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EXHIBIT 10.20
SHAREHOLDERS AGREEMENT
BETWEEN CORNING INCORPORATED,
MOLECULAR SIMULATIONS, INC.
AND CERTAIN SHAREHOLDERS OF
MOLECULAR SIMULATIONS, INC.
AUGUST 15 ,1995
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SHAREHOLDERS AGREEMENT
THIS AGREEMENT, made this 15th day of August, 1995, by and between
Corning Incorporated, a corporation organized and existing under the laws of the
State of New York, U.S.A., having its principal office at Xxx Xxxxxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxx 00000 ("Corning"), Molecular Simulations Inc., a Delaware
corporation having its principal place of business at 16 New England Executive
Park, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("MSI"), and certain shareholders of MSI
identified on Exhibit A hereto (the "MSI Shareholders").
WITNESSETH:
WHEREAS, MSI, MSI Acquisition Inc., MSI's wholly owned subsidiary ("MSI
Acquisition"), Corning and Corning's wholly owned subsidiary, Biosym
Technologies, Inc. ("Biosym"), a California Corporation, have entered into a
Merger Agreement dated August 15, 1995 (the "Merger Agreement") pursuant to
which Biosym has merged with and into MSI Acquisition and Corning has received
certain shares in MSI; and
WHEREAS, the parties wish to enter into this Agreement concerning the
voting of the MSI shares held by Corning and other obligations and benefits of
MSI Shareholders and Corning.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and intending to be legally bound, and for other good and valuable
consideration, receipt of which is acknowledged by all parties, the parties
hereby agree as follows:
ARTICLE 1.
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings; and such meanings shall be equally applicable to singular
and plural forms of such defined terms as applicable:
1.1 AFFILIATE shall have the meaning set forth in Article V,
below.
1.2 BIOSYM shall have the meaning set forth in the introduction to
this Agreement.
1.3 BOARD shall have the meaning set forth in Section 3.1.
1.4 COMMON STOCK means the voting common stock of MSI with a par
value of $.001 per share.
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1.5 CONVERTIBLE NON-VOTING COMMON STOCK means the non-voting Class
B common stock of MSI having a par value of $.001 per share convertible by its
terms into voting Common Stock and issued to Corning pursuant to the terms of
the Merger Agreement.
1.6 CORNING shall have the meaning set forth in the introduction
to this Agreement.
1.7 EXCLUDED ISSUANCE means any shares of Common Stock issued by
MSI: (i) upon the exercise of stock options or warrants existing on the date
hereof and listed and identified on Exhibit B hereto; (ii) upon a conversion of
any shares of the MSI Preferred Stock or Non-Voting Convertible Common Stock
issued and outstanding; (iii) as a stock dividend or upon any subdivision of
shares of Common Stock proportionately equal to all holders of Common Stock; and
(iv) to employees, directors or consultants of MSI or its subsidiaries pursuant
to a stock option plan within the description set forth in Exhibit B hereof.
1.8 FULLY DILUTED SHARES OF COMMON STOCK means all issued and
outstanding shares of Common Stock and all shares of Common Stock issuable upon
conversion or exercise of issued and outstanding Preferred Stock, and
Convertible Non-Voting Common Stock or the options and warrants or other
securities or rights, convertible or exercisable for Common Stock. Exhibit B
sets forth all such options, warrants or securities existing as of the date
hereof.
1.9 MERGER AGREEMENT shall have the meaning set forth in the
introduction to this Agreement.
1.10 MSI shall have the meaning set forth in the introduction to
this Agreement.
1.11 MSI ACQUISITION shall have the meaning set forth in the
introduction to this Agreement.
1.12 MSI SHAREHOLDERS shall have the meaning set forth in the
introduction to this Agreement.
1.13 OPERATING PLAN shall have the meaning set forth in Section
4.1.
1.14 PREFERRED STOCK means the preferred stock of MSI with a par
value of $.01 per share.
1.15 SHARES means any and all shares of Common Stock, Convertible
Non-Voting Common Stock, Preferred Stock or shares of capital stock of MSI by
whatever name called, whether voting or non-voting, including without
limitation, any such shares
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now owned or hereafter acquired by Corning or the MSI Shareholders however
acquired, including by way of example but not limitation, those acquired by
stock splits, stock dividends, exercise of warrants options or conversion of
convertible securities.
1.16 SUBSIDIARY(IES) shall mean any corporation, partnership or other
entity wherever and however organized in which a party owns directly or
indirectly more than fifty percent (50%) of the voting stock, equity or
beneficial interest, is a partner of, or otherwise controls the management of,
by having the right or ability to designate a majority of the directors or
members of the governing body thereof, whether by agreement or otherwise.
ARTICLE 2.
MSI CAPITAL
2.1 INITIAL CAPITAL. As of the date of this Agreement, after giving
effect to the Merger, as that term is defined in the Merger Agreement, the
authorized capital of MSI consists of: (a) 25,000,000 shares of Common Stock;
(b) 1,500,000 shares of Convertible Non-Voting Common Stock; and (c) 2,222,223
shares of Preferred Stock.
2.2 HOLDINGS. Exhibit C hereto sets forth, as of the date hereof and
after giving effect to the Merger as that term is defined in the Merger
Agreement, the total outstanding Shares and any options or other rights to
acquire Shares in either of such stock, held by each of the MSI Shareholders and
Corning.
2.3 CERTIFICATE OF INCORPORATION AND BY-LAWS. A true and correct copy
of the Certificate of Incorporation and By-Laws of MSI as of the date hereof are
attached hereto as Exhibit D.
2.4 CONVERSION OF CONVERTIBLE NON-VOTING COMMON STOCK. Each share of
Convertible Non-Voting Common Stock held by Corning shall be convertible into
one (1) share of Common Stock. The outstanding shares of Convertible Non-Voting
Common Stock held by Corning may be convened by Corning into the .MSI Common
Stock at any time after the occurrence of any of the events described in
subsections 3.5(a) and (e), and shall be converted after the occurrence of the
event described in subsection 3.5(b), but not prior to the occurrence of any
such event.
2.5 ADDITIONAL CAPITAL. Additional capital of MSI issued from time to
time upon such terms and conditions as the Board of Directors of MSI determines
shall be subject to the rights of the parties in this Agreement.
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ARTICLE 3.
MANAGEMENT
3.1 BOARD OF DIRECTORS.
(a) The business of MSI shall be managed by a Board of
Directors consisting of seven (7) members (the "Board"). All actions of the
Board shall require the affirmative vote of a majority of Directors present at a
meeting at which a quorum is present, except for such actions as may be taken by
written consent in lieu of such meeting or as to which the higher than majority
vote is required pursuant to MSI's Certificate of Incorporation, its By-Laws or
applicable law;
(b) In any and all elections of directors of MSI, whether by
vote or written consent, Corning and the MSI Shareholders shall each cast their
votes as shareholders to elect three (3) nominees of Corning to the Board, and
four (4) nominees of the MSI Shareholders to the Board and one of the nominees
of the MSI Shareholders shall be the Chief Executive Officer for MSI as provided
in Section 3.3 below. The MSI Shareholders and Corning shall use their best
efforts to cause any vacancies on the Board caused by resignation or removal of
a Director nominated respectively by Corning or the MSI Shareholders to be
filled by the Board with a nominee of the party which nominated the director who
has resigned or been removed;
(c) at least 30 days prior to its distribution of notice and
proxy materials for any meeting at which directors are elected, MSI will notify
Corning and the MSI Shareholders of such meeting. Corning and the MSI
Shareholders shall each deliver to MSI within fifteen (15) days of receipt of
the notice provided in the first sentence of this subsection (c) the names of
their respective nominees for the Board. The MSI Shareholder nominees shall be
initially as set forth in Section 3.1 (d) below. Thereafter the MSI Shareholders
agree that the MSI nominees will be determined by the shareholders of MSI
(including the MSI Shareholders) holding a majority of the total Shares
outstanding and held by shareholders of MSI immediately prior to the execution
of this Agreement, provided this method of determining MSI Shareholder nominees
may be changed from time to time by the MSI Shareholders as described in the
second sentence of Section 12.2 below. MSI will include the nominees of Corning
and the MSI Shareholders in the notice and proxy material for the election of
such directors. If no nominee is given by Corning or the MSI Shareholders, their
respective nominees shall be the directors on the Board at that time
representing such party;
(d) The initial nominees of Corning to the MSI Board are C.
Xxxxx Xxxxxxx, Xxxxx X. Xxxxx and Xxxxx X. Xxxxxx and the initial nominees
(including the Chief Executive Officer) of the MSI Shareholders to the Board are
Xxxxxxx X. Xxxxxx, and Xxxxx Xxxxxxx, Xxxxx Xxxxx, and Xxx Xxxxx.
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3.2 MEETINGS. The Board of MSI shall have meetings at least four (4)
times every fiscal year for the purpose of reviewing the performance of the
management of MSI and for the purpose of taking such other actions as the Board
may deem appropriate.
3.3 CHIEF EXECUTIVE OFFICERS. The Board will appoint from among its
members: (a) a Chairman who shall not be an employee of MSI, from among the
nominees of Corning; (b) a Vice Chairman who shall not be an employee of MSI,
from among the nominees of the MSI Shareholders; (c) a Chief Executive Officer
for MSI, who in accordance with MSI's By-Laws, may not vote on his or her
removal or replacement. During the period that the restrictions in Section 3.5
continue to be applicable to the Shares held by Corning, the MSI Shareholders
will be entitled to nominate the Chief Executive Officer of MSI. During the Term
of this Agreement, Corning will support the election of the nominee of the MSI
Shareholders for Chief Executive Officer and in the event of any tie vote of the
Board on the removal or replacement of the Chief Executive Officer, Corning will
support and defer to the decision of the directors nominated by the MSI
Shareholders on such removal or replacement unless doing any of the foregoing
would violate fiduciary obligations of any of the members of the Board. The
initial nominee for MSI Chief Executive Officer by the MSI Shareholders is
Xxxxxxx X. Xxxxxx. The Chairman and Vice Chairman of the Board are expected to
spend the appropriate time on issues relating to the integration and operation
of the combined business of Biosym and MSI during the first year of this
Agreement.
3.4 COMMITTEES OF THE BOARD. The Board will appoint an audit committee
consisting of two (2) Board members, one from among the members nominated by
Corning and the other from among the members nominated by the MSI Shareholders.
The audit committee shall by unanimous vote appoint or remove the Chief
Financial Officer of MSI. The initial Chief Financial Officer of MSI will be
Xxxxx X. Xxxxx. Corning's nominees to the Board will have the right to
participate as a member in any other committee of the Board, e.g. executive or
compensation committees.
3.5 VOTING OF SHARES HELD BY CORNING. Unless a longer period is
otherwise agreed upon by Corning, during the term of this Agreement, Corning
will vote all of its Shares in accordance with the direction of a majority of
the Board on any matter submitted for or requiring a shareholder vote, until any
such time as: (a) MSI issues additional Common Stock or stock convertible into
Common Stock to parties other than Corning, such that after such issuance the
Shares held by Corning and its transferees (direct and indirect) collectively
are equal to or less than forty percent (40%) of the total outstanding Common
Stock, Preferred Stock and any stock convertible into Common Stock; or (b) MSI
issues securities to the public requiring registration pursuant to the
Securities Act of 1933 as amended or any successor act (the "1933 Act") in which
the gross proceeds to MSI from the sale of such securities equals or exceeds $10
million; or
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(c) August 15, 2000; or (d) any substantial, material, change in the policies
and business strategy identified in the Mission Statement incorporated in the
Operating Plan described in Section 4.1 below for MSI, which Mission Statement
is attached hereto as Exhibit E, unless formally approved by one or more of
Corning's nominees to the Board; or (e) upon consummation of any acquisition of
MSI or substantially all of its assets by a third party or a merger with a third
party pursuant to which (i) MSI is not the surviving corporation and (ii) MSI
Shares are exchanged or converted into less than a majority of the surviving
corporation shares of capital stock. During the term of this Agreement, the
restrictions provided under this Section 3.5 shall apply to direct and indirect
transferees of Corning's Shares.
3.6 ACTIONS REQUITING UNANIMOUS APPROVAL OF DIRECTORS. The unanimous
vote of all members of the Board of Directors of MSI present at a duly
constituted meeting or by the unanimous written consent of all the members of
the Board of Directors shall be required to make any amendment of the
Certificate of Incorporation or By-Laws of MSI, which would materially conflict
with or be contrary to the provisions of this Shareholders Agreement.
3.7 RIGHTS FOR ADDITIONAL INVESTMENT. During the term of this Agreement
MSI shall, prior to any issuance by MSI of any of its securities (other than
debt securities with no equity feature), offer by written notice to each MSI
Shareholder and Corning (an "Investor"), the right, for a period of thirty (30)
days, to purchase for cash at any amount equal to the price or other
consideration for which such securities are to be issued, the number of such
securities as is equal to the full number of securities to be offered by MSI
multiplied by a fraction, the numerator of which shall be the total number of
shares of Common Stock held by such Investor as of the date of MSI's notice of
offer (treating all outstanding securities that are convertible, exercisable or
exchangeable into or for (whether directly or indirectly) shares of Common Stock
as having been so converted, exercised or exchanged) and the denominator of
which shall be the aggregate number of Fully Diluted Shares of Common Stock
(calculated as of the proposed date of issuance); provided, however, that the
preemptive rights of each Investor pursuant to this Section 3.7 shall not apply
with respect to (i) an Excluded Issuance; (ii) securities issued solely in
consideration for the acquisition (whether by merger or otherwise) by MSI or any
of its .Subsidiaries of the stock or assets of another business entity; or (iii)
except as otherwise provided m Section 3.8, below, securities issued pursuant to
a firm commitment underwritten public offering. MSI's written notice to each
Investor shall describe the securities proposed to be issued by MSI and specify
the number, price and payment terms. Each Investor may accept MSI's offer as to
the full number of securities offered to it or any lesser number, by written
notice thereof given by it to MSI prior to the expiration of the aforesaid
thirty (30) day period, in which event MSI shall promptly sell and such Investor
shall buy, upon the terms specified, the number of securities agreed to be
purchased by such Investor. Subsequent to such thirty (30) day period but prior
to ninety
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(90) days after the date of its notice of offer to the Investors, MSI shall be
free to offer and sell to any third party or parties the number of such
securities not agreed by the Investors to be purchased by them, at a price and
on payment terms identical to those specified in such notice of offer to the
Investors. However, if such third party sale or sales are not consummated within
such ninety (90) day period, MSI shall not sell such securities as shall not
have been purchased within such period without again complying with this Section
3.7.
3.8 INITIAL PUBLIC OFFERING. In the event of any firm commitment
underwritten initial public offering by MSI, MSI agrees to negotiate in good
faith with its underwriter(s) to require as a condition to the public offering
that Corning be offered the opportunity to purchase from such underwriter(s), at
the public offering price, an allotment of the securities to be issued by MSI in
the public offering such that Corning may maintain its pro rata percentage
ownership of MSI, calculated as described in Section 3.7, above. If requested by
MSI and its underwriter(s), Corning shall not sell or otherwise transfer or
dispose of any Common Stock or other securities of MSI held by Corning (other
than those included in the registration) during the seven-day period prior to
and the 180-day period following the effective date of the registration
statement filed under the 1933 Act in connection with MSI's initial public
offering; provided that all other holders of MSI Shares (except any holder
holding less than 1% of the Fully Diluted Shares of Common Stock calculated at
the time of issuance) enter into similar agreements.
3.9 CORNING INVESTMENT. At all times; Corning's investment in MSI will
be treated fairly and with due regard for the fiduciary obligations of the Board
to shareholders generally and to Corning specifically and Corning's investment
in MSI will be entitled to equal treatment with other holders of Common Stock of
MSI on a non-discriminatory basis concerning any voting rights (except as
otherwise expressly provided in this Agreement or the Certificate of
Incorporation of MSI as of the date hereof), dividends (except for the
Convertible Non-Voting Common Stock which does not have the right to receive
cash dividends), whether in cash or securities, rights or options granted by MSI
to purchase additional shares or any other benefits or distributions provided by
MSI to holders of Common Stock by virtue of their status as holders of Common
Stock but not including any Excluded Issuance.
ARTICLE 4.
OPERATIONAL PROVISIONS
4.1 OPERATING PLAN. Corning and the MSI senior management have agreed
upon the operating plan for MSI (the "Operating Plan") of even date herewith,
including without limitation the initial senior officers identified on Exhibit
F, and the MSI senior management will recommend to the Board that MSI adopt and
operate within the general scope of the Operating Plan, provided that the
Operating Plan may be modified, amended
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or updated by MSI senior management with the approval of the Board, as
appropriate, as a result of changing market conditions, new opportunities or
other valid business reasons.
4.2 INDEPENDENT ENTERPRISE. MSI shall at all times be conducted as an
independent enterprise for the profit of all shareholders and with the objective
of becoming a successful public company, except as otherwise may be approved by
its Board or shareholders as the case may be in connection with the sale of all
or substantially all of assets or stock of MSI (whether by merger or otherwise).
4.3 ACCOUNTING AND CONTROLS. The parties and Board shall cause the
management of MSI to maintain its accounts in accordance with generally accepted
accounting principles and specifically to: (a) make and keep books, records and
accounts which in reasonable detail accurately reflect the transactions and
dispositions of the assets of MSI; and (b) devise and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with general or specific
authorizations; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements and to
maintain the accountability of assets; and (iii) the recorded accountability for
the assets can be compared with the existing assets at reasonable intervals and
the appropriate action with respect to any differences is taken.
4.4 FINANCIAL INFORMATION. The management of MSI shall: (a) present to
the Board annual capital and operating budgets for approval by the Board; (b)
make available to all members of the Board on a regular basis all such
information as may be required to permit the Directors to make informed
judgments with respect to such budgets and all other items of business coming
before them; (c) provide to each Director quarterly financial statements showing
profit and loss, cash flow, assets and liabilities and including appropriate
analyses and forecasts; (d) prepare annual financial statements in accordance
with generally accepted accounting principles and have them audited by
independent auditors of recognized standing; (e) allow Corning and the MSI
Shareholders, and their duly authorized accountants including outside certified
public accountants upon reasonable advance notice at the expense of the party
giving notice, to inspect at reasonable times and places the financial books and
records of MSI; and (f) provide to Corning's Corporate Accounting Department
quarterly financial information reasonably needed by Corning in order for it to
report Corning's investment in MSI in accordance with generally accepted
accounting principles.
4.5 INFORMATION FOR THE MEETINGS. The management of MSI shall furnish
to Corning and the MSI Shareholders (or to the directors designated by the MSI
Shareholders in the case of Board meetings) an agenda and information relating
thereto for meetings of shareholders of MSI and regular or special meetings of
the Board of MSI
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in advance of such meetings for the effective deliberation at such meetings and
if reasonably possible to do so at least seven (7) days in advance of such
meetings.
ARTICLE 5.
TRANSFERS TO SUCCESSORS AND AFFILIATES
5.1 TRANSFERS TO SUCCESSORS AND AFFILIATES. Notwithstanding anything to
the contrary herein and subject to applicable securities laws and regulations,
either Corning or any of the MSI Shareholders may transfer any or all of its
Shares to any Affiliate (as such term is defined in Regulation D under the 0000
Xxx) or to any third party as follows:
(a) in the case of transfer to Affiliates or to non-affiliate
third parties by MSI Shareholders, such transfers may be made without Corning's
consent, except that the consent of Corning (not to be unreasonably withheld)
will be required if:
(i) the third party is not an MSI Shareholder or
an Affiliate of an MSI Shareholder; and
(ii) more than twenty-five percent (25%) of the
issued and outstanding Shares (calculated as of the date of transfer) would be
held by such third party as a result of transfers (including the contemplated
transfer) by MSI Shareholders or their transferees;
(b) in the case of transfer to Affiliates or to non-affiliate
third parties by Corning, such transfers may be made without the consent of any
MSI Shareholder, except that the consent of MSI Shareholders holding 80% of the
total Shares held by MSI Shareholders (not to be unreasonably withheld) will be
required if:
(i) the third party is not an Affiliate of
Corning; and
(ii) more than ten percent (10%) of the issued
and outstanding Shares (calculated as of the date of transfer) would be held by
third parties which are not Affiliates of Corning, MSI Shareholders or
Affiliates of MSI Shareholders as a result of transfers (including the
contemplated transfer) by Corning or its transferees;
provided however any such transferee including Affiliates shall agree in
writing, prior to and as a condition of such transfer to be bound by the
provisions of this Agreement to the same extent as the transferring party. Any
such transferee of the MSI Shareholders shall have the rights and obligations of
the MSI Shareholders under this Agreement and any such transferee of Corning
shall have the rights and obligations of Corning under this Agreement provided
such obligations and rights will be shared in the event of a transfer of less
than all the Corning Shares.
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ARTICLE 6.
ADDITIONAL AGREEMENTS
Except for the transactions contemplated or described by this Agreement
or the Merger Agreement, any services, agreements, contractual obligations or
other arrangements material to MSI and not in the ordinary course of business
such as software licensing or computer equipment sales or leases, between the
MSI Shareholders and Corning or any of their respective Affiliates on the one
hand, and MSI on the other, shall be in the form of a written agreement on terms
no less favorable to MSI than MSI would obtain in a transaction with an
unrelated party unless otherwise approved by a majority of the disinterested
members of the Board.
ARTICLE 7.
FORCE MAJEURE
7.1 EFFECT OF FORCE MAJEURE. If performance of this Agreement or of any
obligation hereunder, except the payment of money, is prevented, restricted or
interfered with by reason of force majeure, any party so affected, upon giving
prompt written notice to the other parties, shall be excused from such
performance to the extent of such prevention, restriction or interference;
provided, that the party so affected shall use its best efforts to avoid or
remove such causes of non-performance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed.
7.2 DEFINITION. Force majeure shall be understood to mean and include
damage or delay caused by acts of God, acts or regulations or decrees of any
government (de facto or de jure), natural phenomena such as earthquakes and
floods, fires, riots, war, shipwrecks, strikes, freight embargoes, lockouts, or
other causes, whether similar or dissimilar to those enumerated above, beyond
the reasonable control of the Parties, which prevent the total or partial
carrying out of any obligation, except the payment of money, under this
Agreement.
7.3 NOTIFICATION. In the event a case of force majeure shall prevent
the total or partial execution of a party's obligations under this Agreement,
the party claiming force majeure shall inform the other Parties in writing
within fifteen (15) days after the occurrence of such case, stating the
beginning and, if possible, the ending times of such case of force majeure and
describing the circumstances thereof.
ARTICLE 8.
ARBITRATION; APPLICABLE LAW
8.1 ARBITRATION. The parties expect to resolve amicably all issues,
breaches or disputes under this Agreement. However, in the event that the same
are not resolved amicably they shah be finally settled by arbitration held in
the United States of America
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and conducted in accordance with the Rules of the American Arbitration
Association. The arbitration panel shall consist of three (3) arbitrators
appointed in accordance with such Rules. The arbitration will be conducted in
the English language and in Chicago, Illinois. The award made in such
arbitration shall be final and conclusive upon the parties. Application may be
made to any court having jurisdiction for an order of enforcement of such award.
8.2 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware and the laws of the United
States of America without regard to conflicts of law principles that would
require a different result.
ARTICLE 9.
NOTICES
9.1 NOTICES. Any notice required or permitted to be given pursuant to
this Agreement shall be given in writing in the English language and forwarded,
charges prepaid, by registered airmail, or by telex confirmed by registered
airmail or facsimile (fax) confirmed by registered airmail, and addressed as
follows (or as hereafter specified by notice from the party being addressed):
If to Corning: Corning Incorporated
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 1483 1
Attn: Secretary
cc: General Counsel
If to MSI: Molecular Simulations, Inc.
00 Xxx Xxxxxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX
Attn: President
cc: General Counsel
If to MSI To the respective addresses set forth
Shareholders: on Exhibit A hereto.
All notices given hereunder shall be deemed given, in the case of notice by
registered mail only, as of the fourth (4th) day following posting, and, in the
case of notice by telex or facsimile confirmed by registered mail, as of the day
following the day the telex or facsimile is dispatched.
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ARTICLE 10.
TERM
10.1 TERM. Except as provided in Section 10.2, this Agreement shall be
effective as of the date hereof and remain in full force and effect until the
earliest occurrence of any event under 3.5 (a-e). Any provision of this
Agreement which constitutes an agreement governed by Section 218(c) of the
Delaware General Corporation Law (or any statutory provision which is a
successor thereto) shall be effective for the period described above; provided
that the parties may extend the duration of such period, as they may then agree
in writing.
10.2 DEFAULT. In the event that Corning on the one hand, or MSI
Shareholders on the other shall default in its or their obligations hereunder
and fail to remedy such default within sixty (60) days after such default shall
have been called to its attention by notice from the other party (it being
understood that no default by any one MSI Shareholder shall be construed as a
default by the MSI Shareholders hereunder unless such default, together with the
default of other MSI Shareholders, if any, results in a material adverse effect
on Corning's rights under this Agreement, nor shall a default by Corning be
construed as a default hereunder unless such default results in a material
adverse effect on the MSI Shareholders' rights under this Agreement); (a) the
parties shall have such rights and remedies as are effective under applicable
law; and (b) the non-defaulting party may (but is not required to) immediately
terminate this Agreement. Termination pursuant to, or for reasons set forth at
this Section 10.2 by the non-defaulting party shall serve to extinguish all
provisions of this Agreement.
10.3 REMEDY FOR DEFAULT. Upon a breach or threatened breach of the
terms or conditions of this Agreement, the other Parties hereto shall, in
addition to all other remedies, each be entitled to seek injunctive relief,
and/or a decree for specific performance in accordance with the provisions of
this Agreement.
ARTICLE 11.
ASSIGNMENT
11.1 ASSIGNMENT ON WRITTEN CONSENT. This Agreement shall be binding
upon and inure to the benefits of the parties and their respective successors
and assigns. This Agreement may not be assigned in whole or in part by any party
except as provided herein.
11.2 ASSIGNMENT TO SUBSIDIARY. Subject to the provisions of Section 5.1
above, Corning and the MSI Shareholders reserve the right to assign in whole or
in part their respective rights and obligations hereunder to any Subsidiary. The
exercise by such an assignor of such right to assign shall not alter such
assignee's obligations hereunder. In
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the event Corning or any of the MSI Shareholders assigns its rights and
obligations hereunder to a Subsidiary, then such assignor shall guarantee the
performance by said Subsidiary of the rights and obligations assigned hereunder.
ARTICLE 12.
MISCELLANEOUS
12.1 ENTIRE AGREEMENT. This Agreement and its Exhibits, the Merger
Agreement and the agreements described therein, constitute the entire agreement,
between Corning, MSI and the MSI Shareholders with respect to the subject matter
hereof, and supersede all previous negotiations, commitments and writings.
12.2 AMENDMENT OR MODIFICATION. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instances and either retroactively or
prospectively), only with the written consent of Corning, MSI and the holders of
eighty percent (80%) of the Shares then held by the MSI Shareholders. Any
amendment or waiver effected in accordance with this Section 12.2 will be
binding upon each MSI Shareholder and Corning, each transferee of an MSI
Shareholder or Corning and MSI.
12.3 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
12.4 NO WAIVER. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
12.5 HEADINGS. Article and section headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
12.6 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument.
-13-
15
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives in the manner legally binding
upon them as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
By:____________________________________
-14-
16
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives in the manner legally binding
upon them as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
By:____________________________________
-15-
17
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives in the manner legally binding
upon them as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
ABS Ventures II Limited Partnership
By:____________________________________
-16-
18
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
Xxxxx Technology Associates Limited
Partnership
By:____________________________________
-17-
19
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
American Consulting Corporation
By:____________________________________
-18-
20
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
CH Partners IV
By:____________________________________
-19-
21
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
CH Investment Partners
By:____________________________________
-20-
22
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
D.E. SHAW INVESTMENT GROUP, L.P.
By: X.X. Xxxx & Co., L.P.
Its General Partner
By: X.X. Xxxx & Co., L.P.
Its General Partner
By:____________________________________
Xxxxx X. Xxxx, President
-21-
23
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
Xxxxxxxx VI
By:____________________________________
-22-
24
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
Xxxxxxxx Associates
By:____________________________________
-23-
25
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
Xxxxxx Xxxxxxx Venture Capital Fund, L.P.
By:____________________________________
-24-
26
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives in the manner legally binding upon them
as of the date first above written.
CORNING INCORPORATED
By:____________________________________
MOLECULAR SIMULATIONS INC.
By:____________________________________
MOLECULAR SIMULATIONS INC. SHAREHOLDERS
SIF Limited Partnership
By:____________________________________
-25-
27
EXHIBIT A TO SHAREHOLDERS AGREEMENT
MSI SHAREHOLDERS
ABS Ventures II Limited Partnership
Xxxxx Technology Associates Limited Partnership
00 Xx. Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
American Consulting Corporation
c/o Affinity Publishing
000 Xx. Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
CH Partners IV
CH Investment Partners
c/o Cable & Xxxxx Ventures
000 000xx
Xxxxxx X.X.
Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxx
D.E. Shaw Investment Group, L.P.
000 X. 00xx Xxxxxx
00xx Xxxxx, Xxxxx 00
Xxx Xxxx, XX 00000
Attn: Ben Xxxxx
Xxxxxxxx VI
Xxxxxxxx Associates
c/x Xxxxxxxx Fund
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxx Xxxxx
-26-
28
Xxxxxx Xxxxxxx Venture Capital Fund, L.P.
SIF Limited Partnership
c/o Morgan Xxxxxxx Venture Partners
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxx xx Xxxxxx
-27-
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EXHIBIT B
OPTION PLAN:
The option plan for directors, employees or consultants of MSI will
consist of (a) MSI's existing option plan pursuant to which 1,349,846 shares are
issuable under outstanding options and 77,325 shares are available for option
grants and (b) options for an additional 2,000,000 shares of Common Stock of
MSI, which options shall be awarded to participants selected by the Board to
purchase Common Stock at such price as the Board may in the future determine.
This stock option plan shall be the only stock option plan under which MSI
grants such options to directors, employees or consultants for a period of three
(3) years from the date of this Shareholders Agreement. The number of shares of
Common Stock issuable under this stock option plan shall be adjusted
appropriately for any stock splits, dividends or combinations with respect to
MSI's Common Stock.
FULLY DILUTED SHARES OF COMMON STOCK AS OF THE DATE HEREOF:
Shares of Common Stock Outstanding 9,330,893
Shares of Common Stock Issuable Upon Conversion of Preferred Stock 2,222,223
Shares of Common Stock Issuable Upon Conversion of Convertible
Non-Voting Common Stock 1,467,825
Shares of Common Stock Subject to Outstanding Options 1,349,846
Shares of Common Stock Subject to Outstanding Warrants 40,654
----------
Total 14,411,441
----------
-28-
30
EXHIBIT C TO
SHAREHOLDERS AGREEMENT
NON-VOTING WARRANTS & STOCK, WARRANTS &
SHAREHOLDER COMMON STOCK PREFERRED STOCK COMMON STOCK ISSUES OPTIONS ISSUED OPTIONS
----------- ------------ --------------- ------------ -------------- -----------------
Xxxxxx Xxxxxxx(1) 172,632 172,632
ABS Ventures(2) 368,178 368,178
Cable & Xxxxx(3) 412,599 412,599
American Consulting Corp. 105,478 105,478
Xxxxxxxx(4) 450,097 450,097
D.E. Shaw lnvst Group, L.P. 186,278 2,222,223 2,408,501
Corning 5,776,558 1,467,825 7,244,383
------------ ------------ ---------- -------------- ----------
TOTALS 7,471,820 2,222,223 11,161,868
(1) Shareholders of record are Xxxxxx Xxxxxxx Venture Capital Fund, L.P.
and SIF Limited Partnership
(2) Shareholders of record are ABS Ventures II Limited Partnership and
Xxxxx Technology Associates Limited Partnership
(3) Shareholders of record are CH Partners IV and CH Investment Partners
(4) Shareholders of record are Xxxxxxxx VI and Xxxxxxxx Associates
-29-
31
EXHIBIT D
CERTIFICATE OF INCORPORATION AND BY-LAWS OF MSI
