INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") made as of this 30th
day of June, 1999, by and among TRIANGLE IMAGING GROUP, INC., a Florida
corporation (the "Company"), XXXXXX X. XXXXXXX ("Stockholder"), and WATERSIDE
CAPITAL CORPORATION, a Virginia corporation (collectively, with its successors
and assigns, the "Investor"). (The Company, the Stockholder and the Investor are
each a "Party" and collectively, the "Parties".)
R E C I T A L S:
A. The Company has authorized Fifty Million (50,000,000) shares of
common stock (the "Common Stock");
B. The Company has also authorized One Million (1,000,000) Shares of
Preferred Stock, of which 700 have been designated Series D Convertible
Preferred Stock ("Series D Preferred Stock") with such terms as have been set
forth in the Corporation's Amended Articles of Incorporation ("Articles of
Incorporation");
C. Contemporaneously with the execution and delivery of this Agreement,
(i) the Investor is acquiring from the Company (1) Seven Hundred (700) shares of
Series D Convertible Preferred Stock (the "Preferred Shares") pursuant to a
Series D Convertible Preferred Stock Purchase Agreement dated as of the date
hereof, by and among the Investor, the Company and the Stockholder (the "Stock
Purchase Agreement") and (2) a stock purchase warrant (the "Warrant") to
purchase shares of Common Stock (the "Warrant Stock");
D. Xxxxxx X. Xxxxxxx is the beneficial owner of 3,691,500 shares of
Common Stock (consisting of 2,000,000 shares held of record by Xx. Xxxxxxx,
291,500 shares held by Xx. Xxxxxxx'x wife, and 1,400,000 shares subject to
immediately exercisable stock options), which represent 24.52% of the issued and
outstanding shares of Common Stock on the date of this Agreement (after giving
effect to the exercise of the stock options). Xx. Xxxxxxx disclaims beneficial
ownership of the shares subject to that certain stockholders agreement set forth
in Section 2.3 of the Disclosure Schedule to the Purchase Agreement; and
E. One of the conditions to the investment by the Investor is the
execution and delivery of this Agreement by the Company and the Stockholder.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company, the Stockholder and the Investor
agree as follows:
ARTICLE 1
DEFINITIONS
Intentionally left blank.
ARTICLE 2
BOARD OF DIRECTORS
Section 2.1 INSURANCE. The Company shall maintain directors' and
officers' liability insurance coverage of a type and in an amount set forth in
Schedule 2.22 of the Series D Preferred Stock Purchase Agreement.
ARTICLE 3
PUT RIGHTS
Section 3.1 PUT RIGHTS GENERAL. In addition to such rights as are set
forth in the Articles of Incorporation, the Investor shall have the rights set
forth in this Article 3.
Section 3.2 PUT OF SERIES D PREFERRED STOCK.
3.2.1 At any time after the earlier of (a) a Change
of Control (as defined below) or (b) that date which is five (5) years after the
date of the issuance of the first share of Series D Preferred Stock, the
Investor shall have the right to require the Company to redeem or repurchase up
to all of the shares of Series D Preferred Stock. Following such notice, the
Company shall redeem or repurchase, within 45 days of receipt of such notice,
all of such outstanding shares of Series D Preferred Stock held by the Investor
by paying to the Investor an amount equal to the issuance price of such stock
plus an amount equal to all accrued or unpaid dividends. A "Change of Control"
shall be deemed to occur on (i) the date upon which the Stockholder shall cease
to be employed by the Company on a full-time basis as the Company's President
and Chief Executive Officer, (ii) the date the Stockholder shall cease to be a
director of the Company, (iii) the date the Company's current Chairman of the
Board ceases to be the Chairman of the Board, or (iv) any consolidation, merger,
reorganization or other similar transaction with or into any other corporation
or other entity or person, or any other corporate reorganization, in which the
shareholders of the Company immediately prior to such consolidation, merger or
reorganization, or any transaction or series of related transactions do not hold
shares possessing a majority of votes in the election of directors immediately
after such consolidation, merger or reorganization, or any transaction or series
of transactions.
3.2.2 In addition to the provisions of section 3.2.1,
at any time after the earlier of (a) a Change of Control or (b) that date which
is five years after the date of the issuance of the first share of Series D
Convertible Preferred Stock, the Investor shall have the right to cause the
Stockholder to purchase all 700 shares of Series D Convertible Preferred Stock,
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or such lesser number of shares of Series D Convertible Preferred Stock then
outstanding, by giving written notice thereof to the Stockholder. Following such
notice, the Stockholder shall immediately purchase such shares of Series D
Convertible Preferred Stock by paying to the Investor an amount equal to the
issuance price of such stock plus an amount equal to all accrued or unpaid
dividends thereof.
Section 3.3 REDEMPTION OF SERIES D PREFERRED STOCK. At any time and
from time to time, on not less than thirty (30) days notice to Investor or any
subsequent holder of the Series D Preferred Stock, the Series D Preferred Stock
or any portion thereof may be redeemed by the Company, at the option of the
Company, at a redemption price of $1,000.00 per share plus the payment of all
accrued and unpaid dividends and interest payments due on any unpaid dividends
attributable to the redeemed shares of Series D Preferred Stock.
3.3.1 If the Company desires to exercise its right of
redemption, it shall mail a notice of redemption to each of the registered
holders of the Series D Preferred Stock to be redeemed, first class, postage
prepaid, not later than the thirtieth day before the date fixed for redemption,
at their last address as shall appear on the records of the Company. Any notice
mailed in any manner provided herein shall be conclusively presumed to have been
duly given whether or not the registered holder receives such notice.
3.3.2 The notice of redemption shall specify (i) the
redemption price, (ii) the date fixed for redemption and (iii) the place where
the Series D Preferred Stock certificates shall be delivered and the redemption
price paid. The date fixed for redemption of the Series D Preferred Stock shall
be the "Redemption Date." On and after the Redemption Date, holders of Series D
Preferred Stock certificates provided timely notice of redemption shall have no
further rights except to receive, upon surrender of their Series D Preferred
Stock certificate(s), the Redemption Price.
3.3.3 From and after the Redemption Date specified
for, the Company shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Company by or on behalf of the registered
Holders thereof of one or more certificates evidencing the Series D Preferred
Stocks to be redeemed, deliver or cause to be delivered to or upon the written
order of such registered holder a sum in cash equal to the Redemption Price of
each share of Series D Preferred stock being redeemed. Such cash payment may be
made, at the Company's option, in cash or by check or wire transfer. From and
after the Redemption Date and upon deposit or setting aside by the Company of a
sum sufficient to redeem all of the Series D Preferred shares called for
redemption, such Series D Preferred Shares shall expire and become void and all
rights thereunder, except for the right to receive payment of the Redemption
Price, shall cease.
3.3.4 If the Series D Preferred Stock is subdivided
or combined into a greater or smaller number of shares of Series D Preferred
Stock, the Redemption Price per share shall be proportionately adjusted by the
ratio which the total number of shares of Series D Preferred Stock outstanding
immediately prior to such event bears to the total number of shares of Series D
Preferred Stock outstanding immediately after such event.
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ARTICLE 4
DIVIDENDS
The Company shall pay dividends on the Preferred Shares, out of any
funds legally available therefor, as provided in the Articles of Incorporation
of the Company, as amended.
ARTICLE 5
TERMINATION
This Agreement, and the respective rights and obligations of the
parties hereto, shall terminate upon the purchase of the Preferred Shares by the
Company or the Stockholder, as the case may be.
ARTICLE 6
LEGEND
Any certificates representing the Preferred Shares shall bear on their
face the following legend prominently displayed:
THE SHARES REPRESENTED BY THIS CERTIFICATE, AND
THE TRANSFER THEREOF, ARE SUBJECT TO THE
PROVISIONS OF THAT CERTAIN INVESTOR RIGHTS
AGREEMENT, DATED AS OF JUNE 30, 1999, AMONG THE
CORPORATION, XXXXXX X. XXXXXXX AND WATERSIDE
CAPITAL CORPORATION, A COPY OF WHICH IS ON FILE
AND MAY BE EXAMINED AT, THE PRINCIPAL OFFICE OF
THE CORPORATION.
ARTICLE 7
MISCELLANEOUS
Section 7.1 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered by
hand or mailed via a nationally recognized overnight delivery service, by first
class mail registered or certified mail (air mail if to or from outside the
United States), postage prepaid, facsimile transmission that is acknowledged as
received by the recipient, if to the Stockholder, at the Company's address, if
to the Investor, at 000 Xxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx Xxxxxxxx 00000, if
to the Company, at 0000 XX 00xx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000 or to such other address as the addressee shall have furnished to the
other parties hereto in the manner prescribed by this Section 7.1.
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Section 7.2 SPECIFIC PERFORMANCE. The rights of the parties under this
Agreement are unique and, accordingly, the parties shall have the right, in
addition to such other remedies as may be available to any of them at law or in
equity, to enforce their rights hereunder by actions for specific performance in
addition to any other legal or equitable remedies they might have to the extent
permitted by law.
Section 7.3 ENTIRE AGREEMENT. This Agreement, the Series D Preferred
Stock Purchase Agreement, the Stock Purchase Warrant and the Registration Rights
Agreement, and the documents contemplated thereby, constitute the entire
agreement among the parties with respect to the subject matters thereof and
supersedes all prior agreements and understandings between them or any of them
as to such subject matter.
Section 7.4 WAIVERS AND FURTHER AGREEMENTS. Any of the provisions of
this Agreement may be waived by an instrument in writing with the consent of the
party or parties whose rights are being waived.
Section 7.5 AMENDMENTS. This Agreement may be amended by and shall be
effective upon the receipt of the written consent of the Investor, the Company
and the Stockholder.
Section 7.6 ASSIGNMENT: SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, successors and permitted
transferees, except as may be expressly provided otherwise herein.
Section 7.7 SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and such invalid, illegal
and unenforceable provision shall be reformed and construed so that it will be
valid, legal, and enforceable to the maximum extent permitted by law.
Section 7.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 7.9 SECTION HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 7.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws of the Commonwealth of
Virginia.
Section 7.11 JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. The Company
consents to the jurisdiction of the Circuit Court of the City of Norfolk,
Virginia, for the purpose of any suit, action or other proceeding arising out of
any of its obligations arising under this Agreement or with respect to the
transactions contemplated hereby, and expressly waives any and all objections it
may have as to venue in such court and waives the right to a trial by jury.
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IN WITNESS WHEREOF, the undersigned have executed this Stockholders
Agreement as of the day and year first above written.
COMPANY:
TRIANGLE IMAGING GROUP, INC.,
a Florida corporation
By: /s/ XXXXXX X. XXXXXXX
----------------------------------(SEAL)
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
STOCKHOLDER:
/s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
INVESTOR:
WATERSIDE CAPITAL CORPORATION
By: /s/ XXXXXX X. XxXXXXXX
---------------------------------(SEAL)
Xxxxxx X. XxXxxxxx
Secretary/Treasurer
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