Exhibit 4.3
SHAREHOLDER SUPPORT AGREEMENT
SHAREHOLDER SUPPORT AGREEMENT dated as of October 22, 1998 (this
"Agreement"), by Xxxxx Xxxx (the "Shareholder"), to and for the benefit of N2K
Inc., a Delaware corporation ("N2K"). Capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to them in the Merger
Agreement referred to below.
WHEREAS, as of the date hereof, Shareholder owns of record and
beneficially such number of shares of common stock, no par value ("CDnow Common
Stock"), of CDnow Inc., a Pennsylvania corporation ("CDnow"), set forth opposite
Shareholder's name on Schedule A hereto (such shares, together with any other
voting or equity securities of CDnow hereafter acquired by such Shareholder
prior to the termination of this Agreement, being referred to herein
collectively as the "Shares");
WHEREAS, concurrently with the execution of this Agreement, XXxxx,
X0X, Exit 8 Holding Company, a Pennsylvania corporation ("NewCo"), are entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which, upon the terms and subject to the conditions
thereof, (i) a newly formed subsidiary of NewCo will be merged with and into
CDnow (the "CDnow Merger"), and (ii) a second newly formed subsidiary of Parent
will be merged with and into N2K (the "N2K Merger") such that N2K and CDnow will
become wholly-owned subsidiaries of NewCo and the stockholders of N2K and CDnow
become stockholders of NewCo; and
WHEREAS, as a condition to the willingness of CDnow and N2K to enter
into the Merger Agreement and the Stock Option Agreements (as defined in the
Merger Agreement), N2K has requested the Shareholder agree, and in order to
induce N2K to enter into the Merger Agreement and the Stock Option Agreements,
the Shareholder is willing to agree, to vote in favor of adopting the Merger
Agreement and approving the CDnow Merger, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree, severally and not jointly, as follows:
Section 1. Voting of Shares. Until the termination of this Agreement
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in accordance with the terms hereof, Shareholder hereby agrees that, at the
CDnow Shareholders' Meeting or any other meeting of the shareholders of CDnow,
however called, and in any action by written consent of the stockholders of
CDnow, Shareholder will vote all of his respective Shares (a) in favor of
adoption of the Merger Agreement and approval of the CDnow Merger and the other
transactions contemplated by the Merger Agreement, and (b) in favor of any other
matter necessary to the consummation of the transactions contemplated by the
Merger Agreement and considered and voted upon by the shareholders of CDnow (or
any class thereof). In addition,
Shareholder agrees that he will, upon request by N2K, furnish written
confirmation, in form and substance reasonably satisfactory to N2K, of
Shareholder's support for the Merger Agreement and the CDnow Merger. Shareholder
acknowledges receipt and review of a copy of the Merger Agreement.
Section 2. Transfer of Shares. Shareholder represents and warrants
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that it will not, prior to the termination of this Agreement in accordance with
the terms hereof, to, directly or indirectly, (a) sell, assign, transfer
(including by merger, testamentary disposition, interspousal disposition
pursuant to a domestic relations proceeding or otherwise by operation of law),
pledge, encumber or otherwise dispose of any of his respective Shares, (b)
deposit any of his respective Shares into a voting trust or enter into a voting
agreement or arrangement with respect to his Shares or grant any proxy or power
of attorney with respect thereto which is inconsistent with this Agreement or
(c) enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect sale, assignment, transfer (including by
merger, testamentary disposition, interspousal disposition pursuant to a
domestic relations proceeding or otherwise by operation of law) or other
disposition of any Shares.
Section 3. No Solicitation. Prior to the termination of this Agreement
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in accordance with its terms, Shareholder agrees (a) that he will not, nor will
it authorize or permit any of his agents and representatives to, directly or
indirectly, initiate or solicit any inquiries or the making of any Acquisition
Proposal and (b) that it will notify N2K as soon as possible (and in any event
within 48 hours) if any such inquiries or proposals are received by, any
information or documents is requested from, or any negotiations or discussions
are sought to be initiated or continued with, it or any of its affiliates.
Section 4. Termination. This Agreement shall terminate upon the
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earliest to occur of (i) the Effective Time or (ii) any termination of the
Merger Agreement in accordance with the terms thereof; provided that the
provisions of Section 6 shall survive any termination of this Agreement; and
provided, further, that no such termination shall relieve any party of liability
for a breach hereof prior to termination.
Section 5. Specific Performance. The parties hereto agree that
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irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 6. Miscellaneous.
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(a) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect thereto. This Agreement may not be amended, modified or rescinded except
by an instrument in writing signed by each of the parties hereto.
(b) If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to the principles of conflicts
of law thereof.
(d) Notwithstanding anything herein to the contrary, the covenants and
agreements set forth herein shall not prevent any of the Shareholder's
designees, partners or affiliates serving on the Board of Directors of CDnow
from taking any action, subject to the applicable provisions of the Merger
Agreement, while acting in such capacity as a director of CDnow.
(e) The Shareholder shall be the only person or entity liable with respect
to his obligations. Any monetary liability of the Shareholder under this
Agreement shall be satisfied solely out of the assets of the Shareholder.
Nothing in this Section 6(e) shall prevent N2K from obtaining specific
enforcement of the obligations of the Shareholder under this Agreement.
(f) This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by their respective duly authorized officers as of the
date first written above.
/s/ Xxxxx Xxxx
_______________________________
Xxxxx Xxxx
Accepted and Agreed:
N2K Inc.
By:/s/ Xxxxxxxx X. Xxxxxxx
________________________
Name:
Title:
SCHEDULE A
TO
SHAREHOLDER SUPPORT AGREEMENT (CDNOW)
SHAREHOLDER COMMON STOCK OF CDNOW OWNED BY
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SHAREHOLDER
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Xxxxx Xxxx 2,960,025
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TOTAL: 2,960,025
