STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "Agreement") is made and entered into as
of May 30, 2001, among PeoplePC Inc., a company organized under the laws of
Delaware (the "Company"), @viso Limited, a company organized under the laws of
the United Kingdom ("@viso"), and each party identified on Schedule A attached
hereto (individually, a "Stockholder" and, collectively, the "Stockholders").
All capitalized terms used herein that are not defined herein shall have the
meanings set forth in the Put Option Agreement defined below.
WHEREAS, the Company and @viso have entered into the Put Option
Agreement, as of the date hereof (the "Put Option Agreement"), by and among
the Company, @viso, SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors
Fund LP, SOFTBANK Capital LP, each a Delaware limited partnership, and
PeoplePC Europe N.V., a Dutch Company, pursuant to which the Company has
granted @viso and the SOFTBANK entities named above put options to sell all of
the shares of PeoplePC Europe N.V. held by @viso and the SOFTBANK entities
named above to the Company in exchange for shares of preferred stock or,
following Stockholder Approval, common stock of the Company; and
WHEREAS, each Stockholder owns of record the number of shares of common
stock, par value $0.0001 per share, of the Company (the "Common Stock"), set
forth opposite such Stockholder's name on Schedule A attached hereto (the
"Subject Shares"); and
WHEREAS, as a condition to the effectiveness of the Put Option Agreement,
@viso has requested that each Stockholder enter into this Agreement.
NOW, THEREFORE, to induce @viso to enter into, and in consideration of
its entering into, the Put Option Agreement, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
1.1 "Common Stock" shall mean the Company's common stock, par value
U.S. $0.0001.
1.2 "Exercise Date" shall mean the date on which @viso (i) exercises
the Primary Put Option or (ii) exercises at least US$39,000,000 in value under
the Secondary Put Option.
1.3 "Issuance" shall mean the issuance of up to 32,628,060 shares of
common stock upon the exercise of the Primary Put Option and/or the Secondary
Put Option, as the case may be.
1.4 "Permitted Transferee" shall have the meaning given this term in
Section 11 of the Put Option Agreement.
-1-
1.5 "Primary Put Option" shall have the meaning given such term in
Section 2.1 of the Put Option Agreement.
1.6 The "Designee" shall be Xxxxx Boulben for so long as Mr. Boulben
is employed by Vivendi. In the event Mr. Boulben ceases to be employed by
Vivendi, Vivendi will have the right to determine an alternate designee.
1.7 "Secondary Put Option" shall have the meaning given such term in
Section 2.2 of the Put Option Agreement.
1.8 "Stockholder Approval" shall mean approval of the Issuance by a
majority of the stockholders of the Company by vote, consent or any other
approval.
1.9 "Termination Date" shall mean the date when (i) @viso and its
Permitted Transferees have sold in the aggregate, in one or a series of
transactions, greater than a 40% interest in the Primary Put Option and/or the
Secondary Put Option or greater than 40% of the shares cumulatively received
upon exercise thereof, or (ii) in the event @viso assigns a half interest to
Vivendi pursuant to Section 11 of the Put Option Agreement, the date Vivendi
has sold in the aggregate, in one or a series of transactions, greater than a
40% interest in the portion of the Primary Put Option and/or the Secondary Put
Option assigned to Vivendi or greater than 40% of the shares cumulatively
received upon the exercise of the portion of the Primary Put Option and/or the
Secondary Put Option assigned to Vivendi.
2. Representations and Warranties of each Stockholder. Each Stockholder
hereby represents and warrants that such Stockholder (i) is the beneficial
owner of the Subject Shares set forth opposite such Stockholder's name on
Schedule A, which at the date hereof are free and clear of any liens, claims,
options, charges or other encumbrances; (ii) does not beneficially own any
shares of capital stock of the Company other than the Subject Shares set forth
opposite such Stockholder's name on Schedule A (excluding shares as to which
such Stockholder currently disclaims beneficial ownership in accordance with
applicable law); and (iii) has full power and authority to make, enter into
and carry out the terms of this Agreement.
3. Stockholder Approval. At any meeting of the stockholders of the
Company called to vote upon the Issuance or at any adjournment thereof or in
any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Issuance is sought from the
Company's stockholders in their capacities as such, each Stockholder shall,
including by executing a written consent if requested by @viso, vote (or cause
to be voted) such Stockholder's Subject Shares in favor of the Issuance.
4. Observation Rights. Beginning on the date of this agreement and
continuing until the Exercise Date, Xxxxx Boulben (the "Representative") will
have the right to participate in and attend all meetings of the Board of
Directors of the Company in a non-voting observer capacity. Such
Representative shall continuously serve in this capacity as permitted herein
and shall appoint a substitute representative who is reasonably acceptable to
the Board of Directors only when the Representative is unable to attend
meetings. The Company shall provide notice of and other information with
respect to such meetings as are delivered to the directors of the Company
(including any such information provided in connection with action to be taken
by written consent).
-2-
4.1 The Representative shall maintain the confidentiality of all
financial, confidential and proprietary information of the Company obtained by
him as a result of these rights, and represents and agrees that the
information provided to him by the Company pursuant to these rights shall not
be made available to any competitor or customer of, or vendor to, the Company
or any affiliate or associate of any such entity. Upon the Company's request,
an agreement providing for nondisclosure of the Company's proprietary
information will be executed and signed by the Representative.
4.2 The Company may exclude the Representative from any meetings or
portions thereof if, in the good faith determination of a majority of the
Board of Directors of the Company, (i) the subject matter to be discussed
relates to disputes or negotiations relating to @viso or Vivendi or potential
competitors of @viso or Vivendi, or (ii) if attendance by the Representative
would reasonably be expected to result in waiver or loss of the
attorney-client privilege or other competitive advantage as reasonably
determined by the Company based upon the advice of legal counsel. The Company
will use its best efforts to ensure that any withholding of information or any
restriction on attendance is strictly limited only to the extent necessary as
set forth in the preceding sentence.
4.3 The rights granted in this Section 4 may not be assigned or
otherwise conveyed by the Representative or by any subsequent transferee of
any such rights without the prior written consent of the Company.
4.4 The Company, @viso and each of the Stockholders understand and
agree that notwithstanding anything else in this Section 4 to the contrary,
Vivendi will have the right to designate @viso's designee on the Company's
Board of Directors.
5. Election of Director. Beginning on the Exercise Date and
continuing until the Termination Date, at any annual or special meeting
called, or any other action taken, for the purpose of electing directors to
the Company's Board of Directors, each Stockholder agrees to vote (or cause
the record holder thereof to vote) all of the Subject Shares he, she or it
beneficially owns so as to elect as a director the @viso Designee.
5.1 Beginning on the Exercise Date and continuing until the
Termination Date, at any annual or special meeting called, or any other action
taken, for the purpose of electing directors to the Company's Board of
Directors, the Company agrees to include the @viso Designee as a nominee of
the Company for the Company's Board of Directors, and to solicit proxies in
favor of such election.
5.2 In the event any Designee elected pursuant to Section 5.1 shall
resign or be removed with or without cause from the Board of Directors during
the period beginning on the Exercise Date and continuing until the Termination
Date, each Stockholder will vote the Subject
-3-
Shares to fill such vacancy with a nominee designated in the same manner as
the Designee who held the directorship so vacated.
5.3 This Section 5 shall not extend to voting upon questions and
matters (other than the election of directors and their alternates and any
matters incident to the rights set forth in this Section 5) upon which
stockholders of the Company have a right to vote under the Certificate of
Incorporation or the Bylaws of the Company or under the laws of the State of
Delaware.
6. Sale of Subject Shares. Beginning on the date of this Agreement and
continuing until the Stockholder Approval, each Stockholder 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; provided, however, that notwithstanding
anything to the contrary contained in this Agreement, each Stockholder may,
without the consent of @viso or any other person, transfer any or all of the
Subject Shares (or any interest therein) (i) such that together with all other
Transfers by the Stockholders which have previously taken place do not cause
the aggregate number of Subject Shares to constitute less than either a
majority of the Company's then outstanding capital stock, on a fully-diluted
basis, or a majority of the voting power attributable to all of the Company's
outstanding capital stock, or (ii) if, in connection with such Transfer, the
transferee of the Subject Shares (or such interest therein) agrees to be bound
by the terms of this Agreement, or (iii) pursuant to Section 11 of the Put
Option Agreement.
7. Rights of Co-Sale.
7.1 In the event that @viso or any Stockholder (in this Section 7,
@viso and the Stockholders are collectively referred to as the "Holders")
propose to sell or otherwise transfer any Common Stock to any person or entity
in a transaction that would result in such person or entity, together with its
affiliates or associates, acquiring in excess of 50% of the outstanding voting
securities or voting power of the Company, each Holder, other than a
transferring Holder (a "Transferring Holder") shall have a right of co-sale
(the "Right of Co-Sale") to sell all or part of such Holder's "Pro Rata Share
of Common Stock" (as defined below) of the Common Stock referred to in a
Co-Sale Notice (as defined below) delivered by such Transferring Holder as
provided below.
7.2 A Holder's "Pro Rata Share of Common Stock" shall be equal to
the product of (x) the total number of shares of Common Stock proposed to be
transferred and (y) a fraction, the numerator of which is the number of shares
of Common Stock held by such Holder and the denominator of which is the
aggregate number of shares of Common Stock held by all Holders.
7.3 At least 20 days before the proposed date of a sale or transfer
of Common Stock, the Transferring Holder shall give a written notice (the
"Co-Sale Notice") simultaneously to each of the Holders and the Company in the
manner provided in Section 10.2. The Co-Sale Notice shall describe in detail
the proposed transfer, including, without limitation, the number of shares of
Common Stock proposed to be transferred, the proposed transfer price or
consideration to be paid, the address of the Transferring Holder, and the name
and address of the proposed transferee (the
-4-
"Transferee"). Each Holder shall have the right to sell to the Transferee (or,
upon the unwillingness of any prospective purchaser to purchase directly from
such Holder, to the Transferring Holder) its Pro Rata Share of Common Stock
(determined as of the date the Co-Sale Notice is delivered to the Company)
referred to in the Co-Sale Notice on the terms set forth in the Co-Sale
Notice.
7.4 A Holder shall exercise its Right of Co-Sale by delivering a
notice of exercise of the Right of Co-Sale (the "Election Notice") to the
Transferring Holder within 10 days after the date the Co-Sale Notice has been
deemed delivered from the Transferring Holder to each of the Holders. The
Holder shall specify in the Election Notice the number of shares (up to its
Pro Rata Share of Common Stock) such Holder desires to sell.
7.5 To the extent any Holder elects to sell less than all of its Pro
Rata Share of Common Stock (a "Non-Fully Exercising Holder"), each Holder
electing to sell 100% of its Pro Rata Share of Common Stock (a
"Fully-Exercising Holder") may elect to sell its Pro Rata Share of the Excess
(as defined below) of the Common Stock for which any such Non-Fully Exercising
Holder was entitled to sell but did not sell. A Fully-Exercising Holder's "Pro
Rata Share of the Excess" shall be equal to the product of (i) the total
number of shares of Common Stock that the Non-Fully Exercising Holder is
entitled to transfer minus the number of shares elected to be transferred by
such Non-Fully Exercising Holder and (ii) a fraction, the numerator of which
is the number of shares of Common Stock held by such Fully-Exercising Holder
and the denominator of which is the total number of shares of Common Stock
held by all Fully-Exercising Holders.
7.6 The Transferring Holder shall cause the Pro Rata Share of the
Excess, if any, of each Holder who has exercised its Right of Co-Sale to be
included in the agreement of sale with the Transferees such that the
Transferee shall purchase each Holder's Pro Rata Share of Common Stock and Pro
Rata Share of the Excess, if any, at the same time and on the same terms and
conditions as the Transferee has agreed to purchase the Transferring Holder's
Subject Shares. To the extent that any prospective purchaser or purchasers
prohibits such assignment or otherwise refuses to purchase shares or other
securities from a Holder exercising its Right of Co-Sale hereunder, the
Transferring Holder shall not sell to such prospective purchaser or purchasers
any Common Stock unless and until, simultaneously with such sale, the
Transferring Holder shall purchase the shares or other securities from such
Holder that such Holder is entitled to sell pursuant to its Right of Co-Sale
for the same consideration and on the same terms and conditions as the
proposed transfer described in the Co-Sale Notice.
7.7 To the extent the Holders fail to exercise the Right of Co-Sale
with respect to the Common Stock covered by the Co-Sale Notice, the
Transferring Holder may, not later than 90 days following delivery to each of
the Holders of the Co-Sale Notice, conclude a transfer of the Common Stock
covered by the Co-Sale Notice on terms and conditions not more favorable to
the transferor than those described in the Co-Sale Notice. Any proposed
transfer on terms and conditions more favorable than those described in the
Co-Sale Notice, as well as any subsequent proposed transfer of any of the
Common Stock by any Holder, shall again be subject to the Right of Co-Sale.
-5-
8. Certain Events. Each Stockholder agrees 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 Stockholder'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 Company's Common Stock, the number of Subject Shares shall be
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Common Stock or other voting securities of
the Company issued to or acquired by each Stockholder.
9. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party to this Agreement,
without the prior written consent of all parties to this Agreement. 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.
10. General Provisions.
10.1 Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
10.2 Notices. Any notice required or permitted hereunder shall be
given in writing and shall be conclusively deemed effectively given upon
personal delivery or when deposited with a nationally recognized courier
service for next day delivery, addressed to the Company at the Company's
address shown below, addressed to @viso at @viso's address shown below, or
addressed to a Stockholder at such person's address as shown on Schedule A.
Notwithstanding the foregoing, all notices to addresses outside the United
States shall be sent by telecopier with confirming personal delivery sent by
courier service. Notices sent by telecopier with written confirmation shall be
deemed effectively given at the earlier of (i) 24 hours after confirmation of
transmission by the sending telecopier machine or (ii) delivery of written
confirmation.
Company's Address:
PeoplePC Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Tel. (000) 000-0000
Fax. (000) 000-0000
Attention: Chief Financial Officer
-6-
or to such other address as the Company shall have furnished to
@viso and the Stockholders, with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
@viso's Address:
@viso Limited
c/o MacFarlanes
00 Xxxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
Tel. 00 000 000 0000
Fax. 00 000 000 0000
Attention: Xxxxxxx Xxxxxx
or to such other address as @viso shall have furnished to the
Company and to Stockholders, with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Fax: (000) 000-0000
10.3 Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section to this Agreement unless
otherwise indicated. 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."
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be deemed to be one and the same agreement.
This Agreement shall become
-7-
effective when one or more of the counterparts have been signed by each of the
parties and delivered to each of the other parties, it being understood that
each party need not sign the same counterpart.
10.5 Entire Agreement; No Third-Party Beneficiaries. The Agreement
(including the documents and instruments referred to herein) (i) 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, including the Memorandum of Agreement, dated February 16, 2001, by and
among PeoplePC Inc., PeoplePC Europe N.V., Softbank Technology Ventures IV
L.P., Softbank Technology Advisors Fund L.P., @viso Limited, SOFTBANK Capital
Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors Fund LP, and
(ii) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder, except that Vivendi shall be a beneficiary
of the provision granting Vivendi the right to appoint a representative to the
Company's Board of Directors with the right to enforce its rights thereunder
in accordance with Section 4.2 hereof.
10.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware regardless of the laws that
might otherwise govern under applicable principles of conflicts of law
thereof.
10.7 No Limitations. Nothing in this Agreement shall, and nothing in this
Agreement shall be deemed to, prevent a Stockholder from acting in accordance
with his fiduciary duties as a director of the Company or otherwise limit the
ability of a Stockholder to take any action in his capacity as a director or
officer of the Company.
10.8 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed
in accordance with its specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions 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 State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
10.9 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.
-8-
IN WITNESS WHEREOF, PeoplePC and @viso have caused this Stockholder
Agreement to be signed by their officers thereunto duly authorized and each
Stockholder has signed this Stockholder Agreement, all as of the date first
written above.
PeoplePC, Inc. @VISO LIMITED
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxx Boulben
----------------------------- -----------------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxx Boulben
--------------------------- ---------------------------------
Title: CEO Title: Director
-------------------------- --------------------------------
SOFTBANK Capital Partners LP
SOFTBANK Capital
LP SOFTBANK Capital Advisors Fund LP
By: SOFTBANK Capital Partners LLC
its General Partner
Name: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Title: Administrative Member Representative
--------------------------------
SOFTBANK Technology Ventures IV L.P.
SOFTBANK Technology Advisors Fund L.P.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
---------------------------------
Title:
--------------------------------
/s/ Xxxxxxxx Xxxxx
----------------------------------------
Xxxxxxxx Xxxxx
SCHEDULE A TO STOCKHOLDER AGREEMENT
Name and Address of Stockholder Number of Shares
of Common Stock
Owned of Record
Entities Associated with SOFTBANK Capital Partners
SOFTBANK Capital Partners LP 11,550,865
SOFTBANK Capital Advisors Fund LP 326,037
SOFTBANK Capital LP 11,352,300
SOFTBANK Capital Partners LLC
c/o Xxxxxx X. Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Entities Associated with SOFTBANK Technology
SOFTBANK Technology Ventures IV LP 17,642,350
SOFTBANK Technology Advisors II LP 334,654
SOFTBANK Corp.
c/o Xxxxxxx X. Xxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Xxxx Xxxxx 22,270,000
PeoplePC Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
