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EXHIBIT 10.19
THIRD AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
This Third Amended and Restated Stockholders' Agreement dated as of
November 23, 1999 (the "AGREEMENT") is entered into by and among Sequoia
Software Corporation, a Maryland corporation (the "COMPANY"), the individuals
listed on Schedule I hereto (the "SERIES A STOCKHOLDERS"), the individuals
listed on Schedule II hereto (the "SERIES B STOCKHOLDERS"), the individuals
listed on Schedule III hereto (the "SERIES C/D STOCKHOLDERS") and the
individuals listed on Schedule IV hereto (the "COMMON SHAREHOLDERS"). The Series
A Stockholders, Series B Stockholders, Series C/D Stockholders and Common
Shareholders are referred to herein individually as a "STOCKHOLDER" and
collectively as the "STOCKHOLDERS." The Series A Stockholders, the Series B
Stockholders and the Series C/D Stockholders are collectively referred to herein
as the "PREFERRED STOCKHOLDERS".
Recitals:
1. The Common Stockholders own an aggregate of 15,749,614 shares of
the common stock of the Company, par value $0.001 per share (the "COMMON
STOCK").
2. On November 22, 1996, the Series A Stockholders purchased
8,064,877 shares of the Company's Series A Convertible Preferred Stock, par
value $0.001 per share (the "SERIES A PREFERRED STOCK"), pursuant to the terms
and conditions of that certain Series A Preferred Stock Purchase Agreement of
even date therewith (the "SERIES A STOCK PURCHASE AGREEMENT").
3. On July 28, 1998 and September 28, 1998, the Series B Stockholders
purchased a aggregate of 9,647,920 shares of the Company's Series B Convertible
Preferred Stock, par value $0.001 per share (the "SERIES B PREFERRED STOCK")
pursuant to that certain Series B Convertible Preferred Stock Purchase Agreement
(the "SERIES B STOCK PURCHASE AGREEMENT").
4. Concurrently with the execution of this Agreement, the Series C/D
Stockholders are purchasing up to 26,092,770 shares of the Company's Series C
Convertible Preferred Stock, par value $0.001 per share (the "SERIES C PREFERRED
STOCK") and warrants to purchase 6,817,239 shares of Series D Convertible
Preferred Stock, par value $0.001 per share (the "SERIES D PREFERRED STOCK")
pursuant to that certain Series C Preferred Stock Purchase Agreement of even
date herewith (the "SERIES C STOCK PURCHASE AGREEMENT").
5. The Stockholders desire to provide for their continuing
representation on the Board of Directors of the Company and to define their
respective rights and obligations with respect to ownership of the Company in
the manner set forth below.
In consideration of the premises, mutual covenants and promises contained
herein and the consummation of the sale and purchase of the shares of Series C
Preferred Stock and warrants to purchase Series D Preferred Stock pursuant to
the terms and conditions of the Series C Stock
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Purchase Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Voting.
(a) Election of Directors. Subject to the special provisions of
Sections 1(b), at any time at which the Stockholders of the Company will have
the right to or will vote for or consent in writing to the election of directors
of the Company, each Stockholder hereby agrees to vote or cause to be voted
shares of capital stock of the Company now owned or subsequently acquired by
such Stockholder, however acquired, including, without limitation, stock splits
and stock dividends, or over which such Stockholder has voting control
(collectively, the "SHARES"), so as to fix the number of directors of the
Company at seven (7) and in favor of the following actions:
(i) to cause and maintain the election to the Board of
Directors of one representative designated by Anthem
Capital, L.P. (the "SERIES A/B DIRECTOR");
(ii) to cause and maintain the election to the Board of
Directors of two representatives of the holders of
Series C Preferred Stock, designated by Xxxxx
Communications Fund, L.P. ("XXXXX") (individually, a
"SERIES C DIRECTOR" and collectively, the "SERIES C
DIRECTORS");
(iii) to cause and maintain the election to the Board of
Directors of two members of the management of the
Company including (x) the Chief Executive of the
Company Officer and (y) a member designated by the
Chief Executive Officer of the Company and approved
by a majority of the Board of Directors
(individually, a "MANAGEMENT DIRECTOR" and
collectively, the "MANAGEMENT DIRECTORS"); and
(iv) to cause and maintain the election to the Board of
Directors of two outside individuals (individually,
a "INDEPENDENT DIRECTOR" and collectively, the
"INDEPENDENT DIRECTORS"), with relevant industry
experience to be nominated as follows: one
individual nominated by Divine interVentures, inc.
("DIVINE"), if Divine so desires, who shall at all
times be Xxxxxx Xxxxxxxxxx and one individual
nominated by Xxxxx and approved by the Board of
Directors; and
(v) to cause and maintain the election to serve on the
audit and compensation committee of the Board of
Directors, one representative designated by Xxxxx.
If the Company's Board of Directors establishes an
Executive Committee, at least one Series C Director
shall be appointed to serve on such committee.
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The initial Series A/B Director shall be Xxxxxxx X. Xxxx, XX. The
initial Series C Directors shall be Xxxxxxxx Xxxxxxx and Xxxxxxxx X. Xxxxxx. The
initial Management Directors shall be Xxxxxxx X. Faint, Jr. and Xxxx Wesker.
Xxxxxx X. Xxxxxxxxxx shall be an initial Independent Director.
The Company shall cause the nomination for election to the Board
of Directors of the designated representatives and shall call such Stockholders'
meetings as may be necessary to effect any such election. The Stockholders shall
not vote their Shares in favor of the election of any directors except as
specified in this Section 1.
(b) Vacancies and Removal. Each of the directors designated
pursuant to Section 1(a) shall be elected at any annual or special meeting of
Stockholders (or by written consent in lieu of a meeting of Stockholders) and
shall serve until his successor is elected and qualified or until his earlier
resignation or removal.
The Stockholders shall vote all of their Shares to cause
the Series A/B Director to be removed during his term of office, when, and only
when, they are so directed in writing by the holders of a majority of the shares
of Series A Preferred Stock and the Series B Preferred Stock, voting together as
a class.
The Stockholders shall vote all of their Shares to cause a
Series C Director to be removed during his term of office, when, and only when,
they are so directed in writing by Xxxxx.
The Stockholders shall vote all of their Shares to cause a
Management Director to be removed as a director during his term of office, when,
and only when, they are so directed in writing by the Chief Executive Officer
and a majority of the Board of Directors of the Company.
The Stockholders shall vote all of their Shares to cause an
Independent Director to be removed as a director during his term of office,
when, and only when, they are so directed in writing by the Board of Directors.
In the event of any vacancy in the position of any of the
directors elected pursuant to Section 1(a), the Company agrees to promptly
nominate, and the Stockholders agree to promptly vote their Shares, to elect
such person as has been nominated to fill such position by the respective groups
set forth in Section 1(a).
(c) Notice. The Company shall provide the Stockholders with
prior written notice of any intended mailing of notice to Stockholders for a
meeting at which directors are to be elected, and the Stockholders shall notify
the Company in writing, prior to such mailing, of the persons designated thereby
as nominees for election as directors. If any eligible Stockholder shall fail to
give notice to the Company as provided above, it shall be deemed that the
designees
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of such eligible Stockholder then serving as directors shall be such
Stockholder's designees for reelection.
2. Right of First Refusal.
(a) Except as otherwise provided in this Agreement, no
Stockholder shall sell, assign, transfer, mortgage, pledge, encumber or
otherwise dispose of (whether or not for value) any Shares and any interest
therein (collectively, the "SECURITIES") (such sale, assignment, transfer,
mortgage, pledge, encumbrance or other disposition being hereinafter referred to
as a "TRANSFER"), and in no event shall any Transfer be made, unless and until
the transferring Stockholder has complied with all federal and state securities
laws applicable to such Transfer. Any purported Transfer except in accordance
with the provisions of this Agreement, shall be null and void ab initio. No
Transfer shall be effective unless and until such transferee shall have executed
an instrument pursuant to Sections 10 and 12 hereof agreeing to be bound by the
provisions hereof. Upon the execution of such instrument, the term "Stockholder"
as used in this Agreement shall be deemed to include the transferee executing
such instrument.
(b) Offer Notice. Except as described in Paragraph (h) below,
if any Stockholder wishes to Transfer any Securities owned by such Stockholder
after the date of this Agreement, such Stockholder (the "SELLING STOCKHOLDER")
shall first deliver written notice of such Stockholder's desire to do so (the
"OFFER NOTICE") to the Company in the manner prescribed in Section 12(f) hereof.
The Offer Notice must specify: (i) the name and address of the party to which
the Selling Stockholder proposes to Transfer the Securities (the "OFFEROR");
(ii) the number of Securities the Selling Stockholder proposes to Transfer;
(iii) the consideration per share to be delivered to the Selling Stockholder for
the proposed Transfer; and (iv) all other material terms of the proposed
transaction. If the Selling Stockholder proposes to sell the Securities for
consideration other than solely cash, the Offer Notice shall, to the extent of
such consideration, permit the Company or any other Stockholder exercising its
right of first refusal as set forth in this Section 2, to pay in lieu thereof,
cash equal to the fair market value of such consideration, as determined in good
faith by agreement among the Selling Stockholder, the Company and the
Stockholders acquiring such Securities pursuant to the terms hereof, as
applicable, and the offer shall state the Selling Stockholder's estimate of such
fair market value.
(c) Company Option. Subject to Section 3 and except as set
forth in Paragraph (h) below, the Company shall have the first option to
purchase all or any part of the Securities for the consideration per share and
on the terms and conditions specified in the Offer Notice. The Company must
exercise such option no later than fifteen (15) days after such Notice is deemed
under Section 12(f) hereof to have been delivered to it, by written notice to
the Selling Stockholder. In the event the Company does not exercise its option
within such 15-day period with respect to all of the Securities, the Company
shall, by the last day of such period, give written notice of that fact to the
Series C/D Stockholders (the "SERIES C NOTICE"). The Series C Notice shall
specify the number of Securities not purchased by the Company (the "REMAINING
SHARES"). In the event the Company duly exercises its option to purchase all or
part of the Securities, the closing of such purchase shall take place at the
offices of the Company on the
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later of (i) the date five (5) days after the expiration of such 15-day period,
(ii) the date that the Series C/D Stockholders consummate their purchase of the
Remaining Shares under Paragraph (d) hereof or (iii) the date that the Series
A/B stockholders (as defined) consummate their purchase of the Available Shares
(as defined) under Paragraph (e) hereof.
(d) Series C/D Stockholder Option. Subject to Section 3 and
except as set forth in Paragraph (h) below, each Series C/D Stockholder shall
have an option, exercisable for a period of fifteen (15) days from the date of
delivery of the Series C Notice, to purchase, on a pro rata basis according to
the number of Shares owned by such Series C/D Stockholder, the Remaining Shares
for the consideration per share and on the terms and conditions set forth in the
Offer Notice. Such option shall be exercised by delivery by such Series C/D
Stockholder of written notice to the Secretary of the Company. Alternatively,
each Series C/D Stockholder may within the same 15-day period, notify the
Secretary of the Company of its desire to sell shares pursuant to Section 3(a)
hereof, on the terms set forth in the Offer Notice, and the number of Shares it
wishes to sell.
In the event the Series C/D Stockholders do not exercise their
option within such 15-day period with respect to all of the Remaining Shares,
the Series C/D Stockholders shall, by the last day of such period, give written
notice (the "SERIES A/B NOTICE") of that fact to the Company. The Company shall
promptly notify the Series A Stockholders and the Series B Stockholders
(referred to herein individually as a "SERIES A/B STOCKHOLDER" and collectively
as the "SERIES A/B STOCKHOLDERS"). The Series A/B Notice shall specify the
number of Offered Shares not purchased by the Company or the Series C/D
Stockholders (the "AVAILABLE SHARES"). In the event the Series C/D Stockholders
duly exercise their option to purchase all or part of the Remaining Shares, the
closing of such purchase shall take place at the offices of the Company on the
later of (i) the date five (5) days after the expiration of such 15-day period
or (ii) the date that the Series A/B Stockholders consummate their purchase of
the Available Shares.
(e) Series A/B Stockholder Option. Subject to Section 3 and
except as set forth in Paragraph (h) below, each Series A/B Stockholder shall
have an option, exercisable for a period of fifteen (15) days from the date of
delivery of the Series A/B Notice, to purchase, on a pro rata basis according to
the number of Shares owned by such Series A/B Stockholder, the Available Shares
for the consideration per share and on the terms and conditions set forth in the
Offer Notice. Such option shall be exercised by delivery by such Series A/B
Stockholder of written notice to the Secretary of the Company. Alternatively, if
the Selling Stockholder is a holder of Series A Preferred Stock, Series B
Preferred Stock or Common Stock, each Series A/B Stockholder may within the same
15-day period, notify the Secretary of the Company of its desire to sell shares
pursuant to Section 3(b) hereof, on the terms set forth in the Offer Notice, and
the number of Shares it wishes to sell.
In the event the Series A/B Stockholders do not exercise their
option within such 15-day period with respect to all of the Remaining Shares,
the Series A/B Stockholders shall, by the last day of such period, give written
notice to the Company which shall promptly notify the Selling Stockholder of
that fact. In the event the Series A/B Stockholders duly exercise their option
to purchase all or part of the Available Shares, the closing of such purchase
shall take
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place at the offices of the Company on the date five (5) days after the
expiration of such 15-day period.
(f) Closing. At closing, each of the Stockholders acquiring
Securities from the Selling Stockholder shall deliver to the Selling Stockholder
payment in full for the Securities purchased by it, against delivery by the
Selling Stockholder to each such Stockholder of a certificate or certificates
evidencing the Securities purchased by it.
(g) To the extent that the offer is not subscribed for in full
as a result of Paragraphs (c) through (e) above, then for a period of 90 days
thereafter, the Selling Stockholder may issue and sell the unaccepted
Securities, or any of them, at the same price and upon substantially similar
terms and conditions as those specified in such offer, to any other individual,
firm, corporation, partnership, limited liability company, trust, joint venture,
governmental authority or other entity.
(h) Notwithstanding the provisions of this Section 2, a Selling
Stockholder shall not be required to first offer any Securities to the Company
or the Stockholders pursuant to this Section if the Selling Stockholder wishes
to Transfer such Securities to (i) any other Stockholder, (ii) any stockholder,
partner, member or affiliate of a Stockholder, (iii) any one or more members of
a class consisting of the parents, siblings, spouse, children and grandchildren
of a Stockholder, a trust or family limited partnership for the benefit of any
one or more members of such class, a beneficiary or trustee of a Stockholder as
of the date hereof (or a trustee that is a family member of such a beneficiary);
or (iv) the Company (each, a "PERMITTED TRANSFEREE"). For the purposes of this
Section 2(h), X.X. Xxxxxxx shall be deemed a Permitted Transferee provided that
he shall have agreed in writing to be bound by all the provisions of this
Agreement.
3. Right of Co-Sale.
(a) Sales By Stockholders Other Than Series A/B Stockholders.
Except as set forth in Sections 2(h) and 4 hereof, if at any time a Selling
Stockholder who is not a Series A/B Stockholder, wishes to Transfer any
Securities owned by such Stockholder to other than a Permitted Transferee (the
"PURCHASER"), then each Series C/D Stockholder shall have the right, exercisable
upon written notice to the Selling Stockholder prior to expiration of the right
of first refusal described in Section 2, to participate in the Selling
Stockholder's sale of Securities on the same terms and conditions as those
contained in the Offer Notice; provided, however, that such Series C/D
Stockholder shall not be required to make any representations or warranties
(other an as to valid title and due authorization to sell such Securities) or
covenants or give any indemnities (other than severally and not jointly, with
respect to representations and warranties relating to valid title and due
authorization to sell such Securities, such indemnities to be limited to the
proceeds received by such Series C/D Stockholder for such sale of its
Securities). To the extent a Series C/D Stockholder exercises such co-sale
right, the number of Securities which the Selling Stockholder may Transfer shall
be correspondingly reduced. The right of participation of each Series C/D
Stockholder shall be subject to the following terms and conditions: each Series
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C/D Stockholder may sell all or any part of that number of Securities equal to
the product obtained by multiplying (i) the aggregate number of Securities
described in the Offer Notice, by (ii) a fraction the numerator of which is the
number of shares at the time owned by such Series C/D Stockholder, determined on
an as-if-converted basis, and the denominator of which is the combined number of
shares at the time owned by all Stockholders who are not Series A/B
Stockholders, determined on an as-if-converted basis.
(b) Sales By Series A/B Stockholders. Except as set forth in
Sections 2(h) and 4 hereof, if at any time a Selling Stockholder who is a Series
A/B Stockholder, wishes to Transfer any Securities owned by such Stockholder to
a Purchaser, then each Preferred Stockholder shall have the right, exercisable
upon written notice to the Selling Stockholder prior to expiration of the right
of first refusal described in Section 2, to participate in the Selling
Stockholder's sale of Securities on the same terms and conditions as those
contained in the Offer Notice; provided, however, that the Preferred
Stockholders exercising co-sale rights hereunder shall not be required to make
any representations or warranties (other than as to valid title and due
authorization to sell such Securities) or covenants or give any indemnities
(other than severally and not jointly, with respect to representations and
warranties relating to valid title and due authorization to sell such
Securities, such indemnities to be limited to the proceeds received by such
Stockholder for such sale of its Securities). To the extent a Preferred
Stockholder exercises such co-sale right, the number of Securities which the
Selling Stockholder may Transfer shall be correspondingly reduced. The right of
participation of each Preferred Stockholder shall be subject to the following
terms and conditions: each Preferred Stockholder may sell all or any part of
that number of Securities equal to the product obtained by multiplying (i) the
aggregate number of Securities described in the Offer Notice, determined on an
as-if converted basis, by (ii) a fraction the numerator of which is the number
of Securities at the time owned by such Preferred Stockholder, determined on an
as-if-converted basis, and the denominator of which is the combined number of
Securities at the time owned by all Stockholders, determined on an
as-if-converted basis.
(c) Each Stockholder exercising a co-sale right as set forth in
this Section 3, may participate in the sale by delivering to the Selling
Stockholder for transfer to the Purchaser one or more certificates, properly
endorsed for Transfer, which represent the number of Securities that such
Stockholder elects to sell pursuant to this Section 3.
(d) The stock certificate or certificates which the each
Stockholder exercising a co-sale right hereunder delivers to the Selling
Stockholder pursuant to paragraph (c) above shall be transferred by the Selling
Stockholder to the Purchaser in consummation of the sale of the Securities
pursuant to the terms and conditions specified in the Offer Notice and the
Selling Stockholder shall promptly thereafter remit to such Stockholder that
portion of the sale proceeds to which such Stockholder is entitled by reason of
its participation in such sale.
(e) The Selling Stockholder shall use his best efforts to
obtain the agreement of the Purchaser to the full desired participation of the
Stockholders entitled to co-sale rights hereunder in the contemplated sale, and
such Selling Stockholder shall not sell any Securities to
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such Purchaser if such Purchaser declines to permit the Stockholder exercising
such co-sale rights hereunder to sell all of the Securities they request to
sell.
4. Drag-Along Rights.
(a) Notice. If any Stockholder receives a bona fide offer from
an independent third party that is not a Permitted Transferee to (i) transfer
all or substantially all of the Company's assets, (ii) purchase a majority of
the outstanding capital stock of the Company or (iii) engage in any other
transaction that would result in the Company or the Company's business being
acquired (a "BONA FIDE OFFER"), such Stockholder shall promptly notify the
Company in writing of the price and other terms and conditions of the Bona Fide
Offer. Upon receipt of the notice from the Stockholder, or, if the Bona Fide
Offer is received by the Company directly from the independent third party, upon
receipt of the Bona Fide Offer, the Company shall promptly notify all
Stockholders in writing of the Bona Fide Offer, specifying the terms, including
price, and conditions thereof (the "COMPANY NOTICE").
(b) Stockholder Vote. Within 30 days after the Company Notice,
the Company shall hold a special meeting of the Stockholders to consider the
Bona Fide Offer. If the holders of a majority of the outstanding Common Stock of
the Company (determined on an as-if-converted basis) vote to accept the Bona
Fide Offer ("STOCKHOLDER APPROVAL"), the Bona Fide Offer shall be presented to
the Series C/D Stockholders for their approval.
(c) Approval of Series C/D Stockholders. If the Bona Fide Offer
receives Stockholder Approval, the holders of a majority of the then outstanding
Series C Preferred Stock and Series D Preferred Stock, voting together as a
class, may require each other Stockholder to accept the Bona Fide Offer, by
giving such other Stockholders written notice thereof no later than 15 days
after the notice of Stockholder Approval (the "DRAG ALONG NOTICE").
(d) No later than 10 business days after the Drag Along Notice,
each Stockholder shall promptly deliver to the Company certificates representing
all of such Stockholder's Securities, in proper form for Transfer, together with
a limited power-of-attorney authorizing the President of the Company to deliver
such certificates to the offeror in consummation of the Bona Fide Offer, and to
execute all other documents required to be executed in connection therewith;
provided, however, that any indemnity by the Stockholders in favor of such
offeror in such documents shall be several, and not joint, and each
Stockholder's individual liability thereunder shall not exceed the cash portion
of the consideration to be received by such Stockholder. Pending consummation of
the sale under this Section, the Company shall promptly notify all Stockholders
of any changes in the expected timing of closing of such transaction or any
other material developments in connection therewith. Promptly following such
closing, the Company shall remit to each Stockholder that Stockholder's pro rata
share of the consideration paid in such transaction. Each Stockholder agrees
that upon receipt of a Drag Along Notice it will take all actions necessary to
consummate the transactions contemplated by the Bona Fide Offer.
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(e) If, within 90 days after the date of the Drag Along Notice,
the Bona Fide Offer has not been completed, the Company shall promptly return to
each Stockholder all certificates representing its Shares and the limited
powers-of-attorney previously delivered by it to the Company, and the Company
shall notify the offeror that the Bona Fide Offer has been terminated.
5. Termination. This Agreement shall terminate in its entirety on the
earliest of (a) the closing of the first underwritten public offering of the
Common Stock pursuant to a registration statement on Form S-1 or S-2 (or any
successor form) in which the aggregate gross proceeds to the Company are not
less than $25,000,000 at a per share price of no less than three times the per
share purchase price paid for Series C Preferred Stock pursuant to the Series C
Stock Purchase Agreement (as adjusted for stock splits, stock dividends,
recapitalizations and similar events); (b) November 15, 2009; or (c) the written
consent of (i)the holders of a majority of the Series A Preferred Stock and
Series B Preferred Stock, consenting as a single class, and (ii) the holders of
the majority of the Series C Preferred Stock and Series D Preferred Stock,
consenting as a single class.
6. No Revocation. The voting agreements contained herein are coupled
with an interest and may not be revoked, except by written consent of all of the
Stockholders.
7. Indemnification. In the event that any director elected pursuant
to Section 1 of this Agreement shall be made or threatened to be made a party to
any action, suit or proceeding with respect to which he may be entitled to
indemnification by the Company pursuant to either Article VIII of its By-Laws or
Article NINTH of its Charter, or otherwise, he shall be entitled to be
represented in such action, suit or proceeding by counsel of his choice and the
reasonable expenses of such representation shall be reimbursed by the Company to
the extent provided in or authorized by said By-Laws or other provision. Each of
the Stockholders agrees not to take any action to amend either Article VIII of
the By-Laws or Article NINTH of the Charter, each relating to indemnification of
directors, as presently in effect, without the prior written consent of all of
the Stockholders.
8. Restrictive Legend. All certificates representing Shares owned or
hereafter acquired by the Stockholders or any transferee of the Stockholders
bound by this Agreement shall have affixed thereto a legend substantially in the
following form:
"The shares represented by this certificate are subject to and may
be transferred only in compliance with the provisions of a
stockholders' voting agreement, a copy of which is on file at the
corporation's principal office, and any holder thereof is subject
to the provisions of such agreement."
9. Action as Director. No party hereto who is or may become a
director of the Company either agrees or implies that he will exercise his
actions as a director in any manner other than in accordance with his considered
judgment at such time with respect to the best interests of the Company and all
of its stockholders.
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10. Stock Transfer Record. The Company shall maintain a stock transfer
book in which shall be recorded the name and address of each Stockholder. No
transfer of Shares shall be effective or valid unless and until recorded in such
stock transfer book. The Company agrees not to record any transfer of Shares in
its stock transfer book unless (i) the transfer complies with this Agreement,
and (ii) the transferee shall have agreed in writing to be bound by all of the
provisions of this Agreement applicable to the Stockholders and shall become a
party hereto.
11. Amending and Superseding Prior Agreement. This Agreement amends,
restates and supersedes in its entirety that certain Second Amended and Restated
Stockholders' Voting Agreement dated September 28, 1998 by and among the parties
set forth therein (the "PRIOR STOCKHOLDERS' Agreement"), and the terms and
conditions of the Prior Stockholders' Agreement shall be of no further force or
effect.
12. General.
(a) Severability. The provisions of this Agreement are
severable, so that the invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other term or
provision of this Agreement, which shall remain in full force and effect.
(b) Specific Performance. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, each Stockholder shall be entitled to specific performance of the
agreements and obligations of the other parties hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction.
(c) After Acquired Stock -- Subsequent Stockholders. The terms
and conditions of this Agreement shall specifically apply to the shares of
capital stock of the Company, which shall include any other shares of capital
stock of the Company acquired by the Stockholders subsequent to the date of
execution of this Agreement. It is further understood and agreed that the terms
and conditions of this Agreement shall apply to whomsoever shall receive
one-half of one percent or more of the capital stock of the Company, including,
by way of illustration and not of limitation, bona fide purchasers for value;
provided, however, that this Section 12(c) shall not apply to employees of the
Company who acquire Common Stock through the exercise of stock options. It shall
be a condition precedent to the issuance of one-half of one percent or more of
the capital stock of the Company to any person by the Company that said person
shall agree to be bound by the terms and conditions of this Agreement.
(d) Alteration, Amendment or Termination. No waiver or
amendment of any provision of this Agreement shall be valid unless the same is
in writing and signed by (i) the Company, (ii) the holders in interest of a
majority of the Series A Preferred Stock and the Series B Preferred Stock,
consenting as a single class, (iii) the holders in interest of a majority of the
Series C Preferred Stock and the Series D Preferred Stock, consenting as a
single class, and (iv)
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holders in interest of a majority of the Common Stock subject to this Agreement.
The failure of any party at any time to insist upon strict performance of any
condition, promise, agreement or understanding set forth herein shall not be
construed as a waiver or relinquishment of the right to insist upon strict
performance of the same condition, promise, agreement or understanding at a
future time. The invalidity or unenforceability of any particular provision
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
(e) Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland.
(f) Notices. Any and all notices or elections permitted or
required to be made under this Agreement shall be in writing, signed by the
party giving such notice or election and shall be delivered personally or by
telecopy, or by courier or sent by registered or certified mail, return receipt
requested or first class mail postage prepaid, and shall be addressed to the
Company and the Stockholders at their respective addresses shown on the
schedules attached hereto or such other address designated by such Stockholder
in a written notice to the Company. Notices provided in accordance with this
Section 12(f) shall be deemed delivered upon personal delivery or facsimile
delivery, receipt confirmed, one day after placement with a reputable overnight
delivery service or two business days after deposit in the U.S. mail, postage
prepaid.
(g) Complete Agreement. This Agreement constitutes the full and
complete agreement of the parties hereto with respect to the subject matter
hereof.
(h) Pronouns. Whenever the content may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
(i) Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one Agreement binding on
all the parties hereto.
(j) Captions. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.
{Signatures on following page}
* * *
-11-
12
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above written.
COMPANY:
SEQUOIA SOFTWARE CORPORATION
By:
-----------------------------------
Xxxx Wesker, President
STOCK HOLDERS:
XXXXX COMMUNICATIONS FUND, L.P.
By: Xxxxx Capital Partners, LLC
General Partner
By:
-----------------------------------
Xxxxxxxx Xxxxxxx, Manager
DIVINE INTERVENTURES, INC.
By:
-----------------------------------
Xxxxxx X. Xxxxxxxxxx,
ANTHEM CAPITAL, L.P.
By: Anthem Capital Partners, L.P.,
General Partner
By: Anthem Capital Partners, Inc.
General Partner
By:
-----------------------------------
Xxxxxxx X. Xxxx, XX, President
{Signatures Continued on Next Page}
13
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Corporation
Its: General Partner
By:
-----------------------------------
Xxxx Xxxxxx, Vice President
--------------------------------------
XXXXXXX X. FAINT, JR.
--------------------------------------
XXXXXXX X. XXXX
APPROVED XXXXXX XXXXXX XXXX TRUST ESTATE
- TRUST B
By: By:
---------------------- -----------------------------------
Miro Vranac, Jr., X.X. Xxxxxxx, Trustee
Member Advisory Board
XXXX XXXXXX XXXX TRUST -
XXXX XXXXXXXXXX
By: By:
---------------------- -----------------------------------
Xxxx Xxxx Xxxxxxxxxx, Xxxx Vranac, Jr., Trustee
Trustee
By:
-----------------------------------
XXXX XXXX XXXXXXXXXX
FLANDERS LANGUAGE VALLEY
FUND, C.V.A.
By:
-----------------------------------
Name:
Title:
{Signatures Continue on Next Page}
14
LAMBRO'S L.P.
By: CJ Capital Management LLC
By:
-----------------------------------
Xxxxxx Xxxxxx
Investment Advisor
SMART TECHNOLOGY VENTURES 2
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
--------------------------------------
XXXXXX XXXXXX
--------------------------------------
XXXXXXXXXX XXXXX MANY
--------------------------------------
XXXXXX X. XXXXXXXXXX
ODYSSEY CAPITAL, LP
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
--------------------------------------
XXXX XXXXXXXX
{Signatures Continue on Next Page}
15
JODA ENTERPRISES LTD.
By:
-----------------------------------
Xxxxx X. Xxxxxx
Title:
{Signatures Continue on Next Page}
16
SEQ CAPITAL INVESTMENTS
By:
-----------------------------------
Name: Xx. Xxxxxxx Xxxxxxx
Title:
---------------------------
X. XXXXXXX FAMILY TRUST DATED 8/15/93
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
W. XXXXXXX XXXXX AND XXXX X. XXXXX
AS JOINT TENANTS WITH RIGHT OF
SURVIORSHIP
By:
-----------------------------------
W. Xxxxxxx Xxxxx
By:
-----------------------------------
Xxxx X. Xxxxx
--------------------------------------
XXXXXX XXXXX
--------------------------------------
CILLIAN S. O'BRADAIGH
--------------------------------------
XXXX XXXXXXXX XXXXX
--------------------------------------
XXXXX XXXX
--------------------------------------
XXXXXX XXXXXX
--------------------------------------
XXXXX XXXXXXXXXX
{Signatures Continue on Next Page}
17
--------------------------------------
XXXX WESKER
--------------------------------------
XXXX XXXXX
--------------------------------------
XXX XXXXXXXXX
--------------------------------------
XXXXXXX XXXXX
--------------------------------------
XXXX XXXXXXXXX
RADIAN, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
X'XXXXX COMMUNITY PROPERTY TRUST
By:
-----------------------------------
Name:
------------------------------
Xxxxx X'Xxxxx, Trustee
18
AMENDMENT NO. 1 TO THE
THIRD AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS AMENDMENT NO. 1 (the "Amendment") to that certain Third Amended and
Restated Stockholders' Agreement dated November 23, 1999 (the "Agreement") by
and among Sequoia Software Corporation (the "Company") and the individuals
listed on the schedules thereto, is made as of this 19th day of April, 2000 by
and among the Company and the undersigned stockholders (the "Stockholders"). All
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Agreement.
WHEREAS, the Company and the Stockholders are parties to the Agreement;
and
WHEREAS, pursuant to Section 12(d) of the Agreement, the Company and the
Stockholders desire to amend certain provisions of the Agreement in connection
with the Company's initial public offering of its common stock, par value $0.001
per share (the "Common Stock").
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in the Agreement and this Amendment, the parties hereto agree as
follows:
1. Section 5 of the Agreement shall hereby be amended and restated in its
entirety as follows:
"5. Termination. This Agreement shall terminate in its entirety on the
earliest of (a) the closing of the first underwritten public offering of
the Common Stock pursuant to a registration statement on Form S-1 or S-2
(or any successor form) in which the aggregate gross proceeds to the
Company are not less than $20,000,000; (b) November 15, 2009; or (c) the
written consent of (i) the holders of a majority of the Series A
Preferred Stock and Series B Preferred Stock, consenting as a single
class, and (ii) the holders of a majority of the Series C Preferred Stock
and Series D Preferred Stock, consenting as a single class."
2. Except as otherwise expressly set forth in this Amendment, the
Agreement shall continue to be in full force and effect in accordance with its
terms.
3. This Amendment may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same document. This Agreement may be executed by
facsimile signatures.
* * *
{Signatures on following page.}
19
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the
Agreement as of the date first written above.
SEQUOIA SOFTWARE CORPORATION
By:
------------------------------------
Name:
Title:
ANTHEM CAPITAL, L.P.
By: Anthem Capital Partners, L.P.,
General Partner
By: Anthem Capital Partners, Inc.
General Partner
By:
------------------------------------
Xxxxxxx X. Xxxx, XX, President
NEPA VENTURE FUND II, L.P.
By: NEPA II Management Corporation
General Partner
By:
------------------------------------
Xxxx Xxxxxx, Vice President
FLANDERS LANGUAGE VALLEY
FUND, C.V.A.
By:
------------------------------------
Name:
Title:
XXXXX COMMUNICATIONS FUND, L.P.
By: Xxxxx Capital Partners, LLC
General Partner
By:
------------------------------------
Xxxxxxxx Xxxxxxx, Manager
20
---------------------------------------
XXXXXXX X. FAINT, JR.
---------------------------------------
XXXX WESKER
---------------------------------------
XXXX XXXXX
SETHI FAMILY LLC
---------------------------------------
Xxxx Xxxxx, Managing Partner
