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EXHIBIT 10.17
AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement") is made as of March 30,
1998, among XXXX X. XXXXXXX ("Xxxxxxx"), U.S. ONLINE COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), and the individuals designated as
"Management Shareholders" on the signature pages to this Agreement.
A. The Company and U.S. OnLine Communications, L.L.C., a Washington
limited liability company (the "LLC") are parties to an Asset Acquisition
Agreement dated as of March 27, 1998 (the "Asset Agreement"), under which,
subject to the fulfillment of certain conditions, the LLC has agreed to sell
substantially all of its assets to the Company.
X. Xxxxxxx has guaranteed certain obligations of the LLC, which
obligations will become obligations of the Company upon consummation of the
Asset Agreement. As a material inducement to Xxxxxxx'x approval of the Asset
Agreement in his capacity as a member of the LLC, the Management Shareholders
and the Company have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the other
covenants set forth herein, the Management Shareholders, the Company and Xxxxxxx
hereby agree as follows:
1. Restriction on Transfer. During the term of this Agreement, each
Management Shareholder agrees that he or she shall not sell, devise, encumber,
pledge or otherwise transfer (whether by operation of law or otherwise) the
Shares owned by such Management Shareholder, except to Xxxxxxx in compliance
with Section 3 below, or to the Company pursuant to the Award Certificates For
Restricted Stock Agreement dated March 10, 1998. As used in this Agreement, the
word "Shares" refers to all of the shares of common stock of the Company now
owned by a Management Shareholder, and any shares of common or preferred stock
of the Company received in respect of such shares, whether pursuant to a stock
split, reverse stock split, stock dividend or otherwise.
2. Grant of Voting Rights. The following grant of voting rights will be
effective solely upon the Company's failure to complete a public offering of its
common stock (the "Offering") pursuant to the Securities Act of 1933, as amended
(the "Act"), on or before September 30, 1998 (the "Effective Date"). If the
Company fails to complete the Offering under the Act on or before the Effective
Date, effective upon the Effective Date and without the requirement of any
further action by the Company, the Management Shareholders or Xxxxxxx, each of
the Management Shareholders hereby irrevocably and unconditionally appoints
Xxxxxxx as his or her proxy to vote the Shares as set forth below. This
appointment grants Xxxxxxx the right to vote in Xxxxxxx'x sole discretion all
Shares which the Management Shareholder would be entitled to vote at any meeting
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of shareholders of the Company, upon any and all matters that may properly come
before such meetings. In addition, as the Management Shareholders' proxy,
Xxxxxxx may execute any and all written consent documents that come before the
shareholders of the Company in lieu of a meeting of shareholders. This
appointment is coupled with an interest, and the Management Shareholders
acknowledge that the term of this appointment is for more than 11 months and is
of indefinite duration, and shall remain in effect until this Agreement is
terminated as provided in Section 5 below.
3. Grant of Purchase Option. If the Company fails to complete the
Offering under the Act on or before the Effective Date, effective upon the
Effective Date and without the requirement of any further action by the Company,
the Management Shareholders or Xxxxxxx, each of the Management Shareholders
hereby irrevocably and unconditionally grants Xxxxxxx the option, but not the
obligation, to purchase all or any portion of such Management Shareholder's
Shares on the terms and conditions set forth herein. Xxxxxxx may exercise this
option at any time after the Effective Date and on or before September 30, 2000,
by providing written notice thereof to each Management Shareholder from whom he
elects to acquire such Shares. The purchase price for any Shares purchased by
Xxxxxxx under this option shall be $0.01 per Share. Closing of the purchase of
any Shares purchased by Xxxxxxx under this Section shall take place in the
offices of the Company within five (5) days following Xxxxxxx'x provision of
written notice of exercise of the option to the Management Shareholder(s) from
whom he is purchasing Shares. At closing, Xxxxxxx shall deliver the purchase
price for the purchased Shares by check payable to the Management Shareholder in
U.S. funds. The Management Shareholder shall deliver title to the Shares free
and clear of all liens, claims and encumbrances, and shall deliver the
certificate for the Shares duly endorsed to permit transfer of the Shares to
Xxxxxxx on the books and records of the Company, or accompanied by a duly
executed assignment separate from certificate. Each party agrees to execute and
deliver such assignments, certificates, receipts, instruments, agreements and
other documents, and to take such other actions, as may be reasonably requested
by the other party to evidence the purchase and sale of the Shares as
contemplated in this Section.
4. Legend. Each party to this Agreement consents to the placement of a
legend on all stock certificates which represent the Shares, substantially in
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING, SALE, TRANSFER , PLEDGE OR OTHER DISPOSITION PURSUANT TO A
SHAREHOLDERS AGREEMENT DATED AS OF MARCH 30, 1998, AMONG THE HOLDER, THE
COMPANY AND CERTAIN OTHERS."
5. Termination. This Agreement shall remain in full force and effect
until terminated by (i) the written agreement of the Company, Xxxxxxx and
Management Shareholders holding Shares representing at that time not less than
seventy-five percent
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(75%) of all Shares owned by Management Shareholders and then outstanding, or
(ii) the completion of the Offering by the Company, in which event this
Agreement and the rights and restrictions placed on the Shares hereunder will
terminate without the requirement of any action by Xxxxxxx, the Company or the
Management Shareholders.
6. Assignment. No party may assign its rights or obligations under this
Agreement to any other party without the written consent of the other parties,
which will not be withheld unreasonably.
7. Resolution of Disputes. Any dispute arising under or related to this
Agreement shall be resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, in Seattle,
Washington. The arbitration hearing shall be conducted by a single neutral
arbitrator, who shall be an active Washington State Bar member in good standing.
In addition to all other powers, the arbitrator shall have the right to
determine all issues of arbitrability and shall have the authority to issue
subpoenas. The parties shall be entitled to conduct discovery in connection with
any claims that are arbitrated under this Section. All discovery shall be
completed within ninety (90) days after the request for arbitration is filed
with the appropriate authorities and the first hearing date shall be set for no
later than thirty (30) days after the completion of discovery. The arbitrator
may extend such period for any reason, including without limitation, legal
objections raised to such discovery or unavailability of a witness due to
absence or illness. Depositions may be taken by either party upon seven (7) days
written notice, and requests for production or inspection of documents shall be
responded to within ten days (10) after service. All disputes relating to
discovery that cannot be resolved by the parties shall be submitted to the
arbitrator, whose decision shall be final and binding upon the parties. The
prevailing party in any such arbitration shall be entitled to an award of its
reasonable attorneys' fees and expenses. Any party shall be entitled to file an
action in King County Court, which shall have jurisdiction over the parties to
this Agreement, to compel or aid in the arbitration, or for injunctive relief.
Judgment on any arbitration award may be entered in any court of appropriate
jurisdiction.
8. Notices. All notices, requests, demands, and other communications
called for by this Agreement shall be in writing and shall be deemed to have
been given upon delivery if personally delivered (including delivery by
confirmed telephone facsimile or overnight commercial delivery service with
receipt) or three (3) days after deposit in the U.S. Mail, first class, postage
prepaid for registered or certified delivery:
(a) If to the Management Shareholders, to the addresses listed
on the signature page of this Agreement.
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(b) If to Xxxxxxx, to:
Xxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Fax No. (000) 000-0000
(c) If to Company, to:
U.S. OnLine Communications, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Fax No. (000) 000-0000
Attn: President
9. Counterparts. For the convenience of the parties, this Agreement may
be executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.
10. The headings of the articles and sections are inserted for
convenience of reference only and are not intended to be a part of, or affect
the meaning or interpretation of, this Agreement.
11. This Agreement shall benefit and bind the parties and their
respective successors and assigns.
12. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware.
13. Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties relating to the subject matter hereof and
supersedes any prior agreements, written or oral, with respect to the same
subject matter. This Agreement may be amended by written instrument executed by
all of the parties hereto.
14. Each party shall separately bear the expenses incurred by it in
connection with this Agreement; provided, however, that if either party shall
commence legal action to specifically enforce or otherwise seek redress under or
for breach of this Agreement, the prevailing party in such action shall be
entitled to recover its costs and reasonable attorneys' fees therein, including
costs and fees incurred in any appellate proceeding.
15. Any of the terms or conditions of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof.
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16. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of the Agreement.
17. Further Assurances. Each party agrees to execute and deliver any
agreements, certificates, documents and instruments, and to take such other
actions, as may be reasonably requested by the other parties to evidence the
transactions contemplated in this Agreement.
18. Spousal Consent. The execution of this Agreement by a Management
Shareholder's Spouse signifies that he or she authorizes, ratifies, confirms and
approves the execution of this Agreement by the Management Shareholder, with the
same force and effect as if a party hereto, and further appoints his or her
spouse as his or her attorney-in-fact to exercise all rights he or she may have
with respect to ownership of any Shares, including the encumbrance and
disposition of such Shares.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date and year first above written.
XXXXXXX:
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Xxxx X. Xxxxxxx
THE COMPANY:
U.S. ONLINE COMMUNICATIONS, INC.
By:
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Xxxxxx Xxxxxxx, Chief Executive Officer
MANAGEMENT SHAREHOLDERS:
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Print Address:
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SHAREHOLDER'S SPOUSE:
Signature:
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Print Name:
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