European Shareholders Agreement

EXHIBIT 10.20


Confidential Treatment Requested with respect to certain portions of this agreement.


SHAREHOLDERS AGREEMENT


SHAREHOLDERS AGREEMENT, dated as of June 9, 2000 (this "Agreement"), between Evoke Communications Inc., a Delaware corporation ("Evoke"), and @viso Limited, a company incorporated under the laws of England and Wales ("@viso").


WHEREAS, Evoke and @viso desire to associate themselves, directly or through one or more affiliates, as shareholders (the "Shareholders") of Evoke Communications B.V., a Netherlands corporation (the "Company"), to launch and produce Internet communication services, including audio, video and data web conferencing, web collaboration and streaming in the countries in Europe, which are listed in Annex A hereto (the "Territory");
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WHEREAS, it is deemed in the best interests of the Shareholders and the Company that provision be made for continuity and stability of policy and ownership of the Company, to the extent and upon the terms and conditions hereinafter set forth; and


WHEREAS, the Company and the Shareholders acknowledge that Evoke's ability to consolidate the operating results of the Company into Evoke's financial operations is a fundamental element of the transaction contemplated by this Agreement.


NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth, the parties hereby agree as follows:


1. Organization of Company
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(a) On or before June 30, 2000 (i) Evoke will subscribe to 4,590,000 Common Shares of the Company at * per share for a cash contribution of *, (ii) @viso will subscribe to 4,410,000 Common Shares of the Company at * per share for a cash contribution of * (such 9,000,000 Common Shares being herein called "Shares"), and (iii) in consideration for * from the Company (* in cash and i5,000,000 through a promissory note to Evoke which note will bear interest at 8% per annum and be payable at the earlier of (1) two years from the date of such note, (2) the date of closing the initial public offering (the "IPO") of equity securities of the Company, (3) the date of a change in control of the Company and (4) the date of closing an equity financing yielding not less than i10,000,000 in proceeds to the Company), Evoke will execute and deliver the


* Confidential Treatment Requested


license agreement substantially in the form attached as Annex B hereto (the
------- "License Agreement"). The deed of incorporation containing the Articles of Association of the Company will be substantially in the form of Annex C hereto.
------- Concurrently with its capital subscription under this Section 1(a), @viso will enter into a line of credit agreement permitting the Company to borrow up to * as required from time to time to finance operations, which borrowings will bear interest at 8% per annum and be payable at the earlier of (i) the IPO of the Company and (ii) June 30, 2005.


(b) Up to 1,000,000 additional Common Shares (subject to adjustment for stock splits, combinations, and other changes in capitalization) may be issued to a foundation, which will issue depositary receipts therefor to employees, directors and consultants of the Company pursuant to stock option or award plans adopted by the Board of Directors of the Company.


(c) Up to 5,000,000 shares of Common Shares (subject to adjustment for stock splits, combinations and other changes in capitalization) will be reserved for issuance from time to time to Evoke, at a subscription price to be determined by the Board of Directors of the Company, as required to allow it to maintain its 51% voting control of the Company.


2. Scope of Operations and Responsibilities
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(a) Notwithstanding the extent of the objects set forth in its Articles of Association, the operations of the Company will be limited to launching and producing Internet communication services, including audio, video and data web conferencing, web collaboration and streaming in the Territory and such other activities as may be approved by the Board of Directors in accordance with Section 4 below.


(b) Evoke and @viso affiliates will work with the Company to provide advice and services for the launch and ongoing support of the Company's operations, including recruiting the President/Chief Executive Officer and other senior management. For purposes of this Agreement, the term "affiliate" means any person who controls, or is controlled by or under common control with, the affiliated party, and, unless the context otherwise requires, references to the parties and the Shareholders include their respective affiliates. The Company will pay the Shareholders and their


* Confidential Treatment Request.
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affiliates fees and reimburse allocated costs for services performed pursuant to this Section 2, but only if approved by the Board of Directors pursuant to Section 4(d) below.


(c) Evoke will provide, pursuant to the License Agreement or otherwise, all intellectual property and technology owned by it which are necessary for the Company to operate its business in the Territory on a basis comparable to Evoke's current operations in the United States. Evoke represents and warrants to @viso that (i) such intellectual property will include all licenses, trademarks, service marks, trade names and other intellectual property necessary for such operations, without, to Evoke's knowledge, any material conflict or infringement of the rights of others, except for that certain Complaint filed on March 17, 2000 in the United States District Court for the Northern District of California, and (ii) such technology will include all software and infrastructure, as set forth in the License Agreement, which, to Evoke's knowledge, as adapted to or specifically developed for the local market, will allow such operations.


(d) Affiliates of @viso will work with the Company to provide advice and services as required and agreed to among the parties, including analyzing markets and competition, proposing an entry strategy, preparing business plans, identifying potential partners and co-investors, locating and acquiring office and other facilities, developing operational structures and processes, recruiting personnel and obtaining general administrative services, and complying with national and European Commission merger or other regulations.


(e) Except as set forth in the License Agreement, including, but not limited to Section 2.1 of the License Agreement, for so long as Evoke owns, directly or indirectly, at least 10% of the equity interests in the Company, Evoke will not directly or indirectly engage in or carry on any business which is, or is reasonably likely to be, in competition with the Company within the Territory.


(f) Prior to the closing of the transactions contemplated herein, the Company and @viso and each of its affiliates that is anticipated to have a material business relationship with Evoke or the Company, including Cegetel, shall enter into noncompete and nonsolicitation agreements in the forms and on the terms to be agreed to by the parties.


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3. Representations and Warranties
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Each of Evoke and @viso hereby represents and warrants to the other as follows:


(a) It is a company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full power and authority to enter into and perform this Agreement.


(b) No consent, approval or authorization of or declaration or filing with any governmental authority or person or entity is required on its part in connection with the execution or performance of this Agreement.


(c) The execution and delivery of this Agreement and the performance of its obligations hereunder will not (i) violate or be in conflict with any provision of law, any order, rule or regulation of any court or other agency of government, or any provision of its charter or by-laws, or (ii) violate, be in conflict with, result in a breach of, or constitute a default under any material indenture, license, lease, agreement or other instrument to which it is a party or by which it or any of its properties is bound.


4. Management
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(a) Responsibility for the management, supervision and conduct of the operations of the Company will be vested in its Board of Directors.


(b) The total number of directors comprising the Board will be seven. So long Evoke and @viso continue to hold at least 10% of the equity securities of the Company, respectively, Evoke will designate four directors, and @viso will designate two directors. The President/Chief Executive Officer of the Company who will also be a member of the Board will be designated by a vote of a majority of the other members of the Board. The President/Chief Executive Officer may be terminated at any time by either Shareholder, provided he has
-------- breached his Employment Agreement.


(c) A quorum of directors at any meeting of the Board shall consist of four directors, including one director designated by Evoke and one director designated by @viso. Any corporate action to be taken by vote of the Board shall be authorized by vote of not less than a majority of the directors present at any such meeting at which a quorum is present and acting throughout, or by


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written consent of all directors of the Company except as may be otherwise required by paragraph (d) below or by law.


(d) Strategic corporate actions that are outside the ordinary course of business, except for actions taken in connection with the rights granted pursuant to the License Agreement and the attachments thereto, may be taken by the Board only upon authorization by a majority vote of the directors that includes at least one director designated by @viso, These include:


(i) any acquisition or capital expenditure that involves an amount
exceeding 20% of the assets of the Company;


(ii) any sale, lease or other disposition of assets that involves an
amount exceeding 20K of the assets of the Company;


(iii) the incurrence, guarantee or otherwise becoming liable with
respect to any indebtedness for borrowed money in an amount exceeding 20%
of the assets of the Company;


(iv) the execution of any strategic contract, or the incurrence of
any obligation, with a commitment of an amount exceeding 20% of the assets
of the Company;


(v) the issuance or sale of any Common Shares (including the IPO of
the Company) to new Shareholders other than the 1,000,000 Common Shares
referred to in Section 1(b), as well as of any other securities and the
terms thereof, other than as required by Section 8(c);


(vi) any call for additional capital pursuant to Section 5 below;


(vii) any prop ...