<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)
(Amendment No. )
Egreetings Network, Inc.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title and Class of Securities)
282343102
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(CUSIP Number)
Jon Groetzinger, Jr., Esq.
American Greetings Corporation
One American Road
Cleveland, Ohio 44114
216-252-7300
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 9, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note. Schedules filed in paper format shall include a signed original
and five copies of the Schedule including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 12 Pages)
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CUSIP NO. 282343102 13D PAGE 2 OF 12 PAGES
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<TABLE>
<CAPTION>
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<S> <C> <C>
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
American Greetings Corporation
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, OO (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
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7 SOLE VOTING POWER
6,841,074
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY --------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 6,841,074
--------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,841,074 Shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6%
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14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 282343102 13D PAGE 3 OF 12 PAGES
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<TABLE>
<CAPTION>
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<S> <C> <C>
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Gibson Greetings, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, OO (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
6,841,074
---------------------------------------------------------------------
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH ---------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
6,841,074
---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,841,074 Shares
- --------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.6%
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14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
ITEM 1. SECURITY AND ISSUER.
The name of the issuer is Egreetings Network, Inc., a Delaware
corporation ("Egreetings"), which has its principal executive offices at 149 New
Montgomery Street, San Francisco, California 94105. The title of the securities
to which this Statement relates is Egreetings' common stock, par value $0.001
per share (the "Shares").
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f) This Statement is being filed by American Greetings
Corporation, an Ohio corporation ("American Greetings"), and Gibson Greetings,
Inc. a Delaware corporation and a wholly owned subsidiary of American Greetings
("Gibson"). American Greetings' and Gibson's principal business address and
American Greetings' office address is One American Road, Cleveland, Ohio 44114.
Gibson's office address is 100 East River Center Blvd, Covington, Kentucky
41011. The name, business address, present principal occupation and citizenship
of each executive officer and director of American Greetings and Gibson is set
forth in Schedule I attached hereto.
American Greetings is the world's largest publicly held creator,
manufacturer and distributor of greeting cards and social expression products.
With headquarters in Cleveland, Ohio, American Greetings employs more than
21,000 associates around the world and has one of the largest creative studios
in the world.
(d)-(e) During the last five years, none of American Greetings, Gibson
or, to the best knowledge of American Greetings and Gibson, any executive
officer or director of American Greetings or Gibson listed in Schedule I
attached hereto has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violation of such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On November 9, 1999, American Greetings, through a wholly owned
subsidiary formed for this purpose ("Acquisition Sub"), commenced a tender offer
for all of the issued and outstanding shares of common stock of Gibson. On March
9, 1999, American Greetings accepted for payment and paid for the 15,431,420
shares (approximately 97.4% of the outstanding shares) of Gibson common stock
tendered and completed the acquisition of Gibson through a merger of Acquisition
Sub with and into Gibson. Gibson held the 6,841,074 Shares prior to American
Greetings's acquisition of Gibson.
The total purchase price for the acquisition by American Greetings of
Gibson was approximately $175 million. The funds used to consummate the
acquisition were provided to Acquisition Sub in the form of a capital
contribution made by American Greetings. American
Page 4 of 12 Pages
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Greetings obtained the funds for such capital contribution through its
registered commercial paper program.
ITEM 4. PURPOSE OF TRANSACTION.
American Greetings indirectly acquired beneficial ownership of the
Shares held by Gibson as a result of its acquisition of Gibson. American
Greetings' indirect acquisition of the Shares was incidental to the Gibson
acquisition.
American Greetings and Egreetings have, from time to time, engaged in
discussions regarding a possible combination of Egreetings business with that of
the digital greetings business of American Greetings conducted by
AmericanGreetings.com, Inc. Such discussions have been exploratory in nature
and, although certain discussions regarding specific combination proposals are
currently underway, there can be no assurance that an agreement will be reached
or as to the timing or terms thereof.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(d) American Greetings has an indirect beneficial interest in
6,841,074 Shares, or approximately 19.6% of the outstanding Shares, which are
held directly by its wholly owned subsidiary Gibson. This number includes 67,854
Shares that Gibson has the right to acquire pursuant to currently exercisable
warrants to acquire Shares. American Greetings has sole voting and dispositive
power over the 6,841,074 Shares held by Gibson, arising solely from its control
over Gibson.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Egreetings and certain of its stockholders have granted Gibson the
right to match the terms of any offer made by either Hallmark or American
Greetings in connection with the sale of any equity interest in Egreetings to
Hallmark or American Greetings by Egreetings or such stockholders. If Gibson
elects to match the terms of any such sale, then Egreetings and/or such
stockholder must sell the equity interest to Gibson on such terms. The foregoing
discussion is qualified in its entirety by reference to the Agreement Providing
Right of Last Refusal, which is filed as Exhibit 2 hereto.
Gibson has demand and piggyback registration rights that enable Gibson,
under certain circumstances and subject to certain restrictions, to require
Egreetings to register all or a portion of the Shares Gibson owns under the
Securities Act of 1933 in order to permit Gibson to sell its Shares. These
registration rights will terminate on the earlier of four years after the date
of Egreetings' initial public offering or the date on which Gibson may sell all
of its Shares under Rule 144 of the Securities Act of 1933. The foregoing
discussion is qualified in its entirety by
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reference to the Fifth Amended and Restated Investors' Rights Agreement, which
is filed as Exhibit 3 hereto.
In connection with Egreetings' initial public offering, Gibson agreed
not to transfer or dispose of, directly or indirectly, any Shares or any
securities convertible into or exercisable or exchangeable for Shares for a
period of 180 days after the date the registration statement filed in connection
the initial public offering is declared effective. The foregoing discussion is
qualified in its entirety by reference to the Fifth Amended and Restated
Investors' Rights Agreement, which is filed as Exhibit 3 hereto, and the Lock Up
Agreement, which is filed as Exhibit 4 hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) Joint Filing Agreement
(2) Agreement Providing Right of Last Refusal, dated December 4, 1997.
(3) Fifth Amended and Restated Investors' Rights Agreement, dated
November 19, 1999.
(4) Lock Up Agreement, dated September 1999.
Page 6 of 12 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: April 17, 2000 AMERICAN GREETINGS CORPORATION
By: /s/ W.S. Meyer
----------------------------
Name: William S. Meyer
Title: Senior Vice President
and Chief Financial
Officer
GIBSON GREETINGS, INC.
By: /s/ Morry Weiss
----------------------------
Name: Morry Weiss
Title: President
Page 7 of 12 Pages
<PAGE> 8
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
AMERICAN GREETINGS CORPORATION AND GIBSON GREETINGS, INC.
A. DIRECTORS AND EXECUTIVE OFFICERS OF AMERICAN GREETINGS
The following table sets forth the name, present principal occupation
or employment and material occupations, positions, offices or employment for the
past five years of each director and executive officer of American Greetings.
Unless otherwise indicated below, (i) each individual has held his or her
positions with American Greetings for more than the past five years, (ii) the
business address of each person is One American Road, Cleveland, Ohio 44144 and
(iii) all directors and executive officers listed below are citizens of the
United States. Directors are identified by an asterisk.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
NAME EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
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<S> <C>
*Scott S. Cowen Dr. Cowen's principal occupation is President of Tulane
University. Prior to that Dr. Cowen served as Dean and Albert J.
Weatherhead, III Professor of Management, Weatherhead School
of Management at Case Western Reserve University. Dr. Cowen
serves as a director of JoAnn Stores, Inc. (specialty store retailer),
Forest City Enterprises, Inc. (conglomerate corporation engaged
in real estate development, sales, investment, construction and
lumber wholesale) and Newell-Rubbermaid Incorporated
(consumer home products).
*Edward Fruchtenbaum Mr. Fruchtenbaum is President and Chief Operating Officer of
Parent, a position he has held for more than five years. Mr.
Fruchtenbaum is on the boards of INROADS/Northeast Ohio,
Inc., Gilmour Academy, Cleveland Playhouse and The National
Conference Board (non-profit organizations).
</TABLE>
Page 8 of 12 Pages
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<TABLE>
<S> <C>
*Stephen R. Hardis Mr. Hardis' principal occupation is Chairman and Chief
Executive Officer of Eaton Corporation, (manufacturer of highly
engineered products that serve industrial, vehicle, construction,
commercial and semiconductor markets). Before joining Easton
in 1979, Mr. Hardis served as Executive Vice president of
Finance and Planning for Sybron Corporation (health equipment
supplies and services) and prior to that he was associated with
General Dynamics Corporation (industrial) aerospace
manufacturer). Mr. Hardis is a member of the boards of KeyCorp
(holding company for Key Bank), Lexmark International
Corporation (a spin-off of IBM's printer business), Marsh &
McLennon Companies, Inc. (holding company providing services
in the risk and insurance services, investment and management
consulting fields), Nordson Corporation (industrial painting
system manufacturer) and Progressive Corporation (holding
company of Progressive Insurance Company and other
companies). He also serves as a director of the Cleveland Clinic
Foundation (hospital) and is a trustee of the Musical Arts
Association (Cleveland Orchestra), Leadership Cleveland,
Playhouse Square, Foundation, Greater Cleveland Roundtable
and Cleveland Tomorrow (non-profit organizations).
*Harriet Mouchly-Weiss Mrs. Mouchly-Weiss is founder and managing partner of Strategy
XXI (corporate communications). Before founding Strategy
XXI, she was President of the GCI Group International, an
international public relations and marketing agency. She also
served as Chairman of Ruder Finn & Rotman International
Partners, an independent public relations firm. She is a director
of Viisage Technology, Inc. (developer of personal security and
identification systems), a division of LAU Technologies,
Foundation of the Committee of 200, Friends of the United
Nations, American Academy of Rome, Chinese Foundation of
Culture and Arts for Children, Abraham Fund and Israel Policy
Forum (professional, educational and charitable organizations.
*Albert B. Ratner Mr. Ratner's principal occupation is Co-Chairman of the Board,
Chief Executive Officer and President of Forest City Enterprises,
Inc. (conglomerate corporation engaged in real estate
development, sales, investment, construction and lumber
wholesale) and an officer of its various subsidiary companies.
He is also a director of RPM, Inc. (manufacturer and marketer of
protective coatings).
</TABLE>
Page 9 of 12 Pages
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<TABLE>
<S> <C>
*James C. Spira Mr. Spira's principal occupation is managing partner and director
of Diamond Technology Partners, Inc., (technology management
consulting firm). Before joining Diamond Technology Partners,
he co-founded Cleveland Consulting Associates, serving as
President and Chief Executive Officer from 1974 until 1989. Mr.
Spira serves as a director of New Media, Inc. (information
technology consulting) and is a member of the advisory board of
Progressive Insurance Company's National Accounts Division
(specialty property-casualty insurer).
*Harry H. Stone Mr. Stone's principal occupation is President of the Courtland
Group, Inc. (investments, property and business development and
management) and a general partner in partnerships that own and
manage The Residence Inn by Marriott Cleveland at Beachwood,
Middleburg Heights, Rockside and Westlake, Ohio locations. He
is a trustee of the Cleveland Rotary Foundation and is Trustee
Emeritus of Educational Television Association of Metropolitan
Cleveland, Jewish Community Federation of Cleveland and
Brandeis University (non-profit organizations).
*Morry Weiss Mr. Weiss' principal occupation is Chairman and Chief Executive
Officer of Parent, a position he has held for more than five years.
He also serves as a director of National City Corporation (holding
company of National City Bank - Cleveland and other banks) and
is a member of the advisory board of Primus Venture Partners
(equity investor in companies requiring growth capital).
Michael B. Birkholm Vice President, Manufacturing from 1994 until becoming Senior
Vice President in 1998.
Dale A. Cable Vice President and Treasurer.
Mary Ann Corrigan-Davis President of Carlton Cards Retail, Inc. from 1992 until 1996, and
Group Managing Director of the John Sands Group from 1996 until
becoming Senior Vice President in 1997.
Jon Groetzinger, Jr Senior Vice President, General Counsel and Secretary.
William R. Mason Senior Vice President.
William S. Meyer Senior Vice President and Chief Financial Officer.
Patricia A. Papesh Vice President, Creative of the U.S. Greeting Card Division from
1992 until becoming Senior Vice President in 1995.
Patricia L. Ripple Executive Director, Tax and Financial Reporting from 1993 until becoming
Vice President and Corporate Controller in 1996.
</TABLE>
Page 10 of 12 Pages
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<TABLE>
<S> <C>
Erwin Weiss Senior Vice President.
Jeffrey M. Weiss Vice President, Materials Management of Parent's U.S. Greeting Card
Division from 1996 until 1997; Vice President, Product Management
of Parent's U.S. Greeting Card Division from 1997 until 1998;
Senior Vice President from 1998 until becoming Executive Vice
President in 2000.
George A. Wenz Vice President, National Accounts from 1984 before becoming
Senior Vice President in 1997.
Thomas T. Zinn, Sr. Principal with Ernst & Young LLP before joining Parent in 1995
as Vice President, Information Services. He became Senior Vice
President in 1998.
</TABLE>
B. DIRECTORS AND EXECUTIVE OFFICERS OF GIBSON
The director of Gibson is Morry Weiss. The executive officers of Gibson
are Morry Weiss, President, Edward Fruchtenbaum, Vice President, Jon
Groetzinger, Jr., Secretary, and Dale Cable, Treasurer. Messrs. Weiss,
Fruchtenbaum, Groetzinger and Cable are also executive officers of American
Greetings. Information concerning the present principal occupation or employment
and material occupation, positions, offices or employment for the past five
years of Messrs. Weiss, Fruchtenbaum, Groetzinger and Cable is set forth in the
table of the directors and executive officers of American Greetings. The
business address of each director and officer of Gibson is One American Road,
Cleveland, Ohio 44144, and all directors and officers of Gibson are citizens of
the United States.
Page 11 of 12 Pages
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EXHIBIT INDEX
No. Description
- --- -----------
(1) Joint Filing Agreement
(2) Agreement Providing Right of Last Refusal, dated December 4, 1997.
(3) Fifth Amended and Restated Investors' Rights Agreement, dated
November 19, 1999 (incorporated by reference to Exhibit 4.03 of
Egreetings' Registration Statement on Form S-1 (File No. 333-88595)).
(4) Lock Up Agreement, dated September 1999.
Page 12 of 12 Pages
<PAGE> 1
Exhibit 1
JOINT FILING AGREEMENT
This will confirm the agreement by and between each of the undersigned
that a statement may be filed on behalf of each of the undersigned persons by
American Greetings Corporation with respect to the common stock of Egreetings
Network, Inc. Further, each of the undersigned agrees that American Greetings,
by its duly elected officers, is authorized to sign from time to time on behalf
of the undersigned, any amendments to this Schedule 13D relating to Egreetings
Network, Inc. which may be necessary or appropriate from time to time.
Dated: April 17, 2000 AMERICAN GREETINGS CORPORATION
By: /s/ W.S. Meyer
------------------------------
Name: William S. Meyer
Title: Senior Vice President
and Chief Financial
Officer
GIBSON GREETINGS, INC.
By: /s/ Morry Weiss
------------------------------
Name: Morry Weiss
Title: President
<PAGE> 1
EXHIBIT 2
AGREEMENT PROVIDING RIGHT OF
LAST REFUSAL
This Agreement is entered into effective as of December 4, 1997, by and between
GIBSON GREETINGS, INC. ("Gibson"), THE VIRTUAL MALL INC., a California
corporation doing business as "Greet Street" (the "Corporation") and the other
persons and entities set forth on the signature page hereof (the
"Shareholders"). (Gibson, the Corporation and the Shareholders are collectively
referred to herein as the "Parties").
All capitalized terms utilized within this Agreement shall have the same
definition as in the Series D Preferred Stock Purchase Agreement between Gibson
and the Corporation dated even herewith (including Exhibits attached thereto,
the "Purchase Agreement").
For and in consideration of Gibson and the Corporation entering into the
Purchase Agreement and the Content Agreement (as defined below), the Parties
hereby agree as follows:
1. LAST REFUSAL; EFFECTIVENESS. Subject to Section 5 below, Gibson shall have a
right of last refusal to match the terms of any offer (a "Purchase Offer") made
by either Hallmark or American Greetings (or one of their Affiliates, as those
terms are defined in the Purchase Agreement) in connection with a sale of any
equity interest in the Corporation to such entity or the issuance of any debt
instrument to such entity (a "Proposed Sale Transaction"). Notwithstanding
anything contained herein, this Agreement shall become effective only in the
event that (i) the Corporation issues and sells the Preferred Shares to Gibson
pursuant to the terms of the Purchase Agreement, and (ii) the Corporation and
Gibson each execute and deliver to the other that certain Content Provider and
Distribution Agreement dated even herewith (the "Content Agreement").
2. NOTICE OF PROPOSED SALE TRANSACTION.
(a) Prior to entering into any binding commitment with Hallmark or American
Greetings, or one of their Affiliates, (the "Proposed Purchaser" in connection
with a Proposed Sale Transaction, the Corporation and/or the Shareholders who
would be party to such Proposed Sale Transaction shall deliver to Gibson written
notice (a "Sale Notice") setting forth the name of the Proposed Purchaser and
the specific terms of the Purchase Offer (including, without limitation, the
offering price and the proposed terms of payments). A copy of any written
Purchase Offer or any agreement executed in connection with such Proposed Sale
Transaction shall be attached to such Sale Notice, provided that Gibson shall,
if requested, agree in writing to maintain the confidentiality thereof pursuant
to the terms of a non-disclosure agreement in a form substantially similar to
the Mutual Nondisclosure Agreement dated October 20, 1997 between Gibson and the
Corporation, provided that Gibson may disclose the terms of the Purchase Offer
or Proposed Sale Transaction to its employees, attorneys, or advisers on a
"need-to-know" basis for the purposes of evaluating and responding to the
Purchase Offer or Proposed Sale Transaction.
<PAGE> 2
(b) Gibson shall have the right to elect to cause the Corporation and/or
the relevant Shareholders to enter into a binding transaction with Gibson on the
terms of the Proposed Sale Transaction specified in such Purchase Offer by
giving written notice of its binding election to the Corporation and/or the
relevant Shareholders within 14 days from the date Gibson received the Sale
Notice pursuant to Section 2(a) above (the "Election Period").
(c) If the terms of a proposed Sale Transaction include consideration to be
paid in whole or in part in capital stock of the proposed purchaser, Gibson
shall have the right to substitute therefor substantially equivalent voting
stock of Gibson with the same "fair market value," provided that if the Proposed
Purchaser would be required by the terms of the Proposed Sale Transaction to
file a registration statement with the Securities and Exchange Commission on
Form S-4 or otherwise, then Gibson must register the shares of its voting stock
that it elects to deliver as part of the consideration to be paid to the
Corporation and/or the relevant Shareholders. For purposes of this Section 2(c),
the "fair market value" of the relevant capital stock shall be an amount agreed
upon between Gibson and the Corporation (or, if the Proposed Sale Transaction is
with the Shareholders rather than the Corporation, then between Gibson and the
Shareholders holding a majority of the shares of capital stock of the
Corporation held by the Shareholders, referred to as the "Majority
Shareholders"). If the relevant Parties fail to agree, then "fair market value"
shall be determined by an investment bank firm chosen and in the manner as
follows: Gibson shall choose one, the Corporation (or the Majority Shareholders,
as applicable) shall choose one, and those two investment banking firms shall
choose a third, which third firm shall then determine "fair market value," but
such determination shall be strictly limited to selecting from either Gibson's
or the Corporation's (or the Majority Shareholders', as applicable) written
proposal as to the "fair market value" of the relevant capital stock, which
shall be provided to the third firm, and the other Party, within five (5)
business days of the selection of the third firm, whichever proposal the third
firm believes most closely approximates its own determination of "fair market
value." Such determination shall be final and binding. The fees and expenses of
the third investment banking firm shall be paid equally by Gibson and the
Corporation (or the Majority Shareholders, as applicable).
3. ELECTION TO MATCH PURCHASE OFFER. If Gibson elects to match the terms of any
such Purchase Offer as provided in Section 2 above, then the Corporation and/or
such Shareholders shall consummate the Proposed Sale Transaction with Gibson
pursuant to the terms of the Purchase Offer. Gibson's notice of said election
shall specify a date for the closing of the Transaction, which shall not be more
than 60 days after the date Gibson gave such notice and shall take place at such
place as Gibson specifies in its notice.
4. NO ELECTION TO MATCH PURCHASE OFFER. If Gibson elects not to match the terms
of any such Purchase Offer as provided in Section 2 above, or the Election
Period expires without Gibson making such election, then the Corporation and/or
the relevant Shareholders, as the case may be, may consummate the Proposed Sale
Transaction with the Proposed Purchaser pursuant to the terms of the Purchase
Offer, within a period of 120 days after the expiration of the Election Period.
5. TERMINATION. This Agreement shall terminate, and be of not further force or
effect, immediately (and without notice) upon the earliest of the following
events to occur: (a) if at any time prior to the effective date of the first
registration statement filed by the Corporation
<PAGE> 3
covering an underwritten offering of any of its securities to the general public
(an "Initial Public Offering"), Gibson no longer holds, or has the right to
convert Preferred Shares or Series E Shares into, at least 15% of the
Fully-Diluted Outstanding Stock of the Corporation, other than Excluded Shares
(as those terms are defined in the Corporation's Restated Articles) issued after
the effective date of this Agreement; (b) if at any time during the one-year
period following an Initial Public Offering, Gibson has sold or otherwise
disposed of, in the aggregate during such period, more than ten percent (10%) of
the number of shares of capital stock of the Corporation held by Gibson
(determined on an as-converted-into common stock basis) as of the date of the
Initial Public Offering ("Gibson's IPO Shareholdings"); (c) if at any time after
the one-year period following an Initial Public Offering, Gibson has sold or
otherwise disposed of, in the aggregate at any time since the Initial Public
Offering, more than twenty-five percent (25%) of Gibson's IPO Shareholdings; (d)
if Gibson is in material breach or material violations of its obligations set
forth in the Content Agreement, has had its "Anchor Tenancy" revoked in
accordance with Section 9.2 of the Content Agreement, or fails to renew the
Content Agreement at any time after the initial term or any renewal period a
provided in Section 11.1 thereof, unless the Corporation rejected a firm written
offer made by Gibson to renew the Content Agreement, which offer otherwise fully
satisfied the requirements for renewal set forth in Section 11.1(b) thereof; or
(e) upon the consummation of a Proposed Sale Transaction pursuant to Section 4
above which results in an effective change of control of the Corporation.
6. GENERAL.
(a) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, United States of America,
as applied to agreements signed and performed entirely in California.
(b) NOTICE. Any notice required to be given by either Party to the other
shall be deemed given: (i) five (5) business days after being deposited in the
postal system in registered or certified form with return receipt requested,
postage paid, addressed to the notified Party at the address for notices set
forth in the Purchase Agreement for Gibson or the Corporation, or in the case of
a Shareholder, the last address provided to the Corporation, but only if the
Party giving notice receives a return receipt within 10 business days after the
notice is mailed; (ii) on the next business day if dispatched to the notified
Party at the address specified in clause (i) above via a courier service that
guarantees next business day delivery, but only if the records of such courier
service confirm that such delivery was in fact made the next business day; or
(iii) immediately upon dispatch if dispatched by facsimile transmission to the
notified Party at the facsimile telephone number set forth in the Purchase
Agreement for Gibson or the Corporation, or in the case of a Shareholder, the
last facsimile telephone number provided to the Corporation, and the dispatching
Party receives an electronic confirmation of receipt, and the dispatching Party
also promptly gives notice as provided in clause (i) or (ii) of this Section
7(b). Gibson may change the postal address or facsimile telephone number to
which notice is sent by written notice to the Corporation and the Shareholders;
the Corporation may change the postal address or facsimile telephone number to
which notice is sent by written notice to Gibson; any Shareholder may change the
postal address or facsimile telephone number to which notice is sent by written
notice to the Corporation, and the Corporation shall promptly forward such
change to Gibson.
<PAGE> 4
(c) BINDING OBLIGATION. This Agreement is binding upon the Parties, their
representatives, successors and assigns (including, for any Party who is an
individual, their heirs, administrators and executors). This Agreement is not
assignable by Gibson or the Corporation without the prior written consent of the
other (which consent may be withheld in such party's sole and absolute
discretion), and may only be assigned by a Shareholder in connection with the
sale or transfer of his or its shares of capital stock in the Corporation and
only then if the transferee of such shares agrees in a writing delivered to
Gibson and the Corporation to be bound by the terms of this Agreement as a
"Shareholder" hereunder.
(d) SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other part
or provision of this Agreement unless as a result the rights of either party are
materially diminished or the obligations and burdens of either party are
materially increased so as to be unjust or inequitable.
(e) WAIVER. No waiver by any party of any breach of any provision hereof
shall constitute a waiver of any other breach of that or any other provision
hereof.
(f) ENTIRE AGREEMENT; HEADINGS. This Agreement, as well as the Purchase
Agreement (including all of the agreements referred to therein to which the
Corporation and Gibson are both parties) constitutes the entire agreement
between Gibson and the Corporation, and this Agreement constitutes the entire
agreement between Gibson and each Shareholder, with respect to the subject
Agreement (including all of the agreements referred to therein to which the
Corporation and Gibson are both parties) constitutes the entire agreement
between Gibson and the Corporation, and this Agreement constitutes the entire
agreement between Gibson and each Shareholder, with respect to the subject
matter hereof and supersedes all previous proposals, both oral and written,
negotiations, representations, commitments, writings and other communications
between the parties. This Agreement may not be modified except by an instrument
in writing signed by a duly authorized representative of each of the Parties.
The section headings and captions in this Agreement are for convenience of
reference only and shall not be considered in interpreting this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
<PAGE> 5
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
GIBSON GREETINGS, INC. THE VIRTUAL MALL, INC.
By: /s/ Jim Wilson By: /s/ Fredrick L. Campbell
---------------------------------- --------------------------------
Title: Chief Financial Officer Title: CEO
-------------------------------- ------------------------------
SHAREHOLDERS:
- -------------
ALTOS VENTURES I, L.P.
By: Altos Management Partners I, L.P.,
Its General Partner
By /s/ [signature]
-------------------------
Title: General Partner
----------------------
ROSEWOOD STONE GROUP, INC. BAYVIEW INVESTORS, LTD.
By: Robertson Stephens & Company
Private Equity Group, L.L.C.
By: /s/ [signature] By /s/ [signature]
---------------------------------- ----------------------------------
Title: President Title: Managing Director
------------------------------ -----------------------------
<PAGE> 6
PORTAL PUBLICATIONS, LTD. NEW WORLD EQUITIES
By: /s/ Jeffrey A. Pearson By: /s/ [signature]
--------------------------------- --------------------------------
Title: VP-CFO Title: Jr. Managing Partner
------------------------------- ------------------------------
E-COMMERCE PARTNERS, L.P.
By /s/ [signature]
---------------------------------
Title: General Partner
-----------------------------
/s/ Lee Rosenberg
- ------------------------------------ ------------------------------------
NEIL KATIN LEE ROSENBERG
an individual an individual
/s/ Angelo Grestoni
- ------------------------------------
ANGELO GRESTONI
an individual
/s/ Anthony Levitan /s/ Fredrick Campbell
- ------------------------------------ ------------------------------------
ANTHONY LEVITAN FREDRICK CAMPBELL
an individual an individual
<PAGE> 1
Exhibit 4
September __, 1999
E-greetings Network
501 Second Street, Suite 114
San Francisco, CA 94107
Credit Suisse First Boston Corporation
BancBoston Robertson Stephens Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, NY 10010
Ladies and Gentlemen:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to result
in the establishment of a public market for the Common Stock (the "SECURITIES")
of E-greetings Network (the "COMPANY"), the undersigned hereby agrees that it
will not, during the period commencing on the date hereof and ending 180 days
("THE LOCK-UP PERIOD") after the date of the final prospectus (the "COMMENCEMENT
DATE") relating to the offering of shares of the Securities pursuant to the
Underwriting Agreement, offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of Securities or securities
convertible into or exchangeable or exercisable for any shares of Securities, or
publicly disclose the intention to make any such offer, sale, pledge or disposal
without the prior written consent of Credit Suisse First Boston Corporation (the
"REPRESENTATIVE"). The foregoing sentence shall not apply to (a) the sale of any
shares of Securities to the Underwriters pursuant to the Underwriting Agreement;
(b) transactions relating to Securities acquired in open market transactions
after the Commencement Date; (c) any (i) bona fide gift or (ii) transfer to the
undersigned's immediate family or to a trust for the benefit of the undersigned,
his or her immediate family, or both; or (d) any transfer by the undersigned, if
the undersigned is a corporation or partnership (i) to another corporation or
partnership if the transferee and the undersigned are affiliates of the
undersigned or (ii) as part of a distribution without consideration from the
undersigned to its equity holders on a pro rata basis in accordance with the
equity holder's percentage ownership of the undersigned; provided, however,
that, as a condition of any such transfer pursuant to clause (c) or (d) of this
paragraph, each transferee shall agree to be bound by the terms hereof and shall
execute an agreement substantially in the form hereof which the transferor shall
cause to be delivered to the Representative prior to any such transfer.
In addition the undersigned agrees that without the prior written
consent of Credit Suisse First Boston Corporation, it will not during the
Lock-Up Period make any demand for or exercise any right with respect to the
registration of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock.
<PAGE> 2
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the respective
successors, heirs, personal representatives and assigns of the undersigned and
its affiliates. This agreement shall lapse and become null and void if the
Commencement Date shall not have occurred on or before April 1, 2000.
Very truly yours,
Gibson Greetings, Inc.
By: /s/ Frank J. O'Connell
----------------------------------
Print Name: Frank J. O'Connell
-------------------------
Title: Chairman, President and CEO
------------------------------
