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EXHIBIT 10.28
NOETIX CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of January 30,
2001, by and among Noetix Corporation, a Washington corporation (the "Company"),
Aris Corporation, a Washington corporation ("Aris"), and each of the persons and
entities who have purchased shares of the Company's Series A Preferred Stock
(individually, a "Purchaser," and collectively, the "Purchasers") pursuant to
the Series A Preferred Stock Purchase Agreement of even date herewith by and
among the Company and the Purchasers (the "Purchase Agreement").
RECITALS
WHEREAS, the Company and the Purchasers have entered into the Purchase
Agreement pursuant to which the Company desires to sell to the Purchasers and
the Purchasers desire to purchase from the Company shares of the Company's
Series A Preferred.
WHEREAS, a condition to the obligations of the Company and of the
Purchasers under the Purchase Agreement is that the Company and the Purchasers
enter into this Agreement in order to provide the Purchasers with certain rights
to register shares of the Company's Common Stock issuable upon conversion of the
Series A Preferred held by the Purchasers.
WHEREAS, the Company and the Purchasers each desire to induce the
Purchasers to purchase shares of Series A Preferred pursuant to the Purchase
Agreement by agreeing to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1
Registration Rights
1.1 Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"CHANGE OF CONTROL" shall mean the occurrence of either of the
following events (i) the sale of all or substantially all of the assets of the
Company or (ii) an acquisition of the Company by another corporation or entity
by consolidation, merger, or other reorganization in which the holders of the
Company's outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing less than fifty
percent (50%) of the voting power of the corporation, the surviving entity, or
the entity that controls such surviving entity.
"COMMISSION" shall mean the Securities and Exchange Commission or
any successor agency.
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any successor law thereto.
"FORM S-3" shall mean such form under the Securities Act as in
effect on the date hereof or any successor form under the Securities Act that
permits significant incorporation by reference of the Company's subsequent
public filings under the Exchange Act.
"HOLDER" shall mean each Purchaser, Aris, and any assignee or
transferee who, pursuant to Section 1.11 below, is entitled to registration
rights hereunder.
"INITIAL PUBLIC OFFERING" shall mean a firm commitment underwritten
initial public offering by the Company of its shares of Common Stock pursuant to
a registration statement filed with and declared effective by the Commission
under the Securities Act.
"QUALIFIED IPO" shall mean an Initial Public Offering with aggregate
proceeds (prior to deduction of underwriter fees and issuance expenses) of at
least $30,000,000 and a public offering price per share of at least four dollars
and sixty-five cents ($4.65), three times (3x) the original purchase price of
Series A Preferred, appropriately adjusted for any stock split, stock dividend,
combination, recapitalization, and the like.
"PURCHASER" shall mean each person or entity who has acquired shares
of Series A Preferred and who is a signatory to this Agreement, or who holds
Registrable Securities and who is a signatory pursuant to Section 1.12 hereof.
"REGISTRABLE SECURITIES" shall mean (i) shares of the Company's
Common Stock issued or issuable upon the conversion of the Series A Preferred,
(ii) shares of the Company's Common Stock issued or issuable as a dividend or
other distribution with respect to or in exchange for or in replacement of the
Series A Preferred, or of Common Stock issued upon conversion of the Series A
Preferred, and (iii) shares of the Company's Common Stock issued to Aris;
provided, however, that Registrable Securities shall not include (i) shares of
Common Stock or other securities that have been sold to or though a broker or
dealer or underwriter in a public distribution or public securities transaction,
(ii) shares of Common Stock or other securities sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
under Section 4(1) thereof so that all transfer restrictions and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale, (iii) Registrable Securities sold by a person in a transaction in which
rights under this Agreement are not assigned, or (iv) securities which would
otherwise be Registrable Securities held by a Holder who is then permitted to
sell all of such securities within any three (3) month period pursuant to Rule
144.
The terms "REGISTER," "REGISTERED," AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 1.2, 1.3, and 1.4 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, reasonable fees
and disbursements of one counsel for holders of Registrable
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Securities (not to exceed $15,000), Blue Sky fees and expenses, and the expense
of any special . audits incident to or required by any such registration, but
excluding all Selling Expenses.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act
or any successor rule thereto.
"RULE 145" shall mean Rule 145 promulgated under the Securities Act
or any successor rule thereto.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any successor law thereto.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the securities registered by
the Holders and any fees of counsel to any Holder (not otherwise included within
the definition of "Registration Expenses").
"SERIES A PREFERRED" shall mean shares of the Company's Series A
Preferred Stock issued and sold by the Company pursuant to the Purchase
Agreement.
1.2 Registration.
(a) Request for Registration. If at any time after the first to
occur of (i) January 31, 2004, or (ii) the expiration of six (6) months
following the Initial Public Offering, the Company shall receive from any Holder
or group of Holders of Registrable Securities, representing not less than a
majority of the Registrable Securities then outstanding, a written request that
the Company effect any registration, qualification, or compliance with respect
to Registrable Securities such that the aggregate offering price to the public
would be at least $10,000,000, the Company will:
(A) promptly, but in any event within ten (10) days of receipt of
the written request, give written notice of the proposed registration,
qualification, or compliance to all other Holders; and
(B) as soon as practicable, use best efforts to effect within one
hundred twenty (120) days of the receipt of such request such registration,
qualification, or compliance (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable Blue Sky or other state securities laws, and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to take any action to
effect any such registration, qualification, or compliance pursuant to this
Section 1.2:
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(A) in any particular jurisdiction in which the Company would be
. required to execute a general consent to service of process in effecting such
registration, qualification, or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(B) prior to ninety (90) days immediately following the effective
date of any registration statement pertaining to securities of the Company
(other than a registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan);
(C) if the Company delivers to the Holders, within thirty (30)
days of any request for registration pursuant to this Section 1.2, notice of its
intent to file a registration statement for an Initial Public Offering within
one hundred twenty (120) days of such request;
(D) after the Company has effected two (2) such registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;
(E) if the Holders propose to dispose of Registrable Securities
that may be registered on Form S-3 pursuant to Section 1.4 hereof; or
(F) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 1.2, a certificate signed by the
Company's President or Chairman of the Board stating that the Board of Directors
of the Company has material nonpublic information regarding the Company and,
thus, it would be seriously detrimental to the Company and its shareholders for
such registration statement to be effected at such time, in which event the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days after receipt of the request of the Holders,
provided that such right to delay a request shall be exercised by the Company
not more than once in any twelve (12) month period.
Subject to the foregoing clauses, the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
any Holder or Holders.
(b) Underwriting. If the Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request, and the Company shall include
such information in its written notice to the other Holders. The right of any
Holder to registration pursuant to this Section shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company (subject to the reasonable approval of the Holders of a majority
of the Registrable Securities proposed by such Holders to be distributed through
such underwriting). Notwithstanding any other provision of this Section 1.2, if
the managing underwriter advises the Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then, subject
to the provisions of this Section 1.2(b), the Company shall so advise all
Holders and the number of
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shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated as follows: (i) the Company shall first exclude
Common Stock included in the registration statement that are not Registrable
Securities; and (ii) if necessary, the Company shall then exclude Registrable
Securities in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities requested by the Holders thereof to be included in the
registration statement.
If the managing underwriter has not limited the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account or for the account of others in such registration if the
underwriter so agrees and if the number of Registrable Securities that would
otherwise have been included in such registration and underwriting will not
thereby be limited.
If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the managing underwriter, and the other Holders. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration; provided, however, that if, by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 1.2.
1.3 Company Registration.
(a) Notice of Registration. If the Company shall determine to
register any of its securities, either for its own account or the account of
others, other than: (i) a registration relating to employee benefit plans; or
(ii) a registration on Form S-4, the Company will:
(A) promptly give to each Holder written notice thereof; and
(B) include in such registration (and any related
qualification under Blue Sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within thirty (30) days after receipt of such written notice
from the Company, by any Holder or Holders. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(b) Underwriting. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in the offering
exceeds the amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not jeopardize the success
of the offering.
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The securities so included shall be apportioned as follows: (i) the Company
shall first exclude . Common Stock that are not Registrable Securities; and (ii)
if necessary, the Company shall then exclude Registrable Securities in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities requested by the Holders thereof to be included in the registration
statement), but in no event shall the amount of Registrable Securities of the
selling Holders included in the offering be reduced below twenty percent (20%)
of the total amount of securities included in such offering, unless such
offering is the Qualified IPO, in which case all of the Registrable Securities
of the selling Holders may be excluded. If any Holder disapproves of the terms
of any such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10) business
days prior to the effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For purposes of the preceding sentence
concerning apportionment, for any selling shareholder that is a Holder of
Registrable Securities and that is a partnership or corporation, the partners,
retired partners, and shareholders of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "SELLING HOLDER,"
and any pro rata reduction with respect to such selling Holder shall be based
upon the aggregate amount of Registrable Securities owned by all such related
entities and individuals.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 1.5 hereof.
1.4 Registration on Form S-3.
(a) Request for Registration. The Company shall use its best efforts
to qualify for registration on Form S-3 and, to that end, shall comply with the
reporting requirements of the Exchange Act. After the Company has qualified for
the use of Form S-3, the Holders of Registrable Securities shall have the right
to request that the Company register Registrable Securities on Form S-3 or any
similar short-form registration statement (such requests shall be in writing and
shall state the number of shares of Registrable Securities to be disposed of and
the intended method of disposition of such shares by each such Holder), subject
to the following limitations:
(A) the Company shall not be obligated to cause a registration
pursuant to this Section 1.4 to become effective prior to ninety (90) days
following the effective date of a Company-initiated registration (other than a
registration with respect to which Registrable Securities could not be
registered pursuant to Section 1.3 hereof);
(B) the Company shall not be required to effect a registration
pursuant to this Section 1.4 unless the Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities having an
aggregate disposition price (before deduction of underwriting discounts and
expenses of sale) of at least $1,000,000;
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(C) the Company shall not be required to maintain and keep any
such . registration pursuant to this Section 1.4 effective for a period greater
than the shorter of (i) one hundred twenty (120) days or (ii) the period of time
until all of the Registrable Securities subject to such registration are
disposed; and
(D) if the Company shall furnish to the Holders a certificate
signed by the Chief Executive Officer or the Chairman of the Board of the
Company stating that the Board of Directors of the Company has material
non-public information regarding the Company and, thus, it would be seriously
detrimental to the Company and its shareholders for such Form S-3 Registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than one hundred twenty (120) days after receipt of the request of the Holder or
Holders under this Section 1.4; provided, however, that the Company shall not
utilize this right more than once in any twelve month period.
(b) Notice. The Company shall give notice to all Holders of the
receipt of a request for registration pursuant to this Section 1.4 and shall
provide a reasonable opportunity for all such other Holders to participate in
the registration. Subject to the foregoing, the Company will use its best
efforts to effect promptly the registration of all shares of Registrable
Securities on Form S-3 to the extent requested by the Holder or Holders thereof
for purposes of distribution.
(c) Underwriting. In the event of a request pursuant to this Section
1.4, the Company shall follow the procedures, and the rights and obligations of
the parties with respect to underwriting shall be subject to the provisions, set
forth in Section 1.2(b) above as if such Section applied to registrations on
Form S3.
1.5 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification, or compliance pursuant to
Sections 1.2, 1.3 or 1.4 shall be borne by the Company. All Selling Expenses
relating to securities registered by the Holders pursuant to either Sections
1.2, 1.3 or 1.4 shall be borne by the Holders of such securities pro rata on the
basis of the number of shares so registered.
1.6 Obligations of the Company. In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification, and compliance and as to the completion
thereof. Whenever required to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to one hundred twenty (120)
days or, if earlier, until the Holder or Holders have completed the distribution
related thereto.
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(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement for the period set forth in
paragraph (a) above.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter, or underwriters, of such offering.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. The Company will use its best efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing.
(g) Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, and if so requested by the
underwriters (i) an opinion, dated as of such date, of the counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters.
1.7 Termination of Registration Rights. The registration rights granted
pursuant to this Agreement shall terminate as to any Holder on the earlier to
occur of (i) such time as all of the Registrable Securities held by such Holder
may be sold within any three (3) month period pursuant to Rule 144; or (ii) five
(S) years following consummation of the Qualified IPO.
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1.8 Lock-up Agreement. In consideration for the Company agreeing to its
obligations under this Agreement, each Holder of Registrable Securities and each
transferee pursuant to Section 1.11 hereof agrees, in connection with the
Qualified IPO, upon request of the Company or the underwriters, not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any securities of the Company (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as the
Company or the underwriters may specify, provided that each officer and director
of the Company and each holder of at least five percent (5%) of the Company's
voting securities are similarly bound. Each Holder agrees that the Company may
instruct its transfer agent to place stop-transfer notations in its records to
enforce the provisions of this Section 1.8. Each Holder agrees to execute and
deliver such other agreements as may be reasonably requested by the Company or
the underwriter which are consistent with the foregoing or which are necessary
to give further effect thereto. In addition, if requested by the Company or the
underwriters, the Holder shall provide, within ten (10) days of such request,
such information as may be required by the Company or such representative in
connection with the completion of such initial public offering.
1.9 Indemnification.
(a) To the extent permitted by law, the Company will indemnify each
Holder, each of its officers, directors, and partners and such Holder's legal
counsel and independent accountants, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification, or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages, and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular, or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification, or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act or the
Exchange Act or securities act of any state or any rule or regulation
thereunder, and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
promptly reimburse each such Holder, each of its officers, directors, and
partners and such Holder's legal counsel and independent accountants, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating,
preparing, or defending any such claim, loss, damage, liability, or action; ;
provide however, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability, or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein; provided, further, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Holder, or any person
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controlling such Holder, from whom the person asserting any such losses, claims,
damages or . liabilities purchased shares in the offering, if a copy of the
prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Holder to such person, if required by law so to have been delivered by such
Holder, at or prior to the written confirmation of the sale of the shares to
such person, and if the prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
(b) Each Holder will, severally and not jointly, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification, or compliance is being effected, indemnify the
Company, each of its directors, officers, legal counsel, and independent
accountants, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, its officers, directors, and partners and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages, and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, legal counsel, independent
accountants, underwriters, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability. or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each such Holder hereunder shall be
limited to an amount equal to the proceeds, net of underwriting discounts and
commissions, to each such Holder of Registrable Securities sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section 1.9
(the "INDEMNIFIED PARTY") shall give notice to the party required to PROVIDE
INDEMNIFICATION (THE "INDEMNIFYING PARTY") PROMPTLY after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld) and the Indemnified Party may participate in such defense at such
party's expense; provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement, except to the extent, but only to the extent,
that the Indemnifying Party's ability to defend against such claim or litigation
is impaired as a result of such failure to give notice. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
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(d) If the indemnification provided for in this Section 1.9 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. In no event shall any contribution by a Holder under this
Section 1.9(d) exceed the proceeds, net of underwriting discounts and
commissions but not expenses, from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section
1.9 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
1.10 Information by Holder. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any Holder or Holders of Registrable
Securities included in any registration that such Holder or Holders furnish to
the Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request in
writing and as shall be required in connection with any registration,
qualification, or compliance referred to in this Agreement.
1.11 Transfer or Assignment of Registration Rights. The rights granted
hereunder to cause the Company to register securities may be assigned to (i) a
transferee or assignee who acquires at least five percent (5%) of the
Registrable Securities (appropriately adjusted for stock splits, stock
dividends, combinations, recapitalizations, and the like after the date hereof)
issued to a Purchaser pursuant to the Purchase Agreement; (ii) a transferee or
assignee who acquires all of a Holder's Registrable Securities; or (iii) any
shareholder, member, affiliate, constituent partner (including limited partner),
family member, or trust for the benefit of any Holder; provided, however, that
(i) written notice of such assignment is given to the Company; and (ii) any
proposed assignee or transferee of such right agrees in writing to be bound by
and subject to the terms and conditions of this Agreement, including, without
limitation, the provisions of Section 1.8; provided, further, that no such
transfer or assignment may be made to any proposed assignee or transferee who is
a competitor of the Company as determined in good faith by the Company's Board
of Directors.
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1.12 Limitations on Subsequent Registration Rights. From and after the
date of this . Agreement, the Company shall not enter into any agreement
granting any holder or prospective holder of any securities of the Company
registration rights with respect to such securities without the prior written
consent of holders of a majority of the Registrable Securities then outstanding
unless such new registration rights, including standoff obligations, are
subordinate to those registration rights granted to the Holders hereunder.
1.13 Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 or any similar or analogous rule promulgated
under the Securities Act, at all times after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public;
(b) File with the Commission, in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: (i) a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 and of the
Exchange Act (at any time after it has become subject to such reporting
requirements); (ii) a copy of the most recent annual or quarterly report of the
Company; and (iii) such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
it to sell any such securities without registration.
SECTION 2
Miscellaneous
2.1 Governing Law; Venue. This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State of
Washington, as applied to agreements entered into, and to be performed entirely
in such state, between residents of such state.
The parties hereto agree to submit to the jurisdiction of the federal
and state courts of the State of Washington with respect to the breach or
interpretation of this Agreement or the enforcement of any and all rights,
duties, liabilities, obligations, powers, and other relations between the
parties arising under this Agreement.
2.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
2.3 Notices, Etc. All notices and other communications required or
permitted hereunder, shall be in writing and shall be sent by facsimile,
personally delivered, mailed by registered or certified mail, postage prepaid,
return receipt requested, or otherwise delivered by a nationally-recognized
overnight courier, addressed (i) if to a Purchaser, at such Purchaser's
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facsimile number or address as set forth on the Schedule of Purchasers attached
as Exhibit A to . the Purchase Agreement, or at such other address or as such
Purchaser shall have furnished to the Company in writing; (ii) if to any other
Holder of any Registrable Securities, at such address as such Holder shall have
furnished the Company in writing, or, until any such Holder so furnishes an
address to the Company, then to and at the address of the last Holder of such
Registrable Securities who has so furnished an address or facsimile number to
the Company; or (iii) if to the Company, at the facsimile number or address of
its principal corporate offices addressed to the attention of the Corporate
Secretary. Any such notice or communication shall be deemed effectively given:
(i) upon personal delivery to the party to be notified; (ii) when sent by
confirmed facsimile if sent during normal business hours of the recipient (if
not, then on the next business day); (iii) three (3) business days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with verification of receipt.
2.4 Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any Holder of any Registrable Securities upon any
breach or default of the Company under this Agreement shall impair any such
right, power, or remedy of such Holder, nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent, or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing or as provided in this
Agreement. All remedies, either under this Agreement or by law or otherwise
afforded to any Holder, shall be cumulative and not alternative.
2.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
2.6 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
2.7 Amendment and Waiver. Any provision of this Agreement may be amended
or waived with the written consent of the Company and the holders of at least a
majority of the then outstanding shares of the Registrable Securities. In
addition, the Company may waive performance of any obligation owing to it, as to
some or all of the Holders of Registrable Securities, or agree to accept
alternatives to such performance, without obtaining the consent of any Holder of
Registrable Securities. In the event that an underwriting agreement is entered
into between the Company and any Holder, and such underwriting agreement
contains terms that conflict with this Agreement, as to any such Holder the
terms of such underwriting agreement shall govern.
-13-
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EXHIBIT 10.28
2.8 Rights of Holders. Each Holder of Registrable Securities shall
have the absolute right to exercise or refrain from exercising any right or
rights that such Holder may have by reason of this Agreement, including without
limitation, the right to consent to the waiver or modification of any
obligation under this Agreement, and such Holder shall not incur any liability
to any other Holder of any securities of the Company as a result of exercising
or refraining from exercising any such right or rights.
2.9 Termination of Entire Agreement Upon a Change of Control. This
Agreement shall terminate, and have no further force and effect, upon a Change
of Control.
2.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
2.11 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for the convenience of reference only and
are not to be considered in construing this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXHIBIT 10.28
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first above written.
"COMPANY" NOETIX CORPORATION
a Washington corporation
By: /s/ XXXX SONG
----------------------------
Name: Xxxx Song
--------------------------
Title: Chairman, President, CEO
-------------------------
"PURCHASER" _______________________________
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
"ARIS" ARIS CORPORATION
a Washington corporation
By: /s/ XXXXXXX X. XXXX
----------------------------
Name: Xxxxxxx X. Xxxx
--------------------------
Title: President & CEO
-------------------------
-15-
16
TERMINATION AND REPURCHASE AGREEMENT
THIS TERMINATION AND REPURCHASE AGREEMENT (the "Agreement") is made as
of January 31, 2001 by and among Noetix Corporation, a Washington corporation
("Noetix"), Xxxx X. Song ("Song") and Aris Corporation, a Washington corporation
("Aris").
WHEREAS, the parties wish to set forth their mutual understanding and
agreement concerning (i) the termination of that certain Shareholders' Agreement
(the "Shareholders' Agreement") made as of September 1, 2000, by and among the
parties hereto, and (ii) the repurchase by Noetix of that certain Common Stock
Purchase Warrant dated September 1, 2000 (the "Warrant") entitling Aris to
acquire up to 3,500,000 shares of Noetix common stock;
NOW THEREFORE, the parties agree to be bound by the following terms:
1. TERMINATION AND REPURCHASE
A. Shareholders' Agreement. Pursuant to Section 4.11 of the
Shareholders' Agreement, the parties hereto hereby terminate the Shareholders'
Agreement effective immediately upon delivery of the consideration set forth in
Section II, below; however, that Aris hereby waives its rights under Section 1
of the Shareholders' Agreement in with respect to the sale of Series A Preferred
Stock by Noetix; provided, further, that Aris hereby agrees to enter into the
Registration Rights Agreement substantially in the form attached hereto.
B. Warrant. Noetix hereby repurchases the Warrant from Aris, and all of
Axis' rights with respect thereto are hereby terminated upon the delivery of the
consideration set forth below.
II. CONSIDERATION. In consideration for the above termination and repurchase,
Noetix agrees to pay to Aris two million five hundred thousand dollars
($2,500,000) immediately upon the initial closing of Noetix's Series A Preferred
Stock financing. In addition, Noetix hereby agrees to grant Axis certain
registration rights pursuant to the terms of the Registration Rights Agreement
substantially in the form attached hereto.
III. SEVERABILITY. The parties agree that the provisions of this Agreement are
severable and divisible. In the event any portion of this Agreement is
determined to be illegal or unenforceable, the remaining provisions of this
Agreement shall remain in full force and effect.
IV. ENTIRE AGREEMENT. This Agreement, including the documents referenced herein,
is the entire agreement between the parties hereto with respect to the subject
matter hereof. The parties to this Agreement acknowledge that no promises,
representations, or warranties whatsoever, express or implied, not contained
herein concerning the subject matter hereof, have been made by any party to any
of the other parties to induce such other parties to execute this Agreement. The
parties hereto further acknowledge and warrant that they are not executing this
Agreement in reliance on any promise, representation or warranty not contained
herein, or under duress or coercion, whether economic or otherwise. The parties
hereto acknowledge that they have each been advised by competent legal counsel
as to the legal effect of this Agreement and understand the legal effect (a) of
executing and delivering this Agreement and (b) of the waiver and release of the
claims as set forth above.
V. NOTICES. Any and all notices required or permitted to be sent hereunder shall
be sent by certified mail, return receipt requested, registered mail or Federal
Express, as follows:
1
17
If to Noetix or Song: Xxxx X. Song
Noetix Corporation
0000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000-0000
If to Aris: Aris Corporation
0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
The parties shall notify each other of any changes of address for
purposes of this paragraph.
VI. WAIVER OF CONFLICT. Each party to this Agreement acknowledges that Van
Valkenberg Xxxxxx Law Group, P.L.L.C., counsel for Noetix, has in the past and
continues to perform legal services for Aris in matters unrelated to the
transactions described in this Agreement. Accordingly, each party to this
Agreement hereby (1) acknowledges that they have had an opportunity to ask for
information relevant to this disclosure; (2) acknowledges that Van Valkenberg
Xxxxxx Law Group, P.L.L.C. represented Noetix in the transactions contemplated
by this Agreement and has not represented any other party hereto in connection
with such transactions; and (3) gives its informed consent to Van Valkenberg
Xxxxxx Law Group, P.L.L.C.'s representation of Aris in such unrelated matters
and to Van Valkenberg Xxxxxx Law Group, P.L.L.C.'s representation of Noetix in
connection with this Agreement and the transactions contemplated hereby.
VII. CHOICE OF LAW. This Agreement and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
NOETIX CORPORATION,
a Washington corporation
By: /s/ XXXX X. SONG
---------------------------------
XXXX X. SONG
Chief Executive Officer
/s/ XXXX X. SONG
-------------------------------------
XXXX X. SONG
2
18
ARIS CORPORATION,
a Washington corporation
/s/ XXXXXXX XXXX,
-------------------------------------
Xxxxxxx Xxxx,
Chief Executive Officer
3
19
January 30, 2001
Noetix Corporation
Attn: Secretary
0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000-0000
Aris Corporation
Attn: Xxxxxxx Xxxx, CEO
0000 000" Xxxxxx XX
Xxxxxxxx, XX 00000-0000
Re: Termination of May 19, 2000 Letter Agreement
Dear Xxxxxxx:
Pursuant to Section 5.17 of the Series A Stock Purchase Agreement by and among
Noetix Corporation, Polaris Venture Partners, Sigma Investors, and others, and
concurrent with and subject to the closing of that preferred stock offering with
such investors, this letter shall serve as termination of that certain May 19,
2000 letter agreement by and among ARIS Corporation and Xxxx X. Song, a copy of
which is attached hereto as Exhibit A.
Sincerely,
/s/ XXXX X. SONG
----------------------------
Xxxx X. Song
ACKNOWLEDGED & ACCEPTED:
ARIS CORPORATION
/s/ XXXXXXX X. XXXX
----------------------------
Xxxxxxx Xxxx, CEO
NOETIX CORPORATION
/s/ XXXX X. SONG,
----------------------------
Xxxx X. Song, President
20
UNANIMOUS CONSENT OF DIRECTORS
IN LIEU OF MEETING
OF
NOETIX CORPORATION
Pursuant to RCW 23B.08.210 and RCW 23B.08.230, the undersigned being all
of the directors of Noetix Corporation, a Washington corporation (the
"Corporation"), acting without a meeting, DO HEREBY UNANIMOUSLY ADOPT the
following resolutions and DO HEREBY UNANIMOUSLY CONSENT to the taking of the
action therein set forth:
I.
RESOLVED: That in order to facilitate future financing of the of the
Corporation, the Board of Directors deems it in the best interest of the
Corporation and its shareholders to effectuate a 2-for-1 split of the
outstanding capital stock (the "Split"), to be effectuated immediately
following the filing of the Restated Articles (as defined below) with
the Secretary of State of the State of Washington.
FURTHER RESOLVED: That upon effectiveness of the Restated Articles, the
President of the Corporation is hereby authorized and directed to take
such steps necessary to effectuate the Split, including arrangements for
the exchange of certificates by the shareholders in the Corporation.
FURTHER RESOLVED: That, upon filing of the Restated Articles, to
effectuate the Split, the Board of Directors hereby approves the
issuance of sufficient shares of its Common Stock to the current holders
of Common Stock of the Corporation, and, upon receipt and cancellation
of the outstanding certificates (or receipt of a duly executed affidavit
of lost stock certificate as set forth in the transmittal letter), the
President and Secretary are hereby authorized and directed to issue such
persons such shares of the Corporation's Common Stock necessary to
effectuate the Split, and that the consideration received by the
Corporation for such shares is hereby deemed adequate and such shares
are fully paid and nonassessable.
II.
RESOLVED: That the Corporation hereby approves and adopts the Series A
Preferred Stock Purchase Agreement, including all exhibits and schedules
thereto (the "Purchase Agreement") substantially in the forms circulated
with this Consent, with such changes as the President of the
Corporation, on the advice of counsel, deems to be in best interest of
the Corporation, pursuant to which the Corporation may issue up to
11,129,032 (as measured post-Split) shares of its Series A Preferred
Stock at a price of $1.55 per share for aggregate consideration to the
Corporation of up to $17,250,000.00, and that the President of the
Corporation is hereby authorized and directed to execute and delivery
the Purchase Agreement, and each of the documents attached thereto to
which the Corporation is a party, in the name and on behalf of, the
Corporation.
FURTHER RESOLVED: That the Corporation hereby approves, and the
President is hereby authorized and directed to issue, common stock
warrants substantially in the form attached to the Purchase Agreement
(the "Warrants") which provide for the purchase, in aggregate, of
650,000 (as measured post-Split) shares of the Company's common stock,
for a per share exercise price of $0.385.
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FURTHER RESOLVED: That pursuant to the authority conferred upon the
board of directors of the Corporation by Section 2 of Article II of the
Corporation's Articles of Incorporation, the board of directors does
hereby provide for the designation of a series of preferred stock to be
named "Series A Preferred Stock," consisting of 11,130,000 (as measured
post-Split) shares, with the powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions
determined by the board of directors.
FURTHER RESOLVED: That the Articles of Incorporation are hereby amended
and restated substantially in the form of the Amended and Restated
Articles of Incorporation attached to the Purchase Agreement as Exhibit
A (the "Restated Articles") solely to effectuate the designation of the
Series A Preferred Stock, and the Restated Articles are hereby
confirmed, ratified, approved and adopted.
FURTHER RESOLVED: That the President of the Corporation is hereby
authorized and directed to execute and file, on behalf of the
Corporation, the Restated Articles with the Secretary of State of the
State of Washington.
FURTHER RESOLVED: That the Corporation hereby reserves an equal number
of shares of Common Stock for issuance upon the conversion of the Series
A Preferred Stock and the exercise of the Warrants, which number of
shares shall be adjusted from time to time as appropriate by the proper
officers of the Corporation so that, upon conversion of the Series A
Preferred Stock and the Warrants, a sufficient number of shares shall be
reserved for issuance as contemplated by the Restated Articles, the
Warrant and these resolutions.
FURTHER RESOLVED: That upon payment to the Corporation of the
consideration referenced in the Purchase Agreement, and the execution
and delivery of the documents referenced therein, the proper officers of
the Corporation are hereby authorized and directed to issue (i) the
proper number of shares to each purchaser, which shares shall be
considered fully paid and nonassessable shares issued by the
Corporation, and (ii) the Warrants.
FURTHER RESOLVED: That, effective immediately upon Closing (as defined
in the Agreement), Xxxxx Xxxx and Xxxxxx Xxxxxx shall be appointed to
the Corporation's Board of Directors, to serve in such capacity until
their successors are appointed and qualified.
III.
RESOLVED: That the Corporation hereby approves and adopts the
Termination and Repurchase Agreement by and among the Corporation, Xxxx
Song and Aris Corporation substantially in the form circulated with this
Consent, and hereby directs the President of the Corporation to execute
and deliver such agreement in the name, and on behalf of, the
Corporation.
1V.
RESOLVED: That the Corporation hereby ratifies and confirms the
assumption of Aris Corporation's obligations under that certain change
of control letter agreement between Aris Corporation and Xxxx X. Song
dated May 19, 2000.
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V.
RESOLVED: That the Corporation hereby amends and restates Section 5(f)
of the Corporation's 2000 Stock Plan (the "Plan") to read in its
entirety as follows, which restated provision shall to apply to all
Stock Purchase Agreements (as defined in the Plan) entered into after
the date hereof, unless (i) such Stock Purchase Agreement is entered
into in connection with an employment offer outstanding on the date
hereof, or (ii) the Corporation's board of directors unanimously
approves a Stock Purchase Agreement with an alternative provision:
"SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.
***
(f) ACCELERATED VESTING. Unless the applicable Stock
Purchase Agreement provides otherwise, and except as set forth
below, the lapse of right to repurchase a Purchaser's Shares at
the original Purchase Price (if any) upon termination of the
Purchaser's Service shall be accelerated by 12 months and all of
such Shares shall become vested if:
(i) The Company is subject to a Change in
Control before the Purchaser's Service terminates; and
(ii) Either (A) the repurchase right is not
assigned to the entity that employs the Purchaser
immediately after the Change in Control or to its parent
or subsidiary or (B) the Purchaser is subject to an
Involuntary Termination or "constructive termination"
(as determined by the Board) within 12 months following
such Change in Control.
Notwithstanding the above, if the Company and the other
party to the transaction constituting a Change in Control agree
that such transaction is to be treated as a "pooling of
interests" for financial reporting purposes, and if such
transaction in fact is so treated, then the acceleration of
vesting shall not occur to the extent that the Company's
independent public accountants and such other party's
independent public accountants separately determine in good
faith that such acceleration would preclude the use of "pooling
of interests" accounting.
FURTHER RESOLVED: That the Corporation hereby amends and restates
Section 6(f) of the Plan to read in its entirety as follows, which
restated provision shall to apply to all Options (as defined in the
Plan) granted after the date hereof, unless (i) such Option is granted
in connection with an employment offer outstanding on the date hereof,
or (ii) the Corporation's board of directors unanimously approves an
Option Agreement with an alternative provision:
"SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
***
(f) ACCELERATED EXERCISABILITY. Unless the applicable Stock
Option Agreement
-3-
23
provides otherwise, the vesting of an Optionee's Options shall
be accelerated by 12 months if:
(i) The Company is subject to a Change in
Control before the Optionee's Service terminates; and
(ii) Either (A) such Options do not remain
outstanding, such Options are not assumed by the
surviving corporation or its parent, and the surviving
corporation or its parent does not substitute options
with substantially the same terms for such Options or
(B) the Optionee is subject to an Involuntary
Termination or "constructive termination" (as determined
by the Board) within 12 months following such Change in
Control.
Notwithstanding the above, if the Company and the other
party to the transaction constituting a Change in Control agree
that such transaction is to be treated as a "pooling of
interests" for financial reporting purposes, and if such
transaction in fact is so treated, then the acceleration of
exercisability shall not occur to the extent that the Company's
independent public accountants and such other party's
independent public accountants separately determine in good
faith that such acceleration would preclude the use of "pooling
of interests" accounting.
FURTHER RESOLVED: That all Options (as defined in the Plan) granted
after the date hereof, unless (i) such Option is granted in connection
with an employment offer outstanding on the date hereof, or (ii) the
Corporation's board of directors unanimously approves an Option
Agreement stating otherwise, shall be exercisable, in whole or in part,
in accordance with the following schedule: Twenty five percent (25%) of
the shares of Common Stock subject to the Options shall vest on the
first anniversary of the date the Options are granted, or such other
date, after the date of the Options are granted, fixed by the Company,
and one sixteenth (1/16) of the shares of Common Stock subject to the
Options shall vest on the last day of the last month of each twelve (12)
quarterly periods thereafter, so as to be fully vested four (4) years
after the Vesting Commencement Date, subject to the holder of the
Options continuing to serve as a director, officer, consultant, or
employee of the Corporation on such dates.
VI.
RESOLVED: That any officer or officers of the Corporation is/are hereby
authorized and directed, for and in the name of the Corporation, to:
procure any government authorizations, licenses or permits; negotiate,
execute, deliver and file any documents; and take any actions that such
officer(s) may deem to be necessary or desirable to accomplish the
purposes of the foregoing resolutions. The procurement of any such
authorization(s), license(s), or permit(s), the negotiation, execution,
delivery or filing of any document(s) or the taking of any action(s) by
such officers) shall constitute conclusive evidence that the officers)
deemed such document(s) or action(s) to be necessary or desirable to
accomplish the purpose of these resolutions.
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The execution of this consent shall constitute a written waiver of any
notice required by RCW 23B.08.22 r he Corporation's Bylaws. The actions set
forth herein shall be effective when the last director signs the cons , less the
consent specifies a later effective date.
/s/ XXXX Y SONG
------------------------------------------
Xxxx Y Song Date: January 29, 2001
/s/ XXXXXXX XXXX
------------------------------------------
Xxxxxxx Xxxx Date: January 29, 2001
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