Restated and Amended
XXXXXXXxxxx.xxx, Inc.
RESTATED and AMENDED
STOCKHOLDERS' AGREEMENT
AGREEMENT (the "Agreement") dated January 24, 2000 amending
and restating the AGREEMENT, ("Prior Agreement") dated as of September 30,
1999, by and among TELTRAN INTERNATIONAL GROUP, LTD. ("Teltran"), a Delaware
corporation with its principal address at Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 00000, ANTRA HOLDINGS GROUP, INC., a Delaware corporation with
its principal address at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
("ANTRA"), and XXXXXXXXXXX.XXX, Inc., a Delaware corporation with its
principal address at Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the
"Corporation"). Teltran and Antra may each be referred to herein as a
"Stockholder" and sometimes collectively referred to herein as the
"Stockholders".
INTRODUCTION
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The parties previously entered into the Prior Agreement and
now desire to amend and restate the Prior Agreement in its entirety as set forth
hereinafter.
Teltran is in the telecommunications business and has created
a web portal, and Antra is in the urban music business. The Corporation was
formed on July 29, 1999 to serve as the corporate vehicle for a joint venture
between the two Stockholders to sell various music and other entertainment
products on the Internet. The authorized capital stock of the Corporation
consists of 50,000,000 shares of common stock, $.001 par value per share (the
"Common Shares"), and 5,000,000 shares of preferred stock, $.001 par value per
share (the "Preferred Shares"; and with the Common Shares, sometimes
collectively referred to herein as the "Shares"). Teltran and Antra each own
forty-nine (49%) percent of the outstanding Common Shares. There are no
Preferred Shares currently outstanding.
The Stockholders believe that in order to promote their mutual
interests and the interests of the Corporation, it is advisable to set forth
herein certain understandings with respect to the future disposition of any
Shares and the management of the business and affairs of the Corporation.
Accordingly, in consideration of the foregoing and of the
mutual promises and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Management and Internal Affairs.
1.1.1. Initial Shareholding. Each of the Shareholders shall
own 4,900,000 shares of the Corporation's common stock. The parties have agreed
that the Corporation shall issue 200,000 shares of its common stock to an
affiliate of an entity in which the Corporation has a business relationship.
Each party agrees that hereinafter their percentage ownership shall continue and
no shares shall be issued unless each of the Shareholders shall acquire one half
of such shares.
1.1.2 Initial Capital Contributions. As of the date of the
execution and delivery of this Agreement, the parties have agreed to contribute
$75,000 each to the Corporation as an initial capital contribution ("Initial
Capital Contribution"). As of the date hereof each party has made its initial
capital contribution. Each party shall contribute an additional $175,000
("Additional Required Contribution") from time to time as requested by the Board
of Directors as hereinafter defined.
1.1.3 Budget and Plan of Operations. The Board (as such term
is defined in subsection 1.2.1 below) shall, from time to time, cause to be
prepared and shall approve a budget (the "Budget") for the Corporation, which
sets forth the estimated receipts and expenditures of the Corporation for the
period covered thereby, and a plan of operations (the "Plan") for the
Corporation, which sets forth the projected business goals and methods of
achieving such goals of the Corporation for the period covered thereby. The
Board shall meet periodically to discuss the results of the business operations
of the Corporation and to evaluate the Plan and the Budget, and may, as it deems
in the best interest of the Corporation, update a Budget during a year as
frequently as it wishes, in light of its evaluations of the business operations
and Plan of the Corporation for such year. Upon approval of a Budget (including
any update thereof) and Plan for the Corporation, the officers of the
Corporation shall adhere to the Plan and the Budget and are only authorized to
expend funds and incur liabilities on behalf of the Corporation as therein set
forth.
1.1.4 Additional Advances.
(a) The Stockholders shall make additional advances
("Additional Advances") to or on behalf of the Corporation as part of the
Additional Required Contribution as directed by the Board of Directors or as
required by the Budget. Additional Advances shall be made equally by each
Stockholder.
(b) If a Stockholder does not make any Additional Advances the
other Stockholder may advance any amount owed to the Corporation by the
defaulting Stockholder. Such amount shall bear interest at the rate of interest
equal to three (3%) percent above the prime rate
published by Citibank and shall be a joint and several obligation of the
defaulting Stockholder and the Corporation. In addition, all distributions from
the Corporation that would otherwise be made to the defaulting Stockholder
(whether before or after liquidation of the Corporation) shall, instead, be paid
to the non-defaulting Stockholder, or retained by the Corporation to the extent
it made any payments to the non-defaulting Stockholder, until such amount and
all interest accrued thereon has been repaid in full.
1.1.5 No Other Capital Contributions. Except as set forth in
subsection 1.1.3 and 1.1.4 above, the Stockholders shall not be obligated to
make any additional capital contributions to the Corporation.
1.2 Board of Directors.
1.2.1 The number of directors constituting the entire Board of
Directors of the Corporation (the "Board") shall be two (2). Each Stockholder
agrees during the term of this Agreement, to nominate and to vote their
respective shares for one nominee designated by Teltran and one nominee
designated by Antra. The initial designee of each Stockholder is as set forth on
Schedule A annexed hereto.
1.2.2 The Stockholders may change any or all of their
respective designees from time to time by notice to the other Stockholders, and
the Stockholders agree to vote to elect or appoint such new designees as
Directors as set forth in such notice. In the event that any designee shall fail
to continue to serve as a Director, the Stockholder appointing such designee
shall have the right to designate a replacement for such Director, and the
Stockholders agree to vote to elect or appoint such designee as a Director.
1.2.3 The right to designate Directors for election to the
Board, shall remain in place for as long as the so empowered Stockholders remain
Stockholders of the Company. Upon the cessation for any reason of a
Stockholder's authority to designate a Director, those seats on the Board
formerly controlled by such Stockholder shall be filled by election of the
Stockholders without restriction in accordance with the relevant terms of the
General Corporation Law of the State of Delaware.
1.3 Quorum and Voting Requirements of the Board of Directors.
1.3.1 The presence in person or telephonically of all of the
Directors shall be required for any meeting of the Board. The unanimous vote or
written consent of all of the Directors shall be required for any action taken
by the Board.
1.3.2 Actions taken by written consent shall have the same
effect as actions voted on at meetings of the Board of Directors.
1.4 Officers. The Stockholders agree to use their best efforts to
secure the election and continuation in office of officers of the Company to be
agreed upon.
1.5 No Prohibition Against Other Business Ventures. Except as
prohibited by the provisions of subsection 3.2 hereof, the Stockholders, as well
as any persons or entities which own and/or control a Stockholder, may engage
and hold interests in other business ventures of every kind and description for
their own account. Neither the Corporation nor any of the Stockholders shall
have any rights in or to such business ventures by virtue of the Stockholder (or
a person owning or controlling such Stockholder) engaging in such venture being
a Stockholder (or owning or controlling a Stockholder) of the Corporation.
1.6 Responsibilities of the Stockholders. The Stockholders shall
provide the Corporation with the services it is contemplated that Antra's
services will relate to the nature of the music business and Teltran's services
will be technical in nature.
1.7 Reimbursement by the Corporation. The parties acknowledge
that the services to be provided to the Corporation by Teltran and Antra shall
be an expense of the Corporation and the respective party shall be reimbursed
therefor by the Corporation.
2. Books of Account.
Books and records of account of the Corporation shall be
maintained at its principal office, and true and accurate entries of all
transactions had by and on behalf of the Corporation shall be set down therein.
Such books and records, accounts and all other documents of the Corporation, at
all times during normal business hours, shall be open to the inspection of the
Stockholders and their authorized designees, who shall be entitled to make
copies therefrom and to take extracts thereof. Notwithstanding whether any of
the parties hereto remains a Stockholder, all such records and books of account,
together with all files and documents prepared on behalf of the Corporation,
shall remain in the exclusive possession of the Corporation.
3. Covenants of Stockholders.
3.1 Confidentiality. Each Stockholder agrees that it
shall not, during the term of this Agreement or at any time thereafter, use for
its own benefit, nor divulge, furnish or make accessible to anyone (otherwise
than in the regular course of the business of the Corporation) any confidential
or secret knowledge or information with respect to the business of the
Corporation.
3.2 Non-Competition. Each Stockholder agrees that it
shall not except as provided in subsection 1.1, while it is a Stockholder,
compete with the Corporation with respect to the sale of music products on the
Internet in any business then conducted or under development by the Corporation,
directly or indirectly, nor shall it be, directly or indirectly, a partner
or stockholder of any proprietorship, partnership or corporation which so
competes with the Corporation.
3.3 Non-Solicitation. Each Stockholder agrees that, for
so long as it is a Stockholder of any of the Corporation and for a period of one
(1) year thereafter, it shall not directly or indirectly, (i) seek to persuade
any director, officer, employee or consultant of any of the Corporation to
discontinue that individual's status of employment by, or affiliation with, the
Corporation, (ii) solicit or hire, or cause to be solicited or hired, any such
officer, employee or consultant whether on its own behalf or on the behalf of
any third party; or (iii) solicit any client of the Corporation or solicit any
business which was being solicited by the Corporation or was under contract with
the Corporation during the period in which it was a Stockholder of the
Corporation.
3.4 Investment. Nothing in this Agreement shall preclude
a Stockholder from investing its corporate assets in securities of any
corporation or other business entity which is engaged in a business competitive
with the Corporation, if such securities are regularly traded on a national
stock exchange or over-the-counter and if such purchase shall not result in its
holding beneficially, at any time, more than two (2%) percent of the equity
securities of such competitor.
3.5 Equitable remedies. The parties hereto agree that the
remedy at law for any breach of this Section 3 shall be inadequate and that, in
the event of any such breach, the non-breaching parties shall be authorized and
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief, as well as an equitable accounting of all profits
or benefits arising from such breach, which rights and remedies shall be
cumulative and in addition to any other rights and remedies to which the
non-breaching parties may be entitled. The provisions of this subsection 3.5
shall be enforceable notwithstanding the existence of any claim or cause of
action of the breaching party against any of the non-breaching parties, whether
predicated on this Agreement or otherwise.
4. Obligations of the Corporation; Conflict with By-Laws.
The parties hereto agree that all of the terms, covenants
and conditions of this Agreement shall supplement the By-Laws of the
Corporation, and, in the event of conflict therewith, shall prevail. The
Corporation shall not be deemed a party to, nor be directly obligated with
respect to, any of the voting, consent or approval provisions hereof; provided,
however, that nothing in this Section 4 or elsewhere set forth shall affect the
rights and obligations of the Stockholders among themselves under any of the
provisions of this Agreement. Wherever in any section of this Agreement
reference is made to any action to be taken or not be taken by the Corporation
or otherwise or in accordance with specified procedures, such reference shall be
deemed to mean that the Stockholders shall cast their votes and take such other
action as reasonably may be necessary or desirable or otherwise appropriate to
cause the Corporation to take or not to take such action or otherwise to
effectuate such provisions and in accordance with the procedures therein
specified.
5. General Transfer Restrictions.
Prohibition of Transfers. Neither Stockholder shall sell,
assign, pledge, hypothecate or otherwise alienate, encumber or otherwise dispose
of, in any manner, whether or not for consideration (hereinafter referred to as
a "Transfer"), any of the Shares, except as expressly permitted by the terms of
this Agreement. Any attempted issue or Transfer of Shares or other securities of
the Corporation in violation of this Agreement shall not be recognized and shall
be deemed void ab initio. The foregoing provisions shall not, however, apply to
any sale by a Stockholder in connection with the sale of all such Stockholder's
assets to an entity or person not a party to this Agreement or to a wholly owned
subsidiary of such Stockholder, provided such purchasing party agrees in writing
to be bound by the terms and conditions hereof.
6. Rights of First Refusal.
6.1 Right of First Refusal Generally. If at any time, or
from time to time, a Stockholder receives a bona fide offer from a person or
entity not a party to this Agreement (an "Offeror") to purchase all of its
Shares (the "Third Party Offer"), prior to the acceptance thereof, such
Stockholder (the "Offering Stockholder") shall give notice thereof to the other
Stockholder in accordance with the terms of this Section. Such notice (the
"Offering Notice") shall contain a copy of the Third Party Offer, including, but
not limited to, the name and address of the Offeror and the price at which and
terms upon which such Shares (the "Offered Shares") are proposed to be
transferred. The Offering Notice shall be deemed to be an offer by the Offering
Stockholder to sell all Offered Shares to the other Stockholders in accordance
with the terms of the Offering Notice and subject to the terms of this
Agreement.
6.1.1 The Offered Shares first shall be offered to the
other Stockholder, who shall have thirty (30) days in which to accept by notice
of the Offered Shares at the purchase price and other terms and conditions set
forth in the Third Party Offer. An offer may not be accepted for less than all
such shares unless the Corporation purchase the balance.
6.1.2 If the remaining Shareholder does not agree to
purchase all the aforesaid Offered Shares, the number of Offered Shares not
purchased by the remaining Shareholder shall be deemed offered to the
Corporation, which shall have an additional thirty (30) days in which to accept
the offer to purchase all such Offered Shares not purchased by the remaining
Shareholder at the purchase price and other terms and conditions set forth in
the Third Party Offer.
6.1.3 If all of the Offered Shares are not accepted
pursuant to the provisions of this subsection 6.1 then all, but not less than
all, of the Offered Shares may be transferred by the Offering Stockholder, at
any time within 105 days after the Offering Notice to the
Offeror named in the Offering Notice at the price and upon the other terms and
conditions set forth in the Offering Notice as evidenced by such document as the
Corporation may reasonable require.
6.1.4 Notwithstanding the provisions of this Agreement,
Teltran or Antra, at any time, may buy any or all or the Shares owned by the
other at such price and upon such terms as they may agree.
6.1.5 Except as otherwise expressly provided in this
Agreement, the closing, price and other terms and conditions of a Transfer made
pursuant to any of the provisions of this subsection 6.1 shall be as provided in
Section 8 hereof.
6.1.6 The Offering Stockholder transferring all of its
Shares pursuant to this subsection 6.1 shall cause its designee to the Board of
Directors and any officers nominated thereby to tender his resignation from all
such positions simultaneously with the closing of the transfer of its Shares,
and the other parties hereto shall forthwith do all acts necessary to modify all
applicable documents filed by the Corporation with various regulatory
authorities.
6.1.7 During any period beginning on the giving of an
Offering Notice and ending upon the closing of the transfer of any Shares
offered thereunder, such Shares shall not be voted and the holder thereof shall
not exercise any of the rights attendant to ownership thereof except with
respect to such closing or as provided hereunder.
7. Bankruptcy of a Stockholder.
7.1 Affected Stockholder. Anything in this Agreement to
the contrary notwithstanding, if any Stockholder becomes bankrupt or its Shares
become subject to attachment (a "Triggering Event"), then neither such
Stockholder (an "Affected Stockholder") nor its trustee or transferee (a "Legal
Substitute") shall be entitled thereafter to be offered or to purchase any
Shares pursuant to any of the provisions of this Agreement, and such
Stockholder's interests shall be disregarded for all such purposes hereof;
provided, however, that such Stockholder or its Legal Substitute, in such an
event, shall be bound, with respect to such Shares, to all of the restrictions
and obligations imposed under this Agreement. Notice of the bankruptcy or
attachment of the Affected Stockholder (the "Triggering Event Notice") shall be
given promptly after its occurrence (which shall be within ten (10) days of any
event constituting bankruptcy) by the Affected Stockholder to the Corporation
and to the other Stockholder.
7.2 Call Privilege. Irrespective of the provisions of
subsection 7.2 hereof, a Triggering Event Notice shall constitute the granting
of an option to purchase all of the Affected Stockholder's Shares (hereinafter
referred to as a "Call") at a purchase price determined in accordance with
subsection 7.3 below, which Call shall be available to and may be exercised by
the other Stockholder and/or the Corporation in the same proportions, order of
priorities and manner, within the same time limits and subject to the same
general conditions as provided for a right of first
refusal in section 6 hereof, except that (i) any or all of the Affected Shares
may be purchased pursuant thereto, and (ii) the terms "Affected Stockholder" and
"Triggering Event Notice" shall be substituted for the terms "Offering
Stockholder" and "Offering Notice", respectively, as used therein.
7.3 Valuation. If at any time a Stockholder is deemed to
have offered to sell its Shares pursuant to this Section 7 without having
received a valid Third Party Offer valuing the Shares, the initial purchase
price of the Offered Shares shall be the "Net Book Value" per Share. "Net Book
Value" of a Share shall mean the per share book value of the Corporation as of
the last day of the calendar month immediately preceding the date upon which the
Corporation receives notice of the bankruptcy or? of the Affected Stockholder,
as determined in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods by the Corporation's regularly
employed certified public accountants.
8. General Conditions to Purchase.
8.1 Corporate Repurchase. In the case of any repurchase
of Shares required to be made by the Corporation pursuant to any of the
provisions hereof, the Stockholders shall do all things (including, but not
limited to, the casting of their votes) appropriate and necessary to cause the
Corporation to effect such repurchase, but the Stockholders shall not be
required to contribute additional capital to the Corporation or lend it funds.
In the event that the Corporation=s funds legally available for the repurchase
of such Shares are insufficient to pay the full purchase price due therefor, as
and when it becomes due (or at such sooner date as is required by applicable
laws), and such obligation is not assumed by the Stockholders under such terms
as they shall agree among themselves, then the Corporation and the Stockholders
shall promptly take all action necessary to reduce the stated capital of the
Corporation to the extent required to make funds available for said purpose.
8.2 Closing and Payment.
8.2.1 Except as otherwise provided herein, the
closing of any purchase by the Corporation and/or a Stockholder pursuant to this
Agreement shall take place on the "Closing Date" at the offices of Xxxxxx Xxxxxx
Xxxxxx & Xxxx, P.C., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000. The
Closing Date shall be the first business day following the thirtieth calendar
day after the last Acceptance Notice is given.
8.2.2 At such closing, and except as otherwise provided
herein:
(i) The selling Stockholder (or his or its Legal
Substitute) shall deliver to the purchasing
party certificates representing the Shares to
be purchased, duly endorsed, free and clear
of all liens, claims or encumbrances, with
evidence of payment of all
transfer taxes and fees, if any.
(ii) The purchasing party shall deliver:
(A) A down-payment (by certified or bank
cashier's check) in an amount equal to (x) in
the case of a sale pursuant to the terms of
subsection 6 hereof, the down-payment
required by the terms of the Third Party
Offer; or (y) in the case of a sale pursuant
to Section 7 hereof, thirty three and one
third (33 1/3%) percent of the purchase price
determined in accordance with subsection 7.3
hereof.
(B) A promissory note, in negotiable form, in
the principal amount of the remainder of the
price stated in the Offering Notice or the
purchase price determined in accordance with
subsection 1.3 hereof, as the case may be,
bearing interest at the prime rate per annum
in effect from time to time at a bank to be
designated in New York, New York, but in no
event higher than the highest applicable rate
permitted by law. Such Note shall be payable
in two equal six-month installments of
principal together with all interest accrued
thereon to the date of such payment, the
first such payment to be due and payable six
(6) months following the Closing Date. The
Shares shall be held in escrow until payment
of the Note.
(C) The Corporation and all Stockholders and
their Legal Substitutes shall do all things
necessary and appropriate to consummate such
closing.
9. Binding Agreement; Assignment; Survival.
Except to the extent otherwise expressly provided herein,
this Agreement shall be binding upon the present and future parties hereto,
their respective successors, assigns, heirs, legatees and Legal Substitutes and
all persons and other entities who otherwise may derive any rights or interests
hereunder from or through any of the parties hereto, regardless, in any event,
of whether any certificate representing shares of Common Stock bears the legend
reflecting the restrictions hereby. Except to the extent otherwise expressly
provided herein, this Agreement shall inure to the benefit of the present and
future parties hereto, their respective heirs and legatees
and, to the extent that a transfer of their shares of Common Stock is effected
pursuant to the provisions of this Agreement, their assigns. All agreements,
covenants, representations, and warranties made herein shall survive the
execution and delivery of this Agreement and the agreements made pursuant hereto
or referred to herein.
10. Communications.
All notices, demands, requests, offers, approvals,
consents, acceptances, waivers, reports and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given, received and dated when delivered personally or, if sent by overnight
courier, three days after being deposited with such courier addressed to the
parties at their addresses respectively set forth above or at such other address
as any party may give by notice. Any party may change its address by sending
notice thereof to the other parties in the manner prescribed above, except that
notice of change of address shall not be effective until actually received.
11. Construction; Headings; Word Meanings.
This Agreement, and all related agreements, instruments
and documents, shall be construed and enforced in accordance with the laws of
the State of New York without giving effect to the principles of conflict of
laws. Headings and titles are for convenience of reference only and shall not
control the construction or interpretation of any provision hereof.
12. Choice of Forum.
All disputes that may arise under this Agreement shall be
submitted to hearing in the Courts of the State of New York, County of New York
and the parties hereto irrevocable waive any defenses or claims as to improper
jurisdiction, inconvenient forum and improper venue with regard to such courts.
13. No Third Party Beneficiaries.
Nothing in this Agreement shall be construed as
conferring upon any person or other entity, other than the parties hereto and
their Legal Substitutes (to the extent provided herein), any right, remedy or
claim under or by reason of this Agreement.
14. Entire Agreement; Modification; Consents; Waivers.
This Agreement and the agreements and instruments
referred to herein represent the entire agreement of the parties with respect to
the subject matter hereof and no interpretation, change, termination or waiver
of or extension of time for performance under,
any provision of the Agreement shall be binding upon any party unless in writing
and signed by the party intended to be bound thereby. Any provision of this
Agreement can be modified if consented to by all of the parties hereto. Receipt
by any party of money or other consideration due under this Agreement, with or
without knowledge of breach, shall not constitute a waiver of such breach or of
any provision of this Agreement. Except as otherwise provided herein, no waiver
of or other failure to exercise any right under, or default or extension of time
for performance under, any of the provisions of this Agreement shall affect the
right of any party to exercise any subsequent right under or otherwise enforce
said provision or any other provision hereof or to exercise any right or remedy
in the event of any other default, whether or not similar. Without limitation to
the generality of the foregoing and except as otherwise provided herein, the
failure of any party to exercise any right of first refusal or any Put or Call
hereunder (hereinafter collectively referred to as "said rights") shall not in
any way constitute a waiver of or otherwise affect such party's right to
exercise any of the other said rights or to exercise any subsequent said rights
to which such party may otherwise be entitled hereunder.
15. Severability.
The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any of the other provisions hereof
and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement of ________ __, 2000.
TELTRAN INTERNATIONAL GROUP, LTD.
By:
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Name:
Title:
ANTRA HOLDINGS GROUP, INC.
By:
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Name:
Title:
