Shareholder Agreement, dated May 5, 2021, by and between Aterian, Inc. and Ran Nir
THIS SHAREHOLDER AGREEMENT (as amended, restated, supplemented or otherwise modified in accordance with Section 10.3, this Agreement) is made and entered into as of May 5, 2021 by and between Aterian, Inc., a Delaware corporation (the Company), and Ran Nir (the Stockholder).
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of even date herewith (the Purchase Agreement), by and among the Company, Truweo, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (Acquisition Sub), the Stockholder, Josef Eitan and Photo Paper Direct Ltd, a private limited company organized under the laws of England and Wales (PPD), the Company issued 176,137 shares of its common stock, $0.0001 par value per share (the Common Stock), to the Stockholder at the closing of Acquisition Subs acquisition of 100% of the outstanding equity of PPD (such shares of Common Stock, the Closing Securities), for the benefit of the Stockholder thereunder;
WHEREAS, the Company has agreed, subject to the terms and conditions of the Purchase Agreement, to issue and deliver to the Stockholder additional shares of Common Stock as further consideration in the event that PPD achieves certain results of operations set forth in the Purchase Agreement during the 2021 calendar year (any such shares of Common Stock, the Earn-Out Securities, and together with the Closing Securities, the Securities);
WHEREAS, as a condition to entering into the Purchase Agreement, the Company has required that the Stockholder enter into this Agreement, and the Stockholder, in order to induce the Company to enter into the Purchase Agreement, desires to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
(a) Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(b) A Person shall be deemed the Beneficial Owner or to have Beneficial Ownership of and shall be deemed to beneficially own any securities which such Person or any of such Persons Affiliates or Associates is deemed to beneficially own, within the meaning of Rules 13d-3 and 13d-5 of the General Rules and Regulations under the Exchange Act.
Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase, then outstanding, when used with reference to a Persons Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed the Beneficial Owner hereunder.
(c) Company Acquisition Transaction shall mean (i) the commencement (within the meaning of Rule 14d-2 of the General Rules and Regulations under the Exchange Act) of a tender or exchange offer by a third party for at least fifteen percent (15%) of the then outstanding capital stock of the Company or any direct or indirect Subsidiary of the Company, (ii) the commencement by a third party of a proxy contest with respect to the election of any directors of the Company, (iii) any sale, license, lease, exchange, transfer, disposition or acquisition of any portion of the business or assets of the Company or any direct or indirect Subsidiary of the Company (other than in the ordinary course of business), or (iv) any merger, consolidation, business combination, share exchange, reorganization, recapitalization, restructuring, liquidation, dissolution or similar transaction or series of related transactions involving the Company or any direct or indirect Subsidiary of the Company.
(d) Group shall have the meaning set forth in Section 13(d)(3) of the Exchange Act and Rule 13d-5 of the General Rules and Regulations under the Exchange Act.
(e) Subject Securities means the Securities, including any equity securities issued or issuable directly or indirectly with respect to such Securities by way of any stock dividend or stock split or in connection with a combination of shares, recapitalization, reclassification, merger, amalgamation, arrangement, consolidation or other reorganization.
(f) Subsidiary of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.
(g) Voting Securities shall mean the shares of Common Stock; provided, however, that, Voting Securities, when used in this Agreement in connection with a specific reference to any Person other than the Company, shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.
1.2 Capitalized Terms. All other capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Purchase Agreement.
2. MATERIAL NON-PUBLIC INFORMATION; REPORTING OBLIGATIONS.
2.1 Stockholder acknowledges that it is aware, and will advise each of its representatives who are informed as to the matters that are the subject of the Purchase Agreement and this Agreement, that the United States securities laws may prohibit any person who has received from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
2.2 To the extent that Stockholder is required to do so by applicable law as result of the transactions contemplated by the Purchase Agreement, Stockholder acknowledges and agrees that it shall: (a) be solely responsible for the filing of (i) any Forms 3, 4 and 5 in accordance with Section 16(a) of the Exchange Act and the rules promulgated thereunder and (ii) any Schedule 13D or 13G, as applicable, under the Exchange Act and the rules promulgated thereunder, in each case, in respect of its ownership of a registered class of securities of the Company, and (b) timely file such forms and schedules or amendments thereto with the SEC and any stock exchange or similar authority, as required.
3.1 Standstill Provisions. Commencing on the date of this Agreement and until the date that is the fifth (5th) anniversary of the date of this Agreement (the Standstill Period), the Stockholder agrees, on behalf of itself and its Affiliates and Associates, that for so long as such Persons collectively Beneficially Own any Voting Securities, except pursuant to a negotiated transaction with the Stockholder approved by the board of directors of the Company (the Board), the Stockholder will not (and will cause its Affiliates and Associates not to), in any manner, directly or indirectly:
(a) make, effect, initiate, cause or participate in (i) any acquisition of Beneficial Ownership of any securities of the Company (other than as a result of the Companys issuance of Earn-Out Securities to the Stockholder) or any securities of any Subsidiary or other Affiliate or Associate of the Company if such acquisition would result in the Stockholder and its Affiliates and Associates collectively Beneficially Owning ten percent (10%) or more of the then outstanding Voting Securities, (ii) any Company Acquisition Transaction, (iii) any solicitation of proxies (as those terms are defined in Rule 14a-1 of the General Rules and Regulations under the Exchange Act) or consents with respect to any securities of the Company or (iv) frustrate or seek to frustrate any Company Acquisition Transaction proposed or endorsed by the Company;
(b) recommend, nominate or seek to nominate any Person to the Board or otherwise act, alone or in concert with others, to seek to control or influence the management, the Board or policies or governance of the Company;
(c) take any action which might force the Company to make a public announcement regarding any of the types of matters set forth in subsection (a) of this Section 3.1;
(d) request or propose that the Company (or its directors, officers, employees or agents), directly or indirectly, amend or waive any provision of this Section 3.1, including this subsection (d);
(e) demand an inspection of the Companys books and records whether pursuant to Section 220 of the General Corporation Law of the State of Delaware or otherwise;
(f) institute, solicit, assist or join any litigation, arbitration or other proceeding against or involving the Company or any of its current or former directors or officers (including derivative actions) other than to enforce the provisions of this Agreement or any rights available to the Stockholder under the Purchase Agreement and the Transaction Documents;
(g) agree or offer to take, or encourage or propose (publicly or otherwise) the taking of, any action referred to in subsections (a), (b), (c), (d), (e) or (f) of this Section 3.1;
(h) assist, induce or encourage any other Person to take any action referred to in subsections (a), (b), (c), (d), (e) or (f) of this Section 3.1;
(i) enter into any discussions, negotiations, agreements, understandings or arrangements with any third party with respect to the taking of any action referred to in subsections (a), (b), (c), (d), (e) or (f) of this Section 3.1; or
(j) take any action challenging the validity or enforceability of this Section 3.1 of this Agreement unless the Company is challenging the validity or enforceability of this Agreement.
3.2 Termination of Standstill Provisions
(a) Subject to Section 3.2(b), the provisions of Section 3.1 shall terminate and be of no further force and effect in the event the Board shall have endorsed, approved, recommended, or resolved to endorse, approve or recommend a Company Acquisition Transaction.
(b) All of the provisions of Section 3.1 shall be reinstated and shall apply in full force according to their terms in the event that: (i) if the provisions of Section 3.1 shall have terminated as the result of a tender offer, and such tender offer (as originally made or as amended or modified) shall have terminated (without closing) prior to the commencement of a tender offer by the Stockholder or any of its Affiliates or Associates that would have been permitted to be made pursuant to Section 3.2(a) as a result of such third-party tender offer; (ii) any tender offer by the Stockholder or any of its Affiliates or Associates (as originally made or as extended or modified) that was permitted to be made pursuant to Section 3.2(a) shall have terminated (without closing); or (iii) if the provisions of Section 3.1 shall have terminated as a result of any action by the Board referred to in Section 3.2(a), and the Board shall have determined not to take any of such actions (and no such transaction considered by the Board shall have closed) prior to the commencement of a tender offer by the Stockholder that would have been permitted to be made pursuant to Section 4.2(a) as a result of the initial determination of the Board referred to in Section 3.2(a).
(c) Upon reinstatement of the provisions of Section 3.1, the provisions of this Section 3.2 shall continue to govern for the remainder of the Standstill Period in the event that any of the events described in Section 3.2(a) shall occur. Upon the closing of any tender offer for or acquisition of any securities of the Company or rights or options to acquire any such securities by the Stockholder or any of its Affiliates or Associates that would have been prohibited by the provisions of Section 3.1 but for the provisions of this Section 3.2, all provisions of Section 3.1 and Section 3.2 shall terminate.
3.3 Sales of Shares of Common Stock. During the Standstill Period, the Stockholder will only sell shares of Common Stock in open market transactions on The Nasdaq Stock Market, LLC or on such principal stock exchange as the Common Stock is then listed for trading or in private transactions so long as any sale in a private transaction is not to any Person or Group who the Stockholder reasonably believes after due inquiry Beneficially Owns or as a result of such transaction would Beneficially Own more than five percent (5%) of the then outstanding Voting Securities. Upon sale by the Stockholder of any Common Stock after the Standstill Period to any Person or Group that is not an Affiliate or Associate of the Stockholder, such Common Stock shall no longer be subject to the restrictions or provisions of this Agreement.
4. REGISTRATION RIGHTS.
4.1 Shelf Take-Down. The Company undertakes to use commercially reasonable efforts to register the Subject Securities as soon as practicable following their issuance either through a Shelf Registration Statement or through a Piggy Back Registration Statement (each as defined below). After a Shelf Registration Statement becomes effective, if applicable, the Company shall promptly notify the Stockholder after which the Stockholder may deliver a notice to the Company stating that the Stockholder intends to register all of the then outstanding Subject Securities on the Shelf Registration Statement (a Shelf Offering and such notice, the Shelf Take-Down Notice). Upon receipt of the Shelf Take-Down Notice, the Company shall, subject to the other applicable provisions of this Agreement, amend or supplement the applicable Shelf Registration Statement as may be necessary to enable the Subject Securities included in the Shelf Take-Down Notice to be sold and distributed pursuant to the Shelf Offering; provided, however, that the Company will include in the Shelf Offering only such number of Subject Securities that can be sold without resulting in an Adverse Disclosure (as defined below). For the purposes of this Section 4: (a) Shelf Registration Statement means a registration statement of the Company filed with the SEC on Form S-1 or Form S-3 for an offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the Securities Act), or any similar rule that may be adopted by the SEC, covering the Common Stock; and (b) Adverse Disclosure means public disclosure of material non-public information that, in the good faith judgment of the Company (after consultation with legal counsel) (i) would be required to be made in any registration statement filed with the SEC by the Company so that such registration statement would not be materially misleading and (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such registration statement.
4.2 Piggyback Registration.
(a) If the Company proposes to file a registration statement under the Securities Act with respect to an offering of Common Stock or securities convertible into, or exchangeable or exercisable for, Common Stock, whether or not for sale for its own account (including a Shelf Registration Statement, but other than a registration statement (i) on Form S-4, Form S-8 or any successor forms thereto or (ii) filed to effectuate an exchange offer or any employee benefit or dividend reinvestment plan), in a manner that would permit registration of the Subject Securities for sale for cash to the public under the Securities Act, then the Company shall give prompt written notice of such filing, which notice shall be given to the Stockholder no later than ten (10) business days prior to the filing date (the Piggyback Notice). The Piggyback Notice shall offer the Stockholder the opportunity to include (or cause to be included) in such registration statement the number of shares of Subject Securities as the Stockholder may request (each, a Piggyback Registration Statement). Subject to Section 4.2(b), the Company shall include in each Piggyback Registration Statement all Subject Securities with respect to which the Company has received written requests for inclusion therein (each, a Piggyback Request) within five (5) business days after the date of the Piggyback Notice. The Company shall not be required to maintain the effectiveness of a Piggyback Registration Statement beyond the earlier of (x) 120 days after the effective date thereof and (y) consummation of the distribution by the holders of the Subject Securities included in such registration statement. The Company may withdraw a Piggyback Registration Statement at any time prior to any sales being made pursuant to the Piggyback Registration Statement without incurring any liability to the Stockholder.
(b) If any of Subject Securities to be registered pursuant to the registration giving rise to the rights under this Section 4.2 are to be sold in a registered offering in which securities of the Company are sold to one or more underwriters on a firm commitment basis for reoffering to the public (an Underwritten Offering), the Company shall use commercially reasonable efforts to cause the managing underwriter or underwriters of a proposed Underwritten Offering to permit the Stockholder to include in such offering all Subject Securities included in the Stockholders Piggyback Request on the same terms and subject to the same conditions as any other shares of capital stock, if any, of the Company included in the Underwritten Offering; provided that the Stockholder timely submits a Piggyback request in connection with such offering. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering advise the Company in writing that in its or their good faith opinion the number of securities to be registered exceeds the number of securities which can be sold in such offering in light of market conditions or will adversely affect the success of such offering, the Company will include in such Underwritten Offering only such number of securities that can be sold without adversely affecting the marketability of the offering, which securities will be so included in the following order of priority: (i) first, the securities proposed to be sold by the Company for its own account and (ii) second, the Subject Securities of the Stockholder and any other persons with piggyback registration rights who have the right to participate and that have requested to participate in such offering, allocated pro rata among the selling shareholders according to the total amount of securities entitled to be included therein owned by each selling shareholder and its Affiliates (other than the Company) or in such other proportions as shall mutually be agreed to by such selling shareholders.
(c) As to any particular Subject Securities, once issued, such securities shall cease to be subject to this Section 4.2 when (i) such securities are sold or otherwise transferred pursuant to an effective registration statement under the Securities Act, (ii) such securities shall have ceased to be outstanding, (iii) such securities have been transferred in a transaction in which the Stockholders rights under this Agreement are not assigned in accordance with the terms of this Agreement to the transferee of the securities, (iv) such securities are sold in a brokers transaction under circumstances in which all of the applicable conditions of Rule 144 promulgated under the Securities Act (or any similar provisions then in force) are met, or (v) as to any Subject Securities that are Common Stock of the Stockholder, at any time the Stockholder and its affiliates own less than 1% of the outstanding shares of Common Stock.
4.3 Suspension. The Company shall be entitled, by providing written notice to the Stockholder, no more than two (2) times in any twelve (12) month period for a period of time not to exceed 90 days in the aggregate, to postpone the filing or effectiveness of a registration statement to sell Subject Securities or to require the Stockholder to suspend any offerings or sales of Subject Securities pursuant to a registration statement in accordance with this Section 4 if the Company delivers to the Stockholder a certificate signed by an executive officer certifying that such registration and offering would (a) require the Company to make an Adverse Disclosure or (b) materially interfere with any bona fide material financing, acquisition, disposition or other similar transaction involving the Company or any of its Subsidiaries then under consideration. Such certificate shall contain a statement of the reasons for such suspension and an approximation of the anticipated length of such suspension, in accordance with the specifications set forth in this Section 4.3. The Stockholder shall keep the information contained in such certificate confidential.
4.4 Expenses of Registration. All Registration Expenses (as defined below) incurred in connection with any registration pursuant to this Section 4 shall be borne by the Company. All (a) underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Stockholder, or (b) the fees and expenses of an auditor of the Stockholder or any counsel to the Stockholder incurred in connection with the sale of Subject Securities by the Stockholder shall be borne by the Stockholder on a pro rata basis with any other holders included in such registration. Registration Expenses means all expenses incurred by the Company in complying with this Section 4, including all registration, qualification, listing and filing fees, printing expenses, escrow fees, and fees and disbursements of counsel for the Company, fees and disbursements of the Companys independent public accountants, fees and disbursements of the transfer agent, blue sky fees and expenses.
4.5 Cooperation by the Stockholder. If the Stockholder elects to register Subject Securities in accordance with Section 4.1 or Section 4.2, the Stockholder shall furnish to the Company the number of shares of Common Stock owned by the Stockholder, the number of such Subject Securities proposed to be sold, as applicable, the name and address of the Stockholder, and the distribution proposed by the Stockholder as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. It is understood and agreed that the obligations of the Company under this Section 4 are conditioned on the timely provisions of the foregoing information by the Stockholder and, without limitation of the foregoing, will be conditioned on compliance by the Stockholder with the following: (a) the Stockholder will cooperate with the Company in connection with the preparation of the applicable registration statement and prospectus and, for so long as the Company is obligated to keep such registration statement effective, the Stockholder will provide to the Company, in writing and in a timely manner, for use in such registration statement (and expressly identified in writing as such), all information regarding themselves and such other information as may be required by applicable law to enable the Company to prepare or amend such registration statement, any related prospectus and any other documents related to such offering covering the applicable Subject Securities owned by the Stockholder and to maintain the currency and effectiveness thereof; and (b) during such time as the Stockholder may be engaged in a distribution of Subject Securities, the Stockholder will comply with all laws applicable to such distribution, and will (i) not engage in any stabilization activity in connection with the securities of the Company in contravention of such laws; (ii) distribute the Subject Securities solely in the manner described in the applicable registration statement and (iii) if required by applicable law, cause to be furnished to each agent or broker-dealer to or through whom such Subject Securities may be offered, or to the offeree if an offer is made directly by the Stockholder, such copies of the applicable prospectus (as amended and supplemented to such date) and documents incorporated by reference therein as may be required by such agent, broker-dealer or offeree.
5. VOTING OF STOCKHOLDER SHARES.
5.1 Shares Held Subject to Agreement. Until the Termination Date, for so long as the Stockholder and its Affiliates and Associates collectively Beneficially Own any Common Stock or any other Voting Securities, the Stockholder agrees to hold all such Common Stock or other Voting Securities registered in such Stockholders name or Beneficially Owned by such Stockholder as of the date hereof and any and all other voting securities of the Company legally or beneficially acquired by them after the date hereof, including any Earn-Out Securities (hereinafter collectively referred to as the Stockholder Shares) subject to, and to vote the Stockholder Shares in accordance with, the provisions of this Agreement.
5.2 Vote Required. At all times prior to the Termination Date, the Stockholder shall timely vote in person or by proxy at each annual or special meeting of the Companys stockholders (or shall consent to vote pursuant to an action by written consent of the holders of capital stock of the Company, as and if permitted by the Companys bylaws) all such Stockholder Shares in accordance with the recommendations of the Board on each matter presented to the Companys stockholders at such meeting or consent solicitation as set forth in the applicable definitive proxy statement, including without limitation the election, removal and/or replacement of directors.
5.3 Irrevocable Proxy. The Stockholder hereby constitutes and appoints the Company with full power of substitution, as the proxy of such stockholder with respect to all matters in accordance with Section 5, and hereby authorizes the Company to represent and to vote, if and only if such stockholder: (a) fails to vote; or (b) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of the Stockholder Shares in accordance with the recommendation of the Board on each matter presented to the Companys stockholders at any annual or special meeting of the Companys stockholders or consent solicitation, in each case, as required pursuant to the terms and provisions of this Agreement. The proxy granted pursuant to the immediately preceding sentence is coupled with an interest and shall be irrevocable unless and until this Agreement terminates pursuant to Section 9 hereof. The Stockholder hereby revokes any and all previous proxies with respect to the Stockholder Shares and shall not hereafter, unless and until this Agreement terminates pursuant to Section 9 hereof, purport to grant any other proxy or power of attorney with respect to any of the Stockholder Shares, deposit any of such Stockholder Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any Person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of such Stockholder Shares, in each case, with respect to any matter presented to the Companys stockholders for approval at any annual or special meeting of the Companys stockholders or written consent.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Each party hereto represents and warrants to the other as follows:
(a) Authorization. Such party has the requisite power, authority and legal capacity to execute, deliver and perform and to consummate the transactions contemplated by this Agreement. This Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as such enforcement may be limited by any applicable bankruptcy, insolvency, moratorium or similar law affecting creditors rights generally.
(b) No Consents. No consent of any Governmental Authority or other Person is required to be obtained by such party in connection with the execution and delivery by such party of this Agreement.
6.2 The Stockholder represents and warrants to the Company that as of the date hereof, the Stockholder and its Affiliates and Associates collectively Beneficially Own 176,137 shares of Common Stock and have no other interest in the capital stock of the Company other than the right to receive the Earn-Out Securities subject to the terms and conditions of the Purchase Agreement.
6.3 The Stockholder understands and acknowledges that the Company is entering into the Purchase Agreement in reliance upon the Stockholders execution, delivery and performance of this Agreement.
7.1 Concurrently with the execution of this Agreement, and in addition to any other legends provided for in the Purchase Agreement, there shall be imprinted or otherwise placed on the book-entry statements representing the Stockholder Shares the following restrictive legend (the Legend):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A SHAREHOLDER AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE TRANSFER AND VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH SHAREHOLDER AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
7.2 Subject to a sale to a third party pursuant to Section 3.3, above, the Stockholder agrees that, during the term of this Agreement, it will not remove, and will not permit to be removed (upon registration of transfer, reissuance of otherwise), the Legend from any such book-entry statements and will place or cause to be placed the Legend on any new book-entry statements issued to represent Stockholder Shares theretofore represented by a book-entry statements carrying the Legend. The Stockholder will not request that any of the Stockholder Shares be converted from book-entry format to certificated shares.
8. SUCCESSORS. During the Standstill Period, the provisions of this Agreement shall be binding upon the successors in interest to any of the Stockholder Shares. During the Standstill Period, the Company shall not permit the transfer of any of the Stockholder Shares on its books or issue a new certificate representing any of the Stockholder Shares unless and until the successors in interest to whom such security is to be transferred shall have executed a written agreement, substantially in the form of this Agreement, pursuant to which such successors in interest becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such Person were a Stockholder hereunder. A purchaser in an open market transaction shall not be deemed a successor in interest.
9. TERMINATION. This Agreement shall continue in full force and effect from the date hereof through the earliest of the following dates, on which date (the Termination Date) it shall terminate in its entirety on the earlier of: (a) the date that is the fifth (5th) anniversary of the date of this Agreement and (b) the date of the closing of a sale, lease, or other disposition of all or substantially all of the Companys assets or the Companys merger into or consolidation with any other corporation or other entity, or any other corporate reorganization, in which the holders of the Companys outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing less than 50% of the voting power of the corporation or other entity surviving such transaction; provided, however, that this clause (b) shall not apply to a merger effected exclusively for the purpose of changing the domicile of the Company; and (c) the date as of which this Agreement is terminated by the written consent of the Company and the Stockholder.
10.1 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the parties hereto shall be entitled to enforce specifically the provisions of this Agreement, including obtaining an injunction or injunctions to prevent breaches or threatened breaches of this Agreement, in any court designated to resolve disputes concerning this Agreement (or, if such court lacks subject matter jurisdiction, in any appropriate state or federal court), this being in addition to any other remedy to which such party is entitled at law or in equity. Each party hereto further agrees not to assert and waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security or provide indemnity as a prerequisite to obtaining equitable relief.
10.2 Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party hereto shall be entitled to reasonable attorneys fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
10.3 Amendment and Waiver. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Stockholder. No failure or delay of any party hereto to exercise any right or remedy given to such party under this Agreement or otherwise available to such party or to insist upon strict compliance by any other party with its obligations hereunder and no single or partial exercise of any such right or power shall constitute a waiver of any party heretos right to demand exact compliance with the terms hereof. Any written waiver shall be limited to those items specifically waived therein and shall not be deemed to waive any future breaches or violations or other non-specified breaches or violations unless, and to the extent, expressly set forth therein.
10.4 Notices. All notices and other communications made pursuant to or under this Agreement shall be given pursuant to the terms of the notice provisions in Section 9.01 of the Purchase Agreement.
10.5 Severability. If any term or provision of this Agreement is held invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of all other terms and provisions of this Agreement will not in any way be affected or impaired. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.
10.6 Governing Law. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation, inducement to enter and/or performance of this Agreement (whether related to breach of contract, tortious conduct or otherwise and whether now existing or hereafter arising) shall be governed by, the internal laws of the State of Delaware, without giving effect to any law that would cause the laws of any jurisdiction other than the State of Delaware to be applied.
10.7 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
(a) Each Party agrees that any proceeding arising out of or relating to this Agreement or any transaction contemplated hereby shall be brought exclusively in any state or federal court located in New York County, State of New York, and each of the Parties hereby submits to the exclusive jurisdiction of such courts for itself and with respect to its property, generally and unconditionally, for the purpose of any such proceeding. A final judgment in any such proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each Party agrees not to commence any proceeding arising out of or relating to this Agreement or the transactions contemplated hereby except in the courts described above (other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described above), irrevocably and unconditionally waives any objection to the laying of venue of any proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any such court, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such proceeding brought in any such court has been brought in an inconvenient forum or does not have jurisdiction over any Party. Each Party agrees that service of any process, summons, notice or document by U.S. registered mail to such Partys respective address set forth in the Purchase Agreement shall be effective service of process for any such proceeding.
(b) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, STATUTE OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. EACH PARTY FURTHER WAIVES ANY RIGHT TO SEEK TO CONSOLIDATE ANY PROCEEDING IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER PROCEEDING IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED OR WARRANTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.7.
10.8 Entire Agreement. Except for the Purchase Agreement, this Agreement sets forth the entire understanding and agreement between the parties hereto with respect to the subject matter hereof.
10.9 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement. This Agreement may be executed by facsimile or electronic (.pdf) signature and a facsimile or electronic (.pdf) signature shall constitute an original for all purposes.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this SHAREHOLDER AGREEMENT as of the date first written above.
|ATERIAN, INC.||RAN NIR|
(Signature Page to Shareholder Agreement)