Exhibit 10.2


 




 





AUTOMOTIVE.COM, INC.


 


 


STOCKHOLDERS AGREEMENT


 










 


Dated as of November 15, 2005


 












 


 





 





















 


Confidential


 


TABLE OF CONTENTS


 


	
  ARTICLE 1. Definitions

  	
   

  
	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2. Company Management

  	
   

  
	
   

  	
   

  
	
   

  	
  2.1

  	
  Board of Directors

  	
   

  
	
   

  	
  2.2

  	
  Directors’ Liability and Indemnification

  	
   

  
	
   

  	
  2.3

  	
  Special Voting Requirements

  	
   

  
	
   

  	
  2.4

  	
  Officers

  	
   

  
	
   

  	
  2.5

  	
  Operating Plan

  	
   

  
	
   

  	
  2.6

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3. Additional
  Payments; Dividends; Cash Contributions

  	
   

  
	
   

  	
   

  
	
   

  	
  3.1

  	
  Additional Payments

  	
   

  
	
   

  	
  3.2

  	
  Dividends Payable to Primedia

  	
   

  
	
   

  	
  3.3

  	
  Cash Contributions

  	
   

  
	
   

  	
  3.4

  	
  Bank Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4. Stockholder
  Put/Call Rights

  	
   

  
	
   

  	
   

  
	
   

  	
  4.1

  	
  Primedia Call Right

  	
   

  
	
   

  	
  4.2

  	
  Minority Stockholders Put Right

  	
   

  
	
   

  	
  4.3

  	
  Advance Payments

  	
   

  
	
   

  	
  4.4

  	
  Call Price Notice, Select Call Notice and Advance Notices

  	
   

  
	
   

  	
  4.5

  	
  Company and Primedia Obligations

  	
   

  
	
   

  	
  4.6

  	
  Optionholder Obligations

  	
   

  
	
   

  	
  4.7

  	
  Defined Terms

  	
   

  
	
   

  	
  4.8

  	
  Failure by Primedia to pay Call Price, Select Call Price
  or Put Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5. Transfer Restrictions

  	
   

  
	
   

  	
   

  
	
   

  	
  5.1

  	
  Restrictions on Transfer by Primedia

  	
   

  
	
   

  	
  5.2

  	
  Restrictions on Transfer by the Founding Stockholders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6. Equity Matters

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7. Miscellaneous
  Provisions

  	
   

  
	
   

  	
   

  
	
   

  	
  7.1

  	
  Entire Agreement

  	
   

  
	
   

  	
  7.2

  	
  Governing Law; Jurisdiction

  	
   

  
	
   

  	
  7.3

  	
  Amendment; Waiver

  	
   

  
	
   

  	
  7.4

  	
  Notices

  	
   

  
	
   

  	
  7.5

  	
  Separability

  	
   

  
	
   

  	
  7.6

  	
  Assignment and Binding Effect

  	
   

  



 


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  7.7

  	
  No Benefit to Others

  	
   

  
	
   

  	
  7.8

  	
  Counterparts

  	
   

  
	
   

  	
  7.9

  	
  Interpretation

  	
   

  
	
   

  	
  7.10

  	
  No Presumption

  	
   

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
   

  	
  Schedule A

  	
  Original Stockholders/Optionholders/Residual
  Interest Holders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule B

  	
  Amendments
  to Bylaws

  	
   

  
					



 


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STOCKHOLDERS
AGREEMENT


 


This Stockholders
Agreement (“Agreement”), by and among
PRIMEDIA Inc., a Delaware corporation (“Primedia”),
Automotive.com, Inc., a Delaware corporation (the “Company”),
each holder of common stock, par value $0.001 per share, of the Company (the “Common Stock”) listed under the
heading “Original Stockholder” on Schedule A (each an “Original Stockholder,” and
collectively, the “Original Stockholders”), each
holder of options to purchase Common Stock listed under the heading
“Optionholder” on Schedule A (each an “Optionholder,”
and collectively, the “Optionholders”)
and each Person who, after the date hereof, acquires shares of and joins in and
becomes a party to this Agreement by executing and delivering to the Company a
counterpart signature page to this Agreement is entered into as of the 15th day
of November, 2005.


 


RECITALS


 


Whereas, pursuant to
that certain Stock Purchase Agreement, dated of even date herewith, by and
among Primedia, the Company and the Original Stockholders (the “Stock Purchase Agreement”), Primedia
has purchased from the Original Stockholders 10,493,930 shares of Common Stock
(the “Primedia Closing Shares”);


 


Whereas, each
Original Stockholder continues to hold the number of shares of Common Stock set
forth next to his or her name on Schedule A;


 


Whereas,
pursuant to the Contribution Agreement, dated of even date herewith, by and
among Primedia and the Company  (the “Contribution Agreement”), Primedia
will contribute the assets associated with its online automotive operations as
set forth in the Contribution Agreement to the Company in exchange for the
issuance of new shares of Common Stock; and


 


Whereas, the parties hereto desire to enter into this
Agreement for the purpose of establishing certain of their rights and
obligations with respect to their equity interests in the Company;


 


AGREEMENT


 


Now, Therefore, in
consideration of the mutual covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties agree as follows:


 


ARTICLE 1.

DEFINITIONS


 


1.1          Definitions.  The following terms used in this
Agreement shall have the following meanings (unless otherwise expressly
provided herein):


 


“Affiliate,”
with respect to any Person, shall mean any other Person directly or indirectly
controlling, controlled by or under common control with, such Person.  For purposes of this Agreement, “control” (including with
correlative meanings, the terms “controlling”,
“controlled by” or “under common control with”) as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.


 


“Board of Directors”
shall mean the Board of Directors of the Company.


 





















 


“Bylaws” shall
mean the Bylaws of the Company in effect as of the date hereof, as the same may
hereafter be amended from time to time pursuant to and in accordance with this
Agreement.


 


“Capital Call Notice”
has the meaning set forth in Section 3.2(a).


 


“Certificate of Incorporation”
shall mean the Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware and in effect as of the date
hereof, as the same may hereafter be amended from time to time pursuant to and
in accordance with this Agreement.


 


“Company Option”
shall mean an option to purchase Common Stock held by an Optionholder.


 


“Contribution Agreement” has the
meaning set forth in the Recitals to this Agreement.


 


“Employment Agreement”
means the written employment agreement between an individual and the Company,
dated of even date herewith, as the same may be modified, amended or
supplemented by the parties thereto.


 


“Entity”
shall mean any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, cooperative, foundation, society, political party, union,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization or entity.


 


“Founding Stockholders”
shall mean Gary Fudge, Jason Phillips and Joshua Speyer.


 


“GAAP” shall
mean United States generally accepted accounting principles in effect at the
applicable time.


 


“Legal Requirement”
shall mean any federal, state, foreign, local or municipal law, statute,
legislation, constitution, ordinance, code, edict, rule, regulation, ruling,
directive, pronouncement, or interpretation issued, enacted, adopted, passed,
approved, promulgated, made, implemented or otherwise put into effect by or
under the authority of any governmental body.


 


“License Agreement”
shall mean that certain License Agreement, dated of even date herewith, between
Primedia and the Company.


 


“Minority Stockholders” shall mean
the holders of Common Stock, other than Primedia or its Affiliates or
successors, who are or become a party to this Agreement.


 


“Optionholder” has the meaning
set forth in the Recitals to this Agreement.


 


“Person”
shall mean any individual or Entity.


 


“Qualifying Termination”
means a termination of employment of an individual by the Company For Cause (as
defined in the applicable Employment Agreement) or by the employee without Good
Reason (as defined in the applicable Employment Agreement).


 


“Shared Services Agreement”
shall mean that certain Shared Services Agreement, dated of even date herewith,
by and between the Company and Primedia.


 


“Shares” shall
mean the shares of Common Stock held by any Stockholder.


 


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“Stockholder”
shall mean Primedia and each Minority Stockholder.


 


“Stockholder Representatives”
means those natural Persons appointed by the Original Stockholders as
Stockholder Representatives pursuant to that certain Stockholder Representatives
Agreement by and among the Original Stockholders dated as of November 15, 2005.


 


“Stock Purchase Agreement” has
the meaning set forth in the Recitals to this Agreement.


 


“Subsidiary”
shall mean, in respect of any Person, any Entity of which the majority of each
class of voting stock or other voting equity and the majority of each other
class of capital stock is owned by either (a) such Person or (b) another
Subsidiary of such Person.


 


“Supermajority Vote”
shall mean the affirmative vote of a majority of the members of the Board of
Directors, including at least one (1) Primedia Designated Director and at least
one (1) Minority Designated Director.


 


ARTICLE
2.

COMPANY MANAGEMENT


 


2.1          Board
of Directors.


 


(a)           Appointment.  Except as set forth in Section 4.8, the Board
of Directors shall be comprised of seven members: four members designated by
Primedia (the “Primedia Designated Directors”)
and three members designated by a majority vote of the Stockholder
Representatives (the “Minority Designated
Directors, and together with the Primedia Designated Directors,
the “Designated Directors”).  The initial Primedia Designated Directors
shall be Dean Nelson, Steve Parr, Scott Wagner and Sheila Spence.  The initial Minority Designated Directors
shall be Joshua Speyer, Jason Phillips and Gary Fudge.


 


(b)           Compensation
Committee.  The Board of
Directors shall promptly designate a Compensation Committee, which shall at all
times consist solely of one Primedia Designated Director and one Minority
Designated Director.


 


(c)           Audit
Committee. The Board of Directors shall promptly designate an
Audit Committee, which shall at all times consist solely of one Primedia
Designated Director and one Minority Designated Director.


 


(d)           Contribution
Agreement Committee. The Board of Directors shall
promptly designate a Contribution Agreement Committee, which shall at all times
consist solely of three Minority Designated Directors.  This Contribution Agreement Committee shall
be delegated exclusive and irrevocable authority to control the Company’s
enforcement of its indemnity protections under the Contribution Agreement.


 


(e)           Tenure and Qualification.  Each
Designated Director shall hold office until his or her death, disability,
resignation in accordance with Section 2.1(f) below or removal in accordance
with Section 2.1(g) below.


 


(f)            Resignation. 
Any Designated Director may resign from the Board of Directors at
any time by giving written notice to the Company. The resignation of any
Designated


 


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Director shall take effect upon
receipt of such notice by the Company or at such later time as shall be
specified in the notice.


 


(g)           Removal.  No Primedia
Designated Director may be removed from the Board of Directors without the
written consent of Primedia.  No Minority
Designated Director may be removed from the Board of Directors without the
unanimous written consent of the Stockholder Representatives.


 


(h)           Vacancies.  Upon the
death, disability, resignation or removal of a Primedia Designated Director,
Primedia shall designate a replacement Primedia Designated Director to fill the
vacancy.  Upon the death, disability,
resignation or removal of a Minority Designated Director, the Stockholder Representatives,
by majority vote, shall designate a replacement Minority Designated Director to
fill the vacancy.  Each of Primedia and
the Stockholder Representatives shall cause their respective Designated
Directors to appoint such replacement Designated Directors to the Board of
Directors.


 


(i)            Stockholder Cooperation.  Each of the Stockholders shall vote
all Shares held by such Stockholder in favor of the election to the Board of
Directors of the Designated Directors designated by Primedia and the
Stockholder Representatives, and each Stockholder agrees to take all such steps
as may be necessary, including through the exercise of their respective voting
power, to both elect and remove directors and to give effect to the composition
of the Board as contemplated in this Section 2.1.


 


(j)            Organizational
Documents.  Concurrently
with the execution of this Agreement, the Bylaws of the Company shall be
amended to read as set forth in Schedule B attached hereto.  Neither Primedia nor the Minority
Stockholders, in their capacity as stockholders, shall vote in favor of any
further amendment of the Certificate of Incorporation or Bylaws of the Company
unless such amendment is approved by a Supermajority Vote of the Board of
Directors or unless such amendment is necessary to carry out the intent of
Section 4.8.


 


(k)           Term of
Section 2.1.  The rights
and obligations of the parties under this Section 2.1 shall terminate as of the
earlier of (i) the Call Closing Date (or, the Select Call Closing Date, should
it occur) or the Put Closing Date, as applicable, or (ii) December 31, 2010.


 


2.2          Directors’
Liability and Indemnification.  The
Certificate of Incorporation and Bylaws shall at all times provide (a) for
elimination of the liability of directors and executive officers of the Company
to the maximum extent permitted by law and (b) for indemnification of
directors and executive officers of the Company for acts taken by such persons
on behalf of the Company to the maximum extent permitted by law.


 


2.3          Special
Voting Requirements.  In addition to
any requirement in the Company’s Certificate of Incorporation or Bylaws, a
Supermajority Vote of the Board of Directors at a duly called meeting or by
written consent in lieu of a meeting shall be required for the Company to
undertake any of the following actions on or before the earlier of the Call
Closing Date (or, the Select Call Closing Date, should it occur) or the Put
Closing Date, as applicable, or December 31, 2010:


 


(a)           any
increase or decrease in the number of Designated Directors that Primedia or the
Stockholder Representatives are entitled to designate pursuant to Section
2.1(a) or Section 4.8;


 


(b)           the
dissolution, winding up or liquidation of the Company;


 


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(c)           the filing
of a voluntary bankruptcy petition or the filing of a petition or an answer
seeking a reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any Legal Requirement on behalf of the
Company or any Subsidiary holding a majority of the assets of the Company and
its Subsidiaries, taken as a whole;


 


(d)           any
disposition (whether by sale, exchange, merger, consolidation, license or
otherwise, directly or indirectly) of all or any significant portion of the
assets of the Company or of any Company Subsidiary in a single transaction or
series of related transactions;


 


(e)           incurrence
by the Company or any Company Subsidiary of any liability, direct or indirect,
actual or contingent, with respect to any indebtedness for borrowed money, or
any mortgage, deed of trust, pledge or other security device securing any such
liability or the refunding, refinancing, increasing, modification,
consolidation or extension of the maturity of any of the foregoing other than
any such obligations as would not be significant to the business of the Company
as a whole;


 


(f)            any
acquisition by the Company or any Company Subsidiary of any business or other
Person (including any minority interest therein), whether by way of stock
purchase, asset purchase, merger, consolidation or otherwise;


 


(g)           any
delivery to Stockholders of a Capital Call Notice;


 


(h)           entering
into, amending, extending, renewing or waiving any Company rights under any
agreement between the Company and Primedia; and


 


(i)            any
termination without Cause (as defined in the applicable Employment Agreement)
of the Chief Executive Officer or Chief Operating Officer.


 


2.4          Officers.  The Company shall have a Chief Executive
Officer, President and Chief Operating Officer (the “Senior Executive Officers”) and
such other executive officers as the Board of Directors shall determine.  Initially, the Chief Executive Officer and
President shall be Joshua Speyer and the Chief Operating Officer shall be Jason
Phillips, each of whom shall serve in such capacity through the earlier of the
Call Closing Date (or, the Select Call Closing Date, should it occur) or the
Put Closing Date, as applicable, or December 31, 2010, unless his employment is
earlier terminated pursuant to the terms of his Employment Agreement.  In the absence of any contrary determination
by the Board of Directors, the Senior Executive Officers shall have general
supervision, direction and control of the officers, employees, business and
affairs of the Company.


 


2.5          Operating
Plan.


 


(a)           The Senior
Executive Officers, in consultation with the Board of Directors, shall prepare
an operating plan (each, an “Operating Plan”)
for each of calendar years 2006, 2007, 2008 and 2009, which for years 2007,
2008 and 2009 shall be prepared prior to the commencement of the calendar year
to which it applies.  Among other things,
the Operating Plans may designate staffing levels and limitations on capital
expenditures, research and development expenses, marketing expenses, travel and
entertainment expenses and other budgetary items.


 


(b)           The Company
shall be operated for calendar years 2006, 2007, 2008 and 2009 in accordance
with the Operating Plan for that year; provided, however,
that (i) interim changes to the Operating Plan may be made upon the approval of
both the Senior Executive Officers and the Board of Directors and (ii) the
following actions by the Company may not be taken or included in an Operating
Plan without the approval of the Board of Directors:


 


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(i)            Incurrence by the Company or
any Company Subsidiary of any material liability, direct or indirect, actual or
contingent, with respect to any indebtedness for borrowed money, or any
mortgage, deed of trust, pledge or other security device securing any such
liability or the refunding, refinancing, increasing, modification,
consolidation or extension of the maturity of any such liability.


 


(ii)           any material change by the
Company in its operating structure or business purpose; or


 


(iii)          operating the Company at a
cash flow deficit for a period in excess of 30 days.


 


(c)           Any new
hires or changes in compensation in any period that are in conflict with the
headcount and compensation parameters outlined in the Operating Plan for such
period shall be approved in advance by the Compensation Committee.


 


(d)           The Senior
Executive Officers shall provide written notice to, and seek pre-approval from,
the Board of Directors (or any Primedia Designated Director as determined by
the Board of Directors) for any new contract, contract extension or renewal requiring
the expenditure of greater than $500,000 in any 12-month period and for any
real estate lease.  The Board of
Directors (or any Primedia Designated Director as determined by the Board of
Directors) shall have seven calendar days after its receipt of such written
notice to respond to any such request. 
If the Board of Directors (or any Primedia Designated Director as
determined by the Board of Directors) does not object to the applicable
contract, renewal, extension or lease within such seven calendar day period,
the Senior Executive Officers shall have authority to enter into such contract,
renewal, extension or lease.


 


(e)           The
Company will be operated in a manner which is consistent with Primedia’s (i)
codes of conduct and business ethics, as amended from time to time, (ii)
requirements for financial reporting, including, without limitation, applicable
regulations for purposes of consolidating the Company’s financial statements
and participating in Primedia’s corporate audit conducted by Primedia’s auditors
and (iii) obligations under the Sarbanes-Oxley Act of 2002, as amended (“SOX”), including maintaining
necessary internal controls for the Company to comply with SOX (the “Internal Controls”); provided that
if participating in the Primedia audit and maintaining such Internal Controls
results in additional costs to the Company, such costs shall be excluded from
the calculation of EBITDA hereunder.


 


2.6          Financial
Statements.


 


(a)           The
Company’s monthly, quarterly and annual financial statements shall be prepared
under the direction and management of the Company’s Chief Financial Officer,
with oversight from the Company’s Audit Committee, provided that, subject to
the provisions of Section 2.5(e) above, such financial statements shall be
prepared in accordance with Primedia’s requirements for financial reporting,
including, without limitation, applicable regulations for purposes of
consolidating the Company’s financial statements and obligations under
SOX.  The Company’s Chief Financial
Officer shall be required to certify the accuracy of the Company’s financial
statements for each quarterly period beginning with the quarter ended December
31, 2005 and ending with the quarterly period ended December 31, 2008 or, if
the Put/Call Extension Notice is given, December 31, 2009.


 


(b)           The
Company shall ensure that its annual consolidated financial statements for
calendar years 2005, 2006, 2007, 2008 and, if the Put/Call Extension Notice is
delivered, 2009 are audited by a reputable independent auditing firm, which firm
shall issue a report containing its unqualified opinion that the financial
statements have been prepared in accordance with GAAP,


 


6





















 


consistently
applied.  The Company shall use its best
efforts to cause such independent auditor to complete the audit and issue its
opinion with respect to each such calendar year within 75 calendar days of the
end of such calendar year and in no event later than 120 calendar days after
the end of such calendar year.  In addition
to the foregoing, the Company shall participate in Primedia’s corporate audit
as requested by Primedia; provided that if participating in the Primedia
corporate audit results in additional costs to the Company, such costs shall be
excluded from the calculation of EBITDA hereunder.


 


ARTICLE
3.

ADDITIONAL PAYMENTS; DIVIDENDS; CASH CONTRIBUTIONS


 


3.1          Additional
Payments.


 


(a)           The Company agrees to, and Primedia, the Stockholder
Representatives and each of the Stockholders agree to use their best efforts to
cause the Company to, distribute to the Company stockholders in the form of
dividends all Remaining Free Cash Flow (as defined below), of the Company
generated in the following periods: from the date hereof through December 31,
2005; calendar year 2006; calendar year 2007; calendar year 2008; and, if the
Put/Call Extension Notice is delivered, calendar year 2009.  These dividends shall be paid quarterly to
all holders of record of the Common Stock at the end of the applicable calendar
quarter on a pro rata basis in accordance with their percentage ownership of
the Common Stock at the end of such calendar quarter.  The dividend payment date for each such
quarter shall be between 30 and 45 calendar days after the end of such quarter,
provided that the payment date for the dividend for the last quarter of a
calendar year shall be between 30 and 45 calendar days after the date on which
the Company’s independent auditor shall have issued its report containing its
opinion as to the consolidated audited financial statements of the Company for
the prior calendar year; provided, however,
that, in the event that the Company’s independent auditor fails to issue its
report within 90 calendar days following the applicable calendar year end, the
dividend payment date shall be the 95th calendar day following such
calendar year end.  Within 45 calendar
days of the Call Trigger Date, all dividends accrued hereunder and not paid to
the applicable holders of record of Common Stock shall be paid to those holders
of record of Common Stock.


 


(b)           For
purposes of this Section 3.1, “Remaining Free Cash Flow”
shall mean the cash on hand at the close of each quarter, excluding all cash
held by the Company which has been specifically funded in respect of the 2005
Employee Bonus or the Recognition Payments (as each of those terms is defined
in the Stock Purchase Agreement) less (i) outstanding checks, (ii) one month’s
average cash expenses and (iii) for the quarter prior to the payment of accrued
bonuses (other than the 2005 Employee Bonus and the Recognition Payments), the
amount of any such accrued bonuses.


 


3.2          Dividends
Payable to Primedia.  During such
time, if any, that Primedia is in breach of any of its payment obligations
under Section 4.1, 4.2 or 4.3 of this Agreement or Section 2.02 of the Stock
Purchase Agreement (collectively, the “Primedia Payment
Obligations”), any distributions or dividends in respect of the
Common Stock held by Primedia shall be remitted to the Minority Stockholders to
reduce the amount of the Primedia Payment Obligations.  In furtherance of the foregoing, solely in
the event, and only during such time, that Primedia is in breach of any of the
Primedia Payment Obligations, Primedia hereby assigns to the Minority Stockholders
its rights to receive any such distributions or dividends in respect of the
Common Stock held by Primedia.


 


3.3          Cash
Contributions.


 


(a)           If the
Board of Directors delivers to Stockholders a notice requesting the
contribution by Stockholders of a specified amount of cash to fund the Company’s
operations (a “Capital Call Notice”), the
Company and the Founding Stockholders shall contribute, on a pro rata basis
based on 


 


7





















 


their
ownership of Common Stock, such amount of cash. 
If Primedia contributes cash (the “Initial Primedia
Contributed Amount”) and the Founding Stockholders do not
contribute their pro rata share on behalf of themselves, then Primedia shall
have the right to contribute additional funds in an amount equal to what the
Founding Stockholders should have contributed on their behalf (the “Additional Primedia Contributed Amount”,
and together with the Initial Primedia Contributed Amount, the “Primedia Contributed Amount”).  If the Founding Stockholders contribute cash
on behalf of themselves (the “Initial Founders
Contributed Amount”) and Primedia does not contribute their pro
rata share, then the Founding Stockholders shall have the right to contribute
additional funds in an amount equal to what Primedia should have contributed
(the “Additional Founders Contributed Amount,
and together with the Initial Founders Contributed Amount, the “Founders Contributed Amount”).  For purposes of this Section 3.3, the
aggregate of the Primedia Contributed Amount and the Founders Contributed
Amount shall be referred to herein as the “Contributions.”


 


(b)           All
Contributions shall be deemed to be loans made to the Company by the applicable
party.  Contributions (including accrued
interest) shall be repaid by the Company prior to the distribution by the Company
of any dividends pursuant to Section 3.1. 
The Initial Primedia Contributed Amount and the Initial Founders
Contributed Amount shall accrue interest at a rate of 6% until repayment.  The Additional Primedia Contributed Amount
and the Additional Founders Contributed Amount shall bear interest at a rate of
12% until repayment.  Any Contributions
that remain outstanding at the time of the Call Notice, Select Call Notice or
Put Notice shall be deducted or added to the Call Price, Select Call Price of
Put Price, as applicable.


 


3.4          Bank
Accounts.  With respect to bank
accounts for the Company and banking activity, the parties agree as follows:


 


(a)           Effective
immediately after the Closing and during the term of this Agreement, an
employee of Primedia (who shall be a Primedia Designated Director) who is
familiar with the operations of the Company shall co-authorize all checks and
wires issued in excess of $250,000, except checks and wires relating to the
Recognition Payments do not require such co-authorization.


 


(b)           Effective
immediately after the Closing and during the term of this Agreement, the
Company will provide Primedia with monthly bank statements and reconciliations.


 


(c)           Within
three (3) months following the Closing, the Company will move all of their bank
accounts to Bank of America under Primedia’s corporate platform and will
provide Primedia with the ability to monitor all banking activity online;
provided that no funds of the Company and Primedia shall be commingled.


 


ARTICLE
4.

STOCKHOLDER PUT/CALL RIGHTS


 


For ease of
use, the meanings of defined terms used in this Article 4 are set forth in
Section 4.7 below.


 


4.1          Primedia
Call Right.


 


(a)           Primedia
shall, within 30 calendar days of the 2008 Audit Date and, if the Put/Call
Extension Notice is provided, the 2009 Audit Date, deliver to the Stockholder
Representatives a statement setting forth in reasonable detail the calculation
of the Company’s EBITDA for calendar year 2008 or 2009, as applicable, and the
Call Price (each, a “Call Price Notice”).


 


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(b)           Subject to
Section 4.1(c), Primedia shall have the right to purchase all, but not less
than all, outstanding Shares held by the Minority Stockholders set forth on Schedule A
attached hereto (which shall at no time be less than 19.9% of the outstanding
Shares of the Company) for an aggregate amount of cash equal to the Call Price
(the “Call Right”), by providing
written notice to the Stockholder Representatives at any time during the 30
calendar day period commencing on the 30th calendar day immediately following
the Call Trigger Date (the “Call Period”)
stating that the Call Right is thereby being exercised (the “Call Notice”). The Call Notice must
specify a date for the closing of the purchase of the Common Stock held by the
Minority Stockholders (the “Call Closing Date”)
that is no less than 30 calendar days and no more than 45 calendar days after
the date of the Call Notice.  On the Call
Closing Date, Primedia shall deliver the Call Price to the Stockholder
Representatives who shall, in turn, be solely responsible for calculating the
Call Per Share Price and distributing the Call Price to the appropriate
Minority Stockholders and Residual Interest Holders.  Primedia’s sole payment obligation hereunder shall
be to deliver the Call Price to the Stockholder Representatives, and Primedia
shall have no liability to any Minority Stockholders and/or Residual Interest
Holders with respect to distribution of the Call Price.


 


(c)           Notwithstanding
Section 4.1(b), in the event Joshua Speyer’s employment with the Company is
terminated by a Qualifying Termination on a date prior to December 31, 2008
(the “Speyer Termination Date”),
Primedia shall have the right to purchase all, but not less than all, of the
Shares held by the Minority Stockholders for an aggregate amount of cash equal
to the Select Call Price (the “Select  Call Right”), by providing written
notice to the Stockholder Representatives at any time during the 45 calendar
day period commencing on the Speyer Termination Date (the “Select
Call Period”) stating that the Call Right is thereby being
exercised (the “Select  Call
Notice”).  The Select Call
Notice must specify a date for the closing of the purchase of the Common Stock
held by the Minority Stockholders (the “Select Call Closing Date”)
that is no less than 30 calendar days and no more than 45 calendar days after
the date of the Select Call Notice.  The
Select Call Notice shall set forth in reasonable detail the calculation of the
Company’s EBITDA for the calendar year ended immediately prior to the date of
the Select Call Notice, the Select Call Price and the Select Call Closing
Date.  On the Select Call Closing Date,
Primedia shall deliver the Select Call Price to the Stockholder Representatives
who shall, in turn, be responsible for calculating the Select Call Per Share
Price and distributing the Select Call Price to the appropriate Minority
Stockholders and Residual Interest Holders. 
Primedia’s sole payment obligation hereunder shall be to deliver the Select
Call Price to the Stockholder Representatives, and Primedia shall have no
liability to any Minority Stockholders and/or Residual Interest Holders with
respect to distribution of the Select Call Price.  For purposes of the calculations under this
Section 4.1(c), EBITDA for calendar year 2005 shall be deemed to be
$10,500,000.


 


4.2          Minority
Stockholders Put Right.


 


(a)           If
Primedia does not exercise its Call Right within the Call Period, the
Stockholder Representatives shall have the right to require Primedia to
purchase all, but not less than all, Shares held by Minority Stockholders for
an aggregate amount of cash equal to the Put Price (the “Put
Right”), by providing written notice to Primedia at any time
during the 20 calendar day period after the end of the Call Period (the “Put Period”) stating that the Put
Right is thereby being exercised (the “Put Notice”).  The Put Notice must specify a date for the
closing of the purchase of the Common Stock held by the Minority Stockholders
(the “Put Closing Date”) that is no
less than 30 calendar days and no more than 45 calendar days after the date of
the Put Notice.  On the Put Closing Date,
Primedia shall deliver the Put Price to the Stockholder Representatives who
shall, in turn, be responsible for calculating the Put Per Share Price and
distributing the Put Price to the appropriate Minority Stockholders and
Residual Interest Holders.  Primedia’s
sole payment obligation hereunder shall be to deliver the Put Price to the Stockholder
Representatives, and Primedia shall have no liability to any Minority
Stockholders and/or Residual Interest Holders with respect to distribution of
the Put Price.


 


9





















 


4.3          Advance
Payments.


 


(a)           Within 30 calendar days after the 2006 Audit Date, Primedia
shall provide the Stockholder Representatives with a notice setting forth in
reasonable detail the calculation of the Company’s EBITDA for calendar year
2006 (the “2006 Advance Notice”). If the Company’s EBITDA for calendar year 2006 equals
or exceeds $18,000,000, Primedia shall pay to the Stockholder Representatives,
for the benefit of the holders of Qualified Shares, an amount equal to
$15,000,000 (the “2006 Advance”) within 30
calendar days of the date of the 2006 Advance Notice; provided that if the
EBITDA for the calendar year 2006 does not equal or exceed $18,000,000 solely
as a result of expenses incurred by the Company as a result of utilizing the
services under the Plus 3 Agreement (as defined in the Shared Services
Agreement) rather than comparable alternative services (the “Excess Plus 3 Costs”), then such
Excess Plus 3 Costs for the calendar year 2006 shall be added back to EBITDA
for purposes of determining whether the Company’s EBITDA for calendar year 2006
equals or exceeds $18,000,000 hereunder. 
The 2006 Advance shall be distributed by the Stockholder Representatives
to holders of Qualified Shares that held such shares on December 31, 2006, on a
pro rata basis based on the number of Qualified Shares held by such holders as
of such date.  Primedia’s sole payment
obligation hereunder shall be to deliver the 2006 Advance to the Stockholder
Representatives, and Primedia shall have no liability to any holders of
Qualified Shares with respect to distribution of the 2006 Advance.


 


(b)           Within 30 calendar days after the 2007 Audit Date, Primedia
shall provide the Stockholder Representatives with a notice setting forth in
reasonable detail the calculation of the Company’s EBITDA for calendar year
2007 (the “2007 Advance Notice” and,
together with the 2006 Advance Notice, the “Advance
Notices”). If the Company’s
EBITDA for calendar year 2007 equals or exceeds $26,000,000, Primedia shall pay
to the Stockholder Representatives, for the benefit of the holders of Qualified
Shares, an amount equal to $20,000,000 (the “2007
Advance” and, together with the 2006 Advance, the “Advances”) within 30 calendar days
of the date of the 2007 Advance Notice; provided that if the EBITDA for the
calendar year 2007 does not equal or exceed $26,000,000 solely as a result of
Excess Plus 3 Costs, then such Excess Plus 3 Costs for the calendar year 2007
shall be added back to EBITDA for purposes of determining whether the Company’s
EBITDA for calendar year 2007 equals or exceeds $26,000,000 hereunder.  The 2007 Advance shall be distributed by the
Stockholder Representatives to holders of Qualified Shares that held such
shares on December 31, 2007, on a pro rata basis based on the number of
Qualified Shares held by such holders as of such date.  Primedia’s sole payment obligation hereunder
shall be to deliver the 2007 Advance to the Stockholder Representatives, and
Primedia shall have no liability to any holders of Qualified Shares with
respect to distribution of the 2007 Advance.


 


(c)           In the
event that Primedia does not timely pay all or any portion of an Advance
pursuant to this Section 4.3, Primedia shall be obligated to pay interest on
the unpaid amount of the Advance at a rate of 12% per annum from the date the
Advance is due until it is fully paid (“Advance Payment Interest”).


 


4.4          Call
Price Notice, Select Call Notice and Advance Notices.


 


(a)           The
Stockholder Representatives shall have 30 calendar days from their receipt of a
Call Price Notice, Select Call Notice or Advance Notice to notify Primedia of
any objections to any item or items on such notice. Any such notice (a “Notice of Disagreement”) shall be in
writing and shall specify in reasonable detail the item or items in dispute (a
“Disputed Item” or “Disputed Items”)
and the reasons for any such dispute.  Any
Disputed Item shall be resolved in the manner set forth in Section 4.4(b).  The Company shall provide reasonable access
to and otherwise make available to the Stockholder Representatives, their
financial, legal or other advisors, consultants, agents and other
representatives and their independent accountants, the personnel and all books
and records of the 


 


10





















 


Company,
including work papers, schedules and calculations that that were used or
otherwise applicable to a determination of the items set forth in the Call
Price Notice, Select Call Notice or Advance Notice, any of the auditor’s
records, work papers and other documents related to the calculation of the
EBITDA referred to therein, or any other documents that may be reasonably
requested by the Stockholder Representatives to determine whether the
obligations under this Article 4 have been complied with.


 


(b)           Promptly
after the delivery of a Notice of Disagreement, Primedia and the Stockholder
Representatives, together with representatives from their respective principal
accounting firms (Conrad and Associates LLP (“Conrad”)
on behalf of the Minority Stockholders and Deloitte & Touche (“D&T”) on behalf of Primedia),
shall endeavor in good faith to resolve all Disputed Items.  If Primedia and the Stockholder
Representatives, together with such representatives, are unable to resolve all
Disputed Items within thirty (30) days after receipt by Primedia of the Notice
of Disagreement, then D&T and Conrad shall together,
within ten (10) business days thereafter, appoint a representative of an
independent, internationally-recognized accounting firm (other than D&T) to
arbitrate the dispute (the “Arbitrator”).  Within twenty (20) days after the selection
of the Arbitrator, the Stockholder Representatives and Primedia shall present
to the Arbitrator their respective positions with respect to any and all
unresolved Disputed Items, including such materials as the Arbitrator may
request.  The Arbitrator shall, after the
submission of the evidentiary materials, submit its written decision on each
Disputed Item to the Stockholder Representatives and Primedia. Any
determination by the Arbitrator with respect to any Disputed Item shall be
final, binding and conclusive on each party to this Agreement.  Except as otherwise specifically agreed to by
the parties in writing, the arbitration shall be conducted in New York, New
York, and the Arbitrator shall conduct the arbitration in accordance with the
arbitration rules of the American Arbitration Associa­tion (the “AAA”) as in effect for commercial
arbitrations conducted in the borough of Manhattan by the AAA.  The Minority Stockholders, collectively, and
Primedia shall each bear 50 percent of the Arbitrator’s fees and expenses


 


(c)           If (i) the
Stockholder Representatives do not deliver a Notice of Disagreement to Primedia
within 30 calendar days of the Stockholder Representatives’ receipt of the Call
Price Notice, Select Call Notice or Advance Notice or (ii) the Stockholder
Representatives acknowledge in writing that the Call Price Notice, Select Call
Notice or Advance Notice is accurate or (iii) Primedia and the Stockholder
Representatives and, if necessary, the Arbitrator resolve all Disputed Items in
accordance with Section 4.4(b), then the Call Price Notice, Select Call Notice
or Advance Notice, as applicable, shall be final, binding and conclu­sive on
the parties.


 


(d)           In the
event of a Notice of Disagreement, the closing of any transaction pursuant to
the exercise of the Call Right, Select Call Right or Put Right or the payment
of an Advance pursuant to an Advance Notice shall occur within 10 calendar days
after the respective Call Price Notice, Select Call Notice or Advance Notice is
determined to be final pursuant to Section 4.4(c).


 


4.5          Company
and Primedia Obligations.


 


(a)           From the date hereof through
December 31, 2008 or, if the Put/Call Extension Notice is delivered,
December 31, 2009, (i) none of the Founding Stockholders, the Company,
Primedia or any Primedia Affiliate shall take any action that would have the
effect of shifting revenues or expenses of the Company into or out of any
calendar year from periods in which such revenues or expenses would otherwise
be recognized consistent with the Company’s historical accounting practices;
(ii) the Company shall be operated in a good faith manner and none of the
Company, Primedia or any Primedia Affiliate shall take any action aimed at
decreasing EBITDA for any calendar year; (iii) none of Primedia or any Primedia
Affiliate shall take any action inconsistent with the methodology for
allocating revenue or expenses set forth in the Shared Services Agreement,
without the consent of the Senior Executive Officers, (iv) none of Primedia or
any Primedia Affiliate shall engage in any transactions with 


 


11





















 


the Company, other than on
prevailing market terms; (v) neither Primedia nor any Primedia Affiliate shall
engage in the business of online automotive lead generation, provided that
nothing herein shall restrict Primedia or any Primedia Affiliate from operating
its consumer auto guides business, its Ward’s automotive business or from
running automotive-related advertising on Primedia’s other websites consistent
with current practice and (vi) notwithstanding the Senior Executives’ rights to
effect employee terminations, the Senior Executives shall not terminate any
employees for the sole purpose of increasing EBITDA if such employee’s function
is still required to run the business.


 


(b)           If the Company
shall receive any indemnity payments from Primedia (or its Affiliates or
successors) pursuant to the Contribution Agreement, 50% of such indemnity
payments shall promptly be distributed to the Minority Stockholders on a pro
rata basis in accordance with their percentage ownership of the Common Stock as
of the date of such indemnity payments to the Company.


 


4.6          Optionholder
Obligations.


 


Prior to the
Select Call Closing Date, the Call Closing Date or the Put Closing Date, as
applicable, all Optionholders shall exercise in full all of their remaining
Company Options.  Failure by an
Optionholder to exercise any Company Option prior to any such closing date
shall result in the forfeiture of such Company Option.  Upon the forfeiture of a Company Option, the
Stockholder Representatives shall take into account the corresponding reduction
in the number of Qualified Shares when calculating the Select Call Per Share
Price, the Call Per Share Price and the Put Per Share Price.


 


4.7          Defined
Terms.  The following terms used in
this Article 4 shall have the following meanings (unless otherwise expressly
provided herein):


 


“Baseline EBITDA” shall mean
$12,000,000.


 


“Call Price” shall equal the greater
of (i) an amount determined by (A) multiplying the positive difference obtained
by subtracting the Baseline EBITDA from the Company’s EBITDA for calendar year
2008 or, if the Put/Call Extension Notice is delivered, the Company’s EBITDA
for calendar year 2009, by either (1) 4.0, if the Company’s EBITDA for such
calendar year is equal to or less than $82,000,000, or (2) 4.5, if the
Company’s EBITDA for such calendar year is greater than $82,000,000, (B) then
subtracting the Deductible Advance Amount, if any, from the amount determined
in clause (i)(A), (C) then adding the Advance Payment Interest, if any, to the
amount determined in clause (i)(B), and (D) then adding 50% of the amount of
the cash balance in the Company after the payment of dividends for the quarter
ended December 31, 2008 or 2009, as applicable, and (ii) the amount determined
by (A) multiplying the Company’s EBITDA for such calendar year by 50.0%, (B)
then subtracting the Deductible Advance Amount from the amount determined in
clause (ii)(A), (C) then adding the Advance Payment Interest, if any, to the
amount determined in clause (ii)(B), and (D) then adding 50% of the amount of
the cash balance in the Company after the payment of dividends for the quarter
ended December 31, 2008 or 2009, as applicable.


 


“Call Trigger Date” shall be the 2008
Audit Date; provided, however, that, the Stockholder
Representatives shall be permitted, by unanimous approval of the Stockholder
Representatives, to change the Call Trigger Date to the 2009 Audit Date by
providing the Put/Call Extension Notice to Primedia within 20 calendar days of
their receipt of the Call Price Notice.


 


“Call Per Share Price” shall be
determined by dividing (i) the Call Price, by (ii) the number of Qualified
Shares as of the Call Closing Date.


 


12





















 


“Deductible Advance Amount”
equals the aggregate amount of any Advances actually paid to holders of
Qualified Shares, including the amount of any Advance paid pursuant to dividend
remittances in accordance with Section 3.2.


 


“EBITDA”
means, for any calendar year, aggregate net revenues less all operating
expenses (other than Excess Allocated Costs and that portion of severance costs
accrued through June 30, 2006 related to the termination of any employee of the
Company that was an employee of Primedia or any Primedia Affiliate prior to the
Closing Date (as defined in the Stock Purchase Agreement)), incurred in such
calendar year, but before any provision for (i) interest income or expense,
(ii) federal, state, local or other taxes on income or for federal, state or local
income tax benefits or (iii) depreciation or amortization, including
amortization of intangible assets.  For
purposes of determining EBITDA hereunder, (i) gains and losses from sales of
assets not in the ordinary course of business shall be excluded, (ii) expenses
will include bonus expense equal to the greater of (A) 5% of pre-bonus EBITDA
or (B) the actual bonus expense attributable to the period as determined in
accordance with GAAP, (iii) any excess costs relating to Primedia’s audit and
Internal Controls specifically referred to in Sections 2.5(e) and 2.6(b) shall
be excluded, and (iv) the accounting methodology for capitalizing certain costs
shall be consistent with the accounting methodology used by the Company for its
audited financial statements for the year ended December 31, 2004 (provided
that such methodology is in accordance with GAAP).  Except as otherwise specifically set forth in
this paragraph, revenue and expenses shall be determined in accordance with
GAAP.


 


“Excess
Allocated Costs” mean any costs payable to Primedia, any
Primedia Affiliate or any Primedia employee other than any such costs (a)
expressly provided for in the Shared Services Agreement, (b) expressly set
forth in the applicable Operating Plan, or (c) otherwise approved in writing by
the Company’s Chief Executive Officer.


 


“Put/Call
Extension Notice” shall mean the notice from the Stockholder
Representatives to Primedia regarding an extension of the Call Trigger Date to
the 2009 Audit Date.


 


“Put
Per Share Price” shall be equal to the Call Per Share Price.


 


“Put
Price” shall be equal to the Call Price.


 


“Qualified
Shares” means (i) all shares of Common Stock held by Minority
Stockholders, (ii) all shares of Common Stock underlying Company Options held
by Optionholders and (iii) all Residual Shares held by Residual Interest
Holders.


 


“Residual
Interest Holder” refers to those Persons or entities set forth
on Schedule A below the heading “Residual Interest Holder.”  For purposes of determining the Call Per
Share Price and the Select Call Per Share Price, Residual Interest Holders are
deemed to own that number of shares of Common Stock set forth opposite their
name on Schedule A.


 


“Residual
Shares” means all shares of Common Stock that Residual Interest
Holders are deemed to hold for purposes of determining the Call Per Share Price
and the Select Call Per Share Price.


 


“Select
Call Price” shall equal the greater of (i) an amount determined
by (A) multiplying the positive difference obtained by subtracting the Baseline
EBITDA from the Company’s EBITDA for the most recently completed calendar year
by 4.0, (B) then subtracting the Deductible Advance Amount, if any, from the
amount determined in clause (i)(A), (C) then adding the Advance Payment
Interest, if any, to the amount determined in clause (i)(B), and (D) then
adding 50% of the amount of the amount of cash balance in the Company after the
payment of dividends for the most 


 


13





















 


recently completed calendar quarter, and (ii) the amount
determined by (A) multiplying the Company’s EBITDA for such completed calendar
year by 50.0%, (B) then subtracting the Deductible Advance Amount from the
amount determined in clause (ii)(A), (C) then adding the Advance Payment
Interest, if any, to the amount determined in clause (ii)(B) and (D) then
adding 50% of the amount of the amount of cash balance in the Company after the
payment of dividends for the most recently completed calendar quarter.


 


“Select
Call Per Share Price” shall be determined by dividing the Select
Call Price by the total number of Qualified Shares as of the Select Call
Closing Date.


 


“2006
Audit Date” shall be the date on which the Company’s independent
auditor shall have issued its report containing its unqualified opinion that the
financial statements of the Company for calendar year 2006 have been prepared
in accordance with GAAP, consistently applied.


 


“2007
Audit Date” shall be the date on which the Company’s independent
auditor shall have issued its report containing its unqualified opinion that
the financial statements of the Company for calendar year 2007 have been
prepared in accordance with GAAP, consistently applied.


 


“2008
Audit Date” shall be the date on which the Company’s independent
auditor shall have issued its report containing its unqualified opinion that
the financial statements of the Company for calendar year 2008 have been
prepared in accordance with GAAP, consistently applied.


 


“2009
Audit Date” shall be the date on which the Company’s independent
auditor shall have issued its report containing its unqualified opinion that
the financial statements of the Company for calendar year 2009 have been
prepared in accordance with GAAP, consistently applied.


 


4.8          Failure by
Primedia to pay Call Price, Select Call Price or Put Price.  In addition to the rights of the Minority
Stockholders set forth in Sections 3.2 and 4.3(c), as well as any other
remedies available to the Minority Stockholders as a result of Primedia’s
breach of this Agreement, if Primedia fails to make any payments in accordance
with its obligations set forth in Sections 4.1 or 4.2 under this Agreement (the “Call/Put Payment Obligation”)
within 30 days after any such payments are due (the “Default Date”), then the Minority Stockholders
shall have the following additional rights:


 


(a)           Upon the
written consent of the Stockholder Representatives, the Board of Directors
shall be expanded to nine (9) members, to consist of five (5) Minority
Designated Directors and four (4) Primedia Designated Directors;


 


(b)           Primedia
shall assign to the Minority Stockholders (on a pro rata basis in accordance
with their percentage ownership of the Common Stock as of the Default Date)
that number of Primedia’s shares of Common Stock in the Company that would
result in the Minority Stockholders obtaining 50.1% of the outstanding shares
of Common Stock of the Company (the “Primedia
Transferred Shares”);


 


(c)           At anytime
from the Default Date through 18 months after the Default Date (the “Default Sale Period”) the
Minority Stockholders shall have a right to sell all of their Shares (including
the Primedia Transferred Shares) to a third party (the “Prospective
Purchaser”).  If the
Minority Stockholders elect to sell their Shares pursuant to this Section
4.8(c), they shall deliver a notice (the “Drag Along Notice”)
of such sale to Primedia setting forth the terms of such sale, which terms
shall apply equally (on a per share basis) to both the Minority Stockholders
and Primedia.  Delivery of the Drag Along
Notice by the Minority Stockholder shall obligate Primedia to sell all of its
remaining Shares (the “Primedia Remaining Shares”)
to the Prospective Purchaser on the same terms as set forth in the 


 


14





















 


Drag Along
Notice (the Shares held by the Minority Stockholders, the Primedia Transferred
Shares and the Primedia Remaining Shares, collectively, the “Transferred Shares”).


 


(d)           In
connection with the sale of the Transferred Shares, the Minority Stockholders
shall be entitled to retain an amount (the “Minority
Stockholder Proceeds”) equal to the following formula:


 


(Net Proceeds from sale
of Transferred Shares minus $72,500,000/2)
minus Advance payments made to the
Minority Stockholders, if any;


 


provided, however, that
if the amount of Minority Stockholder Proceeds derived from this formula is
less than the actual Call/Put Payment Obligation, then the formula shall be
changed to reflect an equal split of the net proceeds from the sale of the
Transferred Shares between the Minority Stockholders and Primedia; provided,
further, that in no case shall the Minority Stockholder Proceeds exceed 125% of
the amount of the Call/Put Payment Obligation.


 


Primedia shall be
entitled to any amounts received by the Minority Stockholders in excess of the
Minority Stockholder Proceeds (the “Primedia Proceeds”)
and the Minority Stockholders shall remit the Primedia Proceeds to Primedia
within ten (10) days after receipt thereof.


 


(e)           If the
Minority Stockholders do not sell the Transferred Shares during the Default Sale
Period, then either the Minority Stockholders or Primedia shall have a right to
sell their Shares and shall be permitted to deliver a Drag-Along Notice to the
other parties obligating the other party to sell their shares to the
Prospective Purchaser on the same terms as set forth in the Drag Along Notice.


 


(f)            Within ten
(10) days of the Default Date, Primedia shall deliver its Shares to an escrow
agent to hold in escrow pursuant to the terms of an escrow agreement to be
negotiated in good faith.


 


ARTICLE
5.

TRANSFER RESTRICTIONS


 


5.1          Restrictions
on Transfer by Primedia.  Except as
provided in Section 4.8, Primedia shall not transfer any of its shares of
Common Stock prior to the earlier of (i) the Call Closing Date (or the Select
Closing Call Date, if it occurs) or Put Closing Date, as applicable, or (ii)
December 31, 2010; provided, however, that Primedia may at any time transfer
such shares to a wholly-owned subsidiary of Primedia that becomes a party to
this Agreement and agrees to be a co-obligor on all Primedia Payment
Obligations and to abide by a substantially identical restriction on transfer.


 


5.2          Restrictions
on Transfer by the Founding Stockholders. 
Except as otherwise provided herein, no Founding Stockholder shall
transfer any of its shares of Common Stock prior to the earliest of the Select
Call Closing Date, the Call Closing Date or the Put Closing Date, as
applicable, or December 31, 2010; provided, however, that any Founding
Stockholder may at any time transfer his shares of Common Stock into a trust in
respect of which he serves as trustee, provided that the trust instrument
governing such trust shall provide that such Founding Stockholder shall retain
sole and exclusive control over the voting and disposition of such shares.


 


15





















 


ARTICLE 6.

EQUITY MATTERS


 


With the exception of the
shares of Common Stock issued pursuant to the exercise of a Company Option
outstanding on the date hereof, the Company shall not issue any equity
securities from the date hereof until the earlier of (i) the Call Closing Date
(or Select Call Closing Date, should it occur) or Put Closing Date, as
applicable or (ii) December 31, 2010.


 


ARTICLE
7.

MISCELLANEOUS PROVISIONS


 


7.1          Entire
Agreement.  This Agreement (together
with the Schedules and Exhibits hereto, the Stock Purchase Agreement, the
Contribution Agreement, the Shared Services Agreement and the License
Agreement) contains, and is intended as, a complete statement of all of the
terms of the arrangements between the parties with respect to the matters
provided for herein, and supersedes any previous agreements and understandings
between the parties with respect to those matters.


 


7.2          Governing
Law; Jurisdiction.


 


This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
state of New York.  Each Stockholder
hereby irrevocably submits to the jurisdiction of any United States Federal
Court (or, if such court shall not have jurisdiction, any New York State Court)
sitting in New York City (and any appellate court therefrom) over any action or
proceeding arising out of or relating in any manner (whether in contract, tort
or otherwise) to this Agreement. Each Stockholder hereby irrevocably waives any
objection that it may have to venue and the defense of an inconvenient forum to
the maintenance of such action or proceeding.


 


7.3          Amendment;
Waiver.  No provision of this
Agreement may be amended or modified except by an instrument or instruments in
writing signed by the parties hereto. Any party may waive compli­ance by
another with any of the provisions of this Agreement.  No waiver of any provision hereof shall be
construed as a waiver of any other provision or subsequent breach.  Any waiver must be in writing.  The failure of any party hereto to enforce at
any time any provision hereof shall not be construed to be a waiver of such
provision or to affect in any way the validity hereof or any part hereof or the
right of any party thereafter to enforce each and every such provision.


 


7.4          Notices.  All notices and other communica­tions
under this Agreement shall be in writing and shall be deemed given when
delivered personally, mailed by registered mail, return receipt requested, sent
by documented overnight delivery service or, to the extent receipt is
confirmed, by facsimile to the parties at the following addresses (or to such
other address as a party may have specified by notice given to the other party
pursuant to this provision):


 


	
  If
  to the Primedia, to it at:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PRIMEDIA, Inc.

  	
   

  	
   

  	
   

  	
   

  
	
  745 Fifth Avenue

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10151

  	
   

  	
   

  	
   

  	
   

  
	
  Attention: Sheila Spence

  	
   

  	
   

  	
   

  	
   

  
	
  Phone: (212) 745-0100

  	
   

  	
   

  	
   

  	
   

  
	
  Fax: (212) 745-0645

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PRIMEDIA, Inc.

  	
   

  	
   

  	
   

  	
   

  
	
  745 Fifth Avenue

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10151

  	
   

  	
   

  	
   

  	
   

  
	
  Attention: General Counsel

  	
   

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  (212)
  745-0100

  	
   

  	
   

  
	
  Fax:

  	
  (212)
  745-0131

  	
   

  	
   

  
								



 


16





















 


	
  If
  to Original Stockholders or Stockholder Representatives, to the Stockholder
  Representatives at:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Automotive.com, Inc.

  	
   

  	
   

  	
   

  	
   

  
	
  230 Commerce

  	
   

  	
   

  	
   

  	
   

  
	
  Suite 290

  	
   

  	
   

  	
   

  	
   

  
	
  Irvine, CA 92602

  	
   

  	
   

  	
   

  	
   

  
	
  Attention: Joshua Speyer, Jason Phillips and Gary Fudge

  	
   

  	
   

  
	
  Phone:

  	
  (714)
  389-5000

  	
   

  	
   

  
	
  Fax:

  	
  (714)
  389-5065

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Latham & Watkins LLP

  	
   

  	
   

  	
   

  	
   

  
	
  650 Town Center Drive, Suite 2000

  	
   

  	
   

  	
   

  	
   

  
	
  Costa Mesa, CA 92626

  	
   

  	
   

  	
   

  	
   

  
	
  Attention: R. Scott Shean

  	
   

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  (714)
  540-1235

  	
   

  	
   

  	
   

  	
   

  
	
  Fax:

  	
  (714)
  755-8290

  	
   

  	
   

  	
   

  	
   

  



 


7.5          Separability.  If any provision of this Agreement is
held by any court of competent jurisdiction to be illegal, invalid or
unenforceable, such provision shall be of no force and effect, but the
illegality, invalidity or unenforceability shall have no effect upon and shall
not impair the enforceability of any other provision of this Agreement.


 


7.6          Assignment
and Binding Effect.  Neither party
hereto may assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the other party hereto.  All of the terms and provisions of this
Agreement shall be binding on, and shall inure to the benefit of, the respective
legal successors and permitted assigns of the parties.


 


7.7          No
Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement, the Stock Purchase Agreement and the
Contribution Agreement are for the sole benefit of the parties hereto and
thereto and their respective successors and permitted assigns and shall not be
construed as conferring and are not intended to confer any rights on any other
persons.


 


7.8          Counterparts.  This Agreement may be executed by facsimile
in two (2) or more counterparts, each of which shall be deemed an original, and
each party thereto may become a party hereto by executing a counterpart
hereof.  This Agreement and any
counterpart so executed shall be deemed to be one and the same instrument.


 


7.9          Interpretation.  Article titles, headings to sections and
the table of contents are inserted for convenience of reference only and are
not intended to be a part or to affect the meaning or interpretation
hereof.  The Schedules referred to herein
shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.  As used herein, “include”, “includes” and
“including” are deemed to be followed by “without limitation” whether or not
they are in fact followed by such words or words of like import; “writing”,
“written” and comparable terms refer to printing, typing, lithogra­phy and
other means of reproducing words in a visible form; references to a person are
also to its successors and permitted assigns; “hereof”, “herein”, “hereunder”
and comparable


 


17





















 


terms refer to the entirety hereof and not to any
particular article, section or other subdivision hereof or attachment hereto;
references to any gender include references to the plural and vice versa;
references to this Agreement or other documents are as amended or supplemented
from time to time; references to “Article”, “Section” or another subdivision or
to an attachment or “Schedule” are to an article, section or subdivision hereof
or an attachment or “Schedule” hereto.


 


7.10        No
Presumption.  This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting.


 


[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


 


18





















 


In
Witness Whereof, the undersigned have executed this Stockholders Agreement
as of the date first above written.


 


	
   

  	
  PRIMEDIA INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher A. Fraser

  	
   

  
	
   

  	
   

  	
  Name:
  Christopher A. Fraser

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AUTOMOTIVE.COM,
  INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jason Phillips

  	
   

  
	
   

  	
   

  	
  Name:
  Jason Phillips

  
	
   

  	
   

  	
  Title:
  COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHRIS
  AND PAMELA CALLAHAN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chris Callahan and Pamela Callahan

  	
   

  
	
   

  	
  Chris
  and Pamela Callahan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DANIEL
  D. FERRELL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel D. Ferrell

  	
   

  
	
   

  	
  Daniel
  D. Ferrell

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GERRY
  E. NAEGLE

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gerry E. Naegle

  	
   

  
	
   

  	
  Gerry
  E. Naegle

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JAMES
  R. PHILLIPS, AS CUSTODIAN FOR SENNA 

  
	
   

  	
  NICHOLE
  PHILLIPS

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James R. Phillips

  	
   

  
	
   

  	
  James
  R. Phillips

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JAMES
  R. PHILLIPS, AS CUSTODIAN FOR LUCILLE ROSE 

  
	
   

  	
  OPAL
  POLICH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James R. Phillips

  	
   

  
	
   

  	
  James
  R. Phillips

  
								



 


EXECUTION
COPY


SIGNATURE
PAGE TO STOCKHOLDERS AGREEMENT


 


19





















 


	
   

  	
  TOD
  A. AND CAREN T. PHILLIPS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tod A. Phillips and
  Caren T. Phillips

  	
   

  
	
   

  	
  Tod
  A. and Caren T. Phillips

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JODIE
  ANNE PHILLIPS POLICH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jodie Anne Phillips Polich

  	
   

  
	
   

  	
  Jodie
  Anne Phillips Polich

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DANIEL
  N. ROHR, SR.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel N. Rohr

  	
   

  
	
   

  	
  Daniel
  N. Rohr, Sr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL
  AND FRANKLIN SPEYER, JTWROS

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carol Speyer and Franklin Speyer

  	
   

  
	
   

  	
  Carol
  and Franklin Speyer, JTWROS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JOSHUA
  A. SPEYER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joshua A. Speyer

  	
   

  
	
   

  	
  Joshua
  A. Speyer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JASON
  E. PHILLIPS

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jason E. Phillips

  	
   

  
	
   

  	
  Jason
  E. Phillips

  
							



 





















 


	
   

  	
  JAMES
  R. PHILLIPS AND MEREDITH COLEMAN

  
	
   

  	
  REVOCABLE
  TRUST DATED 8/23/93

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James R. Phillips and Meredith Coleman

  	
   

  
	
   

  	
  Name:

  	
  James
  R. Phillips and Meredith Coleman

  	
   

  
	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROBERT W. LEMASTER AND
  ROSALIE T. LEMASTER,

  
	
   

  	
  TRUSTEES
  OF THE ROBERT W. AND ROSALIE T.

  
	
   

  	
  LEMASTER
  TRUST U/A DTD 10/30/01

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert W. Lemaster and Rosalie T. Lemaster

  	
   

  
	
   

  	
  Name:

  	
  Robert
  W. Lemaster and Rosalie T. Lemaster

  	
   

  
	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GARY
  A. FUDGE, TRUSTEE OF THE TRUST OF GARY A. FUDGE U/D/T DATED JANUARY 27, 1997

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary A. Fudge

  	
   

  
	
   

  	
  Name:

  	
  Gary
  A. Fudge

  	
   

  
	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TODD
  BUSBY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd Busby

  	
   

  
	
   

  	
  Todd
  Busby

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ANN
  WAGNER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ann Wagner

  	
   

  
	
   

  	
  Ann
  Wagner

  
	
   

  	
   

  	
   

  
	
   

  	
  PATRICK
  EGER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick Eger

  	
   

  
	
   

  	
  Patrick
  Eger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRAIG
  BUCCOLA

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Craig Buccola

  	
   

  
	
   

  	
  Craig
  Buccola

  
												



 





















 


	
   

  	
  GARY
  HIBBARD

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gary Hibbard

  	
   

  
	
   

  	
  Gary
  Hibbard

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHAD
  HAYASHIBARA

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Chad Hayashibara

  	
   

  
	
   

  	
  Chad
  Hayashibara