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EXHIBIT 10.15
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (the
"Agreement"), is made and entered into as of April 11, 1997, by and among SCM
Microsystems, Inc., a Delaware corporation (the "Company"), certain existing
holders of the Company's Common Stock and Preferred Stock (the "Existing
Stockholders"), and the existing holders (the "Note Holders") of convertible
notes of the Company which are convertible into shares of the Company's Series C
or Series D Preferred Stock (the "Convertible Notes"), and the undersigned
purchasers of Series F Preferred Stock of the Company (the "Purchasers" and
together with the Existing Stockholders, the "Stockholders"), all as set forth
on Schedule A attached hereto.
RECITALS:
A. The Company, the Existing Stockholders and the Note Holders are parties
to that certain Amended and Restated Stockholders' Agreement dated February 28,
1997 (the "Prior Agreement"), providing those Existing Stockholders and Note
Holders with registration rights and certain other rights.
B. Concurrently herewith, the Purchasers and the Company are entering into
a Series F Preferred Stock Purchase Agreement pursuant to which the Purchasers
are purchasing from the Company shares of the Company's Series F Preferred
Stock.
C. Pursuant to Section 6.1 of the Prior Agreement, the Company and the
beneficial owners of a majority of the securities registrable pursuant to the
Prior Agreement wish to amend and restated the Prior Agreement so as to provide
the Purchasers with registration and certain other rights as set forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties hereto hereby agree as
follows:
1. Registration Rights.
1.1 Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) The term "Debtholder Shares" shall mean any Common Stock
issued or issuable, or Common Stock issuable upon conversion of Preferred Stock
issued or issuable, to any bank, savings and loan association or other
institution or entity, including without limitation the Note Holders, which
provides debt financing to the Company upon conversion of debt outstanding as of
the date hereof, including without limitation the Convertible Notes, provided
that on or prior to the date on which the debt is converted such entity agrees
to be bound by the provisions hereof, which agreement shall be evidenced by such
entity's execution hereof (and upon execution hereof, such entity shall be
deemed to be included within the definition of "Stockholder" for all purposes
hereunder).
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(b) The terms "Holder" and "Holders" mean any person or
persons holding or having the right to acquire Registrable Securities and
transferees qualifying under paragraph 1.12 hereof.
(c) The term "Initiating Holders" shall mean the persons and
entities listed on Schedule B hereto (but shall exclude any such persons or
entities who no longer hold Registrable Securities).
(d) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of the effectiveness of such
registration statement.
(e) The term "Registrable Securities" means all of the
following to the extent the same have not been resold to the public: (i) shares
of Common Stock of the Company held by, or issuable upon conversion of the
Preferred Stock of the Company held by the Existing Stockholders, the Note
Holders and the Purchasers as of the date of this Agreement, (ii) the Debtholder
Shares, (iii) the Warrantholder Shares and (iv) all shares of Common Stock and
other securities issued or issuable in respect of the Common Stock referred to
in clauses (i), (ii) and (iii) by reason of a stock split, stock dividend, stock
combination, recapitalization or the like.
(f) The term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Agreement, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, accounting fees, fees and disbursements of counsel for the Company,
Blue Sky fees and expenses, and the fees and disbursements of one special
counsel retained by the Holders.
(g) The term "SEC" means the Securities and Exchange
Commission.
(h) The term "Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of the Registrable
Securities.
(i) The term "Shares" shall mean the shares of Common Stock
and Preferred Stock of the Company, and in any provision where the context
requires a vote or counting of Shares, the shares of Preferred Stock shall be
counted based upon the number of shares of Common Stock into which such shares
of Preferred Stock are then convertible.
(j) The term "Warrantholder Shares" shall mean any Common
Stock issued or issuable, or Common Stock issuable upon conversion of Preferred
Stock issued or issuable, to any entity with which the Company enters into a
technology development, licensing or other agreement or to any bank, savings and
loan association, equipment lessor or other institution or entity which provides
debt financing to the Company, which entity now holds or is hereafter issued
warrants to purchase shares of the Company's equity securities provided that (i)
on or prior to the date on which a warrant is issued to such entity the Board of
Directors grants such entity rights hereunder and (ii) such entity agrees to be
bound by the provisions hereof, which agreement shall be evidenced
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by such entity's execution hereof (and upon execution hereof, such entity shall
be deemed to be included within the definition of "Stockholder" for all purposes
hereunder).
1.2 Requested Registration.
(a) Demand for Registration. In the event that the Company
receives from Initiating Holders holding a majority of the Registrable
Securities then held by the Initiating Holders a written request that the
Company effect a registration, qualification or compliance with respect to all
or a part of the Registrable Securities (other than a registration on Form S-3
or any successor form regardless of its designation) having an aggregate
proposed offering price to the public of at least $5,000,000 the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications, or compliance
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable Blue Sky
or other state securities laws and appropriate compliance with applicable
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within thirty (30)
days after written notice from the Company is given under subparagraph 1.2(a)(i)
above; provided that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
paragraph 1.2:
(A) prior to the earlier of (i) June 30, 1997 or
(ii) six (6) months after the effective date of a registration statement
pertaining to the Company's initial registered offering;
(B) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(C) after the Company has effected two (2) such
registrations pursuant to this paragraph 1.2, which have been declared or
ordered effective and the securities offered pursuant to such registration have
been sold;
(D) within six (6) months following the effective
date of a prior registered offering of the Company's securities pursuant to this
paragraph 1.2 or paragraph 1.3 below; or
(E) more than five (5) years after the effective
date of a registration statement pertaining to the Company's initial registered
offering.
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Subject to the foregoing clauses (A) through (E), the Company shall file a
registration statement as soon as practicable after receipt of the request or
requests of the Initiating Holders but in any event within sixty (60) days of
receipt of such request; provided, however, that if the Company shall furnish to
such Holders a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors of the Company it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed on or before the date filing would be required and it is
therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days (the "Postponement Period") after receipt of the
request of the Initiating Holders (and not more than once in any twelve month
period). During such Postponement Period the Company may not effect any
registration (other than a registration on Form S-8 relating solely to employee
stock option or purchase plans, or a registration on Form S-4 relating solely to
an SEC Rule 145 transaction, or a registration on any other form (other than
Form X-0, XX-0, X-0 or S-3, or their successor forms) or any successor to such
forms, which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities) for its own account or for the account of holders of
other registration rights, unless such registration had been filed prior to
receipt of the request or requests of the Initiating Holders. If the Company
shall postpone the filing of a registration statement pursuant to this
paragraph, Holders of Registrable Securities may withdraw their request for
registration by giving notice to the Company within thirty (30) days after
receipt of the President's certificate postponing registration. In the event of
such withdrawal, such request will not be counted for purposes of the requests
for registration to which Holders are entitled pursuant to paragraph
1.2(a)(ii)(C).
(b) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this paragraph 1.2 and the Company shall include such information in
the written notice referred to in subparagraph 1.2(a)(i). The underwriter shall
be selected by the holders of a majority of the Registrable Securities proposed
to be sold in the offering, which underwriter shall be reasonably acceptable to
the Company. In such event, if so requested in writing by the Company, the
Holders shall negotiate with the underwriter so selected with regard to the
underwriting of such requested registration. The right of any Holder to
registration pursuant to paragraph 1.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected as above provided. Notwithstanding any other provision of this
paragraph 1.2, if the underwriter advises the Initiating Holders and the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, the Company shall so advise all Holders, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders requesting inclusion in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held (or entitled to be held upon conversion) by such Holders at the
time of filing the registration statement; provided, however, that no
Registrable Securities held by any Initiating Holders shall be so excluded until
all Registrable Securities held by other Holders shall have been excluded. No
Registrable Securities excluded from
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the underwriting by reason of the underwriter's marketing limitation shall be
included in such registration.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Initiating Holders. The Registrable
Securities or other securities so withdrawn shall also be withdrawn from
registration; provided, however, that, if by the withdrawal of such Registrable
Securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this paragraph 1.2.
1.3 Company Registration.
(a) If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its stockholders, other than (i) a registration on Form S-8 relating
solely to employee stock option or purchase plans, or a registration on Form S-4
relating solely to an SEC Rule 145 transaction, or a registration on any other
form (other than Form X-0, XX-0, X-0 or S-3, or their successor forms) or any
successor to such forms, which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, or (ii) a registration statement
pursuant to paragraph 1.2 hereof, the Company will:
(i) promptly give to each Holder written notice thereof;
and
(ii) include in such registration (and any related
qualification under Blue Sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within thirty (30) days after receipt of such written notice
from the Company, by any Holder or Holders, except as set forth in subparagraph
1.3(b) below.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subparagraph 1.3(a)(i). In such event the right of any Holder to
registration pursuant to paragraph 1.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other Holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this paragraph 1.3, if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, and (i) if the registration is the first
registered offering of the sale of the Company's securities to the general
public, the underwriter may limit the amount of securities (including
Registrable Securities) to be included in the registration and underwriting by
the Company's stockholders, or may exclude such securities entirely from such
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registration and underwriting, provided, that securities (other than Registrable
Securities) of any of the Company's stockholders may not be included in the
registration and underwriting to the exclusion of Registrable Securities, or
(ii) if such registration is other than the first registered offering of the
Company's securities to the general public, the underwriter may limit the amount
of securities to be included in the registration and underwriting by the
Company's stockholders; provided, however, the number of Registrable Securities
to be included in such registration and underwriting shall not be reduced to
less than twenty-five percent (25%) of the aggregate number of shares included
in the registration and underwriting without the prior written consent of
Holders of a majority of the Registerable Securities; and provided, further,
that no Registrable Securities held by any Initiating Holder shall be so
excluded unless all Registrable Securities held by other Holders shall have been
excluded first. In the event of any such limitation or exclusion of Registrable
Securities, the Company shall so advise all Holders of Registrable Securities
which would otherwise be registered and underwritten pursuant hereto, and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among Holders requesting
registration in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities (or securities convertible into Registrable
Securities) held by each of such Holders as of the date of the notice pursuant
to subparagraph 1.3(a)(i) above. If any Holder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
1.4 Form S-3. The Company shall use its best efforts to qualify for
registration on Form S-3 or its successor form. After the Company has qualified
for the use of Form S-3, Holders of not less than twenty percent (20%) of the
Registrable Securities or Intel Corporation, if they are still a stockholder in
the Company, shall have the right to request registrations on Form S-3 (such
requests shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended method of disposition of such
shares by such Holders), subject only to the following:
(a) The Company shall not be required to effect a registration
pursuant to this subparagraph 1.4 within six (6) months of any registration
referred to in this subparagraph 1.4 or in subparagraphs 1.2 and 1.3 above.
(b) The Company shall not be required to effect a registration
pursuant to this subparagraph 1.4 unless the Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities having an
aggregate disposition price (before any Selling Expenses) of at least $500,000.
The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this
paragraph 1.4 and shall provide a reasonable opportunity (no fewer than twenty
(20) days from the delivery of the notice) for other Holders to participate in
the registration, provided that if the registration is for an underwritten
offering, the terms of subparagraph 1.3(b) shall apply to all participants in
such offering. The underwriter shall be selected in the same manner as is set
forth in subparagraph 1.2(b). Subject to the foregoing, the Company will use its
best efforts to effect promptly the registration of all shares of Registrable
Securities on Form S-3 to the extent requested by the Holder or Holders thereof
for purposes of disposition.
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1.5 Lockup Agreement. In consideration for the Company's agreeing to
its obligations under this Section 1, each Holder agrees that, effective upon
the request of the underwriters managing the Company's initial public offering,
such Holder shall be obligated, so long as all executive officers and directors
of the Company are bound by a comparable obligation, not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the prior written consent of such underwriters, for such period of time (not to
exceed one hundred eighty (180) days) from the effective date of such public
offering as the underwriters may specify.
1.6 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
paragraphs 1.2, 1.3 and 1.4 shall be borne by the Company; provided, however,
that the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to paragraph 1.2 or 1.4 if the
registration request is subsequently withdrawn, unless the Holders agree to
forfeit their right to a demand registration pursuant to paragraph 1.2 or 1.4 as
the case may be; and provided, further, that the Holders may withdraw a request
for registration upon the occurrence of any event having a material adverse
effect upon the Company over which the Holders had no control or no knowledge
thereof at the time of the request or in response to receipt of the President's
certificate postponing registration pursuant to paragraph 1.2(a)(ii), in which
event the Holders shall not be required to pay any of the expenses and shall
retain the right to require the Company to register Registrable Securities
pursuant to paragraph 1.2 or 1.4, respectively.
1.7 Registration Procedures. Whenever required under this Agreement
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred eighty (180) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(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
Holders, 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 states or jurisdictions.
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(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Apply for qualification and use its best efforts to
qualify the Registrable Securities being registered for inclusion on the
automated quotation system of the National Association of Securities Dealers,
Inc. or on a national securities exchange.
(g) Afford to each Holder and its representatives an
opportunity to make such examination and inquiry into the financial position,
business and affairs of the Company and any of its subsidiaries as the Holder or
its counsel may reasonably deem necessary to satisfy such Holder and its counsel
as to the accuracy and completeness of the registration statement.
(h) Otherwise use best efforts to comply with all applicable
rules and regulations of the Commission and, as soon as practicable after the
effective date of any such Registration Statement, and, in any event, within 16
months thereafter, make generally available to Holders an earnings statement
complying with the provisions of Section 11(a) of the Act and covering a period
of at least 12 consecutive months beginning after the effective date of such
Registration Statement;
(i) Use best efforts to cause all Registrable Securities
covered by such registration statement to be listed on the principal securities
exchange on which similar securities issued by the Company are then listed (if
any), if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) if no similar securities are then so listed, use
best efforts to (x) cause all such Registrable Securities to be listed on a
national securities exchange or (y) failing that, secure designation of all such
Registrable Securities as a National Association of Securities Dealers, Inc.
("NASD") Automated Quotation System ("Nasdaq") "national market system security"
within the meaning of Rule 11Aa2-1 of the SEC or (z) failing that to secure
Nasdaq authorization for such shares and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such shares with the NASD;
(j) Deliver promptly to counsel to the Holders and each
underwriter if any, participating in the offering of the Registrable Securities,
copies of all correspondence between the SEC and the Company, its counsel or
auditors;
(k) Use best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
(l) provide a CUSIP number for all Registrable Securities, no
later than the effective date of the registration statement; and
(m) make available its employees and personnel and otherwise
provide reasonable assistance to the underwriters (taking into account the needs
of the Company's businesses) in their marketing of Registrable Securities.
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1.8 Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities, each of its officers, directors and partners, and each person
controlling such Holder, within the meaning of Section 15 of the Securities Act,
with respect to which such registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter (as defined in the
Act), if any, and each person who controls any underwriter, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto),
including any of the foregoing incurred in settlement of any litigation or
proceeding, commenced or threatened arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) 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 or any
state securities law 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 Holder, each of its
officers, directors and partners, and each person controlling such Holder,
within the meaning of Section 15 of the Securities Act, each such underwriter
and each person who controls any such underwriter, for any reasonable legal and
any other expenses incurred in connection with investigating, defending or
settling 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 or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company in an
instrument duly executed by such Holder or underwriter specifically for use
therein; and provided, further, that the agreement of the Company to indemnify
any underwriter and any person who controls such underwriter contained herein
with respect to any such preliminary prospectus shall not inure to the benefit
of any underwriter from whom the person asserting any such claim, loss, damage,
liability or action purchased the stock which is the subject thereof, if at or
prior to the written confirmation of the sale of such stock a copy of the
prospectus (or the prospectus as amended or supplemented) was not sent or
delivered to such person, excluding the documents incorporated therein by
reference, and the untrue statement or omission of a material fact contained in
such preliminary prospectus was corrected in the prospectus (or the prospectus
as amended or supplemented).
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter as defined in the
Securities Act, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company within the meaning
of the Securities Act, and each other such Holder, each of its officers,
directors and partners and each person controlling such Holder, against all
claims, losses, expenses, damages and liabilities (or actions in respect
thereto), including any of the foregoing incurred in settlement of any
litigation or proceedings, commenced or threatened arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document, or 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, and will reimburse the Company, each of its officers and directors
and each person who controls the Company within the meaning of the Securities
Act, such
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Holders, their directors, officers, partners and persons controlling such
Holders or such underwriters for any reasonable legal or any other expenses
incurred in connection with investigating, defending or settling any such claim,
loss, damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged 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 such
Holder specifically for use therein; and provided, further, that the agreement
of the Holder to indemnify any underwriter and any person who controls such
underwriter contained herein with respect to any such preliminary prospectus
shall not inure to the benefit of any underwriter from whom the person asserting
any such claim, loss, damage, liability or action purchased the stock which is
the subject thereof, if at or prior to the written confirmation of the sale of
such stock a copy of the prospectus (or the prospectus as amended or
supplemented) was not sent or delivered to such person, excluding the material
fact contained in such preliminary prospectus was corrected in the prospectus
(or the prospectus as amended or supplemented). Notwithstanding the foregoing,
the total amount for which any Holder shall be liable under this subparagraph
1.8(b) shall not in any event exceed the aggregate proceeds received by such
Holder from the sale of Registrable Securities held by such Holder in such
registration.
(c) Each party entitled to indemnification under this
paragraph 1.8 (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 be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; 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 hereunder, unless such failure resulted in
actual detriment to the Indemnifying Party. 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.
1.9 Contribution. If the indemnification provided for in paragraph
1.8 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.
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1.10 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.11 Rule 144 Reporting. With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times after ninety (90) days after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144.
(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(c) So long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after ninety (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 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 so filed by the Company as the
Holder may reasonably request in complying with any rule or regulation of the
SEC allowing the Holder to sell any such securities without registration.
(d) After its initial public offering, to take whatever
actions are necessary in order for it to qualify to use Form S-2 or S-3, or any
form subsequently adopted by the SEC to take the place of Form S-2 or S-3 which
does not require substantially more disclosure than the form which it replaces.
1.12 Transfer of Registration Rights. A Holder's rights to cause the
Company to register its securities and keep information available, granted to it
by the Company under paragraphs 1.2, 1.3, 1.4 and 1.10 may be assigned to a
transferee or assignee who the Company does not consider to be an existing or
potential competitor and (i) receives the lesser of 100,000 shares or all of the
Registrable Securities originally acquired by any transferring or assigning
Holder, or (ii) is a partner, retired partner or spouse of such partner of a
Holder or to any wholly-owned subsidiary or parent of, or to any corporation or
entity which is (within the meaning of the Securities Act) controlling,
controlled by or under common control with such Holder. Any transfer or
assignment permitted by the foregoing sentence shall be effective as long as the
Company is given written notice by such Holder 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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1.13 Termination of Registration Rights. The registration rights
contained in paragraph 1.2 hereof shall terminate on the later of (i) December
31, 2003 or (ii) five (5) years after the effective date of the Company's
initial registered public offering; provided, however, that no Holder shall have
any such registration rights at such date, commencing immediately after the
Company's initial registered public offering, as all remaining Registrable
Securities held or entitled to be held by such Holder may be sold under Rule 144
during any three (3) month period.
2. Rights of First Refusal; Right of Co-Sale.
2.1 Right of First Refusal on Company Issuances. The Company hereby
grants to each Stockholder and to each Note Holder, if any, (provided, in the
case of each Stockholder holding Series A or B Preferred Stock, such Stockholder
is then a current holder of at least ten percent (10%) of the shares of such
stock originally issued to such Stockholder in the Reorganization or, in the
case of each Stockholder holding Series C, D, E or F Preferred Stock, such
Stockholder is then a current holder of at least 10% of the shares of Series C,
D, E or F Preferred Stock, as the case may be, originally purchased by such
Stockholder or, in the case of each Note Holder, such Note Holder is then a
current holder of at least 10% of the stock issuable upon conversion of the
Convertible Notes originally issued to such Note Holder) (collectively,
hereinafter, the "Rights Holders") the right of first refusal to purchase, pro
rata, all or any part of New Securities (as defined in this Section 2.1) which
the Company may, after the date hereof from time to time, propose to sell and
issue. A pro rata share, for purposes of this right of first refusal, is the
ratio that the number of Shares then held by each Rights Holder bears to the sum
of the total number of Shares then outstanding.
(a) Equity Securities. "Equity Securities" shall mean any
securities having voting rights in the election of the Board of Directors not
contingent upon default, or any securities evidencing an ownership interest in
the Company, or any securities convertible into or exercisable for any shares of
the foregoing, or any securities issuable pursuant to any agreement or
commitment to issue any of the foregoing.
(b) New Securities. Except as set forth below, "New
Securities" shall mean any Equity Securities, whether now authorized or not, and
rights, options or warrants to purchase said Equity Securities. Notwithstanding
the foregoing, "New Securities" does not include (i) Common Stock issued or
issuable to employees, officers, consultants or directors of the Company
pursuant to sales or options granted at any time after the date of this
Agreement (plus any of such shares which are repurchased at cost or as to which
such options expire unexercised); (ii) securities offered to the public
generally pursuant to a registration statement under the Securities Act; (iii)
securities issued pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all of the assets or other
reorganization whereby the Company or its stockholders own not less than
fifty-one (51%) percent of the voting power of the surviving or successor
corporation; (iv) shares of Series C and Series D Preferred Stock issuable upon
conversion of the Convertible Notes; (v) shares of Common Stock issued upon
conversion of the Series A Preferred Stock, the Series B Preferred Stock, Series
C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock or
Series F Preferred Stock; (vi) warrant or warrants for the purchase of shares of
capital stock of the Company (and stock issued upon exercise of such warrant or
warrants) which have been unanimously approved by the Board of Directors of the
Company and
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issued in connection with an equipment lease, equipment financing or bank line
financing; (vii) stock issued pursuant to any rights or agreements including
without limitation convertible securities, options and warrants, provided that
the rights of first refusal established by this Section 2.1 apply with respect
to the initial sale or grant by the Company of such rights or agreements, or
(viii) stock issued in connection with any stock split, stock dividend, stock
combinations, recapitalizations or the like by the Company.
(c) Notice. In the event the Company proposes to undertake an
issuance of New Securities, it shall give each Rights Holder written notice of
its intention, describing the type of New Securities, and the price and terms
upon which the Company proposes to issue the same. Each Rights Holder shall have
thirty (30) days from the date of receipt of any such notice to agree to
purchase up to its respective pro rata share of such New Securities for the
price and upon the applicable terms specified in the notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased.
(d) Failure to Exercise Right. In the event a Rights Holder
fails to exercise the right of first refusal within said thirty (30) day period,
the Company shall have ninety (90) days thereafter to sell or enter into an
agreement (pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within sixty (60) days from the date of said agreement) to
sell the New Securities not elected to be purchased by Rights Holders at the
price and upon the terms no more favorable to the purchasers of such securities
than specified in the Company's notice. In the event the Company has not sold
the New Securities within said ninety (90) day period (or sold and issued New
Securities in accordance with the foregoing within sixty (60) days from the date
of said agreement), the Company shall not thereafter issue or sell any New
Securities, without first offering such securities in the manner provided above.
2.2 Right of First Refusal on Sales by Stockholders.
(a) The Right. If at any time any of the Holders other than
Intel Corporation (a "Selling Holder") proposes to sell any of the Shares held
by such Selling Holder (the "Offered Securities") to parties other than the
Company in a transaction (the "Transaction") not registered under the Securities
Act in reliance upon a claimed exemption thereunder, then any other Stockholder
(a "Purchasing Holder" for purposes of this subsection 2.2) that notifies the
Selling Holder in writing within thirty (30) days after receipt of the Transfer
Notice referred to in Section 2.2(b), shall have the opportunity to purchase a
pro rata portion of Offered Securities that the Selling Holder proposes to sell
to such third party in the Transaction. For the purposes of this Section 2, the
"pro rata portion" that the Purchasing Holder shall be entitled to purchase
shall be an amount of Shares equal to a fraction of the total amount of Offered
Securities proposed to be sold. The numerator of such fraction shall be the
number of Shares owned by a Purchasing Holder and the denominator shall be the
total number of Shares owned by all Purchasing Holders and the Selling Holder.
Each Purchasing Holder shall be entitled to apportion Shares to be purchased
among its partners and affiliates, provided that such Purchasing Holder notifies
the Selling Holder of such allocation, and provided that such allocation does
not threaten the Company's reliance on any exemption from the registration
provisions of the Securities Act or the qualification provisions of applicable
state securities laws.
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(b) Transfer Notice. If at any time any of the Holders other
than Intel Corporation proposes to sell Shares to one or more third parties
pursuant to an understanding with such third parties in a transaction not
registered under the Securities Act, in reliance upon a claimed exemption
thereunder (the "Transfer"), then such Selling Holder shall give the Company and
each other Holder written notice of his or its intention (the "Transfer
Notice"), describing the Offered Securities, the identity of the prospective
transferee and the consideration and the material terms and conditions upon
which the proposed Transfer is to be made. The Transfer Notice shall certify
that the Selling Holder has received a firm offer from the prospective
transferee and in good faith believes a binding agreement for Transfer is
obtainable on the terms set forth, and shall also include a copy of any written
proposal or letter of intent or other agreement relating to the proposed
Transfer. The Company, upon request of the Selling Holder, will provide a list
of the addresses of the other Holders.
(c) Failure to Notify. If within thirty (30) days after the
Selling Holder gives the aforesaid notice to the Holders, the Holders do not
notify the Selling Holder that they desire to purchase any or all of their pro
rata portions of the Offered Securities described in such notice for the price
and on the terms and conditions set forth therein, then, after complying with
Section 2.3 below, the Selling Holder may sell such Offered Securities as to
which the Holders do not elect to purchase. Any such sale shall be made only to
persons identified in the Transfer Notice and at the same price and upon the
same terms and conditions as those set forth in the Transfer Notice simultaneous
with any Selling Holder's sale. In the event the Selling Holder has not sold the
Offered Securities or entered into an agreement to sell the Offered Securities
within sixty (90) days of the date of the Transfer Notice, the Selling Holder
shall not thereafter sell any Offered Securities without first notifying the
Holders in the manner provided above.
(d) Limitation on Right. Without regard and not subject to the
other provisions of this Section 2.2, any Initiating Holder may sell or
otherwise assign, with or without consideration, any Shares or any other
securities issued in respect of such Shares, to any other Initiating Holder, and
any Holder may sell or otherwise assign, with or without consideration, any
Shares or any other securities issued in respect of such Shares to such Holder
to any Related Person (as defined below) or any or all of his or her ancestors,
descendants, spouse, or members of his immediate family, or to a custodian,
trustee (including a trustee of a voting trust), executor, or other fiduciary
for the account of his or her ancestors, descendants, spouse, or members of his
or her immediate family, provided that each such transferee or assignee, prior
to the completion of the sale, transfer, or assignment, shall have executed
documents assuming the obligations of the Holder under this Agreement with
respect to the transferred securities.
2.3 Right of Co-Sale.
(a) The Right. To the extent that the other Holders do not
exercise or are not entitled to exercise the Right of First Refusal set forth
under Section 2.2 above, then any other Holder (a "Participating Holder" for
purposes of this subsection 2.3) that notifies the Selling Holder in writing
within thirty (60) days after receipt of the Transfer Notice referred to in
Section 2.2(b), shall have the opportunity to sell a pro rata portion of Offered
Securities that the Selling Holder proposes to sell to such third party in the
Transaction. In such instance, the Selling Holder shall assign to the
Participating Holder(s) such of his interest in the proposed agreement of sale
as the
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Participating Holder(s) shall be entitled to and shall request hereunder, and
the Participating Holders shall assume such part of the obligations of the
Selling Holder under such agreement as shall relate to the sale of the
securities by the Participating Holder. Each Participating Holder shall be
entitled to apportion the Shares to be sold among its partners and affiliates,
provided that such Participating Holder notifies the Selling Holder of such
allocation, and provided that such allocation does not threaten the Company's
reliance on any exemption from the registration provisions of the Securities Act
or the qualification provisions of applicable state securities laws.
(b) Failure to Notify. If within sixty (60) days after the
Selling Holder gives the aforesaid notice to the Holders, the Holders do not
notify the Selling Holder that they desire to sell any or all of their pro rata
portions of the Offered Securities described in such notice for the price and on
the terms and conditions set forth therein, then the Selling Holder may sell
such Offered Securities as to which the Holders do not elect to purchase. Any
such sale shall be made only to persons identified in the Transfer Notice and at
the same price and upon the same terms and conditions as those set forth in the
Transfer Notice simultaneous with any Selling Holder's sale. In the event the
Selling Holder has not sold the Offered Securities or entered into an agreement
to sell the Offered Securities within sixty (90) days of the date of the
Transfer Notice, the Selling Holder shall not thereafter sell any Offered
Securities without first notifying the Holders in the manner provided above.
(c) Limitation on Right. The co-sale right granted under this
Section 2.3 shall not be available to any Holder that is not an Initiating
Holder if the Selling Holder is an Initiating Holder. Further, without regard
and not subject to the other provisions of this Section 2.3, any Initiating
Holder may sell or otherwise assign, with or without consideration, any Shares
or any other securities issued in respect of such Shares to any other Initiating
Holder, and any Holder may sell or otherwise assign, with or without
consideration, any Shares or any other securities issued in respect of such
Shares to such Holder to any Related Person (as defined below) or any or all of
his or her ancestors, descendants, spouse, or members of his immediate family,
or to a custodian, trustee (including a trustee of a voting trust), executor, or
other fiduciary for the account of his or her ancestors, descendants, spouse, or
members of his or her immediate family, provided that each such transferee or
assignee, prior to the completion of the sale, transfer, or assignment, shall
have executed documents assuming the obligations of the Holder under this
Agreement with respect to the transferred securities.
2.4 Termination. The rights described in this Section 2 shall
terminate on the effective date of the registration statement filed by the
Company with the SEC in connection with the Company's initial registered public
offering. The rights set forth in this Section 2 shall not apply to proposed
transfers pursuant to any acquisition or reorganization of the Company requiring
approval of the stockholders of the Company or inclusion of shares in a
registered public offering by the Company.
3. Repurchase Right.
3.1 The Company's Right. If any Holder listed on Schedule C (an
"Employee Holder") ceases to be an employee of the Company or any parent or
subsidiary of the Company on or before December 31, 1998 by reason of either (i)
the Employee Holder's voluntary resignation
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from his or her employment with the Company or any parent or subsidiary of the
Company or (ii) the termination of such Employee Holder's employment by the
Company for cause, then the Company shall have the right to repurchase any or
all shares of the Company's Common Stock held by such Employee Holder under the
terms and subject to the conditions set forth in this Section 3.
3.2 Exercise of Repurchase Right. The Company may exercise its
repurchase right under this Section 3 by written notice to the Employee Holder
within thirty (30) days after such termination of employment. If the Company
fails to give notice within such thirty (30) day period, the repurchase right
shall terminate unless the Company and the Employee Holder have extended the
time for the exercise of the repurchase right.
3.3 Payment for Shares and Return of Shares. Payment of the
Repurchase Price (as defined below) shall be made in cash in five equal
installments. The first payment hereunder shall be due and payable six months
after the date specified in the written notice to the Employee Holder delivered
to Section 3.2 above (the "Repurchase Date"). Each subsequent payment shall be
due and payable six months after the date on which the previous payment became
due and payable. Interest at the rate of 6% per annum, compounded annually,
shall accrue on the unpaid portions of the Repurchase Price from the Repurchase
Date. The shares being repurchased shall be delivered to the Company by the
Employee Holder on the Repurchase Date.
3.4 Assignment of Repurchase Right. The Company shall have the right
to assign its rights under this Section 3 to any stockholder of the Company
other than the Employee Holder whose shares are being repurchased.
3.5 Repurchase Price. The Repurchase Price per each share to be
repurchased shall be an amount determined by dividing the greater of (a) the net
consolidated assets of the Corporation (as determined in accordance with
generally accepted accounting principles) and (b) four times the average annual
consolidated net income of the Company (as determined in accordance with
generally accepted accounting principles) for the four most recent fiscal years
immediately prior to the Repurchase Date by the number of shares of the
Company's Preferred Stock (on an as converted basis) and Common Stock
outstanding on the Repurchase Date.
3.6 Effect of Repurchase. From and after the Repurchase Date, the
shares of the Company's Common Stock to be repurchased shall be canceled and
deemed to be part of the authorized but unissued Common Stock of the Company.
The Employee Holder shall have no voting or other rights with respect to the
shares of Common Stock so repurchased from and after the Repurchase Date except
as set forth in this Section 3.
3.7 Termination. This Section 3 shall terminate the effective date
of the registration statement filed by the Company with the SEC in connection
with the Company's initial registered public offering.
4. Drag-Along Agreement. In the event that the board of directors of the
Company submits a proposal for approval by the stockholders of the Company,
which if approved by the required vote of stockholders under the Company's
Certificate of Incorporation, as then amended and restated, and the applicable
law would authorize the board of directors to effect a merger or
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consolidation of the Company with or into another entity or a sale of all or
substantially all of the Company's assets, all parties to this Agreement agree
that they will vote in favor of such transaction and will not exercise any
rights which would otherwise accrue to dissenting stockholders upon the
effectiveness of such transaction if the holders of 75% of the outstanding
voting stock of the Company of each class or series entitled to vote on such
transaction approve such transaction. This Section 4 shall terminate on the
effective date of the registration statement filed by the Company with the SEC
in connection with the Company's initial registered public offering.
5. Information Rights.
5.1 Financial Information. As soon as practicable after the end of
each fiscal year, and in any event within ninety (90) days thereafter, the
Company will mail to Intel Corporation, as long as it remains a stockholder of
the Company, and, as soon as practicable after receipt of a written request from
any other Information Rights Holder (as defined below), to such Information
Rights Holder consolidated balance sheets of the Company and its subsidiaries,
if any, as of the end of such fiscal year, and consolidated statements of income
and consolidated statements of changes in financial position of the Company and
its subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles and setting forth in each case in comparative
form the figures for the previous fiscal year all in reasonable detail and
audited by independent public accountants of national standing selected by the
Company. As used in this Section 5, the term "Information Rights Holder" shall
mean any Holder that holds at least the lesser of (a) 75% of the Shares held by
it as of the date of this Agreement, as shown on Schedule A attached hereto, and
(b) 25,000 shares of Registrable Securities (as adjusted to reflect stock
dividends, stock splits, stock combinations, recapitalizations or the like).
As soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company and in any event
within forty-five (45) days thereafter, the Company will mail to Intel
Corporation, as long as it remains a stockholder of the Company, and, as soon as
practicable after receipt of a written request from any other Information Rights
Holder, to such Information Rights Holder a consolidated balance sheet of the
Company and its subsidiaries, if any, as of the end of each such quarterly
period, and consolidated statements of income and consolidated statements of
changes in financial condition of the Company and its subsidiaries for such
period and for the current fiscal year to date, prepared in accordance with
generally accepted accounting principles (other than for accompanying notes),
subject to changes resulting from year-end audit adjustments, all in reasonable
detail and signed by the principal financial or accounting officer of the
Company.
The Company also will provide to all members of its Board of Directors, to
Intel Corporation and, upon prior written request, to any Information Rights
Holder as soon as practicable after the end of each month, and in any event
within thirty (30) days thereafter, a consolidated balance sheet of the Company
and its subsidiaries, if any, as of the end of each such month, and consolidated
statements of income and consolidated statements of changes in financial
condition of the Company and its subsidiaries for such month and for the current
fiscal year to date, prepared in accordance with the Company's standard internal
accounting practices.
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The Company also will provide to all members of its Board of Directors, to
Intel Corporation and, upon prior written request, to any Information Rights
Holder on or before November 15 or each year a budget, in reasonable detail,
setting forth the Company's planned expenditures and operating plans for the
following calendar year.
5.2 Additional Information. The Company also will provide to each
Information Rights Holder such other information and data, including access
(during regular business hours upon at least two (2) days prior written notice)
to books, records, officers and accountants, with respect to the Company and its
subsidiaries as any such holder may from time to time reasonably request;
provided, however, that the Company shall not be obligated to provide any
information that it reasonably considers in good faith to be a trade secret or
to contain confidential or classified information except that the Company shall
provide such information to its directors as may be necessary to perform their
duties as directors.
5.3 Assignment of Rights to Financial Information. The rights
granted pursuant to Sections 5.1 and 5.2 may not be assigned or otherwise
conveyed by any Information Rights Holder or by any subsequent transferee of any
such rights without the prior written consent of the Company (which consent
shall not be unreasonably withheld); provided, however, that without such
consent any Information Rights Holder may assign to any transferee, other than
an actual or potential competitor of the Company, and after giving notice to the
Company, the rights granted pursuant to Section 5.1 and 5.2 to (i) a transferee
who is or upon transfer of shares becomes an Information Rights Holder, or (ii)
any partner, stockholder, or person in control of, controlled by or under common
control with an Information Rights Holder ("Related Person"); and further
provided, however, that the rights of directors pursuant to the third paragraph
of Section 5.1 shall not be assignable.
5.4 Termination of Financial Information Rights. The covenants set
forth in Sections 5.1, 5.2 and 5.3 shall terminate and be of no further force or
effect with respect to all Information Rights Holders on the first to occur of
(i) the effective date of the Company's registration of any of its securities
pursuant to Section 12(b) or 12(g) of the Exchange Act; (ii) the first date on
which quotations for the Common Stock of the Company are reported by the
automated quotations system operated by the National Association of Securities
Dealers, Inc. or by an equivalent quotations system; or (iii) the first date on
which shares of the Common Stock of the Company are listed on a national
securities exchange registered under Section 6 of the Exchange Act; provided,
however, that notwithstanding the foregoing, Intel's rights under the first and
second paragraphs of Section 5.1 with respect to annual and quarterly financial
information of the Company and the right of Intel to transfer its rights under
Section 5.1 to a Related Person shall terminate on the first date on which Intel
holds no shares of the Company's stock.
6. General.
6.1 Waivers and Amendments. With the written consent of the holders
of a majority of the Registrable Securities, the obligations of the Company and
the rights of the Holders under this Agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively, and either
for a specified period of time or indefinitely), amended or modified, and, with
the same consent, the Company when authorized by resolution of its Board of
Directors may
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enter into a supplementary agreement for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement. Upon the effectuation of each such waiver, consent, agreement of
amendment or modification, the Company shall promptly give written notice
thereof to the record Holders of the Registrable Securities who have not
previously consented thereto in writing. This Agreement or any provision hereof
may be changed, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent otherwise provided in this
paragraph 6.1.
6.2 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Delaware as such laws are applied to agreements
between Delaware residents entered into and to be performed entirely within
Delaware.
6.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
6.4 Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and this Agreement shall supersede and cancel all prior agreements between the
parties hereto with regard to the subject matter hereof.
6.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by either first
class mail, postage prepaid, certified or registered mail, return receipt
requested, or overnight courier service addressed (a) if to any Holder, at such
Holder's address as such Holder shall have furnished to the Company in writing,
and (b) if to the Company, at 000 Xxxxxxxx Xxx, Xxx Xxxxx, Xxxxxxxxxx 00000, or
at such other address as the Company shall have furnished to the Holders in
writing.
6.6 Severability. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to persons or circumstances shall be interpreted so as best to reasonably effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision which will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
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.
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6.9 Prior Agreement; Waiver. This Agreement supersedes and replaces
the Prior Agreement in its entirety, and such Prior Agreement shall be of no
further force or effect upon execution of this Agreement by all parties hereto.
In addition, the Stockholders hereby waive any and all rights they may have
under the Prior Agreement to purchase a pro rata portion of the Series F
Preferred Stock of the Company, and any failure by the Company to comply with
the terms of Section 2.1 of said Prior Agreement with respect to the issuance of
the Series F Preferred Stock.
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IN WITNESS WHEREOF, the parties hereby have executed this Stockholders'
Agreement on the date first above written.
COMPANY:
SCM MICROSYSTEMS, INC.,
a Delaware corporation
By:
-----------------------------------
Xxxxxx Xxxxxxxxx, President
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SCM MICROSYSTEMS, INC.
COUNTERPART SIGNATURE PAGE
TO
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
APRIL 11, 1997
"HOLDER"
------------------------------------------
Print Name of Holder
By:
---------------------------------------
Signature
------------------------------------------
Print Name of Signatory
------------------------------------------
Print Title
Address:
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SCHEDULE A
Schedule of Stockholders and Note Holders
Zweite Beteiligungs-Kommanditgesellschaft Telenor Venture AS
der TVM Techno Venture Management ITOCHU Corporation
Gesellschaft mbH & Co. KG Intellicard Systems
Algomquin Trust S.A. The Special Index Fund
TVM Eurotech Limited Partnership Xxxxxxx Xxxx zu Ortenburn
Alpinvest International B.V. Per Xxxxxxx
Banque SCS Alliance L.B. Finance S.A.
Banque SCS Alliance S.A. Merifin Capital N.V.
KBL Founders Ventures S.C.A. Xxxxxxx & Company
Xxxxx Xxxxx Lombard Odier
Vertex Investment (II) Ltd. Xxx X. Xxxxxx
Genevest Consulting Group S.A. Pictet et Cie
The Index Special Situations Fund Societe Financiere Mirelis S.A.
Vision Capital Partners Societe de Banque Suisse (SBS)
Xxxxx Xxxx Union de Banque Suisse (UBS)
Xxxxx Xxxxxxxxx Xxxxxxx xxx Xxxxx
British Bank of Middle East Xxxxxxx xxx Xxxxx
Bulk Partners A.S. Leitpold xxx Xxxxx
CERN Pension Fund Xxxxxx Xxxx
Xxxx & Cie Xxxxxx Xxxxxx
Claus Dieckell Xxxxxx Xxxxxxxxxxxxxx
Xxxxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Faisal Finance (Jersey), LTD Xxxxx Xxxxx
Xxxx Xxxxx Xxxxx Xxxxx
Fidulex Management Inc. Xxxxxx Xxxxxxx
Fondation Galba Xxxxxx Xxxxxx
The Forum Finance S.A. Xxxxxx Xxxxxxxxx
The Xxxxxxx Fund Xxxxxx Xxxxxxxxx
Xxx X. Xxxx Xxxxxx Xxxxxx
Xxxxx Invest A/S Xxxxxxxx Xxxxx
Intel Corporation Xxxxxxx Xxxx
Xxxxxxxxx & Xxxxx California, Inc. Xxxx-Xxxx XxXxxx
XX Investments 97A
Xxxxxxx Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Case III
Nippon Investment & Finance Co. Ltd.
Investment Enterprise Partnership "NIF8"
Investment Enterprise Partnership "NIF9"
Investment Enterprise Partnership "NIF10A"
Investment Enterprise Partnership "NIF10B"
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SCHEDULE B
Initiating Holders
Zweite Beteiligungs-Kommanditgesellschaft WS Investments 97A
der TVM Techno Venture Management Xxxxxxx Xxxxx
Gesellschaft mbH & Co. KG Xxxxxxx X. Xxxxxx
Algonquin Trust S.A. Xxxxxx X. Xxxxxx
TVM Eurotech Limited Partnership Xxxxxx X. Case III
Alpinvest International B.V. Nippon Investment & Finance Co. Ltd.
Banque SCS Alliance Investment Enterprise Partnership "NIF8"
Banque SCS Alliance S.A. Investment Enterprise Partnership "NIF9"
KBL Founders Ventures S.C.A. Investment Enterprise Partnership "NIF10A"
Xxxxx Xxxxx Investment Enterprise Partnership "NIF10B"
Vertex Investment (II) Ltd. Telenor Venture AS
Genevest Consulting Group S.A. ITOCHU Corporation
The Index Special Situations Fund Intellicard Systems
Vision Capital Partners The Special Index Fund
Xxxxx Xxxx Xxxxxxx Xxxx zu Ortenburn
Xxxxx Xxxxxxxxx Per Xxxxxxx
British Bank of Middle East L.B. Finance S.A.
Bulk Partners A.S. Merifin Capital N.V.
CERN Pension Fund Xxxxxxx & Company
Xxxx & Cie Lombard Odier
Claus Dieckell Xxx X. Xxxxxx
Xxxxxxxxx Xxxxxxxx Pictet et Cie
Faisal Finance (Jersey), LTD Societe Financiere Mirelis S.A.
Xxxx Xxxxx Societe de Banque Suisse (SBS)
Fidulex Management Inc. Union de Banque Suisse (UBS)
Fondation Galba Xxxxxxx xxx Xxxxx
The Forum Finance S.A. Xxxxxxx xxx Xxxxx
The Xxxxxxx Fund Leitpold von Xxxxx
Xxx X. Xxxx
Hoegh Invest A/S
Intel Corporation
Xxxxxxxxx & Xxxxx California, Inc.
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25
SCHEDULE C
Employee Holders
Xxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxx-Xxxx XxXxxx
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26
================================================================================
SCM MICROSYSTEMS, INC.
--------------------
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
--------------------
APRIL 11, 1997
--------------------
================================================================================
27
TABLE OF CONTENTS
PAGE
1. Registration Rights....................................................1
1.1 Definitions......................................................1
1.2 Requested Registration...........................................2
1.3 Company Registration.............................................4
1.4 Form S-3.........................................................5
1.5 Lockup Agreement.................................................6
1.6 Expenses of Registration.........................................6
1.7 Registration Procedures..........................................7
1.8 Indemnification..................................................8
1.9 Contribution....................................................10
1.10 Information by Holder...........................................10
1.11 Rule 144 Reporting..............................................10
1.12 Transfer of Registration Rights ................................11
1.13 Termination of Registration Rights .............................11
2. Rights of First Refusal; Right of Co-Sale ............................11
2.1 Right of First Refusal on Company Issuances.....................11
2.2 Right of First Refusal on Sales by Stockholders.................13
2.3 Right of Co-Sale................................................14
2.4 Termination.....................................................15
3. Repurchase Right......................................................15
3.1 The Company's Right.............................................15
3.2 Exercise of Repurchase Right ...................................15
3.3 Payment for Shares and Return of Shares.........................16
3.4 Assignment of Repurchase Right .................................16
3.5 Repurchase Price................................................16
3.6 Effect of Repurchase............................................16
3.7 Termination.....................................................16
4. Drag-Along Agreement..................................................16
5. Information Rights....................................................17
5.1 Financial Information...........................................17
5.2 Additional Information..........................................17
5.3 Assignment of Rights to Financial Information...................18
5.4 Termination of Financial Information Rights.....................18
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28
TABLE OF CONTENTS
(CONTINUED)
PAGE
6. General...............................................................18
6.1 Waivers and Amendments..........................................18
6.2 Governing Law...................................................18
6.3 Successors and Assigns..........................................18
6.4 Entire Agreement................................................19
6.5 Notices, etc....................................................19
6.6 Severability....................................................19
6.7 Titles and Subtitles............................................19
6.8 Counterparts....................................................19
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