EXHIBIT 10.7
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT is entered into this 1st day of July, 1996 by and
among FWB SOFTWARE, LLC, a California limited liability company (including any
successor corporation, the "COMPANY"), StreamLogic Software Corporation, a
Delaware corporation ("SUB"), and FWB Software, Inc., a California corporation
("FWB").
RECITALS
WHEREAS, Sub is acquiring shares of the Company and in connection therewith
the Company and FWB desire to grant Sub the rights set forth herein.
AGREEMENT
SECTION 1 REGISTRATION RIGHTS.
1.1 DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:
(a) "COMPANY" shall refer to the Company or any corporation to which it
may be converted by merger, asset sale, or other means.
(b) "REGISTER", "REGISTERED" AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance
with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
(c) "SHARES" means the 1,100,000 shares of the Company evidencing the
member interest issued to Sub pursuant to the Operating Agreement (the
"OPERATING AGREEMENT"), any other equity securities or member interests
issued as a dividend or other distribution with respect to or in
replacement of such shares and any shares of any equity securities issued
or issuable upon conversion of the Company into a corporation.
(d) "SHAREHOLDER(S)" means the purchaser of the Shares pursuant to the
Operating Agreement and any transferees of such Shares and related
registration rights, pro rata purchase rights and co-sale rights.
(e) "APPROVAL OF THE SHAREHOLDER" means the approval of the holder(s) of a
majority of the Shares.
1.2 DEMAND TO "GO PUBLIC." After June 30, 2001, if the Company receives a
written request from Shareholders who own at least 75% of the Shares, the
Company will convert into a corporation taxed as a "C Corporation" (effective
as of the time its initial public offering is declared effective by the
Securities and Exchange Commission) and as soon as practicable after receipt
of such written request (and not more than 150 days thereafter) the Company
will use its best efforts to effect an initial registered underwritten public
offering, provided that the Company has been profitable in each of the four
quarters prior to such demand being made and has had cumulative revenue of at
least $20 million during such period. The Company will have the sole right to
select the underwriters for such registration. Such underwriters shall be
nationally-recognized. The Shareholders shall be entitled to sell their
Shares in the offering, provided, however, the underwriters may limit the
amount of securities to be included in the registration, as provided below.
If the underwriters decide that it is necessary for the successful completion
of the public offering to limit the amount of the securities to be sold in the
offering to less than 100% of the Shares requested to be included, the number
of Shares that may be included shall be allocated pro rata among all selling
shareholders in proportion, as nearly as practicable, based upon their
relative ownership of the Company. Notwithstanding the foregoing, in the
event that the underwriters selected by the Company determine that it would
not be practicable or advisable due to market conditions or other reasons for
the Company to effect an initial public offering at the time requested by the
Shareholder pursuant to this Section, then the Company may delay such public
offering until such time as the Company's underwriters determine that it would
be practicable and advisable for the Company to proceed with such initial
public offering, but such delay shall not exceed an aggregate of six months.
1.3 SHAREHOLDER DEMAND.
(a) Demand. At any time more than six months after the closing date of the
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initial registered underwritten public offering of the Company's
securities, if the Company receives a written request from Shareholders who
own at least 75% of the Shares, the Company will as soon as practicable use
its best efforts to effect an underwritten public offering. This right may
be exercised only once, except as provided in subsection 1.3(e) below.
(b) Notice. After the Company receives a request under subsection 1.3(a),
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the Company will (i) promptly give each Shareholder written notice, and
(ii) include in such registration all Shares specified by any Shareholder
in a written response made within fifteen (15) days after the date of such
written notice from the Company, subject to cutback by the underwriters.
(c) Underwriting. The Company will have the sole right to select the
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underwriters for this registration. Such underwriters shall be nationally-
recognized. The right of any Shareholder to register its Shares is
conditioned upon such Shareholder's participation in the underwriting. The
Company and all Shareholders including shares in the registration shall
enter into an underwriting agreement in customary form with the
underwriters.
(d) Cutbacks. The Shareholders will have first priority to include up to
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100% of their Shares in the offering. However, the underwriters may limit
the amount of securities to be included in the registration. If the
underwriters decide to limit the amount of the securities to be sold in the
offering to less than 100% of the Shares requested to be included, the
number of Shares that may be included shall be allocated pro rata among the
Shareholders in
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proportion, as nearly as practicable, to the respective amounts of Shares
requested to be sold by each of them at the time of filing of the
registration statement.
(e) Additional Demand After Cutback. If under subsection 1.3(d) the
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underwriters limit the amount of securities to less than 80% of the Shares
requested to be included in the offering, the Shareholder shall have the
right to one additional demand registration under the terms of this Section
1.3. This right may not be exercised within one year after the closing
date of the prior demand registration completed by the Company under this
Section 1.3.
1.4 PIGGYBACK REGISTRATION.
(a) Notice. If, after the Company's initial registered public offering,
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the Company decides to register any of its securities in an underwritten
offering or in a "shelf" registration, the Company will (i) promptly give
each Shareholder written notice, and (ii) include in such registration all
Shares specified by any Shareholder in a written response made within
fifteen (15) days after the date of such written notice from the Company,
subject to cutback by the underwriters.
(b) Underwriting. As applicable, the Company will have the sole right to
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select the managing underwriters. Such underwriters shall be nationally-
recognized. The right of any Shareholder to register its Shares is
conditioned upon participation in the underwriting and all Shareholder
including shares in the registration shall enter into an underwriting
agreement in customary form with the underwriters.
(c) Cutbacks. If they consider it necessary for the successful completion
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of the public offering, the underwriters may limit the amount of securities
to be included in the registration by the Company's shareholders; provided,
however, that the number of Shares to be included in such registration
shall not be reduced to less than 25% of the aggregate securities included
in the registration. In the event of such reduction, the number of Shares
that may be included in the registration shall be allocated among the
Shareholder who requested to include shares in proportion, as nearly as
practicable, to the respective amounts of such shares held by each such
Shareholder at the time of filing of the registration statements.
1.5 COMPANY DELAY OF REGISTRATION. The Company shall file and use its best
efforts to cause to be effective a registration statement as soon as
practicable after receipt of a request specified in Section 1.3 and not more
than 90 days thereafter; however, if in the good faith judgment of the Manager
(as defined in the Operating Agreement) or board of directors, as applicable,
of the Company it would be seriously detrimental to the Company and its
shareholders for such registration statement to be filed promptly, the Company
shall have the right to defer such filing for a period of not more than one
hundred eighty (180) days.
1.6 EXPENSES OF REGISTRATION. All Registration Expenses relating to
securities registered by the Shareholders shall be borne by the Company. All
Selling Expenses relating to securities registered by the Shareholders shall
be borne by the Shareholders participating in the offering pro rata based on
the number of Shares being sold. "Registration Expenses" means all expenses
incurred by the Company in complying with this Section 1, including all
registration,
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qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.
"Selling Expenses" means all underwriting discounts and selling commissions and
fees and disbursements of special counsel for the Shareholders applicable to
the sale of the Shares.
1.7 REGISTRATION PROCEDURES. In the case of each registration effected
pursuant to this Section 1, the Company will, upon request, inform each
Shareholder as to the status of each such registration. At its expense the
Company will:
(a) Keep such registration, and any qualification or compliance under state
securities laws which the Company determines to obtain, effective for a
period of one hundred eighty (180) days or until the Shareholders have
completed the distribution described in the registration statement relating
thereto, whichever first occurs;
(b) Furnish such number of prospectuses and other documents incident
thereto as a Shareholder from time to time may reasonably request;
(c) Supply to each Shareholder who is named in the prospectus and who is or
will be the beneficial owner of five percent (5%) or more of any class of
the Company's voting securities as of the effective date of the
registration statement, drafts of the registration statement for its review
and each such Shareholder shall have the right to approve the portions of
the registration statement which relate to such Shareholder, provided that
such approval is not to be unreasonably withheld;
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Shareholder,
provided that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general
consent to service of process in any such sates or jurisdictions; and
(e) Notify each Shareholder who owns Shares covered by such registration
statement, when a prospectus relating thereto is required to be delivered
under the Securities Act, at any time that the Company becomes aware of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
1.8 DELAY OF REGISTRATION. No Shareholder shall have any right to take any
action to restrain, enjoin or otherwise delay any registration pursuant to
subsection 1.2, 1.3 or 1.4 hereof as a result of any controversy that may
arise with respect to the interpretation or implementation of this Agreement.
1.9 INDEMNIFICATION.
(a) The Company will indemnify each Shareholder, each of its officers,
directors, employees, partners, legal counsel and accountants, and each
person controlling such
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Shareholder within the meaning of section 15 of the Securities Act of 1933,
as amended (the "Securities Act"), with respect to which any registration,
qualification or compliance has been effected pursuant to this Agreement,
and each underwriter, if any, and each person who controls any underwriter
within the meaning of section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or action in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereof, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or any violation by the
Company of any rule or regulation promulgated under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or state
securities laws applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance and will reimburse each such Shareholder, each
of its officers, directors, employees, partners, legal counsel and
accountants, and each person controlling such Shareholder, each such
underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by an instrument duly executed by or on behalf of such
Shareholder or underwriter and stated to be specifically for use therein.
(b) Each Shareholder will, if Shares held by such Shareholder are included
in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors,
officers, employees, partners, legal counsel and accountants, each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of section 15 of the Securities Act, and
each other such Shareholder, each of its officers, directors, employees,
partners, legal counsel and accountants, and each person controlling such
Shareholder within the meaning of section 15 of the Securities Act, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement of a material fact
contained in any such registration statement, prospectus, offering circular
or other document, or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Shareholder, such
directors, officers, employees, partners, legal counsel, accountants,
persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action, in each case to the
extent, but only to the extent that such untrue statement or omission is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by or on behalf of
such Shareholder and stated to be specifically for use therein.
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(c) Each party entitled to indemnification under this subsection 1.l9 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, provided further, that
if any Indemnified Party shall have reasonably concluded that there may be
one or more legal defenses available to the Indemnifying Party, or that
such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 1, the
Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, and such Indemnifying Party
shall not be required to reimburse such Indemnified Party and any person
controlling such Indemnified Party for that portion of the fees and
expenses of any counsel retained by the Indemnified Party which are related
to such different or additional defenses or which are beyond the scope of
the indemnity agreement provided in this Section 1, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless such failure is prejudicial to the Indemnifying Party in
defending such claim or litigation. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this subsection 1.9 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall be controlling.
1.10 LOCKUP AGREEMENT. In consideration for the Company agreeing to its
obligations under this Section 1, each Shareholder agrees in connection with
the initial registration of the
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Company's securities, upon the request of the Company or the underwriters, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Shares without the prior written consent of the
Company or underwriters, as the case may be, for such period of time beginning
with written notice from the Company of its intent to file a registration
statement and ending on a date not later than 180 days after the effective date
of such registration; provided, however, that the Shareholder shall have no
obligation to enter into the agreement described herein unless all executive
officers, directors of the Company and all owners of 20% or more of the total
combined voting power of all classes of securities of the Company enter into
similar agreements.
1.11 INFORMATION BY SHAREHOLDER. As a condition to the inclusion of their
Shares, the Shareholder who own any Shares included in any registration shall
furnish to the Company such information regarding them and the distribution
proposed by them as the Company may request in writing and as shall be
required in connection with any registration referred to in subsection 1.2,
1.3 or 1.4 of this Agreement.
1.12 RULE 144 REPORTING. With a view to making available to the Shareholder
the benefits of certain rules and regulations of the Commission which at any
time permit the sale of the Shares to the public without registration, the
Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration statement under the
Securities Act filed by the Company for an offering of its securities to
the general public;
(b) Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements); and
(c) So long as a Shareholder owns any unregistered Shares, furnish to such
Shareholder upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time
after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents of the Company as such Shareholder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a
Shareholder to sell any such securities without registration.
1.13 TRANSFER OF REGISTRATION RIGHTS. The rights granted to the Shareholder
by the Company under this Section 1 may be assigned proportionately by the
Shareholder in connection with a sale of the Shares; provided that there are
no more than ten (10) transferees in the aggregate at any one time; and
provided, that the assignee also assumes the obligations under this Section 1
and that the Company is given written notice by the Shareholder at the time of
or within a reasonable time after said transfer, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned.
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1.14 TERMINATION OF REGISTRATION RIGHTS. The obligations of the Company
pursuant to this Section 1 shall terminate upon the earliest to occur of (i)
June 30, 2004, or (ii) with respect to each Shareholder, when all of the
Shares of the Shareholder may be sold under Rule 144 in a three-month period
after the initial public offering of the Company's securities.
SECTION 2 PRO RATA PURCHASE RIGHTS.
2.1 RIGHT OF PRO RATA PURCHASE. If the Company decides to issue any
additional membership interests or other securities, including (upon any
conversion to a corporation taxed as a "C Corporation") common stock or any
other security exercisable for or convertible or exchangeable into common
stock or other otherwise give any rights to acquire any of such securities
(all such securities being hereinafter referred to as "Common Stock
Equivalents"), it will give the Shareholder the right to purchase their pro
rata share of such Common Stock Equivalents based upon the respective
percentage ownership of the Company of such holders on the terms set forth in
Section 2.2. The rights granted to the Shareholder by the Company under this
Section 2.1 may be assigned proportionately by the Shareholder in connection
with a sale of the Shares; provided that there are no more than ten (10)
transferees in the aggregate at any one time.
2.2 PROCEDURE. In the event the Company proposes to issue any Common Stock
Equivalents, it shall give the Shareholder written notice of the proposed
terms ("the Company's Notice"). The Shareholder shall have twenty-one (21)
days after receipt of the Company's Notice to notify the Company in writing
that it agrees to purchase its pro rata share of such Common Stock Equivalents
and it shall thereafter complete such purchase at the same time as the closing
of the sale of the remainder of the Common Stock Equivalents. If a
Shareholder declines to exercise or fails to give notice to the Company within
twenty-one (21) days of receipt of the Company's Notice, the Company shall
have one hundred eighty (180) days thereafter to sell the Common Stock
Equivalents upon terms no more favorable to the purchasers thereof than
specified in the Company's Notice.
2.3 EXCEPTIONS. The pro rata purchase rights set forth in this Section 2
shall not apply to (i) the issuance by the Company of Common Stock Equivalents
(in an amount not to exceed 15% of the Common Stock Equivalents without the
Approval of the Shareholder) to directors, officers, employees or consultants
of the Company other than owners of 10% or more of the Company's stock on a
fully diluted basis pursuant to any stock option or stock purchase plans or
similar agreements approved by the Company's Manager or board of directors as
applicable, (ii) the issuance of Common Stock Equivalents upon exercise or
conversion of any option, warrant or other security, into common stock, (iii)
the issuance of Common Stock Equivalents pursuant to any merger, acquisition,
or similar transaction, or (iv) common stock offered to the public pursuant to
the Company's first registered underwritten offering.
2.4 TERMINATION. The rights set forth in this Section 2 shall terminate
upon the earliest to occur of (i) the closing of the Company's first
registered underwritten public offering, (ii) June 30, 2001 or (iii) when Sub
no longer owns any Shares.
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SECTION 3 CO-SALE RIGHTS.
FWB (or a gratuitous transferee of FWB's membership interests) will not sell,
transfer or exchange ("transfer") any of its membership interests (or other
securities) of the Company for consideration without first giving the
holder(s) of the Shares the opportunity to participate pro rata in such
transfer based upon their relative percentage ownership of the Company. FWB
shall give written notice to the holder(s) of the Shares of the terms of the
proposed transfer. The holder(s) of the Shares shall give written notice to
FWB of the election to participate in such transfer in accordance with the
proposed terms within twenty-one (21) days after receipt of the notice. To
the extent the holder(s) of any Shares do not elect to participate, FWB shall
be entitled to sell a proportionate amount of the securities of the Company
specified in, and according to the terms of, the notice within ninety (90)
days from the date of the sending of the notice. The rights granted to the
Shareholder by the Company under this Section 3 may be assigned by the
Shareholder in connection with a sale of the Shares; provided that there are
no more than ten (10) transferees in the aggregate at any one time. Any
proposed Transfer by FWB to a different transferee, or on terms and conditions
materially different from those described in the written notice, as well as
any subsequent proposed transfer by FWB, shall again be subject to the Co-Sale
Right. This covenant shall terminate upon the earliest to occur of (i) June
30, 2001, or (ii) upon the closing of the Company's registered initial public
offering ("IPO").
SECTION 4 NO ISSUANCES BELOW FAIR MARKET VALUE.
The Company shall not issue any securities to its existing security holders at
a price lower than the fair market value of such securities as determined in
good faith by the Manager of the Company or board of directors as applicable,
except to employees, officers and directors other than owners of ten (10)
percent or more of the securities of the Company on a fully-diluted basis
pursuant to stock option or purchase plans approved by the Manager of the
Company which meet the criteria of Section 2.3. The parties agree that any
legal remedy for violation of this Section 4 would be insufficient and that a
potentially aggrieved party would have the right to cause specific performance
of this Section 4.
SECTION 5 RIGHT OF FIRST REFUSAL, STANDSTILL.
5.1 RIGHT OF REFUSAL.
(a) RIGHT TO PURCHASE. In the event a Shareholder proposes to transfer,
assign or otherwise dispose of any Shares (the "TRANSFER STOCK") in a bona
fide transaction, the Company shall have a right of first refusal (the
"RIGHT OF REFUSAL") to purchase all, but not less than all, of the Transfer
Stock in accordance with the terms of this Agreement.
(b) TRANSFER NOTICE. The Shareholder shall first give written notice of
any proposed transfer (the "TRANSFER NOTICE") to the Company. The Transfer
Notice shall name the proposed transferee and state the number of shares of
Transfer Stock to be transferred, whether the transfer is voluntary or
involuntary, the price per share, and all other terms of the proposed
transaction.
(c) TERMS AND PROCEDURE BEFORE IPO. The following terms and procedures
shall apply to the Right of Refusal:
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(1) EXERCISE PERIOD. Within forty-five (45) days of receipt of the
Transfer Notice, the Company will give the Shareholder written notice
of its election to purchase the Transfer Stock.
(2) PRICE. The per share purchase price for shares of Transfer Stock
purchased by the Company pursuant to the Right of Refusal shall be the
price per share agreed to be paid by the proposed transferee.
(3) PAYMENT OF PURCHASE PRICE. Payment of the purchase price for the
Transfer Stock will be made to the Shareholder in cash or such other
consideration as is offered by the proposed transferee by the Company
within sixty (60) days after the notice from the Company of its
election to exercise its Right of Refusal (see subsection 5.1(c)(1)).
During the period after such notice and until payment of the purchase
price, the Shareholder will vote its Shares as directed by the Company
for any financing arrangements reasonably proposed by the Company for
the purpose of financing its purchase of the Transfer Stock.
(4) FAILURE TO EXERCISE. If the Company fails to exercise in full its
Right of Refusal within the period set forth in subsection 5.1(c)(1)),
the Shareholder may, during the one hundred eighty (180) days
following such period, conclude a transfer of the shares of Transfer
Stock on the terms and conditions described in the Transfer Notice.
Any proposed transfer by the Shareholder to a different transferee, or
on terms and conditions materially different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by
the Shareholder, shall again be subject to the Right of Refusal.
(d) RESTRICTION ON TRANSFEREES. All transferees of Transfer Stock (except
transferees under subsection 5.1(d)(5)), as a condition of such transfer
must agree in writing (in a form satisfactory to the Company) that they
will receive and hold such Transfer Stock subject to the provisions of this
Agreement, including the Right of Refusal. Any sale or transfer of any
Transfer Stock or any interest in such shares shall be void unless the
provisions of this Section 5.1 are met.
(e) TERMINATION. The Right of Refusal under this Section 5.1 shall
terminate on the earlier of (i) June 30, 2004, and (ii) the closing of an
IPO. This Section 5.1 shall not apply to transfers between Shareholders
and their parent corporations or wholly owned subsidiaries.
5.2 STANDSTILL. Unless the prior written approval of the Company's Manager
has been obtained, a Shareholder will not:
(a) ACQUISITION. Acquire by purchase or otherwise, any securities
(whether debt or equity, including options and warrants) of the Company; or
(b) PARTICIPATION. At such time and for so long as the Company is subject
to the reporting requirements under Section 13(a) or Section 15(d) of the
Exchange Act,
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(1) become a "participant" in a "solicitation" of proxies, as those
terms are defined in Rule 14a-11 and Rule 14a-1, respectively, of
Regulation 14A under the Exchange Act in respect of any voting
securities of the Company that may be outstanding and entitled to vote
at any time during such period;
(2) form any group for the purpose of voting, purchasing or disposing
of the Company's securities; or
(3) deposit any securities of the Company in a voting trust or
subject them to a voting agreement or other arrangement of similar
effect.
(c) TERMINATION. The provisions of this Section 5.2 will terminate on
June 30, 2006.
5.3 LEGEND. To assist in effectuating the provisions of this Section 5, the
Shareholder hereby consents to the placement of the following legend on all
certificates certifying ownership of any securities issued hereunder until such
securities have been sold, transferred or disposed of pursuant to the
requirements of this Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
OF AN AGREEMENT BETWEEN THE HOLDER AND FWB SOFTWARE, INC., AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT THE OFFICE OF THE SECRETARY
OF FWB SOFTWARE, INC."
SECTION 6 MISCELLANEOUS.
6.1 WAIVERS AND AMENDMENTS. No amendment or waiver of any provision of this
Agreement will be effective except as follows:
(a) No waiver of any rights under this Agreement shall be effective except
as to the particular parties who have consented to such waiver in writing.
(b) No amendment to this Agreement shall be effective without the written
consent of the Company and FWB and the Approval of the Shareholder.
6.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the rights and obligations under this Agreement may be assigned only with the
prior written consent of the Company. In the event of a merger, acquisition
or similar transaction involving the Company that does not cause a termination
of this Agreement under Section 6.10, all rights and obligations under this
Agreement shall apply to the respective successors and assigns of the parties
hereto.
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6.4 ENTIRE AGREEMENT. This Agreement and the Exhibits to this Agreement
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
6.5 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be given by personal service,
overnight delivery service, or by certified or registered mail, postage
prepaid, to the address indicated below:
If to Sub: StreamLogic Software Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
with copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
If to the Company: FWB Software, LLC
0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
with copy to: McCutchen, Doyle, Xxxxx & Enersen
Three Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
If to FWB: FWB Software, Inc.
0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
with copy to: McCutchen, Doyle, Xxxxx & Xxxxxxx
Three Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
or at such other address as such party shall have furnished to the others.
Such notices shall be deemed received upon the earlier of actual receipt, the
day after dispatch by overnight delivery, or three business days after the
date of mailing.
6.6 SEPARABILITY. In case any provision of this Agreement shall be declared
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
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6.7 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.9 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach or default of the Company
under this Agreement, shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of or in any similar breach or default thereafter
occurring.
6.10 TERMINATION. This Agreement (except Section 1, which shall terminate in
accordance with Section 1.14) shall terminate upon the acquisition or merger of
the Company or any similar transaction where the security holders of the
Company own less than 50% of the voting securities of the surviving
corporation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
FWB SOFTWARE, LLC STREAMLOGIC SOFTWARE CORPORATION
By: FWB Software, Inc., its Manager By /s/ Xxx Xxxxxxx
-------------------------------------
Xxx Xxxxxxx, Chief Financial Officer
By /s/ Xxxxxx Xxxx
-------------------------------
Xxxxxx Xxxx, President
FWB SOFTWARE, INC.
By /s/ Xxxxxx Xxxx
-------------------------------
Xxxxxx Xxxx, President
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