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EXHIBIT 4.03
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (the "AGREEMENT") is made and entered into
as of December __, 1998, by and among CBS Broadcasting Inc., a New York
corporation ("CBS"), and Data Broadcasting Corporation, a Delaware corporation
("DBC") (hereinafter referred to collectively as the "STOCKHOLDERS" and each
singly as "STOCKHOLDER"), XxxxxxXxxxx.xxx, Inc., a Delaware corporation (the
"COMPANY"), and Xxxxxxxxxxx.Xxx LLC, a Delaware limited liability company (the
"LLC").
RECITALS
WHEREAS, the parties hereto are parties to a Merger Agreement, dated as
of the date hereof, pursuant to which the LLC will be merged with and into the
Company for the purpose of operating the business of the LLC in a corporate form
(the "MERGER");
WHEREAS, as a result of the Merger, the LLC will cease to exist,
however, the parties hereto desire to enter into this Stockholders' Agreement;
WHEREAS, the parties hereto also desire to amend certain provisions of
the Contribution Agreement (the "CONTRIBUTION AGREEMENT") dated as of October
29, 1997, between the Stockholders and the LLC;
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby, intending to be legally bound by the terms
hereof, agree as follows:
1. CERTAIN DEFINITIONS.
1.1 BUSINESS. The term "BUSINESS" means, collectively the Internet-based
business and financial news and information service offered by the Company,
which includes, without limitation, the businesses conducted with the assets
contributed to the Company by DBC pursuant to the Contribution Agreement as such
businesses may be expanded or otherwise changed from time to time by the
Company.
1.2 BUSINESS DAY. The term "BUSINESS DAY" means a day that is not a
Saturday, Sunday or other day on which banking institutions in the State of New
York are authorized or required by law, regulation or executive order to be
closed.
1.3 COMMON STOCK. The term "COMMON STOCK" means the Common Stock, $0.01
par value per share of the Company.
1.4 CONVERTIBLE SECURITIES. The term "CONVERTIBLE SECURITIES" mean any
securities convertible into or exchangeable for Voting Securities or any
options, warrants or other rights exercisable to acquire Voting Securities.
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1.5 INITIAL PERCENTAGE. The term "INITIAL PERCENTAGE" means the
percentage of then Total Voting Power of the Company represented by the Voting
Securities held by a Stockholder at the time of the consummation of the
Company's initial public offering.
1.6 OFFERED SECURITIES. The term "OFFERED SECURITIES" means all
Securities proposed to be Transferred by a Stockholder or, if applicable, an
affiliate of a Stockholder.
1.7 PERSON. The term "PERSON" means any natural person, legal entity, or
other organized group of persons or entities. (All pronouns, whether personal or
impersonal, which refer to Person include natural persons and other Persons).
1.8 SECURITIES. The term "SECURITIES" shall mean Voting Securities and
Convertible Securities.
1.9 TOTAL VOTING POWER. The term "TOTAL VOTING POWER" means, at any
time, the total number of votes that may be cast in the election of directors of
the Company at any meeting of the holders of Voting Securities held at such time
for such purpose.
1.10 TRANSFER and TRANSFERRED. The terms "TRANSFER" and "TRANSFERRED"
mean and include any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by bequest, devise or descent, or other
transfer or disposition of any kind, including but not limited to, transfers to
receivers, levying creditors, trustees or receivers in bankruptcy proceedings or
general assignments for the benefit of creditors, whether voluntary or by
operation of law, directly or indirectly, except for:
(a) any transfer of Securities by CBS or DBC to any entity
controlling, controlled by or under common control with CBS or DBC, or to any
entity that acquires CBS or DBC by purchase of stock or by merger or otherwise;
(b) any transfer of Securities by a Stockholder made: (i)
pursuant to a statutory merger or statutory consolidation of the Company with or
into another corporation or corporations; or (ii) pursuant to the winding up and
dissolution of the Company; or
(c) any transfer of Securities by a Stockholder pursuant to a
Stockholder's exercise of such Stockholder's right of first refusal hereunder.
1.11 VOTING POWER. The term "VOTING POWER" means, as to any Voting
Security at any time, the number of votes such Voting Security is entitled to
cast for directors of the Company at any meeting of the holders of Voting
Securities held at such time for such purpose.
1.12 VOTING SECURITIES. The term "VOTING SECURITIES" means the Common
Stock and any other securities issued by the Company having the power to vote in
the election of directors of the Company, including without limitation any
securities having such power only upon the occurrence of a default or any other
extraordinary contingency.
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2. MANDATORY TRANSFERS.
2.1 DBC CHANGE OF CONTROL. Notwithstanding anything herein to the
contrary, and absent agreement of the Stockholders to do otherwise, CBS shall
have the right (but not the obligation) in its sole discretion to purchase DBC's
Securities or require that such Securities be transferred to an independent
trustee, as provided in Section 2.2 within 60 days after a competitor of CBS has
directly or indirectly acquired beneficial ownership of more than 30% of the
outstanding shares of the common stock, or securities representing, in the
aggregate, more than 30% of the voting power, of DBC (or any person controlling
DBC), or all or substantially all of DBC's assets (a "DBC CHANGE OF CONTROL"),
at a time when DBC and its affiliates shall then own in the aggregate a number
of shares of Common Stock equal to at least ten percent (10%) of the outstanding
shares of Common Stock on the IPO Closing Date (defined below) (appropriately
adjusted to reflect any stock splits, reverse stock splits, stock dividends,
recapitalizations and other similar transactions occurring subsequent to the IPO
Closing Date), without the prior written consent of CBS (a "TRIGGERING EVENT").
The parties hereby agree that DBC may give CBS confidential written notice of
its intent to enter into an agreement which would cause a DBC Change of Control,
together with a description of the party with whom DBC intends to effect such a
transaction. CBS shall have twenty (20) days from receipt of such notice to
respond to DBC in writing as to whether it would elect to trigger the provisions
of this Section 2 with respect to such potential DBC Change of Control. If, and
only if, CBS notifies DBC in writing that it would not make such election, CBS
shall be deemed to have waived its right to trigger such mandatory transfer
provisions with respect to such potential DBC Change of Control.
2.2 TRANSFER OF SHARES. Upon the occurrence of a DBC Change of Control,
CBS may elect one of the following within 45 days after written notice from DBC
that a DBC Change of Control has occurred:
(a) (i) CBS may offer to purchase the Securities then held by
DBC and its affiliates, and DBC and its affiliates shall be required to sell to
CBS, such sale to occur no later than 10 days after DBC's receipt of CBS'
written offer to purchase such Securities, at a purchase price for the
Securities held by DBC and its affiliates equal to the Fair Market Value of the
Securities on the date of the Triggering Event.
(ii) Notwithstanding the foregoing provisions of Section
2.2(a)(i), if (y) any legal or regulatory requirements, including, without
limitation, those imposed by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended must be first satisfied prior to making such sale or (z) the
Fair Market Value must be determined according to the terms of subsection (b) of
the definition of Fair Market Value, then such sale shall be made within two
days of the satisfaction of such legal requirements or of the determination of
the Fair Market Value of the Securities, as applicable.
(iii) Upon the date that payment is made for the
Securities, DBC and its affiliates will have no further rights as a holder of
such Securities and DBC and its affiliates will forthwith cause all
certificate(s) evidencing such Securities to be surrendered to the Company or
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its transfer agent for cancellation and new certificates evidencing such
Securities will be promptly delivered to CBS.
(b) CBS may require DBC to transfer all Securities then held by
DBC and its affiliates to an independent trustee reasonably satisfactory to CBS,
which trustee shall then dispose of such Securities formerly held by DBC and its
affiliates to purchaser(s) that is/are not competitor(s) of CBS, subject to the
foregoing, in such a manner as such trustee shall determine with a view to
maximizing the sale price of the shares formerly held by DBC and its affiliates,
while disposing of such shares as promptly as reasonably practicable. Upon such
transfer, such trustee shall have sole voting and dispositive control over such
Securities, DBC shall no longer be entitled to appoint any DBC Designees and all
current DBC Designees shall resign from their positions as members of the
Company's Board of Directors. Unless otherwise agreed in writing by CBS, any
trustee appointed pursuant to this Section 2.2(b) shall be a bank or trust
company incorporated or otherwise organized under the laws of the United States
or a state thereof and having a combined capital and surplus of at least
$100,000,000. The provisions of Article 8 of this Agreement shall not be
applicable to such trustee. Any such trustee shall perform its duties upon
customary terms pursuant to documentation reasonably satisfactory to CBS, it
being understood and agreed that, without the prior written consent of CBS, no
such trustee shall vote any Securities held by it at any meeting of the
stockholders of the Company or otherwise.
"FAIR MARKET VALUE" of the Securities shall mean (a), for any
Security that is listed on a national securities exchange or authorized for
trading on the National Association of Securities Dealers Nasdaq Stock Market or
other automated quotation system, the average of the closing prices for the five
day period ending on the date of the Triggering Event; and (b), for any other
Security, such price as is determined by an appraiser chosen by the members of
the Company's Board of Directors who are neither employees of the Company, CBS
Designees (defined below) or DBC Designees (defined below) or otherwise
affiliated with or employed by either of CBS, DBC or one of their respective
affiliates (other than as serving as an independent member of the Company's
Board of Directors) (the "INDEPENDENT DIRECTORS"). If there are no Independent
Directors, then Fair Market Value for purposes of this Subsection (b) only,
shall be determined by a panel of appraisers, one (1) chosen by CBS, one (1)
chosen by DBC and the third to be chosen by the first two (2) appraisers. If the
appraisers cannot reach agreement within thirty (30) days of the date of the
Triggering Event, then each appraiser shall deliver its appraisal within 40 days
of the Triggering Event and the appraisal which is neither the highest nor the
lowest shall constitute the Fair Market Value. In the event either Stockholder
fails to choose an appraiser within thirty (30) days of the date of the
Triggering Event, then the appraisal of the sole appraiser shall constitute the
Fair Market Value. Each party shall bear the cost of the appraiser selected by
such Stockholder and the cost of the third appraiser shall be borne one-half by
each Stockholder. In the event either party fails to choose an appraiser, the
cost of the sole appraiser shall be borne one-half by each Stockholder.
2.3 TERMINATION PAYMENT. Upon the termination of the Amended and
Restated License dated as of the date hereof between CBS and the Company (the
"AMENDED AND RESTATED LICENSE") in accordance with its terms, CBS may elect to
terminate its advertising obligation under Section 1.04 of the Contribution
Agreement. In the event CBS elects to exercise this
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termination right, CBS shall pay to the Company a cash payment in the amount of
$500,000 times the number of full calendar months from the date of such
termination remaining until October 2002.
3. AGREEMENT NOT TO COMPETE.
3.1 AGREEMENT OF DBC NOT TO COMPETE. DBC understands that the Company
shall be entitled to protect and preserve the going concern value of the
Business to the extent permitted by law and, therefore, until October 29, 2005,
DBC shall not, and DBC shall not authorize or permit another Person to, without
the prior written consent of the Company:
(a) (i) sell advertising on an Internet Web site that has as its
primary function and as its principal theme and format the delivering of
comprehensive real-time or delayed stock quotations and financial news in the
English language to consumers or (ii) use the Internet to sell real-time
snap-quotes to individual subscribers or customers who pay a fee for such
information ("COMPETITIVE ACTIVITIES");
(b) solicit, recruit or hire any employees of the Business or
person who has worked for the Business;
(c) solicit or encourage any employee of the Business to leave
the employment of the Business; and
(d) disclose or furnish to anyone any confidential information
relating to the Business or otherwise using such confidential information for
its own benefit or the benefit of any other person.
The Company acknowledges that the maintenance and
continued operation of the xxx.xxx Web site by DBC shall not be considered to be
a violation of this Section 3.1 provided that xxx.xxx does not engage in any
Competitive Activities. In addition, this Section 3.1 shall not be deemed
breached as a result of the maintenance, operation, sale or transmission over
the Internet of DBC's existing products, including, but not limited to, Bond Vu,
BondEdge, InSite, Signal Online, and StockEdge Online.
3.2 NON-COMPETING ACTIVITIES. The Company acknowledges and agrees that
the following are either not within the express terms of the prohibitions
contained in Section 3.1 or, if so, shall nevertheless be excluded from said
prohibitions:
(a) the ownership by DBC of less than an aggregate of 5% of any
class of stock of a Person engaged, directly or indirectly, in Competitive
Activities;
(b) the ownership by DBC of less than 10% in value of any
instrument of indebtedness of a Person engaged, directly or indirectly, in
Competitive Activities;
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(c) an Internet service or Web site that delivers general news
or sports or entertainment content with a financial news segment or portion
included, will not be considered to have as its primary function or as its
principal theme and format the delivering of comprehensive real-time or delayed
stock market quotations and financial news in the English language to consumers;
(d) an Internet service or Web site will not be considered to
have as its primary function or as its principal theme and format the delivering
of comprehensive real-time or delayed stock market quotations and financial news
in the English language to consumers solely on the basis of its providing a
stock price ticker crawl line;
(e) any activity conducted by DBC and/or its Affiliates as of
December __, 1998, the execution date of this Agreement; or
(f) any Internet services in which DBC has an interest as of
December __, 1998, the execution date of this Agreement.
3.3 AGREEMENT OF THE COMPANY NOT TO COMPETE. The Company agrees that
subsequent to the date hereof through October 29, 2005 or, at such earlier time
(i) as the Amended and Restated Services Agreement has terminated, (ii) upon the
occurrence of a DBC Change of Control, or (iii) at such time as DBC shall hold
less than 10% of the then-outstanding Voting Securities, it will not, except
through DBC, sell any product or service that offers streaming real-time stock
price quotes.
3.4 ENFORCEMENT. Notwithstanding any other provision of this Agreement,
it is understood and agreed that the remedies at law would be inadequate in the
case of any breach of the covenant contained in Sections 3.1 or 3.3. Therefore,
the Company or DBC, as the case may be, shall be entitled to equitable relief,
including the remedy of specific performance, with respect to any breach or
attempted breach of such covenant.
3.5 TERMINATION. The Stockholders and the Company acknowledge that the
provisions of this Section 3 shall terminate and cease to apply in the event
that the Company is dissolved or liquidated.
4. DBC CONTRIBUTION. DBC acknowledges that as of each of October 29, 1997
and October 29, 1998, it had contributed $1,000,000 to the LLC.
5. ASSIGNMENT OF CONTRIBUTION AGREEMENT.
5.1 ASSIGNMENT AND ASSUMPTION. Effective immediately upon the date of
this Agreement, the LLC hereby assigns, transfers, and sets over to the Company
all of LLC's right, title, and interest in and to the Contribution Agreement and
its rights and obligations thereunder
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and the Company does hereby agree to assume and does hereby assume all of the
obligations and liabilities of LLC related to the Contribution Agreement.
5.2 CONSENT OF CBS AND DBC. Each of CBS and DBC consent to the
assignment and assumption provided for in Section 5.1 hereof.
6. AMENDMENTS TO CONTRIBUTION ARRANGEMENT.
6.1 AMENDMENTS
(a) Section 1.04 of the Contribution Agreement is hereby amended
to delete the reference to "$50 million" in the fifth line thereof and insert
"$30 million" therefor and by adding the CBS termination rights described in
Section 2.3 hereof.
(b) Exhibit B to the Contribution Agreement is deleted and
replaced in its entirety with the Amended and Restated License Agreement
attached hereto as Exhibit 5.1(b).
(c) Exhibit C to the Contribution Agreement is deleted and
replaced in its entirety with the Amended and Restated Services Agreement
attached hereto as Exhibit 5.1(c).
(d) Exhibit D to the Contribution Agreement is amended by
deleting the last sentence of paragraph 2 thereto.
6.2 FULL FORCE. Except as expressly amended hereby, the Contribution
Agreement shall remain in full force and effect, except to reflect the change of
the LLC's organization from a limited liability company to a corporation as a
result of the Merger.
7. DIRECTOR NOMINATION RIGHTS.
7.1 BOARD SIZE. The Company shall maintain a Board of Directors of at
least seven (7) members and shall use its best efforts to maintain a Board of
Directors of nine (9) members immediately after the IPO Closing Date (defined
below).
7.2 DESIGNEE. For so long as CBS continues to own a number of Voting
Securities equal to at least one percent (1%) of the Company's outstanding
Voting Securities, the Company shall provide CBS, and for so long as DBC
continues to own a number of Voting Securities equal to at least one percent
(1%) of the outstanding Voting Securities, the Company shall provide DBC, thirty
(30) days prior written notice of any Stockholder solicitation or action
relating to the election of directors. After receipt of such notice by DBC, DBC
may, and after receipt of such notice by CBS, CBS may, by written notice sent to
the Company within ten (10) days of receipt of such notice, request that the
Company nominate, and the Company shall nominate, for election to the Company's
Board of Directors (the "BOARD OF DIRECTORS"), in connection with such
Stockholder solicitation or action:
(a) one, if CBS holds a number of Voting Securities greater than
or equal to one percent (1%) but less than twenty percent (20%) of the Company's
outstanding Voting
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Securities, two, if CBS holds a number of Voting Securities greater than or
equal to twenty percent (20%) but less than thirty percent (30%) of the
Company's outstanding Voting Securities, and three, if CBS holds a number of
Voting Securities greater than or equal to thirty percent (30%) of the
outstanding Voting Securities, candidates designated in the CBS notice, who
shall be reasonably acceptable to the Company (collectively, the "CBS
DESIGNEES"); and
(b) one, if DBC holds a number of Voting Securities greater than
or equal to one percent (1%) but less than twenty percent (20%) of the Company's
outstanding Voting Securities, two, if DBC holds a number of Voting Securities
greater than or equal to twenty percent (20%) but less than thirty percent (30%)
of the outstanding Voting Securities, and three, if DBC holds a number of
Company's outstanding Voting Securities greater than or equal to thirty percent
(30%) of the Company's outstanding Voting Securities, candidates designated in
the DBC notice, who shall be reasonably acceptable to the Company (collectively,
the "DBC DESIGNEES").
In the event that CBS or DBC shall desire to appoint CBS Designees or
DBC Designees, as applicable, otherwise than in connection with a Stockholder
solicitation or action relating to the election of directors, then as soon as
practicable upon written notice from CBS or DBC, as applicable, the Company
shall appoint the CBS Designees or DBC Designees, as applicable, to the Board of
Directors.
In the event that the size of the Company's Board of Directors is
increased to a number greater than nine (9), the number of CBS and DBC Designees
shall be a number equal to the product of (A) the percentage of outstanding
Voting Securities held by such Stockholder times (B) the number of authorized
members of the Company's Board of Directors, rounded up to the nearest whole
number.
Notwithstanding the foregoing, for so long as the Amended and Restated
License remains in effect, CBS shall be entitled to select at least one CBS
Designee, regardless of the number of Voting Securities held by it.
7.3 AFFILIATES. For purposes of this Agreement, all shares held by an
affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933,
as amended (the "SECURITIES ACT")) (each, an "AFFILIATE") of CBS or DBC, will be
deemed to be owned by CBS or DBC, as applicable.
7.4 VOTING OF SHARES.
(a) The Company shall use its best efforts (i) to cause to be
voted the shares of Voting Securities for which the Company's management or the
Board of Directors holds proxies or is otherwise entitled to vote in favor of
the election of the CBS Designees and DBC Designees nominated pursuant to
Section 7.2 to this Agreement; and (ii) to cause the Board of Directors to
unanimously recommend to its stockholders to vote in favor of the CBS Designees
and the DBC Designees.
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(b) Each of CBS and DBC shall vote the shares of Voting
Securities held by it for the CBS Designees and the DBC Designees.
7.5 VACANCIES. In the event that any CBS or DBC Designee shall cease to
serve as a director of the Company for any reason, the vacancy resulting
therefrom shall be filled by another CBS Designee or DBC Designee, as
applicable.
7.6 EQUAL TREATMENT. The Company shall offer the same compensation and
shall provide rights and benefits of indemnity to each CBS Designee or DBC
Designee as are provided to other non-employee directors, provided however, that
none of the CBS Designees or DBC Designees shall be entitled to participate in
the Company's proposed 1998 Directors Stock Option Plan or any other equity
based plan.
8. RIGHT OF FIRST REFUSAL.
8.1 NOTICE. Before any Stockholder or affiliate of any Stockholder may
effect any Transfer of any Securities, such Stockholder or affiliate (the
"SELLING STOCKHOLDER") must give at the same time to the Company and the other
Stockholder a written notice signed by the Selling Stockholder (the "SELLING
STOCKHOLDER'S NOTICE") stating (a) the Selling Stockholder's bona fide intention
to transfer such Offered Securities; (b) the number of Offered Securities
proposed to be transferred to each proposed purchaser or other transferee
("PROPOSED TRANSFEREE"); (c) the name, address and relationship, if any, to the
Selling Stockholder of each Proposed Transferee; and (d) the bona fide cash
price or, in reasonable detail, other consideration, per share for which the
Selling Stockholder proposes to transfer such Offered Securities to each
Proposed Transferee (the "OFFERED PRICE") and the proposed time of payment and
other relevant terms of the proposed sale. If such Selling Stockholder desires
to effect sales into the open market pursuant to Rule 144 promulgated under the
Securities Act ("OPEN MARKET SALE"), the Selling Stockholder's Notice shall also
contain the closing price of the Securities on the date prior to the date of
such notice which price shall constitute the Offered Price. Upon the request of
the Company or the other Stockholder, the Selling Stockholder will promptly
furnish to the Company and to the other Stockholder such other information as
may be reasonably requested to establish that the offer and Proposed
Transferee(s) are bona fide. In the event that the notice provisions of this
Section 8 make it impractical or impossible to comply with the notice provisions
of Section 1 of the Registration Rights Agreement, the parties hereto agree that
the notice provisions of the Registration Rights Agreement shall be modified or
waived to the extent necessary so as to permit the operation of this Section 8
in conjunction with the provisions of Section 1 of the Registration Rights
Agreement.
8.2 STOCKHOLDERS' RIGHT OF FIRST REFUSAL. The non-Selling Stockholder
will have a right of first refusal (the "RIGHT OF FIRST REFUSAL") to purchase
any portion of the Offered Securities made available for purchase in the manner
provided in this Section 8.2 unless (a) the Offered Securities are to be sold in
a private sale to one purchaser, in which case the non-Selling Stockholder will
only be permitted to exercise its Right of First Refusal if it purchases all of
the Offered Securities, or (b) the Selling Stockholder is selling the Offered
Securities through a registered offering and the quantity of Offered Securities
that the non-Selling Stockholder
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proposes to purchase would, in the good faith opinion of the managing
underwriter, jeopardize the success of the offering. In such a circumstance, the
non-Selling Stockholder will only be permitted to purchase either all of the
Offered Securities or such Offered Securities, if any, that would not, in the
good faith opinion of the managing underwriter, jeopardize the success of such
offering. If the non-Selling Stockholder desires to purchase any or all, as
applicable, of the Offered Securities made available for purchase such
Stockholder must give written notice within the fifteen (15) day period
commencing on the date of the Selling Stockholder's Notice (the "REFUSAL
PERIOD"), to the Selling Stockholder (the "PURCHASE NOTICE") and to the Company
of such Stockholder's election to purchase the Offered Securities, and the
number of shares and type of Offered Securities that such Stockholder desires to
purchase, provided however, that in the case of a proposed Open Market Sale, the
non-Selling Stockholder must give the Purchase Notice prior to 5:00 pm. Pacific
time on the second Business Day after the non-Selling Stockholder receives the
Purchase Notice.
8.3 PURCHASE PRICE. The purchase price for the Offered Securities to be
purchased by the non-Selling Stockholder exercising its Right of First Refusal
under this Agreement will be the Offered Price, and will be payable as set forth
in Section 8.4 hereof. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration will be the Fair
Market Value of such noncash consideration.
8.4 PAYMENT. Payment of the purchase price for Offered Securities
purchased by a Stockholder exercising its Right of First Refusal will be made in
cash within ten (10) days after the date of the Purchase Notice, or if any legal
or regulatory requirements, including, without limitation, those imposed by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, must be first satisfied
prior to making such payment, within two (2) days after the satisfaction of such
legal requirements.
8.5 RIGHTS OF STOCKHOLDER. Upon the date that payment is made for the
Offered Securities purchased by the non-Selling Stockholder pursuant to the
Right of First Refusal hereunder, the Selling Stockholder will have no further
rights as a holder of such Offered Securities and the Selling Stockholder will
forthwith cause all certificate(s) evidencing such Offered Securities to be
surrendered to the Company or its transfer agent for cancellation and new
certificates evidencing such Offered Securities will be promptly delivered to
the purchasing Stockholder.
8.6 SELLING STOCKHOLDER'S RIGHT TO TRANSFER. If the non-Selling
Stockholder has not elected pursuant to its Right of First Refusal to purchase
all or a portion, as applicable, of the Offered Securities, the Selling
Stockholder may Transfer the Offered Securities to any person named as a
Proposed Transferee in the Selling Stockholder's Notice, at the Offered Price or
at a higher price, provided that such transfer (a) is consummated within one
hundred twenty (120) days after the date of the Selling Stockholder's Notice and
(b) is in accordance with the terms and conditions of this Agreement; provided
however, that in the case of a proposed Open Market Sale, such transfers must
take place within the six (6) week period following the date of the Selling
Stockholder's Notice. If the Offered Stock is transferred in accordance with the
terms and conditions of this Agreement to a non-affiliate, then the
transferee(s) of the Offered Stock
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will thereafter hold such Offered Securities free of the Right of First Refusal
and all other restrictions imposed by this Agreement. If the Offered Securities
are not so transferred during such one hundred twenty (120) day period or such
six (6) week period, as the case may be, then the Selling Stockholder will not
transfer any of such Offered Stock without complying again in full with the
provisions of this Agreement.
8.7 CERTAIN TRANSFERS.
Notwithstanding the foregoing:
(i) If the Offered Securities will be sold by means of a
registered underwritten offering, then the Selling Stockholder's Notice need not
name any Proposed Transferee if such notice (x) states that the Offered
Securities will be sold by means of a broadly distributed offering and (y)
contains the proposed underwriter's good faith estimate of the public offering
price (the "PROPOSED PUBLIC OFFERING PRICE") based on then-current market
conditions. If the non-Selling Stockholder does not elect, pursuant to its Right
of First Refusal, to purchase all or a portion, as applicable, of the Offered
Securities at the proposed Public Offering Price, the Selling Stockholder may
transfer such Offered Securities as the non-Selling Stockholder has not elected
to so purchase at prices that are based on the prevailing market price for the
Offered Securities at the time of the sale of such Offered Securities even if
such market price is lower than the Proposed Public Offering Price.
(ii) If the Offered Securities will be sold pursuant to block
trades or other brokerage transactions, then the Selling Stockholder's Notice
need not name any Proposed Transferee nor any Offered Price. If the non-Selling
Stockholder does not elect, pursuant to its Right of First Refusal, to purchase
all of the Offered Securities on the date of the Selling Stockholder's Notice at
the closing market price for the Offered Securities on the date of the Selling
Stockholder's Notice, the Selling Stockholder may transfer such Offered
Securities at prices that are based on the prevailing market price in effect for
the Offered Securities at the time of the sale of such Offered Securities
through block trades or other brokerage transaction, even if such market price
is lower than the closing market price for such Offered Securities on the date
of the Selling Stockholder's Notice.
8.8 LEGEND. Each Stockholder understands and agrees that the Company
will cause the legend set forth below, or a legend substantially equivalent
thereto, to be placed upon any certificate(s) or other documents or instruments
evidencing ownership of Securities by the Stockholder:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RIGHTS OF FIRST REFUSAL AS SET FORTH IN A
STOCKHOLDERS' AGREEMENT DATED AS OF ________, 1998
ENTERED INTO BY THE HOLDER OF THESE SHARES, THE COMPANY
AND CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF
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THE COMPANY. SUCH RIGHT OF FIRST REFUSAL IS BINDING ON
CERTAIN TRANSFEREES OF THESE SHARES.
The Company will cause such legend to be removed upon the termination of this
Agreement.
8.9 STOCK TRANSFER INSTRUCTIONS. Each Stockholder agrees, to ensure
compliance with the restrictions referred to herein, that the Company may issue
appropriate "stop transfer" certificates or instructions and that, if the
Company transfers its own securities, it may make appropriate notations to the
same effect in its records.
9. PARTICIPATION RIGHTS.
9.1 NEW SECURITIES. If from time to time the percentage of the Total
Voting Power represented by the Voting Power of all Voting Securities then
owned, directly or indirectly, by a Stockholder (the "APPLICABLE PERCENTAGE")
would be reduced as a result of any issuance of Voting Securities by the Company
or could be reduced as a result of any issuance of Convertible Securities by the
Company (in either case, whether for cash, property or otherwise and, such
securities are referred to herein as "NEW SECURITIES"), the Company shall so
notify the Stockholder in writing not less than ten (10) Business Days prior to
the proposed date of any such issuance and shall offer to sell to the
Stockholder, and, if such offer is accepted in writing by (x) if such issuance
is made pursuant to an underwriting or private placement purchase agreement, the
second Business Day prior to the date of execution of any such agreement (it
being understood that the Company will give the Stockholder at least four (4)
Business Day's prior notice of such date of execution) or (y) if such issuance
is not made pursuant to such an agreement, the fifth (5th) Business Day prior to
the proposed date of such issuance, the Company shall sell to the Stockholder
that portion of the Voting Securities or Convertible Securities to be issued
which would result in such Stockholder's Applicable Percentage immediately prior
to such issuance equaling the Stockholder's Applicable Percentage in effect
immediately prior to such issuance (assuming, in the case of Convertible
Securities, the conversion, exchange or exercise at such time of all Convertible
Securities), or any lesser portion of the Voting Securities or Convertible
Securities to be issued in such issuance as may be designated by the
Stockholder, in either case at a price per share or other trading unit of such
Voting Securities or Convertible Securities, as the case may be, equal to the
price per share or other trading unit of such Voting Securities or Convertible
Securities, as the case may be, to be received by the Company in such issuance,
less any underwriting discounts and commissions (the "PURCHASE PRICE"), and
otherwise on the same terms as may be applicable to such issuance; provided,
however, that a Stockholder shall not be entitled to purchase such Voting
Securities or Convertible Securities from the Company pursuant to this Section
9.1 to the extent that such purchase would cause such Stockholder to own,
directly or indirectly, Voting Securities representing an aggregate Voting Power
in excess of a percentage of the Total Voting Power of the Company equal to the
Initial Percentage after giving effect to the proposed issuance; provided,
further, however, that the preceding provisions shall not apply to issuances of:
(a) up to an aggregate of 1,500,000 shares of the Company's
Common Stock (and/or options or warrants therefor) issued to employees,
officers, directors, contractors,
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advisors or consultants of the Company pursuant to incentive agreements or plans
approved by the Board of Directors of the Company, such number of shares being
subject to proportional adjustment to reflect subdivisions, combinations and
stock dividends affecting the number of outstanding shares of such stock; or
(b) securities offered by the Company in its initial public
offering pursuant to a registration statement filed under the Securities Act; or
(c) up to an aggregate of 500,000 shares of the Company's Common
Stock (and/or options or warrants therefor) issued or issuable to parties as
approved by the Board of Directors for any corporate purpose, including, without
limitation, for providing the Company with equipment leases, real property
leases, loans, credit lines, guaranties of indebtedness, cash price reductions
or similar financing, such number of shares being subject to proportional
adjustment to reflect subdivisions, combinations and stock dividends affecting
the number of outstanding shares of such stock.
Notwithstanding the foregoing provisions, in the event the
Company proposes to issue Voting Securities or Convertible Securities for
consideration other than cash, then, in lieu of purchasing a portion of the
Voting Securities or Convertible Securities to be issued, the Stockholder shall
be entitled to require the Company to issue to such Stockholder at a per share
price equal to the Fair Market Value of the additional Voting Securities or
Convertible Securities such that immediately after such issuance, such
Stockholder's Applicable Percentage equals such Stockholder's Applicable
Percentage in effect immediately prior to such issuance (assuming, in the case
of Convertible Securities, the conversion, exchange or exercise at such time of
all Convertible Securities to be issued in such issuance). For purposes of
calculating the Fair Market Value of such additional Voting Securities or
Convertible Securities, the term "Triggering Event" shall mean the date of the
issuance of such Voting Securities or Convertible Securities for consideration
other than cash.
9.2 ADDITIONAL LIMITATIONS ON PARTICIPATION RIGHTS.
(a) Notwithstanding the provisions of Section 9.1, (i) if the
Company proposes to issue Voting Securities or Convertible Securities pursuant
to the first underwritten public offering of the Company subsequent to its
initial public offering (the "FIRST FOLLOW-ON OFFERING") and a Stockholder would
otherwise be entitled to purchase a portion of such Voting Securities pursuant
to the provisions of Section 9.1, and (ii) if, in the opinion of the
underwriters of such First Follow-On Offering, the public trading market for the
Company's Common Stock would be significantly adversely affected if the
Stockholders exercised their participation rights contained in Section 9.1 with
respect to an amount of Voting Securities or Convertible Securities such that
after exercise of such participation right, the Applicable Percentage of such
Stockholder would be in excess of 25% (assuming, in the case of Convertible
Securities, the conversion, exchange or exercise at such time of all Convertible
Securities), then the Stockholders shall be permitted to exercise their
participation rights specified in Section 9.1 in connection with the First
Follow-On Offering only to the extent that such Stockholder's Applicable
Percentage would not exceed 25% after giving effect to the First Follow-On
Offering, or such higher
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percentage that would not, in the opinion of the underwriters of such First
Follow-On Offering, significantly adversely affect such offering.
(b) In the event that a Stockholder was unable to exercise the
participation rights set forth in Section 9.1 to the extent it would have
otherwise been able to exercise as a result of the provisions of Section 9.2(a),
then in the event the Company proposes to issue Voting Securities or Convertible
Securities subsequent to the First Follow-On Offering, such Stockholder shall be
entitled to purchase up to that portion of the Voting Securities or Convertible
Securities to be issued or to purchase from the Company up to a number of
additional Voting Securities or Convertible Securities pursuant to Section 9.1
such that the Applicable Percentage of such Stockholder immediately after such
purchase equals no more than such Stockholder's Applicable Percentage (not to
exceed such Stockholder's Initial Percentage) immediately prior to the First
Follow-On Offering (assuming, in the case of Convertible Securities, the
conversion, exchange or exercise at such time of all Convertible Securities).
9.3 FAILURE TO EXERCISE. In the event that a Stockholder fails to
exercise the participation right within such ten (10) day period, then the
Company shall have 120 days thereafter to sell the New Securities with respect
to which the Stockholder's participation rights hereunder were not exercised, at
a price and upon general terms not materially more favorable to the purchasers
thereof than specified in the Company's notice to the Stockholders. In the event
that the Company has not issued and sold the New Securities within such 120 day
period, then the Company shall not thereafter issue or sell any New Securities
without again first offering such New Securities to the Stockholders pursuant to
this Section 9.
10. SECTION 5.08 OF THE LLC AGREEMENT. Section 5.08 of the LLC's limited
liability company agreement, dated as of October 29, 1997 (the "LLC AGREEMENT"),
establishes the manner in which the Stockholders, as members of the LLC, will
treat contributions to the LLC for U.S. Federal income tax purposes. In order to
induce the Stockholders to enter into this Agreement and to consummate the
transactions identified herein, the Company agrees that it will not take any
action that contradicts or is inconsistent with such agreed treatment of
contributions to the LLC for U.S. Federal income tax purposes unless a final
determination (which shall include the execution of a Form 870-AD or successor
form) requires a different treatment.
11. TERM. This Agreement shall terminate on October 29, 2005.
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12. GENERAL PROVISIONS.
12.1 NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) if to the Company, at:
XxxxxxXxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: J. Xxxxx Xxxxxxxx
Facsimile: 415/392-1972
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: 650/494-1417
(b) If to CBS:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Facsimile: 212/975-9191
212/597-4031
(c) If to DBC:
Data Broadcasting Corporation
0000 Xxxxx Xxxx Xxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Facsimile: 510/266-6018
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or five (5)
days after being deposited in the mail in the manner set forth above.
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12.2 ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
12.3 AMENDMENT OF RIGHTS. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the parties hereto (and/or any of their permitted successors or
assigns).
12.4 GOVERNING LAW. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of Delaware, excluding that
body of law relating to conflict of laws.
12.5 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, then such provision(s) shall be
excluded form this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
12.6 THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.
12.7 SUCCESSOR AND ASSIGNS. The provisions of this Agreement shall inure
to the benefit of, and shall be binding upon, the successors and permitted
assigns of the parties hereto.
12.8 CAPTIONS. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
12.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.10 NO ASSIGNMENT. No party hereto may assign any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto and any attempt to do so will be void.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
DATA BROADCASTING CORPORATION CBS BROADCASTING INC.
By: By:
---------------------------------- -----------------------------------
Name: Name:
-------------------------------- ----------------------------------
Title: Title:
------------------------------- ---------------------------------
XXXXXXXXXXX.XXX, INC. XXXXXXXXXXX.XXX, LLC
By: By:
---------------------------------- -----------------------------------
Name: Name:
-------------------------------- ----------------------------------
Title: Title:
------------------------------- ---------------------------------
[SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT]
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