exv10w9



 






Exhibit
10.9




THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO §15 — 48 -10 ET SEQ. OF THE SOUTH
CAROLINA CODE OF LAWS (1976), AS AMENDED.



SHAREHOLDERS’ AGREEMENT




This Shareholders’ Agreement (“Agreement”) made as of the 16th day of August, 1999 by and between
Compass CS Partners LP, a Bahamian partnership (“Compass”), and those individuals owning options to
purchase shares of Compass CS Inc., a Delaware corporation (the “Company”) who have executed this
Agreement.



W I T N E S S E T H:




     WHEREAS, Compass is the sole shareholder of the Company;



     WHEREAS, the Company has adopted a Stock Option Plan dated August 16, 1999 (“Plan”) pursuant to
which Compass has granted options to purchase shares of its common stock to Eligible Individuals
(as defined in the Plan);



     WHEREAS, Compass, being the sole shareholder of the Company and those individuals who have signed
this Agreement being the sole holders of options to purchase shares of Company Common Stock
pursuant to the Plan, wish to enter into this Agreement to establish procedures for the transfer of
the Shares (defined below);



     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and promises
hereinafter contained, the parties hereto agree as follows:



     1. Definitions. Whenever used in this Agreement, the following terms shall have the
following respective meanings:



         1.1 “Permitted Transferee” has the meaning assigned to it in Section
3.3.(a).



         1.2 “Shares” means the issued and outstanding shares of Common Stock of the Company, $.001
par value.



         1.3 “Shareholder” means any person other than Compass who owns Shares which were issued
pursuant to the Plan and were not acquired in violation of this Agreement.



         Management of the Company.



         1.4 Directors.



               (a) All of the directors of the Company shall be nominated by Compass. The Shareholders
hereby agree to vote their Shares so as to elect the directors so nominated.



 









 





               (b) From
the date of this Agreement through August 16, 2000, Compass
agrees to nominate and elect Glen Kilgore as a director of The Kilgore Group, Inc.;
provided, however, that the obligation to so nominate Glen Kilgore shall terminate on the earlier
of (i) the completion of a public offering of Shares (ii) the date on which Compass ceases to own
at least 70% of the Shares (iii) the date on which the Company sells all or substantially all of
its assets to a third party in an arms-length party transaction or (iv) the termination “for cause”
of the consulting agreement of even date between Kilgore and Kilgore Group Inc.



     2. Shares Subject to Agreement; Restrictions.



         2.1 Shares Subject to Agreement. All Shares, whether currently outstanding or hereafter
issued, at any time held or owned by any Shareholder or by any successor in interest to any
Shareholder shall be subject to this Agreement and to all the obligations and restrictions hereof.



               2.2
No Transfers. Except as provided in Sections 2.3, 2.4 and
2.5, no Shareholder or any successor in interest to any Shareholder shall sell, assign, convey,
transfer, encumber or in any other manner dispose of any or all of the Shares held or owned by him
except in accordance with the provisions of this Agreement. Any such sale,
assignment, conveyance, transfer, encumbrance or disposition of the Shares in violation of this
Agreement is void ab initio.



               2.3 Transfers to Permitted Transferees.



               (a) Any Shareholder may during his life or pursuant to his will
transfer his Shares to his spouse or lineal descendants or a trust for his benefit and/or for the
benefit of one or more of them. Any person receiving Shares pursuant to this Section 2.3 (a) is
herein referred to as a “Permitted Transferee.”



               (b) If any Shares are transferred to a Permitted Transferee,
such Permitted Transferee shall take and hold such Shares, and such Shares shall be, subject to
this Agreement and to the rights, obligations and restrictions provided herein, including, without
limitation, the provision that such Permitted Transferee shall not thereafter transfer any such
Shares pursuant to this Section 2.3 other than to a person who is a Permitted Transferee of such
Shareholder. Every Permitted Transferee shall observe and comply with this Agreement and with all
obligations and restrictions imposed hereby and shall, upon demand made at any time by Compass or
any Shareholder, execute appropriate instruments to that effect.



         2.4 First Refusal Rights. If any Shareholder (“Offeree Shareholder”) shall receive a
bona fide written cash offer (“Offer”) from a
non-affiliated third party (“Offeror”) which
he desires to accept, Compass shall have the right (“First Refusal Right”) to purchase the Shares
subject to such Offer (“Offered Shares”) at the same price and on the same terms and conditions as
follows:



               (a) The Offeree Shareholder shall provide notice to Compass
setting forth the identity of the Offeror, the number of Shares proposed to be purchased, the
proposed purchase price and all material terms and conditions of the Offer.




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               (b) For a period of 30 days (“Option Period”), Compass shall
have the First Refusal Right to purchase the Offered Shares. Such option shall be exercisable by a
written notice to the Offeree Shareholder no later than the expiration of the Option Period.



               (c) If the First Refusal Right has not been exercised with
respect to all of the Offered Shares within the Option Period, then the Offeree Shareholder shall
have the right to sell all of the Offered Shares to the Offeror pursuant to the Offer within the
period of 90 days following the expiration of the Option Period. If the Offered Shares are not so
sold within such 90 day period, such Offered Shares shall continue to be subject to the provisions
of this Agreement.



               (d) The closing of the purchase of the Offered Shares by
Compass pursuant to this Section shall be held at 11:00 a.m. (New York City time) at the principal
office of Compass within 30 days after the expiration of the Option Period. At the closing, the
Offeree Shareholder shall deliver the certificate(s) representing the Offered Shares in accordance
with, and subject to, the terms and conditions of the accepted Offer.



         2.5 Drag Along Rights.



               (a) If Compass proposes to sell more than 5% of the then
outstanding Shares in a bona fide transaction to a non-affiliated third party at any time, Compass
shall have the right to require each of the other Shareholders (“Drag Along Shareholders”) to sell
such percentage of his Shares to the same purchaser as proposed to be sold by the Company, upon the
same terms and conditions on which, and at the same time, as the Company sells its Shares, The
rights referred to in this Section 2.5 shall be exercised by written notice to the Drag Along
Shareholders (“Disposition Notice”) from Compass proposing the sale or other disposition
contemplated herein. The Disposition Notice shall specify the number of Shares to be sold, the
price, terms and conditions of such proposed sale and a description of the proposed purchaser. The
Disposition Notice shall be deemed effective with respect to each Drag Along Shareholder upon
receipt,



               (b) Promptly following receipt of such Disposition Notice,
each Drag Along Shareholder shall deliver to Compass (or such other person as may be
agreed upon between the Disposing Shareholders and each such Drag Along Shareholder) to be held by
Compass (or such other person) for sale or return upon the terms of this Section 2.5, the
certificate or certificates representing the Shares to be sold or otherwise disposed of pursuant to
this Section, duly endorsed, together with a limited power-of-attorney authorizing Compass to sell
or otherwise dispose of such Shares in accordance with the terms of this Section.



               (c) Promptly after the consummation of the sale or other
disposition of the Shares of Compass and the Drag Along Shareholders to the third party, and in any
event not later than 2 business days after such consummation, Compass shall remit to each of the
Drag Along Shareholders the total sale price of his Shares sold or otherwise disposed of pursuant
hereto (after deduction of his proportionate share of the out-of-pocket expenses associated with
such sale based on the number of Shares sold by such Drag Along Shareholder and each of the other
Drag Along Shareholders and Compass) and shall furnish such other evidence of the expenses
associated with and the completion and time of completion of such sale



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or
other disposition and the terms thereof, as may reasonably be requested by a Drag Along
Shareholder.



               (d) Compass shall have 90 days from the date of the Drag
Along Shareholder’s receipt of the Disposition Notice in which to sell such Shares to the third
party at the price and on the terms not less favorable to the Drag Along Shareholders than will be
received by Compass. If, at the end of such 90 day period Compass has not completed the sale or
other disposition of its Shares and the Shares of the Drag Along Shareholders, all certificates
representing Shares delivered for sale or other disposition pursuant to this Section shall be
returned to the Drag Along Shareholders. Thereafter, Compass may complete its sale or other
disposition to such non-affiliated third parties; provided, however, that the Drag Along
Shareholders shall not be bound by the provisions of this Section with respect to such sale. This
Section shall, however, apply to any other proposed sale or other disposition.



     3. Miscellaneous.



             (a) Legend on Certificates. Each certificate representing Shares shall be inscribed
with the following legend:




“This certificate and the securities represented by this certificate and all rights therein are
subject to and transferable (including without limitation by way of pledge or other grant of a
security interest therein) only in accordance with the provisions of a certain Shareholders’
Agreement dated as of August 16, 1999, among the Company and its Shareholders. A copy of such
Shareholders’ Agreement, as may be amended from time to time, is on file and available for
inspection at the principal office of the Company. Any sale, pledge, gift, bequest, transfer,
assignment, encumbrance or other disposition of this certificate and the securities represented
thereby in violation of said Shareholders’ Agreement shall be invalid.”



             (b) Effectiveness of Transfers. No Shares shall be transferred on the Company’s books
and records and transfer of Shares shall be otherwise ineffective unless such transfer is made
pursuant to and in accordance with the terms and conditions of this Agreement.



             (c) Notices. Any and all notices or consents required or permitted to be given under
any of the provisions of this Agreement shall be in writing and shall be deemed to have been
received (i) on the date of delivery if delivered in person or by facsimile copy and confirmed or
on the second date after it is given if sent by Federal Express or other similar overnight delivery
service which requires a signed receipt or (ii) upon three days after the date of mailing, if
mailed first class by registered or certified mail, return receipt requested, to the party entitled
to receive the same at the following addresses:




	 	(i)	 	If to Compass:





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NAVCO Inc.

C/o Oceanic Bank and Trust

4th Fl Euro Canadian Centre

Marlboro St & Navy Lion Rd

Nassau, Bahamas

Attn: Bruce Bell



with
a copy to:



Phillips Nizer Benjamin

Krim & Ballon LLP

666 Fifth Avenue

New York, New York 10103

Attn: Alan Shapiro, Esq.



and



Compass CS, Inc.

728 Post Road East

Suite 205

Westport, Ct. 06880

Attn: J. Massoud, President





	 	(ii)	 	If to the individuals who have signed this Agreement to
their address set forth on the signature page.





Any party hereto may change his address by giving notice to the other parties stating his new
address, all in the manner provided herein. Commencing on the fifth day after giving such notice,
such newly designated address shall be such parties address for the purpose of all notices or other
communications required or permitted to be given pursuant to this
Agreement.



       (d) Specific Performance. Due to the fact that the Shares cannot be readily
purchased or sold in the open market, and for other reasons, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforced. In the event of a breach or
threatened breach of any of the terms, covenants and conditions of this Agreement by any of the
parties hereto, the other parties shall, in addition to all other remedies, be entitled to a
temporary or permanent injunction, without showing any actual damage, and/or a decree for specific
performance in accordance with the provisions hereof.



       (e) Arbitration. Any controversy arising out of or relating to this Agreement
(except controversies pursuant to or arising under Section 3 of this Agreement) or any
modification, extension or termination thereof, including any claim for damages and/or rescission,
shall be resolved by arbitration in the State of Connecticut, in accordance with the commercial
arbitration rules then obtaining of the American Arbitration Association. The parties consent to
the jurisdiction of the Courts of the State of Connecticut for all purposes in connection



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with said arbitration and further consent that any process or notice of motion or other
application to the Court or any judge thereof and any paper in connection with such arbitration may
be served in or out of the State of Connecticut by certified or registered mail or personal service
or in such other manner as may be permissible under the rules of the applicable Court or
arbitration tribunal, provided a reasonable time for appearance is allowed. Any provisional remedy
which, but for this Agreement to arbitrate disputes, would be available at law, shall be available
to the parties hereto pending arbitration. Each party shall pay his own attorneys’ fees and other
expenses of such arbitration and related proceedings, except that the costs assessed by the
American Arbitration Association or the said Court shall be shared equally by the parties.



       (f) Entire Agreement. This Agreement cancels and supersedes any and all oral or
written agreements and understandings made between the parties relating to the subject matter
hereof, and contains the entire agreement of the parties with respect to the subject matter hereof.



       (g) Amendments; Termination. This Agreement may not be modified, amended or,
except as herein provided, terminated except by a written agreement signed by all of the parties
hereto.



       (h) Waiver. No waiver of any breach or default hereunder shall be considered valid
unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach or default of the
same or similar nature.



       (i) Assignment. Except as otherwise expressly provided herein, this Agreement shall be
binding upon and inure to the benefit of Compass its successors and assigns, and the Shareholders,
their heirs, personal representatives and assigns; provided, however, that nothing contained herein
shall be construed as granting any Shareholder the right to transfer his Shares except as expressly
provided in this Agreement.



       (j) Headings. The headings contained herein are for the purposes of convenience only and are
not intended to define or limit the contents hereof.



       (k) Further Assurances. Each party hereto shall cooperate and shall take such further
action and shall execute and deliver such further documents as may be reasonably requested by any
other party in order to carry out the provisions and purposes of this
Agreement.



       (l) Use of Pronouns. Whenever the pronouns “he” or “his” are used herein they shall
also be deemed to mean “she” or “hers” whenever applicable. Words in the singular shall be read and
construed as though in the plural and words in the plural shall be read and construed as though in
the singular in all cases where they would so apply.



       (m) Counterparts. This Agreement may be executed in one or more counterparts, all of which
taken together shall be deemed one original.



       (n) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut without regard to the principles of conflicts of law of such
State.



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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.



	 	 	 	 	 
	 	 	COMPASS CS PARTNERS LP
	 

	 	By:
	 	NAVCO Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	[ILLEGIBLE]
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: Power of Attorney
	 
	 	 	 	 
	 

	 	 	 	 
	Penny Piegler

	 	 	 	Janet Kinkaid
	183 Royal Oaks Lane

	 	 	 	1140 Longcreek Pointe
	Lexington, SC 29072

	 	 	 	Alpharetta, GA 30005
	 
	 	 	 	 
	 

	 	 	 	 
	Emily Scott

	 	 	 	Chris Carver
	121 Oak Brook Drive

	 	 	 	612 Wilmuth Ct .
	Chapin, SC 29036

	 	 	 	West Columbia, SC 29170
	 
	 	 	 	 
	 

	 	 	 	 
	Linda McGugan

	 	 	 	Rick Horton
	791 Limestone Road

	 	 	 	6434 Goldbranch Road
	Orangeburg, SC 29118

	 	 	 	Columbia, SC 20206
	 
	 	 	 	 
	 

	 	 	 	/s/ Glen Kilgore
	 

	 	 	 	 
	Janie Ackerman

	 	 	 	Glen Kilgore
	203 Village Lane

	 	 	 	138 Spanish Point Drive
	Columbia, SC 29209

	 	 	 	Beaufort, SC 29902
	:
	 	 	 	 







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