EXHIBIT 10.4
STOCKHOLDERS AGREEMENT
This Stockholders Agreement, dated as of August 24, 1999 (this
"Agreement"), is by and among U.S. Audiotex Corporation, a Delaware corporation
(the "Company"), and U.S. Audiotex, Inc. ("Audiotex") and Imperial Bank
("Imperial" and together with Audiotex, the "Holders").
Whereas, the Holders own, on the date hereof, the number of shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company set
forth opposite their respective names on Exhibit A hereto;
Whereas, the Holders, as the sole members of U.S. Audiotex, LLC, have
entered into an agreement dated June 30, 1999, a copy of which is attached
hereto as Exhibit B (the "June Agreement"), with respect to certain material
issues pertaining to an initial public offering of the Common Stock of the
Company, including the formation and management of the Company;
Whereas, Audiotex and Imperial each desire to enter into this
Agreement with the Company for the purpose of regulating certain aspects of the
relationships among Audiotex and Imperial with respect to the Company;
Now, Therefore, in consideration of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. Definitions.
"Affiliate" shall mean, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Board of Directors" shall mean the Board of Directors of the Company,
as the same may be constituted from time to time.
"Capital Stock" shall mean, as to any Person, its common stock (or
other equity interests, the holders of which are entitled, in the absence of
contingencies, to participate generally in the election of directors or other
members of such Person's governing body) and any other Capital Stock of such
Person authorized from time to time.
"Director" shall mean a member of the Board of Directors.
"Law" means any applicable statute, law, ordinance, rule, regulation,
judgment, decree, order or declaration of or by any governmental or regulatory
authority or instrumentality
(including, without limitation, any court, administrative agency, commission,
tribunal, arbitrator or self-regulatory organization) domestic or foreign.
"Organizational Documents" shall mean the bylaws, certificate of
incorporation, or other constituent documents of the Company, as the same may be
amended from time to time as provided herein.
"Permitted Transferee" shall mean any corporation, partnership or
other entity all of the outstanding capital stock or other equity interests of
which are owned by the transferor; provided, however, that no Person shall be a
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Permitted Transferee unless (i) such Person agrees in writing to be bound by all
of the provisions of this Agreement applicable to the transferor and (ii) the
transfer to such Person is in compliance with all applicable Laws.
"Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust, unincorporated
association, joint venture or other entity of whatever nature.
"Public Offering" means an underwritten public offering of shares of
Capital Stock by the Company to the general public pursuant to applicable Law.
"Shares" shall mean any shares of Capital Stock of the Company held at
any time by any Stockholder .
"Stockholder" shall mean any Person that is a party hereto who holds
Shares.
SECTION 2. Actions Requiring Unanimous Stockholders' Consent.
The following actions shall require the unanimous approval of the
Holders:
(a) any (i) amendment to this Agreement, (ii) recapitalization,
reorganization, liquidation or dissolution of the Company or (iii) merger or
other business combination involving the Company and any other Person;
(b) any transaction by the Company with any officer, director,
Affiliate (other than the Company) (i) outside the ordinary course of business
or (ii) other than on an arm's-length basis.
SECTION 3. Legends.
3.1. General. Each of the Stockholders agrees that substantially the
following legends shall be placed on the certificates representing any Shares
owned by them:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER STATE OR U.S. FEDERAL SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF OR
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ENCUMBERED, NOR MAY THESE SECURITIES BE TRANSFERRED ON
THE BOOKS OF THE COMPANY IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR
ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF,
AND IS OTHERWISE RESTRICTED BY THE PROVISIONS OF,
APPLICABLE LAW AND THAT CERTAIN STOCKHOLDERS AGREEMENT
DATED AS OF AUGUST 24, 1999, A COPY OF WHICH IS ON FILE
AT THE OFFICE OF THE SECRETARY OF THIS COMPANY.
3.2. Amendments to Agreement. Each of the Holders further agrees that
references in the legend set forth in Section 3.1(b) to a "Stockholders
Agreement dated as of August 24, 1999," shall refer to this Agreement as amended
pursuant to the terms hereof. Legends on any certificates issued after the date
hereof may be modified to reflect any such amendments.
3.3. Termination of Legends. The legend requirement set forth in
Section 3.1(a) shall terminate as to any Shares (i) when and so long as such
Shares shall have been registered in accordance with applicable Law or (ii) when
the Company shall have received an opinion of counsel reasonably satisfactory to
it that such legend is not required in order to ensure compliance with
applicable Law; provided, that, unless and until terminated pursuant to this
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Section 3.3, the legend requirement set forth in Section 3.1(a) shall survive
the termination of this Agreement. The legend requirement set forth in Section
3.1(b) shall terminate as to any Shares (i) when and so long as such Shares
shall have been registered in accordance with applicable Law or (ii) upon
termination of this Agreement. Whenever the legend requirements imposed by
Section 3 hereof shall terminate, as hereinabove provided, the holder of such
Shares shall be entitled to receive from the Company, at the expense of the
Company, a new certificate bearing no legends in place of the restrictive
legends set forth thereon.
SECTION 4. June Agreement.
The provisions of the June Agreement shall be incorporated into and
made a part of this Agreement and shall be binding upon each of the parties
hereto.
SECTION 5. Stock Incentive Plan
Referencing Sections 5, 6(c), 7 and 9 of the June Agreement, it is
agreed that:
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(a) The exercise price of the options for 5% ownership of the Company
issued to the new CEO, Tom Evans, shall be the price specified in Mr. Evans'
employment agreement (the "CEO Price").
(b) The exercise price of the options for 2.5% ownership of the
Company, which the parties originally agreed would vest upon formation of the
Company, shall be the CEO Price. The parties now agree that these options will
be granted upon formation of the Company, but will not vest until the earlier of
(i) consummation of the Company's initial public offering, or (ii) one (1) year
from the date of filing of the Company's certificate of incorporation.
(c) The exercise price of the options for 10.0% ownership of the
Company allocated to attract new employees shall not be less than the CEO Price.
(d) The exercise price of options granted to Outside Directors shall
not be less than the initial public offering price of the common stock of the
Company, as of the date of such grant. The parties now agree that,
notwithstanding Section 9 of the June Agreement, "Outside Director" shall mean a
director of the Company who is not an officer or employee of the Company,
Imperial or Audiotex, or any affiliated companies thereof; provided, however,
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that George L. Graziadio, Jr. shall be deemed to be an Outside Director.
SECTION 6. Miscellaneous.
6.1. Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
6.2. Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof,
and there are no restrictions, promises, representations, warranties, covenants,
or undertakings with respect to the subject matter hereof, other than those
expressly set forth or referred to herein.
6.3. Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party hereto shall be in writing,
shall be delivered personally or sent by certified or registered mail or by
telecopy transmission at the addresses and numbers set forth on Exhibit A
hereto. All such notices and communications shall be deemed to have been given
or made (i) when delivered by hand, (ii) one business day after being sent by
overnight courier, or (iii) when telecopied, receipt acknowledged.
6.4. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns. Notwithstanding the foregoing, neither
this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall (except as expressly provided in this Agreement) be
assignable by any party without the prior written consent of the other parties
hereto. Notwithstanding the foregoing, a Stockholder may assign such
Stockholder's rights, remedies, obligations and liabilities hereunder to a
Permitted Transferee without obtaining the prior written consent specified in
this Section 6.4.
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6.5. Specific Performance. Each of the parties hereto acknowledges
and agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto shall and do
hereby waive the defense in any action for specific performance that a remedy at
law would be adequate and that the parties hereto, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement.
6.6. Amendments. This Agreement may not be amended, modified or
supplemented without the prior written consent of all the parties hereto.
6.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
6.8. Recapitalization, etc. In the event that any capital stock or
other securities are issued in respect of, in exchange for, or in substitution
of, any Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
Stockholders or combination of the Shares or any other change in the Company's
capital structure, appropriate adjustments shall be made in the amounts and
percentages specified in this Agreement so as to fairly and equitably preserve,
as far as practicable, the original rights and obligations of the parties hereto
under this Agreement.
6.9. Termination. This Agreement shall terminate on the date on
which a Public Offering of the Common Stock of the Company is consummated.
6.10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the conflicts of law principles thereof.
6.11. Representations and Warranties. Each Stockholder party hereto
represents and warrants as follows:
(a) The person executing and delivering this Agreement on behalf of
such Stockholder is duly authorized to execute and deliver this Agreement on
behalf of such Stockholder. This Agreement has been duly executed and delivered
by such Stockholder and constitutes the legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with the
terms hereof.
(b) The execution and delivery of this Agreement by such
Stockholder does not, and the performance by it of its obligations under this
Agreement will not, violate, conflict with or constitute a breach of, or a
default under, any material agreement or instrument to which such Stockholder is
a party or which is binding on such Stockholder or the assets of such
Stockholder, and will not result in the creation of any lien on, or security
interest in, any of the assets of such Stockholder.
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(c) It has good and marketable title to any Shares held by it
immediately prior to the date of this Agreement, free and clear of any claims,
liens, encumbrances or security interests whatsoever.
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In Witness Whereof, the parties hereto have executed this Agreement as
of the date first above written.
U.S. Audiotex Corporation
By: /s/ Brian Nocco
_______________________________
Name: Brian Nocco
Title: Chief Executive
Imperial Bank
By: /s/ Brian Nocco
_______________________________
Name: Brian Nocco
Title: Executive Vice President
U.S. Audiotex, Inc.
By: /s/ Kenneth Stern
_______________________________
Name: Kenneth Stern
Title: President
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