share or higher for
20 consecutive trading days and (b) the average daily trading volume for the
Common Stock as reported by NASDAQ (or such other exchange on which the Common
Stock may hereafter be listed) for such 20 consecutive trading days shall
exceed 100,000 shares.
2. Covenants.
2.1 Covenants. During the Term, without the prior written consent of
each of the other Stockholders party hereto, no Stockholder or any Permitted
Transferee of such Stockholder shall Transfer any Securities, except:
(a) up to the following amounts during the following periods:
Number of Shares Period
---------------- ------
10,000 closing date of the Merger
through the end of the next
full calendar quarter
15,000 second calendar quarter
20,000 third calendar quarter
25,000 fourth calendar quarter
30,000 fifth calendar quarter
35,000 sixth calendar quarter
40,000 seventh calendar quarter
45,000 eighth calendar quarter
;provided, however, that the number of shares which may be sold in any of the
above periods may be increased upon the written consent of five of the
Stockholders;
(b) pursuant to a bona fide underwritten public offering registered
under the Securities Act;
(c) to a Permitted Transferee;
(d) pursuant to a tender offer made to all the holders of the Company's
Common Stock;
(e) pursuant to any transaction duly approved by the stockholders of
the Company;
(f) Such restrictions shall not apply to Transfers of Securities (i) as
gifts, other than to immediate family members or (ii) issued upon exercise of
options to purchase Common Stock in the event such exercise is required to
avoid forfeiture of such options; and
(g) Anything contained in this Agreement to the contrary
notwithstanding, such restrictions shall not apply to any and all Transfers of
Securities by Xxxxxx Xxxxxx at any time or from time to time on or after Xx.
Xxxxxx'x resignation as a member of the Board of Directors of the Company.
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The number of shares permitted to be Transferred or pledged pursuant to
clause (a) shall be adjusted to take into account the pro rata effect of stock
dividends, stock distributions, stock splits, stock combinations,
recapitalizations, reclassifications, subdivisions, conversions or similar
transactions in respect of Common Stock.
2.2 Certain Transferees to be Bound. Unless otherwise provided herein,
no Stockholder or Permitted Transferee may effect any Transfer to a Permitted
Transferee unless such Permitted Transferee executes an agreement pursuant to
which such Permitted Transferee agrees to be bound by the terms and provisions
of this Agreement applicable to the transferor. Any purported Transfer in
violation of this Section 2.2 shall be null and void and of no force and effect
and the purported transferee shall have no rights or privileges in or with
respect to the Company. The Company shall not register or record or permit a
transfer agent to register or record on the stock record books of the Company
any purported Transfer to a Permitted Transferee unless and until it has
received evidence that such Transfer and the parties thereto have complied with
this Section 2.2. In no event shall any Transferee of Securities other than a
Transferee pursuant to Section 2.1(c) be subject to this Section 2.2.
2.3 Other Restrictions May Apply. Each Stockholder (and Permitted
Transferee who becomes subject to this Agreement) acknowledges that the
restrictions set forth herein are in addition to and not in limitation of any
other restrictions that may be imposed by the Securities Act and the Exchange
Act, and the rules and regulations thereunder, state securities laws and the
rules and regulations thereunder, and any rules and regulations of the National
Association of Securities Dealers, Inc.
3. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
3.1 Affiliate. An "Affiliate" of a person shall have the meaning set
forth in Rule 12b-2 of the Exchange Act as in effect on the date hereof and, in
addition, shall include "Associates" (as defined in Rule 12b-2 of the Exchange
Act as in effect on the date hereof) of such Person and its Affiliates.
3.2 Common Stock. "Common Stock" means the common stock, par value $.01
per share, of the Company.
3.3 Exchange Act. "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder as in
effect from time to time.
3.4 Permitted Transferee. "Permitted Transferee" means (i) a
Stockholder's spouse or children or any trust for the benefit of the
Stockholder or the Stockholder's spouse or children; (ii) the heirs, executors,
administrators or personal representatives upon the death of the Stockholder or
upon the incompetency or disability of the Stockholder for purposes of the
protection and management of the Stockholder's assets and (iii) any other
Person who receives a gift of Securities in accordance with the provisions of
Section 2.1(f) hereof, other than a Public Charity;
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3.5 Person. "Person" means any natural person, group, corporation,
limited liability company, partnership, business association, trust, firm,
government or agency or political subdivision thereof, or other entity of
whatever nature.
3.6 Public Charity. "Public Charity" shall have the meaning ascribed to
such term under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
3.7 Securities. "Securities" means the shares of Common Stock now held,
or hereafter acquired (but excluding any shares of Common Stock hereafter
purchased on the open market), by any party hereto and all other securities of
the Company (or a successor to the Company) received on account of ownership of
such shares of Common Stock, including all securities issued in connection with
any stock dividend, stock distribution, stock split, reverse stock split, stock
combination, recapitalization, reclassification, subdivision, conversion or
similar transaction in respect thereof, but excluding any securities received
on account of such ownership in any merger or consolidation.
3.8 Securities Act. "Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder as in effect
from time to time.
3.9 Transfer. "Transfer" means the making of any sale, exchange,
assignment, hypothecation, gift, security interest, pledge or other
encumbrance, or any contract therefor, any voting trust or other agreement or
arrangement with respect to the transfer of voting rights or any other
beneficial interest in any of the Securities, the creation of any other claim
thereto or any other transfer or disposition whatsoever, whether voluntary or
involuntary, affecting the right, title, interest or possession in or to such
Securities.
4. Miscellaneous.
4.1 Legends. Each certificate or instrument representing Securities
subject to the terms of this Agreement will bear the following legends in
addition to any other legend required by law:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT AMONG THE
COMPANY AND THE HOLDERS SPECIFIED THEREIN, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS
SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
Upon termination of this Agreement, the Company will cause such legends to be
removed as soon as practicable.
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4.2 Governing Law; Severability. This Agreement shall be governed by
the laws of the State of Delaware without giving effect to conflicts of law
principles thereof. If any provision of this Agreement shall be declared
invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions hereof shall remain valid and shall continue in effect.
4.3 Binding Effect on Successor. This Agreement shall be binding upon
and inure to the benefit of the Company and the Stockholders, and to their
respective successors and permitted assigns, including any successors to the
Company or the Stockholders or their businesses or assets as the result of any
merger, consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act.
4.4 Specific Performance. The Stockholders and the Company acknowledge
and agree that irreparable injury to the other party would occur in the event
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached and that such injury would not
be compensable in damages. It is accordingly agreed that each party hereto
shall be entitled to specific enforcement of, and injunctive relief to prevent
any violation of the terms hereof, and the other parties hereto will not take
action, directly or indirectly, in opposition to the party seeking such relief
on the grounds that any other remedy or relief is available at law or in
equity. The parties further agree that no bond shall be required as a condition
to the granting of any such relief.
4.5 No Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
4.6 Entire Agreement; Amendments. This Agreement, together with the
Merger Agreement and other agreements entered into in connection herewith and
therewith, constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof. This Agreement may be amended only by a
written instrument duly executed by the parties or their respective successors
or assigns.
4.7 Headings. The section headings contained in the Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
4.8 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by hand delivery, facsimile or
recognized express carrier or delivery service to the respective parties as
follows:
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if to the Company:
Howtek, Inc.
00 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: W. Xxxxx Xxxx
if to the Stockholders:
Xxxxxx Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
W. Xxxxx Xxxx
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Maha Sallam
00000 Xxxxxxxxx Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
W. Xxx Xxxxxx
00000 Xxxxxxxxx Xxx
Xxxx Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Xxxx Xxxxxx
00000 Xxxxxxxxxxx Xxxx.
Xxxx Xxxxx, 00000
Facsimile No.:
Xxxxx Xxxxx
00000 Xxx Xxxxx Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
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4.9 Further Assurances. From time to time on and after the date hereof,
the Company and the Stockholders, as the case may be, shall deliver or cause to
be delivered to the other party hereto such further documents and instruments
and shall do and cause to be done such further acts as the other party hereto
shall reasonably request to carry out more effectively the provisions and
purposes of this Agreement, to evidence compliance herewith or to assure that
it is protected in acting hereunder.
4.10 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall be deemed
one and the same instrument.
IN WITNESS WHEREOF, the Company and the Stockholders have executed this
Agreement as of the date first above written.
HOWTEK, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Title: CFO
/s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
/s/ W. Xxxxx Xxxx
----------------------------
W. Xxxxx Xxxx
/s/ Maha Sallam
----------------------------
Maha Sallam
/s/ W. Xxx Xxxxxx
----------------------------
W. Xxx Xxxxxx
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx
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