STOCKHOLDERS AGREEMENT
EXHIBIT 10.1
STOCKHOLDERS AGREEMENT (the
“Agreement”),
dated as of the 30th day of September, 2009, by and among KIT digital, Inc., a
Delaware Corporation (“KIT”), Mr. Kaleil
Xxxxx Xxxxxx, a resident of Dubai (“Xxxxx Tuzman”), those
stockholders of The FeedRoom, Inc., a Delaware corporation (the “Company”) who execute
a counterpart of this Agreement to KIT on the date hereof (such stockholders are
sometimes individually referred to as a “Stockholder” and
collectively referred to as the “Stockholders”) and
NewSpring Ventures II, L.P. in its capacity as Stockholders’ Representative
(“Stockholder
Representative”) under Article IX of the Merger Agreement (as defined
below).
WITNESSETH:
WHEREAS,
contemporaneously with the execution hereof, the Company and KIT have entered
into a Merger Agreement (the “Merger Agreement”)
pursuant to which the Company will merge with a wholly-owned subsidiary of KIT,
and
WHEREAS,
pursuant to the Merger Agreement the Stockholders will be issued on or about the
date hereof shares of the common stock of KIT (the “KIT Shares”),
and
WHEREAS,
Xxxxx Xxxxxx owns and/or has control of certain shares of common stock of KIT,
by and through KIT Media Ltd., as more fully described in “Exhibit A”, and has
agreed that such shares shall be subject to this Agreement (the “Xxxxx Tuzman
Shares”), and
WHEREAS,
KIT, the Stockholders and Xxxxx Xxxxxx believe it to be in their best mutual
interests that they enter into this Agreement providing for certain rights and
restrictions with respect to the KIT Shares and Xxxxx Tuzman Shares owned by
them or their permitted transferees (collectively, the “Shares”) and to
provide for other related rights and duties.
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties
and obligations set forth in this Agreement, the parties hereto agree as
follows:
1. Xxxxx Xxxxxx Common
Shares. Xxxxx Tuzman hereby represents and warrants that
as of the date hereof he owns 100% of KIT Capital Ltd., KIT Capital Ltd. owns
17,858 shares of KIT common stock and KIT Media Ltd. owns 2,473,430 shares of
KIT common stock. Xxxxx Xxxxxx further represents and warrants that he holds a
controlling interest in KIT Media Ltd. and he holds the voting and dispositive
power of the shares directly held by KIT Media Ltd.
2. Transfers of Shares and
Lock-Up Provision. During the term of this Agreement, the
Stockholders and Xxxxx Tuzman agree not to Transfer any Shares except as may be
specifically permitted by the terms of this Agreement (the “Restrictions”). For
purposes of this Agreement the term “Transfer” means any
short sale of, loan, grant any option for the purchase of, or otherwise pledge,
hypothecate or dispose of any of the Shares. The Restrictions may be terminated, in
whole or in part (if in part, on a pro rata basis), at any time or from time to
time upon the mutual agreement of Xxxxx Xxxxxx and the Stockholder
Representative.
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3. Term. This
Agreement shall terminate upon the earliest occurrence of the date or event of
(i) eighteen months from the date hereof, or (ii) the mutual written agreement
of KIT, Xxxxx Tuzman and the Stockholder Representative, or (iii) a sale, merger
or similar transaction wherein all or substantially all of KIT’s assets or
shares of common stock are acquired by an unaffiliated third party.
4. Management Information
Rights. So long as any KIT Shares remain subject to the
Restrictions, KIT will provide a representative designated from time to time by
the Stockholder Representative (the “Representative”) the
following information and other rights:
(a) The
Representative shall have the right to consult with and advise the Chief
Executive Officer and senior management of the KIT (the “Management”) on
significant business issues, including Management’s proposed annual operating
plans.
(b) Management
will meet with the Representative quarterly at KIT’s New York facility or at
other mutually acceptable location(s) and at mutually agreeable times for such
consultation and advice and to review progress of KIT.
(c) The
Representative may request information at reasonable times and intervals
concerning the general status of the KIT’s financial condition and operation,
provided however that access to (i) highly confidential and proprietary
information may be withheld, at the sole discretion of KIT and (ii) other
information may be withheld if it would result in a waiver of attorney-client
privilege or upon advice of legal counsel to KIT.
(d) The
Representative agrees that all information that is provided to or learned by him
in connection with the Management Information Rights provisions of this
Agreement shall be deemed confidential in all respects and such Representative
shall not (i) divulge such information to any third party, or (ii) engage in any
transactions directly or indirectly involving the common stock of KIT that would
violate any of the laws or regulations administered by the United States
Securities and Exchange Commission, including but not limited to the Securities
Exchange Act of 1934, as amended (the “1934 Act”), or the
Securities Act of 1933, as amended (the “1933
Act”). The Representative further acknowledges that any
information provided hereunder may constitute “insider information” under the
1934 Act.
5. Stock Certificate
Legends. A copy of this Agreement shall be filed with the
Secretary of KIT and kept with the corporate records of KIT.
(a) Each
certificate representing KIT Shares shall bear the following
legends:
(i) THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH LAWS AND THE STOCKHOLDERS AGREEMENT
OF KIT DIGITAL, INC. DATED AS OF SEPTEMBER 30, 2009, (THE “STOCKHOLDERS’
AGREEMENT”), AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
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(ii) THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND OTHER CONDITIONS AND RESTRICTIONS, AS SPECIFIED IN THE STOCKHOLDERS’
AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE OFFICE OF KIT DIGITAL AND WILL BE
FURNISHED WITHOUT CHARGE TO THE STOCKHOLDER OF SUCH SHARES UPON WRITTEN
REQUEST.
(b) Each
certificate representing Xxxxx Xxxxxx Shares shall bear the following
legends:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
AND OTHER CONDITIONS AND RESTRICTIONS, AS SPECIFIED IN THE STOCKHOLDERS
AGREEMENT OF KIT DIGITAL, INC. DATED AS OF SEPTEMBER 30, 2009, COPIES OF WHICH
ARE ON FILE AT THE OFFICE OF KIT DIGITAL AND WILL BE FURNISHED WITHOUT CHARGE TO
THE STOCKHOLDER OF SUCH SHARES UPON WRITTEN REQUEST.
At such
time as the restrictions on transfer set forth above no longer apply, the
certificate(s) representing such Shares shall be replaced, at the expense of
KIT, with certificates not bearing the legends required by this Section 4(a) and
(b), but with any other legends required by KIT in its discretion to comply with
applicable securities laws. KIT shall remove all securities legends
with respect to one or more certificates representing Shares only at such time
as such Shares are sold pursuant to a registration statement effective under the
1933 Act or pursuant to Rule 144 in a transaction where such Shares are no
longer “restricted securities” under the 1933 Act.
6. Amendment and
Modification. This Agreement may be amended, modified or
supplemented only by written agreement of Xxxxx Tuzman, KIT and the holders of
at least a majority of the KIT Shares.
7. No Third Party
Beneficiaries. Except as otherwise provided herein, this
Agreement is not intended to confer upon any person, except for the parties
hereto and their respective permitted transferees, any rights or remedies
hereunder.
8. Further
Assurances. Each party hereto shall do and perform or cause to
be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto or person subject hereto may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
9. Governing
Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without giving effect to the
choice of law principles thereof.
10. Invalidity of
Provision. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
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11. Notices. All
notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, (b) mailed,
certified or registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by facsimile or other form of electronic
transmission, including e-mail, as follows:
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(i)
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if
to the Stockholder
Representative, to it at:
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c/o
NewSpring Capital
000 X.
Xxxxxxxxx Xxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Attn:
Xxxx Xxxxxxxx
Facsimile
No.: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx
(ii) If to any
Stockholder, to the address set forth for such Stockholder on the signature
pages hereto with a copy to:
Xxxxxxxxxxx
X. Xxxxxx
Xxxxxx
Xxxxxxxx LLP
000
Xxxxxx Xxxx
000
Xxxxxxx Xxxx
Xxxxxx,
XX 00000-0000
Telephone (000)
000-0000
Facsimile:
(000) 000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
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(iii)
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If
to KIT, to it at:
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000 0xx
Xxx, Xxxxx # 000
Xxx Xxxx,
XX 00000-0000
Facsimile
No: x0 (000) 000-0000
Email: xxxxxx@xxxx.xxx
with a
copy to:
Xxxxx X.
Xxxxxx
Xxxxxx
& Xxxxxxxxx, PLLC
0000
Xxxxxx Xxxx.
000 Xxxxx
Xxxxxx Xxxxxx
0
Xxxxxxxxxx,
XX 00000
Facsimile
No: 000-000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
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(iv)
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If
to Xxxxx Xxxxxx, to him at:
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000 0xx
Xxx, # 000
Xxx Xxxx,
XX 00000-0000
Facsimile
No: x0 (000) 000-0000
Email: xxxxxx@xxxx.xxx
with a
copy to:
Xxxxx X.
Xxxxxx
Xxxxxx
& Xxxxxxxxx, PLLC
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Facsimile
No: 000-000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
or to
such other person or address as any party shall specify by notice in writing to
the other parties. All such notices, requests, demands, waivers and
other communications shall be deemed to have been received (w) if by personal
delivery on the day after such delivery, (x) if by certified or registered mail,
on the seventh business day after the mailing thereof, (y) if by next-day or
overnight mail or delivery, on the day delivered, (z) if by facsimile or other
form of electronic transmission on the next day following the day on which such
telecopy was sent, provided that a copy is also sent by certified or
registered
12. Headings; Execution in
Counterparts. The headings and captions contained herein are
for convenience and shall not control or affect the meaning or construction of
any provision hereof. This Agreement may be executed in any number of
counterparts, by facsimile or other form of electronic transmission, each of
which shall be deemed to be an original and which together shall constitute one
and the same instrument.
13. Survival. No
termination or expiration of this Agreement shall serve as a release of any
claim or liability of the Stockholder Representative, any Stockholder or Xxxxx
Tuzman for any breach of this Agreement.
14. Entire
Agreement. This Agreement, the Merger Agreement and the other
agreements entered into pursuant to the Merger Agreement constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein and supersede all prior agreements and
understandings among the parties with respect to such subject
matter.
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15. Injunctive
Relief. The Stockholders, Xxxxx Xxxxxx and KIT will be
irreparably damaged in the event this Agreement is not specifically
enforced. Each of the parties therefore agrees that in the event of a
breach of any provision of this Agreement the aggrieved parties may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of this
Agreement; provided that the Stockholders may only act through the Stockholder
Representative. Such remedies shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which the KIT or any
Stockholder may have. Each Stockholder, the Stockholder
Representative, KIT and Xxxxx Tuzman hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts in New York City, New
York State for the purposes of any suit, action or other proceeding arising out
of or based upon this Agreement or the subject matter hereof. Each
Stockholder, the Stockholder Representative, KIT and Xxxxx Xxxxxx hereby
consents to service of process in accordance with Section 10.
[SIGNATURES
ON FOLLOWING PAGES]
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IN
WITNESS WHEREOF, this Stockholders Agreement has been signed by each of the
parties hereto as of the date first above written.
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KIT
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By:
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/s/ Kaleil Xxxxx Tuzman | |
| Name: Kaleil Xxxxx Xxxxxx | ||
| Title: Chairman and Chief Executive Officer | ||
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XXXXX
TUZMAN
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/s/ Kaleil Xxxxx Xxxxxx
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KALEIL
XXXXX TUZMAN, individually
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STOCKHOLDER
REPRESENTATIVE
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NEWSPRING
VENTURES II, L.P.
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By:
Its general partner, NSVII GP, L.P.
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By:
Its general partner, NSVII GP, LLC, solely in its capacity as the
Stockholder Representative
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By:
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/s/
Xxxx Xxxxxxxx
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| Name: Xxxx Xxxxxxxx | ||
| Title: COO & GP | ||
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STOCKHOLDERS
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VELOCITY
EQUITY PARTNERS I SBIC, L.P.,
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by
Velocity Equity Partners I SBIC GP, LLC, its general partner
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By:
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/s/ Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | ||
| Title: Managing Member | ||
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NEWSPRING
VENTURES II, L.P.
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By:
Its general partner, NSVII GP, L.P.
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By:
Its general partner, NSVII GP, LLC
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By:
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/s/ Xxxx Xxxxxxxx | |
| Name: Xxxx Xxxxxxxx | ||
| Title: COO & GP | ||
Signature
to KIT digital, Inc. Stockholders Agreement September 2009
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BRAND
EQUITY VENTURES I, L.P.,
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by
Brand Equity Partners I, LLC, Its General Partner
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By:
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/s/ Xxxx Xxxxxx |
| Name: Xxxx Xxxxxx | |
| Title: Attorney-in-Fact | |
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BRAND
EQUITY VENTURES II, L.P.,
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by
Brand Equity Partners II, LLC, Its General Partner
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By:
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/s/ Xxxx Xxxxxx |
| Name: Xxxx Xxxxxx | |
| Title: Member | |
EXHIBIT
A
XXXXX XXXXXX
SHARES
1,312,000
shares of KIT Common Stock issued in the name of KIT Media Ltd.
