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EXHIBIT 99.4
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT ("Agreement") is made and entered into as
of the 29th day of June, 1998, by and among You Bet International, Inc., a
Delaware corporation (the "Company"), and the other parties named on the
signature pages attached hereto (collectively, the "Stockholders").
Recitals
WHEREAS, the Stockholders are holders of the Company's Series A
Convertible Preferred Stock, par value $.001 per share (the "Preferred Shares"),
or Common Stock, par value $.001 per share (the "Common Shares" ).
WHEREAS, each of the parties hereto believes that it is in their best
interest to enter into this Agreement to facilitate the management and operation
of the Company and to reflect various agreements among the parties.
Agreement
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein, and other valuable consideration, the receipt
and adequacy of which are hereby acknowledged the parties hereto agree as
follows:
Article 1
Corporate Governance
1.1 Composition of the Board. The Stockholders agree to vote or to cause
to be voted (or, if applicable, to give their consent with respect to), all
Preferred Shares or Common Shares owned by them (the "Voting Shares"), including
any shares acquired after the date hereof as a result of the exercise of options
or warrants or the conversion of Preferred Shares, all Voting Shares owned by
them in order to achieve the following results:
(a) Until such time as the Company shall retain a Chief
Executive Officer (other than on an interim basis), the Board of Directors of
the Company (the "Board") shall consist of seven (7) persons. The initial
members of the Board shall be Xxxxxx X. Xxxx, Xxxxx Xxxxxxxx, Xxxxxxx Fine, Xxxx
Xxxxxxx and three persons selected by Fell & Company, Inc. ("FCI") from the
those persons set forth on Schedule 1.1 hereto (which Schedule may be amended
with the approval of FCI, Xxxxx Xxxxxxxx and Xxxxxxx Fine, such approval not to
be unreasonably withheld).
(b) At such time as the Company shall retain a Chief Executive
Officer (other than on an interim basis) the number of directors constituting
the Board shall be increased to
2
eight (8) persons and the Chief Executive Officer shall be elected to the Board
(with the Chairman of the Board being entitled to a tie breaking vote in the
event of any deadlock).
1.2 Removal. The Stockholders agree that if, at any time, they are then
entitled to vote for the removal of directors of the Company, they will not vote
in favor of the removal of any director, unless such removal shall be for cause
or the person entitled to designate or nominate such director shall have
consented to the removal in writing. As used herein, removal for cause shall
mean the removal of a director because of such director's (a) malfeasance in
office, (b) gross misconduct or neglect, (c) willful conversion of corporate
funds, (d) incompetency (e) gross inefficiency, or (f) moral turpitude.
1.3 Vacancies. If as a result of death, disability, retirement,
resignation, removal (with or without cause) or otherwise, there shall exist or
occur any vacancy on the Board, such vacancy shall be filled as follows:
(a) If Xxxx Xxxxxx, Xxxxx Xxxxxxxx or Xxxxxxx Fine or any person
selected in accordance with this Agreement to replace him ceases to be a member
of the Board, Xxxxx Xxxxxxxx and Xxxxxxx Fine, acting jointly, shall designate a
replacement director from the list of persons set forth on Schedule 1.1 hereto;
(b) If any member of the Board other than Xxxx Xxxxxx, Xxxxx
Xxxxxxxx or Xxxxxxx Fine shall cease to be a member of the Board, FCI shall
designate a replacement director from the list of persons set forth on Schedule
1.1 hereto.
(c) Each Stockholder shall cause his or her Voting Shares to be
voted in favor of (or consent to) the election of persons the Board selected in
accordance with this Section 1.3.
1.4 Executive Committee. The Company represents and warrants that the
Board has duly adopted amendments to the Company's Bylaws and otherwise taken
action to establish an Executive Committee on the following terms:
(a) Until such time as the Company shall retain a Chief
Executive Officer (other than on a interim basis), the Executive Committee shall
consist of Xxxxxx X. Xxxx, Xxxxx Xxxxxxxx and Xxxxxxx Fine. Xxxxxx Xxxx shall
serve as the Chairman of the Executive Committee;
(b) At such time the Company shall retain a Chief Executive
Officer (other than on a interim basis), the Executive Committee shall consist
of Xxxxxx X. Xxxx, Xxxxx Xxxxxxxx, Xxxxxxx Fine and the Chief Executive Officer.
Xxxxxx X. Xxxx shall serve as the Chairman of the Executive Committee and shall
have the tie breaking vote in the event of any deadlock;
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(c) The Executive Committee shall be empowered to take all
action which may be taken by the full Board, other than action which is required
by law to be taken by the full Board; and
(d) The Executive Committee shall be required report its actions
to the Board at each meeting of the Board.
1.5 Compensation of Board Members. Members of the Board who are salaried
employees of the Company shall not receive any additional compensation for
serving on the Board. All other members of the Board shall receive such
compensation as the Board may from time to time determine.
Article 2
Termination
2.1 Automatic Termination. This Agreement shall automatically terminate
upon the occurrence of any of the following events:
(a) The second anniversary of the date hereof;
(b) The bankruptcy, receivership or dissolution of the Company;
or
(c) The written agreement of all of the then Stockholders.
Article 3
Miscellaneous
3.1 Transfers of Voting Shares. Nothing in this Agreement shall restrict
any Stockholder's ability to transfer Voting Shares; provided that any such
transfer shall be in accordance with all applicable state and federal securities
laws; provided further that any transferee acquiring Voting Shares in a private
transaction shall agree to become a party to this Agreement. A transferee
acquiring Voting Shares in the open market shall not be obligated to become a
party to this Agreement.
3.2 Legend. Each Stockholder shall surrender to the Company all
certificates representing Voting Shares owned by them and any certificates
representing any additional Voting Shares, if any, which may hereafter be issued
by the Company to such Stockholder, with the request that such certificates be
endorsed with the following words:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A STOCKHOLDERS
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AGREEMENT BETWEEN YOU BET INTERNATIONAL, INC. AND THE
HOLDERS THAT ARE SIGNATORIES THERETO. THE SHARES
REPRESENTED BY THIS CERTIFICATE MUST BE VOTED IN
ACCORDANCE WITH SUCH AGREEMENT. EXCEPT AS SET FORTH IN
SUCH AGREEMENT, ANY TRANSFEREE TAKES SUBJECT TO THE
TERMS OF SUCH AGREEMENT, A COPY OF WHICH MAY BE OBTAINED
AT THE PRINCIPAL OFFICE OF THE ISSUER."
A copy of this Agreement shall be delivered to the Secretary of the Company and
shall be shown by him to any person making a proper and relevant inquiry
concerning it.
3.3 Notices. All notices and other communications provided for hereunder
shall be in writing and shall be sent by first class mail, telex, telecopy or
hand delivery:
If to the Company, to:
YOU BET INTERNATIONAL, INC.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
If to any Holder, to the address of such Holder as shown on the
signature pages hereto, or to such other address as any of the above shall have
designated in writing.
All such notices and communications shall be deemed to have been given or made
(a) when delivered by hand, (b) five business days after being deposited in the
mail, postage prepaid, (c) when telexed, answer-back received or (d) when
telecopied, receipt acknowledged.
3.4 Binding Effect. This Agreement shall bind and inure to the benefit
of the successors and assigns of the Company and the personal representatives,
heirs and, except as provided in Section 4.1 hereof, assigns of each of the
Stockholders.
3.5 Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
3.6 Further Acts. Each of the Stockholders agrees to perform any further
acts and execute and deliver any documents and procedure any court orders which
may reasonably be necessary to carry out the provisions of this Agreement and to
comply with the legend condition.
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3.7 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto with respect to the subject matter
dealt with herein, and supersedes all prior written or oral agreements and
understandings, including but not limited to, the Memorandum of Understanding
dated as of April 1, 1998 among the Company and FCI.
3.8 Counterparts. This Agreement and any amendments, waivers, consents
or supplements hereto or hereunder may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but such counterparts shall together constitute but one and the same
instrument. This Agreement shall become effective upon the execution and
delivery of a counterpart hereof by each of the parties hereto.
3.9 Attorneys' Fees. Should any party hereto or any person bound by the
provisions of this Agreement institute any legal action against any other such
person(s) and/or party to enforce the provisions hereof, the prevailing party in
such action shall be entitled to receive from the losing party such amount as
the court may adjudge to be reasonable attorneys' fees and court costs.
3.10 Construction; Headings. The titles of the sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement. The language of this Agreement shall be construed as
to its fair meaning and not strictly for or against any party.
3.11 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word clause, phrase or sentence
in every other respect and of the remaining provisions, paragraphs, words,
clauses, phrases or sentences hereof shall not be in any way impaired, it being
intended that all rights, powers and privileges of the parties shall be
enforceable to the fullest extent of the law.
3.12 Specific Enforcement. 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, it is agreed that they shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they may be entitled at law or in equity.
3.13 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to conflicts of law principles.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
YOU BET INTERNATIONAL, INC. a
Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
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STOCKHOLDER'S COUNTERPART SIGNATURE
PAGE TO STOCKHOLDERS AGREEMENT
If Stockholder is an entity:
Name of entity: ____________________________
By: ______________________________
Name:
Title:
If Stockholder is an individual:
Name: ____________________________
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(Signed Name)
Address of Stockholder:
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