EXHIBIT 10.21
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of October 15, 1999 (the "AGREEMENT"),
among WAVEXPRESS, INC., a Delaware corporation (the "COMPANY"), and the
stockholders listed on EXHIBIT A hereto, as the same may be supplemented
from time to time (individually, a "STOCKHOLDER" and, collectively, the
"STOCKHOLDERS").
WHEREAS, the holders of all of the shares of the Company's common stock
and preferred stock and options or warrants to purchase the Company's common
stock wish to set forth their relative rights with regard to election of the
Company's Board of Directors, the transfer and issuance of the Company's
securities and certain other matters concerning the Company's capital stock.
Accordingly, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings specified below:
"AFFILIATE" shall mean, with respect to any Person, any other person
which directly or indirectly controls, is controlled by, or is under common
control with such person, including any limited partner, the general partner of
which is any such other person.
"BOARD" shall mean the Board of Directors of the Company.
"COMMON STOCK" shall mean the Company's Common Stock, par value $0.0001
per share.
"COMMON STOCK EQUIVALENTS" shall mean, with respect to any Stockholder,
the number of shares of Common Stock owned by such Stockholder and the number of
shares of Common Stock into or for which any shares of Preferred Stock or
Convertible Securities owned by such Stockholder shall be convertible,
exchangeable or exercisable (other than in
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respect of accrued and unpaid dividends) as of the date of determination
thereof.
"CONVERSION STOCK" shall mean Common Stock into or for which shares of
Preferred Stock or Convertible Securities shall have been converted, exchanged
or exercised.
"CONVERTIBLE NOTE" shall mean the Unsecured Convertible Term Note dated
October 15, 1999 made by the Company payable to the order of Wave for the
principal amount of $3,000,000.
"CONVERTIBLE SECURITIES" shall mean any options, warrants, convertible
notes or other securities or rights (other than Shares) convertible,
exchangeable or exercisable, with or without the payment of additional
consideration, into or for shares of Common Stock, directly or indirectly.
"ENCUMBRANCES" shall mean any and all liens, claims, charges, security
interests, options or other legal or equitable encumbrances.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
"FOUNDERS" shall mean Xxxxxxx and Wave.
"INDEPENDENT THIRD PARTY" shall mean any Person excluding each of the
following: (i) the Stockholders, (ii) the Company and (iii) any officer,
director, Affiliate or Associate (within the meaning of Rule 12b-2 under the
Exchange Act) of the Company or any Stockholder.
"JOINT VENTURE AGREEMENT" shall mean the Joint Venture Agreement dated
as of October 15, 1999, among the Company, Xxxxxxx and Wave, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"PERSON" shall mean an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PREFERRED STOCK" shall mean the Company's Series A Preferred Stock,
par value $0.0001 per share, having such rights, preferences and privileges as
may be in effect from time to time.
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"PUBLIC SALE" shall mean any sale of Common Stock to the public
pursuant to a public offering registered under the Securities Act or to the
public through a broker or market-maker pursuant to the provisions of Rule 144
(or any successor rule) adopted under the Securities Act of 1933.
"QUALIFIED INITIAL PUBLIC OFFERING" shall mean the Company's
underwritten public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale of shares of Common Stock
in which not less than $15,000,000 of gross proceeds from such public offering
are received by the Company for the account of the Company.
"XXXXXXX" shall mean Xxxxxxx Corporation, a New Jersey corporation.
"SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at the time.
"SHARES" shall mean any shares of capital stock of the Company,
including Common Stock and Preferred Stock, now or hereafter issued.
"WAVE" shall mean Wave Systems Corp., a Delaware corporation.
"WAVE WARRANT" means the Warrant to Purchase Common Stock of the
Company dated as of October 15, 1999 issued by the Company to Wave.
ARTICLE 2.
BOARD OF DIRECTORS
2.1. NOMINATION AND ELECTION OF DIRECTORS.
(a) SELECTION OF NOMINEES. In any and all elections of directors of the
Company (whether at a meeting or by written consent in lieu of a meeting), each
Stockholder, to the extent that such Stockholder has voting rights, shall vote,
or cause to be voted, or cause such Stokcholder's designees as directors to
vote, all Shares owned by such Stockholder or over which such Stockholder has
voting control, so as to fix the number of directors of the
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Company at five, and to nominate and elect such five directors of the Company as
follows:
(i) Three (3) individuals designated by Wave SO LONG AS Wave and its
Affiliates own at least 1,800,000 Common Stock Equivalents; and
(ii) Two (2) individuals designated by Xxxxxxx SO LONG AS Xxxxxxx and
its Affiliates own at least 1,200,000 Common Stock Equivalents.
Each Stockholder agrees to vote, or to cause to be voted, all voting Securities
owned by such Stockholder, or over which such Stockholder has voting control, in
order to comply with this Section 2.1(a). The number of Common Stock Equivalents
referred to in this Section 2.1(a) shall be adjusted proportionately in order to
give effect to any stock dividends, splits, reverse splits, combinations or
recapitalizations after the date of this Agreement.
(b) If any vacancy shall occur in the Board of Directors of the Company
as a result of death, disability, resignation or any other termination of a
director, the replacement for such vacating director shall be designated by the
Person or Persons who originally designated such vacating director. Each Person
entitled to designate a director or a replacement for a director pursuant to
this Section 5 shall also be entitled to designate the removal of such director,
with or without cause.
(c) No Stockholder shall vote any Shares in favor of the removal of a
director nominated by one of the other Stockholders hereunder unless the right
of any such Stockholder so to nominate such director shall no longer exist due
to the reduction in the ownership of Common Stock Equivalents by such
Stockholder pursuant to Section 2.1(a); PROVIDED, HOWEVER, that upon the request
of the Stockholder to remove a director previously nominated by such
Stockholder, the Stockholders shall vote all of their Shares in favor of (i) the
removal of such director and (ii) the election of any replacement director as
may be designated by such Stockholder.
2.2. CONSENT TO CERTAIN ACTIONS. The Company hereby agrees that it will
not take, and will not permit any of its subsidiaries to take, any of the
actions set forth in EXHIBIT C attached hereto and incorporated herein by
reference, and each of the Stockholders hereby agrees that it shall not vote any
voting Shares owned by it or over which it has voting control for or approve, or
cause any of the directors designated by it to vote for or approve, any of the
actions set forth on Exhibit C, unless such action has been approved by the
affirmative vote of (i) at least one (1) of the directors of the Company
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designated by Wave pursuant to Section 2.1(a)(i) and (ii) at least one (1) of
the directors of the Company designated by Xxxxxxx pursuant to Section 2.1(a)
(ii).
2.3 PROXY. EACH STOCKHOLDER HEREBY GRANTS TO THE COMPANY AN IRREVOCABLE
PROXY, COUPLED WITH AN INTEREST, TO VOTE ALL OF THE VOTING SECURITIES OWNED BY
SUCH STOCKHOLDER OR OVER WHICH SUCH STOCKHOLDER HAS VOTING CONTROL TO THE EXTENT
NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTICLE 2 IN THE EVENT OF ANY
BREACH BY SUCH STOCKHOLDER OF HIS, HER OR ITS OBLIGATIONS UNDER THE VOTING
AGREEMENT CONTAINED HEREIN.
2.4 ACTION BY SECURITYHOLDERS. Each Stockholder further agrees that
such Stockholder will not vote any voting Shares owned by such Stockholder or
over which such Stockholder has voting control, or take any action by written
consent, or take any other action as a stockholder of the Company, to circumvent
the voting arrangements required by this Article 2. Without limiting the
generality of the foregoing, each Stockholder agrees not to (a) vote any voting
Shares owned by such Stockholder or over which such Stockholder has voting
control, or take any other action as a stockholder of the Company, to approve
any corporate action or transaction by the Company not previously approved by
the Board elected in accordance with this Article 2 and the By-Laws of the
Company, or (b) commence or maintain any shareholder's derivative suit
challenging any action or transaction approved by the Company's Board.
2.5. BOARD OF DIRECTORS MEETING EXPENSES. The Company shall reimburse
each director for all reasonable out-of-pocket expenses incurred by such
director in connection with the attendance at meetings of the Board.
2.6. CONSENT TO CERTAIN ACTIONS PRIOR TO APPOINTMENT OF CEO. Anything
to the contrary notwithstanding, until such time as a Chief Executive Officer of
the Company satisfactory to Xxxxxxx and Wave has commenced employment with the
Company, the Company hereby agrees that it will not take any of the actions set
forth in EXHIBIT D attached hereto and incorporated herein by reference, and
each of the stockholders hereby agrees that it shall not vote any voting Shares
owned by it or over which it has voting control for or approve, or cause any of
the directors designated by it to vote for or approve, any of the actions set
forth on EXHIBIT D, unless such action has been approved by the affirmative vote
of a majority of the committee consisting of Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx and
Xxxxx Thuerson
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(or any substitute members approved by Xxxxxxx and Wave), which majority vote
shall include the approval of Xxxxxx Xxxxxxx.
ARTICLE 3.
TRANSFER OF SHARES
3.1. RESTRICTIONS ON TRANSFER. So long as this Agreement is in effect,
no Stockholder shall sell, assign, transfer, give, encumber, pledge, hypothecate
or in any other way dispose of any Shares or any Convertible Securities (any of
which being a "TRANSFER"), except as provided in this Agreement. No Transfer in
violation of this Agreement shall be made or recorded on the books of the
Company and any such Transfer shall be void and of no force or effect. Subject
to the terms of this Agreement, the Stockholders shall be entitled to exercise
all rights of ownership of their Shares and Convertible Securities.
3.2. CERTAIN PERMITTED TRANSFERS. The Company and the Stockholders
acknowledge and agree that any of the following Transfers shall be deemed to be
in compliance with this Agreement, and shall not be governed by Section 3.3 or
3.4:
(a) a Transfer made to the Company pursuant to Article 3 hereof or the
redemption provisions applicable to the Preferred Stock as in effect from time
to time;
(b) a Transfer upon the death of a Stockholder to his executors,
administrators and testamentary trustees;
(c) a Transfer made by Xxxxxxx or Wave to any of their respective
Affiliates or to any of their respective officers, directors, employees or
consultants, or to any officer, director, employee or consultant of any of their
respective Affiliates; and
(d) a Transfer made for nominal consideration or as a gift in
compliance with applicable federal and state securities laws to the
Stockholder's spouse, parents or issue or to a trust, the beneficiaries of
which, or to a corporation or partnership the stockholders or partners of which,
include only the Stockholder and such Stockholder's spouse or issue.
3.3. RIGHTS OF FIRST REFUSAL AND FIRST OFFER.
(a) Each Stockholder agrees that, subject to the restrictions on
Transfers contained in Sections 3.4 and 3.5 hereof and subject to the
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provisions of Section 3.3(g), if any Stockholder (for purposes of this Section
3.3, a "TRANSFERRING STOCKHOLDER") wishes to Transfer any or all of the Shares
or Convertible Securities then owned by such Transferring Stockholder, other
than as provided in Section 3.2, 3.5 or 3.6 hereof, then such Transferring
Stockholder shall first give a written notice (the "TRANSFER NOTICE") to the
Company (and to the other Founder if the Transferring Stockholder is a Founder)
specifying the number of Shares or Convertible Securities such Transferring
Stockholder wishes to Transfer (the "TRANSFER SECURITIES"), containing an
irrevocable offer (open to acceptance for a period of 30 days after the date
such Transfer Notice is received) to sell the Transfer Securities to the Company
(and the other Founder, if applicable) at the price (and upon such other terms)
stated in the Transfer Notice, which price and terms shall be the same as the
price and terms offered to such Stockholder by a bona fide third party offeror
whose identity has been disclosed by the Transferring Stockholder (the "TRANSFER
PRICE").
(b) The Company shall have the right to purchase all, but not less than
all, of the Transfer Securities at the Transfer Price and on terms identical to
those set forth in the Transfer Notice. The Company shall have 20 days following
receipt of the Transfer Notice (the "COMPANY PERIOD") to deliver written notice
to the Transferring Stockholder that it wishes to purchase the Transfer
Securities ("COMPANY ACCEPTANCE NOTICE"). If the Company shall not give a
Company Acceptance Notice within the Company Period, the Company shall be deemed
not to have elected to purchase the Transfer Securities.
(c) If the Company has not elected (or has been deemed not to have
elected) to purchase the Transferring Securities within the Company Period and
the Transferring Stockholder is a Founder, the other Founder shall have the
right to purchase all, but not less than all, of the Transfer Securities. Such
other Founder shall have 20 days following the end of the Company Period to
deliver a written notice to the Transferring Stockholder that it wishes to
purchase the Transfer Securities ("FOUNDER ACCEPTANCE NOTICE"). If such Founder
shall not give a Founder Acceptance Notice within 20 days following the end of
the Company Period, such Founder shall be deemed not to have elected to purchase
the Transfer Securities.
(d) The closing of the purchase and sale of the Transfer Securities
pursuant to clauses (b) or (c) of this Section 3.3 shall take place at the
principal offices of the Company on the 15th business day after the Company
Acceptance Notice or Founder Acceptance Notice, as applicable, is given. At such
closing, the Company or the Founder, as applicable, shall deliver a certified
check in the appropriate amount to the Transferring
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Stockholder against delivery of duly endorsed certificates representing the
Transfer Securities to be purchased. The Transfer Securities shall be delivered
free and clear of all Encumbrances other than those imposed by this Agreement.
(e) If the Company and, if applicable, the Founders, have not elected
(or have been deemed not to have elected) to purchase the Transfer Securities
pursuant to this Section 3.3, then the Transferring Stockholder shall have 90
days in which to Transfer all of the Transfer Securities, at a price not lower
than the Transfer Price and on terms no more favorable to the transferee than
those contained in the Transfer Notice, to any third party; PROVIDED, HOWEVER,
that no Transfer may be made to any third party unless and until such third
party delivers to the Company an executed consent in the form of EXHIBIT B
hereto. Promptly after any Transfer pursuant to this Section 3.3, the
Transferring Stockholder shall notify the Company of the consummation thereof
and shall furnish such evidence of the completion and time of completion of such
Transfer and of the terms thereof as the Company may request. If, at the end of
such 90 day period, the Transferring Stockholder has not completed the Transfer
of the Transfer Securities, the Transferring Stockholder shall no longer be
permitted to Transfer such Securities pursuant to this Section 3.3(e) without
again complying with this Section 3.3 in its entirety. If the Transferring
Stockholder determines at any time within such 90 day period that the Transfer
of such Transfer Securities at a price not lower than the Transfer Price and on
terms no more favorable to the transferee than those contained in the Transfer
Notice is impractical, such Stockholder may terminate all attempts to Transfer
such Transfer Securities and recommence the procedures of this Section 3.3 in
their entirety without waiting for the expiration of such 90 day period by
delivering written notice of such decision to the Company.
(f) Transfers of Shares or Convertible Securities for property other
than cash are not permitted pursuant to this Section 3.3.
3.4. RESTRICTIONS IN CONNECTION WITH REGISTRATIONS. Each Stockholder
agrees not to effect any sale or other transfer of Shares or Convertible
Securities, during the seven days prior to the effective date of a registration
statement effected pursuant to the terms of the Joint Venture Agreement and
during such period of time beginning on such effective date as may be required
by the underwriters of such offering and agreed to by the Company, but in no
event exceeding 180 days (in each case except as part of such registration).
Each Stockholder hereby acknowledges that such Stockholder shall have no right
to include its Shares or Convertible Securities in any registration of Shares or
Convertible Securities, except as expressly provided in Article 6 hereof.
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3.5. BRING ALONG.
(a) BRING ALONG RIGHT. If, after complying with the right of first
refusal procedures contained in Section 3.3, any Stockholder wishes to Transfer
any Shares or Convertible Securities (other than any Transfer (i) pursuant to
Section 3.2 or (ii) through a sale in a registered offering or through the right
to sell securities provided by this Section 3.5), then such Stockholder must, as
a condition to such Transfer, permit each Founder (or the other Founder if such
selling Stockholder is a Founder) (for the purposes of this Section 3.5(a),
individually a "REMAINING STOCKHOLDER" and collectively the "REMAINING
STOCKHOLDERS") (or cause each such Remaining Stockholder to be permitted) to
sell (either to the prospective purchaser of the selling Stockholder's Shares or
to another financially reputable purchaser reasonably acceptable to such
Remaining Stockholder) the same proportion of the Shares then owned by such
Remaining Stockholder as the proportion that the number of Shares the selling
Stockholder proposes to sell held by him on the date of the Transfer Notice
bears to the total number of Shares held by him on such date, on substantially
equivalent terms and at a substantially equivalent price to that offered by the
third party offeror taking into account any difference in the type of securities
(i.e., Preferred Stock, Common Stock or Convertible Securities) held by the
selling Stockholder and the Remaining Stockholders who desire to sell Shares.
All numbers of Shares under this Section 3.5 and Section 3.6 shall be determined
on the basis of full conversion, exchange or exercise of all Convertible
Securities.
(b) NOTICE. Each Stockholder's obligation under Section 3.5(a) to
afford each of the Remaining Stockholders (or to cause each of them to be
afforded) the rights referred to herein will be discharged if the Remaining
Stockholders are given written notice hereof simultaneously with the giving of
the Transfer Notice required by Section 3.3 and if such notice provides that
each of the Remaining Stockholders may elect to avail himself of such rights by
a written reply given on or before the expiration of the time period referred to
in Section 3.3, addressed to such Person as may be designated in the Transfer
Notice.
ARTICLE 4.
LIMITED FIRST REFUSAL RIGHTS
4.1 ANTI-DILUTION PROVISION. Except for the issuance of Shares and
Convertible Securities (i) pursuant to any Public Sale, (ii) upon the conversion
of Convertible Securities, (including, without limitation, the
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Convertible Note and the Wave Warrant), (iii) to employees, directors or
consultants of the Company in consideration for their service or continued
service to the Company, (iv) as consideration for acquisitions by the Company of
the assets or business of another Person or entity, (v) for the establishment of
corporate relationships for purposes other than raising capital (including,
without limitation, joint ventures and corporate partnerships), and (vi) as a
dividend on the outstanding Shares, if the Company authorizes the issuance of
any Shares or Convertible Securities (collectively, "FIRST REFUSAL SECURITIES"),
the Company will first offer to sell to each Founder a portion of such First
Refusal Securities equal to the percentage determined by dividing (A) the number
of Common Stock Equivalents held by such Founder and such Founder's Affiliates
and the employees, officers, directors and consultants of such Founder and such
Founder's Affiliates, BY (B) the number of Common Stock Equivalents then
outstanding. Each Founder will be entitled to purchase all or part of such First
Refusal Securities at the same price and on the same terms as such stock or
securities are to be offered to any other Persons.
4.2 FOUNDERS' EXERCISE OF RIGHT. Each Founder must exercise its
purchase rights under this Article 4 within 15 days after receipt of a written
notice from the Company describing in reasonable detail the First Refusal
Securities being offered, the purchase price thereof, the payment terms and such
Founders' percentage allotment. If all of the First Refusal Securities offered
to the Founders are not fully subscribed by the Founders, the First Refusal
Securities which are not so subscribed for will be reoffered to the Founders
purchasing their full allotment upon the terms set forth in this paragraph,
except that such Founders must exercise their purchase rights within five (5)
days after receipt of such reoffer.
4.3 COMPANY'S EXERCISE OF RIGHT. Upon the expiration of the offering
periods described above, the Company will be free to sell such First Refusal
Securities which the Founders have not elected to purchase during the 60 days
following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to the Founders. Any First Refusal
Securities offered or sold by the Company after such 60-day period must be
reoffered to the Founders pursuant to the terms of this Article 4.
4.4 ASSIGNMENT. The rights of any Founder under Section 4.2 may be
assigned by such Founder to any Affiliate of such Founder or to any employee,
officer, director or consultant to such Founder or to such Founder's Affiliates.
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ARTICLE 5.
TERMINATION
5.1. This Agreement will terminate upon the earlier to occur of (i) the
completion of any voluntary or involuntary liquidation or dissolution of the
Company, and (ii) the completion of a Qualified Public Offering and the
expiration of all lock-up periods in such Qualified Public Offering.
ARTICLE 6.
MISCELLANEOUS
6.1. CERTIFICATE LEGEND. Upon execution of this Agreement, the
certificates representing Shares and Convertible Securities held by the
Stockholders shall contain substantially the following legend, in addition to
any other legends deemed appropriate or necessary by the Company:
This certificate is transferable only upon compliance with and subject
to the provisions of a Stockholder Agreement among the Company, its
stockholders and their respective spouses, a copy of which Agreement is
on file in the office of the Secretary of the Company at its principal
place of business. The Company will furnish a copy of such Agreement to
the record holder of this Certificate, without charge, upon written
request to the Company at its principal place of business or registered
office.
6.2. NEGOTIABLE FORM. Whenever any Shares are to be delivered or sold
pursuant to this Agreement, the Person selling such Shares shall deliver such
certificates or other instruments duly endorsed or accompanied by appropriate
stock powers or assignments separate from the instrument.
6.3. ENFORCEMENT. No Shares or Convertible Securities shall be
transferred on the books of the Company and no sale, assignment, transfer,
pledge or other disposition thereof shall be effective unless and until the
terms and provisions of this Agreement are complied with, and in cases of
violation of this Agreement by the attempted transfer of the Shares or
Convertible Securities without compliance with the terms and provisions thereof,
such sale, assignment, transfer, pledge or other disposition shall be invalid
and of no effect, and the Company and/or any of the Stockholders who are not
attempting to transfer the Shares or Convertible Securities shall have the right
to compel the Stockholder who is attempting to transfer the Shares
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or Convertible Securities, and/or the purported transferee, to transfer and
deliver the same in accordance with the applicable provisions of this Agreement.
6.4. SPECIFIC PERFORMANCE. The parties hereto recognize that the
Company's Shares and Convertible Securities cannot be readily purchased or sold
on the open market and that it is to the benefit of the Company and the
Stockholders that this Agreement be carried out; and for those and other
reasons, the parties hereto would be irreparably damaged if this Agreement is
not specifically enforced in the event of a breach hereof. If any controversy
concerning the rights or obligations to purchase or sell any Shares and
Convertible Securities arises, or if this Agreement is breached, the parties
hereto hereby agree that remedies at law might be inadequate and that,
therefore, such rights and obligations, and this Agreement, shall be enforceable
by specific performance. The remedy of specific performance shall not be an
exclusive remedy, but shall be cumulative of all other rights and remedies of
the parties hereto at law, in equity or under this Agreement.
6.5. TRANSFEREES AND FUTURE STOCKHOLDERS. The Company and the
Stockholders shall cause any transferee of any Shares or Convertible Securities
that is not already a party to this Agreement and any future Stockholder of the
Company to execute a consent in the form attached as EXHIBIT B hereto, prior to
or simultaneously with such transfer, to be bound by the terms and conditions of
the Agreement. Upon execution thereof, provided such transfer shall not have
been made in contravention of this Agreement, such Stockholder shall be entitled
to the rights of an owner of the Shares or Convertible Securities held by such
Stockholder hereunder, provided that the foregoing shall not apply to Shares or
Convertible Securities that have been sold pursuant to an effective registration
statement under the Securities Act or Rule 144 thereunder.
6.6. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and delivered in person,
transmitted by telecopier or sent by registered or certified mail (return
receipt requested) or recognized overnight delivery service, postage pre-paid,
addressed as follows, or to such other address as any such party may notify to
the other parties in writing:
(a) if to the Company:
WaveXpress, Inc.
000 Xxxxxxxxxx Xxxx, 0-000
Xxxxxxxxx, XX 00000
Attn: President
Facsimile No.: (000) 000-0000
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(b) if to a Stockholder,
at the address set forth on
Exhibit A hereto,
A notice or communication will be effective (i) if delivered in person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier, on the business day of actual confirmed receipt by the addressee
thereof, and (iii) if sent by registered or certified mail, five business days
after dispatch.
6.7. BINDING EFFECT; ASSIGNMENT. This Agreement, including, the rights
and conditions contained herein in connection with disposition of Shares and
Convertible Securities, shall be binding upon the parties hereto, together with
their respective executors, administrators, successors, personal
representatives, heirs and assigns permitted under this Agreement.
6.8. GOVERNING LAW. THE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
6.9. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance here from. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
6.10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
6.11. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.
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6.12. AMENDMENTS. No modification, amendment of waiver of any provision
of this Agreement will be effective against the Company or the Stockholders
unless such modification, amendment or waiver is approved in writing by the
holders of at least 80% of the total number of then outstanding Shares held by
the Stockholders; PROVIDED, HOWEVER, that (i) no amendment, modification or
waiver of any provision of this Agreement that could materially adversely affect
the rights of the Founders hereunder in a manner different from the rights of
the other Stockholders shall be effective against such Founders without their
written consent, and (ii) no amendment, modification or waiver of any provision
of this Agreement that could materially adversely affect the rights of the other
Stockholders hereunder in a manner different from the rights of the Founders
shall be effective against such other Stockholders unless approved in writing by
the holders of a majority of the Shares held by such other Stockholders
constituting Common Stock. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
6.13. CAPTIONS. The captions of this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
6.14. PRONOUNS. Any masculine personal pronoun shall be considered to
mean the corresponding feminine or neuter personal pronoun, and vice versa, as
the context requires.
6.15. SPOUSES. By executing this Agreement, the spouse of each
Stockholder that is an individual agrees to be bound in all respects by the
terms of this Agreement to the same extent as the Stockholders. Each spouse
further agrees that should she or he predecease the Stockholder to whom she or
he is married or should she or he become divorced from such Stockholder, any of
the Shares which such spouse may own or in which she or he may have any interest
shall remain subject to all of the restrictions and to all of the rights of the
Stockholders contained in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
WAVEXPRESS, INC.
By:
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Xxxxx Xxxxxxxx
President
XXXXXXX CORPORATION
By:
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Name:
Title:
WAVE SYSTEMS CORP.
By:
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Xxxxxx Xxxxxxx
President
EXHIBIT A
STOCKHOLDERS
Xxxxxxx Corporation
000 Xxxxxxxxxx Xxxx
XX 0000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx X. XxxXxxx
Facsimile No: (000) 000-0000
Wave Systems Corp.
000 Xxxxxxxx Xxxxxx
Xxxxx X-000
Xxx, XX 00000
Attention: Xxxxxx Xxxxxx, Chief Financial Officer
Facsimile No.: (000) 000-0000
EXHIBIT B
FORM OF CONSENT
The undersigned, having purchased Shares of WaveXpress, Inc., hereby
agrees to be bound by the terms and conditions of the Stockholder Agreement of
the Company as a "Stockholder" thereunder, the form of which is attached hereto,
as if the undersigned had been a party to such agreement as of the date thereof.
Name:
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Signature:
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Address:
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Telecopy No.:
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No. of Shares:
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I, the undersigned, being the spouse of the above-named Stockholder,
hereby acknowledge that I have read and understand the Stockholder Agreement,
and I agree to be bound by the terms thereof, including, but not limited to,
Section 6.15 thereof.
Name:
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Signature:
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EXHIBIT C
CONSENT TO CERTAIN ACTIONS
(a) the election of the Chief Executive Officer of the Company;
(b) the declaration or payment of any dividends or other distributions in
respect of any capital stock (including, without limitation, the Common
Stock and the Preferred Stock) of the Company and its subsidiaries;
(c) any action to effect the voluntary, or which would precipitate an
involuntary, dissolution or winding-up of the Company or any of its
subsidiaries;
(d) the creation, modification, amendment or repeal of the Certification of
Incorporation or By-laws of the Company or any of its subsidiaries, or the
creation or issuance of any equity security, including any security
convertible into or exercisable for any equity security having a preference
over, or being on a parity with the Preferred Stock with respect to voting,
dividends, redemption or liquidation rights;
(e) the entering into or consummating of any merger or consolidation, or any
sale, lease, sublease or other transfer or disposition of all or
substantially all of the assets of the Company or any of its subsidiaries;
or
(f) any redemption, purchase or other acquisition of any shares of capital stock
(including, without limitation, the Common Stock and the Preferred Stock) of
the Company or any of its subsidiaries.
(g) except pursuant to the agreements contemplated by the Joint Venture
Agreement, enter into any transaction with an Affiliate of the Company or
any entity in which any officer, director or employee of the Company (or a
spouse or any immediate family member of the same) has an ownership or other
financial interest, whether directly or indirectly (other than as a holder
of less than 3% of the common stock of any publicly traded company).
EXHIBIT D
CONSENT TO CERTAIN ACTIONS PRIOR TO FIRST CEO
(a) the establishment and modification of the annual budget and forecasts with
respect to income, balance sheets, cash flow, and capital expenditures of
the Company;
(b) (i) the entering into by the Company of any agreement which requires total
payments of more than $5,000, (ii) the making of any expenditure in excess
of $5,000 (iii) the sale or license or any commitment for the sale or
license by the Company of any assets or property which individually have a
value of more than $5,000;
(c) (i) the incurrence by the Company or any of its Subsidiaries of any
indebtedness for borrowed money (including, without limitation, the
establishment of a line of credit at any bank or other financial
institution), other than any indebtedness for borrowed money incurred
pursuant to the Convertible Note (as defined in the Joint Venture
Agreement), or (ii) the granting by the Company of any liens on any of its
properties or assets except (A) liens to secure taxes, assessments and other
governmental charges in respect of obligations not overdue, (B) landlord's
or lessor's liens under leases under which the Company is the lessee, and
(C) liens being contested by the Company in good faith by appropriate
proceedings;
(d) the giving by the Company of any guaranties or indemnities in connection
with the debt or other obligations of any Person, except in connection with
product and service warranties in the ordinary course of business;
(e) the institution or settlement of any lawsuit or other legal proceeding
involving a claim by the Company of more than $5,000;
(f) the appointment or retention of auditors or legal counsel for the Company;
(g) the entering into by the Company of any oral or written contract outside the
ordinary course of business which contemplates the payment to or by the
Company of more than $5,000 in the aggregate; and
(h) the entering into by the Company of any agreement obliging, committing or
binding the Company to do any thing or take any action referred to in
clauses (a)-(g) above.
