This
Shareholders’ Agreement (this “Agreement”) is
entered into and shall be effective as of September, 2004 among
Envision Worldwide Holdings Limited, a British Virgin Islands
international business company (the “Company”), and
certain shareholders of the Company from time to time made a party
hereto (each such Person being referred to herein as a
“Shareholder” and all such Persons being referred to
collectively herein as the “Shareholders”).
Each person
signing this Agreement is desirous of becoming a shareholder of the
Company by purchasing securities of the Company or exercising
options to purchase securities of the Company, and the Company is
desirous in connection therewith and as a condition precedent
thereto to confirm certain understandings with such persons
relating to the securities being acquired by such
person.
NOW,
THEREFORE , in consideration of the mutual covenants contained
in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which arc hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
GENERAL PROVISIONS
1.1
Application . Each Shareholder expressly agrees that the
terms and conditions of this Agreement shall apply to: (a) all
shares of common stock, par value $1.00 per share of the Company
(the “Common Stock”), and all other securities of the
Company which he now owns or has voting control over, including,
without limitation, the shares of Common Stock acquired by such
Shareholder upon the exercise of options granted pursuant to the
Envision Worldwide Holdings Limited 2004 Key Executive Stock Option
Plan (the “Plan”); (b) any shares of Common Stock
and other securities of the Company which he hereafter acquires or
obtains voting control over by any means, including without
limitation, upon the exercise of options granted pursuant to the
Plan, or by agreement, purchase, assignment or operation of law, or
as a result of any stock dividend, stock split, reorganization,
reclassification or other similar transaction (whether voluntary or
involuntary); and (c) any shares of capital stock and other
securities of any successor in interest of the Company which he
hereafter acquires or obtains voting control over, including,
without limitation, by means of a sale, merger, consolidation or
other similar transaction, or by purchase, assignment or operation
of law (collectively, the “Shares”).
1.2 Additional
Shareholders . Except as expressly set forth herein or agreed
to by the Company, any Person acquiring Shares shall, as a
precondition of acquiring such Shares, promptly thereafter become a
party to this Agreement by signing and delivering to the Company a
written agreement to that effect; and the certificates evidencing
the Shares acquired by any such Person shall bear the legend set
forth in Section 1.4 of this Agreement, and be subject to, and
have the benefit of, the terms and provisions of this
Agreement.
1.3 No
Partnership Relationship . Notwithstanding any provision of
this Agreement, subject to applicable law, the parties understand
and agree that the management and operation of the Company in
accordance with the terms of this Agreement shall not create or
imply a general partnership, fiduciary or similar relationship
between or among the Shareholders and any other shareholders of the
Company and shall not make any Shareholder the agent or partner of
any other shareholder of the Company for any purpose.
1.4 Legend
. All Shares shall be certificated. All certificates representing
Shares shall on the face thereof bear the following
legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, REPURCHASE OPTIONS AND OTHER TERMS AND
CONDITIONS SET FORTH IN THAT CERTAIN SHAREHOLDERS’ AGREEMENT
AMONG THE ISSUER AND CERTAIN OF ITS SHAREHOLDERS, COPIES OF WHICH
ARE ON FILE AT AND MAY BE OBTAINED FROM THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND OTHER TERMS AND CONDITIONS
ARE BINDING ON TRANSFEREES OF THESE SECURITIES.”
1.5
Definitions . For purposes of this Agreement, (i) any
decision, determination, election or other action of the Company
shall be deemed to require a majority vote of the Board of
Directors of the Company (the “Board”) unless otherwise
specifically delegated by the Board; and (ii) the following
terms shall have the following meanings:
“Drag-Along Sale” means the Sale of the Company
approved by the Board.
“Independent Third Party” means any Person who,
immediately prior to a contemplated transaction, does not own a
majority of the Company’s capita] stock on a fully-diluted
basis (a “Majority Owner”), who is not controlling,
controlled by or wider common control with any such Majority Owner
and who is not the spouse or descendent (by birth or adoption) of
any such Majority Owner or a trust for the benefit of such Majority
Owner and/or such other Persons, a company (which shall include
corporations and limited liability companies) owned solely by such
Majority Owner and/or such other Persons or a partnership whose
partners include only such Majority Owner and/or such other
Persons.
“Initial
Public Offering” means the first offer and sale of the
Company’s capital stock in an offering registered under the
Securities Act of 1933, as amended (the “Securities
Act”), for the account of the Company.
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“Person” means an individual, partnership,
corporation, business trust, joint stock corporation, estate,
trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
“Sale of
the Company” means a sale of the Company to an
Independent Third Party or group of Independent Third Parties
pursuant to which such Party or Parties acquire initially or
through a series of related transactions consummated within a
twelve (12) month period (i) capital stock of the Company
possessing the voting power under normal circumstances to elect a
majority of the Board (whether by merger, consolidation or sale or
transfer of the capital stock of the Company) or (ii) all or
substantially all of the Company’s assets determined on a
consolidated basis.
Additional
Defined Terms . With respect to a Shareholder, the terms
“Cause,” “without Cause,” and “Good
Reason,” as used in this Agreement shall have the defined
meanings set forth in that certain Employment Agreement between
AAI.FosterGrant, Inc., a Rhode Island corporation and indirect
majority-owned subsidiary of the Company
(“FosterGrant”), and such Shareholder (or the original
Shareholder who directly or indirectly transferred such Shares to
such Shareholder) as set forth on Exhibit A hereto, as
may be amended from time to time by the parties in accordance with
the terms therein or any subsequent employment agreement entered
into by the parties in lieu thereof. If such Shareholder is not
listed on Exhibit A (and did not receive such Shares
directly or indirectly from a Shareholder listed on
Exhibit A ), then the terms “Cause,”
“without Cause,” and “Good Reason,” shall
have the meaning given in the then-current written employment
agreement between such Shareholder (or the original Shareholder who
directly or indirectly transferred Shares to such Shareholder) and
the Company, or one of its affiliates, as applicable.
ARTICLE II
RESTRICTIONS ON TRANSFER OF SHARES
2.1 Prohibition
on Non-Complying Transfers . No Shareholder shall sell, assign,
transfer, exchange, gift, pledge, hypothecate, create a security
interest in or lien on or otherwise alienate, dispose of or
encumber any Shares or any right or interest therein (each, a
“Transfer”) for value or otherwise, whether voluntarily
or involuntarily, except in accordance with the terms of this
Article II or of Articles III or IV hereof, Any such purported
Transfer in violation of any provision of this Agreement shall be
of no force or effect, and the Company shall not be required to
recognize such purported Transfer for any purpose, including
without limitation, for purposes of dividend and voting
rights.
2.2 Transfer of
Shares Pursuant to a Bona Fide Offer.
(a)
Right of First Refusal of the Company and the 25% Owners .
If any Shareholder desires to Transfer any Shares to a Person
pursuant to a bona fide offer (other than pursuant to a Permitted
Transfer (as defined below) or a Drag-Along Sale), such Shareholder
(the “Selling Shareholder”) shall give written notice
(“Selling Shareholder’s Notice”) to the Company
and each Shareholder of the Company owning at least twenty-five
percent (25%) of the Company’s capital stock as recorded in
the Company’s stock register on a fully-diluted basis (a
“25% Owner” (whose names and addresses the Company
shall promptly supply to
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Shareholder
upon request) setting forth (i) the number of Shares that the
Selling Shareholder proposes to sell; (ii) the name and
address of the proposed transferee; (iii) the proposed
purchase price, terns of payment and other material terms and
conditions of such proposed Transfer, and (iv) an estimate, in the
Selling Shareholder’s reasonable judgment, of the fair market
value of any non-cash consideration offered by the proposed
transferee; and attaching a copy of the binding written offer or
agreement of the proposed transferee to purchase such Shares from
the Selling Shareholder. Upon receipt of the Selling
Shareholder’s Notice, the Company shall have the option (but
not the obligation), exercisable by delivery of written notice (the
“Company’s Notice”) to the Selling Shareholder
within thirty (30) days of receipt of the Selling
Shareholder’s Notice (the “Company’s Election
Period”), to purchase or designate one or more Persons to
purchase all or any portion of the Shares proposed to be sold (the
“Offered Shares”) at a price (the “Purchase
Price”) equal to the price set forth in the Selling
Shareholder’s Notice, payable as provided in Section 2.2(b)
hereof. If the Company does not elect to purchase or designate one
or more Persons to purchase all of the Offered Shares, then the 25%
Owners shall have the option (but not the obligation), exercisable
by delivery of written notice (the “25% Owners’
Notice”) to the Selling Shareholder within thirty
(30) days of receipt of the Selling Shareholder’s Notice
(the “25% Owners’ Election Period”) to purchase
all remaining Offered Shares (the “Remaining Shares”)
not so elected to be purchased by the Company on the same terms and
conditions as specified in the Selling Shareholder’s Notice.
Unless otherwise agreed between or among the 25% Owners, each of
the 25% Owners may purchase his pro rata portion of the Remaining
Shares, which shall be calculated by multiplying the number of
Remaining Shares by a fraction, the numerator of which is the
number of Shares held by such 25% Owner and the denominator of
which is the number of Shares held by all 25% Owners. If one or
more of the 25% Owners elects not to purchase his pro rata portion
of the Remaining Shares, then the remaining 25% Owners may purchase
their pro rata portion of the remaining shares of the Remaining
Shares in successive rounds until all such Shares have been
purchased.
(b)
Transfers to the Company and/or the 25% Owners .
Notwithstanding anything else to the contrary set forth herein, the
Company (or its designees) and/or the 25% Owners must together
purchase either all or none of the Offered Shares from the Selling
Shareholder. If the Company (and its designees) and/or the 25%
Owners have not elected to purchase all of the Offered Shares from
the Selling Shareholder, the Selling Shareholder may sell the
Offered Shares to the proposed transferee in accordance with
Section 2.2(c) below. If the Company has elected to purchase
or designate one or more Persons to purchase all or any portion of
the Offered Shares from the Selling Shareholder, the Transfer of
such Shares shall be consummated as soon as practicable after
delivery of the Company’s Notice, but in any event within
thirty (30) days after the expiration of the Company’s
Election Period. If the 25% Owners have elected to purchase all or
any portion of the Offered Shares from the Selling Shareholder, the
Transfer of such Shares shall be consummated as soon as practicable
after delivery of the 25% Owners’ Notice, but in any event
within thirty (30) days after the expiration of the 25%
Owners’ Election Period. The Company and/or each of the 25%
Owners to the extent that each elects to purchase any of the
Offered Shares, shall be referred to as the “Purchasing
Entity.” At the closing of the purchase of the Offered
Shares, (I) the Purchasing Entity shall pay to the Selling
Shareholder the Purchase Price, and (2) the Selling
Shareholder shall provide representations and warranties to the
Purchasing Entity and/or its designees as to his title to such
securities and confirming that there are no liens or encumbrances
on such securities (other than pursuant to this Agreement) and
shall indemnify and hold the Purchasing Entity (and/or
its
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designees, in
the case of the Company) harmless against any breach thereof, and
sign such stock powers and other documents as may be reasonably
requested by the Purchasing Entity (and/or its designees, in the
case of the Company).
(c)
Transfers to Third Parties . If the Company and/or the 25%
Owners shall not have elected to purchase (or, in the case of the
Company, designate one or more Persons to purchase) all of the
Offered Shares proposed to be sold in the Selling
Shareholder’s Notice, then the Selling Shareholder shall be
free to sell all, but not less than all, the Offered Shares to the
proposed transferee designated in the Selling Shareholder’s
Notice at a price and on terms no less favorable to the Selling
Shareholder than those described in the Selling Shareholder’s
Notice; provided, however, that such sale is consummated within
ninety (90) days after the giving of the Selling
Shareholder’s Notice to the Company and the 25% Owners
pursuant to Section 2.2(a). As a condition precedent to the
effectiveness of a Transfer pursuant to this Section 2.2(c),
the proposed transferee shall agree in writing prior to such
Transfer to become a party to and abide by the terms an
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