Exhibit 3
Stockholders Agreement
REGISTRATION AND STOCKHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND STOCKHOLDER RIGHTS AGREEMENT (the "Agreement") is made
as of the day of , 1998, by and between Paradigm Technology, Inc., a
Delaware corporation (the "Company"), and Asea Xxxxx Boveri A.G., a
corporation formed under the laws of Germany and Asea Xxxxx Boveri, Inc., a
Delaware corporation (collectively, the "Stockholder").
Recitals
WHEREAS, the Company, IXYS Corporation, a Delaware corporation ("IXYS") and
Paradigm Enterprises, Inc., a Delaware corporation and wholly owned subsidiary
of the Company ("Merger Sub"), have entered into an Agreement and Plan of
Merger and Reorganization dated as of March 6, 1998 (the "Merger Agreement"),
pursuant to which Merger Sub will be merged with and into IXYS with IXYS as
the surviving corporation (the "Merger");
WHEREAS, pursuant to the terms of the Merger, the Stockholder's shares of
common stock of IXYS, par value $0.001 per share, will be exchanged for the
right to receive shares of the common stock of the Company, par value $0.01;
(the "Common Stock"); and
WHEREAS, in connection with the Merger and pursuant to the Merger Agreement,
the Company has agreed to provide the Stockholder with certain registration
rights as set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
I. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in effect on the
date hereof or any registration form under the Act subsequently adopted by
the SEC which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC.
(c) The term "1934 Act" shall mean the Securities Exchange Act of 1934,
as amended.
(d) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(e) The term "Registrable Securities" means (i) all or any shares of
Common Stock received by the Stockholder in connection with the Merger (all
such Shares, the "Merger Shares"), (ii) any shares of Common Stock issued
as a dividend or distribution with respect to, or in exchange for, or in
replacement of, the Merger Shares, and (iii) any shares of Common Stock
issuable upon the conversion or exercise of any warrant or right.
(f) The term "SEC" shall mean the Securities and Exchange Commission.
1.2 Demand Registration
(a) If at any time after the date hereof, the Company shall receive a
written request from the Stockholder that the Company file a registration
statement under the Act covering the registration of at least twenty five
percent (25%) of the Registrable Securities then outstanding (or a lesser
percent if the anticipated aggregate offering price, net of underwriting
discounts and commissions, would exceed $5,000,000), then the Company shall:
(i) effect as soon as practicable, and in any event within 90 days after
receipt of such request, the registration under the Act of all Registrable
Securities which the Stockholder request to be registered.
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(b) If the Stockholder intends to distribute the Registrable Securities
covered by its request by means of an underwriting, it shall so advise the
Company as a part of its request made pursuant to subsection 1.2(a). The
underwriter or underwriters will be selected by the Stockholder and shall be
reasonably acceptable to the Company. The Stockholder (together with the
Company as provided in subsection 1.4(e)) shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting.
(c) The Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to this Section 1.2:
(i) if more than one registration has been effected pursuant to this
Section 1.2 in any preceding twelve (12) month period and such registration
has been declared or ordered effective, or more than two such registrations
have been declared or ordered effective overall;
(ii) During the period starting with the date thirty (30) days prior to
the Company's good faith estimate of the date of filing of, and ending on a
date ninety (90) days after the effective date of, a registration subject
to Section 1.3 hereof; provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to
become effective;
(iii) If the Stockholder proposes to dispose of shares of Registrable
Securities that may be immediately registered on Form S-3 pursuant to a
request made pursuant to Section 1.10 below; or
(iv) if the Company shall furnish to the Stockholder a certificate signed
by the Chairman of the Board stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such registration statement to be effected
at such time, in which event the Company shall have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Stockholder; provided that such right to delay a request,
whether pursuant to this Section 1.2 or Section 1.10, shall be exercised by
the Company not more than once in any twelve (12) month period.
1.3 Company Registration
(a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company
for stockholders other than the Stockholder) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company employee benefit plan, a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities which are also being registered), the Company shall, at such
time, promptly give the Stockholder written notice of such registration. Upon
the written request of the Stockholder given within twenty (20) days after
mailing of such notice by the Company in accordance with Section 3.5, the
Company shall, subject to the provisions of Section 1.7, cause to be
registered under the Act all of the Registrable Securities that the
Stockholder has requested to be registered.
(b) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 1.3 prior to the effectiveness
of such registration whether or not the Stockholder has elected to include
securities in such registration. The Registration Expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 1.6
hereof.
1.4 Obligations of the Company. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its reasonable best efforts to cause
such registration statement to become effective, and, upon the request of
the Stockholder, keep such registration statement effective for a period of
up to one hundred twenty (120) days or until the distribution contemplated
in the Registration Statement has been completed;
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provided, however, that such 120-day period shall be extended for a period
of time equal to the period the Stockholder refrains from selling any
securities included in such registration at the request of an underwriter
of Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement; provided that, except as to a registration
statement and prospectus pursuant to Section 1.3 hereof, the Company shall
not file any amendment or supplement to such registration statement or
prospectus to which the Stockholder shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Act, having been furnished with a
copy thereof at the earliest practicable date.
(c) Furnish to the Stockholder such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as the Stockholder may reasonably request
in order to facilitate the disposition of Registrable Securities owned by
the Stockholder.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Stockholder; provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general Consent to service of process in any such
states or jurisdictions, unless the Company is already subject to service
in such jurisdiction and except as may be required by the Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The
Stockholder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(f) Notify the Stockholder at any time when a prospectus relating to the
registration of Registrable Securities is required to be delivered under
the Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued
by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant hereunder and a CUSIP number for all such Registrable
securities, in each case not later than the effective date of such
registration.
(i) Use its reasonable best efforts to furnish, at the request of the
Stockholder, on the date that such Registrable Securities are delivered to
the underwriters for sale in connection with a registration pursuant to
this Section 1, if such securities are being sold through underwriters, or,
if such securities are not being sold through underwriters, on the date
that the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Stockholder and (ii) a
letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and, if permitted
by applicable accounting standards, to the Stockholder (or if delivery of
such letter is not permitted by applicable accounting standards, deliver to
the Stockholder a copy of such letter addressed to the underwriters, if
any).
1.5 Expenses of Demand Registration and S-3 Registration. All expenses,
other than underwriting discounts and commissions, incurred in connection with
the first registration pursuant to this Agreement (other
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than pursuant to Section 1.3) and related filings or qualifications, including
(without limitation) all registration, filing and qualification fees,
printers' and accounting fees, and the reasonable fees and disbursements of
counsel for the Company (collectively, the "Registration Expenses") shall be
borne as follows: (i) the Company shall pay the lesser of (A) fifty percent
(50%) of the Registration Expenses or (B) $100,000, and (ii) the Stockholder
shall pay the remaining Registration Expenses. The Stockholder shall pay (i)
one hundred percent (100%) of all Registration Expenses incurred following the
first such registration, (ii) the fees and disbursements of any counsel
retained by it in connection with any such registrations, and (iii) any
underwriting discounts or commissions payable with respect to any Registrable
Securities sold by it.
1.6 Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to
Section 1.3 for the Stockholder (which right may be assigned as provided in
Section 1.11), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto but excluding underwriting discounts and commissions relating to
Registrable Securities. The fees and disbursements of any counsel retained by
the Stockholder in connection with any such registrations shall be paid by the
Stockholder.
1.7 Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.3 to include any of the Stockholder's securities
in such underwriting unless the Stockholder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then only
in such quantity as the underwriters determine in their sole discretion will
not, jeopardize the success of the offering by the Company. If the total
amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling
stockholders according to the total amount of securities entitled to be
included therein owned by each selling stockholder or in such other
proportions as shall mutually be agreed to by such selling stockholders) but,
except with respect to any one offering pursuant to Section 1.3 following the
first such offering pursuant to Section 1.3 to occur after the closing date of
the Merger, in no event shall the amount of securities of the Stockholder
included in the offering be reduced below twenty five percent (25%) of the
total amount of securities included in such offering. For purposes of the
preceding parenthetical concerning apportionment, for any selling stockholder
which is a Stockholder of Registrable Securities and which is a partnership or
corporation, the partners, retired partners and stockholders of such
Stockholder, or the estates and family members of any such partners and
retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling stockholder", and any pro-rata
reduction with respect to such "selling stockholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "selling stockholder", as defined in this
sentence.
1.8 Indemnification. In the event any Registrable Securities are included in
a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless the Stockholder, any underwriter (as defined in the Act) for the
Stockholder and each person, if any, who controls the Stockholder or
underwriter within the meaning of the Act or the 1934 Act, against any
losses, claims, damages, or liabilities (joint or several) to which they
may become subject under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a material
fact
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required to be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by the Company
of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act or the 1934 Act or any state
securities law; and the Company will reimburse the Stockholder, underwriter
or controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 1.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company
be liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by such
Stockholder, underwriter or controlling person.
(b) To the extent permitted by law, each Stockholder will indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls
the Company within the meaning of the Act, any underwriter, any other
selling stockholder in such registration statement and any controlling
person of any such underwriter or other selling stockholder, against any
losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Act, or the 1934 Act or
other federal or state-law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Stockholder expressly for use in connection
with such registration; and such Stockholder will reimburse, as incurred,
any legal or other expenses reasonably incurred by any person intended to
be indemnified pursuant to this subsection 1.8(b), in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 1.8(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Stockholder (which consent shall not be
unreasonably withheld); provided, that, in no event shall any indemnity
under this subsection 1.8(b) exceed the gross proceeds from the offering
received by the Stockholder.
(c) Promptly after receipt by an indemnified party under this Section 1.8
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 1.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.8, but the omission
so to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section 1.8.
(d) If the indemnification provided for in this Section 1.8 is held by a
court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall, to the extent permitted by law,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the
other in
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connection with the Violation(s) that resulted in such loss, liability,
claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and the Stockholder under this Section
1.8 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 1, and the termination of
this Agreement.
1.9 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Stockholder the benefits of Rule 145 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Stockholder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) take such action as is necessary to enable the Stockholder to utilize
Form S-3 for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(d) furnish to the Stockholder, so long as the Stockholder owns any
Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC
Rule 144, the Act and the 1934 Act, or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time when it so
qualifies), (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company,
and (iii) such other information as may be reasonably requested in availing
the Stockholder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such
form.
1.10 Form S-3 Registration. In case the Company shall receive from the
Stockholder a written request that the Company effect a registration on Form
S-3 and any related qualification or compliance with respect to all or a part
of the Registrable Securities owned by the Stockholder, the Company will:
(a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of the
Stockholder's Registrable Securities as are specified in such request;
provided, however, that the Company shall not be obligated to effect any
such registration, qualification or compliance, pursuant to this section
1.10: (A) if Form S-3 is not available for such offering by the
Stockholder; (B) if the Stockholder proposes to sell Registrable Securities
and such other securities (if any) at an aggregate price to the public (net
of any underwriters' discounts or commissions) of less than $500,000; (C)
if the Company has, within the twelve (12) month period preceding the date
of such request, already effected two (2) registrations on Form S-3 for the
Stockholder pursuant to this Section 1.10 or has already effected four (4)
registrations under this Agreement for the Stockholder (exclusive of
registrations pursuant to Section 1.3), (D) if the Company shall furnish to
the Stockholder a certificate signed by the Chairman of the Board of
Directors of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of the Stockholder under this
Section 1.10; provided, however, that such right to delay a request,
whether pursuant to this Section 1.10 or
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Section 1.2, shall be exercised by the Company not more than once in any
twelve (12) month period, or (D) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(b) Subject to the foregoing, (i) the Company shall file a registration
statement covering the Registrable Securities and other securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Stockholder; and (ii) if requested by the
Stockholder, in a transaction constituting (1) a private placement under
Section 3(b) or 4(2) of the Act, or (2) under Rule 144A under the Act, the
Company shall undertake to register such shares after the conclusion of
such placement to permit such shares freely to be tradeable by the
purchasers thereof.
(c) The Company shall use its reasonable best efforts to keep any such
registration described in Section 1.10(b) above , as the case may be,
continuously effective for the period beginning on the date on which such
registration is declared effective and ending on the first to occur of (A)
one hundred twenty (120) days thereafter and (B) on the first date that all
such Registrable Securities have been sold. During the period during which
any such registration is effective, the Company shall supplement or make
amendments to such registration, if required by the Act or if reasonably
requested by the Stockholder or an underwriter of Registrable Securities,
including to reflect any specific plan of distribution or method of sale,
and shall use its reasonable best efforts to have such supplements and
amendments declared effective as soon as practicable after filing.
(d) Registrations effected pursuant to this Section 1.10 shall not be
counted as registrations effected pursuant to Sections 1.2 or 1.3 herein.
1.11 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned
(but only with all related obligations) by the Stockholder to one or more
transferees or assignees of such securities who hold, pursuant to such
assignment(s), a number of Registrable Securities constituting in excess of
five percent (5%) of the outstanding shares of the Common Stock of the
Company, provided: (a) the Company is, within ten (10) days after any such
transfer, furnished with written notice of the name and address of such
transferees or assignees and the securities with respect to which such
registration rights are being assigned; (b) such transferees or assignees
agrees in writing to be bound by and subject to the terms and conditions of
this Agreement, including without limitation the provisions of Section 1.13
below; and (c) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferees or assignees is restricted under the Act. In the event of any
assignment by the Stockholder pursuant to this Section 1.11, any right of the
Stockholder hereunder may only be exercised by written instrument executed by
the holders of at least thirty percent (30%) of the Registrable Securities
then outstanding (the "Written Instrument") and the Company may rely on the
Written Instrument in effecting such right or rights to register Registrable
Securities pursuant to Section 1. Upon any proper assignment of registration
rights in accordance with this Section 1.11, any reduction (pursuant to
Section 1.7) in the participation among holders of Registrable Securities in
any registration subject to Section 1.7 shall, unless the Stockholder and such
other holders of Registrable Securities notify the Company of their agreement
otherwise, be allocated among such holders pro rata in accordance with their
respective holdings of Registrable Securities.
1.12 Limitations on Subsequent Registration Rights. From and after the date
of this Agreement, the Company shall not, without the prior written consent of
the Stockholder, enter into any agreement with any stockholder or prospective
stockholder of any securities of the Company which would allow such
stockholder or prospective stockholder (a) to include such securities in any
registration filed under Section 1.2 hereof, unless under the terms of such
agreement, such stockholder or prospective stockholder may include such
securities in any such registration only to the extent that the inclusion of
his securities will not reduce the amount of the Registrable Securities of the
Stockholder which is included or (b) to make a demand registration which could
result in such registration statement being declared effective within one
hundred twenty (120) days of the effective date of any registration effected
pursuant to Section 1.2.
1.13 Termination of Registration Rights. The rights to registration set
forth in this Section 1 shall terminate as to any particular Registrable
Securities when (i) such Registrable Securities shall have been
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effectively registered under the Act and sold by the Stockholder in accordance
with such registration, (ii) such Registrable Securities shall have been sold
in compliance with Rule 145 promulgated under the Act, or (iii) the date which
is four years after the earliest to occur of, after the Closing date of the
Merger, the date of initial listing of the Common Stock of the Company on (1)
the Nasdaq National Market System, (2) the American Stock Exchange, or (3) the
New York Stock Exchange.
1.14 Delay of Registration; Furnishing Information.
(a) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 1.2, 1.3 or 1.10 that the Stockholder
shall furnish to the Company such information regarding itself, the
Registrable Securities held by the Stockholder and the intended method of
disposition of such securities as shall be required to effect the registration
of the Stockholder's Registrable Securities.
II. Covenants
2.1 Board of Director Meetings. As long as the Stockholder owns not less
than ten percent (10%) of the total number of outstanding shares of Common
Stock of the Company, (A) the Company shall, to the extent that the
Stockholder does not then have a representative as a member of the Board of
Directors of the Company, invite a representative of the Stockholder to attend
all meetings of its Board of Directors in a nonvoting observer capacity and,
in this respect, shall give such representative copies of all notices,
minutes, consents, and other materials that it provides to its directors at
the same time as provided to its directors; provided, however, that such
representative and the Stockholder shall agree to hold in confidence and trust
and to act in a fiduciary manner for the benefit of the stockholders of the
Company with respect to all information so provided, and (B) upon receipt of
the agenda for a meeting of the Board of Directors of the Company or at any
other time, the Stockholder may submit to the Company for discussion and
consideration at the next subsequent meeting of the Board of Directors such
matters as the Stockholder in its sole discretion shall determine.
Notwithstanding the foregoing, the Company may exclude the Stockholder or its
representatives from any deliberation of the Board of Directors if the
Chairman of the Board of Directors delivers, prior to the date of such
deliberation, a letter to the Stockholder stating that legal counsel to the
Company has advised the Board of Directors that such exclusion is necessary to
preserve attorney client privilege.
2.2 Inspection and Cooperation. As long as the Stockholder owns not less
than ten percent (10%) of the total number of outstanding shares of Common
Stock of the Company, the Company shall permit the Stockholder and its
representatives (including but not limited to accounting, legal and financial
advisors) to visit and inspect the Company's properties, to examine its books
of account and records and to discuss the Company's affairs, finances and
accounts with its officers, all at such reasonable times as may be requested
by the Stockholder for the purpose of evaluating its investment in the
Company. In addition, in connection with any attempt by the Stockholder to
sell some or all of the shares of Common Stock it owns in the Company to a
potential purchaser (a "Potential Purchaser"), in a private transaction, the
Company shall permit the Potential Purchaser and its representatives
(including but not limited to accounting, legal and financial advisors) to
visit and inspect the Company's properties, to examine its books of account
and records and to discuss the Company's affairs, finances and accounts with
its officers, all at such reasonable times as may be requested by the
Stockholder and Potential Purchaser, provided that such Potential Purchaser
enters into a confidentiality agreement containing customary terms and
conditions for an agreement of that type; provided, that the Company shall not
be obligated under this Section 2.2 with respect to a direct competitor of the
Company.
2.3 Confidentiality. The Stockholder agrees to use, and to use its
reasonable best efforts to cause its employees and its authorized
representatives to use the same degree of care as the Stockholder uses to
protect its own confidential information and to keep confidential any
information furnished to it which the Company reasonably identifies as being
confidential or proprietary (so long as such information is not in the public
domain). The Stockholder further agrees not to use, and to cause its
representatives and employees not to use any such confidential information for
any purpose other than to evaluate the Stockholder's investment in the
Company.
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2.4 No Assignment. The rights of the Stockholder under Sections 2.1 and 2.2
may not be assigned by the Stockholder without the consent of the Company.
III. Representations and Warranties of the Company
The Company hereby represents and warrants to Stockholder as follows:
3.1 Requisite Consents; Nonviolation.
(a) The Company has obtained all consents, approvals or authorizations of
any third party that would be required as a result of the execution and
delivery of this Agreement by the Company and the consummation of the
transactions contemplated by this Agreement (the "Obtained Consents").
(b) The Company further represents and warrants that the execution and
delivery of this Agreement by the Company and the consummation of the
transactions contemplated by this Agreement will not (a) require the consent,
approval or authorization of any third party, other than the Obtained
Consents, or (b) constitute a default under, violate or conflict with or
permit any third party to modify, terminate, accelerate or rescind any term or
provision of, any contract, agreement, arrangement or understanding to which
the Company is a party or by which the Company is bound or to which the
Company is subject.
3.2 Authority for Agreement. All corporate and other proceedings required to
be taken by or on behalf of the Company to authorize the Company to enter into
and carry out this Agreement have been duly and properly taken. This Agreement
has been duly executed and delivered by the Company and is valid and binding
upon the Company, subject as to enforceability, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
IV. Miscellaneous
4.1 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
4.2 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California.
4.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
4.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given (a) upon personal delivery to the party to be notified, (b) upon deposit
with the United States Post Office, by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address indicated for
such party on the signature page hereof, or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties, (c) upon being sent by confirmed telex or facsimile if sent during
normal business hours of the recipient; if not, then on the next business day,
or (d) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.
4.6 Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary disbursements in addition
to any other relief to which such party may be entitled.
B-9
4.7 Amendments and Waivers. 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 instance and either retroactively or prospectively), only
with the written consent of the Company and the Stockholder. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon the
Stockholder, each person who becomes a transferee or assignee of the
Stockholder after such amendment or waiver, and the Company.
4.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
4.9 Aggregation of Stock. All shares of Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this
Agreement.
4.10 Entire Agreement; Amendment; Waiver. This Agreement (including the
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Paradigm Technology, Inc.
By: _________________________________
Title: ______________________________
Asea Xxxxx Boveri A.G.
By: _________________________________
Title: ______________________________
Asea Xxxxx Boveri, Inc.
By: _________________________________
Title: ______________________________
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