STOCKHOLDER AGREEMENT
This
Stockholder Agreement (this “Agreement”) is entered into as of September 26,
2007 among New Motion, Inc., a Delaware corporation (“Parent”), and Xxxxxx
Xxxxxxxx (the “Stockholder”).
PREAMBLE
A. Parent,
NM Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of
Parent (“Merger Co.”), and Traffix, Inc., a Delaware corporation (the “Company”)
are parties to an Agreement and Plan of Merger dated of even date herewith
(such
Agreement and Plan of Merger, as amended from time to time, the “Merger
Agreement”). Any capitalized term used but not defined herein shall have meaning
ascribed to such term in the Merger Agreement.
B. The
Merger Agreement provides, among other things, that Merger Co. shall merge
with
and into the Company (the “Merger”), upon the terms and subject to the
conditions set forth in the Merger Agreement.
C. The
Stockholder owns beneficially and of record that number of shares of the
Company’s common stock, par value $0.001 per share (the “Company Common Stock”),
opposite his name set forth on Exhibit
1
hereto
(the “Initial Stockholder Shares”).
D. As
a
condition to the willingness of Parent to enter into the Merger Agreement,
and
as an inducement to it to do so, subject to the provisions of this Agreement,
the Stockholder has agreed to vote all the Initial Stockholder Shares and all
other shares of Company Common Stock acquired by such Stockholder in any
capacity after the date hereof and prior to the termination of this Agreement
in
accordance with its terms, whether upon the exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities,
by
means of purchase, dividend, distribution or otherwise, and that are owned
by
the Stockholder on the record date of the meeting of Company stockholders to
approve adopt the Merger Agreement (collectively, the “Stockholder Shares” of
such Stockholder), in favor of approval and adoption of the Merger Agreement.
Therefore,
the parties hereby agree as follows, intending to be legally bound:
AGREEMENT
ARTICLE
I
CONSENT
AND VOTING
SECTION
1.1. Voting.
The
Stockholder hereby revokes any and all previous proxies granted with respect
to
his Stockholder Shares. By entering into this Agreement, the Stockholder hereby
consents to the Merger Agreement and the transactions contemplated thereby,
including the Merger. So long as this Agreement is in effect and has not been
terminated, the Stockholder hereby agrees (i) to vote all Stockholder Shares
now
or hereafter acquired by the Stockholder in favor of adoption of the Merger
Agreement and
approval of the Merger and the other transactions contemplated thereby and
(ii)
to oppose any Acquisition Proposal and to vote all Stockholder Shares now or
hereafter acquired by the Stockholder against (a) any transaction arising out
of
or relating to an Acquisition Proposal and against any Acquisition Proposal,
(b)
any merger agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company,
and (c) any amendment to the Company’s certificate of incorporation or the
Company’s by-laws or other proposal or transaction involving the Company or any
subsidiary of the Company, which amendment or other proposal or transaction
would in any manner impede, frustrate, prevent or nullify any provision of
the
Merger Agreement, the Merger or any other transaction contemplated thereby
or
change in any manner the voting rights of any class of the Company’s capital
stock. The Stockholder shall not commit or agree to take any action inconsistent
with the foregoing.
SECTION
1.2 Proxy.
In
order to fully implement the agreement of each Stockholder set forth in Section
1.1 above, the Stockholder hereby irrevocably appoints Parent, with full power
of substitution (Parent and its substitutes being referred to herein as the
“Proxy”), as the true and lawful attorney and proxy of the Stockholder to vote
all Stockholder Shares of the Stockholder on matters as to which the Stockholder
is entitled to vote at a meeting of the stockholders of the Company or to which
the Stockholder is entitled to express consent or dissent to corporate action
in
writing without a meeting, in the Proxy’s absolute, sole and binding discretion,
on the matters specified in Section 1.1 above. The Stockholder agrees that
the
Proxy may, in such Stockholder’s name and stead, (i) attend any annual or
special meeting of the stockholders of the Company and vote all Stockholder
Shares of the Stockholder at any such annual or special meeting as to the
matters specified in Section 1.1 above, and (ii) execute with respect to all
Stockholder Shares of the Stockholder any written consent to, or dissent from,
corporate action respecting any matter specified in Section 1.1 above. The
Stockholder agrees to refrain from (A) voting the Stockholder Shares of the
Stockholder at any annual or special meeting of the stockholders of the Company
in any manner inconsistent with the terms of this Agreement, (B) executing
any
written consent in lieu of a meeting of the stockholders of the Company in
any
manner inconsistent with the terms of this Agreement, (C) exercising any rights
of dissent with respect to the Stockholder Shares of the Stockholder, and (D)
granting any proxy or authorization to any person with respect to the voting
of
the Stockholder Shares of the Stockholder, except pursuant to this Agreement,
or
taking any action contrary to or in any manner inconsistent with the terms
of
this Agreement. The Stockholder agrees that this grant of proxy and appointment
of attorney is irrevocable and coupled with an interest and agrees that the
person designated as Proxy pursuant hereto may at any time name any other person
as its substituted Proxy to act pursuant hereto, either as to a specific matter
or as to all matters.
SECTION
1.3. Transfer.
(a)
Until this Agreement is terminated, the Stockholder shall not directly or
indirectly (i) offer to sell, sell short, transfer (including gift), assign,
pledge or otherwise dispose of or transfer (each, a “Transfer”) any interest in,
or encumber with any Lien (as defined below), any of the Stockholder Shares
of
the Stockholder, (ii) enter into any contract, option, put, call, “collar” or
other agreement or understanding with respect to any Transfer of any or all
of
the Stockholder Shares of the Stockholder or any interest therein; (iii) deposit
the Stockholder Shares of the Stockholder into a voting trust or enter into
a
voting agreement or arrangement with respect thereto; or (iv) take any other
action with respect to the Stockholder Shares of the Stockholder that would
in
any way restrict, limit or interfere with the performance of its obligations
hereunder.
(b)
The
Stockholder agrees to place the following legend on any and all certificates
evidencing the Stockholder Shares of the Stockholder:
2
THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER PURSUANT TO THAT STOCKHOLDER AGREEMENT BY AND BETWEEN
NEW MOTION, INC. AND XXXXXX XXXXXXXX. ANY TRANSFER OF SUCH SHARES OF COMMON
STOCK IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND
OF
NO EFFECT WHATSOEVER.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
OF
THE
STOCKHOLDER
The
Stockholder represents and warrants to Parent that:
SECTION
2.1. Ownership.
The
Stockholder is the sole, true, lawful record and beneficial owner of the
Stockholder Shares of the Stockholder and that there are no restrictions on
voting rights or rights of disposition pertaining to the Stockholder Shares
of
the Stockholder. The Stockholder will convey good and valid title to the
Stockholder Shares owned by the Stockholder being acquired pursuant to the
Merger free and clear of any and all liens, restrictions, security interests
or
any encumbrances whatsoever, other than restrictions under applicable securities
laws (collectively, “Liens”). None of the Stockholder Shares of the Stockholder
is subject to any voting trust or other agreement, arrangement or restriction
with respect to the voting thereof.
SECTION
2.2. Authority
and Non-Contravention.
(a) The
execution, delivery and performance by the Stockholder of this Agreement and
the
consummation of the transactions contemplated hereby (i) are within the
Stockholder’s power and authority, have been duly authorized by all necessary
action (including any consultation, approval or other action by or with any
other person), (ii) require no action by or in respect of, or filing with,
any
governmental body (except as may be required under the Securities Exchange
Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
“Exchange Act”)), and (iii) do not and will not contravene or constitute a
default under, or give rise to a right of termination, cancellation or
acceleration of any right or obligation of the Stockholder or to a loss of
any
benefit of such Stockholder under, any provision of applicable law or regulation
or any agreement, judgment, injunction, order, decree, or other instrument
binding on the Stockholder or result in the imposition of any Lien on any assets
of the Stockholder.
(b)
If
the Stockholder is married and the Stockholder Shares of the Stockholder
constitute community property or otherwise are owned or held in a manner that
requires spousal or other approval for this Agreement to be legal, valid and
binding, this Agreement has been duly consented to and delivered by the
Stockholder’s spouse or the person giving such approval, and is enforceable
against such spouse or person in accordance with its terms.
SECTION
2.3. Binding
Effect.
This
Agreement has been duly executed and delivered by the Stockholder and is the
valid and binding agreement of the Stockholder, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights
generally.
SECTION
2.4. Total
Shares.
The
Stockholder Shares owned by the Stockholder are the only shares of Company
Common Stock beneficially owned by the Stockholder and, except as set forth
in
the disclosure schedule to this Agreement, the Stockholder has no option to
purchase or right to subscribe for or otherwise acquire any securities of the
Company and has no other interest in or voting rights with respect to any other
securities of the Company.
3
SECTION
2.5. Finder’s
Fees.
No
investment banker, broker or finder is entitled to a commission or fee from
the
Purchaser or the Company in respect of this Agreement based upon any arrangement
or agreement made by or on behalf of the Stockholder.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
OF
PARENT
Parent
represents and warrants to the Stockholder that:
SECTION
3.1. Corporate
Power and Authority; Noncontravention.
Parent
has all requisite corporate power and authority to enter into this Agreement
and
to perform its obligations hereunder. The execution, delivery and performance
by
Parent of this Agreement and the consummation by Parent of the transactions
contemplated hereby (i) have been duly authorized by all necessary corporate
action on part of Parent, (ii) require no action by or in respect of, or filing
with, any governmental body (except as may be required under the Exchange Act),
and (iii) do not and will not contravene or constitute a default under, the
certificate of incorporation or by-laws of Parent or any provision of applicable
law or regulation or any, judgment, injunction, order, decree, material
agreement or other material instrument binding on Parent.
SECTION
3.2. Binding
Effect.
This
Agreement has been duly executed and delivered by Parent and is a valid and
binding agreement of Parent, enforceable against Parent in accordance with
its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors’ rights generally.
ARTICLE
IV
ADDITIONAL
AGREEMENTS
SECTION
4.1. No
Solicitation.
The
Stockholder hereby covenants and agrees that: from the date of this Agreement
until the earlier of (x)
the
Effective Time and (y)
the
termination of this Agreement in accordance with its terms, such Stockholder
shall not (and it will not permit any of its officers, directors, agents or
affiliates to) directly or indirectly (i) solicit, engage in discussions or
negotiate with any person (whether such discussions or negotiations are
initiated by such Stockholder, the Company or otherwise) or take any other
action intended or designed to facilitate the efforts of any person (other
than
Parent) relating to any Acquisition Proposal, (ii) provide information with
respect to the Company to any person, other than Parent, relating to a possible
Acquisition Proposal by any person, other than Parent, or (iii) enter into
an
agreement with any person, other than Parent, relating to a possible Acquisition
Proposal. The Stockholder shall promptly advise Parent orally and in writing
of
any proposal or inquiry made to such Stockholder with respect to or that could
lead to any Acquisition Proposal, the identity of the person making such
Acquisition Proposal and the material terms of any such Acquisition Proposal
or
inquiry.
4
ARTICLE
V
MISCELLANEOUS
SECTION
5.1. Expenses.
All
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such expenses.
SECTION
5.2. Further
Assurances.
Parent
and the Stockholder will execute and deliver or cause to be executed and
delivered all further documents and instruments and use its reasonable best
efforts to secure such consents and take all such further action as may be
reasonably necessary in order to consummate the transactions contemplated hereby
and by the Merger Agreement.
SECTION
5.3. Additional
Agreements.
Subject
to the terms and conditions of this Agreement, each of the parties hereto agrees
to use all reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations and that may be required under any agreements,
contracts, commitments, instruments, understandings, arrangements or
restrictions of any kind to which such party is a party or by which such party
is governed or bound, to consummate and make effective the transactions
contemplated by this Agreement.
SECTION
5.4. Specific
Performance.
The
parties acknowledge and agree that performance of their respective obligations
hereunder will confer a unique benefit on the other and that a failure of
performance will not be compensable by money damages. The parties therefore
agree that this Agreement shall be specifically enforceable and that specific
enforcement and injunctive relief shall be available to Parent or the
Stockholder for any breach by the other party or parties of any agreement,
covenant or representation hereunder.
SECTION
5.5. Notices.
All
notices, requests, clauses, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
sent by facsimile (with confirmation) or sent by overnight or same-day courier
(providing proof of delivery) to Parent in accordance with Section 8.2 of the
Merger Agreement and to the Stockholder at its address set forth on Exhibit
1
hereto
(or at such other address as shall be specified by like notice).
SECTION
5.6. Survival
of Representations and Warranties.
None of
the representations and warranties contained in this Agreement shall survive
the
Effective Time.
SECTION
5.7. Amendments;
Termination.
This
Agreement may not be modified, amended, altered or supplemented, except upon
the
execution and delivery of a written agreement executed by the parties hereto.
This Agreement shall terminate upon the earliest of (i) the Effective Time
and
(ii) the termination of the Merger Agreement in accordance with its terms,
other
than with respect to the liability of any party for breach hereof prior to
such
termination; provided,
however, that
Section 1.1 shall be suspended and shall have no force or effect following
the
time that Company has made a Change in Company Recommendation and prior to
any
withdrawal by Company of its Company Change in Recommendation.
SECTION
5.8. Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns; provided,
however,
that a
party may not assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties hereto
and any purported assignment, delegation or transfer without such consent shall
be null and void.
5
SECTION
5.9. Governing
Law.
This
Agreement shall be construed in accordance with and governed by the internal
laws of Delaware without giving effect to the principles of conflicts of laws
thereof.
SECTION
5.10. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which shall constitute one and the same
agreement.
SECTION
5.11. Stockholder
Capacity.
Each
Stockholder signs solely in its capacity as the record holder and beneficial
owner of the Stockholder Shares of such Stockholder and nothing herein shall
limit or affect any actions taken by such Stockholder in his or her capacity
as
an officer, director, partner, employee or affiliate of the Company and no
such
actions shall be deemed a breach of this Agreement.
SECTION
6.12. Validity;
Conflict.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
each of which shall remain in full force and effect. To the extent that any
provision of this Agreement and the Merger Agreement conflict, the provisions
of
the Merger Agreement shall control.
[REMAINDER
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
|
By:
|
/s/ Xxxxxx Xxxx | |
|
Name:
|
Xxxxxx Xxxx | |
|
Title:
|
Chief Executive Officer | |
|
|
/s/
Xxxxxx
Xxxxxxxx
|
|
|
XXXXXX
XXXXXXXX
|
||
7
EXHIBIT
1
|
Stockholder
|
Stockholder
Shares
|
|
Xxxxxx
Xxxxxxxx
|
655,382
|
Address
for Notices:
Traffix,
Inc.
0
Xxxx
Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxx
Xxxxx, Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
8
