Stockholders and Voting Agreement - Alloy Designs Inc.
STOCKHOLDERS AND VOTING AGREEMENT
Agreement made as of this 30th day of June, 1997, by and among (i) Alloy
Designs, Inc., a Delaware Corporation (the "Company"), (ii) the stockholders
named on Schedule I hereto, (iii) each of the persons who shall, after the date
hereof, acquire or receive the right to acquire any shares of capital stock of
the Company and join in and become a party to this Agreement by executing and
delivering to the Company an Accession Agreement in the form of Schedule II
hereto (each of the aforementioned persons in (ii) and (iii) being hereinafter
referred to collectively as the "Stockholders" and singularly as a
"Stockholder"), and (iv) Samuel A. Gradess, James K. Johnson, and Matthew
Diamond (collectively, the "Founders").
WHEREAS, the Company has issued, effective the date hereof, shares of
common stock, $.01 par value per share ("Common Stock") of the Company in the
amounts and to the Stockholders listed on Schedule I hereto (such shares,
together with any after acquired shares as provided in Section 1 hereof, the
"Shares"); and
WHEREAS, the parties hereto desire to promote their mutual interests and
the interests of the Company by providing in this Agreement for the terms and
conditions governing the transfer of the Shares and with respect to the voting
of the Shares.
NOW THEREFORE, in consideration of these premises and of the stipulations
hereinafter recited, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby agree
as follows:
1. GENERAL PROVISIONS
1.1 Shares Subject to this Agreement. The Stockholders expressly agree
that the terms and restrictions of this Agreement shall apply to all shares of
capital stock of the Company which any of them now owns or hereafter acquires by
any means, including without limitation by purchase, assignment or operation of
law, or as a result of any stock dividend, stock split, reorganization,
reclassification, whether voluntary or involuntary, or other similar
transaction, and to any shares of capital stock of any successor in interest of
the Company, whether by sale, merger, consolidation or other similar
transaction, or by purchase, assignment or operation of law.
1.2 No Partnership Relationship. Notwithstanding, but not in limitation
of, any other provision of this Agreement, the parties understand and agree that
the creation, management and operation of the Company shall not create or imply
a general partnership between or among the Stockholders and shall not make any
Stockholder the agent or partner of any other Stockholder for any purpose.
2. RESTRICTIONS ON TRANSFER
2.1 Non-complying Transfers Prohibited. Except as provided in this
Agreement, no Stockholder may sell, assign, transfer, exchange, gift, devise,
pledge, hypothecate, encumber
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or otherwise alienate or dispose of any Shares now owned by such Stockholder or
owned by him or her during the term of this Agreement, or any right or interest
therein, whether voluntarily or involuntarily, by operation of law or otherwise,
except in accordance with this Agreement. Any such purported transfer in
violation of any provision of this Agreement and all actions by the purported
transferor and transferee in connection therewith shall be of no force or effect
and the Company shall not be required to recognize such purported transfer for
any purpose, including without limitation for purposes of dividend and voting
rights.
2.2 Rights of First Refusal on Voluntary Transfers.
2.2.1 Right of First Refusal of the Company. Any Stockholder who
intends to sell, assign, transfer or otherwise voluntarily alienate or dispose
of any Shares (the "Selling Stockholder") shall, prior to any such transfer,
give written notice (the "Selling Stockholder's Notice") of such intention to
the Company. The Selling Stockholder's Notice shall include the name of the
proposed transferee, the proposed purchase price per Share, the terms of payment
of such purchase price and all other matters relating to such sale and shall be
accompanied by a copy of a binding written agreement of the proposed transferee
to purchase such Shares from the Selling Stockholder. The Selling Stockholder's
Notice shall constitute a binding offer by the Selling Stockholder to sell to
the Company such number of Shares (the "Offered Shares") then owned by the
Selling Stockholder as are proposed to be sold in the Selling Stockholder's
Notice at the monetary price per Share designated in the Selling Stockholder's
Notice, payable as provided in Section 2.2.3 hereof. Not later than sixty (60)
days after receipt of the Selling Stockholder's Notice, the Company shall
deliver written notice (the "Company's Notice") to the Selling Stockholder
stating whether the Company has accepted the offer stated in the Selling
Stockholder's Notice. The Company may only accept the offer of the Selling
Stockholder in whole and may not accept such offer in part. If the Company
accepts the offer of the Selling Stockholder, the Company's Notice shall fix a
time, location and date for the closing of such purchase, which date shall be
not less than ten (10) nor more than sixty (60) days after delivery of the
Company's Notice.
2.2.2 Right of First Refusal of the Founders. If the Company fails
to accept the offer stated in the Selling Stockholder's Notice within the
sixty-day period provided in Section 2.2.1, the Founders (the "Buying
Stockholders") shall have the right to purchase the Offered Shares, at the
monetary price per Share designated in the Selling Stockholder's Notice, payable
as provided in Section 2.2.3. Not later than thirty (30) days after the
expiration of the sixty-day period described in Section 2.2.1, the Buying
Stockholders shall deliver to the Selling Stockholder a written notice (the
"Buying Stockholders' Notice") stating whether the Buying Stockholders have
accepted the offer stated in the Selling Stockholder's Notice. The Buying
Stockholders may only accept the offer of the Selling Stockholder in whole and
may not accept such offer in part. If the Buying Stockholders accept the offer
of the Selling Stockholder, the Buying Stockholders' Notice shall fix a time,
location and date for the closing of such purchase, which date shall be not less
than ten (10) nor more than sixty (60) days after delivery of the Buying
Stockholders' Notice. Unless otherwise agreed between or among the Buying
Stockholders, the purchase by the Buying Stockholders shall be pro rata to their
then holdings of Shares; provided, that if one or more of the Buying
Stockholders elects not to purchase any Offered Shares, the remaining Buying
Stockholders may purchase all of the
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Offered Shares without the consent of any non-purchasing Stockholders, pro rata
between or among them or in such other manner as they may agree.
2.2.3 Closing. The place for the closing of any purchase and sale
described in Section 2.2.1 or Section 2.2.2 shall be the principal office of the
Company or at such other place as the parties shall agree. At the closing, the
Selling Stockholder shall accept payment on the terms offered by the proposed
transferee named in the Selling Stockholder's Notice; provided, however, that
the Company and the Buying Stockholders shall not be required to meet any
non-monetary terms of the proposed transfer, including, without limitation,
delivery of other securities in exchange for the Shares proposed to be sold. At
the closing, the Selling Stockholder shall deliver to the Company or the Buying
Stockholders, as the case may be, in exchange for Shares purchased and sold at
the closing, certificates for the number of Shares stated in the Selling
Stockholder's Notice, accompanied by duly executed instruments of transfer.
2.2.4 Transfers to Third Parties. If the Company and the Buying
Stockholders fail to accept the offer stated in the Selling Stockholder's
Notice, then the Selling Stockholder shall be free to sell all, but not less
than all, of the Offered Shares to the designated transferee at a price and on
terms no less favorable to the Selling Stockholder than described in the Selling
Stockholder's Notice; provided, however, that such sale is consummated within
ninety (90) days after the later of the giving of the Selling Stockholder's
Notice to the Company and, if applicable, to the Buying Stockholders. As a
condition precedent to the effectiveness of a transfer pursuant to this Section
2.2.4, the proposed transferee(s) shall agree in writing prior to such transfer
to become a party to this Agreement and shall thereafter be permitted to
transfer Shares only in accordance with this Agreement.
2.3 Transfers to Permitted Transferees. The restrictions on transfer
contained in Section 2.1 hereof shall not apply to (a) transfers by a
Stockholder to the trustee or trustees of a trust for the benefit of his or her
immediate family, (b) transfers by a Stockholder to his or her guardian or
conservator, (c) or transfers by a Stockholder, in the event of his or her
death, to his or her executor(s) or administrator(s) or to trustee(s) under his
or her will (collectively, "Permitted Transferees"); provided, however, that in
any such event the Shares so transferred in the hands of each such Permitted
Transferee shall remain subject to this Agreement, and each such Permitted
Transferee shall so acknowledge in writing as a condition precedent to the
effectiveness of such transfer.
VOTING
3.1 Grant of Proxy. By his or her execution hereof, each of the
Stockholders hereby grants to the Founders an irrevocable proxy, with full power
of substitution, to vote all of the Shares held by him or her or to execute and
deliver written consents on all matters submitted to the stockholders of the
Company with respect to his or her Shares in such manner as the Founders in
their sole discretion shall determine. The Founders shall have full power and
authority to do and perform each and every act and thing whether necessary or
desirable to be done, as fully as such Stockholder might or could do if
personally present at a stockholders' meeting or personally providing or
withholding such consent. The Founders may adopt their
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own rules of procedure and are authorized to vote or act in person or by proxy
at any and all regular and special meetings of the stockholders of the Company
for whatever purpose called or held, or in connection with any proceedings
wherein the vote or written consent of the stockholders may be required or
authorized. Each Stockholder hereby affirms that this proxy is given as a
condition to his or her receipt of the Shares and as such is coupled with an
interest and will not be revocable or revoked by him or her during the term of
this Agreement.
3.2 Notice of Meeting or Consent. The Company agrees that during the term
of this Agreement it will provide written notice to the Founders with respect to
all proposals to be submitted to a vote of stockholders at a special or annual
meeting of the Company or all proposals as to which the consents of the
stockholders of the Company are being sought, as if he/she were a stockholder of
the Company in the manner provided under the Company's Certificate of
Incorporation and By-Laws or as written notice is otherwise provided to other
holders of the Company's voting capital stock.
3.3 Dividends. This Agreement shall only effect the Stockholders' right to
vote the Shares at a special or annual meeting of the Company or consent to
proposals otherwise presented to stockholders of the Company. Nothing herein
shall restrict the Stockholders from receiving payments of dividends or other
distributions from the Company with respect to the Shares.
3.4 Resignation and Replacement of Founders. If any of the Founders dies,
becomes disabled or resigns as proxyholder [or is no longer an officer or
director of the Company], the remaining Founder(s) shall be entitled to exercise
all of the powers and rights granted to the Founders hereunder without any
further action or formality. If none of the Founders is entitled to act as
proxyholder under this Agreement either due to death, disability or resignation
[or because none of the Founders is an officer or director of the Company], the
Stockholders, by vote of a majority in interest of their Shares shall designate
a replacement proxyholder hereunder. Upon such replacement, such proxyholder
shall be entitled to exercise all of the powers and rights granted to the
Founders hereunder without any further action or formality.
3.5 Effect of Votes. Each Stockholder covenants and agrees that, on any
proposal upon which the Founders are empowered to vote Shares pursuant hereto,
whether at a meeting of stockholders or by written consent, such voting will be
as fully effective as if such votes had been cast by such Stockholder without
regard hereto. Without limiting the generality of the foregoing, each
Stockholder agrees that he or she will not, with respect to any proposal upon
which such votes may be cast, make any claim against the Company, its other
stockholders, directors, officers, employees, agents or representatives in his
or her capacity as a stockholder of the Company, including but not limited to
any claim for an appraisal with respect to any Shares.
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Individual Stockholders. Each
Stockholder who is an individual hereby represents and warrants to the Company
and to each other Stockholder as follows:
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(a) Absence of Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation of, or default under, or conflict with, or require any
consent under any term or provision of any contract, commitment, indenture,
lease or other agreement to which such Stockholder is a party or by which such
Stockholder or any of his or her assets is bound.
(b) Binding Obligation. This Agreement constitutes a valid and binding
obligation of such Stockholder, enforceable in accordance with its terms, except
to the extent that such enforceability may be limited by bankruptcy, insolvency
and similar laws affecting the rights and remedies of creditors generally, and
by general principals of equity and public policy.
5. MISCELLANEOUS
5.1 Term. This Agreement shall remain in full force and effect until
terminated upon the earlier to occur of the closing of the sale of the Company
by stock purchase, exchange, merger, sale of all or substantially all of the
Company's assets or the dissolution and liquidation of the Company.
5.2 Legend Required. Each certificate representing Shares shall bear the
following legend during the term of this Agreement:
"The shares represented by this certificate are subject to a Stockholders
and Voting Agreement dated as of June 30, 1997, a copy of which Stockholders and
Voting Agreement is available for inspection at the offices of the Company or
will be furnished upon request of the record owner of the shares represented by
this certificate."
5.3 Enforcement. Each Stockholder acknowledges that immediate and
irreparable damage would occur in the event that he or she fails to perform the
provisions of this Agreement in accordance with their specific terms or if he or
she otherwise breaches this Agreement. Accordingly, in addition to any other
remedy, the Company shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement by the Stockholder and to enforce specifically the
terms and provisions hereof in any federal or state court jurisdiction.
5.4 Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral.
5.5 Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered or certified mail, return receipt requested, postage prepaid.
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If to the Company:
Alloy Designs, Inc.
_______________________________
_______________________________
Attn: _________________________
Telecopier No.: _______________
If to the Stockholders:
To the address indicated on the signature pages hereto.
If to the Founders:
Samuel A. Gradess
James K. Johnson
Matthew Diamond
c/o Alloy Designs, Inc.
_______________________________
Attn: _________________________
Telecopier No.: _______________
All notices, requests, consents and other communications hereunder shall
be deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the fifth business day following the day such mailing is
made.
5.6 Severability. In the event that any court having jurisdiction shall
determine that any provision contained in this Agreement shall be unreasonable
or unenforceable in any respect, then such covenant or other provision shall be
deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such covenant or other provision wholly
unenforceable, the remaining covenants and other provisions of this Agreement
shall nevertheless remain in full force and effect.
5.7 Further Agreements. Each of the parties hereto shall execute such
documents and take such further actions as may be reasonably required or
desirable to carry out the provisions of this Agreement and the transactions
contemplated hereby.
5.8 Assignment. This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of the other party hereto.
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5.9 Parties in Interest. This Agreement shall be binding upon the heirs,
legatees and devisees, executors, administrators, legal representatives,
successors and assigns of the Company, the Stockholders and the Founders.
Nothing herein, either express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement. Nothing in this Agreement shall be construed to create any
rights or obligations except among the parties hereto, and no person or entity
shall be regarded as a third-party beneficiary of this Agreement.
5.10 Interpretation. The parties hereto acknowledge and agree that: (i)
each party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.
5.11 Amendment; Waiver. This Agreement may not be amended or modified
except by an instrument in writing signed by the parties hereto. The terms and
provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by written document executed by the party entitled to
the benefits of such terms or provisions. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other
terms or provisions of this Agreement, whether or not similar. Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.
5.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Delaware, without giving effect to the
conflict of law principles thereof.
5.13 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Stockholders and
Voting Agreement to be executed and delivered under seal as of the date first
written above.
ALLOY DESIGNS, INC.
By:________________________________
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FOUNDERS
___________________________________
Samuel A. Gradess
___________________________________
James K. Johnson
___________________________________
Matthew Johnson
[See attached counterpart signature pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders and
Voting Agreement to be executed and delivered under seal as of the date first
written above.
STOCKHOLDER
________________________________
Signature
________________________________
Print Name
Address:
________________________________
________________________________
________________________________
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Schedule I
Stockholders
Stockholder Name and Address No. of Shares Owned
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Schedule II
ACCESSION AGREEMENT
Reference is made to the Stockholders and Voting Agreement dated as of
_____________, 1997 (the "Stockholders and Voting Agreement"), by and among (i)
Alloy Designs, Inc., a Delaware Corporation (the "Company"); (ii) the
stockholders named on Schedule I to the Stockholders and Voting Agreement, (iii)
each of the persons who shall, after the date hereof, acquire or receive the
right to acquire any shares of capital stock of the Company and join in and
become a party to the Stockholders and Voting Agreement by executing and
delivering to the Company an Accession Agreement in the form of Schedule II to
the Stockholders and Voting Agreement, and (iv) Samuel A. Gradess, James K.
Johnson, and Matthew Diamond. All capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Stockholders and Voting
Agreement.
Pursuant to a vote of the Board of Directors of the Company dated as of
_______________, the Company is issuing to the undersigned purchaser (the
"Investor") shares of the Company's ___________________, in the aggregate amount
of ________ shares. By execution and delivery of this Accession Agreement, the
Investor agrees to be bound by the terms and conditions of the Stockholders and
Voting Agreement. Upon such execution and delivery, the Investor shall be deemed
to be a "Stockholder" (as such term is defined in the Stockholders and Voting
Agreement) for all purposes of the Stockholders and Voting Agreement effective
the date hereof and Schedule I to the Stockholders and Voting Agreement shall be
revised to reflect the Investor's admission to the Stockholders and Voting
Agreement.
This Accession Agreement may be executed in one or more counterparts, and
by different parties hereto on separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, this Accession Agreement has been duly executed under
seal by the Investor as of this ____ day of ______, 199_.
________________________________
Investor Signature
________________________________
Print Name
Address:
________________________________
________________________________
________________________________
Agreed to and Accepted:
Alloy Designs, Inc.
By: ________________________________
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