EXHIBIT 5
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "AGREEMENT"), dated as of June 17, 2004,
by and among The Canopy Group, Inc. ("CANOPY") and the entities listed on the
signature pages hereto (the "INVESTORS"), and, for purposes of Section 5 only,
MTI Technology Corporation, a Delaware corporation (the "COMPANY").
BACKGROUND
A. As of the date hereof, Canopy is the Beneficial Owner of
14,463,285 shares of the common stock, par value $0.001 per share, of the
Company (the "COMMON STOCK").
B. Under Sections 7.01(n) of that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company and the
Investors (the "PURCHASE AGREEMENT"), the delivery of this Agreement is a
condition to the Investors' obligation to purchase from the Company (i) shares
of the Company's Series A Convertible Preferred Stock, par value $0.001 per
share (the "SERIES A PREFERRED STOCK") and (ii) warrants to purchase shares of
Common Stock (the "WARRANTS").
C. This Agreement is being entered into in order to induce the
Investors to consummate the transactions contemplated by the Purchase Agreement
and the other Transaction Documents (as defined in the Purchase Agreement).
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the indicated meanings:
"ADVENT" means Advent International Corporation, a Delaware
corporation.
"AFFILIATE" of a Person means any Person which, directly or
indirectly, controls, is controlled by, or is under common control with such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to elect a
majority of the board of directors (or other governing body) or to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise and, in any
event and without limiting the generality of the foregoing, any Person owning
more than twenty percent (20%) of the voting securities of another Person shall
be deemed to control that Person.
"BENEFICIALLY OWN" has the meaning set forth in Rule 13d-3 under the
Exchange Act, and "BENEFICIAL OWNERSHIP" shall have a correlative meaning.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day
on which commercial banks in the City of New York are authorized by law to
close.
"CHANGE OF CONTROL TRANSACTION" means (i) any merger, consolidation
or liquidation of the Company, (ii) any sale by the Company or the Company's
stockholders of Securities representing twenty percent (20%) or more of the
outstanding Voting Securities; (iii) any issuance by the Company of Securities
which constitutes, after such issuance, twenty percent (20%) or more of the
outstanding Voting Securities or which requires an amendment to the Company's
Certificate of Incorporation to increase the authorized capital of the Company;
(iv) any sale of assets representing twenty percent (20%) or more of either the
total fair market value of the assets or the book value of the Company, or (v)
any acquisition of equity interests in or assets of another Person with a
purchase price representing twenty percent (20%) or more of the market
capitalization of the Company (calculated by multiplying (x) the average closing
price per share of Common Stock on the Nasdaq SmallCap Market for the twenty
(20) trading days prior to (and not including) the date of the meeting of the
Company's stockholders at which such Change of Control Transaction is to be
voted upon, by (y) the number of shares of Common Stock outstanding on such
date).
"COMMISSION" means the Securities and Exchange Commission.
"DGCL" means the Delaware General Corporation Law, as amended.
"EMC" means EMC Corp., a Massachusetts corporation.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"PERSON" means an individual or a corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"RULE 144" means Rule 144 promulgated under the Securities Act, and
any successor rule or regulation thereto, and in the case of any referenced
section of such rule, any successor section thereto, collectively and as from
time to time amended and in effect.
"SECURITIES" means (a) all shares of the common stock and preferred
stock of the Company, (b) all options, warrants or rights to acquire shares of
common stock or preferred stock, (c) all securities which are convertible into
or exchangeable or exercisable for, common stock or preferred stock and (d) all
other securities of the Company which may be issued in exchange for or in
respect of shares of common stock or preferred stock (whether by way of stock
split, stock dividend, combination, reclassification, reorganization or any
other means).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
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"SERIES A CERTIFICATE" means the Certificate of Designation of
Series A Convertible Preferred Stock forming a part of the Certificate of
Incorporation of the Company, as amended from time to time in accordance with
the terms thereof.
"SERIES A DIRECTOR" means the representative of the Investors
elected to the Board pursuant to Section 3(b) of the Series A Certificate.
"TRANSFER" means any transfer of Securities, whether by sale,
assignment, gift, will, devise, bequest, operation of the laws of descent and
distribution, or in trust, pledge, hypothecation, mortgage, encumbrance or other
disposition. The verb to "TRANSFER" shall mean to sell, assign, give, dispose,
transfer (including by gift, will, devise, bequest, or operation of laws of
descent and distribution, or in trust), pledge, hypothecate, mortgage, or
encumber.
"VOTING SECURITIES" means any Securities which are entitled under
the DGCL or the Company's Certificate of Incorporation to be voted at a meeting
of stockholders of the Company.
2. Agreements to Vote.
2.1. Elections of Directors. At any meeting of the
stockholders of the Company at which members of the Board are to be elected and
the Investors do not then have either a Series A Director on the Board or the
power at such election to elect a Series A Director to the Board:
(a) Canopy shall vote, or cause to be voted, all
Voting Securities that it Beneficially Owns in favor of the election to the
Board of one (1) individual nominated by the Investors and indicated by Advent
to Canopy in writing at least ten (10) days prior to such meeting of the
stockholders; and
(b) each Investor shall vote, or cause to be voted,
all Voting Securities that it Beneficially Owns in favor of the election to the
Board of one (1) individual nominated by Canopy and indicated to Advent in
writing at least ten (10) days prior to such meeting of the stockholders.
2.2. Change of Control Transactions.
(a) Irrevocable Proxy.
(i) Contemporaneously with the execution of this
Agreement, Canopy shall deliver, or cause to be delivered, to the Investors an
irrevocable proxy coupled with an interest in the form attached hereto as
Exhibit A (the "IRREVOCABLE PROXY"), designating Advent as the named proxy with
the right to vote all Voting Securities Beneficially Owned by Canopy (the "PROXY
SECURITIES") on behalf of Canopy in connection with any vote of the stockholders
of the Company on any matter relating to a Change of Control Transaction (a "COC
ISSUE"). The Irrevocable Proxy shall be irrevocable to the fullest extent
permitted by law and shall be effective from and after the date hereof, except
as set forth below.
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(ii) Notwithstanding the foregoing, in the event
Canopy and a Contested Investor (as defined below) disagree as to how to vote
any Contested Proxy Securities (as defined below) on any COC Issue after the
procedures of Section 2.2(b) below and either (A) such Contested Investor
exercises the Put Right pursuant to Section 2.2(c) below and Canopy tenders the
Put Price with respect to all of the Put Shares or (B) such Contested Investor
does not exercise the Put Right, the Irrevocable Proxy shall be without any
force or effect with respect to, and Advent shall not be entitled to vote, the
Contested Proxy Securities with respect to such COC Issue. In such event, Canopy
shall vote the Contested Proxy Securities on such COC Issue in accordance with
the Canopy Vote Notice (as defined below) and, if the Irrevocable Proxy is not
terminated pursuant to Section 2.2(a)(iii) below due to Canopy's purchase of the
Put Shares, the Irrevocable Proxy shall be reinstated immediately after the Vote
Date with respect to such Contested Proxy Securities and shall thereafter
continue in full force and effect with respect to any future COC Issue, except
to the extent provided in this Section 2.2.
(iii) The Irrevocable Proxy shall terminate on the
date upon which the Investors cease to Beneficially Own in the aggregate more
than fifty percent (50%) of the shares of Series A Preferred Stock they
Beneficially Own as of the date hereof (subject to appropriate adjustment in the
event of any stock dividend, stock split, reverse stock split, combination,
split-up, recapitalization and like occurrences on or after the date hereof
affecting the Series A Preferred Stock).
(b) Agreement to Vote.
(i) Within ten (10) days after receipt of notice
from the Company setting the date (the "VOTE DATE") of the meeting of the
Company's stockholders at which the COC Issue is to be voted upon (but not
earlier than ten (10) days after receipt of materials disclosing the material
terms of the Change of Control Transaction), Advent shall provide written notice
to Canopy (the "INVESTOR VOTE NOTICE") indicating how the Investors intend the
Proxy Securities to be voted by Advent on such COC Issue. If the Investors do
not agree on how to vote the Proxy Securities, the Investor Vote Notice shall
set forth the various positions of each of the Investors with respect to the COC
Issue and specify how the Proxy Securities are intended to be voted in light of
such disagreement. In all events, the Investor Vote Notice shall also set forth
the number of shares of Series A Preferred Stock held by each Investor.
(ii) If the Investor Vote Notice indicates that
the Investors are in agreement as to how the Proxy Securities shall be voted,
and Canopy desires that the Proxy Securities be voted differently on the COC
Issue from the manner set forth in the Investor Vote Notice, then Canopy shall
provide written notice to each of the Investors of such desire within five (5)
days after receipt of the Investor Vote Notice.
(iii) If the Investor Vote Notice indicates that
the Investors are not in agreement as to how the Proxy Securities shall be
Voted, and Canopy desires that the Proxy Securities be voted differently on the
COC Issue from the manner set forth in the Investor Vote Notice for any one of
the Investors, then Canopy shall provide written notice to each of the Investors
of such desire within five (5) days after receipt of the Investor Vote Notice.
The proportionate amount of the Proxy Securities that are the subject of
disagreement between
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any Investor and Canopy under this clause (iii) or clause (ii) above (which
shall be in the same proportion as the Contested Investor's shares of Series A
Preferred Stock are to all shares of Series A Preferred Stock then outstanding)
are herein referred to as the "CONTESTED PROXY SECURITIES," and any Investor
with which Canopy so disagrees is herein referred to as a "CONTESTED INVESTOR."
(iv) Within five (5) days after the Investors'
receipt of a notice from Canopy provided pursuant to clause (ii) or (iii) of
this Section 2.2(b) (in either case, a "CANOPY VOTE NOTICE"), the Investors and
Canopy shall meet at the Company's corporate headquarters to discuss their
differences as to the intended vote, and, if five (5) days after commencement of
such discussions:
(A) Canopy and all of the Investors agree
that the Proxy Securities shall be voted on the COC Issue as set forth by any
Investor in the Investor Vote Notice or as set forth in the Canopy Vote Notice,
then the Investor Vote Notice shall be deemed to have been changed (if all
Investors agree with Canopy Vote Notice) or the Canopy Vote Notice shall be
deemed to have been withdrawn and, if applicable, the Investor Vote Notice shall
be deemed to have been changed to reflect the agreement of all Investors (if
Canopy and all Investors agree with the position of one or more Investors set
forth in the Investor Vote Notice). In that case, Advent shall provide written
notice of such agreement to all Investors and Canopy, and the Contested Proxy
Securities shall be voted by Advent on the COC Issue in accordance with such
agreement; or
(B) Canopy and any Contested Investor(s)
do not agree as to how the Contested Proxy Securities shall be voted on the COC
Issue, then Advent shall be entitled to vote the Contested Proxy Securities in
accordance with the Investor Vote Notice unless Canopy tenders payment with
respect to the shares of Series A Preferred Stock designated by each Contested
Investor pursuant to the exercise of the Put Right in accordance with Section
2.2(c) below.
(v) In the event Canopy does not provide a
Canopy Vote Notice, Canopy shall be deemed for purposes of this Section 2.2(b)
to have agreed that Advent may vote the Proxy Securities on the COC Issue in the
manner (or manners, as the case may be) set forth in the Investor Vote Notice.
(vi) To the extent that the number of days
provided between notice of a stockholder vote and the Vote Date is less than or
more than forty (40), the time periods provided in this Section 2.2 shall be
proportionately contracted or expanded, as the case may be. In all events, the
time periods set forth in this Section 2.2 shall be contracted (proportionately)
to the extent necessary to allow the procedures outlined in this Section 2.2 to
be completed at least seven (7) Business Days prior to the Vote Date.
(c) Put Right.
(i) If Canopy and any Contested Investor(s)
shall fail to reach agreement as provided in Section 2.2(b)(iv)(B) above such
that the Contested Proxy Securities are to be voted against the position
designated by such Contested Investor(s), such
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Contested Investor(s), severally and not jointly, shall then have the right (the
"PUT RIGHT") to require Canopy to purchase for cash all or any portion of the
Series A Preferred Stock owned by such Contested Investor (the "PUT SHARES") at
a purchase price equal to two (2) times the sum of (i) the aggregate Stated
Value (as defined in the Series A Certificate) of the shares of Series A
Preferred Stock that such Contested Investor requires Canopy to purchase
hereunder, plus (ii) any accrued but unpaid dividends on such Series A Preferred
Stock (the "PUT PRICE").
(ii) A Contested Investor shall exercise its Put
Right, if at all, by providing written notice thereof (a "PUT NOTICE") to Canopy
on or prior to five (5) Business Days prior to the Vote Date. In the Put Notice,
the Contested Investor shall indicate the number of Put Shares and the date
proposed by the Contested Investor for the closing of Canopy's purchase of such
Put Shares (which shall not be more than four (4) Business Days after the date
the Investor provides such Put Notice). The Investor providing such Put Notice
(other than an Investor managed by Advent) shall simultaneously furnish a copy
thereof to Advent.
(iii) The closing of Canopy's purchase of all Put
Shares (the "PUT CLOSING DATE") shall take place simultaneously at such time,
date and location as shall be mutually agreeable to Canopy and the selling
Contested Investor(s), which shall be as consistent as reasonably possible with
the dates proposed for the closing in the Put Notices but in no event later than
one (1) Business Day prior to the Vote Date. The Put Price shall be paid by
Canopy to such selling Contested Investor at such closing by wire transfer of
immediately available funds to an account designated in writing by such selling
Contested Investor, and such selling Contested Investor shall deliver to Canopy
the certificates evidencing the Put Shares, duly endorsed and in negotiable form
with all the requisite documentary stamps affixed thereto. The Contested
Investor shall deliver good title to its Put Shares on such closing date, free
and clear of any liens or restrictions whatsoever, except for those restrictions
provided for in this Agreement.
(d) Additional Payment Upon Subsequent Transaction.
(i) If all of the following events occur, Canopy
shall pay to the relevant Contested Investor promptly (but in no event later
than three (3) Business Days following the consummation of the Approved COC
Transaction (as defined below)) the Additional COC Payment Amount (as defined
below), if any, as calculated with respect to such Investor pursuant to Section
2.2(d)(ii) below:
(A) the Investor Vote Notice indicates
that such Contested Investor desires that the relevant portion of the Proxy
Securities be voted in favor of a proposed Change of Control Transaction;
(B) Canopy indicates to such Contested
Investor in a Canopy Vote Notice that it desires that such Proxy Securities not
be voted in favor of the proposed Change of Control Transaction;
(C) such Contested Investor exercises its
Put Right and Canopy purchases the Put Shares pursuant to Section 2.2(c),
following the inability of such Contested Investor and Canopy to agree as to how
the Proxy Securities shall be voted on the proposed Change of Control
Transaction; and
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(D) within two (2) years after the Put
Closing Date, the Company's stockholders approve a Change of Control Transaction
with the same party (or its Affiliate) as in the proposed Change of Control
Transaction (the "APPROVED COC TRANSACTION").
(ii) The "ADDITIONAL COC PAYMENT AMOUNT" shall be
an amount (which amount may not be less than zero) equal to (A) the amount such
Contested Investor would have received for its Put Shares had the proposed
Change of Control Transaction been consummated, minus (B) the Put Price such
Contested Investor actually received from Canopy for its Put Shares.
2.3. Written Consents. The provisions of this Section 2 shall
be equally applicable to any action taken or proposed to be taken by the
Company's stockholders with respect to a COC Issue without a meeting, including
without limitation any such action taken or proposed to be taken by written
consent pursuant to Section 228 of the DGCL.
3. Restrictions on Transfers of Securities.
3.1. General Restrictions.
(a) Except as provided in Section 3.4 hereof, Canopy
shall not Transfer, or permit the Transfer of, any Securities that it
Beneficially Owns (whether Beneficially Owned as of the date hereof or acquired
hereafter) unless all of the following conditions are met:
(i) in the case of a Transfer to any of the
Persons listed on Schedule 3.1(a) hereto or any Affiliate of such Persons,
Canopy has obtained the prior written consent of Advent;
(ii) such Transfer is effected only after
compliance with the terms and conditions of this Section 3; and
(iii) the transferee agrees in writing to be bound
by the terms and provisions of this Agreement and a copy of such writing is
provided to Advent.
(b) Canopy agrees that the legend set forth on
Schedule 3.1(b) hereto (the "RESTRICTIVE LEGEND") shall be affixed to all stock
certificates representing Securities that it Beneficially Owns, and Canopy has
submitted such stock certificates to the Company on the date hereof for such
purposes. The Company hereby agrees to return such stock certificates to Canopy
promptly after the Restrictive Legend has been affixed thereto.
(c) Any Transfer or purported Transfer made in
violation of this Section 3 shall be null and void and of no effect. The parties
agree that the restrictions on Canopy's ability to Transfer Securities that are
Beneficially Owned by it, as set forth in this Agreement, are not manifestly
unreasonable.
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3.2. Right of First Refusal.
(a) Except as provided in Section 3.4, Canopy shall
not Transfer any Securities unless Canopy shall have first provided the
Investors with written notice of the proposed transfer of such Securities (the
"SUBJECT SECURITIES"), and shall have offered to sell to the Investors all of
such Subject Securities (an "OFFER NOTICE"). The Offer Notice shall include a
statement of intention to Transfer the Subject Securities to a third party, the
plan of disposition, and if the Transfer is pursuant to a bona fide offer ("BONA
FIDE Offer") of a third party (the "BONA FIDE TRANSFEREE") the name and address
of the Bona Fide Transferee and all of the terms of the Bona Fide Offer.
(b) The Investors shall have the right to purchase,
severally or jointly, all or any portion of the Subject Securities, and shall
exercise such right by Advent providing written notice thereof (an "ELECTION
NOTICE") to Canopy within ten (10) days after the Investors' receipt of the
Offer Notice. In the Election Notice, Advent shall indicate the number of
Subject Securities to be purchased, the Investors that will be purchasing such
Subject Securities, and the date for the closing of such purchase (which shall
not be more than twenty (20) days after the date Advent provides such Election
Notice).
(c) If the offer of Subject Securities is pursuant to
a Bona Fide Offer and is for cash or cash plus deferred payments of cash, the
Investors shall pay a purchase price per share for the Subject Securities equal
to the price per share offered to be paid by the Bona Fide Transferee described
in the Offer Notice, which price shall be paid in cash or, if so provided in the
offer of the Bona Fide Transferee, cash plus deferred payments of cash in the
same proportions and on the same terms of deferred payment as set forth in the
Bona Fide Offer.
(d) If the offer of Subject Securities is pursuant to
a Bona Fide offer and is for consideration other than cash or cash plus deferred
payments of cash, the Investor shall pay the cash equivalent of such other
consideration. If Canopy and the Investors cannot agree on the amount of such
cash equivalent within ten (10) days after Advent provides the Election Notice
to Canopy, either Canopy or Advent may, by three (3) days' written notice to the
other, initiate appraisal proceedings for determination of the cash equivalent.
The Investors may choose to revoke their election to purchase Subject Securities
based on the determination of the appraised value of the cash equivalent
pursuant to Section 3.2(e) below, and shall exercise such option by providing
written notice to Canopy of such revocation within ten (10) days after such
determination.
(e) If any party shall initiate an appraisal procedure
to determine the amount of the cash equivalent of any consideration for Subject
Securities, then Canopy and Advent shall each promptly (but no later than five
(5) days thereafter) appoint as an appraiser an individual who shall be a member
of an independent investment banking firm. Each appraiser shall, within twenty
(20) days of appointment, separately investigate the value of the consideration
for the Subject Securities as of the proposed transfer date and shall submit a
notice of an appraisal of that value to each party. Each appraiser shall be
instructed to determine such value without regard to income tax consequences to
Canopy as a result of receiving cash rather than other consideration. If the
appraised values of such consideration (the "EARLIER APPRAISALS") vary by less
than ten percent (10%), the average of the two appraisals on a per
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share basis shall be controlling as the amount of the cash equivalent. If the
appraised values vary by more than ten percent (10%), the appraisers, within ten
(10) days of the submission of the last appraisal, shall appoint a third
appraiser who shall be a member of a nationally recognized investment banking
firm. The third appraiser shall, within twenty (20) days of his appointment,
determine which one of the Earlier Appraisals more accurately represents the
value of the consideration for the Subject Securities and such appraisal will
control. If any party fails to appoint an appraiser within five (5) days after
the initiation of an appraisal procedure or if one of the two initial appraisers
fails after appointment to submit his appraisal within the required period, the
appraisal submitted by the remaining appraiser shall be controlling. Canopy and
the Investors shall each bear the cost of its respective appointed appraiser,
and the cost of the third appraisal shall be shared equally by Canopy and the
Investors.
(f) If the proposed Transfer of Subject Securities is
not pursuant to a Bona Fide Offer, the Investors shall pay cash in an amount
equal to the average closing price per share of Common Stock on the Nasdaq
SmallCap Market for the twenty (20) trading days prior to (and not including)
the date of the Election Notice, multiplied by the number of Subject Securities
to be purchased as set forth in the Election Notice.
(g) The closing of the purchase shall take place at
such time, date and location as shall be mutually agreeable to Canopy and Advent
(but not later than twenty (20) days after the last Election Notice is given or,
if an appraisal procedure is initiated pursuant to Section 3.2(d), the final
determination of the value of the cash equivalent). The purchase price, to the
extent comprised of cash, shall be paid at the closing, and cash equivalents and
documents evidencing any deferred payments of cash shall be delivered at the
closing. In connection with such closing, neither Canopy nor the Investors shall
be required, at any time prior to or at the closing, to make any representation
to the other parties concerning whether such party is in possession of any
material, non-public information regarding the Company. At the closing, Canopy
shall deliver to the Investors the certificates evidencing the Subject
Securities to be conveyed, duly endorsed and in negotiable form with all the
requisite documentary stamps affixed thereto.
(h) To the extent that the Investors decline to
purchase any Subject Securities, Canopy may Transfer such Subject Securities to
the Bona Fide Transferee or other third party only in strict accordance with the
terms stated in the Offer Notice. If Canopy shall fail to make such Transfer
within sixty (60) days following (i) the expiration of the time period provided
in Section 3.2(b) for Advent to deliver an Election Notice or (ii) the date
Canopy receives notice of the Investors' revocation of their election to
purchase such Subject Securities pursuant to Section 3.2(d), as the case may be,
such Subject Securities shall again become subject to the restrictions of this
Section 3.2.
3.3. Tag-Along Rights.
(a) In addition to their rights pursuant to Section
3.2 above, each Investor who does not exercise the right of first refusal set
forth in Section 3.2 shall have the right to sell to the Bona Fide Transferee or
other third party purchaser (the "PURCHASER") (except as provided in Section
3.4), at the same price and on the same terms and conditions as the sale by
Canopy thereto (which shall not be other than as set forth in the Offer Notice
in any
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material respect in the case of a sale to a Bona Fide Transferee) a number of
shares of (x) Series A Preferred Stock convertible into a number of shares of
Common Stock, (y) Common Stock or (z) a combination of the foregoing (the
"TAG-ALONG SHARES"), equal to (i) the shares of Common Stock, or shares of
Common Stock underlying the Securities, the Purchaser proposes to purchase,
multiplied by (ii) a fraction, the numerator of which shall be the number of
shares of Common Stock Beneficially Owned by such Investor and the denominator
of which shall be the aggregate number of shares of Common Stock Beneficially
Owned by Canopy and by each Investor electing to exercise its rights hereunder;
provided, however, that if the amount of Tag-Along Shares calculated above shall
represent fifty percent (50%) or more of the total Series A Preferred Stock and
Common Stock held by such Investor, such Investor shall have the right to sell
to the Purchaser all of the Series A Preferred Stock and Common Stock such
Investor holds (in which event Canopy shall sell fewer Subject Securities).
(b) The Investors shall exercise the right to sell the
Tag-Along Shares to the Purchaser by Advent indicating the Investors' election
in the Election Notice. Such Election Notice shall also indicate the amount and
type of Tag-Along Shares to be sold by the Investors and the Investors selling
such Tag-Along Shares.
3.4. Exclusions. Notwithstanding the foregoing, the rights of
the Investors pursuant to Sections 3.2 and 3.3 shall not apply to the following
Transfers:
(a) Transfers by Canopy to a Person that is acquiring
all or substantially all of the assets of Canopy (other than Persons that are
principally engaged in the businesses in which the Company competes and other
than Persons listed on Schedule 3.1(a) hereto or Affiliates of such Persons);
and
(b) Transfers by Canopy made pursuant to Rule 144 or
an effective registration statement.
3.5. Termination of Restrictions. Notwithstanding the
foregoing, in the event of a Transfer by Canopy of any Securities it
Beneficially Owns pursuant to either Section 3.4(a) or (b), the rights of the
Investors under this Section 3 shall terminate with respect to such Securities
immediately upon the consummation of such Transfer.
4. Representations and Warranties of Canopy. Canopy represents
and warrants to the Investors as follows:
4.1. Right to Vote Securities. Canopy has the right to vote
all of the Voting Securities that it Beneficially Owns.
4.2. Power; Binding Agreement; Non-Contravention. Canopy has
the full, right, power and authority to enter into this Agreement and to perform
all of its obligations hereunder. Neither the execution, delivery nor
performance of this Agreement by Canopy will violate the charter, by-laws or
other organizational or constitutive documents of Canopy, or any other
agreement, contract or arrangement to which Canopy is a party or is bound,
including any voting agreement, stockholders agreement or voting trust. This
Agreement has been duly executed and delivered by Canopy and constitutes a
legal, valid and binding agreement of
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Canopy, enforceable in accordance with its terms, except as such enforceability
may be limited by (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors and (ii) rules of law governing specific
performance, injunctive relief or other equitable remedies and by general
principles of equity. Neither the execution or delivery of this Agreement by
Canopy will (i) require any material consent or approval of or filing with any
governmental or other regulatory body, other than filings required under the
federal or state securities laws, or (ii) constitute a violation of, conflict
with or constitute a default under any material law, rule or regulation
applicable to Canopy, or any material order, judgment or decree to which Canopy
is bound.
5. Covenants.
5.1. Canopy Covenant. Except in accordance with the express
provisions of this Agreement, Canopy shall not, directly or indirectly, grant
any proxies, deposit any Securities into a voting trust or enter into any other
voting agreement with respect to any Securities.
5.2. Company Covenants.
(i) The Company shall use its best efforts to
set any particular Vote Date so as to accommodate as reasonably as practicable
the procedures outlined in Section 2.2(b).
(ii) The Company shall only remove, or cause to
be removed, the restrictive legend affixed on any stock certificate representing
Securities that Canopy Beneficially Owns if it receives (i) a certificate signed
by an executive officer of Canopy certifying that such Securities have been
Transferred in accordance with Rule 144 and (ii) an opinion from Canopy's
counsel (which may be in-house counsel) that such Transfer was effected in
accordance with Rule 144.
(iii) With a view to making available to Canopy
the benefits of Rule 144, the Company shall (A) use its best efforts to make and
keep current public information about the Company available (as those terms are
understood and defined in Rule 144) at all times, (B) use its best efforts to
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, and (C)
furnish to Canopy upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, as well as such other
reports and documents of the Company as Canopy may reasonably request in order
to avail itself of Rule 144.
6. Termination. This Agreement shall terminate on earlier of (i)
the date upon which Canopy ceases to Beneficially Own any Securities of the
Company or (ii) the date upon which the Investors cease to Beneficially Own any
Securities of the Company.
7. Survival. Except as expressly set forth herein, the
representations, warranties, covenants and agreements made by Canopy in this
Agreement shall survive the date
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hereof and shall remain in full force and effect until the termination of this
Agreement in accordance with Section 6 above.
8. Release of Claims.
8.1. Canopy hereby confirms that (a) it has substantial
experience in evaluating transactions involving venture capital investments and
other types of investments in public and private companies and (b) it has had
the opportunity (i) to discuss with its counsel and advisors, and has received
answers for, any questions it may have had regarding the terms of this Agreement
and (ii) to negotiate the terms of this Agreement with the Investors.
8.2. Canopy hereby acknowledges that the Company's business
consists to a large extent of selling products developed and produced by EMC,
which has resulted in a close business relationship between the Company and EMC.
8.3. Canopy hereby completely releases, relinquishes, waives
and discharges each of the Investors, each of the Investors' respective present
and former officers, directors, agents, employees, consultants, accountants,
attorneys or other representatives (and their respective heirs, executors,
trustees and administrators), and each of the Investors' respective successors
and assigns (collectively, the "RELEASED PARTIES"), from all suits, charges,
debts, dues, losses, bills, covenants, contracts, promises, agreements,
variances, trespasses, expenses, claims, liabilities, demands and causes of
action, known or unknown, fixed or contingent, whether in law or equity, direct
or indirect, matured or not matured that Canopy ever had, now has, or
hereinafter can or may have, against the Released Parties that may be based on
the negotiation process leading up to, and the terms of, this Agreement, the
Purchase Agreement and the other Transaction Documents.
8.4. Canopy specifically acknowledges and agrees that (a)
this Section 8 constitutes an essential, material term of this Agreement, and
(b) this Agreement is a material inducement for the Investors to enter into the
Purchase Agreement and the other Transaction Documents and to consummate the
transactions contemplated thereby.
9. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth on the
signature page hereof, or such other address or facsimile number as such party
may hereinafter specify for the purpose of this Section 9 to the party giving
such notice. Each such notice, request or other communication shall be effective
(a) if given by facsimile transmission, when such facsimile is transmitted to
the facsimile number specified on the signature pages of this agreement and the
appropriate confirmation is received or, (b) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or, (c) if given by any other means, when delivered at
the address specified on the signature pages of this Agreement.
10. Entire Agreement; Amendment; Waiver. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter contained herein and supersedes all prior agreements and
understandings among the parties with respect to such subject matter. This
Agreement may not be modified, amended, altered or supplemented except
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by an agreement in writing executed by Canopy and Investors holding a majority
of the Series A Preferred Stock (or Common Stock issued upon conversion
thereof); provided, however, that the observance of any term of this Agreement
may be waived with respect to all parties to this Agreement (either generally or
in a particular instance and either retroactively or prospectively), by the
written consent of Canopy and Investors holding at least seventy-five percent
(75%) of the Series A Preferred Stock and any Common Stock that may be issued
upon conversion thereof.
11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their permitted successors
and assigns.
12. Governing Law; Consent to Jurisdiction; Consent to Process;
Waiver of Jury Trial. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of conflict of
laws principles. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of Delaware,
for the adjudication of any dispute hereunder or in connection with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each of the parties hereby
waives all rights to a trial by jury.
13. Injunctive Relief. The parties agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to specific performance or to enjoin the continuing breach of such provision, in
each case without the requirement that a bond be posted, as well as to obtain
damages for breach of this Agreement. By seeking such relief, the aggrieved
party will not be precluded from seeking any other relief to which it may be
entitled.
14. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
15. Further Assurances. Each party hereto shall execute and
deliver such additional documents as may be necessary to effectuate the voting
agreements contemplated by this Agreement.
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16. No Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, shall be construed to give any Person, other than the
parties hereto, any legal or equitable right, remedy or claim under or by reason
of this Agreement or any provision contained herein.
17. Representative of the Investors. To the extent certain
provisions hereof expressly authorize Advent to deliver notices on behalf of an
Investor, each Investor hereby appoints and authorizes Advent to act on its
behalf with respect to such notices; provided, however, that prior to any such
notice Advent shall obtain the express written direction of the applicable
Investor.
18. Legal Expenses. In the event any legal proceeding is commenced
by any party to this Agreement to enforce, or recover damages for any breach of,
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees and disbursements.
19. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. -
20. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Voting
Agreement to be duly executed by their respective authorized signatories as of
the date first above written.
THE CANOPY GROUP, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
Address for notices:
000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: 801.932.2031
with a copy to:
000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile: 801.932.2031
[Investor and Company signature pages follow]
S-1
INVESTORS:
DIGITAL MEDIA & COMMUNICATIONS III LIMITED
PARTNERSHIP
DIGITAL MEDIA & COMMUNICATIONS III-A LIMITED
PARTNERSHIP
DIGITAL MEDIA & COMMUNICATIONS III-B LIMITED
PARTNERSHIP
DIGITAL MEDIA & COMMUNICATIONS III-C LIMITED
PARTNERSHIP
DIGITAL MEDIA & COMMUNICATIONS III-D C.V.
DIGITAL MEDIA & COMMUNICATIONS III-E C.V.
By: Advent International Limited
Partnership, General Partner
By: Advent International Corporation,
General Partner
By: /s/ Xxxxxxx Xxxx
------------------------
Name: Xxxxxxx Xxxx
Title: Partner
Address for notices:
c/o Advent International Corporation
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxx
Operating Partner
Facsimile: 617.951.0566
With a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Facsimile: 215.981.4750
Investor Signature Page to Voting Agreement
S-2
ADVENT PARTNERS DMC III LIMITED PARTNERSHIP
ADVENT PARTNERS II LIMITED PARTNERSHIP
By: Advent International Corporation,
General Partner
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
Title: Partner
Address for notices:
c/o Advent International Corporation
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxx
Operating Partner
Facsimile: 617.951.0566
With a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Facsimile: 215.981.4750
Investor Signature Page to Voting Agreement
S-3
XXX XXXXXXXXXXX
By: /s/ Xxxxxxx X. Xxxx
-------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President,
Corporate Development
Address for notices:
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: C. Xxxxxxx Xxxxx
Senior Corporate Counsel
Facsimile: 508.497.6915
With a copy to:
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Facsimile: 215.981.4750
Investor Signature Page to Voting Agreement
S-4
MTI TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer and
President
Address for notices:
MTI Technology Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile:
with a copy to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: 949.725.4100
Company Signature Page to Voting Agreement
S-5
