Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Form S-1 Amendment 130 888K
2: EX-1.1 Purchase Agreement 24 113K
3: EX-1.2 Form of Lock-Up Agreement 2 13K
4: EX-3.1 Amended and Restated Certificate of Incorporation 3 17K
5: EX-3.2 By-Laws of the Company 10 39K
6: EX-5.1 Opinion re: Legality 2 12K
7: EX-10.1 1998 Stock Incentive Plan 29 112K
10: EX-10.16 Globalcenter Master Service Agreement 8 34K
11: EX-10.17 Operating Lease Agreement 5 19K
12: EX-10.18 Operating Lease Agreement 12± 52K
13: EX-10.19 Pledge and Security Agreement 9 45K
14: EX-10.20 Senior Convertible Note With Warrants Purchase 19 66K
15: EX-10.21 Amended and Restated Stockholder's Agreement 19 72K
8: EX-10.3.2 Material Contract 4 16K
9: EX-10.6 Purchase Agreement Between K2 Design & 24/7 Media 18 66K
16: EX-11.1 Computation of Loss Per Share 1 10K
17: EX-23.1 Accountants' Consent and Report on Schedule 2 11K
18: EX-23.2 Consent of Arthur Andersen LLP 1 8K
19: EX-23.3 Consent of Arthur Andersen LLP 1 8K
20: EX-23.5 Consent of Media Metrix 1 8K
21: EX-23.6 Consent of Jupiter Communications 1 8K
22: EX-23.7 Consent of Idc 1 8K
23: EX-23.8 Consent of Network Solutions 1 8K
24: EX-23.9 Consent of Direct Marketing Association 1 8K
EX-10.21 — Amended and Restated Stockholder’s Agreement
| EX-10.21 | 1st Page of 19 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
|---|
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
This Amended and Restated Stockholders' Agreement (this "Agreement")
is made and entered into as of this 9th day of April, 1998, by and among 24/7
Media, Inc., a Delaware corporation (the "Company"), The Travelers Insurance
Company, a Connecticut corporation ("Travelers"), Prospect Street NYC Discovery
Fund, L.P., a New York limited partnership ("Prospect I"), Prospect Street NYC
Co-Investment Fund, L.P., a New York limited partnership ("Prospect II") Big
Flower Digital Services, Inc., a Delaware corporation ("Big Flower") (Travelers,
Prospect I, Prospect II, and Big Flower collectively, together with their
respective affiliates, assigns or permitted transferees, the "Old Investors"),
David Banks ("Banks"), Trinity Ventures V, L.P. ("Trinity I"), Trinity V
Side-By-Side Fund, L.P. ("Trinity II"), Zero Stage Capital V Limited Partnership
("Zero"), F&W Investments 1996 ("FW") (Banks, Trinity I, Trinity II, Zero, and
FW collectively, together with their respective affiliates, assigns or permitted
transferees, the "New Investors", and, together with the Old Investors, the
"Investors") and those persons listed on Schedules 1, 2, 3, and 4 hereto.
WHEREAS, pursuant to a Securities Purchase Agreement dated February
25, 1998, the Old Investors acquired from Interactive Imaginations, Inc. (the
"Former Parent"), a New York corporation, shares of its Series B Convertible
Voting Preferred Shares, par value $.01 per share ("Series B Shares") and Class
A and Class B Warrants to purchase Common Shares, par value $.01 per share
("Common Shares") of the Former Parent (the "Purchase Agreement"); and
WHEREAS, in connection with the Purchase Agreement, the Former
Parent, the Old Investors and those persons listed on Schedules 1, 2, and 3
hereto entered into a Shareholders' Agreement dated February 25, 1998 (the "Old
Agreement"); and
WHEREAS, Former Parent has been merged with and into the Company,
and the Company has adopted the Old Agreement, the Common Shares have been
converted into Common Stock, par value $.01 per share ("Common Stock"), of the
Company, and the Series B Shares have been exchanged for Series A Convertible
Preferred Stock, par value $.01 per share ("Series A Preferred"), of the
Company, and the Class A, Class B and Class C Warrants of the Former Parent have
become Class A, Class B and Class C Warrants (collectively, "Warrants") to
purchase Common Stock; and
WHEREAS, concurrently with this Agreement, those persons listed on
Schedule 4 hereto are entering into a Merger Agreement (the "Merger Agreement")
of even date herewith with the Company whereby they are acquiring from the
Company shares of its Common Stock, Series A Stock and Class A, Class B and
Class C Warrants to purchase Common Stock; and
WHEREAS, those persons listed on Schedules 1, 2 and 3 hereto
(collectively, the "Existing Stockholders") are the legal and beneficial owners
of outstanding Common Stock, Series A Preferred, and Warrants; and
WHEREAS, those persons listed on Schedule 5 hereto (collectively,
the "Executives") are executives of, and key consultants to, the Company and/or
its subsidiary, Intelligent Interactions, Inc.; and
WHEREAS, the Existing Stockholders, the Investors, the Executives,
and the Company desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed as follows:
Section 1. Definitions
As used herein, the following terms, unless the context clearly
indicates otherwise, shall have the following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Affiliate" shall mean with respect to any Person, any other Person
which directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with, such Person. The term "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Business Days" shall mean any day which is not a Saturday, Sunday
or day on which banks are authorized by law to be closed in the State of New
York.
"Common Stock" shall mean the Company's Common Stock, par value $.01
per share.
"Diluted Basis" shall mean with respect to the calculation of the
number of shares of Common Stock, (i) all Common Stock issued and outstanding at
the time of the determination and (ii) all Common Stock issuable upon the
exercise, conversion or exchange of any security of the Company which by its
terms, is or may be exercisable, convertible or exchangeable for or into Common
Stock.
"Permitted Transfer" shall mean a transfer to any of the following
Persons, in each case who agrees in writing to be bound by the terms of this
Agreement: (i) as to any Stockholder who is a natural person, the spouse or any
lineal descendant (including by adoption) of such Stockholder, or any trust of
which such Stockholder is the trustee and which is established solely
2
for the benefit of any of the foregoing individuals and whose terms are not
inconsistent with the terms of this Agreement or any partnership, the general
partner(s) and limited partner(s) (if any) of which are one or more persons
identified in this clause (i); (ii) as to any Investor, any director, officer,
employee, representative, general partner, limited partner, associate or
Affiliate of such Investor; any director, manager, officer, employee,
representative, Stockholder, member, general partner or limited partner of any
such Affiliate; and any trust, a majority in interest of the beneficiaries of
which, or corporation, limited liability company or partnership, a majority in
interest of the Stockholders, members or limited partners of which, or
partnership or limited liability company, the managing general partner or
manager of which, are (or is) one or more of the persons identified in this
clause (ii), the spouse of any such person and/or such person's lineal
descendants (including by adoption); or any other person in order to avoid a
regulatory problem; and (iii) as to any third party or buyer that becomes a
Stockholder and that is not a natural Person, any Affiliate of such Stockholder.
"Person" shall mean any individual, partnership, corporation,
unincorporated organization or association, limited liability company, trust or
other entity.
"Qualified Public Offering" shall mean a sale of Common Stock by the
Company that satisfies each of the following conditions: (i) the sale of the
Common Stock is effected in an underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
other than a registration relating solely to a transaction under Rule 145 under
such Act (or any successor thereto) or to an employee benefit plan of the
Company; (ii) such Common Stock upon issuance is listed on the New York Stock
Exchange or included for trading in the Nasdaq National Market System; (iii) the
offering price to the public is not less than $2.00 per share of Common Stock,
adjusted for stock splits, stock dividends, other stock combinations or other
like events; and (iv) the sale of Common Stock results in at least $20,000,000
of gross proceeds to the Company, or, when considered together with all previous
underwritten public offerings of the Company satisfying clauses (i), (ii) and
(iii) above, at least $30,000,000 of aggregate gross proceeds to the Company.
"Security, Securities" shall have the meanings ascribed thereto in
Section 2(l) of the Act.
"Series A Stock" shall mean the Series A Convertible Voting
Preferred Stock, par value $.01 per share, of the Company.
"Stockholder" or "Stockholders" shall mean collectively the
Investors, the Existing Stockholders and the Executives.
3
Section 2. Governance
2.1 Board Nominees.
(a) The parties hereto shall take all such actions, including,
without limitation, calling, or causing the Company and the appropriate officers
and directors of the Company to call, Stockholder meetings and to vote all
shares of capital stock of the Company owned or controlled by such party, and to
take all actions by written consent in lieu of any such meeting, as shall be
necessary to ensure that (i) the Board of Directors (the "Board") of the Company
shall consist of eight members, and (ii) that there shall be designated as
members of the Board three individuals elected by the Old Investors, one of whom
shall be designated by Travelers, one of whom shall be designated by Prospect I,
and one of whom shall be designated by Big Flower.
(b) The holders of Series A Preferred and the holders of the
Common Stock shall be entitled to elect five members of the Company's board of
directors. The Stockholders listed on Schedule 1 hereto by majority vote shall
have the right to nominate one member of the Board. The Stockholders listed on
Schedule 2 hereto by majority vote shall have the right to nominate one member
of the Board. The Stockholders listed on Schedule 3 hereto by majority vote
shall have the right to nominate one member of the Board. The Stockholders
listed on Schedule 4 hereto by majority vote shall have the right to nominate
one member of the Board. The parties hereto shall take all such actions as are
described in Section 2.1(a) above as shall be necessary to ensure that an
individual designated by the Stockholders listed on Schedule 1 hereto is elected
as a member of the Board. The parties hereto shall take all such actions as are
described in Section 2.1(a) above as shall be necessary to ensure that an
individual designated by the Stockholders listed on Schedule 2 hereto is elected
as a member of the Board. The parties hereto shall take all such actions as are
described in Section 2.1(a) above as shall be necessary to ensure that an
individual designated by the Stockholders listed on Schedule 3 hereto is elected
as a member of the Board. The parties hereto shall take all such actions as are
described in Section 2.1(a) above as shall be necessary to ensure that an
individual designated by the Stockholders listed on Schedule 4 hereto is elected
as a member of the Board. Immediately following the closing of the Merger
Agreement, the directors of the Company shall be as follows: Jack Rivkin, the
Travelers designee; Kristopher Wood, the Big Flower designee; David Chaney, the
Prospect I designee; David J. Moore, the Schedule 1 Stockholder designee;
Michael P. Paolucci, the Schedule 2 Stockholder designee; Jacob I. Friesel, the
Schedule 3 Stockholder designee; Yale R. Brown, the Schedule 4 Stockholder
designee; and Dr. Charles Stryker.
(c) If a director is designated and elected pursuant to Section
2.1(a) and, during such director's term as a director, the party or parties
designating such director requests that such director be removed by written
notice to all other Stockholders, each Stockholder hereby agrees to vote all
Series A Stock and Common Stock owned or held by it, or to take action by
written consent, to effect such request. Each Stockholder will not otherwise
vote in favor of the removal of such director unless such removal shall be for
cause. For the purposes of this Section 2.1, "cause" shall mean the commission
by a director of a felony, the willful commission by a director of a dishonest
act affecting the Company or any subsidiary thereof, or the commission by a
4
director of an act of gross negligence in connection with the director's duties
to the Company which causes a financial loss for the Company or any subsidiary.
(d) Subject to Section 706 of the New York Business Corporation
Law, any director who shall have been elected by the Stockholders pursuant to
Section 2.1(b) above may be removed during the aforesaid term of office, either
for or without cause, by, and only by, the affirmative vote of the holders of
voting securities of the Company given at a meeting of Stockholders duly called
or by an action by written consent for that purpose.
2.2 Replacement Directors.
In the event that any director (a "Withdrawing Director") nominated
in the manner set forth in Section 2.1 hereof is unable to serve, or once having
commenced to serve, is removed or withdraws from the Board of Directors, such
Withdrawing Director's replacement (the "Substitute Director") will be nominated
and elected in the same manner in which such Withdrawing Director was nominated
and elected.
2.3 Board Meetings. The parties hereto shall take such action as
is necessary to cause the Company to hold meetings of the Board at least once
every three months and will not hold any meetings of the Board on fewer than ten
(10) days prior written notice unless all directors are present at such meeting
or such notice is waived in writing by any member(s) of the Board not present at
such meeting on or prior to the date of such meeting. If at any time an Old
Investor chooses not to nominate a director, the Company shall permit such Old
Investor to send a representative (without voting rights) to each meeting of the
Board and all committees of such Board, except in emergencies, in which case
each such holder shall be provided with (i) notice of such meeting at the same
time that notice is provided to all directors of the Company, and (ii) all
materials provided to directors of the Company. Any such Old Investor exercising
its rights under this Section, and its representatives, shall maintain the
confidentiality of, and act in a fiduciary manner with respect to, all
financial, confidential and proprietary information of the Company acquired in
exercising such rights. For so long as he is an employee of the Company and a
holder of at least 2,000,000 shares of Common Stock (adjusted for stock splits,
dividends, recapitalizations, and similar events), Garret P. Cecchini shall be
permitted to attend (without voting rights) each meeting of the Board of
Directors of the Company, except in emergencies, and shall be provided with
notice of such meetings at the same time that notice is provided to all
directors of the Company. Furthermore, for so long as Prospect I shall have a
right to designate a director, Prospect I shall also have the right to designate
a person who shall be permitted to attend (without voting rights) each meeting
of the Board of Directors of the Company, and shall be provided with notice of
such meetings and copies of all materials provided to all directors of the
Company at the same time that notice or such materials, as applicable, is
provided to all directors of the Company. In addition, for so long as the
persons on Schedule 4 hereto shall have a right to designate a director, the New
Investors shall also have the right to designate a person (or two persons who
shall be permitted to attend alternating meetings) who shall be permitted to
attend (without voting rights) each meeting of the Board of Directors of the
Company, and shall be provided with notice of such meetings and copies of all
materials provided to all directors of
5
the Company at the same time that notice or such materials, as applicable, is
provided to all directors of the Company
2.4 Proxy. If any Stockholder shall refuse to vote his or its
shares as provided in this Section 2 at any meeting of Stockholders of the
Company, or shall refuse to give its written consent in lieu of a meeting as
provided in this Section 2, thereupon, without further action by such
Stockholder, the Chief Executive Officer of the Company shall be, and hereby is,
irrevocably constituted the attorney-in-fact and proxy of such Stockholder for
the purpose of voting, and shall vote such shares at such meeting as provided in
this Section 2 or give such consent as provided in this Section 2, as the case
may be.
2.5 No Other Proxies. Each Stockholder covenants and agrees that,
except as a result of Permitted Transfers, such Stockholder will have sole
voting power with respect to such Stockholder's Common Stock or Series A Stock
and will not grant any proxy with respect to such Common Stock or Series A
Stock, enter into any voting trust or other voting agreement or arrangement with
respect to such Common Stock or Series A Stock, or grant any other rights to
vote such Common Stock or Series A Stock other than this Agreement.
Section 3. Transfers Of Stock
3.1 First Offer Rights.
(a) Except for (i) Permitted Transfers or (ii) sales to the public
in a registered public offering of the Common Stock pursuant to the Act, a
Stockholder may sell or otherwise transfer Common Stock, Series A Stock and
Warrants only in compliance with the provisions of this Section 3.1.
(b) A Stockholder desiring to sell or otherwise transfer Common
Stock, Series A Stock or Warrants in compliance with this Section 3.1 (a
"Selling Stockholder") shall first deliver written notice to the Company, the
Investors and the Executives (hereinafter referred to as the "Notice of Offer")
which Notice of Offer shall specify (i) the number of shares of Common Stock,
Series A Stock or Warrants owned by the Selling Stockholder which such Selling
Stockholder wishes to sell (the "Offered Shares"); (ii) the proposed cash
purchase price per share for the Offered Shares (the "Offer Price"); and (iii)
all other terms and conditions of the offer. The Notice of Offer shall
constitute an irrevocable offer by the Selling Stockholder to sell to the
Investors and the Executives (the "Remaining Stockholders") and the Company the
Offered Shares at the Offer Price, as hereinafter provided. Within five business
days of its receipt of the Notice of Offer, the Company shall send a copy of
such Notice to each of the Remaining Stockholders.
(c) Within 30 days following the Company's receipt of the Notice
of Offer, (i) each Remaining Stockholder shall notify the Company and the
Selling Stockholder as to the number of Offered Shares, if any, it is electing
to purchase (such notification is hereinafter referred to as the "Stockholder's
Acceptance" and such Stockholder electing to purchase Offered Shares, an
"Accepting Stockholder") and (ii) the Company shall notify the Selling
Stockholder as to the
6
number of Offered Shares, if any, that it is electing to purchase (such
notification is hereinafter referred to as the "Company's Acceptance" and,
together with the Stockholder's Acceptance, as an "Acceptance"); provided,
however, that the Company shall not be entitled to purchase Offered Shares (and
the Company's Acceptance shall be appropriately limited) if, and to the extent
that, such purchase would be prohibited by the Certificate of Incorporation or
state law. If any Remaining Stockholder does not provide a Stockholder's
Acceptance to the Company and the Selling Stockholder, or if the Company does
not deliver a Company Acceptance to the Selling Stockholder, within such period,
such Remaining Stockholder or the Company, as applicable, shall be deemed to
have declined to purchase any of the Offered Shares. A Stockholder's Acceptance
and the Company's Acceptance each shall be deemed to be an irrevocable
commitment to purchase from the Selling Stockholder the number of Offered Shares
which the Stockholder or the Company has elected to purchase pursuant to its
Acceptance, subject to allocation of the Offered Shares among Stockholders
accepting the Notice of Offer, and the Company if it has accepted the Notice of
Offer, as hereinafter provided. The election by the Company to purchase Offered
Shares shall be made on behalf of the Company by a majority of those members of
the Board of Directors of the Company who have not been designated by, and are
not affiliated or associated with, the Selling Stockholder.
(d) If the Remaining Stockholders and the Company have elected to
purchase a number of Offered Shares that in the aggregate exceeds the total
number of Offered Shares, the Offered Shares shall be allocated among the
Accepting Stockholders, if any, and the Company, (i) first, entirely among the
Investors who are Accepting Stockholders, on a pro rata basis in proportion to
the number of shares of Common Stock held by each Investor on a Diluted Basis,
if the Investors have elected to purchase a number of Offered Shares that in the
aggregate exceeds the total number of Offered Shares; (ii) second, among the
Executives who are Accepting Stockholders on a pro rata basis; and (iii) third,
to the Company (subject to the limitations on purchases by the Company set forth
in Section 3.1(c)).
(e) This Section 3.1 shall be construed and given effect in such
manner that no Stockholder nor the Company shall be required or entitled to
purchase a number of Offered Shares greater than the number set forth in its
Stockholder Acceptance or Company Acceptance, as applicable. The Company shall
promptly notify each Accepting Stockholder, if any, of the number of shares
allocated to it, and each such Accepting Stockholder shall be obligated to
purchase at the Offer Price such shares, and the Company shall be obligated to
purchase at the Offer Price the number of shares allocated to it in accordance
with the foregoing provisions, at a closing as set forth in Section 3.1(g).
(f) If the Accepting Stockholders and the Company do not elect to
purchase all of the Offered Shares available for purchase under this Section
3.1, the Selling Stockholder (a) shall be under no obligation to sell any of the
Offered Shares to any other Stockholder or the Company, unless the Selling
Stockholder so elects, and (b) may, within a period of ninety (90) days from the
date of the Notice of Offer, subject to the provisions of Section 3.2 if
applicable, and subject to the approval of the Board of Directors of the Company
as described below, sell the Offered Shares to one or more third parties (each a
"Third Party Transferee") for cash at a price per share not less
7
than the Offer Price, and on such other terms and conditions as are no more
favorable to the proposed Third Party Transferee than those specified in the
Notice of Offer. Upon any such sale, the Third Party Transferee of such Offered
Shares shall execute an agreement in form and substance reasonably satisfactory
to the Company and the Stockholders pursuant to which such Third Party
Transferee agrees that the Offered Shares it acquired from the Selling
Stockholder are subject to the provisions of this Agreement. Any Third Party
Transferee to whom Offered Shares are transferred pursuant to and in compliance
with this Section 3.1(f) shall, with respect to such shares upon consummation of
such transfer, be deemed a Stockholder. If the Selling Stockholder does not
complete the sale of the Offered Shares within such ninety (90) day period, the
provisions of this Section 3.1 shall again apply, and no sale of such Offered
Shares by the Selling Stockholder shall be made otherwise than in accordance
with the terms of this Agreement.
(g) The closing of purchases of Offered Shares by the Company
and/or other Stockholders pursuant to this Section 3.1 shall take place no later
than 60 days after the date of the Notice of Offer, at 10:00 A.M. local time at
the principal offices of the Company, or at such other date, time or place as
the parties to the sale may agree. At least five (5) business days prior to such
closing, the Company shall notify the Selling Stockholder(s) in writing of the
names of purchasers and the portion of the Offered Shares to be purchased by
each. At such closing, the Selling Stockholder(s) shall sell, transfer and
deliver to each purchaser full right, title and interest in and to the Offered
Shares so purchased by such purchaser, free and clear of all liens, security
interests, adverse claims or restrictions of any kind and nature (except as
otherwise set forth in this Agreement), and shall deliver to each purchaser a
certificate or certificates representing the Offered Shares sold to such
purchaser, in each case duly endorsed for transfer or accompanied by appropriate
stock transfer powers duly endorsed with signatures guaranteed by a commercial
bank, trust company or registered broker dealer and any other documents
necessary for transfer. Simultaneously with delivery of such certificates, each
purchaser of the Offered Shares shall deliver to the Selling Stockholder(s), by
wire transfer of immediately available funds to such bank account as the Selling
Stockholder(s) shall designate, a cash amount equal to the product of the Offer
Price and the number of Offered Shares being acquired by such purchaser, in full
payment of the purchase price of the Offered Shares purchased.
3.2 Right to Join in Sale.
(a) If any one or more Stockholders (the "Selling Stockholders")
proposes to transfer Common Stock, Series A Stock or Warrants, as the case may
be (a "Transaction"), including, without limitation, pursuant to Section 3.1,
then the Selling Stockholders shall refrain from effecting a Transaction unless,
prior to the consummation thereof, each Executive (in the case of transfers by
Existing Stockholders) or each Investor (in the case of transfers by Investors
or Existing Stockholders) other than the Selling Stockholders, shall have been
afforded the opportunity to join in such transfer on a pro rata basis, as
hereinafter provided. Any purported transfer subject to this Section 3.2 not
made in compliance with this Section 3.2 shall be void and shall not be
consummated upon the books and records of the Company.
8
(b) Prior to the consummation of any Transaction, the Selling
Stockholders shall cause each person or persons that propose to acquire Common
Stock, Series A Stock or Warrants in the Transaction (the "Proposed Purchasers")
to offer (the "Purchase Offer") in writing to each Executive and each Investor
(in the case of transfers by Existing Stockholders) or each Investor (in the
case of transfers by Investors) to purchase that number of shares of Common
Stock, Series A Stock or Warrants from each such other Stockholder that
constitutes the same percentage of the aggregate Common Stock, Series A Stock,
or Warrants held by such other Stockholder as the percentage determined by
dividing the number of shares of Common Stock, Series A Stock, or Warrants to be
purchased from the Selling Stockholders by the aggregate number of shares of
Common Stock, Series A Stock, or Warrants held by the Selling Stockholders, at
the same price per share (the "Joining Price"), and on such other terms and
conditions (the "Joining Terms"), as the Proposed Purchaser has offered to
purchase Common Stock, Series A Stock, or Warrants, as the case may be, to be
sold by the Selling Stockholders. Notwithstanding the foregoing, if the Proposed
Purchasers are acquiring Common Stock, Series A Stock or Warrants in a series of
related transactions, or in a single transaction or series of related
transactions from multiple Selling Stockholders, (i) the Joining Price shall be
the highest of the prices offered by any Proposed Purchaser to any Selling
Stockholder in any one of such transactions, and (ii) the Joining Terms shall be
those terms offered by any Proposed Purchaser to any Selling Stockholder in any
one of such transactions which are most favorable to the offeree. Each Executive
or Investor shall have at least 30 days from the receipt of the Purchase Offer
in which to accept the Purchase Offer and, to the extent any such Stockholder
accepts such Purchase Offer in accordance with the terms hereof, the number of
shares of Common Stock, Series A Stock or Warrants, as the case may be, to be
sold by the Selling Stockholders shall be reduced.
(c) The provisions of this Section 3.2 shall not apply to (w) a
sale of shares in a public offering, (x) any redemption of shares of Preferred
Stock by the Company in accordance with the Certificate of Incorporation or (y)
Permitted Transfer. In the event that a transfer subject to this Section 3.4 is
proposed to be made to a Person other than a Stockholder or the Company, the
Selling Stockholders shall notify such Person that the transfer is subject to
this Agreement and shall ensure that no transfer is consummated without
compliance with this Section 3.2.
3.3 Bring Along Rights. Anything in this Agreement to the contrary
notwithstanding, if any Stockholder or group of Stockholders proposes, in a
single transaction, to sell, dispose of or otherwise transfer for consideration
all of the Stockholders, then outstanding Securities of the Company (other than
a transfer to a Stockholder or Permitted Transferee), then such selling
Stockholders may require each of the other Stockholders to sell all of the
Securities owned by such other Stockholders for the same consideration, at the
same price per Common Share and on terms and conditions no less favorable to the
other Stockholders than those obtained by such selling Stockholder(s); provided,
however, that no Stockholder shall be required under this Section 3.3 to sell
any Securities owned by it unless such transaction is approved by (i)
Stockholders owning at least 50% of the Common Stock (on a Diluted Basis) then
outstanding and (ii) each of the Investors.
3.4 Transfer of Stock.
9
(a) Each Stockholder agrees not to transfer any of his or its
shares of capital stock of the Company (including warrants) (i) except in
accordance with the terms of this Agreement, (ii) unless and until the
transferee agrees in writing to be bound by the terms and conditions of this
Agreement and executes a counterpart of this Agreement, and (iii) unless such
Stockholder has complied with all applicable laws in connection with such
transfer.
(b) Each Executive agrees not to transfer any of his shares of
capital stock of the Company (including warrants) until the consummation of a
Qualified Public Offering, except (i) in connection with a Permitted Transfer,
or (ii) with the consent of each of the Investors.
(c) Any purported disposition in violation of any provision of
this Agreement will be void and the Company shall not transfer upon its books
and records any Common Stock, Series A Stock or Warrants purported to be
transferred to any Person in violation of this Agreement. If any Stockholder
acquires additional Securities of the Company on and after the date of this
Agreement, such Securities so acquired shall be subject to all of the terms and
provisions of this Agreement.
3.5 Regulatory Compliance Cooperation. (a) Before the Company
redeems, purchases or otherwise acquires, directly or indirectly, or converts or
takes any action with respect to the voting rights of, any shares of any class
of its capital stock or any securities convertible, exchangeable or exercisable
for or into any shares of any class of its capital stock, the Company will give
written notice of such pending action to Prospect I. Upon the written request of
any Stockholders of Prospect I made within twenty (20) days after its receipt of
any such notice, stating that after giving effect to such action such
Stockholders of Prospect I would have a Regulatory Problem (as defined below),
the Company will defer taking such action for such period (not to extend beyond
forty-five (45) days after such Stockholders of Prospect I's receipt of the
Company's original notice) as such Stockholders of Prospect I requests to permit
it and its Affiliates to reduce the quantity of securities owned by them in
order to avoid the Regulatory Problem. In the event the Company or any
Stockholders of Prospect I is precluded from taking any action under this
Agreement within any allotted period of time as a consequence of this Section,
such period of time shall be extended by the number of days during which the
Company or such Stockholders of Prospect I is precluded from acting.
(b) In the event that Prospect I determines that it has a
Regulatory Problem, the Company agrees to take all such actions as are
reasonably requested by Prospect I in order to (i) effectuate and facilitate any
transfer by the Stockholders of Prospect I or any of Prospect I's Affiliates of
any securities of the Company then held by the Stockholders of Prospect I or
such Affiliates to any Person designated by Prospect I, (ii) permit the
Stockholders of Prospect I (or any of their affiliates) to exchange all or a
portion of any voting security then held by them on a share-for-share basis for
shares of a nonvoting security of the Company, which nonvoting security shall be
identical in all respects to the voting security exchanged for it, except that
it shall be nonvoting and shall be convertible into a voting security on such
terms as are requested by the Prospect I Stockholders in light of regulatory
considerations then prevailing, and (iii) continue and preserve the respective
allocation of the voting interests with respect to the Company provided for
herein,
10
and with respect to Prospect I's and its Affiliates' ownership of the Company's
securities. Such actions may include, but shall not necessarily be limited to,
entering into such additional agreements, adopting such amendments to the
Certificate of Incorporation and by-laws of the Company and taking such
additional actions as are reasonably requested by Prospect I in order to
effectuate the intent of the foregoing.
(c) In addition, the Company will not be a party to any merger,
consolidation, recapitalization or other action pursuant to which Prospect I or
any of it Affiliates would be required to take any voting securities, or any
securities convertible, exchangeable or exercisable for or into voting
securities, which might reasonably be expected to cause Prospect I to have a
Regulatory Problem. For purposes of this Agreement, "Regulatory Problem" means
any set of facts or circumstances wherein it has been asserted by any
governmental agency or other authority or Prospect I reasonably believes that,
such Person and such Person's Affiliates own, control or have power over a
greater quantity of securities of any kind issued by the Company than are
permitted under any requirement of any governmental authority.
Section 4. Additional Investors.
As a condition precedent to the future sale of any Securities of the
Company to any Person who is not then a party to this Agreement, such Person
shall execute a counterpart of this Agreement and thereafter shall be deemed to
be an "Existing Stockholder" for all purposes of this Agreement.
Section 5. Termination of Rights.
This Agreement shall expire upon the closing of a Qualified Public
Offering, unless sooner terminated in accordance with Section 10.
Section 6. Legends.
The Company and the Stockholders agree that certificates evidencing
Common Stock, Series A Stock or Warrants held by any Stockholder will bear the
following legends, in addition to those set forth in Section 3.7 of the Purchase
Agreement and in the Merger Agreement:
"TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY AN AGREEMENT, DATED APRIL 9, 1998, A COPY OF WHICH IS
ON FILE AT THE OFFICE OF THE CORPORATION. ANY PURPORTED TRANSFER IN
VIOLATION OF THIS AGREEMENT IS VOID AND WILL NOT BE RECOGNIZED BY
THE CORPORATION OR ITS TRANSFER AGENT."
11
The Common Stock, Series A Stock or Warrants shall not be required
to bear such legends after such time as they are no longer subject to this
Agreement. Whenever, pursuant to the preceding sentence, any certificate for any
of the Securities is no longer required to bear the foregoing legend, the
Company may, and if requested by the holder thereof, shall, issue to the holder,
at the Company's expense, a new certificate not bearing the foregoing legends.
Section 7. Notices.
All notices, instructions or other communications required or
permitted to be given hereunder or necessary in connection herewith shall be in
writing and shall be deemed to have been duly delivered upon the delivery
thereof, if delivered personally, upon the transmission thereof, if sent by
facsimile transmission, on the second Business Day after delivery to an air
courier company for express delivery, or on the seventh Business Day after
mailing, if mailed, postage prepaid, registered or certified mail, to the
Company and to each Stockholder at such address as the Company may have
furnished to each Stockholder in writing or as the Stockholders may have
furnished to the Company in writing.
Section 8. Assignment.
This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
assigns. The rights and obligations arising from this Agreement shall be
transferred in connection with the transfer by a Stockholder to any Person of
any Common Stock, Series A Stock or Warrants in compliance with this Agreement,
other than in a registered public offering, and any such Person shall
conclusively be deemed to have agreed to be bound by this Agreement.
Notwithstanding the foregoing, if any Existing Stockholder shall transfer Common
Stock other than as a Permitted Transfer, the right to designate a director
under the provisions of Section 2 hereof shall not be transferable.
Section 9. Specific Performance.
The parties hereby declare that it is impossible to measure in money
the damages which will accrue to a party hereto by reason of a failure to
perform any of the obligations under this Agreement. Therefore, all parties
hereto shall have the right to specific performance of the obligations of the
other parties under this Agreement, and if any party hereto shall institute any
action or proceeding to enforce the provisions hereof, any person (including the
Company) against whom such action or proceeding is brought hereby waives the
claim or defense therein that such party has or have an adequate remedy at law,
and such person shall not urge in any such action or proceeding the claim or
defense that such remedy at law exists.
Section 10. Modification.
This Agreement contains the entire agreement between the parties
hereto with respect to the transactions contemplated herein and shall not be
modified or amended or terminated
12
except by an instrument in writing signed by or on behalf of each of the
Investors and at least a majority in interest of the Existing Stockholders.
Section 11. Prior Agreements.
This Agreement supersedes any and all previously executed
Stockholders' agreements (including the Old Agreement), letters of intent or
other communications among the parties hereto relating to the subject matter
hereof; but shall not be deemed to supersede any terms or provisions of the
Purchase Agreement or the Merger Agreement or the documents entered into in
connection therewith relating to the rights or obligations of the Investors.
Section 12. Governing Law.
The General Corporation Law of the state of Delaware shall govern
all issues concerning the relative rights of the Company and its Stockholders.
All other questions concerning this Agreement shall be governed by, and
construed and enforced in accordance with, the domestic laws of the State of New
York without giving effect to any choice of law or conflict of law provision or
rule (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.
Section 13. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 14. Section Headings.
The Section headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provisions hereof.
References to numbered Sections and subsections refer to Sections and
subsections of this Agreement.
Section 15. Remedies.
In the event of a breach by any party to this Agreement of its
obligations under this Agreement, any party injured by such breach, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages and costs (including reasonable attorneys' fees), will be entitled to
specific performance of its rights under this Agreement. The parties agree that
the provisions of this Agreement shall be specifically enforceable, it being
agreed by the parties that the remedy at law, including monetary damages, for
breach of any such provision will be inadequate compensation for any loss and
that any defense in any action for specific performance that a remedy at law
would be adequate is waived.
13
Section 16. Recapitalizations, Exchanges, etc.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Common Stock or Series A Stock, to any and all
shares of the Company capital stock or any successor or assign of the Company
(whether by merger, consolidation, sale of assets, or otherwise, including
shares issued by a parent corporation in connection with a triangular merger)
which may be issued in respect of, in exchange for, or in substitution of,
Common Stock or Series A Stock, and shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, reclassifications and the
like occurring after the date hereof.
Section 17. Severability.
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 prohibited or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
Section 18. Further Assurances.
Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
14
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
24/7 MEDIA, INC.
By:
----------------------------------------------
David J. Moore
Chief Executive Officer
The Travelers Insurance Company
By:
----------------------------------------------
Name:
Title:
Prospect Street NYC Discovery Fund, L.P.
By: Prospect Street Discovery Fund, Inc.
its General Partner
By:
----------------------------------------------
Name:
Title:
Prospect Street NYC Co-Investment Fund, L.P.
By: Prospect Street Co-Investment Fund, LLC,
its General Partner
By:
----------------------------------------------
Name:
Title:
Big Flower Digital Services, Inc.
By:
----------------------------------------------
Name:
Title:
15
------------------------------------ ------------------------------------
David J. Moore Scott E. Cohen
-----------------------------------
Mark A. Burchill
PETRY MEDIA CORP.
By:---------------------------------
Thomas F. Burchill
Chief Executive Officer
------------------------------------ ------------------------------------
Michael P. Paolucci Ronald V. Paolucci
------------------------------------ ------------------------------------
Patrick Paolucci Porridge Partners II
-----------------------------------
John G. Waller
------------------------------------ ------------------------------------
Jacob I. Friesel Garret P. Cecchini
------------------------------------ ------------------------------------
Bruce W. Mello Gregory T. O'Brien
------------------------------------ ------------------------------------
Edward L. Newhouse David Meister
-----------------------------------
Jason Drago
16
------------------------------------ ------------------------------------
Yale Brown John N. Gonzalez
------------------------------------ ------------------------------------
Robert Lippmann Alison Lynch
------------------------------------ ------------------------------------
Matthew B. Walker David Banks
Trinity Ventures V, L.P.
A California Limited Partnership
By: Trinity TVL Partners V, L.P.
A California Limited Partnership, its General Partner
By:
--------------------------------
Name:
A General Partner
Trinity V Side-By-Side Fund, L.P.
By: Trinity TVL Partners V, L.P.
A California Limited Partnership, its General Partner
By:
--------------------------------
Name:
A General Partner
Zero Stage Capital V Limited Partnership
By: Zero Stage Capital Associates Limited Partnership, General Partner
By:
--------------------------------
A General Partner
F&W Investments 1996
A California Partnership
By:
--------------------------------
A General Partner
17
Schedule 1
----------
David J. Moore Mark A. Burchill
Scott E. Cohen Petry Media Corp.
Schedule 2
----------
Michael P. Paolucci Porridge Partners II
John G. Waller Ronald V. Paolucci
Patrick Paolucci
Schedule 3
----------
Jacob I. Friesel Edward L. Newhouse
Garret P. Cecchini David Meister
Bruce W. Mello Jason Drago
Gregory T. O'Brien
Schedule 4
----------
Yale Brown Robert Lippmann
Alison Lynch Matthew B. Walker
David Banks John Gonzalez
Trinity Ventures V, L.P. Trinity V Side-By-Side Fund, L.P.
Zero Stage Capital V F&W Investments 1996
Limited Partnership
18
Schedule 5
----------
David J. Moore Mark A. Burchill
Scott E. Cohen Michael P. Paolucci
Jacob I. Friesel Edward L. Newhouse
Garret P. Cecchini David Meister
Bruce W. Mello Jason Drago
Gregory T. O'Brien Yale Brown
Robert Lippmann Alison Lynch
Matthew B. Walker
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/24/98 | | | | | | | None on these Dates |
| | 4/9/98 | | 11 |
| | 2/25/98 | | 1 |
| List all Filings |
↑Top
Filing Submission 0000950146-98-001232 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Fri., Apr. 19, 9:17:56.1pm ET 