EXECUTION COPY
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT ("Agreement") is, dated and effective as of the
30th day of October, 1996, by and among EARTHLINK NETWORK, INC. (the "Company"),
UUNET TECHNOLOGIES, INC. ("UUNET"), and SKY X. XXXXXX, XXXX X. XXXXXXX, XXXXX
X. X'XXXXXXX, XXXXXX XXXXX, XXXXXXX X. XXXXX AND XXXX XXXXXX (each such
stockholder referred to herein as a "Stockholder").
A. This Agreement is the Stockholders Agreement referenced in that
certain Note Purchase Agreement (the "Note Purchase Agreement") of even date
herewith between the Company and UUNET.
B. As a condition to and as further consideration for UUNET entering the
Note Purchase Agreement and consummating the investment transactions
contemplated thereby, the Company and the Stockholders have agreed to execute
and deliver this Agreement for the purpose of agreeing to designate and elect to
the Company's Board of Directors the director nominee to be specified by UUNET
(the "Director Nominee").
NOW THEREFORE, for and in consideration of the mutual representations,
warranties and covenants contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Note Purchase Agreement.
1. STOCKHOLDER REPRESENTATIONS AND WARRANTIES. Each Stockholder hereby
represents and warrants that:
(a) OWNERSHIP OF SHARES. The Stockholder owns his shares of the Company's
common stock, par value $0.01 per share, or, in the case of Quantum
Industrial Partners LDC ("Quantum"), shares of Series A Convertible
Preferred Stock with voting rights (collectively, the "Company Stock"),
free and clear of all liens, restrictions, pledges and encumbrances;
(b) NO TRANSFERS. The Stockholder has made no transfer of Company Stock
since it acquired such stock;
(c) NO VOTING RIGHTS GRANTED. The Stockholder has granted no proxy rights
or other voting rights with respect to any Company Stock; and
(d) NUMBER OF SHARES. The number of shares of Company Stock set forth
beside the Stockholder's name on the signature page hereto represents those
shares of Company
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Stock owned by such Stockholder which are subject to this Agreement.
2. COMPANY REPRESENTATION. A vacancy presently exists on the Board of
Directors of the Company, which vacancy may be filled by a majority of the
members of the Board of Directors.
3. OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS.
(a) DESIGNATION AND NOMINATION OF UUNET NOMINEE. The Company agrees to
take such action as is necessary (i) to cause the Director Nominee to be
designated by a majority of the members of the Board of Directors, as the
person designated to fill the vacancy thereon identified in Section 2
hereof, effective no later than the date of closing of the Note Purchase
Agreement and the date of signing of Addendum No. 1 to The Network Services
Agreement between the Company and UUNET dated October 28, 1996, and (ii) to
cause the Board of Directors to nominate the Director Nominee to stand for
election in subsequent elections of the Board of Directors held during the
term of this Agreement.
(b) ELECTION OF UUNET NOMINEE. Each Stockholder agrees to vote his, her
or its shares of Company Stock in favor of the Director Nominee in any
election of the Board of Directors held during the term of this Agreement.
(c) CONDITION PRECEDENT. If the Closing of the transactions contemplated
by the Note Purchase Agreement (as that term is defined in the Note
Purchase Agreement) shall not occur, this Agreement shall be null and void
and of no effect.
4. AFTER-ACQUIRED STOCK. Whenever, during the term of this Agreement, any
Stockholder acquires any additional shares of Company Stock other than the
shares of Company Stock listed on the signature page hereto, such shares of
Company Stock so acquired shall be subject to all of the terms of this Agreement
to the extent such shares have voting rights.
5. TERMINATION. This Agreement shall terminate on the earlier of (i) the
termination of the Note Purchase Agreement for any reason whatsoever, or (ii)
the consummation of an initial public offering such that the Company becomes a
reporting company under the Securities Exchange Act of 1934, as amended.
6. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given on the date of
delivery if personally delivered, five (5) days after the date of mailing if
mailed by United States certified or registered mail postage prepaid, or one day
after the date deposited with the courier if delivered by Federal Express or
similar overnight courier service, to the parties at the following addresses (or
at such other addresses as shall be given in writing by any party to the other
parties hereto):
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If to EarthLink Network, Inc.
a Stockholder 0000 Xxx Xxxx Xxxxx
or the Company: Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telecopy No.: (000) 000-0000
With a copy to: Hunton & Xxxxxxxx
41st Floor
600 Peachtree Street, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Hobby, Esq.
Telecopy No.: (000) 000-0000
7. BINDING EFFECT, ASSIGNMENT AND AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of and be enforceable against the parties hereto
and their respective executors, legal or personal representatives, heirs,
successors and permitted assigns. This Agreement may not be assigned by any
party without the prior written consent of the other parties hereto. This
Agreement may be amended, supplemented or interpreted only by a written
instrument executed by all the parties hereto.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties concerning the transactions contemplated herein and supersede all prior
agreements or understandings between the parties relating to the subject matter
hereof. No representation, agreement or understanding, written or oral, express
or implied, heretofore made by any party shall be binding upon such party or any
other party hereto unless set forth herein.
9. CAPTIONS AND SECTION HEADINGS. Captions and section headings used herein
are for convenience only and are not a part of this Agreement and shall not be
used in construing it.
10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware.
11. SEVERABILITY. If any one or more of the provisions of this Agreement shall
be determined to be invalid, illegal or unenforceable in any respect for any
reason the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions of this Agreement shall not be
impaired in any way.
12. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[The Next Following Pages are the Signature Pages]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written.
EARTHLINK NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Printed Name: Xxxxxxx X. Xxxxx
----------------------
Title: President and CEO
----------------------------
UUNET TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Printed Name: Xxxxx Xxxxxx
----------------------
Title: V.P
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STOCKHOLDERS:
/s/ Sky X. Xxxxxx
-----------------------------------
Sky X. Xxxxxx (3,000,000 shares)
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx (1,873,095 shares)
/s/ Xxxxx X. X'Xxxxxxx
-----------------------------------
Xxxxx X. X'Xxxxxxx (1,871,046 shares)
/s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxxx Xxxxx (412,513 shares)
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx (50,000 shares)
/s Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx (677,250)
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