EXHIBIT 10.7
AMENDED AND RESTATED
REGISTRATION RIGHTS, RESTRICTED STOCK
AND STOCK OPTION AGREEMENT
Agreement, dated as of October 11, 1988, by and among Adra Systems, Inc., a
Delaware corporation (the "Company"), and those parties listed as Stockholders
on the signature pages hereto (the "Stockholders").
WHEREAS, the Company and certain of the Stockholders desire to amend and
restate a certain Registration Rights, Restricted Stock and Stock Option
Agreement, dated as of August 26, 1988, by and among the Company and certain of
the Stockholders (the "Original Agreement") to take into account the issuance
and sale of additional shares of Class D Preferred Stock and the issuance and
sale of Class E Preferred Stock, in some cases to Stockholders which were not
party to the Original Agreement;
NOW, THEREFORE, the parties hereby amend and restate the Original Agreement
to read in its entirety as provided herein.
ARTICLE I. DEFINITIONS
1.1 "Applicable Securities Laws" has the meaning set out in Section 3.8.
1.2 "Class A Common Stock" means the Class A Common Stock, $.01 par value,
of the Company.
1.3 "Class A Preferred Stock" means the Class A Convertible Preferred
Stock, $1.00 par value, of the Company issued pursuant to the Class A Purchase
Agreement or the Xxxxx Preferred Stock Purchase Agreement dated as of August 24,
1983 among the Company and Xxxxxxx X. Xxxxx, as amended.
1.4 "Class A Purchase Agreement" means the Preferred Stock Purchase
Agreement, dated August 24, 1983, among the Company and various investors, as
amended.
1.5 "Class B Preferred Stock" means the Class B Convertible Preferred
Stock, $1.00 par value, of the Company issued pursuant to the Class B Purchase
Agreement.
1.6 "Class B Common Stock" means the Class B Common Stock, $.01 par value,
of the Company.
1.7 "Class B Purchase Agreement" means the Class B Preferred Stock
Purchase Agreement, dated December 20, 1984, among the Company and various
investors, as amended.
1.8 "Class C Preferred Stock" means the Class C Convertible Preferred
Stock, $1.00 par value, of the Company issued pursuant to either of the Class C
Purchase Agreements.
1.9 "Class C Purchase Agreements" means the Class C Preferred Stock
Purchase Agreement, dated December 18, 1985, among the Company and various
investors, as amended (the "earlier Class C Purchase Agreement"), and the Class
C Preferred Stock Purchase Agreement, dated January 20, 1987, among the Company
and various investors, as amended (the "later Class C Purchase Agreement").
1.10 "Class D Preferred Stock" means the Class D Convertible Preferred
Stock, $1.00 par value, of the Company issued (a) upon conversion of those
Convertible Subordinated Demand Promissory Notes issued by the Company and dated
October 16, 1987 or (b) to former shareholders of Elcam in connection with the
merger contemplated by the Reorganization Agreement or (c) pursuant to the Class
D and Class E Purchase Agreement.
1.11 "Class D and Class E Purchase Agreement" means the Class D Preferred
Stock and Class E Preferred Stock Purchase Agreement, dated as of October 11,
1988, among the Company and various investors, as amended.
1.12 "Class E Preferred Stock" means the Class E Convertible Preferred
Stock, $1.00 par value, of the Company issued pursuant to the Class D and Class
E Purchase Agreement.
1.13 "Commission" means the United States Securities and Exchange
Commission.
1.14 "Common Stock" means the Class A Common Stock and the Class B Common
Stock.
1.15 "Elcam" means Elcam, Inc., a Delaware corporation.
1.16 "Excluded Registrations" shall have the meaning set out in Section
3.4.
1.17 "Merger Common Stock" means Common Stock initially issued to former
stockholders of Elcam in connection with the merger contemplated by the
Reorganization Agreement.
1.18 "Merger Stockholder" means the Stockholders listed as Merger
Stockholders on the signature pages hereto.
1.19 "1984 Options" means options issued pursuant to Article IX of the
Class B Purchase Agreement.
1.20 "1985 Options" means options issued pursuant to Article IX of the
earlier Class C Purchase Agreement.
1.21 "1987 Options" means options issued pursuant to Article IX of the
later Class C Purchase Agreement.
1.22 "1988 E Options" means options issued pursuant to Article VIII of the
Class D and Class E Purchase Agreement.
1.23 "1988 Options" means options issued pursuant to Article IV of this
Agreement.
1.24 "1933 Act" means the Securities Act of 1933.
1.25 "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.26 "Reorganization Agreement" means the Agreement and Plan of
Reorganization entered into between the Company, Adra Merger Corp., Elcam and
certain shareholders of Elcam.
1.27 "Stock" means the Class A Preferred Stock, the Class B Preferred
Stock, the Class C Preferred Stock, the Class D Preferred Stock and the Class E
Preferred Stock, any Common Stock issued on conversion of any of the Class A
Preferred Stock, the Class B Preferred Stock, the Class C Preferred Stock, the
Class D Preferred Stock or the Class E Preferred Stock, any Common Stock issued
upon exercise of any of the 1984 Options, the 1985 Options, the 1987 Options,
the 1988 Options or the 1988 E Options, any Common Stock issued upon exercise of
any Warrant issued pursuant to a certain Note and Warrant Purchase Agreement
among the Company and certain investors dated as of October 16, 1987, any shares
of Merger Common Stock, and any equity security of the Company issued as a
dividend or distribution thereon or in exchange therefor or upon conversion
thereof (whether such stock is held by a Stockholder or its assignees, other
than persons acquiring shares of stock in a underwritten public offering), but
not to other stock of the same class or of any other class which is now or
hereafter may be outstanding.
1.28 "Stockholder" shall have the meaning set out in the preamble hereto.
ARTICLE II. INVESTMENT REPRESENTATIONS OF
CERTAIN STOCKHOLDERS
The following representations, warranties and statements are each made as
of August 26, 1988.
2.1 Compliance with Securities Laws. Each of the Merger Stockholders,
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severally and not jointly, represents and warrants to the Company that such
Stockholder: (a) is acquiring shares of Stock to be issued to such Stockholder
solely in exchange for the shares of capital stock of Elcam owned by such
Stockholder and solely in connection with the transactions contemplated by the
Reorganization Agreement; (b) has paid no brokerage or similar commission in
connection with the acquisition of such shares of Stock; (c) is acquiring such
shares of Stock solely for his or its account; (d) is a sophisticated investor,
with such knowledge and experience in financial and business matters as to be
able to evaluate the merits and risks of acquiring shares of Stock; (e) has no
need for liquidity in connection with its acquisition of shares of Stock; and
(f) is able to bear the economic risk of loss of its investment in the Stock.
Each such Stockholder understands and agrees that his or its shares of Stock or
any interest therein have not been registered under the 1933 Act and may not be
sold, assigned or otherwise transferred in the absence of an effective
registration statement under the 1933 Act covering the
transfer unless the sale or transfer is (i) made pursuant to Section 3.2 or (ii)
made in compliance with Rule 144 under the 1933 Act.
Each Merger Stockholder has provided such information as may reasonably
have been requested by the Company in order for the Company or its counsel to
evaluate the availability of an exemption under the 1933 Act for the issuance of
Class D Preferred Stock and the Merger Common Stock to such Stockholder.
2.2 Company Documents. Each Merger Stockholder hereby acknowledges
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receipt of the Reorganization Agreement, together with all schedules and
exhibits thereto and all financial statements referred to therein, which
documents each such Stockholder warrants have been reviewed such Stockholder.
Each such Stockholder acknowledges and warrants that, prior to the
execution of the Original Agreement, such Stockholder has had the opportunity to
ask questions and receive answers from the Company concerning the terms and
conditions of the transactions contemplated by the Reorganization Agreement and
the issuance of the shares of Stock in connection therewith, and concerning the
Company, its business and any of the documents identified above, and to obtain
such additional further information from the Company as such Stockholder has
deemed necessary to verify the accuracy of the information contained in the
documents identified above or any other information furnished to such
Stockholder.
2.3 1933 Act Matters. Each Merger Stockholder acknowledges and agrees
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that the shares of Stock to be issued to such Stockholder have not been (and at
the time of acquisition by such Stockholder, will not be) registered under the
1933 Act or under the securities laws of any state, in reliance upon certain
exemptive provisions of such statutes. Each such Stockholder recognizes and
acknowledges that such claims of exemption are based, in part, upon the
representations of each such Stockholder contained in this Agreement. Each such
Stockholder further recognizes and acknowledges that, because the shares of
Stock are unregistered under federal and state laws, they are not presently
eligible for resale, and that they must be held indefinitely unless resold
pursuant to an effective registration statement under the 1933 Act and any
applicable state securities laws, or pursuant to a valid exemption from such
registration requirements. Each such Stockholder recognizes and acknowledges
that Rule 144 promulgated under the 1933 Act (which facilitates routine sales of
securities in limited amounts in accordance with the terms and conditions of
that Rule, including a holding period requirement) may not now be available to
such Stockholder for resale of the shares of Stock, and each such Stockholder
recognizes and acknowledges that, in the absence of the availability of Rule
144, a sale pursuant to a claim of exemption from registration under the 1933
Act would require compliance with some other exemption under the 1933 Act, none
of which may be available for resale of the shares of Stock by such Stockholder.
Each such Stockholder recognizes and acknowledges that, except as set forth in
the Agreement, the Company is under no obligation to register the shares of
Stock acquired by such Stockholder, either pursuant to the 1933 Act or the
securities laws of any state.
ARTICLE III. TRANSFER RESTRICTIONS AND REGISTRATIONS
3.1 Legend. Unless and until otherwise permitted as hereinafter provided,
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each certificate for Stock and each certificate issued to any subsequent
transferee of any such certificate shall be stamped or otherwise imprinted with
a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
When (a) any Stock shall have been effectively registered and disposed of
in accordance with registrations under the 1933 Act and any applicable state
securities laws, or (b) both counsel referred to in Section 3.2 shall have
determined that such legends are no longer required in order to ensure
compliance with applicable federal or state laws, the holders of Stock bearing
such restrictive legend shall be entitled to receive from the Company, without
expense, a new certificate for such Stock not bearing such restrictive legend.
3.2 Transfer of Stock Where Registration Not Required. Before
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transferring any Stock other than pursuant to Rule 144 under the 1933 Act and
other than Stock which has been registered under the 1933 Act, each holder of
Stock shall give written notice to the Company of its intention to do so,
describing briefly the manner of the disposition to be made thereof. Promptly
upon receiving such written notice, the Company shall present copies thereof to
its counsel. If the Company so requires, such holder shall furnish the Company
with an opinion of counsel acceptable to the Company (it being agreed that
Xxxxx, Xxxx & Xxxxx, Xxxxxxxxx & Xxxxxxxx, Ropes & Xxxx or Proskauer, Rose,
Xxxxx & Xxxxxxxxxx is acceptable), with respect to the proposed disposition. If
in the opinion of counsel for the Company, which opinion shall be rendered as
promptly as practicable and in any event not later than 15 days after the later
of receipt by the Company of (a) such written notice or (b) such opinion of
holder's counsel, the proposed disposition of Stock may be effected without
registration or qualification thereof under any federal or state law, the
Company, as promptly as practicable, shall notify such holder of such opinion,
whereupon such holder shall be entitled to dispose of the Stock in accordance
with the terms of the notice delivered by it to the Company. Anything herein to
the contrary notwithstanding, provided that the transferee agrees to be bound by
the terms of this Agreement, any holder of Stock may transfer any Stock without
such notice to a partner, retired partner, a stockholder, a subsidiary or a
successor of such holder (or the estate of such partner, retired partner or
stockholder) or the ultimate parent corporation of such holder or any wholly-
owned direct or indirect subsidiary of such ultimate parent corporation,
provided such holder first obtains from counsel satisfactory to the Company (it
being agreed that Xxxxx, Xxxx & Xxxxx, Xxxxxxxxx & Xxxxxxxx, Ropes & Xxxx or
Proskauer, Rose, Xxxxx & Xxxxxxxxxx is satisfactory) a written opinion that the
proposed transfer of the Stock may be effected without the registration
or qualification thereof under any federal or state law or that any required
registration or qualification has been effected.
3.3 Required Registration. Any holder of Stock, provided such holder,
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together with any other holder exercising rights pursuant to this Section 3.3,
holds at least 35% of the then outstanding shares of Stock (excluding, however,
for purposes of calculation of such percentage, any shares of Common Stock
issued upon the exercise of any 1984 Option, any 1985 Option, any 1987 Option,
any 1988 Option or any 1988 E Option), shall have the right to require the
Company to effect any necessary registration or qualification in connection with
any proposed transfer or disposition of Stock, but, if the Company is otherwise
in registration on Form S-1, or S-2 at the time of demand, or if it has just
completed a registration at the time of demand, then not prior to ninety days
after the effective date of any such registration. If requested by such holder
to register or qualify any Stock, the Company shall promptly give written notice
of such request to all registered holders of Stock. Any holder of Stock
desiring to have any of its Stock included in such registration or qualification
shall, within 20 days after its receipt of such notice from the Company, notify
the Company of the number of shares of Stock which it desires to have so
included and the manner in which it proposes to dispose of such Stock. The
Company shall, as expeditiously as possible, endeavor in good faith to effect
any registration or qualification, to give any notification, to obtain any
governmental approval and to effect listing with any securities exchange on
which the Stock of the Company is then listed, which may be required to permit
each holder of Stock who has given the Company a timely request or notice
pursuant to this Section 3.3 to dispose of the Stock referred to in such request
or notice in the manner specified therein. The Company's obligations pursuant
to this Section 3.3 to effect registrations under the 1933 Act shall be limited
to two such registrations.
3.4 Piggy-Back Registration Rights. If the Company at any time, during
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the period commencing with and including the effective date of the Company's
first offering of Common Stock or securities convertible into Common Stock
pursuant to a registration statement under the 1933 Act, and ending ten years
after such effective date, proposes to register, under the 1933 Act, or qualify
any of its Common Stock or securities convertible into Common Stock, other than
registrations solely for the purpose of any plan for the acquisition of such
shares by employees of the Company or registrations relating to a merger,
acquisition or other transaction of the type described in Rule 145 or any
comparable rule, on Form S-4 or any similar form (collectively "Excluded
Registrations"), it will each such time give written notice to all registered
holders of Stock of its intention to do so. Any holder of Stock desiring to
have any of its Stock included in such registration or qualification shall,
within 20 days after its receipt of such notice from the Company, notify the
Company of the number of shares of Stock which it desires to have so included
and the manner in which it proposes to dispose of such Stock. The Company will,
at its sole expense, use its best efforts to cause all such Stock, the holders
of which shall have requested the registration or qualification thereof, to be
registered or qualified to the extent requisite to permit the sale or other
disposition thereof in the manner described by such holder; provided, however,
that if in connection with any offering by the Company of Common Stock or
securities convertible into Common Stock pursuant to a registration under the
1933 Act (which is not an Excluded Registration), the managing underwriter shall
limit or eliminate the number of previously issued shares of the Company's
securities which may be included in any such registration statement because, in
its judgment, such action is necessary to
effect an orderly public distribution, and (except as set out in the next
proviso) such limitation is imposed with respect to the Stock held by each
holder requesting inclusion pursuant to this Section 3.4 pro rata based upon the
respective amounts of Stock held by each such holder, and no outstanding
securities are included other than pursuant to such a right, then the Company
shall be obligated to include in such registration statement only such limited
portion of the Stock which it has been requested hereunder to include; provided
further that, notwithstanding the above, with respect to any such offering by
the Company on or before the third anniversary of the date hereof, New Shares
(as defined below) shall not be excluded from any such offering to the extent
the number of New Shares which the holders thereof have requested to have
registered do not exceed 50% of the number of previously issued shares of the
Company's securities which may be so included in any such registration (such
number of the New Shares to be allocated among the holders of New Shares pro
rata based upon the number of New Shares held by each holder) and the remaining
shares to be so registered shall be allocated among the holders of Stock
requesting inclusion pursuant to this Section 3.4 pro rata based upon the
respective amounts of Stock (excluding New Shares to be registered pursuant to
the previous clause) held by each such holder. "New Shares" means Class D
Preferred Stock and Class E Preferred Stock issued pursuant to the Class D and
Class E Purchase Agreement, and any Common Stock issued on conversion thereof or
upon conversion of any Common Stock issued upon conversion of such Class D
Preferred Stock or Class E Preferred Stock or as a dividend or distribution
thereon.
In the event that the Company in any registration under this Section 3.4
offers the holders of Stock the opportunity to sell such of the shares of Stock
which such holders propose to register to underwriters on a "firm commitment"
basis (as opposed to a "best efforts" basis), the holders shall, as a condition
to their participating in such registration, accept such offer to sell such of
the shares of Stock to such underwriters if the manager of the underwriters so
requires and shall enter into an agreement with such underwriter containing
conventional representations, warranties and indemnity provisions (provided that
such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of the Stockholders greater than the
obligations of the Stockholders pursuant to Section 3.8), or, in the
alternative, agree not to sell such of the shares of Stock pursuant to such
registration within such reasonable period (not exceeding 120 days) as may be
specified by the manager of the underwriters to enable the underwriters to
complete their distributions and establish a satisfactory trading market for the
Company's Class A Common Stock. The holders of Stock shall comply with such
other reasonable requirements as may be imposed by the manager of the
underwriters to effect an orderly distribution of shares.
Should any holder of Stock decide not to have any shares of such Stock of
the Company then held by it included in such registration under this Section 3.4
or if some or all of its shares of Stock are excluded from registration as
provided herein, such holder agrees, upon the request of the manager of the
underwriters, not to sell any of such Stock within such reasonable period (not
exceeding 120 days) as may be specified by the manager of the underwriters to
enable the underwriters to complete their distributions and establish a
satisfactory trading market for the Company's Class A Common Stock.
3.5 Registration on Form S-3. Following the first offering of Class A
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Common Stock by the Company pursuant to a registration under the 1933 Act, the
Company shall use its
best efforts to meet, as soon as possible, the eligibility requirements for a
secondary distribution of its Class A Common Stock under the 1933 Act on Form S-
3 (or any similar form promulgated by the Commission). To that end, the Company
shall register (whether or not required by law to do so) its Class A Common
Stock under the 1934 Act no later than 30 days prior to the end of the Company's
fiscal year following the effective date of the first registration of any
securities of the Company under the 0000 Xxx. If the effective date of the
public offering is less than 30 days prior to the end of the Company's fiscal
year, the registration under the 1934 Act shall occur prior to the end of such
fiscal year. After the Company is eligible for the registration of its Class A
Common Stock under the 1933 Act on Form S-3 (or similar form), the Company will,
upon written request of any holder or holders of shares of Stock having an
aggregate market value of not less than $1,000,000 and constituting greater than
4% of the outstanding shares of Stock (excluding, however, for purposes of
calculation of such percentage, any shares of Common Stock issued upon the
exercise of any 1984 Options, 1985 Options, 1987 Options, 1988 Options or 1988 E
Options) of the Company to register or qualify such Stock pursuant to this
Section 3.5, promptly give written notice of such request to all registered
holders of Stock, any holder of Stock desiring to have any of its Stock included
in such registration or qualification shall, within 20 days after its receipt of
such notice from the Company, notify the Company of the number of shares of
Stock which it desires to have so included and the manner in which it proposes
to dispose of such Stock. The Company shall, as expeditiously as possible,
endeavor in good faith to effect a registration under the 1933 Act on Form S-3
(or similar form) of all Stock referred to in a request or notice timely given
to the Company pursuant to this Section 3.5, and to effect any registration or
qualification of such Stock under any state law, and any listing of such Stock
with any securities exchange on which the Class A Common Stock of the Company is
then listed, which may be required to permit the sale or disposition of such
Stock in the manner specified in such request or notices. The Company shall not
be required to cause a registration statement to become effective pursuant to
this Section 3.5 prior to 90 days following the effective date of the most
recent registration by the Company under the 1933 Act, or more than twice during
any year.
3.6 Payment of Expenses. The Company shall bear the expense (excluding
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underwriting commissions, dealers' fees, brokers' fees and concessions
applicable to Stock) of two registrations pursuant to Section 3.3, and all
registrations pursuant to Sections 3.4 and 3.5, including all reasonable
expenses of the holders of Stock and fees and disbursements of their counsel,
provided that the Company shall be obligated hereunder to pay fees and
disbursements of counsel only to a single law firm representing the holders of
Stock. The Company shall not be required to undertake any registration in
addition to those for which it is to bear the expenses unless and until the
Company shall have received assurances satisfactory to it that the holders of
Stock to be registered will bear all expenses thereof (including fees and
disbursements of counsel).
3.7 Registrations to be Maintained; Only Class A Common Stock to be
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Registered. The Company shall keep effective and maintain any registration,
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qualification, notification or approval specified in Sections 3.3 or 3.4 for
such period not exceeding 120 days, and in Section 3.5 for such period not
exceeding 180 days, as may be necessary for the holders of Stock to dispose
thereof, and from time to time shall amend or supplement the prospectus used in
connection therewith to the extent necessary in order to comply with applicable
law. The
Company shall not be required pursuant to any provision of this Article III to
register or qualify any securities other than the Class A Common Stock of the
Company, and the Company may require as a condition of any such registration or
qualification that any Stock to be included in such registration or
qualification other than Class A Common Stock be converted to Class A Common
Stock no later than the effective date of any registration or qualification
effected pursuant to this Article III.
3.8 Indemnification. The Company hereby agrees to indemnify each holder
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of Stock and each person, if any, who controls any such holder within the
meaning of applicable federal and state securities laws (the "Applicable
Securities Laws") against all losses, claims, damages, liabilities and expenses
(under the Applicable Securities Laws or common law or otherwise) caused by any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein complete or not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by any untrue statement or
omission contained in information furnished in writing to the Company by such
holder or by any underwriter through which any offering is made pursuant to any
registration statement provided for under this Article III, expressly for use
therein. If the offering pursuant to any registration statement provided for
under this Article III is made through underwriters, the Company agrees to enter
into an underwriting agreement in customary form with such underwriters and to
indemnify such underwriters and each person who controls such underwriters
within the meaning of the Applicable Securities Laws to the same extent as
hereinabove provided with respect to the indemnification of the holders of
Stock, provided that such underwriters shall to the same extent indemnify the
Company and each holder of Stock included in such offering in connection with
information furnished by such underwriters expressly for use in the related
registration statement. In connection with any registration statement in which
a holder of Stock is participating, each such holder will furnish to the Company
in writing such information as shall reasonably be requested by the Company for
use in any such registration statement or prospectus and will indemnify the
Company, its directors and officers, each person, if any, who controls the
Company within the meaning of the Applicable Securities Laws, such underwriters
and each person who controls such underwriters within the meaning of the
Applicable Securities Laws, against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus and necessary to make the
statements therein complete or not misleading, but only to the extent that such
untrue statement or omission is contained in information so furnished in writing
by such holder expressly for use therein; provided, that the indemnification by
any Stockholder under this Section 3.8 shall be limited to the amount of the
proceeds to the Stockholder from the public offering pursuant to such
registration statement; provided further that the indemnification and
contribution obligations of the Stockholders contained in any underwriting
agreement shall be no greater than those contained in this Section 3.8.
3.9 Rule 144 Requirements. At all times when the Company is subject to
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the reporting requirements of either Section 13 or Section 15(d) of the 1934
Act, it will file with the
Commission such information as the Commission may require under either of said
Sections, and shall take all action as may be required as a condition to the
availability of Rule 144 under the 1933 Act (or any successor exemptive rule
hereinafter in effect) for sales of the Stock. The Company shall furnish to any
holder of the Stock, upon request, a written statement executed by the Company
as to the steps it has taken to comply with the current public information
requirement of Rule 144.
3.10 Action Under State Laws. The Company shall use its best efforts to
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register or qualify the securities covered by a registration statement which
includes Stock under the securities or blue sky laws of such jurisdictions as
each selling holder of Stock shall reasonably request, and do any and all other
acts and things as may be necessary or advisable to enable such holder to
consummate the disposition of the securities in such jurisdiction, but in no
event shall the provisions of this Article III be deemed to require the Company
to register or qualify as a foreign corporation or as a broker or dealer or to
subject itself generally to service of process in any jurisdiction.
ARTICLE IV. OPTIONS.
4.1 Future Grant of Options.
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(a) If, while there are any shares of Class D Preferred Stock
outstanding, the Company shall at any time propose to issue any additional
shares ("New Shares") of Common Stock at a price per share ("New Price") less
than $9.00 per share (as adjusted to reflect equitably any subdivision or
combination of shares or the paying of a stock dividend or any similar
adjustment or recapitalization involving the Common Stock) (such price per
share, as so adjusted, being referred to herein as the "Applicable Conversion
Value"), as then in effect, then each Stockholder then holding shares of Class D
Preferred Stock (or affiliate thereof) who purchases any of the New Shares (the
"Participating Purchaser") shall receive an option exercisable upon the closing
of the sale of the New Shares to require the Company to sell to such
Participating Purchaser a number of shares of Class A Common Stock of the
Company at an exercise price of $.01 per share, which number of shares shall
equal the number of New Shares issued to such Participating Purchaser less the
number of New Shares which the net aggregate consideration received by the
Company for the New Shares purchased by such Participating Purchaser would
purchase at the Applicable Conversion Value of the Class D Preferred Stock held
by such Participating Purchaser as in effect immediately prior to the issuance
of the New Shares; provided, however, that, if the cumulative purchase price
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paid by any Participating Purchaser for all New Shares purchased by such
Participating Purchaser shall exceed the product obtained by multiplying the
number of shares of Class D Preferred Stock held by such Participating Purchaser
by $9.00, then such Purchaser shall have no rights pursuant to this Article IX
with respect to such excess; and provided, further, that if any Stockholder is
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not offered the option to purchase New Shares in a number proportionate, as
compared to the total number of New Shares being offered, to the portion of the
aggregate number of shares of Class D Preferred Stock and Class E Preferred
Stock being acquired by such Stockholder pursuant to the Convertible
Subordinated Demand Notes described in Section 1.8(a), the Reorganization
Agreement and the Class D and Class E Preferred Stock Purchase Agreement dated
as of the date hereof among the Company and certain investors, then for purpose
of this Article IV, such
Stockholder shall be deemed to be a Participating Purchaser and to have
purchased such number of New Shares as is so proportionate, irrespective of the
number of New Shares actually purchased by such Stockholder.
(b) The provisions of this Article IV shall terminate on August 31,
1990.
(c) The issuance of Class D Preferred Stock pursuant to the
Convertible Subordinated Demand Notes (described in Section 1.10(a) hereof)
and/or the Reorganization Agreement, the adjustments pursuant to subparagraph
(i)(e) or (ii)(e) of Paragraph D of Article IV of the Company's Certificate of
Incorporation, the issuance of any shares of Common Stock upon exercise of the
warrants issued pursuant to a certain Note and Warrant Purchase Agreement dated
as of October 16, 1987, among the Company and certain investors, the issuance of
Class D Preferred Stock on conversion of the Notes, the issuance of Merger
Common Stock by the Company, the issuance of Common Stock upon the conversion of
any Class A Preferred Stock, Class B Preferred Stock, Class C Preferred Stock,
Class D Preferred Stock or Class E Preferred Stock, the issuance and exercise of
any options under any Stock Plan of the Company which has been approved by
stockholders of the Company within one year of adoption, the 1984 Options, the
1985 Options, the 1987 Options, the 1988 Options and the 1988 E Options and the
issuance of any shares of any class of Common Stock in exchange for a like
number of shares of any other class of Common Stock shall not be deemed an
issuance of additional shares of Common Stock and shall have no effect on the
options arising under this Article IV.
(d) For the purposes of Section 4.1(a) above and except as provided
in Section 4.1(c) above, the issuance of any warrants, options or other
subscription or purchase rights with respect to shares of Common Stock and the
issuance of any securities (other than Common Stock) convertible into shares of
Common Stock (or the issuance of any warrants, options or any rights with
respect to such convertible securities) shall be deemed an issuance at such time
of such Common Stock if the Net Consideration Per Share which may be received by
the Company for such Common Stock (as hereinafter determined) shall be less than
the Applicable Conversion Value at the time of such issuance and, except as
hereinafter provided, an option shall arise upon each such issuance in the
manner provided in paragraph (a) of this Section 4.1; provided, however, that
-------- -------
any option arising under this Section 4.1 with respect to warrants, options,
subscription or purchase rights or convertible securities shall remain
outstanding so long as such warrants, options, subscription or purchase rights
or convertible securities are outstanding, and shall become exercisable only
upon and to the extent of, the exercise or conversion of such warrants, options,
subscription or purchase rights or convertible securities. No further option
shall arise under this Section 4.1 upon the issuance of any shares of Common
Stock which are issued pursuant to the exercise of any warrants, options or
other subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities if any option shall
previously have arisen upon the issuance of any such warrants, options or other
rights or upon the issuance of any convertible securities (or upon the issuance
of any warrant, options or any rights therefor) as above provided. Any option
arising with respect to this paragraph (d) which relates to warrants, options or
other subscription or purchase rights or convertible securities with respect to
shares of Common Stock shall be terminated if, as, and when such warrants,
options or other subscription or purchase rights or convertible securities
expire or are cancelled or redeemed without being exercised. For purposes of
this paragraph (d), the Net Consideration Per Share received by the Company
shall be determined as follows:
(A) "Net Consideration Per Share" shall mean the amount equal to
the total amount of consideration, if any, received by the Company for
the issuance of such warrants, options, subscriptions, or other purchase
rights or convertible securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that
would be issued if all such warrants, options, subscriptions, or other
purchase rights or convertible securities were exercise or converted.
(B) The Net Consideration Per Share received by the Company
shall be determined in each instance as of the date of issuance of
warrants, options, subscriptions or other purchase rights, or convertible
securities without giving effect to any possible future price adjustments
or rate adjustment which may be applicable with respect to such warrants,
options, subscriptions or other purchase rights or convertible
securities. The occurrence of such a price adjustment or rate adjustment
shall be deemed to be the issuance of a new security subject to the
provisions of this Article IV.
4.2 Exercise of Option. All options arising under this Article IV shall
------------------
be exercisable by delivery of written notice to the Company, which notice shall
specify the number of shares of Common Stock that shall be sold by the Company.
The closing of any purchase and sale pursuant to this provision shall be held at
the same time and place as the closing of the sale of the New Shares except
that, with respect to options arising under this Article IV by reason of the
issuance of any warrants, options or other subscription or purchase rights with
respect to shares of Common Stock and the issuance of any securities convertible
into shares of Common Stock (or the issuance of any warrants, options or any
rights with respect to such convertible securities) the closing shall be held at
the same time and place as the closing of the exercise or conversion of such
warrants, options, subscription or purchase rights or convertible securities, as
described in Section 4.1(d), and the purchase price shall be paid by delivery at
such closing of a check in the full amount of such purchase price.
4.3 Reservation of Shares. The Company shall at all times reserve and
---------------------
keep available out of its authorized but unissued shares of Class A Common
Stock, solely for the purpose of effecting the exercise of the options arising
under Section 4.1, such number of shares of Class A Common Stock as shall from
time to time be sufficient to effect the exercise of all outstanding options
arising under Section 4.1, and if at any time the number of authorized but
unissued shares of Class A Common Stock shall not be sufficient to effect the
exercise of all then outstanding options arising under Section 4.1, the Company
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Class A Common Stock
to such number of shares as shall be sufficient for such purpose.
4.4 Notice of Option. In each case of an option arising under Section
----------------
4.1, the Company will furnish each Stockholder receiving such an option a
certificate showing such option, and stating in detail the facts upon which such
option is based.
ARTICLE V. MISCELLANEOUS.
5.1 Notices. All notices to a party hereunder shall be deemed to have
-------
been adequately given if delivered in person or mailed, certified mail, return
receipt requested, to such party at its address set forth below (or such other
address as it may from time to time designate in writing to the other parties
hereto).
The Company: Adra Systems, Inc.
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Xxxxx, Xxxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
The Stockholders: To their respective addresses
as shown on Exhibit A hereto
With copies to: Xxxx X. Xxxxx, Esq.
Ropes & Xxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxxx X. Xxxxxxxx, Esq.
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
H. Xxxxxxx Xxxx, Esq.
Xxxxx, Xxxx & Xxxxx
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
And to: Xxxxxx X. Xxxxxxx, Esq.
Proskauer, Rose, Xxxxx & Xxxxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
5.2 No Waiver; Amendments. No failure to exercise and no delay in
---------------------
exercising, on the part of any Stockholder, any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law. Any
term, covenant, agreement or condition of this Agreement may be amended and only
by a writing signed by the Company and by Stockholders then holding a majority
of the aggregate outstanding shares of Class A Preferred Stock, Common Stock
issued upon conversion of Class A Preferred Stock, Class B Preferred Stock,
Common Stock issued upon conversion of Class B Preferred Stock, Class C
Preferred Stock, Common Stock issued upon conversion of Class C Preferred Stock,
Class D Preferred Stock, Common Stock issued upon conversion of Class D
Preferred Stock, Class E Preferred Stock, Common Stock issued upon conversion of
Class E Preferred Stock, the Merger Common Stock and any Common Stock issued
upon conversion of any Common Stock described herein, all voting together as a
single class; provided, that amendment to Article IV hereof shall also require a
writing signed by a majority of the outstanding shares of Class D Preferred
Stock. For purposes of this Section 5.2, each share of any class of preferred
stock shall be deemed equivalent to the number of shares of Common Stock into
which such share of preferred stock could then be converted. No amendment shall
be made to this Section 5.2 without the written consent of the holders of all of
the Stock at the time outstanding. No waiver of any term or provision hereof
shall be effective unless made in the same manner as an amendment of such term
or provision.
5.3 Survival of Agreements, etc. All agreements, representations and
---------------------------
warranties contained herein or made in writing by or on behalf of the Company or
the Stockholders in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Agreement, the closing contemplated
under the Reorganization Agreement and any investigation at any time made by or
on behalf of any Stockholder.
5.4 Construction. This Agreement shall be governed by and construed in
------------
accordance with the laws of The Commonwealth of Massachusetts. The description
headings of the several sections hereof are for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
5.5 Binding Effect and Benefits. This Agreement shall be binding upon and
---------------------------
shall inure to the benefit of the parties and their respective heirs, successors
and assigns, including assignees of the Stock (other than persons acquiring
shares of Stock (i) in an underwritten public offering or (ii) in a transaction
pursuant to Rule 144 under the 1933 Act after the Company's initial underwritten
public offering). It is expressly contemplated that, without limiting the
general right of any Stockholder to assign its rights herein, all of the rights
and obligations of a holder of Stock set forth in Article III hereof shall
devolve upon any subsequent holder of Stock originally issued to a Stockholder
without specific assignment and assumption thereof. The parties hereto
understand and agree that DSV Partners III and DSV Partners IV are limited
partnerships formed under the laws of the State of New Jersey, that the limited
partners of neither DSV Partners III nor DSV Partners IV will be liable for any
liabilities of either DSV Partners III or DSV Partners IV, as the case may be,
nor will they be required to perform any of the obligations of either DSV
Partners III or DSV Partners IV, as the case may be, pursuant to this Agreement
and that neither the Company, nor the shareholders or officers of the Company
will seek to enforce such liabilities and/or obligations or otherwise seek
relief with respect thereto against such limited partners.
5.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original.
5.7 Severability of Provisions. Any provision of this Agreement which is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
[The remainder of this page is intentionally left blank].
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
ADRA SYSTEMS, INC. STOCKHOLDERS:
[CORPORATE SEAL]
By: /s/ Authorized Signatory
-------------------------
Title: President
XXXXXX CAPITAL CORPORATION
By: X. X.XXXXXX & CO.
INCORPORATED as agent
for Xxxxxx Capital
Corporation
By: /s/ Authorized Signatory
------------------------
XXXX XXXXXXX VENTURE CAPITAL
FUND LIMITED PARTNERSHIP
By: Its General Partner,
Xxxx Xxxxxxx Venture Capital
Management, Inc.
By: /s/ Authorized Signatory
------------------------
EVERGREEN I LIMITED PARTNERSHIP
By its general partner,
Back Bay Partners L.P.
By one of its general partners,
Xxxx Xxxxxxx Venture Capital
Management Inc.
By /s/ Authorized Signatory
------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
XXXXXXX FAMILY GROWTH PORTFOLIO
By: /s/ Authorized Signatory
-----------------------------
BERKSHIRE PARTNERS II, L.P.
By: /s/ Authorized Signatory
-----------------------------
Title: Managing Gen. Partner
XXXXXX, XXXXXXX FUND, L.P.
By its general partner,
Xxxxxx, Holland Partners
By: /s/ Authorized Signatory By: /s/ Xxxxx X. Xxxxxx
-------------------------------- -----------------------------
Title: Title: MGP
THE XXXXXX XXXXX FUND
By: /s/ Authorized Signatory
-----------------------------
Title: General Partner
AMERICAN RESEARCH &
DEVELOPMENT I, L.P.
By its general partner
ARD Partners I, L.P.
By: /s/ Authorized Signatory
-----------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
NEW COURT PARTNERS
By its managing partner,
OneRock Associates
By: /s/ Authorized Signatory
----------------------------
Title
ARROW CAPITAL, N.V.
By: /s/ Authorized Signatory
----------------------------
Attorney-in Fact under P/O/A
dated 2/1/88
ARROW PARTNERS C.V.
By: /s/ Authorized Signatory
----------------------------
Attorney-in Fact under P/O/A
dated 2/1/88
ROTHSCHILD INC., as Agent
By: /s/ Xxxxx X. X'Xxxxx
----------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
VENTURE FOUNDERS 1983
LIMITED PARTNERSHIP
By its general partner,
Venture Management
Limited Partnership
By: /s/ Authorized Signatory
----------------------------
Title:
VENTURE FOUNDERS CAPITAL
LIMITED PARTNERSHIP
By its general partner,
Venture Founders Partners
Limited Partnership
By: /s/ Authorized Signatory
----------------------------
Title:
OXFORD VENTURE FUND II
LIMITED PARTNERSHIP
By its general partner
Oxford Partners II
By: /s/ Authorized Signatory
----------------------------
Title:
OXFORD VENTURE FUND III,
LIMITED PARTNERSHIP
By its general partner,
Oxford Partners III,
Limited Partnership
By: /s/ Authorized Signatory
----------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
DSV PARTNERS III L.P.
By: /s/ Authorized Signatory
------------------------
Title: General Partner
DSV PARTNERS IV L.P.
By: Authorized Signatory
------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
/s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
--------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxx, Jr.
--------------------------
Xxxxxx Xxxxxxx, Jr.
Merger Stockholders:
A.T. VENTURE INVESTMENTS, a division of
Ameritrust Corporation
By
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Executive Vice President
ACCEL CAPITAL L.P.
By
By: /s/ Authorized Signatory
---------------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
ACCEL CAPITAL (INTERNATIONAL) L.P.
By
/s/ Authorized Signatory
-----------------------------
Title:
/s/ Xxxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxxx X. Xxxxx
ASEA-Harvest Partners I
By
By: /s/ Authorized Signatory
------------------------
Title:
BNP VENTURE CAPITAL CORPORATION
By
By: /s/ Authorized Signatory
------------------------
Title: President
XXXXXX CAPITAL CORP.
By
By: /s/ Authorized Signatory
------------------------
Title:
/s/ Xxxxxxxx Xxxx
----------------------------------
Xxxxxxxx Xxxx
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
XXXXXXX X. XXXXXXXXX PARTNERS
By
By: /s/ Authorized Signatory
------------------------
Title:
ELRON TECHNOLOGIES, INC.
By: /s/ Authorized Signatory
-----------------------------
Title: President
EUROPEAN DEVELOPMENT
CAPITAL CORP. N.V.
By
By: /s/ Authorized Signatory
------------------------
Title:
FAIRFIELD VENTURE CAPITAL
FUND L.P.
By
By: /s/ Authorized Signatory
------------------------
Title:
IAI VENTURE PARTNERS
By
By: /s/ Authorized Signatory
------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
XXXXXXXXXX BRIDGE FUND II, L.P.
By
By: /s/ Authorized Signatory
------------------------
Title:
XXXXXXXXXX BRIDGE INVESTMENTS
LIMITED
By
By: /s/ Authorized Signatory
------------------------
Title:
XXXXXXXXXX PRIVATE INVESTMENTS
PARTNERSHIP
By
By: /s/ Authorized Signatory
------------------------
Title:
NORDIC INVESTORS, LTD.
By
By: /s/ Authorized Signatory
------------------------
Title:
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
NORO CAPITAL LTD.
By
By: /s/ Authorized Signatory
------------------------
Title:
NORO VENTURE PARTNERS IV
By
By: /s/ Authorized Signatory
------------------------
Title:
IAI STOCK FUND, INC.
By
By: /s/ Authorized Signatory
------------------------
Title:
OVERSEAS VENTURE CAPITAL, LTD.
By
By: /s/ Authorized Signatory
------------------------
Title:
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
/s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
PROCORDIA HARVEST PARTNERS I
By
By: /s/ Authorized Signatory
------------------------
Title:
/s/ Xxxx X. Xxxx
----------------------------------
Xxxx X. Xxxx
767 VCI VENTURES NV
By
By: /s/ Authorized Signatory
------------------------
Title:
XXXXXX FAMILY PARTNERSHIP
By
By: /s/ Authorized Signatory
------------------------
Title:
/s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
[Registration Rights, Restricted Stock and
Stock Option Agreement Signature Pages]
VENAD II
By Xxxxx & Company
By: /s/ Authorized Signatory
------------------------
Title:
VENAD III
By
By: /s/ Authorized Signatory
------------------------
Title:
VENAD IV
By
By: /s/ Authorized Signatory
------------------------
Title:
VENAD IV-A
By
By: /s/ Authorized Signatory
------------------------
Title:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxxx
----------------------------------
Xxxxxx Xxxxx
EXHIBIT A
---------
Stockholders Names and Addresses
