SHARE REPURCHASE AGREEMENT
This Agreement is made and entered into this 26 day of October, 2001,
by and between Loudeye Technologies, Inc. (the "Company") and Martin Tobias and
Alex Tobias ("Tobias").
WHEREAS, Tobias is the largest holder of shares of common stock of the
Company ("Company Stock");
WHEREAS, Tobias requires liquidity to meet certain commercial
obligations;
WHEREAS, the sale by Tobias of large amounts of Company Stock has and
may in the future depress the market price of the Company Stock due to limited
trading volume of the Company Stock; and
WHEREAS, the Company and Tobias desire to make certain arrangements to
provide TOBIAS liquidity and to provide for orderly sales of shares of the
Company Stock in the public market;
IN CONSIDERATION of the mutual covenants and agreements contained
herein, the parties agree as follows:
1. Purchase of Shares.
(a) The Company shall purchase from Tobias, and Tobias agrees to sell
to the Company, an aggregate number of shares of Company Stock such that the
purchase price as calculated under the formula set forth herein equals
$2,000,000 (the "Purchased Shares"). The number of Purchased Shares will be
calculated by dividing $2,000,000 by the lesser of the average closing bid price
for the Company Stock for the trailing 30 trading days prior to closing, or 95%
of the closing bid price for the Company Stock the day before closing.
(b) The proceeds from the sale of the Purchased Shares shall be used
for the repayment or principal reduction of existing loans of Tobias from City
National Bank. Tobias shall provide the Company with the outstanding balance of
each loan on the closing date. The Company shall pay the proceeds from the sale
directly to City National Bank at Closing.
2. Closing. Closing shall occur at the offices of the Company on October 26,
2001 10:00 a.m., or such other date, time or place as the parties may mutually
agree.
3. Market Stand-Off.
(a) Except as otherwise provided in this Agreement, Tobias agrees that,
without the prior written consent of the Company, he will not (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Company Stock or any securities convertible into or exercisable or
exchangeable for Company Stock owned by him or over which he has the power to
cause the sale (whether such shares or any such securities are then owned by
Tobias or are thereafter acquired) (the "Tobias Shares"), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Company Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Company Stock or such other securities, in cash or otherwise. Such
restrictions shall commence at closing of this transaction and shall continue
until the later of the repayment of all outstanding principal and interest on
that loan from the Company to Tobias evidenced by a promissory note dated as of
the closing date in the maximum principal amount of $2,000,000 (the "Company
Loan"), or January 31, 2003.
(b) Notwithstanding subparagraph (a) above, Tobias shall be permitted
to establish a program of sales of Tobias Shares not otherwise subject to the
option granted in Section 4 hereof consistent with Rule 10b5-1 under the
Securities Exchange Act of 1934 and with Rule 144 under the Securities Act of
1933, so long as the minimum sales price of the Company Stock under such plan
equals or exceeds $1.25 per share.
(c) The Company shall exercise reasonable efforts to identify and to
assist Tobias in identifying a private buyer for some or all of the Tobias
shares, on terms acceptable to Tobias.
4. Transfer of Shares.
Within ten (10) business days of Closing Tobias will transfer all of
his shares of Company Stock into the account listed in the Account Control
Agreement dated January 30, 2001 between Robertson Stephens, Inc., fka
FleetBoston Robertson Stephens, Inc., Loudeye Technologies, Inc., and Martin G.
Tobias.
5. Minimum Liquidity Commitment.
(a) If in any calendar quarter commencing after December 31, 2001,
Tobias does not sell a sufficient amount of Tobias Shares to achieve the Minimum
Liquidity Commitment, Tobias may, by written notice to the Company within three
business days following the end of each calendar quarter, require the Company to
purchase from him a quantity of Tobias Shares so that Tobias will achieve the
Minimum Liquidity Commitment for each calendar quarter. The Minimum Liquidity
Commitment is an amount equal to the lesser of (i)150% of the maximum number of
shares that could have been sold by Tobias under Rule 144 on the last day of the
calendar quarter (without regard to any sales made by Tobias during the 90 days
preceding the last day of the quarter) times the lesser of (x) the average
closing bid price of the Company Stock for the trailing 30 trading days ending
on the last trading day of the calendar quarter or (y) 95% of the closing bid
price of the Company Stock on the last trading day of the calendar quarter, or
(ii) $500,000. Any purchases of Tobias Shares will be made at a price equal to
the lesser of the average closing bid price for the Company for the trailing 30
trading days or 95% of the closing bid price on the last day of the applicable
calendar quarter.
(b) Tobias' right to require the Company to purchase Tobias Shares to
satisfy the Minimum Liquidity Commitment will expire upon the earlier of (i)
three business days following June 30, 2003, (ii) repayment in full of principal
and accrued interest on the Company Loan, or (iii) at such time as Tobias ceases
to be the beneficial or record owner of any shares of Company Stock.
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6. Grant of Proxy.
Tobias hereby grants to the Board of Directors of the Company an
irrevocable proxy, with full power of substitution, to vote any and all of the
Tobias Shares, in its discretion, on all matters that may properly come before
any meeting of the Company's stockholders. This proxy shall terminate on the
later of January 31, 2003 or the repayment of all principal and accrued interest
on the Company Loan. This proxy shall be deemed coupled with an interest and
shall be irrevocable by Tobias during its term.
7. Representations and Warranties of Tobias. As of the Closing Date, Tobias
represents and warrants to the Company as follows:
(a) Tobias will be the record and beneficial owner of the Tobias
Shares, free and clear of any lien or other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of the Shares),
except for liens on the Tobias Shares held by the Company, and will transfer and
deliver to the Company at the Closing valid title to the Purchased Shares, free
and clear of any lien and any such limitation or restriction. Other than as set
forth in this Agreement, no person or entity has any right to acquire any record
or beneficial interest in the Tobias Shares.
(b) Tobias has the capacity, power and authority to conduct his
business, to own and dispose of his properties, to execute and deliver this
Agreement, and to perform all of his obligations under this Agreement. This
Agreement constitutes the legal, valid and binding obligations of Tobias
enforceable in accordance with its terms.
(c) Neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby will require any
consent or other action by any person under, result in a breach of, or a default
under, any term or provision of any contract to which Tobias is a party or by
which any of the Tobias Shares are bound.
8. Representations and Warranties of the Company. As of the Closing Date, the
Company represents and warrants to Tobias as follows:
(a) The execution and delivery by the Company of this Agreement, and
the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary corporate actions of the Company. This Agreement has
been duly executed and delivered by the Company, and constitutes the legal,
valid and binding obligations of the Company, enforceable in accordance with its
terms.
(b) Neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby will: (i) violate
the Certificate of Incorporation , bylaws or other organizational documents of
the Company, (ii) require any consent or other action by any person under,
result in a breach of, or a default under, any term or provision of any contract
to which the Company is a party or by which any of its assets are bound or (iii)
violate any applicable law, rule, regulation, judgment, injunction, order or
decree or alter or impair any license, franchise, permit or other similar
authorization held by the Company or require the consent of any governmental
authority, except to the extent that any failure to obtain any such consent or
any violation would not reasonably be expected to have a material adverse effect
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on the business or financial condition of the Company and its subsidiaries,
taken as a whole.
9. Miscellaneous Provisions.
(a) Martin Tobias shall resign as a director of the Company effective
immediately upon execution of this Agreement.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(c) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
No party shall assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of each other
party hereto.
(d) If all or any portion or provision of this Agreement shall to any
extent be held invalid or unenforceable in whole or in part by a court or agency
having valid jurisdiction pursuant to a valid decision or decree, then the
parties hereto expressly agree to be bound by any lesser covenant imposing the
maximum legal duty permitted by law that is subsumed within the terms of such
covenant, as if the resulting covenants were separately stated in and made a
part of this Agreement, and the remainder of this Agreement shall remain in full
force and effect.
(e) This Agreement and the Company Loan and related documents thereto
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement.
(f) Tobias shall bear all of his own costs, fees and expenses in
connection with this Agreement and the transactions contemplated hereby and
shall reimburse the Company for all of its costs, fees and expenses in
connection with this Agreement and the transactions contemplated hereby.
[END OF TEXT]
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In witness whereof, the parties have caused this Agreement to be
executed as of the date first written above.
Loudeye Technologies, Inc.
By: /s/ John A. Baker /s/ Martin Tobias
_________________________ __________________________
John A. Baker Martin Tobias
Chief Executive Officer
/s/ Alex Tobias
__________________________
Alex Tobias
SIGNATURE PAGE TO SHARE REPURCHASE AGREEMENT
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