Exhibit 10.1
SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT (the "Agreement") is made and entered into
as of November 10, 2000, among Softlock.com, Inc., a Delaware corporation
("Company"), and the shareholders of the Company identified on the signature
page hereto (the "Shareholders") representing 97% of the issued and outstanding
Series B Preferred Stock.
WHEREAS, the Company is in the process of obtaining private equity
financing from existing shareholders and third parties in the form of
convertible preferred stock and with aggregate gross proceeds to the Company of
$7,000,000 (the "Financing");
WHEREAS, the Shareholders, certain other shareholders of the
Corporation and third parties have agreed to enter into good faith negotiations
for the consummation of the Financing conditioned upon the execution of this
Agreement by the Shareholders; and
WHEREAS, each Shareholder owns of record and/or beneficially shares of
Series B Convertible Preferred Stock ("Series B Preferred"), Series A
Convertible Preferred Stock ("Series A Preferred") and/or Common Stock ("Common
Stock") of the Company (such classes being referred to collectively as the
"Stock").
NOW, THEREFORE, in consideration of the promises and the
representations, warranties and agreements contained herein, the parties agree
as follows:
1. Definition. For purposes of this Agreement, "Subject Shares" shall
mean all issued and outstanding shares of Series B Preferred and all Shares of
Common Stock issued upon conversion thereof, and all shares issued upon exercise
of the Warrants that are owned of record or beneficially by the Shareholders or
their affiliates as of the date hereof or from time to time while this Agreement
is in effect. By signing this Agreement, each Shareholder is binding itself and
its affiliates.
2. Representations and Warranties of the Shareholders. The
Shareholders, severally as to themselves and not jointly,
hereby represent and warrant to the Company as of the date hereof as follows:
a) Authority. Each Shareholder has all requisite capacity to
enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by the Shareholder and constitutes a valid and binding
obligation of the Shareholder, enforceable against the Shareholder in
accordance with its terms. Except for informational filings with the
Securities and Exchange Commission ("SEC"), the execution and delivery
of this Agreement by the Shareholder do not, and the consummation by
the Shareholder of the transaction contemplated hereby and compliance
by the Shareholder with the terms hereof will not (i) conflict with, or
result in any violation of, or default (with or without notice or lapse
of time or both) under any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Shareholder or to the Shareholder's
property or assets, (ii) require any filing by the Shareholder or
require the Shareholder to obtain any permit, authorization, consent or
approval of, any Federal, state or local government or any court,
tribunal, administrative agency or commission or other governmental or
regulatory authority or agency, domestic or foreign, or (iii) violate
any order, writ, injunction, decree, statute, rule or regulation
applicable to the Shareholder or the Subject Shares.
b) The Subject Shares. Each Shareholder is the record
and beneficial owner of, and has good and valid title
to, the Subject Shares, free and clear of any liens.
3. Covenants of the Shareholders and the Company.
a) For the period commencing on the date hereof and ending on
the earlier of June 1, 2001 or the date six (6) months from the closing
date of the Financing, each Shareholder, agreeing as to itself
severally and not jointly, shall not (i) sell, transfer, pledge, assign
or otherwise dispose of (including by gift) (collectively, "Transfer"),
consent to any Transfer of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to
the Transfer of, any or all of the Subject Shares (or any interest
therein) to any person and agrees not to commit or agree to take any of
the foregoing actions or (ii) convert any shares of Series B Preferred
held by the Shareholders into Common Stock pursuant to the terms and
provisions of the Company's Certificate of Incorporation, as amended.
Notwithstanding anything to the contrary contained herein, each
Shareholder may, without the consent of the Company or any other person
but so long as it is done in compliance with law, Transfer any or all
of the Subject Shares (or any interest therein): (x) to one or more
members of such Shareholder's family, any trust for the benefit of such
Shareholder or one or more members of such Shareholder's family or any
entity controlled by the Shareholder so long as the Transferee of such
Subject Shares (or such interest therein) agrees to be bound by this
Agreement; (y) in the event the Shareholder is a partnership or limited
liability company, to its members or partners in distribution from the
Shareholder in accordance with its governing documents so long as the
Transferees of such Subject Share (or interest therein) agree to be
bound by this Agreement or (z) to any Affiliate or partnership which is
controlled by or under common control with the Shareholder or by or
among any Tudor Entity. Notwithstanding the foregoing, the provisions
of this Section 3(a) shall terminate if the Company has not consummated
the Financing on or prior to January 31, 2001. For purposes hereof
"Affiliate" shall mean, as to any Shareholder, any other person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with the Shareholder and includes without
limitation, (i) any person who is an officer, director, or direct or
indirect beneficial holder of at least 5% of the then outstanding
capital stock of the Shareholder and any of the Family Members of any
such person, (ii) any person of which the Shareholder and/or its
Affiliates (as defined in clause (i) above), directly or indirectly,
either beneficially own(s) at least 5% of the then outstanding equity
securities or constitute(s) at least a 5% equity participant, (iii) in
the case of a Shareholder who is an individual, Family Members of such
person, and (iv) in the case of the Preferred Shareholders, any
entities for which a Purchaser or any of its Affiliates serve as
general partner and/or investment adviser or in a similar capacity, and
all mutual funds or other pooled investment vehicles or entities under
the control or management of such Preferred Shareholder or the general
partner or investment adviser thereof, or any Affiliate of any of them,
or any Affiliates of any of the foregoing. For purposes hereof, "Family
Members" means, as applied to any individual, any parent, spouse,
child, spouse of child, brother or sister of the individual sharing the
same household as such individual, and each trust created for the
benefit of one or more of such persons and each custodian of property
of one or more such persons and the estate of any such persons. For
purposes hereof "Tudor Entity" shall mean each of the following: Tudor
Private Equity Fund, L.P., Tudor Arbitrage Partners, L.P., Tudor BVI
Futures, Ltd., Raptor Global Fund, L.P., Raptor Global Fund Ltd. and
Raptor Global Portfolio, Ltd., or any funds or other investment
vehicles or entities of which any of the foregoing entities are
Affiliates, or any Affiliate or Affiliated Group of Tudor Investment
Corporation and/or Tudor Global Trading, Inc.
b) Upon the execution of this Agreement, the Company shall
issue to each Shareholder who owns Series B Preferred and who is listed
on Exhibit A, Warrants (the "Warrants") to purchase Common Stock of the
Company. The Warrants shall be in the amounts set forth opposite such
Shareholder's name on Exhibit A, shall remain exercisable for two years
from the date hereof, shall have an exercise price per share equal to
the greater of the Fair Market Value (as defined in the Warrant) or
$2.25, and shall be in the form of Exhibit C hereof.
c) Each Shareholder listed on Exhibit B hereto by signing this
Agreement agrees, severally as to itself and not jointly, to invest the
aggregate dollar amount set forth opposite such Shareholder's name on
Exhibit B in the Financing; provided that the Shareholders shall only
be required to invest to the extent that the terms and conditions
(including but not limited to price, valuation and terms and conditions
in all documents executed in connection with the Financing) of the
Financing are reasonably acceptable to each such Shareholder. Such
Shareholder's investment will be on the same terms and conditions as
other investors in the Financing and shall be contingent upon an
aggregate of $7,000,000 in gross proceeds being raised in the Financing
including amounts listed on Exhibit B.
4. No Voting Rights Conferred; Termination. The Shareholders retain all
voting rights with respect to the Subject Shares and this Agreement does not
obligate the Shareholders to vote for or against a Financing or any other
matter. This Agreement shall terminate upon the announcement by the Company of
any merger or consolidation of the Company or of the sale of all or
substantially all of its assets or any other comparable change-in-control
transaction.
5. Further Assurances. The Shareholders will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as the Company may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
6. Certain Events. The Shareholders agree that this Agreement and the
obligations hereunder shall attach to the Subject Shares and shall be binding
upon any person or entity to which legal or beneficial ownership of such Subject
Shares shall pass, whether by operation of law or otherwise, including such
Shareholder's heirs, guardians, administrators or successors. In the event of
any stock split, stock dividend, merger, reorganization, recapitalization or
other change in the capital structure of the Company affecting the Stock, or the
acquisition of additional shares of Stock or other voting securities of the
Company by the Shareholders, the number of Subject Shares shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Stock or other voting securities of the Company issued
to or acquired by the Shareholders.
7. Indemnification. So long as the Shareholder's representations
contained in Section 2(a) above remain true and correct, the Company shall
indemnify and hold harmless the Shareholders and the Shareholder's Affiliates,
agents, advisers, representatives, employees, officers and directors (the
"Indemnified Parties") against and from any costs, expenses (including
reasonable attorneys' fees), settlement payments, claims, demands, judgments,
fines, penalties, losses, damages and liabilities incurred in connection with
any claim, suit, action or proceeding that arises directly or indirectly from or
relates directly or indirectly to (a) the execution, delivery or performance of
this Agreement, or (b) any of the transactions contemplated by this Agreement.
8. Assignment. Except as otherwise provided herein, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by the Shareholders, without the prior written consent of the Company.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
representatives, executors, administrators, estate, heirs, successors and
assigns.
9. General Provisions.
a) Amendments. This Agreement may not be amended except
by an instrument in writing signed by each of the
parties hereto.
b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to the
Company at its principal executive offices and to the Shareholders at
the Shareholder's address set forth on the signature page attached
hereto (or at such other address for a party as shall be specified by
like notice).
c) Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
d) Counterparts. This Agreement may be executed in
counterparts, all of which shall be deemed to be a single agreement,
and shall be effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other party.
e) Entire Agreement. The Agreement (including the documents
and instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter
hereof.
f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of
Massachusetts regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.
g) No Limitations. Nothing in this Agreement shall, and
nothing in this Agreement shall be deemed to, prevent the Shareholders
from acting in accordance with his fiduciary duties if he, she or it is
a director of the Company or otherwise limit the ability of the
Shareholders to take any action in his, her or its capacity as a
director or officer of the Company, if applicable.
h) Non-Contravention. Nothing contained in this Agreement
shall be deemed to limit or amend any of the rights or provisions of
the Shareholders pursuant to the Shareholders and Rights Agreement
dated February 10, 2000.
10. Enforcement. The parties agree that irreparable damage would occur
in the event of a breach of this Agreement. It is accordingly agreed that the
parties shall be entitled to injunctive relief to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States located in The Commonwealth of Massachusetts
or in a Massachusetts state court, this being in addition to any other remedy to
which they are entitled at law or in equity. Each party (i) consents to the
personal jurisdiction of any court of the United States located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction, (iii)
agrees that such party will not bring any action relating to this Agreement or
the transactions contemplated hereby in any court other than a court of the
United States located in The Commonwealth of Massachusetts or a Massachusetts
state court and (iv) waives any right to trial by jury with respect to any claim
or proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
11. Public Announcement. Except to the extent required by law or
regulation, the Shareholders and the Company shall not issue any press release
or other public statement with respect to this Agreement without the prior
written consent of each party.
12. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.
SOFTLOCK.COM, INC.
By:
Name:
Title:
SHAREHOLDERS:
RAPTOR GLOBAL PORTFOLIO, LTD.
By: Tudor Investment Corporation,
as Investment Advisor
By:
Name:
Title:
ALTAR ROCK FUND, L.P.
By: Tudor Investment Corporation,
as General Partner
By:
Name:
Title:
RC CAPITAL, L.L.C.
By: Ritchie Capital Investments, L.L.C.,
its manager
By: Ritchie Capital Management, L.L.C.,
its manager
By: THR, Inc.
By:
Name:
Title:
RAM TRADING, LTD.
By: Ritchie Capital Management, L.L.C.,
its investment manager
By: THR, Inc.
By:
Name:
Title:
RITCHIE CAPITAL MANAGEMENT, L.L.C.
By: THR, Inc.
By:
Name:
Title:
APEX INVESTMENT FUND IV, L.P.
By: Apex Management IV, L.L.C.,
its General Partner
By:
Name:
APEX STRATEGIC PARTNERS IV, LLC
By: Apex Management IV, LLC, Manager
By:
Name:
Title:
SI VENTURE FUND II, L.P.
By: SI Venture Management II, L.L.C.,
its General Partner
By:
Name:
Title: its Managing Member
<PAGE>
Exhibit A
Shareholder Number of Warrant Shares
Raptor Global Portfolio, Ltd. 746,760
Altar Rock Fund, L.P. 3,240
RC Capital, L.L.C. 100,000
Ram Trading, Ltd. 500,000
Ritchie Capital Management, L.L.C. 100,000
Apex Investment Fund IV, L.P. 181,880
Apex Strategic Partners IV, LLC 5,640
SI Venture Fund II, L.P. 187,520
