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EXHIBIT 10.2
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT ("Agreement") is
entered into effective as of April 13, 2000 by and among Tricord Systems, Inc.,
a Delaware corporation (the "Company"), the persons listed on Schedule A hereto
(each person listed on Schedule A, an "Investor" and, collectively, the
"Investors") and Xxxx Xxxxxxx (the "Major Holder").
RECITALS
WHEREAS, certain of the Investors (the "Existing Investors") (a) hold
shares of Common Stock, warrants to purchase shares of Common Stock ("Warrants")
and/or shares of Common Stock issued upon exercise of Warrants and (b) possess
registration rights, information rights and/or other rights pursuant to an
Investors Agreement dated December 7, 1998 and/or an Investors Agreement dated
July 23, 1999, each between the Company and certain Existing Investors (each an
"Existing Rights Agreement" and collectively, the "Existing Rights Agreements");
and
WHEREAS, the undersigned parties to the Existing Rights Agreements (a)
desire to terminate the Existing Rights Agreements and to accept the rights
created pursuant to this Agreement in lieu of the rights granted to them under
the Existing Rights Agreements and (b) under the terms of Sections 5.2 and 7.2
of the Existing Rights Agreements, have the power to bind the other parties to
the Existing Rights Agreements to the terms of this Agreement, even though such
other parties have not signed this Agreement; and
WHEREAS, the Company and certain Investors (the "Certain Investors") are
parties to a Stock Purchase Agreement of even date herewith (the "April 2000
Agreement"), pursuant to which the Company will sell and issue to the Certain
Investors shares of Common Stock; and
WHEREAS, in order to induce (a) the Company to enter into the April 2000
Agreement, (b) the Certain Investors to invest funds in the Company pursuant to
the April 2000 Agreement and (c) the undersigned Existing Investors to execute
this Agreement, the Investors and the Company hereby agree that this Agreement
shall govern the rights of all the Investors (i) to cause the Company to
register certain shares of Common Stock issuable to the Investors and (ii) with
respect to certain other matters as set forth herein.
NOW THEREFORE, in consideration of the foregoing, the Company and the
Investors agree as follows:
Pursuant to Section 7.2 of the Existing Rights Agreement dated December 7,
1998 and Section 5.2 of the Existing Rights Agreement dated July 23, 1999, the
Company and the undersigned Existing Investors, being (i) the holders of at
least two-thirds of the outstanding Registrable Securities under each of the
respective Existing Rights Agreements, (ii) the holders of at least two-thirds
of the Common Stock issued or issuable upon exercise of the Warrants, as
described in Section 7.2(iii) of the Existing Rights Agreement dated December 7,
1998 and (iii) the Major Holder (as defined in the Existing Rights Agreement
dated December 7, 1998),
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hereby, on behalf of themselves and the other Existing Investors: (A) waive the
rights of first refusal and notice contained in the Existing Rights Agreements
with respect to the issuance of the shares of Common Stock to the Certain
Investors pursuant to the April 2000 Agreement and (B) terminate the Existing
Rights Agreements and replace them with this Agreement.
SECTION 1.
DEFINITIONS
1.1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Board" means the Board of Directors of the Company.
"Change in Control" means the occurrence after December 7, 1998 of either
or both of the following events: (i) a transaction or series of
transactions occur in which, or as a result of which, the ownership of 50%
or more of the outstanding shares of Common Stock is changed, or (ii) the
Incumbent Directors of the Company cease to constitute a majority of the
Board.
"Commission" means the Securities and Exchange Commission of the United
States or any other U.S. federal agency at the time administering the
Securities Act.
"Common Stock" means the common stock of the Company, par value $.01 per
share.
"December 1998 Holder" means a Holder who became such pursuant to the Stock
Purchase Agreement with the Company effective December 7, 1998.
"Exempt Issuances" means:
(i) the sale or issuance of Voting Securities pursuant to an
effective registration statement under the Securities Act;
(ii) the sale or issuance of shares of Common Stock to officers,
directors and employees of, and consultants and advisors to, the
Company pursuant to stock grants, option plans, purchase plans or
other compensatory benefit contracts, programs or arrangements
approved by the Board or upon exercise of options or warrants granted
to such parties pursuant to any such plan or arrangement;
(iii) shares of Common Stock issued upon exercise or conversion
of any options, warrants or rights to acquire shares of Common Stock
outstanding on the date hereof;
(iv) Voting Securities issued pursuant to any merger,
consolidation or acquisition involving the Company or in connection
with a Recapitalization;
(v) Voting Securities issued in connection with any acquisition
of a third parties' assets, products, technology or other rights; and
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(vi) Voting Securities issued in connection with research and
development partnerships, OEM or distribution arrangements, licensing
or collaborative arrangements or similar transactions, in each case
approved by the Board.
"Holder" means each of the Investors, and their transferees as permitted by
Section 2.10 hereof, holding Registrable Securities.
"Incumbent Directors" of the Company means any individuals who were members
of the Board on December 7, 1998 and any individual who subsequently
becomes a member of the Board whose election, or nomination for election by
the Company's stockholders, was approved by a vote of at least a majority
of the Incumbent Directors (either by specific vote or by approval of the
Company's proxy statement in which such individual is named as a nominee
for director without objection to such nomination), in which case such
subsequently elected members shall thereafter be deemed an Incumbent
Director for purposes of this definition.
"Investors' Nominee" means Xxx Xxxxxx or such other person selected by a
majority in interest of the holders of Voting Securities owned by Xx.
Xxxxxx, his immediate family and any trusts or entities established for
their benefit.
"Other Holders" means holders of Company securities, other than Holders,
proposing to distribute their securities pursuant to a registration under
this Agreement.
"Pro Rata Portion" means, for purposes of Section 4 hereof, the amount of
Company Offered Securities (as defined in Section 4 hereof) multiplied by a
fraction, the numerator of which shall equal the number of shares of Common
Stock issued, or issuable upon exercise or conversion of any rights to
purchase shares of Common Stock, then held by a Holder, and the denominator
of which shall equal the aggregate number of shares of Common Stock issued,
or issuable upon exercise or conversion of any rights to purchase shares of
Common Stock, then outstanding.
"Recapitalization" means any stock split, stock dividend, stock
combination, recapitalization or similar event.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and all applicable blue sky or other
securities laws), and the declaration or ordering of the effectiveness of
such registration statement (and qualification or compliance with such
laws).
"Registrable Securities" means any of the following, but only if acquired
pursuant to the April 2000 Agreement, the Stock Purchase Agreement with the
Company dated December 7, 1998 or the Stock Purchase Agreement with the
Company dated July 23, 1999: (i) Common Stock, (ii) Common Stock issued or
issuable upon exercise of the Warrants and (iii) Common Stock issued or
issuable in respect of such Common Stock upon any Recapitalization, in each
case, held by Holders. Notwithstanding the preceding sentence, "Registrable
Securities" shall not include (i) shares that have been sold to the public
either pursuant to a registration statement or Rule 144 under the
Securities Act or
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(ii) shares sold in a transaction in which the registration rights
conferred by this Agreement are not transferred as provided in Section 2.10
hereof.
"Registration Expenses" means all expenses, other than Selling Expenses,
incurred by the Company in complying with Section 2 hereof, including,
without limitation, all registration, qualification, listing and filing
fees, printing expenses, escrow fees, fees and disbursements of counsel for
the Company and one counsel for the Investors as a group selected by
holders of at least a majority of the Registrable Securities proposed to be
included in such registration, blue sky fees and expenses and the expense
of any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall
be in effect at the time.
"Selling Expenses" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by
Holders.
"Selling Holder" means each Holder who holds Registrable Securities
included in a registration statement under the Securities Act pursuant to
this Agreement.
"Selling Major Holder" means each Major Holder who desires to sell,
transfer, assign or otherwise dispose of any Voting Securities.
"Transfer" means any transfer, sale, assignment, conveyance, pledge,
mortgage, donation, change of legal record or beneficial ownership,
issuance or other disposal or delivery.
"Voting Securities" means the Common Stock, any other securities of the
Company entitled to vote in the election of directors of the Company, any
securities convertible into or exchangeable for such securities, and any
options, warrants or other rights to purchase such securities (including
the Warrants).
SECTION 2.
REGISTRATION RIGHTS
2.1. Xxxxxx Demand Registration.
(a) Request for Registration. In case the Company shall receive from
Xxx Xxxxxx or his permitted transferee under Section 2.10 (the "Demanding
Holder") a written request that the Company effect any registration with respect
to not less than 33% of the then outstanding Registrable Securities (a
"Registration Notice") held by him and all his permitted transferees, the
Company will:
(A) promptly give written notice of the proposed registration,
qualification or compliance to all Holders; and
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(B) as soon as practicable, use its reasonable best efforts to
effect such registration as described in Section 2.6 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 joining in such
request as are specified in a written request received by the Company within 20
days after receipt of such written notice from the Company.
Notwithstanding the foregoing, the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 2.1:
(i) 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;
(ii) prior to the earlier of (1) a Change in Control or (2) June 30,
2000;
(iii) during the period starting with the date 60 days prior to the
Company's estimated date of filing of, and ending on the date 90 days
immediately following the effective date of, any registration statement
pertaining to securities of the Company sold by the Company, provided that the
Company is actively employing in good faith its best reasonable efforts to cause
such registration statement to become effective, and provided, further, that the
Company may not, pursuant to this Section 2.1(a)(B)(iii) whether included herein
or incorporated into Section 2.3, delay implementation of a demand for
registration more than once in any 12-month period;
(iv) if the Company shall furnish to the Demanding Holder a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board it would be seriously detrimental to the Company or
its stockholders for registration statements to be filed in the near future,
then the Company's obligation to use its best reasonable efforts to file a
registration statement shall be deferred for a period not to exceed 90 days from
the receipt of the request to file such registration by the Demanding Holder;
provided, however, that the Company cannot, pursuant to this Section
2.1(a)(B)(iv) whether included herein or incorporated into Section 2.3, utilize
this right more than once in any 12-month period; or
(v) after the Company has effected two registrations pursuant to this
Section 2.1, and such registrations have been declared or ordered effective.
(b) Underwriting. In the event that a registration pursuant to Section
2.1 is for a registered public offering involving an underwriting, the Company
shall so advise the Holders as part of the notice given pursuant to Section
2.1(a)(A). In such event, the right of any Holder to registration pursuant to
Section 2.1 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 2.1, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.
The Company shall (together with all Holders and Other Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in
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customary form with the managing underwriter selected for such underwriting by
the Holders of at least a majority of the Registrable Securities proposed to be
included in such registration, but subject to the reasonable approval of the
Company. Notwithstanding any other provision of this Section 2.1, if the
managing underwriter advises the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise all Holders and Other Holders, and the number of shares
that may be included in the registration and underwriting shall be allocated,
first, among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement and, second, among the Other Holders in
proportion to the number of shares proposed to be included in such registration
by such Other Holders. No Registrable Securities or other securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any holder to the nearest 100 shares.
If any Holder or Other Holder disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Demanding Holder. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration.
(c) The Company shall not register securities for sale for its own
account in any registration requested pursuant to this Section 2.1 unless
permitted to do so by the written consent of Holders who hold at least
two-thirds of the Registrable Securities as to which registration has been
requested or unless the underwriter shall indicate in writing to the Demanding
Holder that the inclusion of the shares to be sold for the account of the
Company will not adversely affect the registration, the price of the shares to
be sold and the number of shares to be sold for the account of the Holders. The
Company may not cause any other registration of securities for sale for its own
account (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan) to be initiated after a registration
requested pursuant to this Section 2.1 and to become effective less than 90 days
after the effective date of any registration requested pursuant to this Section
2.1.
2.2. Piggyback Registration.
(a) Notice of Registration. If at any time, or from time to time, the
Company shall determine to register any of its securities, either for its own
account or the account of any security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Rule 145 transaction, the Company will:
(A) promptly give to each Holder written notice thereof; and
(B) 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 20 days after receipt of such written notice from the
Company, by any Holder.
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(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 Section 2.2(a). In such event the right of any Holder to
registration pursuant to Section 2.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall, together with the Company and Other Holders, enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 2.2, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit or eliminate the Registrable Securities and other
securities to be included in such registration by Holders and Other Holders. The
Company shall so advise all Holders and Other Holders, and the number of shares
that may be included in the registration and underwriting by all Holders and
Other Holders shall be allocated among them, as nearly as practicable, first,
among the Holders in proportion to the respective amounts of Registrable
Securities held by such holders at the time of filing of the registration
statement, and, second, among the Other Holders in proportion to the number of
shares proposed to be included in such registration by such Other Holders. To
facilitate the allocation of shares in accordance with the above provisions, the
Company may round the number of shares allocated to any Holder or Other Holder
to the nearest 100 shares.
If any Holder or Other Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company and the managing underwriter. Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
(c) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.2
prior to the effectiveness of such registration whether or not any Holder has
elected to include Registrable Securities in such registration.
2.3. Required Registration of Shares.
(a) Registration Statement. Following the closing of the sale of
shares of Common Stock pursuant to the April 2000 Agreement, the Company will
prepare and file a registration statement on Form S-3 under the Securities Act
(or any successor form to Form S-3) registering the Registrable Securities for
resale. If Form S-3 is not available at that time, the Company will file a
Registration Statement on such form as is then available to effect a
registration of the Registrable Securities. The Company will use its best
efforts to cause the Registration Statement to be declared effective by the
Commission as soon as practicable after such filing, and in any event no later
than September 15, 2000. The Company's best efforts will include, but will not
be limited to, promptly responding to all comments received from the staff of
the Commission.
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(b) Limitations. If, at any time during which a registration statement
remains effective as provided in this Section 2.3, an event occurs that would
have given the Company the right to delay a demand registration pursuant to
Section 2.1(a)(B)(iii) or (iv) had such a registration been requested (without
regard to the 12-month period referred to therein), the Company may provide
written notice to the Selling Holders, in which case the Selling Holders shall
keep the fact and subject matter of such notice confidential and shall suspend
all sales of Registrable Securities pursuant to such registration statement
until the earlier of (i) termination of the event giving rise to the right to
suspend such sales, or (ii) the end of the period set forth in Section
2.1(a)(B)(iii) or (iv), whichever is applicable. Such period shall be referred
to as a "Black-Out Period," and the Company shall not be entitled to implement
more than one such Black-Out Period during any 12-month period.
2.4. Limitations on Subsequent Registration Rights. From and after the date
hereof, the Company will not, without the prior written consent of Holders of a
majority of the then outstanding Registrable Securities, enter into any
agreement with respect to its securities which is inconsistent with, or grant
rights superior or pari passu to, the registration rights granted under this
Section 2.
2.5. Expenses of Registration.
(a) Registration Expenses. The Company shall bear all Registration
Expenses incurred in connection with all registrations pursuant to Sections 2.1,
2.2 and 2.3. In the event the Demanding Holder causes the Company to withdraw or
abandon a registration statement filed with the Commission or, following an
effective registration pursuant to Section 2.1 hereof, does not sell Registrable
Securities, then all Registration Expenses in respect of such registration shall
be borne, at the Demanding Holder's option, either by the Demanding Holder or by
the Company (in which case, if borne by the Company, such withdrawn or abandoned
registration shall be deemed to be an effective registration for purposes of
Section 2.1(a)(B)(v) hereof).
(b) Selling Expenses. Unless otherwise stated, all Selling Expenses
directly relating to securities registered on behalf of the Holders and Other
Holders shall be borne by the Holders and Other Holders pro rata on the basis of
the number of shares so registered.
2.6. Registration and Qualification. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
as promptly as is practicable and in good faith:
(a) prepare and file with the Commission, as soon as practicable, and
use its best efforts to cause to become effective, a registration statement
under the Securities Act relating to the Registrable Securities to be offered on
such form as the initiating Holders, or if not filed pursuant to Section 2.1 or
2.3 hereof, the Company, determines and for which the Company then qualifies;
(b) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
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Securities until the earlier of such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition set
forth in such registration statement or the expiration of 135 days after such
registration statement becomes effective; provided that: (i) such 135-day period
shall be extended in the case of a registration pursuant to Section 2.1 or 2.3
hereof for such number of days that equals the number of days elapsing from (A)
the date the written notice contemplated by Section 2.6(f) hereof is given by
the Company to (B) the date on which the Company delivers to the Selling Holders
the supplement or amendment contemplated by Section 2.6(f) hereof; (ii) such
135-day period shall be extended for a period of time equal to the period the
Holder refrains from selling any securities included in such registration at the
request of the Company or an underwriter of Common Stock (or other securities)
of the Company; (iii) in the case of any registration of Registrable Securities
on Form S-3 which are intended to be offered on a continuous or delayed basis,
such 135-day period shall be extended, if necessary, to keep the registration
statement effective until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that applicable
rules under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment that (A) includes
any prospectus required by Section 10(a)(3) of the Securities Act or (B)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (A) and (B) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement; and (iv) in the case of any
registration of Registrable Securities pursuant to Section 2.3 hereof, whether
on Form S-3 or otherwise, such 135-day period shall be extended, if necessary,
to keep the registration statement effective until all such Registrable
Securities are sold or until all such Registrable Securities may be sold without
registration under the Securities Act pursuant to exemptions provided by Rule
144(k) under the Securities Act;
(c) furnish to the Selling Holders and to any underwriter of
Registrable Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act, such
documents incorporated by reference in such registration statement or
prospectus, and such other documents, as the Selling Holders or such underwriter
may reasonably request, and, if requested, a copy of any and all transmittal
letters or other correspondence to, or received from, the Commission or any
other governmental agency or self regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to
such offering;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of such registration statement at the earliest
possible moment;
(e) if requested by a Selling Holder, use its best efforts to furnish
to each Selling Holder a "comfort" or "special procedures" letter addressed to
each Selling Holder and any underwriters and signed by the independent public
accountants who have audited the Company's financial statements included in such
registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) and with respect to events subsequent to the date of such financial
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statements as are customarily covered in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request;
(f) immediately notify the Selling Holders in writing (i) at any time
when a prospectus relating to a registration hereunder is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(ii) of any request by the Commission or any other regulatory body or other body
having jurisdiction for any amendment of or supplement to any registration
statement or other document relating to such offering, and in either such case
(i) or (ii) at the request of a Selling Holder prepare and furnish to such
Selling Holders a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(g) cause the listing of all such Registrable Securities covered by
such registration statement on each securities exchange and inter-dealer
quotation system on which similar securities issued by the Company are then
listed or quoted and to pay all fees and expenses in connection therewith;
(h) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
securities holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and
(i) prepare and file such forms, prosecute such registrations, obtain
such qualifications and comply with all requirements of all state or foreign
governmental or other agencies having jurisdiction under blue sky or other
securities laws and regulations.
2.7. Indemnification; Contribution.
(a) By Company. To the extent permitted by law, the Company will
indemnify each Selling Holder, each of its officers and directors, partners and
legal counsel, and each person controlling such Selling Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions or proceedings in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
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supplement thereto, 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 the Securities Act or
any rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Selling Holder, each of its officers,
directors, partners and legal counsel, and each person controlling such Selling
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating, preparing, settling or defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Selling Holder, controlling person or underwriter and stated to be specifically
for use therein or such Selling Holder's failure to deliver a copy of the
registration statement or prospectus or any amendment thereto after the Company
has furnished such Selling Holder with a sufficient number of copies of the
same.
(b) By Selling Holders. To the extent permitted by law, each Selling
Holder will indemnify the Company, each of its directors, officers and legal
counsel, each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other Selling
Holder, each of its officers, directors and partners, and each person
controlling such Selling Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
or proceedings in respect thereof) 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, such Selling Holders, such officers, directors,
partners, legal counsel, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating,
settling or defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent that such untrue statement (or
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 Selling Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Selling Holder under this subsection (b) shall be limited in an amount
equal to the net proceeds of the shares sold by such Selling Holder, unless such
liability arises out of or is based on willful misconduct by such Selling
Holder.
(c) Procedure for Indemnification. Each party indemnified under
subsection (a) or (b) of this Section 2.7 (the "Indemnified Party") shall,
promptly after receipt of actual notice of any claim or the commencement of any
action against such Indemnified Party in respect of which indemnity may be
sought notify the party required to provide indemnification (the "Indemnifying
Party") in writing of the claim or the commencement thereof, provided that the
failure of the Indemnified Party to notify the Indemnifying Party shall not
relieve the
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Indemnifying Party from any liability which it may have to an Indemnified Party
on account of the indemnity agreement contained in subsection (a) or (b) of this
Section 2.7, unless the Indemnifying Party was materially prejudiced by such
failure, and in no event shall relieve the Indemnifying Party from any other
liability which it may have to such Indemnified Party. If any such claim or
action shall be brought against an Indemnified Party, it shall notify the
Indemnifying Party thereof and the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable
(except to the extent the proviso to this sentence is applicable, in which event
it will be so liable) to the Indemnified Party under this Section 2.7 for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided that each Indemnified Party shall have the right to
employ separate counsel to represent it and assume its defense (in which case,
the Indemnifying Party shall not represent it) if (i) upon the advice of
counsel, the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, or
(ii) in the event the Indemnifying Party has not assumed the defense thereof
within 10 days of receipt of notice of such claim or commencement of action, and
in which case the fees and expenses of one such separate counsel shall be paid
by the Indemnifying Party. The Indemnifying Party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one firm for all such Indemnified Parties,
unless conflicting interests of the Indemnified Parties make the retention of
one firm on behalf of all of them unreasonable. If any Indemnified Party employs
such separate counsel it will not enter into any settlement agreement which is
not approved by the Indemnifying Party, such approval not to be unreasonably
withheld. If the Indemnifying Party so assumes the defense thereof, it may not
agree to any settlement of any such claim or action as the result of which any
remedy or relief, other than monetary damages for which the Indemnifying Party
shall be responsible hereunder, shall be applied to or against the Indemnified
Party, without the prior written consent of the Indemnified Party which consent
shall not be unreasonably withheld. In any action hereunder as to which the
Indemnifying Party has assumed the defense thereof with counsel reasonably
satisfactory to the Indemnified Party, the Indemnified Party shall continue to
be entitled to participate in the defense thereof with counsel of its own
choice, but, except as set forth above, the Indemnifying Party shall not be
obligated hereunder to reimburse the Indemnified Party for the costs thereof.
Each Indemnified Party shall furnish such information regarding itself or the
claim in question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) Contribution. If the indemnification provided for in this Section
2.7 shall for any reason be unavailable to an Indemnified Party in respect of
any loss, claim, damage or liability, or any action in respect thereof, referred
to therein, then each Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault shall be determined by
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reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Indemnifying Party on the one hand or the Indemnified Party on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission,
but not by reference to any Indemnified Party's stock ownership in the Company.
In no event, however, shall a Selling Holder be required to contribute in excess
of the amount of the net proceeds received by such Selling Holder in connection
with the sale of Registrable Securities in the offering which is the subject of
such loss, claim, damage or liability. The amount paid or payable by an
Indemnified Party as a result of the loss, claim, damage or liability, or action
in respect thereof referred to above in this subsection (d) shall be deemed to
include, for purposes of this paragraph, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating, settling or
defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) Conflicts. Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
2.8. Information by Selling Holder. Selling Holders including any
Registrable Securities in any registration shall promptly furnish to the Company
such information regarding such Selling Holders as shall be necessary to enable
the Company to comply with the provisions hereof in connection with any
registration referred to in this Agreement.
2.9. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and
(c) furnish to any Holder forthwith upon written request a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as such Holder may reasonably request in writing in
availing itself of any rule or regulation of the Commission allowing such Holder
to sell any such securities without registration.
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2.10. Transfer of Registration Rights. The rights to cause the Company to
register securities granted to Holders under Sections 2.1, 2.2 and 2.3 may be
assigned only concurrent with the sale or transfer of Registrable Securities and
only in connection with (i) the assignment by a Holder to any wholly owned
subsidiary or parent of, or to any corporation or entity that is, within the
meaning of the Securities Act, controlling, controlled by or under common
control with, any such Holder, (ii) the assignment to members of the Holder's
immediate family and to trusts or entities established for the benefit of the
Holder or his immediate family, or (iii) in connection with the sale or transfer
of at least 1% of the total outstanding shares of Registrable Securities
(subject to adjustment for any stock dividend, stock split, subdivision,
combination or other recapitalization of the Company). Notwithstanding the
foregoing, such rights may only be assigned provided that all of the following
additional conditions are satisfied: (a) such assignment is effected in
compliance with applicable securities laws; (b) such assignee agrees in writing
to become subject to the terms of this Agreement; and (c) the Company is given
written notice by such Holder of such assignment, stating the name and address
of the assignee and identifying the Registrable Securities with respect to which
such rights are being assigned.
2.11. [Intentionally Omitted.]
2.12. No Registration of Warrants. Nothing in this Section 2 shall be
deemed to require the Company to register any Warrants, it being understood that
the registration rights granted hereby relate only to the shares of Common Stock
underlying such Warrants.
2.13. Termination. The right of any Holder to effect registration of its
Registrable Securities pursuant to Sections 2.1, 2.2 or 2.3 shall terminate,
with respect to each Holder, on July 23, 2006. The respective indemnities,
representations and warranties of the Investors and the Company shall survive
such termination.
SECTION 3.
INFORMATION RIGHTS
3.1. Delivery of Company Information. The Company hereby covenants and
agrees that it will promptly deliver to each Holder a copy of each filing with
the Commission by the Company and a copy of each press release issued by the
Company.
SECTION 4.
RIGHT OF FIRST REFUSAL
4.1. Company Offer. Subject to the terms and conditions contained in this
Section 4, the Company hereby grants to each Investor the right to purchase all
or any part of such Investor's Pro Rata Portion of any Voting Securities (other
than Exempt Issuances) which the Company intends to sell or issue after the date
hereof. The Company shall give each Investor 20 days' prior written notice (the
"Company Offer"), delivered or mailed as provided in Section 7.4, of the
Company's intention to sell or issue any Voting Securities (the "Company Offered
Securities"), other than an Exempt Issuance, stating the proposed price per
Voting Security, the number of Voting Securities offered and the other material
terms of such proposed sale or issuance and the Investor's respective record
ownership of Voting Securities. Such notice shall include a representation to
the Investors that the Company has a good faith intention to sell such
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Voting Securities to such person on the terms specified. A Company Offer shall
constitute an offer by the Company, irrevocable for 20 days, to sell or issue to
each Investor all or any part of such Investor's Pro Rata Portion of the Company
Offered Securities on the same terms as specified in the Company Offer or, if
such terms provide for consideration other than cash, for cash in an amount
equal to the fair market value of such noncash consideration (as determined in
good faith by the Board) if the parties cannot mutually agree upon such value.
4.2. Acceptance of Company Offer. Within 20 days after receipt of a Company
Offer, each Investor may elect to provide written notice to the Company (a
"Section 4 Acceptance Notice") that such Investor has elected to purchase all or
a part of such Investor's Pro Rata Portion of the Company Offered Securities. If
such Investor fails to give a Section 4 Acceptance Notice by the end of such
20-day period, such Investor shall be deemed to have elected not to purchase any
of the Company Offered Securities. In addition, in such notice an Investor who
elects to purchase all of such Investor's Pro Rata Portion may also elect to
purchase such Investor's pro rata share (with others who so elect) of the Pro
Rata Portions of other Investors who do not elect to purchase all of their Pro
Rata Portions.
4.3. Closing. The closing of any sale or issue of Company Offered
Securities to an Investor pursuant to this Section 4 shall take place at such
time and on such terms as may be provided for by the terms of such sale of
Voting Securities. At any such closing, the Company shall deliver to such
Investor certificate(s) representing the Company Offered Securities being
issued, registered in the name of such Investor or its nominee, against payment
of the applicable purchase price by check or wire transfer of same day funds.
4.4. Sale to Third Parties. If the Investors in the aggregate do not elect
to purchase all of the Company Offered Securities, the Company shall have the
right to sell and issue the Company Offered Securities not purchased by the
Investors at not less than the price stated in the Company Offer and otherwise
on terms and conditions that are not materially more favorable than those set
forth in the Company Offer on or before the 90th day following the expiration of
the 20-day period in Section 4.2 hereof (subject to extension to comply with
applicable securities and other applicable laws and regulations related to the
sale and issuance of the Company Offered Securities to such third party). If the
Company Offered Securities have not been sold and issued within such period,
then the Company may not sell or issue any Company Offered Securities unless it
provides the Investors with a new Company Offer pursuant to Section 4.1 hereof.
4.5. Continuing Rights.
(a) The election or non-election to participate in a Company Offer
shall not adversely affect an Investor's right to participate in subsequent
Company Offers pursuant to this Section 4.
(b) To the extent that an Investor does not elect to purchase its Pro
Rata Portion of the Company Offered Securities in connection with any particular
Company Offer, such Investor shall have the prior right to acquire more than its
then Pro Rata Portion in any subsequent Company Offer so as to permit such
Investor (even though at the different price of the later Company Offer) to
restore or move toward restoring its proportionate ownership of
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Common Stock as in effect on the date hereof; provided, however, that this
should not increase the total number of Company Offered Securities that may be
purchased by Investors. Reasonable allocations and procedures shall be
instituted by the Company to achieve this goal.
4.6. Termination of Right of First Refusal. The rights of the Investors
under this Section 4 shall terminate on July 23, 2004.
4.7. Transfer. The right of first offer set forth in this Section 4 may not
be assigned or transferred, except that (i) such right is assignable by each
Investor to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Securities Act, controlling,
controlled by or under common control with, any such Investor, (ii) such right
is assignable between and among any of the Investors and (iii) such right is
assignable to members of the Investor's immediate family and to trusts or
entities established for the benefit of the Investor or such Investor's
immediate family.
SECTION 5.
XXXXXX BOARD NOMINEE
5.1. Nominee to the Board of Directors. For so long as Xxx Xxxxxx, his
immediate family and trusts and entities established for their benefit hold at
least 33% of the Voting Securities acquired pursuant to the Stock Purchase
Agreement with the Company effective December 7, 1998, the Company will use its
best efforts to cause the Investors' Nominee to be elected to the Board. The
Company agrees that, in submitting to the Company's stockholders the names and
nominees for election as director, it will nominate the Investors' Nominee and
use its best efforts to cause such person to be elected as a director. The
Investors' Nominee shall have the option of choosing when to accept election,
which choice may be effected by his written notice to any member of the Board.
In the meantime, and pending his acceptance, and provided that he executes an
appropriate confidentiality agreement, he shall receive all notices and other
information and be permitted to attend all meetings he would receive or be
permitted to attend as a member of the Board, but shall not be permitted to vote
and shall not have any of the duties or liabilities of a member of the Board.
The Company shall adopt whatever bylaw amendments may be necessary from time to
time to permit the Company to so elect the Investors' Nominee.
5.2. Reimbursement of Expenses. The Company shall reimburse the Investors'
Nominee for the reasonable out-of-pocket expenses incurred by him to the same
extent it reimburses members of the Board, and at least for his expenses to
attend meetings of the Board and all other expenses approved in advance by the
Company, whether or not he has actually chosen to accept election as a member of
the Board. Upon election to the Board, the Investors' Nominee will be
compensated in the same manner as other directors.
5.3. Indemnification. Upon the election of the Investor's Nominee to the
Board, the Company shall promptly enter into an indemnification agreement with
the Investors' Nominee, in the same form as other directors have entered into;
shall indemnify and hold harmless (and exculpate) the Investors' Nominee against
any and all liabilities and claims against him as a result of his affiliation
with the Company to the fullest extent permitted by law; and shall provide to
the Investors' Nominee liability insurance to the greatest extent made available
to any other member of the Board.
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SECTION 6.
CERTAIN RIGHTS OF CO-SALE
6.1. Rights of Co-Sale. In the event that any Selling Major Holder desires,
at any time, to sell, transfer, assign or otherwise dispose of any Voting
Securities (whether now held or hereafter acquired), and receives a bona fide
offer from a third party to purchase such Voting Securities (the "Major Holder
Offered Securities"), then, unless such Selling Major Holder became a Selling
Major Holder subsequent to and as a result of the death of a prior Major Holder,
such Selling Major Holder shall give each December 1998 Holder 20 days' prior
written notice (the "Major Holder Offer"), delivered or mailed as provided in
Section 7.4, of the Selling Major Holder's intention to sell, transfer, assign
or otherwise dispose of such Voting Securities (the "Major Holder Offered
Securities"), stating the proposed price per Voting Security, the number of
Voting Securities offered and the other material terms of such proposed sale.
Such notice shall include a representation to the December 1998 Holders that a
person has made a bona fide offer to consummate such Major Holder Offer and the
Selling Major Holder has a good faith intention to sell such Voting Securities
to such person on the terms specified. Each December 1998 Holder shall have the
right, exercisable upon written notice to the Selling Major Holder within 20
days after receipt by such December 1998 Holder of the Major Holder Offer, to
participate in the sale of Major Holder Offered Securities pursuant to the
specified terms and conditions of the Major Holder Offer. To the extent a
December 1998 Holder exercises such right of participation in accordance with
the terms and conditions set forth below, the number of Major Holder Offered
Securities which the Selling Major Holder may sell pursuant to the Major Holder
Offer shall be correspondingly reduced. The right of participation of each
December 1998 Holder shall be subject to the following terms and conditions:
(a) Each December 1998 Holder may sell all or any part of that number
of Common Stock then held by such December 1998 Holder equal to the product
obtained by multiplying (i) the aggregate number of Major Holder Offered
Securities covered by the Major Holder Offer by (ii) a fraction, the numerator
of which shall be the number of shares of Common Stock then held by such
December 1998 Holder, and the denominator of which shall be the aggregate number
of shares of Common Stock then held by the Selling Major Holder and all December
1998 Holders. For purposes of this subsection (a) and making such computation,
each December 1998 Holder and the Selling Major Holder shall be deemed to own
the number of shares of Common Stock which are issuable upon exercise of
Warrants and exercise or conversion of all other classes or series of the
Company's securities exercisable or convertible into Common Stock then held by
such December 1998 Holder.
(b) Each December 1998 Holder may effect its participation in the sale
by delivering to the Selling Major Holder for transfer to the purchase offeror
one or more certificates, properly endorsed for transfer, which represent the
number of shares of Common Stock or other securities which such December 1998
Holder elects to sell pursuant to this Section 6.
6.2. Deliveries; Required Sale. The security certificate(s) which the
December 1998 Holder delivers to the Selling Major Holder pursuant to Section
6.1 shall be transferred by the Selling Major Holder to the purchase offeror in
consummation of the sale of the Major Holder Offered Securities pursuant to the
terms and conditions specified in the Major Holder
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Offer, and the Selling Major Holder shall concurrently therewith remit to each
December 1998 Holder that portion of the sale proceeds to which such December
1998 Holder is entitled by reason of its participation in such sale. To the
extent that any purchase offeror prohibits such assignment or otherwise refuses
to purchase shares or other securities from a December 1998 Holder exercising
its rights of co-sale hereunder, the Selling Major Holder shall not sell to such
purchase offeror any Major Holder Offered Securities unless and until,
simultaneously with such sale and on the same terms, the Major Holder shall
purchase such shares or other securities from such December 1998 Holder.
6.3. Permitted Transfers.
(a) Intra-Family Transfers. The Major Holder may transfer any shares
to the following without complying with the provisions of this Section 6: (i) to
a member of his immediate family; or (ii) to a trust or entity established for
the benefit of the Major Holder or his immediate family. No such transfer of
shares shall be effective unless and until the transferee shall have executed
such documentation, in form and substance reasonably satisfactory to the
Company, evidencing agreement by the transferee to be bound by the provisions of
this Section 6 as a Major Holder.
(b) Exempt Transactions. The participation rights set forth in this
Section 6 shall not apply to any transfer of shares pursuant to a registration
statement declared effective under the Securities Act, to market transactions
(whether under Rule 144 or otherwise) or to any transfer of shares in any merger
or sale approved by the Board if all stockholders of the Company have the right
to participate in such merger or sale on the same terms.
6.4. Continuing Rights. The exercise or non-exercise of the rights of the
December 1998 Holders hereunder to participate in one or more sales of Company
securities made by the Selling Major Holder shall not adversely affect their
rights to participate in subsequent sales of Company securities by the Selling
Major Holder pursuant to this Section 6.
6.5. Legends; Stop Transfers. Each certificate representing shares of stock
now or hereafter owned by the Major Holders or issued to any permitted
transferee thereof, shall be endorsed with the legend specified in Section 7.1.
The Major Holder agrees that the Company may or may instruct its transfer agent
to impose transfer restrictions on the shares represented by certificates
bearing the legend referred to in Section 7.1 to enforce the provisions of this
Agreement and the Company agrees to promptly do so. The legend shall be removed
upon termination of this Agreement.
6.6. Termination of Rights. The rights and obligations of the Major Holder
under this Section 6 shall terminate on December 7, 2003.
SECTION 7.
MISCELLANEOUS
7.1. Governing Law; Legends.
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without regard to any
principles of conflicts of
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law that, if applied, might require or permit the application of the laws of a
different jurisdiction.
(b) Legends. Each certificate representing securities held by the
Investors shall be endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RIGHTS AND RESTRICTIONS CONTAINED IN AN AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT DATED AS OF APRIL 13, 2000,
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION.
7.2. Amendment and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and (i) the consent of holders of at least
two-thirds of the then outstanding Registrable Securities, voting as a class, if
such amendment or waiver would adversely affect the terms and conditions of
Section 2, 3 or 4 of this Agreement, (ii) the consent of holders of at least
two-thirds of the Common Stock issued, or issuable upon exercise of the
Warrants, in connection with the Stock Purchase Agreement with the Company
effective December 7, 1998, voting as a class, if such amendment or waiver would
adversely affect the terms and conditions of Section 6 of this Agreement, (iii)
the Major Holder's consent, if such amendment or waiver would adversely affect
the terms and conditions of Section 6 of this Agreement, or adversely affect the
rights of the Major Holder in a manner different than for other Holders, or (iv)
the consent of Xx. Xxxxxx if such amendment or waiver would adversely affect his
rights under Section 5 of this Agreement and, in each of (i), (ii), (iii) and
(iv) above, the consents referred to above would also be required where the
rights of any of the foregoing classes are adversely affected by such amendment
or waiver. Any amendment or waiver effected in accordance with this paragraph
will be binding upon the Company, the Major Holder, each Investor and each
future holder of Registrable Securities.
7.3. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegally
invalid, unenforceable or void, this Agreement shall continue in full force and
effect without said provision. In such event, the parties shall negotiate, in
good faith, a legal, valid and binding substitute provision which most nearly
effects the intent of the parties in entering into this Agreement.
7.4. Notices. All notices and other communications required or permitted
hereunder shall be in writing (or in the form of a telex or telecopy (confirmed
in writing) to be given only during the recipient's normal business hours unless
arrangements have otherwise been made to receive such notice by telex or
telecopy outside of normal business hours) and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand, messenger, or
telex or telecopy (as provided above) addressed (a) if to an Investor, at such
other address as such Investor shall have furnished to the Company in writing or
(b) if to the Company, one copy should be sent to its principal executive
offices and addressed to the attention of the Corporate Secretary, or at such
other address as the Company shall have furnished to the Investors.
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Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid, or, if
by telex or telecopy pursuant to the above, when received.
7.5. Facsimile Signatures. Any signature page delivered by a fax machine or
telecopy machine shall be binding to the same extent as an original signature
page, with regard to any agreement subject to the terms hereof or any amendment
thereto. Any party who delivers such a signature page agrees to later deliver an
original counterpart to any party which requests it.
7.6. Conflict with Certificate of Incorporation or Bylaws. It is expressly
agreed that whether or not the Certificate of Incorporation or Bylaws of the
Company fully incorporate the provisions hereof, or any of them, the parties'
rights and obligations shall be governed by this Agreement which shall prevail
in the event of any ambiguity or inconsistency between this Agreement and the
Certificate of Incorporation or Bylaws.
7.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
7.8. Headings and Subheadings. The headings and subheadings used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.9. Termination. Except as otherwise provided herein, this Agreement shall
terminate on July 23, 2009.
(Balance of page intentionally blank; signature pages follow.)
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Investors' Rights Agreement as of the date first above written.
TRICORD SYSTEMS INC. MAJOR HOLDER
By: /s/ Xxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
------------------------------------ -----------------------------------
Name: Xxxx X. Xxxxxxx Xxxx Xxxxxxx
------------------------------
Title: Chairman and Co-CEO
------------------------------
CERTAIN INVESTORS - Schedule A of this Agreement constitutes and includes the
signature page for the Certain Investors.
EXISTING INVESTORS - Schedule A of this Agreement constitutes and includes the
signature page for the Existing Investors.
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Certain Investors
NAME AND SIGNATURE ADDRESS NUMBER OF SHARES
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS Xxxxxxxxxxx Variable Account Funds One million
FOR THE ACCOUNT OF for the account of eight
XXXXXXXXXXX AGGRESSIVE Xxxxxxxxxxx Aggressive Growth Fund hundred
GROWTH FUND c/o OppenheimerFunds, Inc. seventy-five
Attn: Banking Operations thousand
By: /s/ Xxxxx Xxxxxxxx 0000 Xxxxx Xxxxxx Xxx (1,875,000)
--------------------- Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxxx,
Vice President & with a copy to
Portfolio Manager
The Bank of New York
Attn: Mutual Funds Custody
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(Note: each Certain Investor has signed a separate signature page:
balance of page intentionally blank:
other signature pages for Certain Investors, if any, follow.)
23
CERTAIN INVESTORS
--------------------------------------------------------------------------------------
NAME AND SIGNATURE ADDRESS NUMBER OF
SHARES
--------------------------------------------------------------------------------------
HARTFORD CAPITAL Hartford Capital Appreciation Fund One million
APPRECIATION FUND c/o Wellington Management Company, LLP two hundred
00 Xxxxx Xxxxxx xxxxxx
Xxxxxx, XX 00000 thousand five
By: Wellington Management hundred
Company, LLP Attn: Xxxx Xxxxxxx (1,212,500)
Its: Investment Advisor
By: /s/ Xxxx Xxx Xxxxx
--------------------
Xxxx Xxx Xxxxx,
Senior Vice President and
Partner
(Note: each Certain Investor has signed a separate signature page:
balance of page intentionally blank;
other signature pages for Certain Investors, if any, follow.)
24
CERTAIN INVESTORS
--------------------------------------------------------------------------------------
NAME AND SIGNATURE ADDRESS NUMBER OF
SHARES
--------------------------------------------------------------------------------------
HAZELBROOK PARTNERS, L.P. Hazelbrook Partners, L.P. Thirty-seven
c/o Wellington Management Company, LLP thousand five
00 Xxxxx Xxxxxx xxxxxxx
Xxxxxx, XX 00000 (37,500)
By: Wellington Management
Company, LLP Attn: Xxxx Xxxxxxx
Its: Investment Advisor
By: /s/ Xxxx Xxx Xxxxx
--------------------
Xxxx Xxx Xxxxx,
Senior Vice President and
Partner
(Note: each Certain Investor has signed a separate signature page:
balance of page intentionally blank;
other signature pages for Certain Investors, if any, follow.)
25
CERTAIN INVESTORS
--------------------------------------------------------------------------------------
NAME AND SIGNATURE ADDRESS NUMBER OF
SHARES
--------------------------------------------------------------------------------------
THE XXXXXXXXX GROUP LONG Suite 3800 One hundred
TERM CAPITAL PARNTES, LP 00 Xxxxxxxx Xxxxx xxxxxx-xxxx
Xxx Xxxx, XX 00000 thousand
BY: THE XXXXXXXXX GROUP (125,000)
LONG TERM CAPITAL PARTNERS
GENERAL PARTNER, LLC
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
A Managing Member
--------------------------------------------------------------------------------------
(Note: each Certain Investor has signed a separate signature page:
balance of page intentionally blank;
other signature pages for Certain Investors, if any, follow.)
26
SCHEDULE A
EXISTING INVESTORS (PURSUANT TO THE STOCK PURCHASE AGREEMENT DATED
DECEMBER 7, 1998)
NAME AND SIGNATURE ADDRESS NUMBER OF SHARES / WARRANTS
HELD AS OF APRIL 13, 2000
Insource, Inc.
0 Xxxx Xxx Xxxx 1,500,000 / 1,500,000
0000 Xxxx Xxx Xxxxxxx
Xxxxx 0000
----------------------- Xxxxxxx, XX 00000
Xxxxxx Xxxxxx Xxxxxx
Insource, Inc.
Xxxxxxx Xxxxxx Xxxxxxxxx Trust 0 Xxxx Xxx Xxxx 100,000 / 100,000
0000 Xxxx Xxx Xxxxxxx
By: Suite 1655
-------------------- Xxxxxxx, XX 00000
Its:
-------------------
Insource, Inc.
Xxxxxx Xxxxxx Xxxxxxx Trust 0 Xxxx Xxx Xxxx 100,000 / 100,000
0000 Xxxx Xxx Xxxxxxx
By: Suite 1655
-------------------- Xxxxxxx, XX 00000
Its:
-------------------
Insource, Inc.
Xxxxx Xxxxxxx Xxxxxx Trust 0 Xxxx Xxx Xxxx 100,000 / 100,000
0000 Xxxx Xxx Xxxxxxx
By: Suite 1655
-------------------- Xxxxxxx, XX 00000
Its:
-------------------
Insource, Inc.
Xxxxxx Xxxxx Xxxxxx Trust 0 Xxxx Xxx Xxxx 100,000 / 100,000
0000 Xxxx Xxx Xxxxxxx
By: Suite 1655
-------------------- Xxxxxxx, XX 00000
Its:
-------------------
Insource, Inc.
Xxxxx Xxxx Xxxxxx Trust 0 Xxxx Xxx Xxxx 100,000 / 100,000
0000 Xxxx Xxx Xxxxxxx
By: Suite 1655
-------------------- Xxxxxxx, XX 00000
Its:
-------------------
00000 Xxxxxx Xxxx Xxxxx Xxxx
Xxxxxx, XX 00000 250,000 / 250,000
-----------------------
Xxxxx Xxxxx Xxxxxxx
Questia
0 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000 0 / 250,000
-----------------------
Xxxxxxx Xxxxxx
27
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000 50,000 / 50,000
-----------------------
Xxxxxxxx Xxxxx
Questia
0 Xxxxxxxx Xxxxx 50,000 / 50,000
----------------------- Suite 1700
Xxxxx X. Xxxxxxx Xxxxxxx, XX 00000
Sand Hill Financial
Xxxxxx X. Xxxxx Profit Sharing 0000 Xxxx Xxxx Xxxx 112,500 / 37,500
Trust DTD 0-0-00 #0-000
Xxxxx Xxxx, XX 00000
By:
-------------------- (Purchased 75,000 shares and 75,000
Xxxxxx X. Xxxxx warrants, but has exercised 37,500
warrants.)
Its: Successor Trustee
Sand Hill Financial
Xxxxxxx X. Xxxxx Cancer 0000 Xxxx Xxxx Xxxx 112,500 / 37,500
Foundation #3-210
By: Xxxxx Xxxx, XX 00000 (Purchased 75,000 shares and 75,000
-------------------- warrants, but has exercised 37,500
Xxxxxx X. Xxxxx warrants.)
Its: Chairman of the Board
0000 Xxxxxxxxx Xxxx XX
Xxxxxx Xxxx Investments Suite 1030 112,500 / 0
Xxxxxxx, XX 00000
By: (Purchased 75,000 shares and 75,000
-------------------- warrants, but has exercised 75,000
Xxxxx Xxxxxx warrants and sold 37,500 shares.)
Its:
-------------------
Xxxx and Xxxxx Xxxxxxxxxx Family 0000 Xxxxxxx 25,000 / 25,000
Investment Partnership Ltd. Xxxxx 0000
Xxxxxxx, XX 00000
By:
--------------------
Xxxx Xxxxxxxxxx
Its:
-------------------
0000 Xxxx Xxx Xxxx. 0 / 25,000
---------------------- Suite 2200
Xxxxx Xxxxxxx III Xxxxxxx, XX 00000 (Purchased 25,000 shares and 25,000
warrants, but has sold 25,000 shares.)
28
Xxxxxxxx, Page & Xxxxxxx
0000 Xxxx Xxx Xxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000 0 / 25,000
-----------------------
Xxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxx 0 / 25,000
----------------------- Xxxxxxx, XX 00000 (Purchased 25,000 shares and 25,000
Xxxxxxx X. Xxxxx warrants, but has sold 25,000 shares.)
0000 Xx. Xxxxx Xxxxx 25,000 / 25,000
----------------------- Suite 000
Xxxxx Xxxxxxxxxx Xxxxxxx, XX 00000
0000 Xxxxx Xxxx 0 / 25,000
----------------------- Xxxxxxx, XX 00000
H. Xxxxx Xxxxx, Xx. (Purchased 25,000 shares and 25,000
warrants, but has sold 25,000 shares.)
5 Riverway 0 / 25,000
----------------------- Suite 1610
Xxxxxx X. Xxxxxx III Xxxxxxx, XX 00000 (Purchased 25,000 shares and 25,000
warrants, but has sold 25,000 shares.)
(Balance of page intentionally blank; Schedule A continues on next page.)
29
EXISTING INVESTORS (PURSUANT TO THE STOCK PURCHASE AGREEMENT DATED
JULY 23, 1999)
NAME AND SIGNATURE ADDRESS NUMBER OF SHARES HELD AS OF
APRIL , 2000
---
0000 Xxxxx Xxxx 400,000
----------------------- Suite 100
Xxxxx X. Xxxxxx Xxxxxx, XX 00000
0000 Xx. Xxxxx Xxxxx 120,000
----------------------- Suite 000
Xxxxx Xxxxxxxxxx Xxxxxxx, XX 00000
Xxxx and Xxxxx Xxxxxxxxxx Family 0000 Xxxxxxx 80,000
Investment Partnership Ltd. Xxxxx 0000
Xxxxxxx, XX 00000
By:
--------------------
Xxxx Xxxxxxxxxx
Its:
-------------------
408 Xxxxxx Xxxx 56,000
----------------------- Xxxx
Xxxxxx X. Xxxxxx III Xxxxxxx, XX 00000
0000 Xxxxx Xxxx 24,000
----------------------- Xxxxxxx, XX 00000
H. Xxxxx Xxxxx Xx.
0000 Xxxx Xxx Xxxx. 40,000
----------------------- Suite 2200
Xxxxx Xxxxxxx, III Xxxxxxx, XX 00000
5847 San Xxxxxx 80,000
----------------------- Suite 3600
Xxxxx Xxxxxx Xxxxxxx, XX 00000
0000 Xxxxx Xxxx 40,000
----------------------- Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxx
(Balance of page intentionally blank; Schedule A continues on next page.)
30
CERTAIN INVESTORS
NAME AND SIGNATURE ADDRESS NUMBER OF SHARES
(Note: each Certain Investor has signed a separate signature page;
balance of page intentionally blank;
other signature pages for Certain Investors, if any, follow.)
