SETTLEMENT AGREEMENT
Exhibit 10.1
This
SETTLEMENT AGREEMENT (this “Agreement”) is made and
entered into as of October 4, 2019, by and among Liberated
Syndication, Inc., a Nevada corporation (the “Company”), on the one
hand, and Camac Fund, LP and Xx. Xxxx Xxxxxxxxx (collectively, the
“Stockholders”), on the
other hand.
RECITALS
WHEREAS, as of the
date hereof, the Stockholders beneficially own 1,955,519 shares of
the issued and outstanding common stock of the Company, par value
$0.001 per share (“Common
Stock”);
WHEREAS, on April
26, 2019, Camac Fund, LP (“Camac”), Camac Partners,
LLC, Camac Capital, LLC, Xxxx Shaninian, Xxxxxxx Xxxxxxxx, Xxxxxx
XxXxxxxx, Xxxx Xxxxxx and Xxxxxxx X. Xxxxxx (collectively, the
“Filing
Parties”) filed a preliminary proxy
statement on Schedule 14A regarding the solicitation of requests
(the “Request
Solicitation”) to call a special meeting of the
Company’s stockholders (including any adjournments,
postponements or other delays thereof, the “Special Meeting”) and on
July 15, 2019, Camac delivered the requisite requests to request
the call (the “Request”) of the Special
Meeting in accordance with the Company’s bylaws (the
“Bylaws”);
WHEREAS, as part of
the Request Solicitation, the Filing Parties indicated their
intention to present the following matters for a vote of the
Company’s stockholders at the Special Meeting: (i) removal of
the existing directors of the Company (the “Removal Proposal”); (ii)
the amendment of Article III, Section 3.02 of the Bylaws to
increase to nine the number of directors constituting the board of
directors (the “Board”) of the Company
(the “Board Size
Proposal”); (iii) the amendment of Article III,
Section 3.10 of the Bylaws to confirm that stockholders may fill
any vacancies, however caused, on the Board and provide that only
stockholders may fill vacancies caused by the removal of a director
by stockholders (the “Vacancy Proposal”); (iv)
the election of Xxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx XxXxxxxx, Xxxx Xxxxxx and
Xxxxxxx X. Xxxxxx as directors of the Company (the
“Election
Proposal”); and (v) the amendment of Article III,
Section 3.03 of the Bylaws to eliminate any ability of the Board to
unilaterally adopt a classified Board structure such that a nominee
only stands for election once every three years (the
“De-staggered Board
Proposal” and with the Removal Proposal, the Board
Size Proposal, the Vacancy Proposal and the Election Proposal,
collectively, the “Stockholder
Proposals”);
WHEREAS, on July
11, 2019, the Filing Parties delivered a Notice of Nomination of
Directors and Stockholder Proposals regarding the Company’s
Annual Meeting of Stockholders for fiscal year 2018 (the
“Annual
Meeting”) containing matters substantially identical
to the Stockholder Proposals (the “Annual Meeting Notice”);
and
WHEREAS, on July
15, 2019, Camac filed a Verified Complaint and Alternative Petition
for Writ of Mandamus/Prohibition regarding its request to inspect
certain books and records maintained by the Company in the District
Court for Xxxxx County, Nevada, Case No. A-19-798511-B (the
“Books and Records
Action”), which action is currently
pending.
NOW,
THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
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1. Withdrawal of Special Meeting Request
and Annual Meeting Notice.
(a) The
Stockholders hereby irrevocably withdraw (i) the Request and (ii)
the Annual Meeting Notice.
(b) The
Stockholders shall, and shall cause their Representatives to,
immediately cease all solicitation efforts in connection with the
Special Meeting.
(c) From
and after the date hereof, the Stockholders shall not, and shall
not permit their Representatives to, vote, deliver or otherwise use
any consents or proxies of other stockholders of the Company that
may have been received by the Stockholders or any of their
Representatives to date with respect to the Special
Meeting.
2. Corporate
Governance Matters.
(a) Board
Appointments. Immediately following the execution of this
Agreement, the Company shall take all necessary action to appoint
Xxxx Xxxxxxxxx (the “First Camac Designee”)
and Xxxxxxx Xxxxxx (the “Second Camac Designee”
and, together with the First Camac Designee, the
“Camac
Designees”) to the Board with a term expiring at the
Company’s Annual Meeting of Stockholders for fiscal year 2019
(the “2020 Annual
Meeting”). If either Camac Designee ceases to be a
member of the Board for any reason, then Camac will identify (and
the Board will promptly take all necessary action to appoint)
another person (a “Successor Director”) to
serve as a director in place of such Camac Designee. Any Successor
Director must (i) be qualified to serve as a member of the Board
under all applicable corporate governance policies or guidelines of
Company and the Board and applicable legal and regulatory
requirements; and (ii) meet the independence requirements under any
applicable rules of any U.S. stock exchange on which the Company is
traded. Upon becoming a member of the Board, the Successor Director
will succeed to all of the rights and privileges, and will be bound
by the terms and conditions, of the Camac Designee being replaced
under this Agreement.
(b) Chairman
of the Board Matters. Xxxxxxxxxxx Xxxxxxx has delivered to
the Company an irrevocable resignation from the position of
Chairman of the Board, which resignation is contingent upon the
execution of this Agreement. Immediately following the execution of
this Agreement, the Board shall adopt resolutions separating the
offices of Chairman of the Board and Chief Executive Officer. Xx.
Xxxxxxx will continue to serve as Chief Executive Officer of the
Company until his resignation or removal. The Company and the
Stockholders shall engage in good faith discussions to identify a
member of the Board to serve as Chairman, but a Chairman will not
be designated without the consent of the Stockholders.
(c) Independent
Board Appointment. Promptly following the date of this
Agreement, the Company shall provide the Stockholders with the
names (and all other information reasonably requested by the
Stockholders concerning such individuals) of three proposed
director nominees (which individuals will not include candidates
previously identified to the Stockholders by the Company prior to
the date of this Agreement). Each such individual will be (i)
qualified to serve as a member of the Board under all applicable
corporate governance policies or guidelines of Company and the
Board and applicable legal and regulatory requirements; and (ii)
meet the independence requirements with respect to Company of the
listing rules of The Nasdaq Stock Market LLC (“Nasdaq”). The
Stockholders may, but will not be obligated to choose one of the
three candidates so proposed to serve as a new independent director
of the Company (such new director, the “New Independent
Director”). The Company and the Stockholders shall
engage in good faith discussions to identify the New Independent
Director within 30 days. If the Stockholders agree on the New
Independent Director, the Company shall take all necessary action
to appoint the New Independent Director to the Board within five
Business Days of such agreement, and upon the appointment of such
individual to the Board, the Company shall take all action
necessary to cause one of Denis Yevstifeyev, Xxxxxxx Xxxxxxxx or J.
Xxxxxxx Xxxxx (each, a “Legacy Independent
Director”) to resign from the Board.
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(d) Compensation
Committee Matters. Immediately following the execution of
this Agreement, the Company shall take all necessary action to
appoint the First Camac Designee to the compensation committee of
the Board (the “Compensation Committee”)
and upon such appointment, one of the Legacy Independent Directors
shall resign from the Compensation Committee. Upon his appointment,
the First Camac Designee will act as chairman of the Compensation
Committee. If the New Independent Director joins the Board, then
the New Independent Director shall be appointed to the Compensation
Committee and an additional Legacy Independent Director shall
resign from the Compensation Committee. From and after the
appointment of the New Independent Director, the Compensation
Committee will evaluate all executive compensation arrangements,
and make all executive compensation determinations, provided that the accrued but unpaid
bonus for Xxxxxxxxxxx Xxxxxxx (a one-time payment of $800,000) will
remain fixed. The Compensation Committee will consist of no more
than three directors. Promptly following the date of this Agreement
(but not before the appointment of the New Independent Director, if
it occurs), the Compensation Committee will review its charter and
propose any modifications for approval by the Board.
(e) Audit
Committee Appointment. Immediately following the execution
of this Agreement, the Company will take all action necessary so
that the Second Camac Designee is appointed to the audit committee
of the Board (the “Audit Committee”) and
upon such appointment, one of the Legacy Independent Directors
shall resign from the Audit Committee. Promptly following the date
of this Agreement, the Audit Committee will review its charter and
propose any modifications for approval by the Board.
(f) Review
Committee. Immediately following the execution of this
Agreement, the Company will take all action necessary to form a
strategic review committee (the “Review Committee”)
composed solely of the First Camac Designee and the New Independent
Director (if the New Independent Director joins the Board). The
First Camac Designee will act as chairman of the Review Committee.
The charter of the Review Committee will be in the form of Exhibit
B hereto. If the New Independent Director does not join the Board,
then the Stockholders will select a Legacy Independent Director to
join the Review Committee, and the Company will promptly take all
action necessary to appoint such director to the Review Committee.
The Review Committee will consist of no more than two
directors.
(g) No
Modifications. Prior to the Company’s Annual Meeting
of Stockholders for fiscal year 2020 (the “2021 Annual Meeting”),
the Board will consist of no more than six members. Prior to the
2021 Annual Meeting, the Board will not form any committees or
subcommittees that do not include either the First Camac Designee
or the Second Camac Designee, or any Successor Director thereto.
Prior to the 2021 Annual Meeting, the Bylaws will not be amended
without the consent of the Camac Designees, or any Successor
Director thereto.
(h) Board
Member Benefits. The Camac Designees (or any Successor
Director) will be entitled to the same director benefits as other
members of the Board, including (i) compensation for such
director’s service as a director and reimbursement for such
director’s expenses on the same basis as all other
non-employee directors of Company; (ii) equity-based compensation
grants and other benefits, if any, on the same basis as all other
non-employee directors of Company; and (iii) the same rights of
indemnification and directors’ and officers’ liability
insurance coverage as the other non-employee directors of Company
as such rights may exist from time to time.
(i) Cancellation
of Equity Grants. Immediately following the execution of
this Agreement, the Company shall take all action necessary to
irrevocably cancel those equity awards previously granted to the
Company’s Chief Executive Officer and Chief Financial Officer
representing an aggregate of 300,000 restricted shares (150,000
held by each of them), the vesting conditions with respect to which
relate to the achievement of a Nasdaq uplisting. Promptly following
such cancellation, the Company shall provide to the Stockholders
evidence from its transfer agent regarding the return of such
shares and their cancellation by the Company. The Company will
obtain appropriate written confirmations from the affected
individuals regarding such cancellation.
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(j) Further
Assurances. Without limiting any other provision herein, (i)
the Company shall cause the Board to comply with the terms of this
Agreement and (ii) each of the Company and the Board shall take all
actions as promptly as practicable in order to accomplish the
actions contemplated by this Agreement.
3. Strategic
Matters. The Review Committee shall engage, consistent with
its charter and on behalf of the Company, a nationally recognized
investment bank with no material prior relationship with the
Company (the “Financial Advisor”) to
advise the Review Committee and the Board. The Review Committee
will have oversight of the Financial Advisor and will also retain
independent legal counsel. The Review Committee and the Financial
Advisor will work in good faith to provide an appropriate
recommendation to the Board concerning the Review Committee’s
work by March 31, 2020. The Review Committee will report regularly
to the Board. The Company will promptly disclose publicly the
recommendation of the Review Committee, and the Board’s
decision with respect to that recommendation.
4. Annual
Meeting Matters.
(a) The
Company shall hold the 2020 Annual Meeting no later than September
15, 2020, and will not hold an annual or special meeting of
stockholders, or conduct any action by written consent, prior to
the 2020 Annual Meeting. Unless otherwise agreed by the
Stockholders, the only matters and proposals that the Company shall
present for a vote of the stockholders at the 2020 Annual Meeting
shall be proposals concerning the election of directors and the
ratification of the Company’s independent registered public
accounting firm. The Board will include the Camac Designees on its
slate of nominees for election to the Board at the 2020 Annual
Meeting along with at least one additional new director (who will
not be the New Independent Director) proposed by the Board and
reasonably acceptable to the Stockholders and who is (i) qualified
to serve as a member of the Board under all applicable corporate
governance policies or guidelines of Company and the Board and
applicable legal and regulatory requirements; and (ii) meet the
independence requirements with respect to Company of the listing
rules of Nasdaq. Such new director will replace one of the Legacy
Independent Directors. The Company will support and solicit proxies
for its director slate at the 2020 Annual Meeting in a reasonable
and customary manner.
(b) If
the Camac Designees (or any Successor Director) are included on the
Board’s slate of nominees for election to the Board at the
2020 Annual Meeting, then (i) the Stockholders shall appear in
person or by proxy at the 2020 Annual Meeting and be present for
quorum purposes and vote all shares of Common Stock beneficially
owned by them and over which they have voting power at the 2020
Annual Meeting in accordance with the Board’s recommendations
with respect to all such proposals referred to in Section 4(a)
above; and (ii) the Stockholders shall not execute any proxy card
or voting instruction form in respect of the 2020 Annual Meeting
other than the proxy card and related voting instruction form being
solicited by or on behalf of the Board. The Stockholders agree that
they shall not, and they shall not permit any of their
Representatives to, directly or indirectly, take any action
inconsistent with this Section 4(b).
(c) The
Company will cause its directors and executive officers (other than
the First Camac Designee and the Second Camac Designee) to appear
in person or by proxy at the 2020 Annual Meeting and be present for
quorum purposes and vote all shares of Common Stock beneficially
owned by each of them and over which they have voting power at the
2020 Annual Meeting for the Board’s slate of director
nominees. The Company agrees that it shall not, and it shall not
permit any of its Representatives to, directly or indirectly, take
any action inconsistent with this Section 4(c).
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(d) The
Company shall hold the 2021 Annual Meeting no later than September
15, 2021.
5. Standstill.
Except as otherwise provided in this Agreement (including with
respect to the implementation of any recommendation of the Review
Committee), without the prior written consent of the Board, during
the Restricted Period, the Stockholders shall not, and shall
instruct their Representatives not to, directly or indirectly (in
each case, except as permitted by this Agreement):
(a) (i)
acquire, offer or agree to acquire, or acquire rights to acquire
(except by way of stock dividends or other distributions or
offerings made available to holders of voting securities of the
Company generally on a pro rata basis), whether by purchase, tender
or exchange offer, through the acquisition of control of another
person, by joining a group, through swap or hedging transactions or
otherwise, any voting securities of the Company or any voting
rights decoupled from the underlying voting securities; or (ii)
knowingly sell, offer or agree to sell, through swap or hedging
transactions or otherwise, the voting securities of the Company or
any voting rights decoupled from the underlying voting securities
held by the Stockholders to any Third Party that would result in
such Third Party having any beneficial ownership interest of 5.0%
or more of the then-outstanding shares of Common Stock (except for
Schedule 13G filers that are mutual funds, pension funds or index
funds with no known history of activism);
(b) (i)
nominate or recommend for nomination a person for election at any
Stockholder Meeting at which the Company’s directors are to
be elected; (ii) initiate, knowingly encourage or participate in
any solicitation of proxies in respect of any election contest or
removal contest with respect to the Company’s directors;
(iii) submit any stockholder proposal for consideration at, or
bring any other business before, any Stockholder Meeting; (iv)
initiate, knowingly encourage or participate in any solicitation of
proxies in respect of any stockholder proposal for consideration
at, or other business brought before, any Stockholder Meeting; (v)
knowingly encourage or participate in any request to call a special
meeting of the stockholders of the Company; or (vi) initiate,
knowingly encourage or participate in any “withhold” or
similar campaign with respect to any Stockholder Meeting;
provided,
however, that,
except as set forth in Section 2(a), (b) or (c) or Section 4,
nothing in this Section 5(b) will be interpreted to restrict the
Stockholders’ ability to (A) privately recommend candidates
for the Board or (B) vote their shares on any proposal duly brought
before the Company’s stockholders as each Stockholder
determines in his or its sole discretion;
(c) form,
join or in any way participate in any group with respect to any
voting securities of the Company in connection with any election or
removal contest with respect to the Company’s directors
(other than with the Stockholders or one or more of their
Affiliates to the extent that any such person signs a joinder to
this Agreement reasonably acceptable to the Company);
(d) deposit
any voting securities of the Company in any voting trust or subject
any Company voting securities to any arrangement or agreement with
respect to the voting thereof, other than any such voting trust,
arrangement or agreement solely among the Stockholders and one or
more of their Affiliates;
(e) seek
publicly, alone or in concert with others, to amend any provision
of the Company’s articles of incorporation or
bylaws;
(f) effect
or seek to effect, offer or propose to effect, cause or participate
in, or in any way knowingly assist or facilitate any other person
to effect or seek, offer or propose to effect or participate in,
any (i) acquisition of any securities, or any material assets or
businesses, of the Company or any of its subsidiaries; (ii) tender
offer or exchange offer (except as specifically contemplated by
this Agreement), merger, acquisition, share exchange or other
business combination involving any of the voting securities or any
of the material assets or businesses of the Company or any of its
subsidiaries; or (iii) recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with
respect to the Company or any of its subsidiaries or any material
portion of its or their businesses;
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(g) enter
into any discussions, negotiations, agreements or understandings
with any Third Party with respect to the foregoing, or advise,
assist, encourage or seek to persuade any Third Party to take any
action with respect to any of the foregoing, or otherwise take or
cause any action inconsistent with any of the foregoing;
or
(h) take
any action challenging the validity or enforceability of this
Section 5 or this Agreement, or publicly make or in any way advance
publicly any request or proposal that the Company or the Board
amend, modify or waive any provision of this
Agreement.
Notwithstanding the foregoing, nothing in this Agreement shall
prohibit or restrict (i) Camac or its affiliates from
acquiring, offering or agreeing to acquire, or acquiring rights to
acquire, whether by purchase, tender or exchange offer, through the
acquisition of control of another person, by joining a group,
through swap or hedging transactions or otherwise, any voting
securities of the Company or any voting rights decoupled from the
underlying voting securities so long
as, after giving effect to any such transactions, the Net Long
Shares of Camac does not exceed 22% of Company’s
then-outstanding common stock; or (ii) the Stockholders from: (A)
communicating privately with the Board or any of the
Company’s officers regarding any matter, so long as such
communications are not intended to, and would not reasonably be
expected to, require any public disclosure of such communications;
(B) communicating privately with stockholders of the Company and
others in a manner that does not otherwise violate this Section 5,
or (C) taking any action necessary to comply with any law, rule or
regulation or any action required by any governmental or regulatory
authority or stock exchange that has, or may have, jurisdiction
over the Stockholders. Furthermore, for the avoidance of doubt,
nothing in this Agreement shall be deemed to restrict in any way
the ability of the Camac Designees (or any Successor Director) from
exercising their duties as directors of the Company (including
voting on any matter submitted for consideration by the Board,
participating in deliberations or discussions of the Board, and
making suggestions or raising any issues or recommendations to the
Board).
6. Mutual
Non-Disparagement. No party hereto shall, and no party shall
permit any of its Representatives to, publicly disparage or
publicly criticize any other party or its subsidiaries, its or its
subsidiaries’ business or any of its or its
subsidiaries’ current or former directors, officers or
employees, including the business and current or former directors,
officers and employees of such other party’s Affiliates, as
applicable. The restrictions in this Section 6 shall not (i) apply
(A) in any compelled testimony or production of information,
whether by legal process, subpoena or as part of a response to a
request for information from any governmental or regulatory
authority with jurisdiction over the party from whom information is
sought, in each case, to the extent required; or (B) to any
disclosure required by applicable law, rules or regulations; or
(ii) prohibit any person from reporting possible violations of
federal law or regulation to any governmental authority pursuant to
Section 21F of the Exchange Act or Rule 2F promulgated thereunder.
Notwithstanding anything to the contrary in this Agreement, the
Stockholders will not be in violation of this Agreement if they
privately disclose how they intend to vote their shares of Common
Stock at any Stockholder Meeting.
7. Litigation
Matters.
(a) Upon
the execution of this Agreement, the parties shall execute and
submit to the court a stipulation to dismiss with prejudice the
Books and Records Action.
(b) The
Stockholders covenant and agree that they shall not, and shall not
permit any of their Representatives to, alone or in concert with
others, knowingly encourage or pursue, or knowingly assist any
other person to threaten, initiate or pursue, any lawsuit, claim or
proceeding before any court or governmental, administrative or
regulatory body (collectively, “Legal Proceeding”)
against the Company or any of its Representatives, except for any
Legal Proceeding initiated solely to remedy a breach of or to
enforce this Agreement or relating to an Excluded Matter (as
defined in Section 8 below); provided, however, that the foregoing
shall not prevent the Stockholders or any of their Representatives
from responding to oral questions, interrogatories, requests for
information or documents, subpoenas, civil investigative demands or
similar processes (a “Legal Requirement”) in
connection with any Legal Proceeding if such Legal Proceeding has
not been initiated by, or on behalf of, the Stockholders or any of
their Representatives; provided, further, that in the event that
any of the Stockholders or any of their Representatives receives
such Legal Requirement, the Stockholders shall give prompt written
notice of such Legal Requirement to the Company.
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(c) The
Company covenants and agrees that it shall not, and shall not
permit any of its Representatives to, alone or in concert with
others, knowingly encourage or pursue, or knowingly assist any
other person to threaten, initiate or pursue, any Legal Proceedings
against the Filing Parties or any of their respective
Representatives, except for any Legal Proceeding initiated solely
to remedy a breach of or to enforce this Agreement; provided, however, that the foregoing
shall not prevent the Company or any of its Representatives from
responding to a Legal Requirement in connection with any Legal
Proceeding if such Legal Proceeding has not been initiated by, or
on behalf of, the Company or any of its Representatives;
provided,
further, that in
the event that the Company or any of its Representatives receives
such Legal Requirement, the Company shall give prompt written
notice of such Legal Requirement to the Stockholders.
8. Mutual
Releases.
(a) Each
of the Stockholders, on behalf of themselves and their respective
heirs, estates, trustees, beneficiaries, successors, predecessors,
assigns, subsidiaries, principals, directors, officers, insurers,
Associates and Affiliates (the “Stockholder Releasors”),
hereby do remise, release and forever discharge, and covenant not
to xxx or take any steps to pursue or further any Legal Proceeding
against, the Company or its successors, predecessors, assigns,
subsidiaries, principals, directors, officers, insurers, Associates
and Affiliates (the “Company Releasees”), and
each of them, from and in respect of any and all claims and causes
of action, whether based on any federal, state or foreign law or
right of action, direct, indirect or representative in nature,
foreseen or unforeseen, matured or unmatured, known or unknown,
that all or any of the Stockholder Releasors have, had or may have
against the Company Releasees, or any of them, of any kind, nature
or type whatsoever, from the beginning of time to the date of this
Agreement; provided, however, that the foregoing
release shall not release any rights or duties under this Agreement
or any claims or causes of action that the Stockholder Releasors
may have for the breach or enforcement of any provision of this
Agreement. Notwithstanding anything to the contrary in this
Agreement, the Stockholder Releasors do not release or waive any
claim or cause of action against any Company Releasee arising from
fraud or the criminal activity or criminal conduct of such Company
Releasee, or the entry of a pleading of guilty or nolo contendere
by such Company Releasee, in a court or administrative agency or
tribunal of competent jurisdiction, to a felony or comparable
charge, in each case relating to actions or omissions prior to the
date of this Agreement, other than the matters that are the subject
of Securities and Exchange
Commission v. Xxxxxxxxxxx X. Xxxxxxx and Xxxx Xxxxxxxx,
Civil Action No. 1:19-cv-9070 (S.D.N.Y.) (filed September 30, 2019)
(any such unreleased claim, an “Excluded Matter”). For
the avoidance of doubt, it is understood that the release in this
Section 8(a) does not release or waive any claims or causes of
action by the Company against any Company Releasee. The Stockholder
Releasors expressly waive and release any and all provisions,
rights, and benefits conferred by §1542 of the California
Civil Code, which provides:
Section 1542. Certain Claims Not
Affected by General Release. A
general release does not extend to claims that the creditor or
releasing party does not know or suspect to exist in his or her
favor at the time of executing the release and that, if known by
him or her, would have materially affected his or her settlement
with the debtor or released party;
or by
any law of any state or territory of the United States, or
principle of common law, which is similar, comparable, or
equivalent to Section 1542 of the California Civil
Code.
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(b) The
Company, on behalf of itself and its successors, predecessors,
assigns, subsidiaries, principals, directors, officers, insurers,
Associates and Affiliates (the “Company Releasors”),
hereby do remise, release and forever discharge, and covenant not
to xxx or take any steps to pursue or further any Legal Proceeding
against, any of the Filing Parties or their respective heirs,
estates, trustees, beneficiaries, successors, predecessors,
assigns, subsidiaries, principals, directors, officers, insurers,
Associates and Affiliates (the “Stockholder Releasees”),
and each of them, from and in respect of any and all claims and
causes of action, whether based on any federal, state or foreign
law or right of action, direct, indirect or representative in
nature, foreseen or unforeseen, matured or unmatured, known or
unknown, that all or any of the Company Releasors have, had or may
have against the Stockholder Releasees, or any of them, of any
kind, nature or type whatsoever, from the beginning of time to the
date of this Agreement; provided, however, that the foregoing
release shall not release any rights or duties under this Agreement
or any claims or causes of action that the Company Releasors may
have for the breach or enforcement of any provision of this
Agreement. The Company Releasors
expressly waive and release any and all provisions, rights, and
benefits conferred by §1542 of the California Civil Code,
which provides:
Section 1542. Certain Claims Not
Affected by General Release. A
general release does not extend to claims that the creditor or
releasing party does not know or suspect to exist in his or her
favor at the time of executing the release and that, if known by
him or her, would have materially affected his or her settlement
with the debtor or released party;
or by any law of any state or territory of the United States, or
principle of common law, which is similar, comparable, or
equivalent to Section 1542 of the California Civil
Code.
(c) Each
party hereto represents and warrants that it has not heretofore
transferred or assigned, or purported to transfer or assign, to any
person, firm or corporation any claims, demands, obligations,
losses, causes of action, damages, penalties, costs, expenses,
attorneys’ fees, liabilities or indemnities herein released.
Other than for the Books and Records Action, each of the parties
hereto represents and warrants that neither it nor any assignee has
filed any lawsuit against any other party.
(d) Each
party hereto waives any and all rights (to the extent permitted by
state law, federal law, principles of common law or any other law)
that may have the effect of limiting the releases in this Section
8. Without limiting the generality of the foregoing, each party
hereto acknowledges that there is a risk that the damages and costs
that it believes it has suffered or will suffer may turn out to be
other than or greater than those now known, suspected or believed
to be true. Facts on which each party hereto has been relying in
entering into this Agreement may later turn out to be other than or
different from those now known, suspected or believed to be true.
Each party hereto acknowledges that in entering into this
Agreement, it has expressed that it agrees to accept the risk of
any such possible unknown damages, claims, facts, demands, actions
and causes of action. Each party hereto acknowledges and agrees
that the releases and covenants provided for in this Section 8 are
binding, unconditional and final as of the date
hereof.
9. Press
Release and SEC Filings.
(a) No
later than one Business Day following the date of this Agreement,
the Company shall announce the entry into this Agreement and the
material terms hereof by means of a mutually agreed upon press
release in the form attached hereto as Exhibit A (the
“Mutual Press
Release”). Prior to the issuance of the Mutual Press
Release, neither the Company nor the Stockholders shall issue any
press release, public announcement or other public statement
(including, without limitation, in any filing required under the
Exchange Act) regarding this Agreement or take any action that
would require public disclosure thereof without the prior written
consent of the Other Party. No party hereto or any of its
Representatives shall issue any press release, public announcement
or other public statement (including, without limitation, in any
filing required under the Exchange Act) concerning the subject
matter of this Agreement inconsistent with the Mutual Press
Release, except as required by law or applicable stock exchange
listing rules or with the prior written consent of the Other Party
and otherwise in accordance with this Agreement.
8
(b) No
later than two Business Days following the date of this Agreement,
the Stockholders shall file with the SEC an amendment to their
Schedule 13D in compliance with Section 13 of the Exchange Act
reporting their entry into this Agreement, disclosing applicable
items to conform to their obligations hereunder and appending this
Agreement as an exhibit thereto (the “Schedule 13D Amendment”).
The Schedule 13D Amendment shall be consistent with the Mutual
Press Release and the terms of this Agreement. The Stockholders
shall provide the Company and its Representatives with a reasonable
opportunity to review the Schedule 13D Amendment prior to it being
filed with the SEC and consider in good faith any comments of the
Company and its Representatives.
(c) No
later than four Business Days following the date of this Agreement,
the Company shall file with the SEC a Current Report on Form 8-K
reporting its entry into this Agreement, disclosing applicable
items to conform to its obligations hereunder and appending this
Agreement and the Mutual Press Release as an exhibit thereto (the
“Form
8-K”). The Form 8-K shall be consistent with the
Mutual Press Release and the terms of this Agreement. The Company
shall provide the Stockholders and their Representatives with a
reasonable opportunity to review and comment on the Form 8-K prior
to the filing with the SEC and consider in good faith any comments
of the Stockholders.
10. Compliance
with Securities Laws. Each of the Stockholders acknowledges
that the U.S. securities laws generally prohibit any person who has
received from an issuer material, non-public information concerning
such issuer from purchasing or selling securities of such issuer
and from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities. Additionally,
each of the Stockholders (i) acknowledge that the Company possesses
or has access to material non-public information about the Company
and its Affiliates and Associates that has not been communicated to
the Stockholders; (ii) hereby waive any and all claims, whether at
law, in equity or otherwise, that such Stockholder may now have or
may hereafter acquire, whether presently known or unknown, against
the Company relating solely to any failure to disclose any
non-public information in connection with entering into this
Agreement, including, without limitation, any such claims arising
under securities or other laws, rules and regulations; and (iii)
are aware that the Company is relying on the acknowledgement and
waiver in clauses (i) and (ii) above, respectively, in connection
with entering into this Agreement.
11. Affiliates
and Associates. Each party hereto shall cause their
Affiliates and Associates to comply with the terms of this
Agreement and shall be responsible for any breach of this Agreement
by any such Affiliate or Associate. A breach of this Agreement by
an Affiliate or Associate of a party, if such Affiliate or
Associate is not a party to this Agreement, shall be deemed to
occur if such Affiliate or Associate engages in conduct that would
constitute a breach of this Agreement if such Affiliate or
Associate was a party to the same extent as the first
party.
12. Representations
and Warranties.
(a) Xx.
Xxxxxxxxx represents and warrants as to himself that he is
sui juris and of full
capacity. Each Stockholder severally and not jointly represents and
warrants that it has full power and authority to execute, deliver
and carry out the terms and provisions of this Agreement, and that
this Agreement has been duly and validly executed and delivered by
such Stockholder, constitutes a valid and binding obligation and
agreement of such Stockholder and is enforceable against such
Stockholder in accordance with its terms. Xx. Xxxxxxxxx represents
and warrants that, as of the date of this Agreement, he
beneficially owns 1,955,519 shares of Common Stock, has voting
authority over such shares, and owns no Synthetic Equity Interests
or any Short Interests in the Company.
9
(b) Denis
Yevstifeyev, Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxx and Xxxxxxxxxxx
Xxxxxxx each represents and warrants as to himself that he is
sui juris and of full
capacity. The Company hereby represents and warrants that (i) it
has the power and authority to execute, deliver and carry out the
terms and provisions of this Agreement; (ii) this Agreement has
been duly and validly authorized, executed and delivered by the
Company following appropriate action by the Board, constitutes a
valid and binding obligation and agreement of the Company, is
enforceable against the Company in accordance with its terms and
does not require the approval of the Company’s stockholders;
(iii) the execution of this Agreement, the consummation of any of
the transactions contemplated hereby, and the fulfillment of the
terms hereof, in each case in accordance with the terms hereof,
will not conflict with, or result in a breach or violation of the
organizational documents of the Company as currently in effect; and
(iv) the execution, delivery and performance of this Agreement by
the Company does not and will not (A) violate or conflict with any
law, rule, regulation, order, judgment or decree applicable to it,
or (B) result in any breach or violation of or constitute a default
(or an event which with notice or lapse of time or both would
constitute such a breach, violation or default) under or pursuant
to, or result in the loss of a material benefit under, or give any
right of termination, amendment, acceleration or cancellation of,
any organizational document, agreement, contract, commitment,
understanding or arrangement to which it is a party or by which it
is bound.
13. Termination.
Other than with respect to Section 2, Section 3 and Section 4, this
Agreement shall terminate at the end of the Restricted Period (such
date, the “Termination Date”). No
termination of this Agreement shall relieve any party hereto from
liability for any breach of this Agreement prior to such
termination. Notwithstanding anything to the contrary in this
Agreement:
(a) The
obligations of the Stockholders pursuant to Section 1, Section 2,
Section 3, Section 4, Section 5, Section 6, Section 7, Section 8
and Section 10 shall terminate in the event that the Company
materially breaches its obligations pursuant to Section 2, Section
3, Section 4, Section 5, Section 6, Section 7, Section 8 or the
representations and warranties in Section 12(b) of this Agreement
and, in each case, such breach has not been cured within 30 days
following written notice of such breach; provided, however, that any termination
in respect of a breach of Section 6 shall require a determination
of a court of competent jurisdiction that the Company has
materially breached Section 6; provided, further, that the obligations
of the Stockholders pursuant to Section 7 shall terminate
immediately in the event that the Company materially breaches its
obligations under Section 7; and
(b) The
obligations of the Company pursuant to Section 2, Section 3,
Section 4, Section 5, Section 6, Section 7 and Section 8 shall
terminate in the event that the Stockholders materially breach
their obligations in Section 1, Section 2, Section 4, Section 5,
Section 6, Section 7, Section 8 and Section 10 or the
representations and warranties in Section 12(a) and, in each case,
such breach has not been cured within 30 days following written
notice of such breach; provided, however, that any termination
in respect of a breach of Section 6 shall require a determination
of a court of competent jurisdiction that the Stockholders have
materially breached Section 6; provided, further, that the obligations
of the Company pursuant to Section 7 shall terminate immediately in
the event that either Xx. Xxxxxxxxx or Camac materially breaches
the its obligations under Section 7.
14. Expenses.
Within five Business Days following the date of this Agreement, the
Company shall reimburse the Stockholders, in an amount not to
exceed $600,000, for expenses incurred by them in connection with
their investment in the Company, including, but not limited to,
legal and other advisory costs, proxy solicitation costs, filing
costs, and all costs incurred to mail proxy soliciting materials,
letters, and press releases to stockholders of the Company,
litigation costs, and travel costs.
10
15. Notices.
All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when
delivered by hand, with written confirmation of receipt; (b) upon
sending if sent by facsimile to the facsimile numbers below, with
electronic confirmation of sending; (c) one day after being sent by
a nationally recognized overnight carrier to the addresses set
forth below; or (d) when actually delivered if sent by any other
method that results in delivery, with written confirmation of
receipt:
If to
any party other than Xxxx Xxxxxxxxx or Camac Fund, LP:
Liberated
Syndication, Xxx.0000 Xxxx Xxxx, Xxxxx 000Xxxxxxxxxx, XX
00000
Attention:
Chief Executive Officer
Facsimile:
(000) 000-0000
|
with
copies (which shall not constitute notice) to:
Loeb
& Loeb LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxxx X. Xxxxxxxx
Facsimile:
(000) 000-0000
and
Xxxxxxx
& Xxxxxx LLP
000
Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxx
Facsimile:
(000) 000-0000
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If to
Xxxx Xxxxxxxxx or Camac Fund, LP:
Camac
Partners, XXX000 Xxxx Xxxxxx, 00xx XxxxxXxx Xxxx, XX
00000 Attn. Xxxx Xxxxxxxxx
|
with
copies (which shall not constitute notice) to:
Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx
Professional
Corporation
000
Xxxx Xxxx Xxxx
Xxxx
Xxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxx
Facsimile:
(000) 000-0000
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16. Governing
Law; Jurisdiction; Jury Waiver. This Agreement, and any
disputes arising out of or related to this Agreement (whether for
breach of contract, tortious conduct or otherwise), shall be
governed by, and construed in accordance with, the laws of the
State of New York, without giving effect to its conflict of laws
principles. The parties hereto agree that exclusive jurisdiction
and venue for any Legal Proceeding arising out of or related to
this Agreement shall exclusively lie in any state or federal court
located in the Borough of Manhattan in the State of New York. Each
party hereto waives any objection it may now or hereafter have to
the laying of venue of any such Legal Proceeding, and irrevocably
submits to personal jurisdiction in any such court in any such
Legal Proceeding and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any court that any such
Legal Proceeding brought in any such court has been brought in any
inconvenient forum. Each party hereto consents to accept service of
process in any such Legal Proceeding by service of a copy delivered
to it by certified or registered mail, postage prepaid, return
receipt requested, addressed to it at the address set forth in
Section 15. Nothing contained herein shall be deemed to affect the
right of any party hereto to serve process in any manner permitted
by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT. No party hereto shall seek to
consolidate, by counterclaim or otherwise, any action in which a
jury trial has been waived with any other action in which a jury
trial cannot be or has not been waived.
11
17. Specific
Performance. The Stockholders, on the one hand, and the
Company, on the other hand, acknowledge and agree that irreparable
injury to the other party would occur in the event that any
provision of this Agreement were not performed in accordance with
such provision’s specific terms or were otherwise breached or
threatened to be breached, and that such injury would not be
adequately compensable by the remedies available at law (including
the payment of money damages). It is accordingly agreed that the
Stockholders, on the one hand, and the Company, on the other hand
(as applicable, the “Moving Party”), shall
each be entitled to specific enforcement of, and injunctive relief
to prevent any violation of, the terms hereof, and the other party
shall not take action in opposition to the Moving Party seeking
such relief on the grounds that any other remedy or relief is
available at law or in equity. The party hereto against whom
specific performance is sought agrees to waive any applicable right
or requirement that a bond be posted.
18. Certain
Definitions and Interpretations. As used in this Agreement:
(a) the terms “Affiliate” and
“Associate” (and any
plurals thereof) have the meanings ascribed to such terms under
Rule 12b-2 promulgated by the SEC under the Exchange Act and shall
include all persons or entities that at any time prior to the
Termination Date become Affiliates or Associates of any person or
entity referred to in this Agreement; (b) the term
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder;
(c) the terms “beneficial ownership,”
“group,”
“person,”
“proxy,” and
“solicitation” (and any
plurals thereof) have the meanings ascribed to such terms under the
Exchange Act; (d) the term “Business Day” means any
day that is not a Saturday, Sunday or other day on which commercial
banks in the State of New York are authorized or obligated to be
closed by applicable law; (e)
“Net Long
Shares” will be limited
to the number of shares of the Company’s common stock
beneficially owned by any person or entity that constitute such
person or entity’s net long position as defined in Rule 14e-4
under the Exchange Act and, to the extent not covered by such
definition, reduced by any shares as to which such Person does not
have the right to vote or direct the vote as of the date for
determining or documenting or as to which such Person has entered
into a derivative or other agreement, arrangement or understanding
that xxxxxx or transfers, in whole or in part, directly or
indirectly, any of the economic consequences of ownership of such
shares, it being understood that whether shares constitute Net Long
Shares will be decided by the Board in its reasonable
determination; (f) the term “Other Party” means (i)
with respect to the Company, Xx. Xxxxxxxxx and Camac, and (ii) with
respect to Xx. Xxxxxxxxx, the Company;
(g) the term “Representatives” means a
person’s Affiliates and Associates and its and their
respective directors, officers, employees, partners, members,
managers, consultants, legal or other advisors, agents and other
representatives; (h) “Restricted
Period” means the period
from the date of this Agreement until 11:59 p.m., Eastern time
on September 1, 2020 (unless the Board does not nominate the
Camac Designees (or any Successor Director) for election at the
2020 Annual Meeting by 11:59 p.m.,
Eastern time on the date that is 31 days prior to the
deadline for the submission of stockholder nominations of directors
and business proposals for the 2020 Annual Meeting as set forth in the Bylaws (as in effect on the
date of this Agreement), in which case the Restricted Period will
immediately end); (i) the term “SEC” means the U.S.
Securities and Exchange Commission; (j) the term “Short Interests” means
any agreement, arrangement, understanding or relationship,
including any repurchase or similar so-called “stock
borrowing” agreement or arrangement, engaged in by such
person, the purpose or effect of which is to mitigate loss to,
reduce the economic risk (of ownership or otherwise) of shares of
any class or series of the Company’s equity securities by,
manage the risk of share price changes for, or increase or decrease
the voting power of, such person with respect to the shares of any
class or series of the Company’s equity securities, or that
provides the opportunity to profit from any decrease in the price
or value of the shares of any class or series of the
Company’s equity securities; (k) the term “Stockholder Meeting”
means each annual or special meeting of stockholders of the
Company, or any other meeting of stockholders held in lieu thereof,
and any adjournment, postponement, reschedulings or continuations
thereof; (l) the term “Synthetic Equity
Interests” means any derivative, swap or other
transaction or series of transactions engaged in by such person,
the purpose or effect of which is to give such person economic risk
similar to ownership of equity securities of any class or series of
the Company, including due to the fact that the value of such
derivative, swap or other transactions are determined by reference
to the price, value or volatility of any shares of any class or
series of the Company’s equity securities, or which
derivative, swap or other transactions provide the opportunity to
profit from any increase in the price or value of shares of any
class or series of the Company’s equity securities, without
regard to whether (i) the derivative, swap or other transactions
convey any voting rights in such equity securities to such person;
(ii) the derivative, swap or other transactions are required to be,
or are capable of being, settled through delivery of such equity
securities; or (iii) such person may have entered into other
transactions that hedge or mitigate the economic effect of such
derivative, swap or other transactions; and (m) the term
“Third Party” refers to any person that is not a party
hereto, a member of the Board, a director or officer of the
Company, or legal counsel to any party. In this Agreement, unless a
clear contrary intention appears, (i) the word
“including” (in its various forms) means
“including, without limitation”; (ii) the words
“hereunder,” “hereof,” “hereto”
and words of similar import are references in this Agreement as a
whole and not to any particular provision of this Agreement; (iii)
the word “or” is not exclusive; and (iv) references to
“Sections” in this Agreement are references to Sections
of this Agreement unless otherwise indicated.
12
19. Miscellaneous.
(a) This
Agreement contains the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter
hereof.
(b) This
Agreement shall not be assignable by operation of law or otherwise
by a party hereto without the consent of the other parties. Any
purported assignment without such consent is void. Subject to the
foregoing sentence, this Agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the permitted
successors and assigns of each party hereto.
(c) Neither
the failure nor any delay by a party hereto in exercising any
right, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any right, power or privilege hereunder.
(d) If
any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It
is hereby stipulated and declared to be the intention of the
parties hereto that the parties would have executed the remaining
terms, provisions, covenants and restrictions without including any
of such which may be hereafter declared invalid, void or
unenforceable. In addition, the parties hereto agree to use their
reasonable best efforts to agree upon and substitute a valid and
enforceable term, provision, covenant or restriction for any of
such that is held invalid, void or enforceable by a court of
competent jurisdiction.
(e) Any
amendment or modification of the terms and conditions set forth
herein or any waiver of such terms and conditions must be agreed to
in a writing signed by each party hereto.
(f) This
Agreement may be executed in one or more textually identical
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
Signatures to this Agreement transmitted by facsimile transmission,
by electronic mail in “portable document format”
(“.pdf”) form, or by any other electronic means
intended to preserve the original graphic and pictorial appearance
of a document, shall have the same effect as physical delivery of
the paper document bearing the original signature.
(g) Each
of the parties hereto acknowledges that it has been represented by
counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement, and that it has executed
this Agreement with the advice of such counsel. Each party hereto
and its counsel cooperated and participated in the drafting and
preparation of this Agreement, and any and all drafts relating
thereto exchanged among the parties will be deemed the work product
of all of the parties and may not be construed against any party by
reason of its drafting or preparation. Accordingly, any rule of law
or any legal decision that would require interpretation of any
ambiguities in this Agreement against any party hereto that drafted
or prepared it is of no application and is hereby expressly waived
by each of the parties, and any controversy over interpretations of
this Agreement will be decided without regard to events of drafting
or preparation.
(h) The
headings set forth in this Agreement are for convenience of
reference purposes only and will not affect or be deemed to affect
in any way the meaning or interpretation of this Agreement or any
term or provision of this Agreement.
[Signature Page Follows]
13
IN
WITNESS WHEREOF, each of the parties has executed this Agreement,
or caused the same to be executed by its duly authorized
representative, as of the date first above written.
LIBERATED
SYNDICATION, INC.
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By:
|
/s/
Xxxxxxxxxxx Xxxxxxx
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Name:
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Xxxxxxxxxxx
Xxxxxxx
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Title:
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CEO,
President and Director
|
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/s/
Denis Yevstifeyev
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Denis
Yevstifeyev
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/s/
Xxxxxxx Xxxxxxxx
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Xxxxxxx
Xxxxxxxx
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/s/ J.
Xxxxxxx Xxxxx
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J.
Xxxxxxx Xxxxx
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/s/
Xxxxxxxxxxx Xxxxxxx
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Xxxxxxxxxxx
Xxxxxxx
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CAMAC
FUND, LP
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By:
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/s/
Xxxx Xxxxxxxxx
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Name:
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Xxxx
Xxxxxxxxx
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Title:
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Authorized
Signatory
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/s/
Xxxx Xxxxxxxxx
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Xxxx
Xxxxxxxxx
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Signature Page to Settlement Agreement
14
Exhibit A
Mutual
Press Release
Liberated
Syndication Announces Settlement Agreement with Camac
Partners
Xxxx Xxxxxxxxx, Xxxx Xxxxxx, and an Independent Director to Join
Board;
Camac Withdraws Special Meeting Request and Dismisses Nevada
Litigation
PITTSBURGH, PA – October 4, 2019
– Liberated Syndication (OTCQB:LSYN) (“Libsyn” or
the “Company”), a recognized leader in podcast hosting,
distribution and monetization, today announced it has reached a
settlement agreement with Camac Fund, LP, and its affiliates Camac
Partners, LLC, Camac Capital, LLC, and Xxxx Xxxxxxxxx,
(collectively, “Camac”) which own approximately 6.7% of
outstanding shares of Libsyn’s common stock. The agreement
includes: the addition of new directors to Libsyn’s Board of
Directors, including Xxxx Xxxxxxxxx and Xxxx Xxxxxx (a managing
director at Palm Active Partners), and at least one new independent
director; Camac withdrawing its special meeting request; and Camac
dismissing its pending litigation in Nevada.
“We are
pleased to have reached a resolution that we believe is in the best
interests of all Lisbyn shareholders,” said Xxxxx Xxxxxxx,
Liberated Syndication CEO. “We look forward to adding new
directors to our Board and believe the new independent voices will
complement those of our existing directors. Libsyn is performing
well, as evidenced by the strong third quarter podcasting
subscription growth announced yesterday, and we believe the Company
is well positioned to continue executing on our strategy and
enhancing shareholder value.”
“We are
pleased to reach this agreement with Libsyn that brings fresh
perspectives to its Board and positions the Company for future
value creation,” said Xx. Xxxxxxxxx, founder and managing
member of Camac. “Libsyn is a wonderful business, and we
believe this agreement will drive enhanced value for all
shareholders, employees and customers.”
The agreement
provides for, among other things, the following:
●
Board Updates: Xx. Xxxxxxxxx and Xx.
Xxxxxx have been appointed to the Board. Xx. Xxxxxxxxx will chair
the Compensation Committee and Strategic Review Committee and Xx.
Xxxxxx will join the Audit Committee. Libsyn will work to identify
new independent director candidates for approval by Camac, with the
intention that one new independent director will promptly join the
Board and its Compensation Committee in place of an existing
director. Further, Libsyn’s director slate for the 2020
annual meeting will include at least one additional new independent
director in lieu of an existing independent director.
●
Strategic Review: Libsyn will form a
Strategic Review Committee aimed at developing value-enhancing
actions for all stakeholders.
15
●
Annual Meeting Dates: Libsyn will hold
its next annual meeting no later than September 15, 2020. The
Company will hold its 2021 annual meeting no later than September
15, 2021.
●
Voting and Standstill Agreements:
Libsyn’s directors and management team will vote their
respective shares in favor of the Company’s director nominees
at the 2020 Annual Meeting. Camac will also vote its shares in
favor of the Company’s director nominees at the 2020 Annual
Meeting, unless the Board does not nominate Xx. Xxxxxxxxx and Xx.
Xxxxxx at the 2020 Annual Meeting. Camac has agreed to a customary
standstill until September 1, 2020.
●
Fees: Libsyn will reimburse Camac for up
to $600,000 in out of pocket expenses.
●
Equity Grants: Libsyn will immediately
cancel an aggregate of 300,000 shares from the equity grants on
April 13, 2017 associated with the Nasdaq uplisting. The shares
will be equally split between Xx. Xxxxxxx and Xxxx Xxxxxxxx, the
Company’s former Chief Financial Officer.
Loeb & Loeb LLP
and Xxxxxxx & Xxxxxx LLP are serving as legal advisors to the
Company and MacKenzie Partners, Inc. is serving as proxy advisor.
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation and
Xxxxxxx Xxxxx LLP are serving as legal advisors to Camac and
InvestorCom, LLC is serving as proxy advisor.
About Xxxx Xxxxxxxxx
Xxxx
Xxxxxxxxx, age 31, is the managing member of Camac Partners LLC,
which he founded in 2011. Prior to founding Camac, he was an
analyst at Kingstown Capital Management L.P., an investment firm,
from 2009 to 2011. Xx. Xxxxxxxxx was a director of Khan Resources,
Inc. from 2015 to 2017, during which time the company reached a
settlement with the government of Mongolia in regards to an
arbitration award entered in the company’s favor and paid out
a large return of capital. Xx. Xxxxxxxxx has a B.S. from Babson
College.
About Xxxxxxx Xxxxxx
Xxxxxxx
X. Xxxxxx, age 49, is a managing director at Palm Active Partners
LLC. From 2009 to 2016, Xx. Xxxxxx was founder and Chief Executive
Officer of Xxxxx Partners and managed various investment
partnerships that focused on engaging public companies to improve
corporate governance and improve stockholder returns. Earlier in
his career, he worked for Credit Suisse First Boston, Caxton
Associates, Sigma Capital Management and Xxxxxxx Investment
Company. Xx. Xxxxxx is the Chairman of the Board of Full House
Resorts, Inc., a casino developer and operator, and has been a
director since December 2014. He previously held director positions
at Flowgroup, Xxxxxx Dental Management Services, Inc., Applied
Minerals, Inc. and USA Technologies, Inc. Xx. Xxxxxx is a trustee
of the HALO Trust USA, the world’s largest humanitarian mine
clearance organization which clears the debris of war in over 20
countries. Xx. Xxxxxx received a B.S. from Tufts University and an
M.B.A from Georgetown University.
16
About Liberated Syndication
Liberated Syndication (“Libsyn”) is
the world’s leading podcast hosting network and has been
providing publishers with distribution and monetization services
since 2004. In 2018 Libsyn delivered over 5.1 billion downloads.
Libsyn hosts over 5.6 million media files for more than 67,000
podcasts, including typically around 35% of the top 200 podcasts in
Apple Podcasts. Podcast producers choose Libsyn to measure their
audience via IAB V2 certified stats, deliver popular audio and
video episodes, distribute their content through smartphone Apps
(iOS and Android), and monetize via premium subscription services
and advertising. We are a Pittsburgh based company with a world
class team. Visit us on the web at xxxxx://xxx.xxxxxx.xxx.
Pair Networks, founded in 1996, is one of the
oldest and most experienced Internet hosting company providing a
full range of fast, powerful and reliable Web hosting services.
Pair offers a suite of Internet services from shared hosting to
virtual private servers to customized solutions with world-class
24x7 on-site customer support. Based in Pittsburgh, Pair serves
businesses, bloggers, artists, musicians, educational institutions
and non-profit organizations around the world. Visit us on the web
at xxx.xxxx.xxx.
Legal Notice
“Forward-looking
Statements” as defined in the Private Securities litigation
Reform Act of 1995 may be included in this press release. These
statements relate to future events or our future financial
performance. These statements are only predictions and may differ
materially from actual future results or events. Except as required
by law, we disclaim any intention or obligation to revise any
forward-looking statements whether as a result of new information,
future developments or otherwise. There are important risk factors
that could cause actual results to differ from those contained in
forward-looking statements, including, but not limited to, those
described from time to time in our filings with the Securities and
Exchange Commission.
Contacts:
Investors
Art
Xxxxxx
Xxxxxx
Xxxxxxx & Associates, Inc.
(000)
000-0000
Xxx
Xxxxxx
XxxXxxxxx
Partners, Inc.
(000)
000-0000
Media
Xxxx
Xxxxxxxx / Xxxxxxxx Xxxxxxx / Xxxxxxxxxx Xxxxx
Reevemark
(000)
000-0000
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Exhibit B
Review
Committee Charter
CHARTER
OF THE STRATEGIC REVIEW COMMITTEE
PURPOSE
The purpose of the
Strategic Review Committee (the “Committee”) of
the Board of Directors (the “Board”) of
Liberated Syndication Inc. (the “Company”) is
to conduct a strategic review (the “Review”) of
the business of the Company and make recommendations to the Board
with respect to the strategic direction of the Company, its
businesses and its opportunities (including with respect to
potential strategic transactions involving the Company), in order
to enhance shareholder value.
COMPOSITION
The Committee shall
consist of two members of the Board. The members of the Committee
shall be appointed by and serve at the discretion of the Board in
accordance with the terms of the Settlement Agreement (the
“Settlement
Agreement”) dated as of October 4, 2019 between the
Company, Camac Fund LP (“Camac”) and
certain other parties. Vacancies occurring on the Committee shall
be filled by the Board in accordance with the terms of the
Settlement Agreement. The Chairman of the Committee shall be
appointed by the Board in accordance with the terms of the
Settlement Agreement.
MEETINGS
AND MINUTES
The Committee shall
hold such regular or special meetings as its members deem necessary
or appropriate. In lieu of a meeting, the Committee may act by
unanimous written consent. Minutes of each meeting of the Committee
shall be prepared and distributed to each director of the Company
and the Secretary of the Company promptly after each meeting. The
Committee shall report to the Board from time and time and whenever
requested to do so by the Board. The majority of the members of the
Committee shall constitute a quorum.
AUTHORITY
The Committee shall
have full access to all books, records, facilities and personnel of
the Company as deemed necessary or appropriate by any member of the
Committee to discharge his or her responsibilities hereunder. The
Committee at its discretion may permit other members of the
management of the Company or of the Board to attend meetings of the
Committee.
The approval of
this Charter shall be construed as a delegation of authority to the
Committee with respect to the responsibilities set forth
herein.
RESPONSIBILITIES
To implement the
Committee’s purpose, the Committee shall be charged with the
following duties and responsibilities:
1. Strategic Review.
Review and make recommendations to the Board and management on the
following:
●
the Company’s
long-term strategic plan, as developed by the Company’s
management and approved by the Board;
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●
the strategic
direction of the Company and strategic alternatives available to
the Company, including capital allocation, significant corporate
transactions, change of control transactions (including a sale of
the Company or of its assets), modifications of the Company’s
capital structure, debt and equity financings, and other strategic
transactions (any of the foregoing, a “Potential
Transaction”);
●
proposals from any
party that could reasonably be expected to result in a Potential
Transaction; and
●
responses to
external developments and factors, such as the economy,
competition, and technology.
For the avoidance
of doubt, the Committee is explicitly authorized to conduct, with
the assistance of its advisors, a market check to determine whether
a buyer exists for the Company in a transaction that the Committee
is willing to recommend to the Board.
2. Engagement of
Advisors. Engage, at the Company’s expense,
independent legal, accounting, financial, valuation and other
appropriate advisors to serve the Committee’s needs and
assist it in the discharge of its responsibilities in connection
with the Review and the investigation, review and negotiation of
any Potential Transaction, and making a recommendation to the Board
with respect thereto, and the Committee shall also have the power
and authority to enter into on behalf of the Company retention
letters, engagement letters, contracts and agreements (including
agreements relating to indemnification and contribution) with such
advisors provided that such letters, contracts and agreements do
not contain obligations of the Company that extend beyond the
closing of a Potential Transaction, except for customary provisions
of an engagement letter such as indemnities and deferred payments
that have effect post-closing.
3. Periodic Review of
Charter. Review and
assess periodically the adequacy of this charter, including the
Committee’s role and responsibilities as outlined in this
Charter, and recommend any proposed changes to the Board for its
consideration.
4. Other Matters.
Undertake from time to time such additional activities within the
scope of the Committee’s primary functions as assigned by the
Board.
The Committee shall
not have the power to approve or reject any matter requiring
approval by the Board.
The operation of
the Committee shall be subject to the Bylaws of the Company as in
effect from time to time and the provisions of the Nevada Revised
Statutes, as applicable.
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