Shareholders "Agreement"
SHAREHOLDERS AGREEMENT
THIS AGREEMENT made the day of , 2003;
BETWEEN: Amy Ciambriello, 318 Main Street, Stirling, New Jersey 07980, hereinafter called ?Amy?;
AND: Dennis X, hereinafter called ?Dennis?;
AND: Robin McRae, 6508 Shadow Oaks Ct., Monmouth Junction, New Jersey, 08852, hereinafter called ?Robin?.
WHEREAS, Amy is 51% owner of the capital stock of Rockhopper Imaging, Inc., and Dennis is 24.5% owner of the capital stock in said corporation, and Robin is also a 24.5% owner of the capital stock in said corporation; and
WHEREAS, the shareholders wish to set forth their understanding regarding the rights and duties towards one another; and
WHEREAS, the parties agree that it is in the best interest of the corporation and the shareholders to provide for the future disposition of the shares of the corporation; and
WHEREAS, the Agreement is entered into for the purpose of setting forth all the rights and obligations of the shareholders toward one another and of providing for the purchase, by a shareholder of the stock interest owned by another shareholder who may die, become disabled or retire, thereby preventing the stock interest of a shareholder from passing into other hands and introducing other interests which might be disadvantageous to the continued success of the business.
NOW THEREFORE, in consideration of the mutual promises and covenants herein contained, the shareholders agree as follows:
1. TYPE OF BUSINESS: The shareholders hereby voluntarily associate themselves together for the purpose of conduction the general business of providing imaging, scanning and electronic publishing and such other business as may be agreed upon by them in the future.
2. NAME OF THE CORPORATION: The name of the corporation shall be ?Rockhopper Imaging Incorporated?.
3. TERM OF THE CORPORATION: The corporation shall commence on the date of execution of the Certificate of Incorporation and shall continue until terminated by mutual agreement of the parties or as herein provided.
4. PLACE OF BUSINESS: The principal place of business of the corporation shall be at 45 North Gaston Avenue, Somerville, New Jersey, or such other place or places as may be mutually agreed upon by the parties hereto.
5. LEASE:
A. Image Media Solutions, LLC will lease the office equipment listed in Attachment A to the corporation for an unspecified period of time. The corporation will make monthly payments of 10% from every invoice to Image Media Solutions, LLC for use of the equipment. Rockhopper Imaging has the option to buy or lease new equipment as they see fit, or to terminate the leasing of the equipment to be listed on Attachment A.
B. On or before _________, 2004, the corporation will reimburse Image Media a proportionate amount of all materials (business cards, office supplies, office furniture, etc.) and equipment (telephone answering machine, telephones, etc.) that Image Media provided for the corporation?s use before _______, 2004.
6. INITIAL CAPITAL: The initial operating capital of the corporation consisted of loans from the undersigned shareholders, all of which have been repaid.
7. WITHDRAWL OF CAPITAL: No shareholder shall withdraw any portion of the capital of the corporation without the expressed written consent of the other shareholders.
8. PROFITS AND LOSSES: Any net profits or losses that may accrue to the corporation shall be distributed to or borne by the shareholders to their respective equity ownership.
9. BOOKS OF ACCOUNT: At all times during the continuance of the corporation, the shareholders shall keep accurate books of account in which all matters relating to the corporation, including all income, expenditures, assets and liabilities thereof, shall be entered. Said books shall be open to examination by any shareholder at any time.
10. TAXABLE YEAR: The taxable year of the corporation shall end on the 31st day of December each year.
11. ACCOUNTINGS: A complete accounting of the corporation?s affairs as of the close of business on the last day of December of each year shall be rendered to each shareholder within forty-five (45) days after the close of each month. Except as to manifest errors discovered within 30 days after its rendition, each such accounting shall be final and conclusive as to each shareholder.
12. TIME DEVOTED TO CORPORATION: Each shareholder shall devote his or her complete working time to the furtherance of the corporation?s business and shall use the utmost of his or her skills and ability in the furtherance of the corporation?s business.
13. MANAGEMENT AND AUTHORITY: Each shareholder shall have an equal voice in the management of the corporation and shall have equal authority to bind the corporation in making contracts and incurring obligations in the name and on the credit of the firm. However, no shareholder shall incur any obligation in the name or on the credit of the corporation exceeding $15,000.00 without the expressed written consent of the other shareholders. Any obligation incurred in violation of this provision shall be charged to and collected from the individual shareholder incurring such obligation.
14. SALARIES AND BENEFITS: The salaries of the shareholders shall be agreed upon between themselves. It is the intention of this Agreement that the shareholders shall each receive equal salary and benefits.
15. NET PROFITS DEFINED: The term ?net profits? as used in this Agreement shall mean the net profits of the corporation as determined by generally accepted accounting principles for each accounting period provided for in this Agreement.
16. RESTRICTION ON TRANSFER OF SHARES: None of the shares of any shareholder nor any right, title or interest therein, whether now owned or hereafter acquired, shall be sold, assigned, transferred, pledged or otherwise disposed of or encumbered, except in accordance with the provisions of this Agreement. Any disposition or encumbrance of shares contrary to the provisions hereof, shall be void.
17. INCLUSION IN WILL: Each shareholder shall include in his Will such appropriate provisions as may be necessary to carry out this Agreement.
18. ENDORSEMENT ON STOCK CERTIFICATES: Each certificate representing shares of the corporation now or hereafter held by the shareholders shall be stamped with the legend in substantially the following form:
The transfer of the shares represented by the within certificate is restricted under the terms of an agreement dated , a copy of which is on file at the office of the corporation.
19. PURCHASE UPON RETIREMENT, DEATH OR DISABILITY: In the event of voluntary retirement or disability of a shareholder, which term is hereinafter defined in Paragraph 26, the remaining shareholders or the corporation shall have the first option to purchase the shares of said disabled or retiring shareholder. If a shareholder wishes to retire, he shall give six (6) months? written notice to the remaining shareholder. The remaining shareholder, within said six month period, shall notify the retiring shareholder in writing of his intention to purchase the business. If a retiring shareholder dies, then the remaining shareholder or the corporation shall purchase the business within 90 days from the date of appointment of the legal representative of the deceased shareholder. If a shareholder is disabled for 6 months, the remaining shareholder shall have 90 days after the end of the 6 month disability date to notify in writing the disabled shareholder of his intention to purchase the shares. If written notification is not received within said time periods, the shares may be sold to any other person.
The purchase price for the shares shall be the fair market value of the tangible assets of the corporation less liabilities plus the last certificate of value amount set forth in Exhibit A to this Agreement.
In the event of death of a shareholder, all monies owed to the deceased shareholder will become due within 90 days of the death of the shareholder. A shareholder withdrawing from the business will receive the full cash value of all monies owed to him by the corporation, except that a shareholder withdrawing from the business will receive the cash value of his vacation leave account up to a maximum of $15,000.00.
20. CERTIFICATE OF VALUE: The term ?Certificate of Value? shall mean the value of a share of the corporation as set forth in the latest Certificate of Value filed with the corporation. The parties shall file with the corporation such a Certificate of Value at the end of each fiscal year; but the failure to file any certificate shall not invalidate the value set forth in the last certificate filed.
21. PAYMENT OF PURCHASE PRICE: The closing of such purchase and sale shall take place at the office of the corporation at a date designated by the purchasing shareholder or corporation which shall not be more than ninety days nor less than thirty days following the end of the time periods set forth in Paragraph 18. At such time and place the decedent?s personal representative, the retiring or disabled shareholder, shall deliver all their stock in the corporation, endorsed in blank, and receive any cash, promissory note and other security referred to hereinafter. The selling shareholder shall have no further rights in said stock.
22. INSURANCE: The corporation may purchase life insurance on the individual shareholders as set forth in Schedule A attached to this Agreement. If the corporation or any individual shareholder shall receive the proceeds of the life insurance set forth in Schedule A, such proceeds shall be paid by the corporation to the decedent?s personal representative to the extent of the purchase price of the decedent?s shares, such payment to be deemed on account of such purchase price. Payment thereof may be deferred until the closing. If the purchase price is less than the insurance proceeds, the deceased shareholder?s estate shall be entitled to the entire policy proceeds.
23. BALANCE OF PURCHASE PRICE: The balance of the purchase price remaining, after credit for any such insurance proceeds, shall be evidenced by a promissory note signed by the shareholders individually or the corporation and delivered to the personal representative of the deceased shareholder, retiring or disabled shareholder, payable in 60 equal monthly installments at 1% over prime interest per annum from the date of closing. Said note shall provide for prepayment at any time, without penalty, and that a default in any payment of the note shall cause the remaining balance to become immediately due and payable. As security for said note, the corporation shall execute appropriate financing statement, security agreements or encumbrances on the bills of sale of all corporate equipment and mortgages on corporate real estate. However, said liens shall be released if the corporation substitutes similar security.
24. PROFITS AFTER DEATH, RETIREMENT OR DISABILITY: All profits earned by the corporation after the death, disability or retirement of a shareholder shall belong to the corporation and the estate of a deceased, disabled or retired shareholder shall have no further right or claim thereto.
25. TERMINATION: This Agreement shall terminate upon the occurrence of any of the following events:
a. Bankruptcy, receivership or dissolution of the corporation.
b. Voluntary agreement of all surviving shareholders.
26. CORPORATE RESTRICTIONS AFTER PURCHASE: So long as any part of the purchase price remains unpaid, the corporation shall not declare or pay any dividend, reorganize its capital structure, or sell any of its assets except in the regular course of its business.
27. DISABILITY: Disability shall be defined as the inability of a shareholder to attend work on a daily basis at the corporate offices Monday through Friday, and perform the work usually assigned to such shareholder.
28. NOTICES: Any and all notices between the parties provided for or permitted under this Agreement or by law shall be in writing and shall be deemed duly served when personally delivered to a shareholder, or, in lieu of such personal service, when deposited in the United States mail, certified, postage prepaid, addressed to such shareholder at the address of the principal place of business of the corporation or to such other place as may from time to time be specified in a notice given pursuant to this paragraph as the address for service of notice on such shareholder.
29. CONSENTS AND AGREEMENTS: Any and all consents and agreements provided for or permitted by this Agreement shall be in writing and a signed copy thereof shall be filed and kept with the books of the corporation.
30. SOLE AND ONLY AGREEMENT: This instrument contains the sole and only agreement of the parties relating to their corporation and correctly sets forth the rights, duties and obligations of each to the other in connection therewith as of the date of execution by both shareholders. Any prior agreements, promises, negotiations or representations not expressly set forth in this Agreement are of no force or effect.
31. AMENDMENTS: Any amendments to this Agreement shall be made in writing and shall be attached hereto.
32. EFFECT OF AGREEMENT: This agreement shall be binding upon the heirs, executors, administrators and assigns of the shareholders and the successors of the corporation.
IN WITNESS WHEREOF, each party hereto has executed this Agreement on the day and year first above written.
_______________________
AMY CIAMBRIELLO
________________________
DENNIS FLYNN
________________________
Yeah, I think they pretty much threw this agreement to the wind. They've opened themselves up to a lawsuit with that action.
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