EX-2
X. Xxxxxxxx Voting and First Offer Agreement
VOTING AND FIRST OFFER AGREEMENT
VOTING AND FIRST OFFER AGREEMENT, dated as of January 24, 2000 (this
"Agreement"), between Xxxxx Xxxxxxxx (the "Principal Stockholder") and USANi
Sub LLC, a Delaware limited liability company ("Parent").
WHEREAS, Xxxxxxxxxx.xxx Inc., a California corporation (the
"Company"), and Parent propose to enter into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), which provides for,
among other things, the merger of the Company (the "Merger") with a wholly
owned subsidiary of a newly formed Delaware corporation ("Newco") and the
concurrent contribution by Parent to Newco of all of the outstanding limited
liability interests of Internet Shopping Network LLC, a Delaware limited
liability company ("ISN");
WHEREAS, the Principal Stockholder is the owner of one or more of
the following securities: (a) shares of common stock of the Company, no par
value ("Company Common Stock") and (b) options to acquire Company Common
Stock; and
WHEREAS, in order to induce Parent to enter into the Merger
Agreement, the Principal Stockholder has agreed to enter into this Agreement
with respect to all the shares of Company Common Stock now owned, whether
beneficially or of record, and which may hereafter be acquired by the
Principal Stockholder and any shares of Company Common Stock over which the
Principal Stockholder has investment power or voting power, each within the
meaning of Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended
(the "Shares"), and all options to acquire Shares now owned and which may
hereafter be acquired (the "Options").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE 1
Section 1.1 Voting Agreement. The Principal Stockholder hereby
agrees that during the Restricted Period (as defined below) at any meeting of
the stockholders of the Company, however called, and in any action by consent
of the stockholders of the Company, the Principal Stockholder shall vote her
Shares or shall cause her Shares to be voted: (a) in favor of the Merger, the
Merger Agreement (as amended from time to time) and the transactions
contemplated by the Merger Agreement (the "Proposed Transactions") and (b)
against any proposal (other than in respect of the Proposed Transaction) for
any: (i) merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any other material corporate transaction, the
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consummation of which could reasonably be expected to impede, interfere with,
prevent or materially delay the Proposed Transactions; (ii) a sale, lease,
exchange, transfer or other disposition of 20% or more of the assets of the
Company in a single transaction or series of transactions; or (iii) the
acquisition by any person or "group" (as defined in Section 13(d) of the
Exchange Act) other than Parent or its affiliates (herein, a "third party"),
of "beneficial ownership" of 15% or more of the Company's voting stock
whether by tender offer or exchange offer or otherwise and including a self
tender offer, merger, sale of assets or other business combination between
the Company and any person or entity or any other action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or
which could result in any of the conditions to the Company's obligations
under the Merger Agreement not being fulfilled. For purposes of this
Agreement, the term "Restricted Period" shall mean the time during which the
Merger Agreement remains in effect and for 12 months thereafter.
Section 1.2 Acknowledgment. The Principal Stockholder acknowledges
receipt and review of a copy of the Merger Agreement.
Section 1.3 Waiver of Dissenters' Rights. The Principal Stockholder
hereby irrevocably and forever waives any rights the Principal Stockholder
may have, as a result of the Merger, to demand payment for any Shares
beneficially owned by the Principal Stockholder pursuant to Section 1300 et.
seq. of California Law or to otherwise qualify as a "dissenting shareholder"
as such term is used in such sections of California Law.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL STOCKHOLDER
The Principal Stockholder hereby represents and warrants to Parent
as follows:
Section 2.1 Authority Relative to This Agreement. The Principal
Stockholder has all necessary power and authority to execute and deliver this
Agreement, to perform her obligations hereunder and to consummate the
transactions contemplated hereby and no other proceedings on the part of the
Principal Stockholder are necessary to authorize this Agreement or to
consummate such transactions. This Agreement has been duly and validly
executed and delivered by the Principal Stockholder and, assuming the due
authorization, execution and delivery by Parent, constitutes a legal, valid
and binding obligation of the Principal Stockholder, enforceable against the
Principal Stockholder in accordance with its terms.
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Section 2.2 No Conflict. (a) The execution and delivery of this
Agreement by the Principal Stockholder do not, and the performance of this
Agreement by the Principal Stockholder will not, (i) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to the
Principal Stockholder or by which the Shares or the Options are bound or
affected or (ii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien (as defined below) on
any of the Shares or the Options pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Principal Stockholder is a party or by
which the Principal Stockholder or the Shares or the Options are bound or
affected, except for any such conflicts, violations, breaches, defaults or
other occurrences which would not prevent or delay the performance by the
Principal Stockholder of her obligations under this Agreement.
(b) The execution and delivery of this Agreement by the
Principal Stockholder do not, and the performance of this Agreement by the
Principal Stockholder will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any court or arbitrator or
any governmental body, agency or official except for applicable requirements,
if any, of the Securities Exchange Act of 1934, as amended, and except where
the failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay the
performance by the Principal Stockholder of her obligations under this
Agreement.
Section 2.3 Title to the Shares. As of the date hereof, the
Principal Stockholder is the record and beneficial owner of, or has voting
power or investment power over, the Shares, and is the record and beneficial
owner of the Options, listed on Schedule 1. Such Shares and Options are all
the securities of the Company owned, either of record or beneficially, by the
Principal Stockholder or in which the Principal Stockholder has voting or
investment power and the Principal Stockholder owns no other rights or
interests exercisable for or convertible into any securities of the Company.
Except as identified on Schedule 2, all of the Shares and Options referred to
above are owned free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreement, limitations on the
Principal Stockholder's voting rights, charges and other encumbrances of any
nature whatsoever (collectively, "Liens") except, with respect to the
Options, the Company Option Plan and any agreements executed pursuant thereto
pursuant to which such Options were issued. The Principal Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares.
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ARTICLE 3
COVENANTS OF THE PRINCIPAL STOCKHOLDER
Section 3.1 No Inconsistent Agreement. The Principal Stockholder
hereby covenants and agrees that she shall not enter into any agreement or
grant a proxy or power of attorney with respect to the Shares or Options
which is inconsistent with this Agreement.
Section 3.2 Transfer Restriction.
(a) The Principal Stockholder hereby covenants and agrees
that she shall not sell, give, assign, hypothecate, pledge, encumber, grant a
security interest in or otherwise dispose of, whether by operation of law or
by agreement or otherwise (each a "Transfer"), from the date hereof until the
termination of the Merger Agreement, any Shares or Options, or any right,
title or interest therein or thereto.
(b) Notwithstanding the foregoing, the Principal
Stockholder may Transfer any Shares or Options, or any right, title or
interest therein or thereto, to any trust which is established, and which
remains, solely for the benefit of the Principal Stockholder or her spouse,
siblings, children or grandchildren (a "Trust"), provided, that, prior to
such Transfer, the Trust shall execute and deliver an agreement by which it
shall become a party to and be bound by the applicable terms and provisions
of this Agreement, in form and substance reasonably satisfactory to Parent.
(c) Notwithstanding the foregoing, if Parent permits any
stockholder that is a party to an agreement containing restrictions on
transfer of the type contained herein (the "Transferring Stockholder") to
Transfer any Shares, Options or warrants to purchase Company Common Stock
(the "Warrants") after the date hereof and prior to the termination of the
Merger Agreement, which Transfer would otherwise be prohibited by such
agreement, then Parent shall permit the Principal Stockholder, upon her
request, to Transfer a number of Shares or Options equal to the product of
(i) the number of Shares, Options or Warrants Transferred by the Transferring
Stockholder divided by the number of Shares, Options or Warrants owned by the
Transferring Stockholder as of the date of such Transfer, and (ii) the number
of Shares or Options owned by the Principal Stockholder as of the date of
such Transfer, in each case, treating all Options and Warrants as Shares on
an as- converted basis (without giving effect to restrictions or limitations
on the exercise of such Options or Warrants).
Section 3.3 Right of First Offer. The Principal Stockholder hereby
covenants and agrees that, following the termination of the Merger Agreement
and during the remainder of the Restricted Period, the Principal Stockholder
shall not Transfer any Shares or Options except pursuant to the following
provisions:
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(a) Offering Notice. If the Principal Stockholder wishes to
Transfer (other than pursuant to the Merger) all or any portion of her Shares
or Options to any person or entity (a "Third Party Purchaser"), the Principal
Stockholder shall first offer such Shares or Options to Parent, by sending
written notice (an "Offering Notice") to Parent, which shall state (i) the
number of Shares or Options proposed to be transferred (the "Offered
Securities"); (ii) whether such sale (with respect to Shares only) will be
effected in an open market transaction that complies with Rule 144(f) of the
Securities Act of 1933 (a "Public Sale") or otherwise (a "Private Sale"),
(iii) the proposed purchase price for the Offered Securities, which price
must be in cash and, with respect to a Public Sale, may not be at a per share
price in excess of the closing price of shares of Company Common Stock on the
NASDAQ for the trading day immediately prior to the date on which the
Offering Notice is given (the "Offer Price"); and (iv) with respect to a
Private Sale, the terms and conditions of such sale, which terms and
conditions must be customary and reasonable for a transaction of such type.
Upon delivery of the Offering Notice, such offer shall be irrevocable unless
and until the rights of first offer provided for herein shall have been
waived or shall have expired;
(b) Parent Option. For a period of five days after the
giving of the Offering Notice pursuant to Section 3.3(a) (the "Option
Period"), Parent shall have the right (the "Option") but not the obligation
to purchase all (but not less than all) of the Offered Securities at a
purchase price equal to the Offer Price and, with respect to a Private Sale,
upon the terms and conditions set forth in the Offering Notice. The right of
Parent to purchase any or all of the Offered Securities under this Section
3.3(b) shall be exercisable by delivering written notice of the exercise
thereof (the "Acceptance"), prior to the expiration of the Option Period, to
the Principal Stockholder, which notice shall state the number of Offered
Securities proposed to be purchased by Parent. The failure of Parent to
respond within the Option Period shall be deemed to be a waiver of the
Option; provided that Parent may waive its rights under this Section 3.3(b)
prior to the expiration of the Option Period by giving written notice to the
Principal Stockholder (the date any such written waiver is received by the
Principal Stockholder or, if no notice is given, the last date of the Option
Period is referred to as the "Waiver Date");
(c) Closing. The closing of the purchase of Offered
Securities subscribed for by Parent under Section 3.3(b) shall be held at the
executive offices of Parent at 11:00 a.m., local time, on the later of (i)
the 10th day after the Acceptance pursuant to Section 3.3(b) and (ii) two
days following the date on which all governmental or regulatory approvals
(including the expiration of any waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act) with respect to such transaction, if any, have
been obtained or at such other time and place as the parties to the
transaction may agree. At such closing, the Principal Stockholder shall
deliver certificates representing the Offered Securities, duly endorsed for
transfer and accompanied by all requisite transfer taxes, if any, and such
Offered Securities shall be free and clear of any Liens (other than those
arising hereunder) and the Principal Stockholder shall so represent and
warrant, and shall further represent and warrant
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that she is the sole beneficial and record owner of such Offered Securities.
Parent shall deliver at the closing payment in full in immediately available
funds for the Offered Securities purchased. In connection with such sale the
parties to the transaction shall execute such additional documents and take
all reasonable steps as are otherwise necessary or appropriate to effectuate
such transaction; and
(d) Sale to a Third Party Purchaser. If Parent does not
elect to purchase all of the Offered Securities under Section 3.3(b), the
Principal Stockholder may sell all, but not less than all, of the Offered
Securities that Parent elected not to purchase (i) with respect to a Private
Sale to a Third Party Purchaser on terms and conditions no less favorable to
the Principal Stockholder than those set forth in the Offering Notice;
provided, however, that such sale is bona fide and not undertaken for the
purpose of avoiding the Principal Stockholder's obligations hereunder and
made pursuant to a contract entered into within 10 days after the Waiver Date
and (ii) with respect to a Public Sale, such sale is effected within five
days following the Waiver Date at the market price in effect at the time of
such sale. If such sale is not consummated within five days after the Waiver
Date with respect to a Public Sale or 45 days after the Waiver Date with
respect to a Private Sale, then the restrictions provided for herein shall
again become effective, and no transfer of such Offered Securities may be
made thereafter by the Principal Stockholder without again offering the same
to Parent in accordance with this Section 3.3.
Section 3.4 Security Interests. Within 30 days following the date of
this Agreement, the Principal Stockholder hereby agrees to release all of the
security interests she holds (either in her own name or jointly with another
party) in the assets of the Company and file appropriate documentation of
such release, in form and substance reasonably satisfactory to Parent, with
the United States Patent and Trademark Office.
Section 3.5 Stockholders Agreement. Prior to the Closing of the
Merger, the Principal Stockholder hereby agrees to execute the Stockholders
Agreement, substantially in the form attached as Exhibit A to the Merger
Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 4.1 Authority Relative to this Agreement. Parent has full
right, power and authority to enter into and perform this Agreement and this
Agreement has been duly authorized, executed and delivered by Parent and is a
valid and binding agreement of Parent and enforceable against Parent in
accordance with its terms.
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Section 4.2 No Conflict. (a) The execution and delivery of this
Agreement by Parent do not, and the performance of this Agreement by Parent
will not, conflict with or violate any law, rule, regulation, order, judgment
or decree applicable to Parent.
(b) The execution and delivery of this Agreement by Parent do not,
and the performance of this Agreement by Parent will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any court or arbitrator or any governmental body, agency or official
except for applicable requirements, if any, of the Securities Exchange Act of
1934, as amended, and except where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay the performance by Parent of its
obligations under this Agreement.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Termination. This Agreement shall terminate upon the
earliest to occur of (i) the Closing, (ii) the 12-month anniversary following
termination of the Merger Agreement and (iii) the termination of the Merger
Agreement by Parent pursuant to Section 7.1(c) of such Agreement; provided
that the representations and warranties contained herein shall survive the
termination hereof.
Section 5.2 Specific Performance. 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 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 5.3 Definitions. Unless otherwise defined herein, all
capitalized terms shall have the definitions assigned to such terms in the
Merger Agreement.
Section 5.4 Entire Agreement. This Agreement constitutes the entire
agreement among Parent and the Principal Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof.
Section 5.5 Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
Section 5.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless
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remain in full force and effect so long as the economic or legal substance of
this Agreement is not affected in any manner materially adverse to any party.
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.
Section 5.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts
of law.
Section 5.8 Jurisdiction. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated
hereby shall be brought in the courts of the State of New York and hereby
expressly submits to the personal jurisdiction and venue of such courts for
the purposes thereof and expressly waives any claim of improper venue and any
claim that such courts are an inconvenient forum.
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IN WITNESS WHEREOF, Parent and the Principal Stockholder have caused
this Agreement to be duly executed as of the date first above written.
USANi SUB LLC
By: /s/ Xxxx Xxxxxxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
/s/ Xxxxx Xxxxxxxx
--------------------------
Xxxxx Xxxxxxxx
Schedule 1
Number of Shares
owned beneficially Number of
or of record (1) Options owned
------------------ -------------
369,292 237,227
1,136,955 (2)
-------------------------
(1) Other than Shares issuable upon exercise of Options, which are listed in
the next column.
(2) Shares owned jointly with Xxx Xxxxxxxx.
Schedule 2
Liens
-----
None.
