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JTS CORPORATION
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement") is made and entered into
this 25th day of September, 1997, by and among Amber Arbitrage LDC, a Cayman
Islands corporation ("Amber"), and those certain undersigned holders of the
Common Stock of JTS Corporation, a Delaware corporation (the "Company"), listed
on Exhibit A hereto (the "Key Stockholders").
WITNESSETH:
WHEREAS, the Company proposes to sell shares of its Series D Preferred
Stock (the "Series D Preferred Stock") to certain investors (the "Series D
Investors") pursuant to the Securities Purchase Agreement (the "Purchase
Agreement") of even date herewith by and among the Company and the Series D
Investors (the "Financing");
WHEREAS, in connection with the consummation of the Financing, the Key
Stockholders have agreed to vote their shares of the Company's capital stock as
set forth below;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
VOTING
1.1 COMMON SHARES.
1.1.1 Amber and each of the Key Stockholders each agrees to hold all
shares of voting capital stock of the Company registered in their respective
names or beneficially owned by them as of the record date of any meeting of the
Company's stockholders covered by this Agreement (hereinafter collectively
referred to as the "Common Shares") subject to, and to vote the Common Shares in
accordance with, the provisions of this Agreement.
1.2 VOTING. Amber and the Key Stockholders hereby covenant and agree that,
prior to the Expiration Date (as defined below) at any and all meetings of
stockholders of the Company (each a "Meeting") at which an amendment to the
Company's Certificate of Incorporation (i) increasing the Company's authorized
number of shares of Common Stock to cover at least the number of shares of
Common Stock issuable upon conversion of the Series D Preferred Stock and (ii)
authorizing holders of not less than twenty-five percent (25%) of the
outstanding voting capital stock of the Company to call a special meeting of
stockholders (the "Amendment") is submitted for a vote of the Company's
stockholders, to vote their respective shares of the Company's voting stock in
favor of the Amendment. In the event that at such Meeting, the Amendment is not
passed, the obligations of this Section 1.2 shall continue at each subsequent
meeting of stockholders until the Amendment is passed. The Key Stockholders each
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agree not to convert any of the Series D Preferred Stock registered in their
respective names or beneficially owned by each of them as of the date hereof
until the Amendment is approved; provided, however, that Amber shall be able to
convert the number of its shares of Series D Preferred Stock into the maximum
number of shares of Common Stock that are authorized and reserved as of the date
hereof for such conversion subject to restrictions imposed by the Lock Up
Agreement executed by Amber of even date herewith. As used in this Stockholders
Agreement, the term "Expiration Date" shall mean the earlier of the date the
Amendment is approved or September 25, 2018.
1.3 PROXY; FURTHER ASSURANCES. Contemporaneously with the execution of
this Stockholders Agreement, each of the Key Stockholders shall deliver to Amber
a proxy in the form attached hereto as Exhibit B, which shall be irrevocable to
the fullest extent permitted by law, with respect to the respective shares (the
"Proxy"). Each of the Key Stockholders shall perform such further acts and
execute such further documents and instruments as may reasonably be required to
vest in a designee of Amber the power to carry out and give effect to the
provisions of this Stockholders Agreement. Amber hereby agrees that it will vote
all of its Common Shares in the same manner as it will vote the Proxies and that
the Proxies shall become null and void at the time Amber breaches the terms of
this covenant.
1.4 OTHER RIGHTS. Except as provided by this Agreement, each of Amber and
the Key Stockholders shall be entitled to exercise the full rights of a
stockholder with respect to the Common Shares, including without limitation the
right to buy or sell Common Shares, provided such sales are made in the open
market.
ARTICLE 2
TERMINATION
2.1 This Agreement shall continue in full force and effect from the date
hereof through the earlier of the day after the date of the annual or special
meeting of stockholders of the Company in which the Amendment is approved or
September 25, 2018. On such day the Agreement shall terminate in its entirety.
ARTICLE 3
MISCELLANEOUS
3.1 OWNERSHIP. Each of Amber and the Key Stockholders represents and
warrants to all other parties to this Agreement that he, or she or it (a) now
owns the Common Shares, free and clear of liens or encumbrances, and has not,
prior to or on the date of this Agreement and other than as contemplated hereby,
executed or delivered any proxy or entered into any other voting agreement or
similar arrangement other than one which has expired or terminated prior to the
date hereof, and (b) has full power and capacity to execute, deliver and perform
this Agreement, which has been duly executed and delivered by, and evidences the
valid and binding obligation of, such party enforceable in accordance with its
terms.
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3.2 GOVERNING LAW. This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the General Corporation
Law of the State of Delaware.
3.3 AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by Amber and a majority in interest of the Key Stockholders.
Notwithstanding the foregoing, the consent of a Key Stockholder shall be
required for any amendment or waiver of this Agreement which materially
increases either such Key Stockholder's obligations or diminishes such Key
Stockholder's rights under this Agreement (other than on a pro rata basis
including Amber).
3.4 SEVERABILITY. Any term or provision of this Stockholders Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Stockholders Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Stockholders Agreement
in any other jurisdiction so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. If any provision of this Stockholders Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
3.5 SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
3.6 ADDITIONAL SHARES. In the event that subsequent to the date of this
Agreement any shares or other securities (other than any shares or securities of
another corporation issued to the Company's Stockholders pursuant to a plan of
merger) are issued on, or in exchange for, any of the Common Shares by reason of
any stock dividend, stock split, consolidation of shares, reclassification or
consolidation involving the Company, such shares or securities shall be deemed
to be Common Shares, for purposes of this Agreement.
3.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
3.8 WAIVER. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
3.9 ATTORNEY'S FEES. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party shall be entitled
to all costs and expenses of maintaining such suit or action, including
reasonable attorneys' fees.
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3.10 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, along with
the Purchase Agreement and each of the Exhibits thereto, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof and no party shall be liable or bound to any other
in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first above written.
KEY STOCKHOLDERS: AMBER ARBITRAGE LDC
/s/ XXXXX XXXXXXX c/o Custom House Fund
------------------------------ Management Limited
Xxxxx Xxxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxx 0, Xxxxxxx
/s/ XXXX XXXXXXX
------------------------------
Xxxx Xxxxxxx
/s/ XXXXX X. XXXXXXXX /s/ XXXX XXXXXX
------------------------------ --------------------------------
Xxxxx X. Xxxxxxxx By: Xxxx Xxxxxx
Title: Trading Manager
/s/ X. XXXXXXX
------------------------------
Alta V Limited Partnership
/s/ XXXXXXX X. XXXXXX
------------------------------
Lunenburg S A
/s/ XXXXXXXX X. XXXXXX
------------------------------
D & U Tandon LLC
/s/ XXXXXXX XXX TANDON
------------------------------
Xxxxxxx Xxx Tandon
/s/ XXXXXXX XXX TANDON
------------------------------
Tandon Family Partnership
/s/ XXXXXXX X. XXXXXX
------------------------------
J & S Tandon, LLC
/s/ XXXXXXX X. XXXXXX
------------------------------
Lunenburg S A
SHAREHOLDERS AGREEMENT
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EXHIBIT A
LIST OF KEY STOCKHOLDERS
Xxxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxx V Limited Partnership
Lunenburg S A
D & U Tandon LLC
Xxxxxxx Xxx Tandon
Tandon Family Partnership
J & S Tandon, LLC
Lunenburg S A
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EXHIBIT B
IRREVOCABLE PROXY
Each of the undersigned stockholders of JTS Corporation, a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Xxxx Xxxxxx ("Xxxxxx") as attorney and proxy of
the undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to the shares of capital stock
of the Company owned by the undersigned as of the record date of any meeting of
the stockholders of the Company to which this proxy pertains. (The shares of the
capital stock of the Company referred to in the immediately preceding sentence
are referred to as the "Shares.") Upon the execution hereof, all prior proxies
given by the undersigned with respect to any of the Shares are hereby revoked,
and no subsequent proxies will be given with respect to any of the Shares for as
long as this Proxy remains in effect.
This proxy is irrevocable and is coupled with an interest. This proxy is
granted in connection with the Stockholders Agreement of even date herewith
between Amber Arbitrage LDC ("Amber") and each of the undersigned (the
"Stockholders Agreement") and in consideration of Amber entering into the
Securities Purchase Agreement of even date herewith among the Company, Amber and
certain investors (the "Purchase Agreement") and in consideration of the
benefits accruing to the undersigned by virtue of Amber entering into the
Securities Purchase Agreement. Capitalized terms used but not otherwise defined
in this proxy have the meanings assigned to such terms in the Stockholders
Agreement.
The attorney and proxy named above will be empowered, and may exercise
this proxy, to vote the Shares at any meeting of the stockholders of the Company
in favor of an amendment to the Company's Certificate of Incorporation (the
"Amendment") to (i) increase the Company's authorized number of shares of Common
Stock to cover at least the number of shares of Common Stock issuable upon
conversion of the Series D Preferred Stock (as defined in the Stockholders
Agreement) and (ii) authorizing holders of not less than twenty-five percent
(25%) of the outstanding voting capital stock of the Company to call a special
meeting of stockholders. This proxy shall terminate and have no further effect
following the earlier to occur of (x) the approval by the stockholders of the
Amendment or (y) September 25, 2018.
This proxy shall be binding upon the heirs, successors and assigns of the
undersigned (including any transferee of any of the Shares, except for
transferees of the undersigned in open market transactions).
Dated: September 25, 1997
/s/ XXXXX XXXXXXX
-------------------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------
Number of Shares of Company Common
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Stock: 11,597,325
----------------------------------
/s/ XXXX XXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxx
----------------------------------
Number of Shares of Company Common
Stock: 707,611
----------------------------------
/s/ XXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Number of Shares of Company Common
Stock: 4,010,196
----------------------------------
/s/ XXXX X. MANAGEMENT PARTNERSHIP, L.P.
-----------------------------------------
Name: Xxxx X. Management Partnership L.P.
-----------------------------------
Number of Shares of Company Common
Stock: 3,896,550
-----------------------------------
/s/ LUNENBURG S.A.
-----------------------------------------
Name: Lunenburg S.A.
-----------------------------------
Number of Shares of Company Common
Stock: 1,911,673
-----------------------------------
/s/ Da X. XXXXXX LLC
-----------------------------------------
Name: Da X. Xxxxxx LLC
-----------------------------------
Number of Shares of Company Common
Stock: 1,013,336
-----------------------------------
/s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Number of Shares of Company Common
Stock: 1,000,000
-----------------------------------
/s/ TANDON FAMILY PARTNERSHIP
-----------------------------------------
Name: Tandon Family Partnership
-----------------------------------
Number of Shares of Company Common
Stock: 4,350,000
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/s/ XX X. XXXXXX
-------------------------------------------
Name: Xx X. Xxxxxx
--------------------------------
Number of Shares of Company Common
Stock: 1,013,335
--------------------------------
/s/ LUNDENBURG SA
-------------------------------------------
Name: Lundenburg SA
--------------------------------
Number of Shares of Company Common
Stock: 500,000
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-------------------------------------------
Name:
--------------------------------
Number of Shares of Company Common
Stock:
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