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EXHIBIT 4.4
WP HOLDING, INC.
FOUNDERS' AGREEMENT
This FOUNDERS' AGREEMENT (the "Agreement") is made as of this 26th day
of March, 1999, and is effective on the Effective Date of the Merger (as such
terms are defined below) by and among the stockholders set forth on Schedule A
annexed hereto (sometimes referred to herein as "Stockholder" or, collectively,
as "Stockholders"), and WP HOLDING, INC., a Delaware corporation (hereinafter
referred as to as the "Company").
RECITALS
WHEREAS, Superhighway Consulting, Inc., an Illinois corporation ("SCI")
and the Company have executed simultaneously herewith that certain Plan of
Merger (the "Plan"), whereby SCI will merge with and into the Company, with the
Company as the surviving entity (the "Merger"); and
WHEREAS, as a condition to the obligation of the AV Stockholders
(defined below), the SCI Stockholders (defined below), SCI and the Company to
consummate the transactions contemplated by the Plan, this Agreement shall have
been executed and effective simultaneous with the effective date of such Merger
as set forth in the Certificate of Merger to be filed with the Secretary of
State of the State of Delaware (the "Effective Date"); and
WHEREAS, the Stockholders set forth on Schedule A as the AV Group (the
"AV Stockholders") and the Stockholders set forth on Schedule A as the SCI
Group, each of whom prior to the Merger was a shareholder and full-time employee
of SCI, and as of the Closing of the Merger shall be a stockholder and full-time
employee of the Company (the "SCI Stockholders"), upon the Closing of the Merger
shall be the holders of record of substantially all of the issued and
outstanding shares of the common stock, par value $.0001 per share (the "Common
Stock") of the Company, in the respective amounts and percentages set forth
opposite their names on Schedule A (the "Percentage Interests"); and
WHEREAS, the Stockholders hereto believe that it is in the best
interests of the Company and the Stockholders to make provision for the future
disposition of the Common Stock of the Company owned by such Stockholders as of
the date hereof (the "Shares"), and to impose certain restrictions on the
transfer of such Shares for so long as this Agreement is in full force and
effect.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto do hereby agree as follows:
1. RECITALS. The Recitals set forth above are true and accurate and are
incorporated herein by this reference.
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2. DISTRIBUTION UPON SALE OF THE COMPANY. In the event of a merger or
consolidation of the Company or the sale of all or substantially all of the
outstanding Shares of capital stock or assets of the Company (hereinafter, a
"Sale Transaction"), as a result of which the stockholders of the Company
receive (or are to receive) either cash, stock or other consideration, the
parties hereto agree that:
(a) with respect to the first Twenty Million and No/100 Dollars
($20,000,000.00) of aggregate consideration, determined as of the closing date
of any Sale Transaction, received by the Stockholders, collectively, from such
Sale Transaction ("Minimum Sale Proceeds"), notwithstanding the Stockholders'
respective ownership of the capital stock of the Company as of the date of such
Sale Transaction, such Minimum Sale Proceeds shall be allocated among the SCI
Stockholders, and the AV Stockholders (as defined in Section 3) shall deliver or
cause to be delivered to the SCI Stockholders such Minimum Sale Proceeds
(collectively, the "SCI Allocation"), such that each of the SCI Stockholders (as
defined in Section 3) shall receive in pro rata proportion to his then existing
ownership of the outstanding Common Stock of the Company (and for purposes of
such calculation not giving effect to the Common Stock held by any AV
Stockholders) the respective percentage of the SCI Allocation that would
otherwise be payable in the aggregate to the all of AV Stockholders (as defined
in Section 3); and
(b) with respect to the next One Million and No/100 Dollars
($1,000,000) of aggregate consideration from such Sale Transaction over and in
addition to the SCI Allocation (the "AV Allocation", and collectively with the
SCI Allocation, the "Initial Allocations"), such AV Allocation shall be
allocated among the AV Stockholders, and the SCI Stockholders (as defined in
Section 3) shall deliver or cause to be delivered to the AV Stockholders such AV
Allocation, such that each of the AV Stockholders shall receive in pro rata
proportion to his then existing ownership of the outstanding Common Stock of the
Company (and for purposes of such calculation not giving effect to any of the
Common Stock (and for purposes of such calculation not giving effect to any of
the Common Stock held by the SCI Stockholders) the respective percentage of the
AV Allocation;
(c) with respect to any consideration received by the Company or
the Stockholders, collectively, from such Sale Transaction, over and in addition
to the Initial Allocations ("Additional Sale Proceeds"), each of the
Stockholders shall receive, and the Additional Sale Proceeds shall be allocated,
in accordance with each of such Stockholders' respective ownership of the
capital stock of the Company as of the date of such Sale Transaction.
(d) Notwithstanding anything else to the contrary herein, the
provisions of this Section 2 shall not apply to any Sale Proceeds that any
Stockholder receives pursuant to any shares of capital stock that such
Stockholder may hereafter acquire pursuant to (i) any subsequent stock offering
of the Company or (ii) his exercise or conversion of any options or warrants
issued by the Company (whether now existing or hereafter issued) including,
without limitation that certain Warrant of the Company dated December 28, 1999
issued to Xxxxxxxxx X. Xxxx, or otherwise ("Investment Shares"), and the Sale
Proceeds received by such Stockholder in respect of such Investment Shares shall
not be included in the Initial Allocations, but shall be separate and apart and
not subject to such Initial Allocations; and
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3. SCI STOCKHOLDERS' OPTION RIGHT UPON OCCURRENCE OF AN INITIAL PUBLIC
OFFERING. In the event the Company offers any of its capital stock to the public
(the "Offering Shares") pursuant to a registration statement (the "Registration
Statement") on any form promulgated by the Securities and Exchange Commission
(the "SEC") for effectuating such registration (and "IPO"), and subject to
compliance with (i) any lock-up agreement or similar restrictions on transfer of
such Offering Shares required by, any underwriter(s) ("Underwriters'
Restrictions"), and (ii) federal and state securities laws, the AV Stockholders
shall offer to sell to the SCI Stockholders such number of shares of Common
Stock of the Company (the "Option Shares"), for an aggregate purchase price of
$1.00 ("SCI Stockholders' Option Right"), determined by dividing
(a) the number which is the (i) the total percentage of
outstanding shares of Common Stock of the Company owned in the aggregate
by the AV Stockholders as of the date the Registration Statement is
declared effective by the SEC multiplied by twenty million (20,000,000);
(ii) reduced by the total percentage of outstanding shares of Common
Stock owned in the aggregate by all of the SCI Stockholders as of the
date the Registration Statement is declared effective by the SEC
multiplied by one million (1,000,000); by
(b) the closing price per share of the Option Shares determined
as of the close of trading on the first day the Option Shares are
publicly traded.
Upon receipt of written notice of such offer from the AV Stockholders
(which should be delivered in writing by the AV Stockholders within a reasonable
time before or after the consummation of the IPO), the SCI Stockholders shall
deliver written notice of acceptance to each of the AV Stockholders of such
offer within ten (10) days thereafter. Delivery of the Option Shares to the SCI
Stockholders by the AV Stockholders shall be subject to compliance with (i)
Underwriters' Restrictions and (ii) federal and state securities laws. Further,
as a condition to the closing of the sale and delivery of the Option Shares by
the AV Stockholders to the SCI Stockholders, each of the SCI Stockholders
receiving any such Option Shares, jointly and severally, hereby agrees to
indemnify and hold each of the AV Stockholders harmless, on an after-tax basis,
against and in respect of any and all federal and state income, gift and
withholding taxes and any associated penalties, additions to tax, additional
amounts and interest thereon assessed against any of the AV Stockholders
together with any other liability, costs, expenses or losses incurred by any of
such AV Stockholders (such amounts hereinafter collectively referred to as
"Taxes") in connection with the sale and transfer of such Option Shares.
Incident to the Taxes, the AV Stockholders agree they will file any and all
documents related to the Taxes in a timely manner and report the transactions in
the manner most favorable to the Stockholders as a whole, in the reasonable
judgment of the SCI Stockholders; provided, however, that such manner of
reporting the transaction does not increase the tax liability of any one AV
Stockholder beyond that of his proportionate investment in the Company. If the
AV Stockholders do not timely file said documents or treat the transaction in
accordance with the above provision (except pursuant to their rights set forth
in the proviso immediately above), any and all liability of the SCI Stockholders
to the AV Stockholders failing to so file in a timely manner or report the
transaction consistent herewith shall be reduced in an amount equal to the Taxes
which arise as a result of such failure to file in a timely manner or the
failure to report the transaction consistent herewith. Notwithstanding anything
else to the contrary in this Section 3, any
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Investment Shares then held by a Stockholder shall be excluded, shall not be
counted and shall not be subject to the SCI Stockholders' Option Right described
herein.
4. LIMITATION ON ENCUMBRANCE; RIGHT OF FIRST REFUSAL; AND TRANSFER OF
SHARES.
(a) Limitation. Unless a Stockholder a party hereto shall first
obtain the written consent of all other Stockholders of the Company a party
hereto (provided each such Stockholder then holds Shares of the Company) or as
otherwise provided herein, no Stockholder a party hereto shall sell, assign,
transfer, donate, bequeath, devise, convey or otherwise dispose of, during any
three-month period, an amount of Shares (voluntarily, involuntarily or by
operation of law) (hereinafter "Transfer") equal to more than one (1) percent of
the outstanding shares of the Company's Common Stock, without first giving to
the other Stockholders a party hereto and the Company notice of an intent to
make any such Transfer (setting forth therein the name of the person to whom
such Shares are to be transferred and the price and other terms of Transfer) and
sixty (60) days from the date of receipt of said notice within which to purchase
all Shares owned by Stockholder at the price provided in Section 4(c)
hereinbelow and in accordance with the priorities described immediately below
(the "Right of First Refusal");
(i) Such Shares first shall be offered for sale to the
Stockholders of the same group (each a "Group Stockholder") in amounts
proportionate to their Percen tage Interests (e.g. a selling SCI
Stockholder first offers to other SCI Stockholders); provided, however,
that if any Group Stockholder declines so to purchase the portion of the
Shares to which he is entitled, such portion shall be subject to the
similarly proportionate option of the other Group Stockholders;
(ii) If the Group Stockholders of the same group decline to
purchase such all or any of such Shares, then such Shares shall be
offered for sale to or for redemption by the Company;
(iii) If the Company declines to purchase such Shares, such
Shares shall next be offered for sale to all of the Stockholders of the
other group in amounts proportionate to their Percentage Interests (e.g.
a selling SCI Stockholder first offers the Shares to other SCI
Stockholders; if all or some decline and there are remaining Shares that
the SCI Stockholders do not wish to purchase, then the selling SCI
Stockholder offers such Shares to the Company; if the Company declines,
then the SCI Stockholder must offer the Shares to the AV Stockholders);
provided, however, that if any Stockholder declines so to purchase the
portion of the Shares to which he is entitled, such portion shall be
subject to the similarly proportionate option of the other Stockholders.
The Company and/or the other Stockholders may exercise their
rights so as to purchase such Shares only with respect to the Shares offered for
Transfer. Any Shares transferred by any Stockholder pursuant to the provisions
of this Section 4(a) shall be subject to the restrictions and other provisions
of this Agreement.
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Notwithstanding the above, beginning on the date hereof and
ending on the Board Rights Termination Date (as defined in Section 9 hereof),
each of the AV Stockholders agrees that notwithstanding his right to Transfer
the limited number of Shares during any three-month period without such Shares
being subject to the Right of First Refusal of the other Stockholders and the
Company, as set forth above, he will not Transfer any Shares owned by him and
subject to this Agree ment without abiding by the Right of First Refusal
provisions set forth in this Section 4 in the event that at the time of such
proposed Transfer he no longer holds of record in the aggregate at least
one-third (1/3) of the Shares of the Company that he owns as of the date hereof
(giving effect to any stock dividend or distribution, or a subdivision,
combination, reclassification or other purely capital restructuring change in
the Shares).
(b) Suspension of Limitation. If the Shares being offered for
Transfer are not purchased or redeemed by the Company and/or the other
Stockholders in accordance with the provisions of Section 4(a), then the
Stockholder offering such Shares shall be permitted to Transfer such Shares to
the person named in the notice of Transfer provided for in Section 4(a) hereof,
at the price and in accordance with the other terms set forth in such notice of
Transfer, provided that such Transfer is consummated within forty (40) days from
the last day of the aforesaid 60-day period, and provided the Transfer is made
in compliance with federal and state securities laws. Prior to any such
Transfer, the selling Stockholder shall cause the intended purchaser to deliver
an instrument acceptable to the Company, in substantially the form attached
hereto as Exhibit B and made a part hereof, whereby such purchase agrees to the
restrictions and other terms and conditions of this Agreement. Any attempted
Transfer of Shares of the Company other than in accordance with the terms and
provisions hereof shall be void and of no force or effect.
(c) Price of Shares. Any Shares transferred between Stockholders
pursuant to Section 4(a) of this Agreement shall be transferred either: (i) at
the price mutually agreed between such Stockholders, or (ii) if no such
agreement can be reached, upon the terms and conditions offered to the third
party and at a price equal to the GREATER of: (y) the price offered by or to any
third party, or (z) if requested by any Stockholder who is a party to the
Transfer, the price established for such Shares pursuant to the following
appraisal process:
(A) The value of such Shares shall be determined by multiplying
the Percentage Interest which is represented by such Shares by the fair
market value of the Company as determined by an appraisal prepared by an
MAI-qualified appraisal service chosen by the nonpurchasing Stockholder,
taking into account all appropriate discounts for illiquidity and
minority interest ("Appraisal 1"). In the event the purchasing Stock
holder disagrees with the value of such Shares as determined by
Appraisal 1, then at the option of such purchasing Stockholder, a second
appraisal will be conducted, taking into account appropriate discount,
as above, and provided by another MAI-qualified appraisal service chosen
by the purchasing Stockholder ("Appraisal 2"); whereupon, the value of
such Shares subject to the sale shall be based upon the average of
Appraisal 1 and Appraisal 2.
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(B) In the event either the nonpurchasing Stockholder or the
purchasing Stockholder disagrees with the value of such Shares resulting
from the average of Appraisal 1 and Appraisal 2, then at the option of
either Stockholder, a third appraisal will be prepared by a firm
mutually agreeable to, and chosen by each of the two MAI-qualified
appraisal services chosen by the nonpurchasing Stockholder and the
purchasing Stockholder ("Appraisal 3"), whereupon the value of such
Shares shall be based upon the average of Appraisal 1, Appraisal 2 and
Appraisal 3.
(C) The cost of Appraisal 1 shall be paid by the Company. The
cost of any additional appraisal shall be paid by the Stockholder
requesting such appraisal. Any MAI-qualified appraiser chosen by any
Stockholder shall have at least ten (10) years experience in the
appraisal of corporations.
(d) Transfer by Decedent. Notwithstanding anything else
contained herein to the contrary, Shares of any individual Stockholder which are
devised, bequeathed or otherwise transferred as a result of the death of such
Stockholder shall not be subject to the limitations and restrictions contained
within Section 4 of this Agreement if and only if all of the Shares of such
decedent Stockholder are devised, bequeathed or otherwise Transferred to that
individual who is the legal spouse of such Stockholder at the time of such
Stockholder's death. Any Shares devised, bequeathed or otherwise Transferred
pursuant to the exception provided in this Section 4(d) shall remain subject to
all of the restrictions and provisions of this Agreement.
(e) Restriction on Sale. Subject to each Stockholder's right to
sell his Shares as provided in Section 4(a) hereof, neither the Company nor the
Stockholders shall sell, encumber or pledge all or substantially al of the
capital stock or assets of the Company without the prior written consent of all
of the other Stockholders who are parties hereto. In the event that this Section
4(e) shall conflict with any provision of the Company's Certificate of
Incorporation or By-laws, the provisions of this Subsection (e) shall govern and
control.
5. ENDORSEMENT ON SHARE CERTIFICATES. Upon the execution of this
Agreement, each of the certificates evidencing the Shares of Common Stock
subject hereto, including certificates evidencing Common Stock as are hereafter
acquired by a Stockholder, shall be endorsed on the bottom of the face of each
such certificate with the following statement:
"RESTRICTIONS ON THE RIGHT TO OWN OR TRANSFER THE SHARES OF
STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO A
FOUNDERS' AGREEMENT DATED AS OF MARCH __, 1999 BETWEEN THE COMPANY AND
CERTAIN OF ITS FOUNDING STOCKHOLDERS, A COPY OF WHICH IS ON FILE WITH
THE OFFICE OF, AND AVAILABLE UPON WRITTEN REQUEST TO, THE SECRETARY OF
THE COMPANY."
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In the event of any Transfer pursuant to any provision of Section 4, the
legend set forth in this Section 5 shall be endorsed on any certificate
representing Common Stock so transferred. In addition, the Company may also
cause to be imposed upon such certificates such other legends as counsel to the
Company shall determine to be required under the provisions of any federal or
state securities laws.
6. ACTION TO ENFORCE. Each Stockholder agrees for himself and his
successors in interest that if any amendment to the By-laws of the Company, or
any other action requiring the vote or approval of the Stockholders of the
Company, is required in order to make permissible or lawful any of the
provisions or sales required to be made under this Agreement, then the Shares
presently owned by every Stockholder or his successors will be voted in favor of
such amendment or action.
7. PREEMPTIVE RIGHTS. Except in the event of an IPO or a Sales
Transaction duly approved by the Company and its stockholders, the Company and
the Stockholders agree that each of the Stockholders shall have the preemptive
right to subscribe for and purchase their proportionate share of additional
Common Stock upon its issuance and sale for cash or otherwise by the Company.
Accord ingly, no amendment to the Certificate of Incorporation shall be made
with respect thereto unless or until such time as such preemptive rights are
modified, waived or altered by: (a) the Company, and (b) all of the Stockholder
signatories to this Agreement (or their successors, transferees or assigns). Any
Stockholder which declines to subscribe for and purchase additional Common Stock
upon its issuance and sale for cash or otherwise by the Company may, upon formal
written request of such non-subscribing Stockholder to the Company, require that
any additional Common Stock issued and sold for cash or otherwise by the Company
be transferred and sold, if at all, at the price established for such Common
Stock pursuant to the appraisal process described in Section 4(c)(A)-(C).
8. REGISTRATION RIGHTS. The Company shall grant the Stockholders certain
piggyback registration rights as described in the Registration Rights Agreement
attached hereto as Exhibit C and made a part hereof.
9. BOARD OF DIRECTORS; OFFICERS.
(a) Beginning the date hereof and ending on the earlier of (x)
the date that the AV Stockholders no longer hold of record in the aggregate at
least one-half (1/2) of the Shares of the Company that they own collectively as
of the date hereof (giving effect to any stock dividend or distribution, or a
subdivision, combination, reclassification or other purely capital restructuring
change in the Shares, the "Minimum Ownership"), (y) the date that the Company is
required to file reports pursuant to Sections 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, and (z) thirty months from the date hereof
(the "Board Rights Termination Date"), all of the Stockholders, and any other
persons who may become parties hereto, agree, and such Stockholders shall vote
all of their Shares and take all such other action to cause and ensure, that the
Board of Directors of the Company shall contain a minimum of: two (2)
individuals designed exclusively by the SCI Stockholders, which the parties
agree shall initially be Xxxxxxx Xxxx and Xxxxx Xxxxxx (the "SCI Board
Members"), two (2) individuals exclusively designed by the AV Stockholders,
which the parties agree shall initially be Xxxxxxxxx Xxxx and Xxxxxxx Xxxxxx
(the "AV Board members"); provided, however, that notwith standing the
occurrence of the Board Rights Termination Date due to the expiration of the
thirty-month
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period described in clause (z) above, so long as the AV Stockholders retain the
Minimum Ownership of Shares in the Company, all of the Stockholders, and any
other persons who may become parties hereto, agree, and such Stockholders shall
vote all of their Shares and take all such other action to cause and ensure,
that the Board of Directors of the Company shall contain a minimum of one (1)
individual designated exclusively by the AV Stockholders.
(b) Beginning upon the date thirty (30) days after the date
hereof, or earlier upon the approval of the majority of the SCI Board Members
and the AV Board Members voting as a group, and ending on the Board Rights
Termination Date, all of the Stockholders, and any other persons who may become
parties hereto, agree, and such Stockholders shall vote all of their Shares and
take all such other action to cause and ensure, that the Board of Directors of
the Company shall contain, in addition to the SCI Board members and the AV Board
members described in Section 9(a) above, three (3) outside directors selected as
follows:
(i) one "outside" director nominated by the vote of a
majority of the SCI Board Members, and approved by the majority
of the AV Board Members;
(ii) one "outside" director nominated by the vote of a
majority of the AV Board Members, and approved by the majority
of the SCI Board Members; and
(iii) one "outside" director nominated by the vote of
the majority of the entire Board of Directors.
(c) During the term of this Agreement, the Board of Directors
may be expanded, subject to conformance with the Company's By-laws and
applicable Delaware law, to a nine (9) member Board upon the vote of the
majority of the entire Board of Directors, but inclusive of the unanimous vote
and approval of all of the SCI Board Members and the AV Board members.
(d) The parties hereby agree that Xxx Xxxx shall serve as the
Chairman of the initial Board of Directors until the next annual meeting of the
stockholders, unless earlier removed in accordance with the By-laws. In
addition, in the event that Xxxxx Xxxxxx is appointed as the permanent Chief
Executive Officer of the Company by approval of a resolution by the Board of
Directors, then, upon such appointment, the parties hereto agree that Xxxxx
Xxxxxx will replace Xxxxx Xxxxxx as one of SCI Stockholders' two exclusive Board
appointees.
(e) The parties further hereby agree that during the term of
this Agreement and subject to the terms of any employment agreements that may
currently exist or hereafter be executed between the Company and the following
individuals, the Company will not terminate from employment Xxx Xxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxx or Xxxx Xxxxx (collectively the "SCI Founders") without
cause, except upon the agreement of any three SCI Founders. For the purposes of
this sentence only, "cause" shall be defined as a breach of the employee's
fiduciary responsibility to the Company as a whole.
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(f) The Stockholders hereby agree, to the extent required by
applicable Delaware law, to cause the Company's By-laws to reflect at all times
during the term of this Agreement, the terms and agreements set forth in this
Section 9, and to take any and all such further actions necessary to make the
terms and agreements set forth in this Section 9 legal and enforceable.
10. SCI STOCKHOLDERS' RIGHT OF PURCHASE.
(a) Right of Purchase. If a Purchase Event (as defined below)
shall occur, then the SCI Stockholders, voting as a group, shall have the right
to purchase all, but not less than all, of the Shares (except any Investment
Shares, as described below) then held by the AV Stockholders in the aggregate
for a purchase price of One and 00/100 Dollar ($1.00) in the aggregate (the
"Right of Purchase"); provided, however, that the Right of Purchase shall not
apply to any Investment Shares held by any of the AV Stockholders, such
Investment Shares not being subject to this Agreement. For purposes of this
Section 10, the following event shall constitute a "Purchase Event": except for
a delay caused in whole or in part by the SCI Stockholders, Superhighway
Consulting, Inc. or their representatives or agents (and, in such case, then
only to the extent of such delay) and as otherwise provided in the Note
Agreement, the Company shall not have closed on a minimum of Six Million Dollars
and No/100 ($6,000,000.00) in aggregate gross proceeds through a private
placement of equity securities or otherwise (the "Offering"), at a price
determined based upon a valuation of the Company of at least Twenty Million
Dollars ($20,000,000) on or before April 15, 1999 or as such date shall
otherwise be extended by the AV Group (the "Closing Date"), but in no event
later than April 30, 1999; provided, however, that (A) the Company shall have
acted in good faith and used its best efforts to close such Offering on or prior
to the scheduled Closing Date and in the event that the Company has not
proceeded in good faith or used its best efforts or has otherwise caused the
delay of the Offering, the SCI Stockholders' Right of Purchase shall not apply;
(B) the $1,000,000 bridge loan made by Xxxxxxxxx Xxxx ("Xxxx") to Superhighway
Consulting, Inc. and evidenced by that certain Note Agreement of Superhighway
Consulting, Inc. dated as of December 28, 1998, may be converted by Xxxx into
such number of shares of Series A Preferred Stock issued pursuant to the
Offering and, therefore, counted towards the $6,000,000 minimum contemplated
above, but Xxxx may not acquire additional amounts in excess of $1,000,000
through the Offering; and (C) the AV Group shall separately pay the "necessary
expenses" to operate the Company until such Closing Date, which amount shall be
repaid from the proceeds of the Offering. For the purposes of this paragraph,
"necessary expenses" shall be defined as expenses related to payroll and other
expenses which, if remaining unpaid until the Closing Date, would have a
material adverse impact on the Company.
(b) Terms of Offer. Upon the occurrence of the Purchase Event
set forth in subsection (a) of this Section 10, the SCI Stockholders, together
or individually (collectively, the "Offeror SCI Stockholder") may notify each of
the AV Stockholders (the "Offeree AV Stockholders") of any of the Offeror SCI
Stockholders' desire to Purchase all, but not less than all, of the Shares then
held by the AV Stockholders (but not including any Investment Shares then held
by any of such AV Stockholders) (the "Purchase Shares"). The notice, delivered
in accordance with requirements for notice set out in this Agreement, shall
contain such commercially reasonable terms as the Offeror SCI Stockholder(s)
shall desire (the "Notice"). Upon receipt of the Notice, the Offeree AV
Stockholders shall have a reasonable period of time in which to tender the
Purchase Shares held by such Offeree AV
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Stockholders and upon such tender, the Offeree SCI Stockholder(s) shall
immediately deliver the purchase price.
11. TAKE ALONG. Except for a Sales Transaction contemplated under the
provisions of Section 2 hereof which shall be exclusively governed by such
Section 2 and not this Section 11, if at any time any or all of the SCI
Stockholders (for purposes of this Section 11, the "Take-Along Holder(s)")
decide (and are permitted pursuant to Section 4 hereof) to sell any or all of
their Shares in a Sale Transaction or Transfer (as such terms are defined
herein), or in a series of related Sales Transactions or Transfers, to a third
party, the AV Stockholders shall have the right to sell the same proportionate
amount of their Shares on the same terms and conditions, including, but not
limited to, the purchase price and payment terms, as those on which the
Take-Along Holder(s) are selling their Shares to such third party.
12. GENERAL PROVISIONS.
(a) Notices. Whenever notice is provided for in this Agreement,
it shall be given in writing and hand delivered or mailed by registered or
certified mail, return receipt requested, to the party or parties to whom
addressed at the addresses set forth on the signature page of this Agreement.
Any party may change the address to which notice shall be delivered or mailed by
giving written notice to the Company of such other address.
(b) Governing Law and Amendments. This Agreement shall be
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law. This Agreement may only be
modified by a writing signed by all parties hereto.
(c) Benefits. This Agreement shall insure to the benefit of, and
be binding upon, the parties hereto and respective heirs, beneficiaries, legal
representatives, successors and assigns (including successive as well as
immediate successors to and assigns of said parties).
(d) Definitions. For the purposes of this Agreement, transfers
in connection with a merger, reorganization, stock split or reverse stock split,
which affect an exchange or conversion of the Company's capital stock, are not
barred by this Agreement. Further, the Shares of the Company presently owned by
each Stockholder shall be deemed to include such Shares of stock (common or
preferred) of the Company as are hereafter acquired by him, whether such
acquisition is by way of purchase, stock dividend, exchange or any other manner
whatsoever. Further, for the purposes of this agreement, the term "the Company"
shall mean the Delaware corporation presently known as "WP Holding, Inc.,"
whether or not such name be changed in the future, and wherever appropriate in
this Agreement, shall mean any past, present or future subsidiary corporation
which is a party to a merger or a consolidation with the Company, and/or
acquires all of the Shares of capital stock of the Company, and/or all or any
part of the assets of said Company other than in the ordinary course of business
of said Company.
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(e) Separate Counsel. The parties acknowledge that Xxxxxxxxx
Xxxx and Xxxxxxxx Xxxxxxx of the AV Stockholders group have been represented in
this transaction by Xxxxxxxxx Traurig, P.A., and that each of the other
Stockholders hereto and the Company has not been represented by Xxxxxxxxx
Xxxxxxx, and that each of the other Stockholders and the Company has been
advised that it is important for each of them to seek separate legal advice and
representation in this matter.
13. TERM. This Agreement shall terminate upon the earliest to occur of
(i) the voluntary written agreement by all of the Stockholders of the Company
who are, at that time, bound by the terms of this Agreement; (ii) the
dissolution, bankruptcy or receivership of the Company; (iii) a Sales Trans
action that is duly approved by the Company and in accordance with the terms
hereof; or (iv) there is a public offering of the capital stock of the Company
as set forth in Section 3 hereof or a private placement under Section 4(2) of
the Securities Act of 1933, either of which generates trading in the Shares on
an established securities market or permits the Shares to be readily tradable on
a secondary market. Upon termination of this Agreement, the Stockholders shall
surrender to the Company their stock certificates and the Company shall issue to
them an equal number of Shares without the legend set forth in this Agreement.
14. ENTIRE AGREEMENT. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement, including
without limitation, that certain term sheet concerning a Founders' Agreement
with Acquisition Ventures Group and Superhighway Consulting, Inc. dated December
28, 1998 attached as Exhibit B to the Note Agreement.
15. ARBITRATION. If at any time during the term of this Agreement any
dispute, difference or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference and disagreement shall be referred to a single arbiter agreed upon by
the parties, or if no single arbiter can be agreed upon, an arbiter or arbiters
shall be selected in accordance with the rules of the American Arbitration
Association and such dispute, difference or disagreement shall be settled by
arbitration in accordance with the prevailing rules of the American Arbitration
Association, and judgment upon the award rendered by the arbiter may be entered
in any court having jurisdiction thereof.
16. PARAGRAPH HEADINGS. The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
17. GENDER. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates, is appropriate.
18. PRESUMPTION. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
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19. FURTHER ACTION. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
20. PARTIES IN INTEREST. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
21. ATTORNEYS' FEES. In the event of suit or other legal proceeding,
including mediation or arbitration, to enforce the terms of this Agreement, the
substantially prevailing party shall be entitled to collect from the
substantially nonprevailing party its reasonable attorneys' fees, reasonable
expenses and court costs, which shall include any appellate proceeding.
22. SEVERABILITY. In the event that any of the provisions of this
Agreement, or portions thereof, are held to be unenforceable or invalid by any
court of competent jurisdiction, the validity and enforceability of the
remaining provisions, or portions thereof, shall not be affected thereby.
23. EXECUTION IN COUNTERPARTS. This Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
24. SUBSEQUENT STOCKHOLDERS TO BECOME BOUND. Any person or entity not an
original signatory hereto who purchases or otherwise receives Shares from a
Stockholder party hereto shall be bound by all of the terms and provisions of,
and shall be entitled to all of the benefits and privileges of, this Agreement.
Before any person or entity not a party to this Agreement, including any person
or entity to whom transfers of Shares may be made hereunder, may be entitled to
be a Stockholder of the Company, such person or entity shall be required first
to execute and deliver to the Company an agreement, in substantially the form of
Exhibit B, pursuant to which such person or entity agrees to be bound by all of
the terms and conditions of this Agreement (as it may have then been amended)
thereby becoming a Stockholder and failure of any such person or entity so to do
shall preclude such person or entity from becoming a Stockholder of the company.
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IN WITNESS WHEREOF, the Stockholders and the Company have caused this
Founders' Agreement to be executed on and as of the above-noted date.
COMPANY:
WP HOLDING, INC,
A DELAWARE CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
Signatures, Continued:
STOCKHOLDERS:
SCI STOCKHOLDERS:
____________________________________
(Witness) XXXXXXX XXXX, Individually
Address:
____________________________________
(Witness) XXXXX XXXXXX, Individually
Address:
____________________________________
(Witness) XXXXX XXXXX, Individually
Address:
____________________________________
(Witness) XXXX XXXXX, Individually
Address:
____________________________________
(Witness) XXXX XXXXXXXX, Individually
Address:
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SIGNATURES (CONTINUED):
____________________________________
(Witness) XXXXXX XXXXXX, Individually
Address:
____________________________________
(Witness) XXXXXXX XXXXXX, Individually
Address:
Signatures, Continued:
AV STOCKHOLDERS:
____________________________________
(Witness) XXXXXXXXX X. XXXX, Individually
Address:
____________________________________
(Witness) XXXXXXXX XXXXXXX, Individually
Address:
____________________________________
(Witness) XXXXX XXXXXX, Individually
Address:
____________________________________
(Witness) XXXXX XXXXXXX, Individually
Address:
____________________________________
(Witness) XXXX XXXXXX, Individually
Address:
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SCHEDULE A
STOCKHOLDERS OF WP HOLDING, INC.
NUMBER OF PERCENTAGE
NAME OF STOCKHOLDER SHARES OWNED INTEREST
1. SCI GROUP:
a. Xxxxxxx Xxxx 5,494,832 Shares 21.98%
b. Xxxxx Xxxxxx 5,494,832 Shares 21.98%
c. Xxxxx Xxxxx 3,722,306 Shares 14.89%
d. Xxxx Xxxxx 3,722,306 Shares 14.89%
e. Xxxx Xxxxxxxx 236,336 Shares 0.95%
f. Xxxxxx Xxxxxx 236,336 Shares 0.95%
g. Xxxxxxx Xxxxxx 236,336 Shares 0.95%
2. AV GROUP:
x. Xxxxxxxxx X. Xxxx 1,470,000 Shares 5.88%
b. Xxxxxxxx Xxxxxxx 390,000 Shares 1.56%
c. Xxxxx Xxxxxx 200,000 Shares 0.80%
d. Xxxxx Xxxxxxx 1,470,000 Shares 5.88%
e. Xxxx Xxxxxx 1,470,000 Shares 5.88%
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EXHIBIT A
RETURNS ANALYSIS SCHEDULE
(ATTACHED SEPARATELY HERETO)
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EXHIBIT B
FORM OF BINDING AGREEMENT
I,___________________________, the undersigned, do hereby agree to all of the
restrictions, terms and conditions of, and intend to be legally bound by, that
certain WP HOLDING, INC. FOUNDERS' AGREEMENT, dated as of March __, 1999 (the
"Founders' Agreement") and hereby authorize and direct the WP Holding, Inc., or
any successor or assign (collectively, the "Company") thereby, to place a
corresponding legend to that effect on all shares of Capital Stock of the
Company owned by me, directly or indirectly, and covered by the Founders'
Agreement.
Dated:______________
________________________________
________________________________
[Print Name]
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
(ATTACHED SEPARATELY HERETO)
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