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EXHIBIT 10.19
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
This Amended and Restated Shareholders' Agreement (the
"Agreement") is entered into as of November 16, 1997 by SynQuest, Inc., a
Georgia corporation (the "Company") and Warburg, Xxxxxx Investors, L.P., a
Delaware limited partnership ("Warburg").
BACKGROUND
Factory Automation & Computer Technologies, Inc., a New York
corporation ("FACT"), the predecessor in interest to the Company, Warburg and
Xxxxx Xxxxxxxxxx entered into a Shareholders' Agreement dated May 11, 1994 (the
"Shareholders' Agreement"). FACT merged into the Company and the Company was the
survivor in the Merger. The Company and Warburg now wish to enter into this
Agreement to make certain provisions with respect to Warburg's right to vote its
shares and other matters, and to amend and restate the Shareholders' Agreement
in its entirety.
The Company and Warburg agree as follows:
SECTION 1. SUBSCRIPTION RIGHT
1.1 Right to Subscribe for Securities.
(a) If at any time while Warburg's subscription right as
described in this Section 1 (the "Subscription Right") is in effect, the Board
of Directors of the Company authorizes the issuance to a Person or Persons other
than Warburg of shares of Common Stock or warrants, rights, options or shares of
capital stock exercisable for or convertible into shares of Common Stock for
cash except, in each case, for the issuance of shares of Common Stock, or rights
to acquire Common Stock, to employees, consultants, officers or directors
pursuant to stock option, stock purchase, stock bonus or stock incentive plans
or pursuant to written contracts relating to the employment, engagement or
compensation and which issuances have been approved by the holders of the
majority of the shares of Series B Preferred Stock then outstanding, then prior
to the issuance of the foregoing Securities, the Company will, with respect to
each such issuance and each such time, offer to Warburg the right to purchase
for cash up to that number of shares of Common Stock or warrants, rights,
options or shares of capital stock exercisable for or convertible into shares of
Common Stock necessary for Warburg to maintain its pro rata ownership of the
outstanding capital stock of the Company. For the purposes of the foregoing
sentence, there will be taken into account the aggregate number of shares of
Common Stock issuable upon conversion of Securities of the Company convertible
into Common Stock, upon exercise of warrants of the Company and upon exercise of
stock options of the Company, whether such Securities are then outstanding or to
be issued at such time.
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(b) Any offer of Common Stock (or other Securities) to
Warburg under the Subscription Right will be made by notice in writing at least
15 business days prior to the date on which the Company intends to issue and
sell Securities to any Person other than Warburg. Such notice will set forth (i)
the amount of Securities proposed to be issued and sold to Persons other than
Warburg, (ii) the price at which such Securities are proposed to be sold to such
Persons and the terms of payment, including the price at which such Securities
may be converted into capital stock of the Company, if applicable, and (iii) the
proposed date of issuance and sale of the Securities to Persons other than
Warburg.
(c) Not later than 10 business days after receipt of such
notice, Warburg will notify the Company in writing whether it elects to purchase
all or any of the Securities offered to Warburg pursuant to such notice and if
Warburg will fail to so notify the company, then all rights of Warburg to
purchase Securities under the offer and notice in question will terminate.
(d) If Warburg will elect to purchase any additional
shares or other Securities as aforesaid, the Securities which Warburg has
elected to purchase will be issued and sold to Warburg by the Company at the
price determined in accordance with Section 1.2 and otherwise on the same terms
as such Securities are issued and sold to Persons other than Warburg.
1.2 Price of Securities.
With respect to each issuance of additional shares or other
Securities by the Company to Warburg, the price of such Securities offered to
Warburg upon exercise of the Subscription Right will be the same purchase price
as that specified in the notice called for by Section 1.1(b)(ii) hereof.
1.3 Non-Waiver.
The election of Warburg not to exercise the Subscription Right
under this Section 1 in any instance will not affect the right of Warburg (other
than in respect of a reduction in the percentage holdings of Warburg) as to any
subsequent issuance.
SECTION 2. LIMITATION ON VOTING RIGHTS
2.1 Limitation
If Warburg owns, in the aggregate, directly and indirectly,
beneficially and of record, a number of shares of all classes of stock of the
Company that would otherwise entitle Warburg to cast a number of votes in excess
of the Maximum Number of Votes, then all shares held by Warburg which represent
a number of votes in excess of the Maximum Number of Votes will be deemed to be
nonvoting shares, and such nonvoting shares will have no right to vote upon the
election of directors or any other matter submitted to shareholder vote. This
paragraph will
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not apply to any shares transferred by Warburg, to the extent such transfer
would not cause the transferee of such shares to become the owner, directly or
indirectly, beneficially or of record, of any shares representing a number of
vote in excess of the Maximum Number of Votes.
2.2 Section 2.1 Definitions
For the purposes of Section 2.1, the term:
(a) "Maximum Number of Votes," will be equal to the
number of votes represented by all outstanding shares of all classes of the
Corporation's capital stock that are not owned directly or indirectly,
beneficially or of record by Warburg; and
(b) "beneficial ownership" will be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934 (or any successor rule or statutory provision); provided, however,
that Rule 13d-3(d)(1) will not apply.
SECTION 3. TERMINATION OF RIGHTS
The rights and obligations provided by Section 1 will expire
upon the earlier of (a) the closing of an underwritten public offering covering
the offer and sale of Common Stock for the account of the Company to the public
generally at a price to the public which places on the Company a value (prior to
the receipt of proceeds of such offering) of at least $35 million and in which
net proceeds to the Company are not less than $15 million or (b) the reduction
of Warburg's ownership to less than 10% of the Common Stock on a fully diluted
basis.
SECTION 4. LEGEND
Warburg agrees that certificates evidencing the Securities
issued to it by the Company will bear the following legend:
"The shares of stock represented by this certificate are
subject to all the terms of that certain Shareholders'
Agreement, dated as of November 16, 1997, a copy of which is
on file at the office of the Company."
SECTION 5. NOTICES
All notices, instructions or other communications required or
permitted to be given hereunder or necessary in connection herewith will be in
writing and will be deemed to have been duly delivered upon the delivery
thereof, if delivered personally, upon the transmission thereof, if sent by
facsimile transmission, on the second business day after delivery to an air
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courier company for express delivery, or on the seventh business day after
mailing, if mailed, postage prepaid, registered or certified mail, as follows:
if to Warburg, at the address shown below, marked for
attention as there indicated, or at such other address as
Warburg may have furnished to each of the other parties hereto
in writing:
Warburg, Xxxxxx Investors, L.P.
000 Xxxxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
if to the Company, at the address shown below, or at such
other address as the Company may have furnished to each of the
other parties hereto in writing:
SynQuest, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
SECTION 6. ASSIGNMENT
Except as otherwise expressly provided herein, this Agreement
will not be assignable by any party hereto.
SECTION 7. SPECIFIC PERFORMANCE
The parties hereby declare that it is impossible to measure in
money the damages which will accrue to a party hereto by reason of a failure to
perform any of the obligations under this Agreement. Therefore, all parties
hereto will have the right to specific performance of the obligations of the
other parties under this Agreement, and if any party hereto will institute any
action or proceeding to enforce the provisions hereof, any person (including the
Company) against whom such action or proceeding is brought hereby waives the
claim or defense therein that such party has or have an adequate remedy at law,
and such person will not urge in any such action or proceeding the claim or
defense that such remedy at law exists.
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SECTION 8. MODIFICATION
This Agreement contains the entire agreement among the parties
hereto with respect to the transactions contemplated herein and will not be
modified or amended except by an instrument in writing signed by or on behalf of
all of the parties hereto.
SECTION 9. PRIOR AGREEMENT
This Agreement supersedes the Shareholders' Agreement any and
all previously executed shareholders' agreements, letters of intent, term sheets
or other communications among the parties hereto relating to the subject matter
hereof.
SECTION 10. GOVERNING LAW
This Agreement will be governed by, and construed and enforced
in accordance with, the laws of the State of Georgia.
SECTION 11. COUNTERPARTS
This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
SECTION 12. SECTION HEADINGS
The section headings in this Agreement are for convenience of
reference only and will not be deemed to alter or affect any provisions hereof.
Reference to numbered sections and subsections and lettered exhibits refer to
sections and subsections of this Agreement and exhibits annexed thereto.
SECTION 13. DEFINITIONS
As used herein, the flowing terms, unless the context clearly
indicates otherwise, will have the following meanings:
"Act" will mean the Securities Act of 1933, as amended.
"Common Stock" will mean the Company's Common Stock, par value
$.01 per share.
"Security, Securities" will have the meanings ascribed thereto
in Section 2(1) of the Act.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
SYNQUEST, INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
President and Chief Executive Officer
WARBURG, XXXXXX INVESTORS, L.P.
By: Warburg, Xxxxxx & Co., its General Partner
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Managing Director
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