Exhibit 10.18
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STOCKHOLDERS' AGREEMENT
AMONG
XXXXXXXXXXX.XXX, INC.,
THE FOUNDERS IDENTIFIED HEREIN
AND
THE INVESTORS IDENTIFIED
ON
SCHEDULE 1 HERETO
DATED AS OF FEBRUARY 26, 1999
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STOCKHOLDERS' AGREEMENT dated as
of February 26, 1999, among (i)
XXXXXXXXXXX.XXX, INC., a Delaware
Corporation (the "Corporation"), (ii) each
of the Investors listed on Schedule 1 hereto
(each, an "Investor and, collectively, the
"Investors"), and (iii) XXXXXX X. XXXXXXXX,
XXX XXXXXXXXX and XXXXXX & CO., LLC (the
"Founders").
The Investors own and/or have the right to acquire upon the exercise
or exchange of stock subscription warrants, shares of Senior Convertible
Preferred Stock, $.001 par value (the "Senior Preferred Stock"), of the
Corporation and each Founder owns, on the date hereof, or has the right to
acquire by conversion of shares of Preferred Stock, $.001 par value, (the
"Junior Preferred Stock") or exercise or exchange of options, shares of Common
Stock, $.001 par value (the "Common Stock"), of the Corporation. The parties
wish to provide herein for the terms with respect to certain matters regarding
the relationship between the Corporation and its stockholders and among such
stockholders. Accordingly, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings:
(a) "AFFILIATE" shall mean any (a) corporation or other entity in which
the subject person owns, directly or indirectly, more than 50% of the capital
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other entity and (b) any other person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, the subject person.
(b) "BOARD" means the Board of Directors of the Corporation and the
Subsidiaries of the Corporation.
(c) "CONTROL" (including the terms "controlled by" and "under common
control with") shall mean the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise.
(d) "FOUNDER SHARES" means the shares of Common Stock held by the
Founders on the date hereof or acquired by Founders after the date hereof, and
any shares of capital stock issued thereon as a stock dividend or upon any stock
split or other subdivision of shares of capital stock.
(e) "FOUNDER GROUP" means (i) the spouse and lineal descendants of such
Founder, and (ii) all trusts for the benefit of any of the foregoing.
(f) "INVESTOR SHARES" means at any time, with respect to any Investor,
the shares of Senior Preferred Stock held by it on the date hereof or issuable
upon exercise or
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exchange of the Investor Warrants, and any shares of Common Stock issuable upon
conversion of any shares of Senior Preferred Stock so held or so issuable, any
shares of capital stock or other securities received in respect thereof, which
are held by such Investor, and which have not previously been sold to the public
pursuant to a registration statement under the Securities Act or pursuant to
Rule 144.
(g) "INVESTOR WARRANTS" means, collectively, each stock subscription
warrant dated the date hereof, and issued by the Corporation to each Investor,
respectively.
(h) "PRO RATA AMOUNT" means, the PRO RATA percentage of capital stock
being offered by a Selling Founder pursuant to Section 3.2 hereof that each
Investor shall be entitled to purchase; such PRO RATA percentage shall be the
percentage figure that expresses the ratio, based upon Common Stock equivalents,
between (x) the number of shares of Stock owned by such Investor and (y) the
aggregate number of shares held by such Investor and the Selling Founder that is
proposing to Transfer.
(i) "PLANNED SECONDARY OFFERING" shall mean the underwritten secondary
public offering (the managing underwriters of which shall be one or more
nationally recognized investment banking firms) for the account of the
Corporation of its Common Stock pursuant to a registration statement filed under
the Securities Act which shall have been completed by the Corporation on or
before June 30, 1999 (the "Anticipated Offering Date") and results in aggregate
gross cash proceeds to the Corporation of not less than $20,000,000
(collectively, the "Secondary Offering Criteria").
(j) "SHARES" means the Investor Shares and the Founder Shares.
(k) "STOCKHOLDERS" means the Investors and the Founders.
(l) "SUBSIDIARY" any corporation, partnership, joint venture, limited
liability company or other legal entity of which the Corporation (either alone
or through or together with any other Subsidiary) owns, directly or indirectly,
more than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
(m) "THIRD PARTY" means, with respect to any Founder, any person or
entity that is not a Founder or a member of the Group of such Founder.
(n) "TRANSFER" means to sell, transfer, assign, or otherwise dispose
of, either voluntarily or involuntarily and with or without consideration.
(o) "VOTING SHARES" means the shares of capital stock of the
Corporation entitled to vote for the election of directors.
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2. BOARD REPRESENTATION.
(a) Subject to the terms of this Agreement, the holders of a majority
in voting power of all outstanding shares of Senior Preferred Stock shall be
entitled (A) to nominate one individual for election to the Board (the "Investor
Director") to serve as a director until his or her successor is elected and
qualifies, (B) to nominate such successor, and (C) if such holders so determine
to be appropriate, to propose the removal from the Board of such director
nominated under the foregoing clause (A) or (B), PROVIDED, HOWEVER, that a
majority of directors of the then current Board must consent to the selection of
such nominee, which consent shall not be unreasonably withheld, delayed or
conditioned. The Investor Director may otherwise be removed only by vote of
662/3% of the Board for cause. In the event that an Investor Director is removed
for cause, the holders of a majority in voting power of all outstanding shares
of Senior Preferred Stock may nominate the successor thereto in accordance with
this Section 2(a).
(b) Each nomination or any proposal to remove from the Board any
director shall be made by delivering to the Corporation a notice signed by the
party or parties entitled to such nomination or proposal. As promptly as
practicable after delivery of such notice, the Corporation shall take or cause
to be taken such corporate actions as may be reasonably required to cause the
election or removal proposed in such notice. Such corporate actions may include
calling a meeting or soliciting a written consent of the Board, or calling a
meeting or soliciting a written consent of the stockholders of the Corporation.
Anything contained herein to the contrary notwithstanding, no director may be
proposed for removal (other than for cause) by any Stockholder other than the
Stockholder entitled to nominate such individual in accordance with the
foregoing provisions of this Section 2.1(b).
3. VOTING AGREEMENT.
Each Stockholder shall vote all Voting Shares held by such Stockholder
for the election to the Board of the Corporation of the individual nominated in
accordance with Section 2 and for the removal from the Board of the Corporation
of any director proposed to be removed in accordance with Section 2, and the
Corporation shall cause such individual to be so elected or removed, as the case
may be, from the Board of each Subsidiary. If applicable, each Stockholder shall
use all reasonable efforts to cause each director originally nominated by such
Stockholder to vote, or if such Stockholder is a director, such Stockholder
shall vote, for the election to the Board of all individuals nominated as
replacement directors in accordance with Section 2.
4. CO-SALE RIGHT.
(a) CO-SALE. If any Founder (a "Selling Founder") proposes to Transfer
any Shares to any Third Party at any time after the date hereof, such Selling
Founder, shall, at least 30 days before such Transfer, deliver a notice (the
"Sale Notice") to all the Investors specifying the identity of the Third Party
and disclosing in reasonable detail the terms and conditions of the proposed
Transfer. Within 30 days after delivery of the Sale Notice, each Investor may
elect to participate in the proposed Transfer by delivering to such Selling
Founder, a notice (the "Purchase Notice") specifying the Investor Shares with
respect to which the Investor exercises its right under this Section. Each
Investor shall be entitled to Transfer, at the price and on the terms and
conditions applicable to the Transfer by such Selling Founder, up to a number of
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shares of Common Stock equal to its Pro Rata Amount of the aggregate number of
shares of Common Stock subject to the Transfer, PLUS, in the case of any
Investor who or which indicated in its Purchase Notice its intention to sell, if
available, any Shares in excess of its Pro Rata Amount thereof, such Investor's
Pro Rata Amount of the balance of the Shares not sold by the other Investors(s)
excluding for purposes of determining such Pro Rata Amount the other Investor(s)
electing not to sell or selling less than its Pro Rata Amount. No Founder shall
be entitled or permitted to effect any Transfer of Shares contemplated by this
Section 4(a) unless the Third Party purchases all Investor Shares set forth in
the Purchase Notice delivered by each Investor hereunder in accordance with the
terms of this Section 4(a).
(b) FOUNDER PERMITTED TRANSFER. Notwithstanding Section 4(a), each
Founder may Transfer free of the restrictions of Section 4(a), (i) any Founder
Shares to any other member of the Founder Group, PROVIDED transferee executes
and delivers to the Corporation a counterpart to this Agreement, agreeing to be
treated in the same manner as the transferring Founder, (ii) any Founder Shares
to any other Founder or (iii) up to an aggregate of 10% of the Founder Shares
held by such Founder on the date hereof. Upon such Transfer and such execution
and delivery, the transferee shall be bound by, and comply with, this Agreement
with respect to the transferred Shares in the same manner as the transferring
Founder or (iv) any shares by will or intestate succession. In Addition, this
Section 4 shall not apply to shares of Common Stock representing an aggregate
offering price of up to $5,000,000 to be offered and sold in the Planned
Secondary Offering.
5. LEGEND ON STOCK CERTIFICATES.
(a) Each certificate representing shares of capital stock that are
subject to this Agreement shall bear a legend substantially in the following
form:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF SUCH
SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT DATED AS OF FEBRUARY 26, 1999, AMONG
XXXXXXXXXXX.XXX, INC. AND CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL
STOCK. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY
OF XXXXXXXXXXX.XXX, INC."
(b) Upon termination of this Agreement, the holders of any shares of
capital stock bearing the legends described in subsection (a) or (b) above shall
be entitled to receive from the Corporation, without expense, a new certificate
not bearing the restrictive legends described in subsection (a) or (b) and not
containing any other reference to the restrictions imposed by this Agreement.
6. SEVERABILITY; GOVERNING LAW.
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If any provision of this Agreement shall be determined to be illegal
and unenforceable by any court of law, the remaining provisions shall be
severable and enforceable in accordance with their terms. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New York.
7. ASSIGNMENTS; SUCCESSORS AND ASSIGNS.
Except in connection with any Transfer of Shares in accordance with
this Agreement, the rights of each party under this Agreement may not be
assigned. This Agreement shall bind and inure to the benefit of the parties and
their respective successors, permitted assigns, legal representatives and heirs.
8. TERMINATION. This Agreement shall cease and terminate and be of no further
force or effect upon the earlier to occur of (a) the Investors owning or having
the right to acquire less than fifty percent (50%) of the Investor Shares that
they own or have the right to acquire as of the date hereof or (b) the tenth
(10th) anniversary of the date hereof.
9. AMENDMENTS.
This Agreement may only be modified or amended, or the performance
thereof waived, by an instrument in writing signed by the Corporation, Investors
holding at least majority of all Shares then held by all Investors and the
holders of at least majority of the Founder Shares. This Section may only be
amended with the consent of all parties to this Agreement.
10. CONSENT TO JURISDICTION; VENUE.
(a) The Corporation and each Founder hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the United States District Court of the Southern District of New
York, and any appellate court from such court, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and the Corporation and each of Founders hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Federal court. The Corporation
and the Founders may not bring or commence any such action or proceeding except
in any such court in such jurisdiction. Each of the Corporation and Founders
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) The Corporation and each Founder hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (a) of this Section. Each of the Corporation
and Founders hereby irrevocably waives, to the fullest extent permitted by law,
the defense of FORUM NON CONVENIENS to the maintenance of such action or
proceeding in any such court.
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(c) The Corporation and each Founder hereby irrevocably appoints and
designates Gotenbock, Eiseman, Xxxxx & Xxxx located at 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or any other person having and maintaining a place of
business in the State of New York whom the Corporation or such Founder, as the
case may be, may from time to time hereafter designate (having given 30 days'
notice thereof to the parties hereto), as the true and lawful attorney and duly
authorized agent for acceptance of service of legal process from the Corporation
or such Founder, as the case may be. Without prejudice to the foregoing, the
Corporation and the Founder to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 4.6. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
11. NOTICES.
All notices, claims, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or if sent by nationally-recognized overnight courier, by
telecopy, or by registered or certified mail, return receipt requested and
postage prepaid, addressed as follows:
(i) if to the Corporation:
Xxxxxxxxxxx.xxx, Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx XX 00, Xxxxxxx
Fax: 000-000-0000
Telephone: 000-0000-0000
Attention: Xxxxxx X Xxxxxxxx
with a copy to:
Golenbock, Eiseman, Assor & Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Tel: 000-000-0000
Attention: Xxxxxxxx Xxxx, Esq.
(ii) if to an Investor, to the address specified on Schedule 1
hereto, with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
and
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(iii) if to any Founder, to his or her address set forth on the
books of the Corporation;
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
notice or communication shall be deemed to have been received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when received, and (d) in
the case of mailing, on the third business day following that on which the piece
of mail containing such communication is posted.
12. HEADINGS.
The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of this
Agreement.
13. NOUNS AND PRONOUNS.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa.
14. ENTIRE AGREEMENT.
This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings with respect to such subject matter.
15. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
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COUNTER PART SIGNATURE PAGE TO
THE STOCKHOLDERS' AGREEMENT
DATED AS OF FEBRUARY __, 1999
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders' Agreement on the date first above written.
XXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: CEO
FOUNDERS:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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Xxx Xxxxxxxxx
XXXXXX & CO., LLC
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title:
INVESTORS:
NAZEM & COMPANY IV, L.P.,
By: Nazem & Associates IV, L.P., its
General Partner
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: General Partner
COUNTER PART SIGNATURE PAGE TO
THE STOCKHOLDERS' AGREEMENT
DATED AS OF FEBRUARY __, 1999
TRANSATLANTIC VENTURE FUND C.V.
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Investment Manager
/s/ Xxxxx Xxx
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Xxxxx Xxx
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
SCHEDULE 1
LIST OF STOCKHOLDERS
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NAZEM & COMPANY IV, L.P.
c/o Nazem & Co.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
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TRANSATLANTIC VENTURE FUND C.V.
c/o Nazem & Co.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
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Xxxxx Xxx
c/o Triarc Companies, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
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Xxxxxx Xxxxx
c/o Triarc Companies, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
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