Exhibit 10.21
STOCKHOLDERS AGREEMENT
THIS AGREEMENT is dated as of October 15, 1999, between ▇▇▇▇▇▇ Interactive
Inc., a Delaware corporation (the "Company"), each of the investors listed on
the Schedule of Investors attached hereto (the "Investors"), and the existing
principal shareholders of the Company listed on the Schedule of Principal
Shareholders attached hereto (the "Principal Holders"). The Investors and the
Principal Holders are collectively referred to as the "Stockholders" and
individually as a "Stockholder." Capitalized terms used herein are defined in
Section 6 hereof.
WHEREAS, the Investors are purchasing shares of the Company's Class B
Convertible Preferred Stock pursuant to Investment Agreements between each of
the Investors, respectively, and the Company dated as of the date hereof, and in
the case of Young & Rubicam Inc., dated October 22, 1999 (collectively, the
"Investment Agreements"), and
WHEREAS, the Company and the Stockholders desire to enter into this
Agreement for the purpose, among others, of limiting the manner and terms by
which the Stockholders' Shares may be transferred. The execution and delivery of
this Agreement is a condition to the Investors' purchase of the Company's stock
pursuant to the Investment Agreements.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Representations and Warranties. Each Stockholder represents and
warrants that (i) such Stockholder is (or will be following the issuance of
capital stock pursuant to the Investment Agreements) the record owner of the
number of Stockholder Shares set forth opposite its name on the relevant
Schedule attached hereto and (ii) this Agreement has been duly authorized,
executed and delivered by such Stockholder and constitutes the valid and binding
obligation of such Stockholder, enforceable in accordance with its terms,
subject to limitations imposed by bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization or other laws or judicial decisions or principles of
equity relating to or affecting the enforcement of creditors' rights generally.
No holder of Stockholder Shares shall become party to any agreement which is
inconsistent with, conflicts with, or violates any provision of this Agreement.
2. Restrictions on Transfer of Stockholder Shares.
(a) Transfer of Stockholder Shares. No Principal Holder shall sell,
transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in its Stockholder Shares (a "Transfer"), except pursuant to (i)
the provisions of this Section 2 or (ii) a Public Sale. No Principal Holder
shall consummate any Transfer (other than a Public Sale) until 31 days after the
Company and the Investors have received such Stockholder's Sale Notice (if any),
unless the procedures provided for in Section 2(b) have been
consummated and the parties to the Transfer have been finally determined prior
to the expiration of such 31-day period (the "Election Period").
(b) Participation Rights. At least 30 days prior to any Transfer of
Stockholder Shares (other than a Public Sale or Transfer under Section 2(d)
hereof) the transferring Principal Holder (the "Transferring Principal Holder")
shall deliver a written notice (the "Sale Notice") to the Company and holders of
Underlying Common Stock, and pursuant to the Class A Agreement to the Class A
Holders, specifying in reasonable detail the identity of the prospective
transferees, the number of shares to be transferred, and the terms and
conditions of the Transfer. The holders of Underlying Common Stock, and the
Class A Holders pursuant to the Class A Agreement, may elect to participate in
the contemplated Transfer at the same price per share and on the same terms by
delivering written notice to the Transferring Principal Holder within 30 days
after delivery of the Sale Notice. If any holders of Underlying Common Stock
have elected to participate in such Transfer, the Transferring Principal Holder,
any participating Class A Holders, and such holders of Underlying Common Stock
shall be entitled to sell in the contemplated Transfer, at the same price and on
the same terms, a number of Stockholder Shares equal to the product of (i) the
quotient determined by dividing the percentage of Stockholder Shares owned by
such Person by the aggregate percentage of Stockholder Shares owned by the
Transferring Principal Holder, Class A Holders, and holders of Underlying Common
Stock participating in such sale and (ii) the number of Stockholder Shares to be
sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100 Stockholder
Shares by the Transferring Principal Holder, and if the Transferring
Principal Holder at such time owns 30% of all Stockholder Shares and if
one holder of Underlying Common Stock and one Class B Holder elect to
participate and each owns 10% of all Stockholder Shares, the Transferring
Principal Holder would be entitled to sell 60 shares (30% / 50% x 100
shares) and the holder of Underlying Common Stock would be entitled to
sell 20 shares (10% / 50% x 100 shares).
Each Transferring Principal Holder shall use best efforts to obtain the
agreement of the prospective transferees to the participation of the holders of
Underlying Common Stock in any contemplated Transfer and no Transferring
Principal Holder shall transfer any of its Stockholder Shares to any prospective
transferee if such prospective transferee declines to allow the participation of
the holders of Underlying Common Stock unless the Transferring Principal Holder
agrees to purchase from the holders of Underlying Common Stock the number of
Stockholder Shares each such holder would otherwise be entitled to sell in the
contemplated Transfer pursuant to this Section 2(b).
(c) Permitted Transfers. The restrictions set forth in this Section 2
shall not apply with respect to any Transfer of Stockholder Shares by any
Principal Holder pursuant to applicable laws of descent and distribution or
among such Principal Holder's Family Group (collectively referred to herein as
"Permitted Transferees"); provided that the restrictions contained in this
Section 2 shall continue to be applicable to the Stockholder Shares after any
such Transfer and provided further that the transferees of such Stockholder
Shares shall have agreed in writing to be bound by the provisions of
this Agreement affecting the Stockholder Shares so transferred. For purposes of
this Agreement, "Family Group" means a Principal Holder's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of the
Principal Holder and/or the Principal Holder's spouse and/or descendants,
spouse's descendants, siblings, spouse's siblings, siblings offspring, and
spouse's siblings offspring.
(d) Termination of Restrictions. The restrictions set forth in this
Section 2 shall continue with respect to each Stockholder Share until the
earlier of (i) the date on which such Stockholder Share has been transferred in
a Public Sale, (ii) the date on which such Stockholder Share has been
transferred pursuant to this Section 2 (other than subparagraph 2(c)), (iii) the
consummation of a Sale of the Company or (iv) the consummation of a Qualified
Public Offering.
3. Legend. Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares after such transfer) shall have
stamped thereon or otherwise affixed thereto a legend in substantially the
following form:
"The securities represented by this certificate are subject to a
Stockholders Agreement dated as of October 15, 1999, among the
issuer of such securities (the "Company") and certain of the
Company's stockholders, as amended and modified from time to time. A
copy of such Stockholders Agreement shall be furnished without
charge by the Company to the holder hereof upon written request."
The Company shall stamp or otherwise affix such legend on certificates
evidencing Stockholder Shares outstanding as of the date hereof. The legend set
forth above shall be removed from the certificates evidencing any shares that
are no longer subject to the restrictions hereunder in accordance with Section
2(d) hereof.
4. Transfer. Prior to transferring any Stockholder Shares (other than in a
Public Sale or a Sale of the Company) to any Person, the transferring
Stockholder shall cause the prospective transferee to be bound by this Agreement
and to execute and deliver to the Company and the other Stockholders a
counterpart of this Agreement.
5. Transfers in Violation of Agreement. Any Transfer or attempted Transfer
of any Stockholder Shares in violation of any provision of this Agreement shall
be void, and the Company shall not record such Transfer on its books or treat
any purported transferee of such Stockholder Shares as the owner of such shares
for any purpose.
6. Definitions.
"Class A Agreement" means the Stockholders Agreement among the Company and
the Class A Holders listed on the Schedule attached thereto dated July 7, 1998.
"Class A Holders" means the holders of the Class A Stock.
"Class A Stock" means the Company's Class A Convertible Preferred Stock,
par value $.01 per share.
"Class B Stock" means the Company's Class B Convertible Preferred Stock,
par value $.01 per share.
"Common Stock" means the Company's Common Stock, par value $.001 per
share.
"Company" has the meaning set forth in the preamble.
"Independent Third Party" means any Person who, immediately prior to the
contemplated transaction, does not own in excess of 5% of the Company's Common
Stock on a fully-diluted basis (a "5% Owner"), who is not controlling,
controlled by or under common control with any such 5% Owner and who is not the
spouse or descendent (by birth or adoption) of any such 5% Owner or a trust for
the benefit of such 5% Owner and/or such other Persons.
"Investment Agreements" has the meaning set forth in the preamble.
"Investors" has the meaning set forth in the preamble.
"Permitted Transferee" has the meaning set forth in paragraph 2(c) hereof.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Principal Holders" has the meaning set forth in the preamble.
"Public Sale" means any sale of Stockholder Shares to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act (other than Rule 144(k)).
"Qualified Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of shares of the Company's Common
Stock having an aggregate offering value of at least $25 million.
"Sale of the Company" means the sale of the capital stock of the Company
to an Independent Third Party or group of Independent Third Parties pursuant to
which such party or parties acquire (i) capital stock of the Company possessing
the voting power to elect a majority of the Company's board of directors
(whether by merger, consolidation or sale or transfer of the Company's capital
stock) or (ii) 50% or more of the Company's assets determined on a consolidated
basis.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Stockholder Shares" means (i) any Common Stock or Underlying Common Stock
purchased or otherwise acquired by any Stockholder and (ii) any capital stock or
other equity securities issued or issuable directly or indirectly with respect
to the Common Stock referred to in clause (i) above by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular shares
constituting Stockholder Shares, such shares shall cease to be Stockholder
Shares when they have been (x) effectively registered under the Securities Act
and disposed of in accordance with the registration statement covering them or
(y) sold to the public through a broker, dealer or market maker pursuant to Rule
144 (or any similar provision then in force) under the Securities Act.
"Stockholders" has the meaning set forth in the preamble.
"Subsidiary" means, with respect to any Person. any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.
"Transfer" has the meaning set forth in paragraph 2(a).
"Underlying Common Stock" means (i) the Common Stock issued or issuable
upon conversion of the Class B Stock purchased by the Investors under their
respective Investment Agreement and (ii) any Common Stock issued or issuable
with respect to the securities referred to in clause (i) above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other
reorganization. For purposes of this Agreement, any Person who holds Class B
Stock shall be deemed to be the holder of the Underlying Common Stock obtainable
upon conversion of the Class B Stock in connection with the transfer thereof or
otherwise regardless of any restriction or limitation on the conversion of the
Class B Stock, such Underlying Common Stock shall be deemed to be in existence,
and such Person shall be entitled to exercise the rights of a holder of
Underlying Common Stock hereunder. As to any particular shares of Underlying
Common Stock, such shares shall cease to be Underlying Common Stock when they
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) distributed to the
public through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act (or any similar provision then in force) or (c) repurchased by
the Company.
7. Additional Shareholder. Upon the execution of the signature page
attached hereto, Y&R shall become a party to this Agreement. As of the date of
such execution, Y&R shall be bound by this Agreement and shall hold such Shares
with all rights conferred, and subject to the obligations and restrictions
imposed, hereunder.
8. Amendment and Waiver. Except as otherwise provided herein, this
Agreement may only be amended, waived or modified with the written consent of
the Company and the holders of a majority of all Stockholder Shares and the
holders of a majority of Underlying Common Shares. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
9. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
10. Entire Agreement. Except as otherwise expressly set forth herein, this
Agreement embodies the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
11. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Stockholders and any subsequent
holders of Stockholder Shares and the respective successors and assigns of each
of them, so long as they hold Stockholder Shares.
12. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which taken together shall
constitute one and the same agreement.
13. Remedies. The Company, the Investors and any of the Principal Holders
shall be entitled to enforce their rights under this Agreement specifically, to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in their favor. The parties hereto agree
and acknowledge that money damages would not be an adequate remedy for any
breach of the provisions of this Agreement and that the Company, any Investor
and Principal Holder may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement.
14. Notices. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed first class mail (postage
prepaid) or sent by reputable overnight courier service (charges prepaid) to the
Company at the address set forth below and to any other recipient at the address
indicated on the schedules hereto and to any subsequent holder of Stockholder
Shares subject to this Agreement at such address as indicated by the Company's
records, or at such address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notices shall be deemed to have been given hereunder when delivered personally,
three days after deposit in the U.S. mail and one day after deposit with a
reputable overnight courier service. The Company's address is:
▇▇▇▇▇▇ Interactive Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
15. Governing Law. The corporate law of the State of Delaware shall govern
all issues and questions concerning the relative rights of the Company and its
stockholders. All other issues and questions concerning the construction,
validity, interpretation and enforceability of this Agreement and the exhibits
and schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
16. Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or legal holiday in the
State of New York, the time period shall automatically be extended to the
business day immediately following such Saturday, Sunday or legal holiday.
17. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
▇▇▇▇▇▇ INTERACTIVE INC.
By: /s/ ▇▇▇▇▇▇ ▇. Black
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Its: Chief Executive Officer
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▇▇▇▇▇▇▇ TRUST COMPANY, as Trustee for the
▇▇▇▇▇▇▇ MAP VENTURE CAPITAL FUND III
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Trust Officer
▇▇▇▇▇▇▇ Trust Company
BVCF III, L.P.
By: ▇.▇. ▇▇▇▇ Associates, LLC, its General Partner
By: ▇▇▇▇▇▇▇ Venture Management, LLC, its
Attorney-in-fact
By: By: ▇▇▇▇▇▇▇ Partners, Inc., its Managing
Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Director
VIRGINIA RETIREMENT SYSTEM
By: ▇▇▇▇▇▇▇ Partners, Inc. under Power of Attorney
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Director
▇▇▇▇▇▇▇ Partners, Inc.
/s/ ▇▇▇▇▇▇ ▇. Black
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▇▇▇▇▇▇ ▇. Black
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Excite, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Executive Vice President
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Young & Rubicam Inc.
By: /s/ ▇▇▇▇▇▇ Blondy
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Title: Senior Vice President
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▇▇▇▇▇▇▇ Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
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SEQUEL LIMITED PARTNERSHIP II
By: Sequel Venture Partners II, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. Washing
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Its: Manager
SEQUEL ENTREPRENEUR'S FUND II, LP
By: Sequel Venture Partners II, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. Washing
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Its: Manager
SCHEDULE OF INVESTORS
Name and Address Number of Stockholder Shares
---------------- ----------------------------
Excite, Inc. 30,000 shares of Class A Stock
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Corporation 10,000 shares of Class A Stock
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Sequel Limited Partnership II 48,374 shares of Class A Stock
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Sequel Entrepreneur's Fund II, LP 1,626 Shares of Class A Stock
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Young & Rubicam Inc. 110,000 shares of Class A Stock
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE OF PRINCIPAL HOLDERS
Name and Address Number of Stockholder Shares
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▇▇▇▇▇▇ ▇. Black 2,923,900 shares of Common Stock
▇▇▇▇▇▇ Black International, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3,116,260 shares of Common Stock
▇▇▇▇▇▇ Black International, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,039,332 shares of Common Stock
▇▇▇▇▇▇ Black International, Ltd. 1,638,000 options for shares of Common Stock
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BVCF III, L.P. 17,195.5968 shares of Class A Stock
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ MAP Venture 2,804.5804 shares of Class A Stock
Capital Fund III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Virginia Retirement System 126,999.8206 shares of Class A Stock