STOCKHOLDER AGREEMENT
This
Stockholder Agreement (this “Agreement”) is entered into as of September 26,
2007 by and among Traffix, Inc., a Delaware corporation (“Company”), and the
other parties listed on Exhibit 1 hereto (each a “Stockholder” and,
collectively, the “Stockholders”) of New Motion, Inc., a Delaware corporation
(the “Parent”).
PREAMBLE
A. Parent,
NM Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of
Parent (“Merger Co.”), and the Company are parties to an Agreement and Plan of
Merger dated of even date herewith (such Agreement and Plan of Merger, as
amended from time to time, the “Merger Agreement”). Any capitalized term used
but not defined herein shall have meaning ascribed to such term in the Merger
Agreement.
B. The
Merger Agreement provides, among other things, that Merger Co. shall merge
with
and into the Company (the “Merger”), upon the terms and subject to the
conditions set forth in the Merger Agreement.
C. Each
Stockholder owns beneficially and of record that number of shares of the
Parent’s common stock, par value $0.01 per share (the “Parent Common Stock”),
opposite his or her or its name set forth on Exhibit
1
hereto
(the “Initial Stockholder Shares”).
D. As
a
condition to the willingness of Company to enter into the Merger Agreement,
and
as an inducement to it to do so, each Stockholder has agreed to vote all the
Initial Stockholder Shares and all other shares of Parent Common Stock acquired
by such Stockholder in any capacity after the date hereof and prior to the
termination of this Agreement in accordance with its terms, whether upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, by means of purchase, dividend,
distribution or otherwise, and that are owned by such Stockholder on the record
date of the meeting of Parent stockholders to approve the Merger Agreement
(collectively, the “Stockholder Shares” of such Stockholder), in favor of
approval and adoption of the Merger Agreement.
Therefore,
the parties hereby agree as follows, intending to be legally bound:
AGREEMENT
ARTICLE
I
CONSENT
AND VOTING
SECTION
1.1. Voting.
Each
Stockholder hereby revokes any and all previous proxies granted with respect
to
its Stockholder Shares. By entering into this Agreement, each Stockholder hereby
consents to the Merger Agreement and the transactions contemplated thereby,
including the Merger. So long as this Agreement is in effect and has not been
terminated, each Stockholder hereby agrees (i) to vote all Stockholder Shares
now or hereafter acquired by each Stockholder in favor of adoption of the Merger
Agreement and
approval of the Merger and the other transactions contemplated thereby and
(ii)
to oppose any Acquisition Proposal and to vote all Stockholder Shares now or
hereafter acquired by such Stockholder against (a) any transaction arising
out
of or relating to an Acquisition Proposal and against any Acquisition Proposal,
(b) any merger agreement or merger (other than the Merger Agreement and the
Merger), consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Parent,
and (c) any amendment to the Parent’s certificate of incorporation or the
Parent’s by-laws or other proposal or transaction involving the Parent or any
subsidiary of the Parent, which amendment or other proposal or transaction
would
in any manner impede, frustrate, prevent or nullify any provision of the Merger
Agreement, the Merger or any other transaction contemplated thereby or change
in
any manner the voting rights of any class of the Parent’s capital stock. No
Stockholder shall commit or agree to take any action inconsistent with the
foregoing.
SECTION
1.2 Proxy.
In
order to fully implement the agreement of each Stockholder set forth in Section
1.1 above, each Stockholder hereby irrevocably appoints Company, with full
power
of substitution (Company and its substitutes being referred to herein as the
“Proxy”), as the true and lawful attorney and proxy of such Stockholder to vote
all Stockholder Shares of such Stockholder on matters as to which such
Stockholder is entitled to vote at a meeting of the stockholders of the Parent
or to which such Stockholder is entitled to express consent or dissent to
corporate action in writing without a meeting, in the Proxy’s absolute, sole and
binding discretion, on the matters specified in Section 1.1 above. Each
Stockholder agrees that the Proxy may, in such Stockholder’s name and stead, (i)
attend any annual or special meeting of the stockholders of the Parent and
vote
all Stockholder Shares of such Stockholder at any such annual or special meeting
as to the matters specified in Section 1.1 above, and (ii) execute with respect
to all Stockholder Shares of such Stockholder any written consent to, or dissent
from, corporate action respecting any matter specified in Section 1.1 above.
Such Stockholder agrees to refrain from (A) voting the Stockholder Shares of
such Stockholder at any annual or special meeting of the stockholders of the
Parent in any manner inconsistent with the terms of this Agreement, (B)
executing any written consent in lieu of a meeting of the stockholders of the
Parent in any manner inconsistent with the terms of this Agreement, (C)
exercising any rights of dissent with respect to the Stockholder Shares of
such
Stockholder, and (D) granting any proxy or authorization to any person with
respect to the voting of the Stockholder Shares of such Stockholder, except
pursuant to this Agreement, or taking any action contrary to or in any manner
inconsistent with the terms of this Agreement. Each Stockholder agrees that
this
grant of proxy and appointment of attorney is irrevocable and coupled with
an
interest and agrees that the person designated as Proxy pursuant hereto may
at
any time name any other person as its substituted Proxy to act pursuant hereto,
either as to a specific matter or as to all matters.
SECTION
1.3. Transfer.
(a)
Until this Agreement is terminated, each Stockholder shall not directly or
indirectly (i) offer to sell, sell short, transfer (including gift), assign,
pledge or otherwise dispose of or transfer (each, a “Transfer”) any interest in,
or encumber with any Lien (as defined below), any of the Stockholder Shares
of
such Stockholder, (ii) enter into any contract, option, put, call, “collar” or
other agreement or understanding with respect to any Transfer of any or all
of
the Stockholder Shares of such Stockholder or any interest therein; (iii)
deposit the Stockholder Shares of such Stockholder into a voting trust or enter
into a voting agreement or arrangement with respect thereto; or (iv) take any
other action with respect to the Stockholder Shares of such Stockholder that
would in any way restrict, limit or interfere with the performance of its
obligations hereunder.
(b)
Each
Stockholder agrees to place the following legend on any and all certificates
evidencing the Stockholder Shares of such Stockholder:
2
THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER PURSUANT TO THAT STOCKHOLDER AGREEMENT BY AND AMONG
TRAFFIX, INC. AND CERTAIN STOCKHOLDERS. ANY TRANSFER OF SUCH SHARES OF COMMON
STOCK IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND
OF
NO EFFECT WHATSOEVER.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
OF
THE
STOCKHOLDERS
Each
Stockholder, severally and not jointly, represents and warrants to Company
that:
SECTION
2.1. Ownership.
Such
Stockholder is the sole, true, lawful record and beneficial owner of the
Stockholder Shares of such Stockholder and that there are no restrictions on
voting rights or rights of disposition pertaining to the Stockholder Shares
of
such Stockholder. Such Stockholder will convey good and valid title to the
Stockholder Shares owned by such Stockholder being acquired pursuant to the
Merger free and clear of any and all liens, restrictions, security interests
or
any encumbrances whatsoever, other than restrictions under applicable securities
laws (collectively, “Liens”). None of the Stockholder Shares of such Stockholder
is subject to any voting trust or other agreement, arrangement or restriction
with respect to the voting thereof.
SECTION
2.2. Authority
and Non-Contravention.
(a) The
execution, delivery and performance by such Stockholder of this Agreement and
the consummation of the transactions contemplated hereby (i) are within such
Stockholder’s power and authority, have been duly authorized by all necessary
action (including any consultation, approval or other action by or with any
other person), (ii) require no action by or in respect of, or filing with,
any
governmental body (except as may be required under the Securities Exchange
Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
“Exchange Act”)), and (iii) do not and will not contravene or constitute a
default under, or give rise to a right of termination, cancellation or
acceleration of any right or obligation of such Stockholder or to a loss of
any
benefit of such Stockholder under, any provision of applicable law or regulation
or any agreement, judgment, injunction, order, decree, or other instrument
binding on such Stockholder or result in the imposition of any Lien on any
assets of such Stockholder.
(b)
If
such Stockholder is married and the Stockholder Shares of such Stockholder
constitute community property or otherwise are owned or held in a manner that
requires spousal or other approval for this Agreement to be legal, valid and
binding, this Agreement has been duly consented to and delivered by such
Stockholder’s spouse or the person giving such approval, and is enforceable
against such spouse or person in accordance with its terms.
(c)
If
such Stockholder is an entity, such Stockholder (i) is duly organized and
validly existing under the laws of its jurisdiction of organization and (ii)
has
all requisite corporate, limited liability company or partnership power and
authority, as applicable, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.
SECTION
2.3. Binding
Effect.
This
Agreement has been duly executed and delivered by such Stockholder and is the
valid and binding agreement of such Stockholder, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors’ rights
generally.
3
SECTION
2.4. Total
Shares.
The
Stockholder Shares owned by such Stockholder are the only shares of Parent
Common Stock beneficially owned by such Stockholder and, except as set forth
in
the disclosure schedule to this Agreement, such Stockholder has no option to
purchase or right to subscribe for or otherwise acquire any securities of the
Parent and has no other interest in or voting rights with respect to any other
securities of the Parent.
SECTION
2.5. Finder’s
Fees.
No
investment banker, broker or finder is entitled to a commission or fee from
Purchaser or the Parent in respect of this Agreement based upon any arrangement
or agreement made by or on behalf of such Stockholder.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
OF
COMPANY
Company
represents and warrants to each Stockholders that:
SECTION
3.1. Corporate
Power and Authority; Noncontravention.
Company
has all requisite corporate power and authority to enter into this Agreement
and
to perform its obligations hereunder. The execution, delivery and performance
by
Company of this Agreement and the consummation by Company of the transactions
contemplated hereby (i) have been duly authorized by all necessary corporate
action on part of Company, (ii) require no action by or in respect of, or filing
with, any governmental body (except as may be required under the Exchange Act),
and (iii) do not and will not contravene or constitute a default under, the
certificate of incorporation or by-laws of Company or any provision of
applicable law or regulation or any, judgment, injunction, order, decree,
material agreement or other material instrument binding on Company.
SECTION
3.2. Binding
Effect.
This
Agreement has been duly executed and delivered by Company and is a valid and
binding agreement of Company, enforceable against Company in accordance with
its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors’ rights generally.
ARTICLE
IV
ADDITIONAL
AGREEMENTS
SECTION
4.1. No
Solicitation.
Each
Stockholder hereby covenants and agrees that: from the date of this Agreement
until the earlier of (x)
the
Effective Time and (y)
the
termination of this Agreement in accordance with its terms, such Stockholder
shall not (and it will not permit any of its officers, directors, agents or
affiliates to) directly or indirectly (i) solicit, engage in discussions or
negotiate with any person (whether such discussions or negotiations are
initiated by such Stockholder, the Parent or otherwise) or take any other action
intended or designed to facilitate the efforts of any person (other than
Company) relating to any Acquisition Proposal, (ii) provide information with
respect to the Parent to any person, other than Company, relating to a possible
Acquisition Proposal by any person, other than Company, or (iii) enter into
an
agreement with any person, other than Company, relating to a possible
Acquisition Proposal. Such Stockholder shall promptly advise Company orally
and
in writing of any proposal or inquiry made to such Stockholder with respect
to
or that could lead to any Acquisition Proposal, the identity of the person
making such Acquisition Proposal and the material terms of any such Acquisition
Proposal or inquiry.
4
ARTICLE
V
MISCELLANEOUS
SECTION
5.1. Expenses.
All
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such expenses.
SECTION
5.2. Further
Assurances.
Company
and the Stockholder will execute and deliver or cause to be executed and
delivered all further documents and instruments and use its reasonable best
efforts to secure such consents and take all such further action as may be
reasonably necessary in order to consummate the transactions contemplated hereby
and by the Merger Agreement.
SECTION
5.3. Additional
Agreements.
Subject
to the terms and conditions of this Agreement, each of the parties hereto agrees
to use all reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations and that may be required under any agreements,
contracts, commitments, instruments, understandings, arrangements or
restrictions of any kind to which such party is a party or by which such party
is governed or bound, to consummate and make effective the transactions
contemplated by this Agreement.
SECTION
5.4. Specific
Performance.
The
parties acknowledge and agree that performance of their respective obligations
hereunder will confer a unique benefit on the other and that a failure of
performance will not be compensable by money damages. The parties therefore
agree that this Agreement shall be specifically enforceable and that specific
enforcement and injunctive relief shall be available to Company or the
Stockholders for any breach by the other party or parties of any agreement,
covenant or representation hereunder.
SECTION
5.5. Notices.
All
notices, requests, clauses, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
sent by facsimile (with confirmation) or sent by overnight or same-day courier
(providing proof of delivery) to Company in accordance with Section 8.2 of
the
Merger Agreement and to each Stockholder at its address set forth on
Exhibit
1
hereto
(or at such other address as shall be specified by like notice).
SECTION
5.6. Survival
of Representations and Warranties.
None of
the representations and warranties contained in this Agreement shall survive
the
Effective Time.
SECTION
5.7. Amendments;
Termination.
This
Agreement may not be modified, amended, altered or supplemented, except upon
the
execution and delivery of a written agreement executed by the parties hereto.
This
Agreement shall terminate upon the earliest of (i) the Effective Time and
(ii) the termination of the Merger Agreement in accordance with its terms,
other than with respect to the liability of any party for breach hereof prior
to
such termination; provided,
however, that
Section 1.1 shall be suspended and shall have no force or effect following
the
time that Parent has made a Change in Parent Recommendation and prior to any
withdrawal by Parent of its Parent Change in Recommendation.
SECTION
5.8. Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns; provided,
however,
that a
party may not assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties hereto
and any purported assignment, delegation or transfer without such consent shall
be null and void.
5
SECTION
5.9. Governing
Law.
This
Agreement shall be construed in accordance with and governed by the internal
laws of Delaware without giving effect to the principles of conflicts of laws
thereof.
SECTION
5.10. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which shall constitute one and the same
agreement.
SECTION
5.11. Stockholder
Capacity.
Each
Stockholder signs solely in its capacity as the record holder and beneficial
owner of the Stockholder Shares of such Stockholder and nothing herein shall
limit or affect any actions taken by such Stockholder in his or her capacity
as
an officer, director, partner, employee or affiliate of the Parent and no such
actions shall be deemed a breach of this Agreement.
SECTION
6.12. Validity;
Conflict.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
each of which shall remain in full force and effect. To the extent that any
provision of this Agreement and the Merger Agreement conflict, the provisions
of
the Merger Agreement shall control.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
TRAFFIX,
INC.
|
||
/s/
Xxxxxxx Xxxxxxxx, CEO
|
||
Name:
Xxxxxxx Xxxxxxxx
|
||
Title:
Chief Executive Officer
|
||
STOCKHOLDERS:
|
||
/s/
Xxxxxxx Xxxxx
|
||
Xxxxxxx
Xxxxx
|
||
/s/
Xxxxx Xxxxxx
|
||
Xxxxx
Xxxxxx
|
||
/s/
Xxxxx Xxxxxxx
|
||
Xxxxx
Xxxxxxx
|
||
/s/
Xxxxx Xxxxxxx
|
||
Xxxxx
Xxxxxxx
|
||
/s/
Xxxxxx Xxxx
|
||
Xxxxxx
Xxxx
|
STOCKHOLDERS:
|
||
/s/
Xxxxxx Xxxxx
|
||
Xxxxxx
Capital Master Fund, Ltd.
|
||
By:
Xxxxxx Xxxxx
|
||
Its:
Director
|
7
EXHIBIT
1
Stockholders
|
Stockholder
Shares
|
Options
to Acquire Shares
|
Warrants
to Acquire Shares
|
Xxxxxxx
Xxxxx
|
435,821
|
0
|
0
|
Xxxxx
Xxxxxx
|
1,569,525
|
37,500
|
14,382
|
Xxxxx
Xxxxxxx
|
75,000
|
0
|
0
|
Xxxxx
Xxxxxxx
|
0
|
290,548
|
9,152
|
Xxxxxx
Xxxx
|
0
|
0
|
444,434
|
Xxxxxx
Capital Master Fund, Ltd.
|
1,482,500
|
0
|
0
|
Address
for Notices:
New
Motion, Inc.
00
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
8