EXECUTION COPY
SHAREHOLDERS AGREEMENT dated as of
September 2, 1999 (this "Agreement"), among
LYCOS, INC., a Delaware corporation ("Parent"),
and the individuals and other parties listed on
Schedule A attached hereto (each, a
"Shareholder" and, collectively, the
"Shareholders").
WHEREAS Parent, Quicksilver Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), and Xxxxx.xxx,
Inc., a California corporation (the "Company"), propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement"; terms used but not defined
herein shall have the meanings set forth in the Merger Agreement) providing
for the merger of Sub with and into the Company (the "Merger") upon the terms
and subject to the conditions set forth in the Merger Agreement;
WHEREAS each Shareholder owns the number of shares of capital stock
of the Company set forth opposite such Shareholder's name on Schedule A hereto
(such shares of capital stock of the Company, together with any other shares
of capital stock of the Company acquired by such Shareholder after the date
hereof and during the term of this Agreement (including through the exercise
of any stock options, warrants or similar instruments), being collectively
referred to herein as the "Subject Shares"); and
WHEREAS as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that each Shareholder enter into this
Agreement.
NOW, THEREFORE, to induce Parent to enter into, and in consideration
of its entering into, the Merger Agreement, and in consideration of the
premises and the representations, warranties and agreements contained herein,
the parties hereto agree as follows:
SECTION 1. Representations and Warranties of Each Shareholder. Each
Shareholder hereby, severally and not jointly, represents and warrants to
Parent as follows:
(a) Organization; Authority; Execution and Delivery; Enforceability.
To the extent that such Shareholder is an entity other than an individual,
such Shareholder is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite
corporate or other power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by such Shareholder and the consummation by such
Shareholder of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of such Shareholder. This Agreement has
been duly executed and delivered by such Shareholder and constitutes a legal,
valid and binding obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms. The execution and delivery by such
Shareholder of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof, will not,
conflict with, or result in any breach or violation of, or default (with or
without notice or lapse of time or both) under, or result in the termination
of, or accelerate the performance required by, or give rise to a right of
termination, cancelation or acceleration of any obligation or loss of a
benefit under, or to increased, additional, accelerated or guaranteed rights
or entitlements of any person under, or result in the creation of any Lien on
any properties or assets of such Shareholder pursuant to, (i) any provision of
the certificate of incorporation or by-laws or partnership agreement or the
comparable organizational documents of such Shareholder, (ii) any Contract to
which such Shareholder is a party or by which any of the properties or assets
of such Shareholder are bound or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to such Shareholder or its
assets. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to such Shareholder in connection with
the execution and delivery of this Agreement by such Shareholder or the
consummation by such Shareholder of the transactions contemplated hereby. No
trust of which such Shareholder is a trustee requires the consent of any
beneficiary to the execution and delivery of this Agreement or to the
consummation of the transactions contemplated hereby.
(b) The Subject Shares. Such Shareholder is the record and
beneficial owner of (or is the trustee of a trust that is the record holder
of, and whose beneficiaries are the beneficial owners of), and has good and
marketable title to, the Subject Shares set forth opposite its name on
Schedule A hereto, free and clear of any Liens. Such Shareholder does not own
of record any shares of capital stock of the Company other than the Subject
Shares set forth opposite its name on Schedule A hereto, and does not
beneficially own any shares of capital stock of the Company other than Subject
Shares. Such Shareholder has the sole right to vote and Transfer (as defined
below) the Subject Shares set forth opposite its name on Schedule A hereto,
and
none of such Subject Shares is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting or the Transfer of such
Subject Shares, except as set forth in Sections 3 and 4 of this Agreement.
SECTION 2. Representations and Warranties of Parent. Parent hereby
represents and warrants to each Shareholder as follows: Parent has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Parent. This Agreement has been duly executed and delivered by Parent and,
assuming due execution by each Shareholder, constitutes a valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms.
The execution and delivery by Parent of this Agreement do not, and the
consummation of the transactions contemplated hereby will not, conflict with,
or result in any breach or violation of, or default (with or without notice or
lapse of time or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien on any assets of Parent pursuant
to, (i) any provision of the charter or by-laws of Parent, (ii) any Contract
to which Parent is a party or by which any of its assets is bound or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its assets. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Parent
in connection with the execution and delivery of this Agreement by Parent or
the consummation by Parent of the transactions contemplated hereby.
SECTION 3. Covenants of Each Shareholder. Each Shareholder,
severally and not jointly, covenants and agrees as follows:
(a) At any meeting of the shareholders of the Company called to vote
upon the Merger, the Merger Agreement or any of the transactions contemplated
by the Merger Agreement, or at any adjournment thereof, or in any other
circumstances upon which a vote, consent or other approval (including by
written consent) with respect to the Merger, the Merger Agreement or any of
the transactions contemplated by the Merger Agreement, is sought, such
Shareholder shall, including by executing a written consent solicitation if
requested by Parent, vote (or cause to be voted) such Shareholder's Subject
Shares in favor of the adoption and approval by the Company of the Merger
Agreement and the approval of the terms thereof and of the Merger and each of
the other transactions contemplated by the Merger Agreement (including the
issuance of the Xxxxxxxx Shares).
(b) At any meeting of the shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which such
Shareholder's vote, consent or other approval is sought, such Shareholder
shall vote (or cause to be voted) the Subject Shares of such Shareholder
against, and shall not consent to (and shall cause not to be consented to),
any of the following (or any agreement to enter into or effect any of the
following): (i) any Takeover Proposal or transaction or occurrence which if
publicly proposed and offered to the Company and its shareholders (or any of
them) would be the subject of a Takeover Proposal (collectively, "Alternative
Transactions") or (ii) any amendment of the Company's Amended and Restated
Certificate of Incorporation or Amended and Restated By-laws or other
proposal, action or transaction involving the Company or any of its
subsidiaries, which amendment or other proposal, action or transaction would
or could reasonably be expected to prevent or materially impede, interfere
with, hinder or delay the consummation of the Merger or any of the other
transactions contemplated by the Merger Agreement or to dilute in any material
respect the benefits to Parent of the Merger and the other transactions
contemplated by the Merger Agreement, or change in any manner the voting
rights of any class or shares of Company Capital Stock (collectively,
"Frustrating Transactions").
(c) Other than this Agreement, such Shareholder shall not (i) sell,
transfer, pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or consent to any Transfer of, any Subject Shares
or any interest therein or enter into any Contract, option or other
arrangement (including any profit sharing or other derivative arrangement)
with respect to the Transfer of, any Subject Shares or any interest therein to
any person other than pursuant to the Merger Agreement, unless prior to any
such Transfer the transferee of such Subject Shares enters into a shareholders
agreement with Parent on terms substantially identical to the terms of this
Agreement, or (ii) enter into any voting arrangement, whether by proxy, voting
agreement or otherwise, in connection with, directly or indirectly, any
Alternative Transaction or Frustrating Transaction or otherwise with respect
to the Subject Shares.
(d) Such Shareholder shall not, and shall not authorize or permit
any of its subsidiaries or affiliates (other than the Company) or any of its
or their directors, officers, employees, partners, investment bankers,
attorneys or other advisors or representatives to, directly or indirectly, (i)
solicit, initiate, encourage or take any other action to facilitate any
inquiries with respect to any Takeover Proposal or the submission of any
Takeover Proposal, (ii) enter into any agreement with respect to any Takeover
Proposal or (iii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or otherwise cooperate
in any way with, or assist or participate in any effort or attempt by any
person with respect to, any Takeover Proposal.
(e)(i) Such Shareholder shall use its best efforts to take, or cause
to be taken, all other actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all other things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by the
Merger Agreement.
(ii) Such Shareholder shall not, and shall not authorize or permit
any of its subsidiaries or affiliates (other than the Company) or any of its
or their directors, officers, employees, partners, investment bankers,
attorneys or other advisors or representatives to, issue any press release or
make any other public statement with respect to the Merger Agreement, this
Agreement, the Merger or any of the other transactions contemplated by the
Merger Agreement or this Agreement without the prior written consent of
Parent, except as may be required by applicable law.
(f) Such Shareholder hereby waives any rights of appraisal, or
rights to dissent from the Merger, that such Shareholder may have.
(g) If, at the time the Merger Agreement is submitted for approval
to the shareholders of the Company, a Shareholder may be deemed, in the
reasonable judgment of Parent or the Company, an "affiliate" of the Company
for purposes of Rule 145 under the Securities Act, such Shareholder shall
deliver to Parent on or prior to the Closing Date a written agreement
substantially in the form attached as Exhibit D to the Merger Agreement.
(h) Such Shareholder shall execute and deliver to Parent the Escrow
Agreement.
SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy. (a)
Each Shareholder hereby irrevocably grants to, and appoints, Parent and Xxxxxx
X. Xxxxxx, its Chief Operating Officer and Chief Financial Officer, Xxxxxx X.
Xxxxxxxxx, its Vice President, Finance & Administration, and Xxxxxxx X.
Xxxxxx, its General Counsel, in their respective capacities as designees of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and each of them individually, such Shareholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Shareholder, to vote such Shareholder's Subject Shares, or
grant a consent or approval in respect of such Subject Shares, (i) in favor of
the Merger, the adoption and approval by the Company of the Merger Agreement
and the approval of the other transactions contemplated by the Merger
Agreement (including the issuance of the Xxxxxxxx Shares) and (ii) against any
Alternative Transaction or Frustrating Transaction.
(b) Such Shareholder represents that any proxies heretofore given in
respect of such Shareholder's Subject Shares are not irrevocable, and that all
such proxies are hereby revoked.
(c) Such Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Shareholder under this Agreement. Such
Shareholder hereby further affirms that the irrevocable proxy is coupled with
an interest and may under no circumstances be revoked. Such Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof.
SECTION 5. Further Assurances. Each Shareholder will, from time to
time, execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as Parent may
request for the purpose of effectuating the matters covered by this Agreement,
including the grant of the proxies set forth in Section 4.
SECTION 6. Certain Events. Each Shareholder agrees that this
Agreement and the obligations hereunder shall attach to such Shareholder's
Subject Shares and shall be binding upon any person or entity to which legal
or beneficial ownership of such Subject Shares shall pass, whether by
operation of law or otherwise, including such Shareholder's heirs, guardians,
administrators or
successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of
the Company affecting the Company Capital Stock, or the acquisition of
additional shares of Company Capital Stock or other voting securities of the
Company by any Shareholder, the number of Subject Shares listed on Schedule A
hereto beside the name of such Shareholder shall be adjusted appropriately and
this Agreement and the obligations hereunder shall attach to any additional
shares of Company Capital Stock or other voting securities of the Company
issued to or acquired by such Shareholder.
SECTION 7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or
in part, by operation of law or otherwise, by any of the parties hereto
without the prior written consent of the other parties hereto, except that
Parent may assign, in its sole discretion, any of or all its rights, interests
and obligations under this Agreement to any direct or indirect wholly owned
subsidiary of Parent, but no such assignment shall relieve Parent of its
obligations under this Agreement. Any purported assignment in violation of
this Section 7 shall be void. Subject to the preceding sentences of this
Section 7, this Agreement will be binding upon, inure to the benefit of, and
be enforceable by, the parties hereto and their respective successors and
assigns.
SECTION 8. Termination. This Agreement shall terminate upon the
earlier of (a) the Effective Time and (b) the termination of the Merger
Agreement in accordance with its terms. No such termination of this Agreement
shall relieve any party hereto from any liability for any breach of this
Agreement prior to termination.
SECTION 9. General Provisions. (a) Amendments. This Agreement may
not be amended except by an instrument in writing signed by each of the
parties hereto.
(b) Notices. All notices, requests, clauses, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (with confirmation) or sent by
overnight or same-day courier (providing proof of delivery) to Parent in
accordance with Section 9.02 of the Merger Agreement and to the Shareholders
at their respective addresses set forth on Schedule A hereto (or at such other
address for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to
Sections or Schedules, such reference shall be to a Section or Schedule to
this Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The term "or" is not exclusive. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms. Any agreement or instrument defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement or
instrument as from time to time amended, modified or supplemented. References
to a person are also to its permitted successors and assigns.
(d) Counterparts; Effectiveness. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other party. The
effectiveness of this Agreement shall be conditioned upon the execution and
delivery of the Merger Agreement by each of the parties thereto.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties hereto with respect to the subject
matter of this Agreement and (ii) is not intended to confer upon any person
other than the parties hereto (and the persons specified as proxies in Section
4) any rights or remedies.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE.
(g) Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable
law in an acceptable manner and to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 10. Enforcement. Each of the parties hereto agrees that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
Delaware state court or any Federal court located in the State of Delaware,
this being in addition to any other remedy to which they are entitled at law
or in equity. In addition, each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any Delaware state court or any Federal
court located in the State of Delaware in the event any dispute arises out of
or under or relates to this Agreement or any of the transactions contemplated
hereby, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (c)
agrees that it will not bring any action, suit or proceeding arising out of or
under or relating to this Agreement or any of the transactions contemplated
hereby in any court other than any Delaware state court or any Federal court
located in the State of Delaware and (iv) waives any right to trial by jury
with respect to any action, suit or proceeding arising out of or under or
relating to this Agreement or any of the transactions contemplated hereby in
any Delaware state court or any Federal court located in the State of
Delaware, and hereby further and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by
its officer thereunto duly authorized and each Shareholder has signed this
Agreement, all as of the date first written above.
LYCOS, INC.,
by /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Vice President
SHAREHOLDERS:
by /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Sequoia Capital
by /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
by /s/ Xxxx Xxxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Director of AZ Company
by /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director of
Shawmut Equity Partners,
L.P.
by /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
by /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
by /s/ Xxxxx XxXxxxx
--------------------------------
Name: Xxxxx XxXxxxx
by /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
by /s/ Xxx Xxxxxx
--------------------------------
Name: Xxx Xxxxxx
by /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: Trustee of Maro Corporation
by /s/ Xxx Xxxxxxxx
--------------------------------
Name: Xxx Xxxxxxxx
Title: Partner of Riva
Investments
by /s/ Xxxxx Xxxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Software Engineer
by /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
by /s/ Avon Xxxxxxxx
--------------------------------
Name: Avon Xxxxxxxx
by /s/ Xxxxxx Xxxxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: General Partner of
MLS. I, L.P.
by /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
by /s/ Xxxxxx Nova
--------------------------------
Name: Xxxxxx Nova
Title: General Partner of
Highland Capital Partners
III Limited Partnership
Member of Highland
Entrepreneur's Fund III,
Limited Partnership
by /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
by /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
