NEWGEN RESULTS CORPORATION
RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This Agreement is made and entered into as of November 26, 1997 (the
"Effective Date") by and among Newgen Results Corporation, a California
corporation (the "Company"), Xxxxxxx Xxxxxx, an individual, Xxxxxx Xxxxxx, an
individual, K&S Imports, Inc., a California corporation, and Johari Investment
Company Ltd., a corporation organized under the laws of the province of British
Columbia, Canada (collectively the "Prior Investors"), the persons and entities
listed on Exhibit A attached hereto (hereafter collectively the "Preferred
Investors"), and those shareholders of the Company listed on Exhibit B attached
hereto (the "Shareholders"). This Agreement amends and restates the Right of
First Refusal and Co-Sale Agreement, dated as of August 7, 1996, by and among
certain of the parties hereto (the "Prior Agreement"). As a result, the parties
to the Prior Agreement, each of whom is also a party to this Agreement, hereby
agree that the Prior Agreement is superseded by this Agreement and that the
Prior Agreement shall have no further force or effect.
RECITALS
A. Certain of the Preferred Investors have agreed, contingent on
execution by all parties of this Agreement, to purchase shares of the Company's
Series B Preferred Stock (the "Series B Stock") pursuant to a Series B Preferred
Stock Purchase Agreement of even date herewith (the "Series B Agreement"). In
connection with their purchase of Series B Stock, such Preferred Investors
desire to receive the rights of first refusal and co-sale rights set forth
herein.
B. The Prior Investors are holders of shares of the Company's Common
Stock ("Common Stock") issued to them by the Company prior to August 7, 1996;
certain of the Preferred Investors are holders of shares of the Company's Series
A Preferred Stock (the "Series A Stock") issued to them by the Company in August
and December 1996; and the Shareholders are holders of Common Stock and/or own
options to purchase shares of Common Stock issued to them by the Company on
various dates since the Company's inception. Each of the foregoing holders of
the Company's securities is a party to the Prior Agreement. In order to induce
certain of the Preferred Investors to purchase shares of Series B Stock from the
Company and to enter into the Series B Agreement, each of the parties to the
Prior Agreement has agreed to grant the Preferred Investors who acquire Series B
Stock certain rights of first refusal and rights of co-sale, all on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises herein contained, and for other consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms
have the following meanings:
1.1 "SHAREHOLDER SHARES" means and includes all shares of Common Stock
that are owned and held of record or beneficially by the Shareholders on the
Effective Date hereof, or such other securities of the Company for which such
shares are exchanged or into which such shares are converted by way of
recapitalization, reclassification, substitution or otherwise and any Common
Stock or other securities of the Company acquired and owned of record or
beneficially by the Shareholders after the Effective Date.
1.2 "PRIOR INVESTOR SHARES" means shares of Common Stock of the Company
owned of record or beneficially by any of the Prior Investors prior to August 7,
1996, or such other securities of the Company for which such shares are
exchanged or into which such shares are converted by way of recapitalization,
reclassification, substitution or otherwise and any Common Stock or other
securities of the Company acquired and owned of record or beneficially by the
Prior Investors after the Effective Date.
1.3 "COMMON STOCK EQUIVALENTS" means, at a given time, the then
outstanding shares of Common Stock and shares of Common Stock then issuable upon
the conversion of then outstanding shares of Preferred Stock of the Company.
For purposes of this Agreement, at a given time a shareholder of the Company is
deemed to own a number of Common Stock Equivalents equal to the number of
outstanding shares of Common Stock then owned by such shareholder of the Company
plus the number of shares of Common Stock then issuable upon the conversion of
the then outstanding shares of Preferred Stock of the Company owned and held of
record by such shareholder of the Company.
1.4 "OFFERED SHAREHOLDER SHARES" means all Shareholder Shares proposed to
be Transferred by a Shareholder to a particular transferee other than Excluded
Shares.
1.5 "OFFERED PRIOR INVESTOR SHARES" means all Prior Investor Shares
proposed to be Transferred by a Prior Investor to a particular transferee other
than Excluded Shares.
1.6 "EXCLUDED SHARES" means an aggregate of two percent (2%) per year of
the Shareholder Shares or Prior Investor Shares held by a Shareholder or a Prior
Investor (as applicable) on the date of this Agreement.
1.7 "TRANSFER" AND "TRANSFERRED" mean and include any sale, assignment,
encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by
bequest, devise
2.
or descent, or other transfer or disposition of any kind, including but not
limited to transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of creditors,
whether voluntary or by operation of law, directly or indirectly, EXCEPT FOR:
(a) any bona fide pledge if the pledgee executes a counterpart copy
of this Agreement and becomes bound thereby as if such pledgee were a
Shareholder or Prior Investor (as applicable);
(b) if the Shareholder or Prior Investor is a natural person, any
transfers of Shareholder Shares or Prior Investor Shares during a Shareholder's
or Prior Investor's lifetime or on a Shareholder's or Prior Investor's death by
will or intestacy to such Shareholder's or Prior Investor's "immediate family"
(as defined below) or to a trust for the benefit of such Shareholder or Prior
Investor or Shareholder's or Prior Investor's immediate family, provided that
each transferee or other recipient executes a counterpart copy of this Agreement
and becomes bound thereby as a Shareholder or Prior Investor (as applicable).
As used herein, the term "immediate family" will mean the Shareholder's or Prior
Investor's spouse, lineal descendant or antecedent, father, mother, brother or
sister, adopted child or grandchild, or the spouse of any child, adopted child,
grandchild, or adopted grandchild of the Shareholder or Prior Investor;
(c) any transfer of Shareholder Shares by a Shareholder or Prior
Investor Shares by a Prior Investor made: (i) pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation or
entity; (ii) pursuant to the winding up and dissolution of the Company; or (iii)
at, and pursuant to, the "IPO" (as defined below);
(d) any transfers of Shareholder Shares to the Company, a Preferred
Investor or Prior Investor pursuant to the exercise by such person or entity of
its right of first refusal under Section 3;
(e) any transfers of Shareholder Shares to the Company; and
(f) any transfer of Prior Investor Shares by a Prior Investor to (i)
another Prior Investor, or to (ii) an entity owned or controlled by such Prior
Investor or a group of Prior Investors; PROVIDED HOWEVER, that in the case of
such an entity, it executes a counterpart copy of this Agreement and becomes
bound thereby as if such entity were a Prior Investor.
1.8 "IPO" means the first sale of the Company's Common Stock to the
general public that meets the criteria for automatic conversion of the Preferred
Stock of the Company under the Company's Articles of Incorporation, as they may
be amended or restated from time to time (the "Articles of Incorporation").
3.
1.9 "INVESTOR'S PRO RATA SHARE" means, for purposes of the Investors'
Right of First Refusal that number of shares determined by multiplying the
number of Offered Shareholder Shares by a fraction (i) whose numerator is the
number of Common Stock Equivalents owned of record by such Investor at the
commencement of the Investors' Refusal Period and (ii) whose denominator is the
number of shares of Common Stock Equivalents owned of record by all Investors at
the commencement of the Investors' Refusal Period.
2. NOTICE OF PROPOSED TRANSFER.
2.1 NOTICE BY SHAREHOLDER. Before any Shareholder may effect any Transfer
of any Shareholder Shares other than Excluded Shares, such Shareholder (the
"Selling Shareholder") must give to the Company, the Preferred Investors and the
Prior Investors a written notice signed by the Selling Shareholder (the "Selling
Shareholder's Notice") stating (a) the Selling Shareholder's bona fide intention
to transfer such Offered Shareholder Shares; (b) the number of shares of Offered
Shareholder Shares proposed to be transferred to each proposed purchaser or
other transferee ("Proposed Transferee"); (c) the name, address and
relationship, if any, to the Selling Shareholder of each Proposed Transferee;
and (d) the bona fide cash price or, in reasonable detail, other consideration,
per share for which the Selling Shareholder proposes to transfer such Offered
Shareholder Shares to each Proposed Transferee (the "Offered Price"). Upon the
request of the Company, any Preferred Investor or Prior Investor, the
Shareholder will promptly furnish to the Company, the Preferred Investors and
Prior Investors such other information as may be reasonably requested to
establish that the offer and Proposed Transferee(s) are bona fide.
2.2 NOTICE BY PRIOR INVESTOR. Before any Prior Investor may effect any
Transfer of any Prior Investor Shares other than Excluded Shares, such Prior
Investor (the "Selling Prior Investor") must give to the Company and the
Preferred Investors a written notice signed by the Selling Prior Investor (the
"Selling Prior Investor Notice") stating (a) the Selling Prior Investor's bona
fide intention to transfer such Offered Prior Investor Shares; (b) the number of
shares of Offered Prior Investor Shares proposed to be transferred to each
proposed purchaser or other transferee ("Proposed Transferee"); (c) the name,
address and relationship, if any, to the Selling Prior Investor of each Proposed
Transferee; and (d) the bona fide cash price or, in reasonable detail, other
consideration, per share for which the Selling Prior Investor proposes to
transfer such Offered Prior Investor Shares to each Proposed Transferee (the
"Offered Price"). Upon the request of any Preferred Investor, the Selling Prior
Investor will promptly furnish to the Preferred Investors such other information
as may be reasonably requested to establish that the offer and Proposed
Transferee(s) are bona fide.
4.
3. RIGHT OF FIRST REFUSAL.
3.1 COMPANY'S RIGHT OF FIRST REFUSAL. At any time within fifteen (15)
days after the date the Selling Shareholder's Notice is given to the Company
(the "Company's Refusal Period"), the Company may, by giving written notice to
the Selling Shareholder, elect to exercise a right of first refusal (the
"Company's Right of First Refusal") to purchase all (but not less than all) of
the Offered Shareholder Shares for the price and upon the general terms
specified in the Selling Shareholder's Notice and stating the quantity of
Offered Shareholder Shares to be purchased.
3.2 NON-PURCHASE BY COMPANY. If during the Company's Refusal Period the
Company does not exercise, or decides not to exercise, the Company's Right of
First Refusal in full with respect to the Offered Shareholder Shares, then on or
before the expiration of the Company's Refusal Period, the Company will promptly
give the Selling Shareholder and the Investors (as defined in Section 3.3)
written notice of its intention not to exercise the Company's Right of First
Refusal with respect to the Offered Shareholder Shares (the "Availability
Notice"), specifying the number of Offered Shareholder Shares not being
purchased by the Company pursuant to the Company's Right of First Refusal (and
the Proposed Transferee thereof), which Offered Shareholder Shares will then be
subject to the Investors' Right of First Refusal described below.
3.3 INVESTORS' RIGHT OF FIRST REFUSAL. If during the Company's Refusal
Period the Company does not exercise the Company's Right of First Refusal in
full with respect to the Offered Shareholder Shares, then each of the Preferred
Investors and Prior Investors (all such Preferred Investors and Prior Investors
hereinafter referred to collectively as "Investors") will then have a right of
first refusal (the "Investors' Right of First Refusal") to purchase their
Investor's Pro Rata Share (as defined in Section 1.9) of all (but not less than
all) of the Offered Shareholder Shares not purchased by Company under Section
3.2 above. The Investors' Right of First Refusal may be exercised as follows:
(a) ELECTIONS TO PURCHASE. Each Investor desiring to purchase any or
all of the Offered Shareholder Shares must, within the fifteen (15) day period
commencing on the first date after the expiration of the Company's Right of
First Refusal with respect to such Offered Shareholder Shares (the "Investors'
Refusal Period"), give written notice to the Company and the Selling Shareholder
of such Investor's election to purchase at least his or its Pro Rata Share of
such Offered Shareholder Shares, or a larger number of such Offered Shareholder
Shares ("Purchase Election"). No Investor will have a right to purchase any of
the Offered Shareholder Shares unless the Investors, in the aggregate, exercise
the collective Investors' Right of First Refusal to purchase all of the Offered
Shareholder Shares.
5.
(b) COMPANY NOTICE. Within five (5) days after the expiration of the
Investors' Refusal Period, the Company will give the Selling Shareholder and
each Investor notice (the "Investors' Expiration Notice") (which Investors'
Expiration Notice may be given by the Company by telephone if confirmed in
writing within two (2) days after such telephonic notice is given), stating
either: (i) that all of the Offered Shareholder Shares were duly subscribed for
by Investors exercising their respective Investors' Right of First Refusal; (ii)
that Investors timely submitted Purchase Elections to purchase more shares of
Common Stock than the Offered Shareholder Shares, in which case subsection
3.3(c) will apply and the Investors' Expiration Notice will set forth the excess
number of shares subscribed for and the pro rata share of the Offered
Shareholder Shares (computed as provided in subsection 3.3(c)) of each Investor
who timely submitted a Purchase Election; or (iii) that Investors did not timely
submit Purchase Elections to purchase all of the Offered Shareholder Shares, in
which case subsection 3.3(d) will apply and the Investors' Expiration Notice
will set forth the total number of Offered Shareholder Shares not subscribed
for, the number of Offered Shareholder Shares subscribed for by each Investor,
the Investors eligible to purchase the unsubscribed for Offered Shareholder
Shares and each such Investor's pro rata share of such unsubscribed for Offered
Shareholder Shares (computed as provided in subparagraph 3.3(d)).
(c) EXCESS PURCHASE ELECTIONS. If the total number of shares of
Offered Shareholder Shares that Investors elect to purchase as specified in
timely given Investors' Purchase Elections exceeds the number of Offered
Shareholder Shares available for purchase, then the Investors' Expiration Notice
shall so notify each Investor who timely submitted a Purchase Election to
purchase such Offered Shareholder Shares as provided in Section 3.3(b) and
(unless the Investors agree otherwise in writing) each such Investor will have
the right to purchase, pursuant to this subsection, that Investor's "pro rata
share" of such Offered Shareholder Shares. For purposes of this subsection (c),
an Investor's "pro rata share" is the number of shares of Offered Shareholder
Shares available for purchase multiplied by a fraction (i) whose numerator is
the number of Common Stock Equivalents owned by such Investor at the
commencement of the Investor Refusal Period and (ii) whose denominator is the
total number of Common Stock Equivalents owned, at the commencement of the
Investor Refusal Period, by all Investors who timely delivered Purchase
Elections.
(d) OVERALLOTMENT OPTION. If the total number of shares of Offered
Shareholder Shares that Investors elect to purchase as specified is timely given
and Investors' Purchase Elections is fewer than the number of Offered
Shareholder Shares available for purchase, then in the Investors' Expiration
Notice the Company shall so notify each Investor and (unless the Investors agree
otherwise in writing) each Investor who timely submitted a Purchase Election for
such Offered Shares and gives the Company and Selling Shareholder written notice
of such Investor's election to do so within five (5) days after the Company
gives the Investors' Expiration Notice, may
6.
purchase pursuant to this subsection (in addition to the Offered Shareholder
Shares specified in such Investor's Purchase Election) that number of Offered
Shareholder Shares that is such Investor's "pro rata share". For purposes of
this subsection (d) an Investor's "pro rata share" is obtained by multiplying
the number of shares of Offered Shareholder Shares that the Investors did not
elect to purchase pursuant to timely given Purchase Elections (the "Available
Offered Shares") by a fraction (i) whose numerator is the number of Common Stock
Equivalents owned by such Investor at the commencement of the Investor Refusal
Period and (ii) whose denominator is the total number of Common Stock
Equivalents owned, at the commencement of the Investor Refusal Period, by all
Investors who timely delivered Purchase Elections and who elect to purchase
Available Offered Shares pursuant to this subparagraph (d).
3.4 PURCHASE PRICE. The purchase price for the Offered Shareholder Shares
to be purchased by the Company or by an Investor exercising its respective Right
of First Refusal under this Agreement will be the Offered Price and will be
payable as set forth in Section 3.5 hereof. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration will be determined by the Board of Directors of the Company in
good faith, which determination will be binding upon the Company, the Investors
and the Selling Shareholder absent fraud or error.
3.5 PAYMENT. Payment of the purchase price for Offered Shareholder Shares
purchased by the Company exercising its Company Right of First Refusal will be
made within twenty-five (25) days after the date the Selling Shareholder Notice
is given to the Company. Payment of the purchase price for Offered Shareholder
Shares purchased by an Investor will be made within ten (10) days after the
Investors' Expiration Notice is given to all Investors. Payment of the purchase
price will be made, at the option of the Company or, as the case may be, by an
Investor, (a) in cash (by check), (b) by cancellation of all or a portion of any
outstanding indebtedness of the Selling Shareholder to the Company or such
Investor, as the case may be, or (c) by any combination of the foregoing.
3.6 RIGHTS OF SHAREHOLDER. Upon the date that payment in full is made for
the Offered Shareholder Shares purchased by the Company and/or the Investors
pursuant to their respective Rights of First Refusal hereunder, the Selling
Shareholder will have no further rights as a holder of such Offered Shareholder
Shares and the Selling Shareholder will forthwith cause all certificate(s)
evidencing such Offered Shareholder Shares to be surrendered to the Company for
cancellation, and, as to purchase by Investor(s), for transfer to the purchasing
Investor(s).
7.
4. RIGHT OF CO-SALE.
4.1 RIGHT OF CO-SALE FOR OFFERED SHAREHOLDER SHARES. If the Company and
Investors have waived or failed to timely exercise their respective Rights of
First Refusal to purchase all of the Offered Shareholder Shares, each Preferred
Investor will have the right to participate in the sale of any Offered
Shareholder Shares not sold to the Company or to the Investors (the "Remaining
Offered Shareholder Shares") in the manner set forth herein (the "Right of
Co-Sale for Offered Shareholder Shares"). Pursuant to this Section 4, each
Preferred Investor may transfer to the Proposed Transferee(s) identified in the
Selling Shareholder's Notice up to such Preferred Investor's pro rata share of
the Remaining Offered Shareholder Shares (other than any Excluded Shares), by
giving written notice to the Selling Shareholder within ten (10) days after the
date the Investors' Expiration Notice is given to all Investors specifying the
number of shares and type of shares of stock in the Company that such Preferred
Investor desires to transfer to each Proposed Transferee by exercising the Right
of Co-Sale for Offered Shareholder Shares. For purposes of this Section 4.1, a
Preferred Investor's "pro rata share" will be defined as a fraction, the
numerator of which is the number of shares of Common Stock Equivalents then
owned by such Preferred Investor, and the denominator of which is the number of
shares of Common Stock Equivalents then owned by all Preferred Investors plus
the number of shares of Common Stock Equivalents held by the Selling Shareholder
who proposes the Transfer.
4.2 RIGHT OF CO-SALE FOR PRIOR INVESTOR SHARES. Upon receipt of a Selling
Prior Investor Notice, each Preferred Investor will have the right to
participate in the sale of any Offered Prior Investor Shares (the "Right of
Co-Sale for Prior Investor Shares"). Pursuant to this Section 4, each Preferred
Investor may transfer to the Proposed Transferee(s) identified in the Selling
Prior Investor Notice up to such Preferred Investor's pro rata share of the
Offered Prior Investor Shares (other than any Excluded Shares), by giving
written notice to the Selling Prior Investor within ten (10) days after the date
of the receipt of such Selling Prior Investor Notice; specifying the number of
shares and type of shares of stock in the Company that such Preferred Investor
desires to transfer to each Proposed Transferee by exercising the Right of
Co-Sale for Prior Investor Shares. For purposes of this Section 4.2, a
Preferred Investor's "pro rata share" will be defined as a fraction, the
numerator of which is the number of shares of Common Stock Equivalents then
owned by such Preferred Investor, and the denominator of which is the number of
shares of Common Stock Equivalents then owned by all Preferred Investors plus
the number of shares of Common Stock Equivalents held by the Selling Prior
Investor who proposes the Transfer.
4.3 CONSUMMATION OF CO-SALE. Each Preferred Investor, in exercising the
Right of Co-Sale for Remaining Offered Shareholder Shares or the Right of
Co-Sale for Offered Prior Investor Shares, may effect such Preferred Investor's
participation in such
8.
Transfer by delivering to the Selling Shareholder or Selling Prior Investor (as
applicable) at the closing of the transfer of Remaining Offered Shareholder
Shares or Offered Prior Investor Shares to such transferee (the "Closing") one
or more certificates, properly endorsed for Transfer, representing the shares of
stock in the Company to be Transferred by such Preferred Investor. At the
Closing, such certificates or other instruments will be transferred and
delivered to the Proposed Transferee(s) set forth in the Selling Shareholder's
Notice or Selling Prior Investor Notice (as applicable) in consummation of the
transfer of the Remaining Offered Shareholder Shares or Offered Prior Investor
Shares pursuant to the terms and conditions specified in the Selling
Shareholder's Notice or Selling Prior Investor Notice, and the Selling
Shareholder or Selling Prior Investor (as applicable) will remit, or will cause
to be remitted, to the Preferred Investor within seven (7) days after such
Closing that portion of the proceeds of the Transfer to which the Preferred
Investor is entitled by reason of such Preferred Investor's participation in
such Transfer pursuant to the Right of Co-Sale for Remaining Offered Shareholder
Shares or the Right of Co-Sale for Offered Prior Investor Shares, as applicable.
5. RIGHT TO TRANSFER; REFUSAL TO TRANSFER.
5.1 SELLING SHAREHOLDER'S RIGHT TO TRANSFER. If the Company, on the one
hand and the Investors, on the other hand, have not elected pursuant to their
Investors' Right of First Refusal to purchase all of the Offered Shareholder
Shares, then, subject to the Preferred Investors' Right of Co-Sale for Offered
Shareholder Shares described in Section 4 hereof, the Selling Shareholder may
Transfer the Offered Shareholder Shares permitted to be sold by the Selling
Shareholder to any person named as a Proposed Transferee in the Selling
Shareholder's Notice, at the Offered Price or at a higher price, provided that
such Transfer (a) is consummated within one hundred twenty (120) days after the
date of the Selling Shareholder's Notice and (b) is in accordance with the terms
and conditions of this Agreement. If the Offered Shareholder Shares are
transferred in accordance with the terms and conditions of this Agreement, then
the transferee(s) of the Offered Shareholder Shares will (other than as provided
as to certain transferees required to become parties hereto as provided in
Section 1.7 hereof) thereafter hold such Offered Shareholder Shares free of the
Investors' Right of First Refusal, the Right of Co-Sale for Offered Shareholder
Shares and all other restrictions imposed by this Agreement. If the Offered
Shareholder Shares are not so transferred during such one hundred twenty (120)
day period, then the Selling Shareholder will not transfer any of such Offered
Shareholder Shares without complying again in full with the provisions of this
Agreement.
5.2 PRIOR INVESTOR'S RIGHT TO TRANSFER. If the Preferred Investors have
not elected to sell their full pro rata share of the Offered Prior Investor
Shares pursuant to their Right of Co-Sale for Offered Prior Investor Shares
described in Section 4 hereof, the Selling Prior Investor may Transfer the
Offered Prior Investor Shares permitted to be sold by the Selling Prior Investor
to any person named as a Proposed Transferee in the Selling
9.
Prior Investor Notice, at the Offered Price or at a lower price, provided that
such Transfer (a) is consummated within one hundred twenty (120) days after the
date of the Selling Prior Investor Notice and (b) is in accordance with the
terms and conditions of this Agreement. If the Offered Prior Investor Shares
are transferred in accordance with the terms and conditions of this Agreement,
then the transferee(s) of the Offered Prior Investor Shares will (other than as
provided as to certain transferees required to become parties hereto as provided
in Section 1.7 hereof) thereafter hold such Offered Prior Investor Shares free
of the Preferred Investors' Right of Co-Sale for Offered Prior Investor Shares
and all other restrictions imposed by this Agreement. If the Offered Prior
Investor Shares are not so transferred during such one hundred twenty (120) day
period, then the Selling Prior Investor will not transfer any of such Offered
Prior Investor Shares without complying again in full with the provisions of
this Agreement.
5.3 REFUSAL TO TRANSFER. Any attempt by any Selling Shareholder to
transfer any Shareholder Shares or Prior Investor to transfer any Prior Investor
Shares in violation of any provision of this Agreement will be void. The
Company will not (a) transfer on its books any Shareholder Shares or Prior
Investor Shares that have been sold, gifted or otherwise transferred in
violation of this Agreement, or (b) treat as owner of such Shareholder Shares or
Prior Investor Shares, or accord the right to vote to or pay dividends to any
purchaser, donee or other transferee to whom such Shareholder Shares or Prior
Investor Shares may have been so transferred.
6. OTHER COVENANTS REGARDING TRANSFER.
6.1 MARKET STANDOFF AGREEMENT. In connection with any registration of the
Company's securities, upon the request of the Company or the underwriters
managing any registered public offering of the Company's securities, each
Shareholder so requested will not sell or otherwise dispose of any Shareholder
Shares without the prior written consent of the Company or such managing
underwriters, as the case may be, for a period of time (not to exceed 180 days)
after the effective date of such registration as the Company or the underwriters
may specify generally for shareholders who are officers or directors.
7. RESTRICTIVE LEGEND AND STOP-TRANSFER ORDERS.
7.1 LEGEND FOR SHAREHOLDERS. Each Shareholder understands and agrees that
the Company will cause the legend set forth below, or a legend substantially
equivalent thereto, to be placed upon any certificate(s) or other documents or
instruments evidencing ownership of Stock by the Shareholder:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL AND
10.
RIGHTS OF CO-SALE AS SET FORTH IN A RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT DATED AS OF NOVEMBER 26, 1997 ENTERED INTO BY
THE HOLDER OF THESE SHARES, THE COMPANY AND CERTAIN SHAREHOLDERS OF
THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. SUCH RIGHTS OF FIRST REFUSAL AND RIGHTS OF
CO-SALE ARE BINDING ON TRANSFEREES OF THESE SHARES.
7.2 LEGEND FOR PRIOR INVESTORS. Each Prior Investor understands and
agrees that the Company will cause the legend set forth below, or a legend
substantially equivalent thereto, to be placed upon any certificate(s) or other
documents or instruments evidencing ownership of Prior Investor Shares by the
Prior Investor:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RIGHTS
OF CO-SALE AS SET FORTH IN A RESTATED RIGHT OF FIRST REFUSAL AND
CO-SALE AGREEMENT DATED AS OF NOVEMBER 26, 1997 ENTERED INTO BY
THE HOLDER OF THESE SHARES, THE COMPANY AND CERTAIN SHAREHOLDERS
OF THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY. SUCH RIGHTS OF CO-SALE ARE
BINDING ON TRANSFEREES OF THESE SHARES.
7.3 STOP TRANSFER INSTRUCTIONS. Each Shareholder and Prior Investor
agrees, to ensure compliance with the restrictions referred to herein, that the
Company may issue appropriate "stop transfer" certificates or instructions and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its records.
8. TERMINATION, WAIVER AND AMENDMENT.
8.1 TERMINATION. The Company's and Investors' Right of First Refusal, and
the Preferred Investor's Right of Co-Sale for Offered Shareholder Shares and
Right of Co-Sale for Offered Prior Investor Shares will terminate upon the
earliest to occur of the following: (a) immediately prior to the closing of the
IPO; (b) the date on which this Agreement is terminated by a writing executed by
the Company, the holders of a majority of the Common Stock Equivalents then held
by all Prior Investors and the holders of at least three-quarters (3/4) of the
Common Stock Equivalents then held by all Preferred Investors (and their
permitted assigns); or (c) the dissolution of the Company.
11.
8.2 WAIVER. The application of the Company's and Investors' Right of
First Refusal, and the Preferred Investor's Right of Co-Sale for Offered
Shareholder Shares and Right of Co-Sale for Offered Prior Investor Shares as to
any proposed Transfer by a Selling Shareholder or Selling Prior Investor of any
Shareholder Shares or Prior Investor Shares may be waived in advance of or after
such transfer by the written agreement of the Company, the holders of a majority
of the Common Stock Equivalents then held by all Prior Investors and the holders
of over three-quarters (3/4) of the Common Stock Equivalents then held by all
Preferred Investors (and their permitted assigns), in which case such waiver
will be binding as to all parties hereto.
8.3 AMENDMENT. This Agreement may be amended only by a written instrument
executed by the Company, the holders of a majority of the Common Stock
Equivalents then held by all Prior Investors and the holders of over
three-quarters (3/4) of the Common Stock Equivalents then held by all Preferred
Investors (and their permitted assigns), in which case such amendment will be
binding as to all parties hereto.
9. MISCELLANEOUS PROVISIONS.
9.1 NOTICES. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed given to such party under this Agreement on the earliest of
the following: (a) the date of personal delivery; (b) one (1) business day after
transmission by facsimile or telecopier, addressed to the other party at its
facsimile number or telecopier address, with confirmation of transmission; (c)
one (1) business day after deposit with a return receipt express courier for
United States deliveries, or three (3) business days after such deposit for
deliveries outside of the United States; or (d) three (3) business days after
deposit in the United States mail by registered or certified mail (return
receipt requested) for United States deliveries. All notices not delivered
personally or by facsimile will be sent with postage and/or other charges
prepaid and properly addressed to the party to be notified at the address set
forth below such party's signature on this Agreement or on Exhibit A hereto, or
at such other address as such other party may designate by ten (10) days advance
written notice to the other parties hereto. All notices for delivery outside
the United States will be sent by facsimile or by express courier. Any notice
given hereunder to more than one person will be deemed to have been given, for
purposes of counting time periods hereunder, on the date effectively given to
the last party required to be given such notice. Notices to the Company will be
marked "Attention: President."
9.2 BINDING ON SUCCESSORS AND ASSIGNS; INCLUSION WITHIN CERTAIN
DEFINITIONS. This Agreement, and the rights and obligations of the parties
hereunder, will inure to the benefit of, and be binding upon, their respective
successors, assigns, heirs, executors, administrators and legal representatives
and, except as otherwise expressly provided herein, any transferee of Offered
Shareholder Shares or Offered Prior Investor
12.
Shares. Any permitted transferee of a Shareholder or Prior Investor who is
required to become a party hereto will be considered a "Shareholder" or "Prior
Investor" for purposes of this Agreement without the need for any consent,
approval or signature of any party hereto.
9.3 SEVERABILITY. If any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect, such provision will be
enforced to the maximum extent possible and such invalidity, illegality or
unenforceability will not affect any other provision of this Agreement, and this
Agreement will be construed as if such invalid, illegal or unenforceable
provision had (to the extent not enforceable) never been contained herein.
9.4 NEW INVESTORS. Notwithstanding anything herein to the contrary, if
additional parties purchase directly from the Company any shares of the
Company's Series B Preferred Stock, then each such new investor shall become a
party to this Agreement as a "Preferred Investor" hereunder, without the need
for any consent, approval or signature of any Preferred Investor, Prior Investor
or any Shareholder when such new investor has both: (a) purchased shares of
Series B Preferred Stock and paid the Company all consideration payable for such
shares and (b) executed one or more counterpart signature pages to this
Agreement.
9.5 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the internal laws of the State of California, excluding that
body of law pertaining to conflict of laws.
9.6 OBLIGATION OF COMPANY; BINDING NATURE OF EXERCISE. The Company agrees
to use its best efforts to enforce the terms of this Agreement, to inform each
Preferred Investor and Prior Investor of any breach hereof (to the extent the
Company has knowledge thereof) and to assist each Preferred Investor and Prior
Investor in the exercise of such party's rights and performance of such party's
obligations hereunder.
9.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and all such counterparts together will constitute one and the same
instrument.
9.8 ENTIRE AGREEMENT. This Agreement, including all Exhibits hereto, each
of which is incorporated herein by reference, constitutes the entire agreement
of the parties with respect to the specific subject matter hereof and supersedes
in their entirety all other agreements or understandings between or among the
parties hereto with respect to such specific subject matter.
9.9 CONFLICT. In the event of any conflict between the terms of this
Agreement and the Company's Articles of Incorporation or its Bylaws, the terms
of the Company's
13.
Articles of Incorporation or its Bylaws, as the case may be, will control. In
the event of any conflict between the terms of this Agreement and any other
agreement to which a Preferred Investor or Prior Investor is a party or by which
the Selling Shareholder is bound, the terms of this Agreement will control,
except insofar as this Agreement provides otherwise. In the event of any
conflict between the Company's books and records and this Agreement or any
notice delivered hereunder, the Company's books and records will control absent
fraud or error.
9.10 CALCULATION; BINDING EFFECT OF COMPANY NOTICES. All calculations of
an Investor's or Preferred Investor's pro rata share under any provision herein
will be made by the Company.
9.11 HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement. Unless otherwise stated, all references herein to Sections and
Exhibits will refer to Sections of and Exhibits to this Agreement.
9.12 SHAREHOLDER PURCHASE AGREEMENT. In the event of any conflict between
the terms of this Agreement and the terms of the Memoranda of Understanding
dated as of April 15, 1994 between the Company, Johari Investment Company Ltd.,
K&S Imports Inc., Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx on the one hand, and Xxxxxx
Xxxxxxxx, Xxxxxx Silver, Xxxxx Xxxxx and on the other hand, or the Memorandum of
Understanding dated as of August 15, 1994 between the Company, Johari Investment
Company Ltd., K&S Imports Inc., Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx on the one
hand, and Xxxxxxx Xxxxx on the other hand, (collectively the "Memoranda of
Understanding") the terms of this Agreement shall control. Notwithstanding the
foregoing, nothing in this Agreement shall be construed or understood to modify,
delete or supersede those provisions of the Memoranda of Understanding giving
the Company a right to repurchase Shareholder Shares in the event a
Shareholder's employment with the Company is terminated or those provisions
relating to purchase price adjustments to Shareholder Shares.
[THIS SPACE INTENTIONALLY LEFT BLANK]
14.
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement as of the date first written above.
COMPANY: NEWGEN RESULTS CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxx,
President and Chief Executive Officer
SHAREHOLDERS:
/s/ Xxxxxx Xxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Silver
---------------------------------------
Xxxxxx Silver
/s/ Xxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------
Xxxxxxx Xxxxx
PRIOR INVESTORS:
K&S IMPORTS, INC.
By: /s/ Xxx Xxxxxx
------------------------------------
Xxx Xxxxxx, President
Address: 0000 Xxx Xxxxxx Xxxx
Xxx Xxx, XX 00000
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
JOHARI INVESTMENT COMPANY LTD.
By: /s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx, President
Address: 0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. Xxxxxx X0X0X0
/s/ Xxxxxxx Xxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
Address: X.X. Xxx 0000
Xxxxxx Xxxxx Xx, XX 00000
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
Address: X.X. Xxx 0000
Xxxxxx Xxxxx Xx, XX 00000
PREFERRED INVESTORS:
INFORMATION ASSOCIATES, L.P.
By: Trident Capital Management, L.L.C.
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Title: Managing Director
---------------------------------
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
INFORMATION ASSOCIATES, C.V.
By: Trident Capital Management, L.L.C.
its investment general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Title: Managing Director
---------------------------------
INFORMATION ASSOCIATES - II, L.P.
By: Trident Capital Management - II,
L.L.C.
its general partner
By: /s/ Xxxx Xxxxxxx
------------------------------------
Title: Managing Director
---------------------------------
IA-II AFFILIATES FUND, L.L.C.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Title: Managing Director
---------------------------------
Address: C/O Trident Capital, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
CAPSTONE VENTURES
By: Capstone Management L.L.C.,
its General Partner
By:
-------------------------------------
Xxxxxx Xxxxxxx, Managing Member
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
BANKAMERICA VENTURES
By:
-------------------------------------
Xxxx X. Xxxxxx, Managing Director
Address: 000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
BA VENTURE PARTNERS II
By:
-------------------------------------
Xxxx X. Xxxxxx, General Partner
Address: c/o BankAmerica Ventures
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
BANCAMERICA XXXXXXXXX XXXXXXXX
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx
0000
Xxx Xxxxxxxxx, XX 00000
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
GC&H INVESTMENTS
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx, Executive Partner
Address: Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
SF GROWTH FUND
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Print Name: Xxxxx X. Xxxxxx
-----------------------------
Title: President
----------------------------------
Address: x/x Xxxxx X. Xxxxxx
Xxxxx Xxxxxxx High School
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
/s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx
Address: 0000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
XXXXXX XXXXX REVOCABLE TRUST
By: /s/ Xxxxxx XxXxx
-------------------------------------
Print Name: Xxxxxx XxXxx
-----------------------------
Title: Co-Trustee
----------------------------------
Address: c/o Xxxxxx XxXxx
The XxXxx Foundation
000 Xxxxxxxxxx Xxxxxx, Xxxxxx
Xxxxx
Xxx Xxxxxxxxx, XX 00000
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
BAYVIEW INVESTORS, LTD.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Print Name: Xxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------------
Address: c/x Xxxxxxxxx, Xxxxxxxx &
Company
000 Xxxxxxxxxx Xxxxxx, Xxxxx
0000
Xxx Xxxxxxxxx, XX 00000
RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
EXHIBIT A
SCHEDULE OF PREFERRED INVESTORS
Name and Address
---------------------------------
Information Associates, L.P.
C/O Trident Capital, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Information Associates, C.V.
C/O Trident Capital, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Information Associates - II, L.P.
C/O Trident Capital, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
IA-II Affiliates Fund, L.L.C.
C/O Trident Capital, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Capstone Ventures
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
BankAmerica Ventures
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
BA Venture Partners II
c/o BankAmerica Ventures
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
GC&H Investments
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx
Name and Address
--------------------------
SF Growth Fund
c/o Xxxxx X. Xxxxxx
Saint Xxxxxxx High School
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxx
0000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Xxxxxx XxXxx Revocable Trust
c/o Xxxxxx XxXxx
The XxXxx Foundation
000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Bayview Investors, Ltd.
c/x Xxxxxxxxx, Xxxxxxxx & Company
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
EXHIBIT B
SCHEDULE OF SHAREHOLDERS
Xxxxxx Xxxxxxxx
0000 XxXxxx Xxx
Xxx Xxxxx, XX 00000
Xxxxxx Silver
0000 Xxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Xxxxx Xxxxx
00000 Xxxxxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Xxxxxxx Xxxxx
000 Xxxxxx
Xxxxxx Xxxxx, XX 00000
