EXHIBIT 10.6
COMPANY RIGHTS AGREEMENT
THIS COMPANY RIGHTS AGREEMENT (the "AGREEMENT") is made to be effective
July 1, 1996 (the "CLOSING DATE"), by and between StreamLogic Corporation, a
Delaware corporation ("STREAMLOGIC"), and FWB Software, LLC, a California
limited liability company (the "COMPANY").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is acquiring 1,256,123 shares of the common stock of
StreamLogic (the "COMMON STOCK") and in connection therewith StreamLogic desires
to grant the Company the rights set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein, and subject to the terms and conditions hereinafter set forth, the
parties hereby agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF STREAMLOGIC
Except as set forth otherwise in Schedule 1.0 hereto, StreamLogic
represents and warrants as of the Closing Date that:
1.1 ORGANIZATION AND STANDING OF STREAMLOGIC. StreamLogic is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has the corporate power and authority to enter into
and perform this Agreement and to consummate the transaction contemplated
hereby.
1.2 CORPORATE ACTION. StreamLogic has the corporate power and will, prior
to the Closing Date, have taken all necessary corporate action required to
authorize, execute, deliver and perform this Agreement and any other agreements
and instruments executed in connection herewith and therewith, and to issue,
sell and deliver the Common Stock. When executed and delivered by StreamLogic,
this Agreement and any other agreement and instrument executed in connection
herewith and therewith will constitute the valid and binding obligations of
StreamLogic, enforceable in accordance with their terms.
1.3 GOVERNMENTAL APPROVALS. Except for the filings to be made, if any, to
comply with exemptions from registration or qualification under federal and
state securities laws, no authorization, consent, approval, license, exemption
of or filing or registration with any court or governmental agency or
instrumentality is necessary for the offer, issuance, sale, execution or
delivery by StreamLogic, or for the performance by it of its obligations under,
this Agreement.
1.4 LITIGATION. There is no litigation or governmental proceeding or
investigation pending, or, to StreamLogic's knowledge, threatened against
StreamLogic affecting any of its properties or assets that, if decided adversely
to StreamLogic, will result in any material adverse change in the business,
operations, affairs, prospects or conditions of StreamLogic or that, if decided
adversely to StreamLogic, will call into question the validity of this
Agreement, nor, to StreamLogic's knowledge, has there occurred any event or does
there exist any condition on the basis of which any litigation, proceeding or
investigation might properly be instituted.
1.5 FILED REPORTS. The common stock of StreamLogic is registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") and quoted on the Nasdaq Stock Market. StreamLogic has delivered to the
Company copies of StreamLogic's (a) Annual Report on Form 10-K for the fiscal
year ended March 29, 1996 (the "FORM 10-K REPORT") as filed with the Securities
and Exchange Commission (the "COMMISSION") and (b) all proxy statements relating
to StreamLogic's meetings of stockholders (whether annual or special) during
1996 as filed with the Commission. StreamLogic has made available to the
Company upon its request all other reports, registration statements and other
documents filed by StreamLogic with the Commission under the Exchange Act and
the Securities Act of 1933, as amended (the "SECURITIES ACT"), for the past
three fiscal years. All such documents described in the first two sentences of
this Section 1.5 are collectively referred to as "STREAMLOGIC'S FILED REPORTS".
StreamLogic has during the last three fiscal years timely filed all reports,
registration statements and other documents (including StreamLogic's Filed
Reports) required to be filed with the Commission under the rules and
regulations of the Commission, and all of StreamLogic's Filed Reports complied
as to form with the Securities Act or the Exchange Act, as the case may be. As
of their respective date, StreamLogic's Filed Reports (including any exhibits or
schedules thereto or documents incorporated therein by reference) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
1.6 SECURITIES ACT OF 1933. StreamLogic has complied and will comply with
all applicable federal or state securities laws in connection with the issuance
and sale of the Common Stock to the Company.
1.7 NO BROKERS OR FINDERS. StreamLogic owes no commission, fee or other
compensation to any individual, corporation, partnership, joint venture, trust,
or unincorporated organization or other entity (each of which is hereinafter
referred to as a "PERSON") as a finder or broker as a result of the transactions
contemplated by this Agreement.
1.8 CAPITALIZATION; STATUS OF CAPITAL STOCK. The authorized capital stock
of StreamLogic is as set forth on StreamLogic's Filed Reports. All of the
issued and outstanding shares of capital stock of StreamLogic as of March 29,
1996 are set forth on the Form 10-K Report. All of the outstanding shares of
capital stock of StreamLogic have been duly authorized, are validly issued and
are fully paid and nonassessable, and no holder thereof is entitled to
preemptive rights. Between March 29, 1996 and the Closing Date, there has been
no material change in the outstanding capital stock of StreamLogic. Except as
set forth in StreamLogic's Filed Reports, there are no options, warrants or
rights to purchase shares of its capital stock or other securities authorized,
issued or outstanding, nor is StreamLogic obligated in any manner to issue
shares of its capital stock or other securities.
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1.9 ABSENCE OF CHANGES. Since March 29, 1996, no event has occurred or
failed to occur that would be required to be disclosed in the footnotes of
StreamLogic's financial statements for such statements to be prepared in
accordance with generally accepted accounting principles, and to the best
knowledge of StreamLogic, there has been no other event or condition of any
character specifically relating to StreamLogic which specifically pertains to
and materially adversely affects its business, properties or condition,
financial or otherwise.
SECTION 2. REGISTRATION RIGHTS
2.1 REGISTRATION.
(a) No later than forty-five (45) days after the Closing Date,
StreamLogic shall prepare and file an S-3 registration statement with the
Securities and Exchange Commission (the "COMMISSION") under the Securities Act
to register the resale of the Common Stock by the Company (the "REGISTRATION
STATEMENT") and shall use its reasonable best efforts, including the filing of
one or more subsequent registration statements or amendments or supplements to
the Registration Statement, to obtain effectiveness of the Registration
Statement under the Securities Act.
(b) StreamLogic shall pay all Registration Expenses (as defined below) in
connection with any registration, qualification or compliance hereunder, and
the Company shall pay all Selling Expenses (as defined below) and other
expenses that are not Registration Expenses relating to the Common Stock
resold by the Company. "REGISTRATION EXPENSES" shall mean all expenses,
except for Selling Expenses, incurred by StreamLogic in complying with the
registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for StreamLogic, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration. "SELLING EXPENSES" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Common Stock, and
all other expenses incurred by the Company or any transferee of the Company in
connection with sales of the Common Stock.
(c) StreamLogic shall use its best efforts to: (i) keep such
Registration Statement effective until the earlier of (A) the first
anniversary of the effectiveness of the Registration Statement plus any
"blackout" periods imposed during such year, provided, that the Company shall
use its best efforts to sell the Common Stock within the first one hundred
eighty (180) days following the effectiveness of the Registration Statement
plus any "blackout" periods imposed during such 180-day period and any periods
during which StreamLogic's Common Stock is not listed on either the Nasdaq
Stock Market or any national securities exchange, (B) such date as all of the
Common Stock have been resold, and (C) such date as all of the shares of
Common Stock may be resold under Rule 144 during a three month period
(collectively, the "Registration Process"); (ii) prepare and file with the
Commission such amendments and supplements to the Registration Statement and
the prospectus used in connection with the Registration Statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Common Stock covered by the Registration Statement;
(iii) furnish such number of prospectuses and other documents incident
thereto, including any amendment of, or
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supplement to, the prospectus as the Company from time to time may reasonably
request; (iv) cause all Common Stock registered as described herein to be
listed on each securities exchange and quoted on each quotation service on
which similar securities issued by StreamLogic are then listed or quoted; (v)
provide a transfer agent and registrar for all Common Stock registered
pursuant to the Registration Statement and a CUSIP number for all such Common
Stock; (vi) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission; and (vii) file the documents required of
StreamLogic and otherwise use its reasonable best efforts to maintain
requisite blue sky clearance in all United States jurisdictions specified in
writing by the Company; provided, however, that StreamLogic shall not be
required to qualify to do business or consent to service of process in any
state in which it is not now so qualified or has not so consented. StreamLogic
may impose "blackouts" during the effectiveness of the Registration Statement
during which the Company may not sell any of the shares of Common Stock under
the Registration Statement. StreamLogic may impose a "blackout" only in
circumstances where the Board of Directors of StreamLogic determines in good
faith that a material event is occurring or is reasonably expected to occur
with respect to StreamLogic which StreamLogic has not yet disclosed to the
public or in any other case where the Board has in good faith determined that
such action is necessary for the protection of StreamLogic or its shareholders
or to comply with applicable law. However, a "blackout" period may not last
more than three (3) weeks and StreamLogic may not impose more than three (3)
"blackout" periods during the Registration Process. A "blackout" period shall
not be effective and binding upon the Company until one (1) day after the
Company has received a written communication from StreamLogic by facsimile
informing the Company that StreamLogic is imposing a "blackout."
(d) StreamLogic shall furnish to the Company upon request a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary in order to facilitate the public sale or other disposition of
all or any of the Common Stock held by the Company.
(e) With a view to making available to the Company the benefits of
certain rules and regulations of the Commission which at any time permit the
sale of the Common Stock to the public without registration, StreamLogic
agrees to:
(1) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act ("RULE 144"),
at all times after the effective date of the first registration statement
under the Securities Act filed by StreamLogic for an offering of its
securities to the general public;
(2) Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of StreamLogic under the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements); and
(3) So long as a the Company owns any unregistered Common Stock,
furnish to the Company upon request a written statement by StreamLogic as
to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration
statement filed by FWB for an
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offering of its securities to the general public), and of the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly
report of FWB, and such other reports and documents of FWB as such
Shareholder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Shareholder to sell any such
securities without registration.
(f) StreamLogic will indemnify the Company, each of its officers,
directors, employees, partners, legal counsel and accountants, and each person
controlling the Company within the meaning of section 15 of the Securities Act
of 1933, as amended (the "SECURITIES ACT"), with respect to which any
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of section 15 of the Securities Act, against
all expenses, claims, losses, damages and liabilities (or action in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereof, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by StreamLogic of
any rule or regulation promulgated under the Securities Act, the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") or state securities laws
applicable to StreamLogic and relating to action or inaction required of
StreamLogic in connection with any such registration, qualification or
compliance and will reimburse the Company, each of its officers, directors,
employees, partners, legal counsel and accountants, and each person
controlling the Company, each such underwriter and each person who controls
any such underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that StreamLogic will not be liable in
any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission made in
reliance upon and in conformity with written information furnished to
StreamLogic by an instrument duly executed by or on behalf of the Company or
underwriter and stated to be specifically for use therein, and further
provided that there shall be no liability if StreamLogic provided to the
Company, a reasonable period before the sale, a prospectus correcting any such
untrue statement or omission but such prospectus was not delivered to the
purchaser.
(g) The Company will, if any of the Common Stock held by the Company is
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify StreamLogic, each of its directors,
officers, employees, partners, legal counsel and accountants, each
underwriter, if any, of such Common Stock covered by such a registration
statement, each person who controls StreamLogic or such underwriter within the
meaning of section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
StreamLogic,
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such directors, officers, employees, partners, legal counsel, accountants,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent that such untrue statement or omission is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to
StreamLogic by an instrument duly executed by or on behalf of the Company and
stated to be specifically for use therein.
(h) Each party entitled to indemnification under this Section 2.1 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, provided further, that if any Indemnified
Party shall have reasonably concluded that there may be one or more legal
defenses available to the Indemnifying Party, or that such claim or litigation
involves or could have an effect upon matters beyond the scope of the
indemnity agreement provided in this Section 2.1, the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of such
Indemnified Party, and such Indemnifying Party shall not be required to
reimburse such Indemnified Party and any person controlling such Indemnified
Party for that portion of the fees and expenses of any counsel retained by the
Indemnified Party which are related to such different or additional defenses
or which are beyond the scope of the indemnity agreement provided in this
Section 2.1, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement, unless such failure is prejudicial to the
Indemnifying Party in defending such claim or litigation. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(i) If the indemnification provided for in this Section 2.1 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
thereunder, shall 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 connection
with the statements or omissions which 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
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Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(j) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall be controlling.
(k) The obligations of StreamLogic and the Company under this Section 2.1
shall be in addition to any liability which StreamLogic and the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls StreamLogic or the Company within the meaning of
the Securities Act.
(l) The Company shall not have any right to take any action to restrain,
enjoin or otherwise delay any registration pursuant to this Section 2.1 as a
result of any controversy that may arise with respect to the interpretation or
implementation of this Agreement.
(m) The rights and obligations of this Section 2.1 shall be binding upon
and available to subsequent transferees of the Common Stock; provided,
however, that there shall be no more than ten (10) transferees of the Common
Stock without StreamLogic's prior written consent, which shall not be
unreasonably withheld.
2.2 RESTRICTIONS ON PUBLIC SALE; INCONSISTENT AGREEMENTS.
(a) LOCK-UP. Notwithstanding any registration of the Common Stock pursuant
to Section 2.1, the holder(s) of the Common Stock agree not to effect any sale
or distribution of any of the Common Stock in a transaction not exempt from the
registration requirements of the Securities Act except as follows: one-third
(1/3) may be resold immediately upon effectiveness of the Registration
Statement, one-third (1/3) may be resold 60 days after the shares are registered
and the final one-third (1/3) may be resold 60 days later. StreamLogic may
impose a stop-transfer instruction with respect to the shares (or other
securities) subject to the foregoing restriction until the end of such period.
(b) NO DISTRIBUTION. StreamLogic agrees (i) without the written consent of
the Company, which may not be unreasonably withheld, not to effect any public or
private sale or distribution of its common equity securities or any security
convertible into or exchangeable or exercisable for any equity security of
StreamLogic, including a sale pursuant to Regulation D under the Securities Act,
during the Company's or its transferees' Registration Process (except (A) as
part of such underwritten registration or pursuant to registrations on Form S-8
or any successor form or (B) equity securities issued pursuant to the conversion
or exchange of any securities convertible into or exchangeable for StreamLogic's
common equity securities and which were outstanding prior to the commencement of
such Registration Process), and (ii) to use its reasonable efforts to cause each
holder of its privately placed securities purchased from StreamLogic at any time
on or after the date of this Agreement to agree not to effect any public sale or
distribution of any such securities during such period, including a sale
pursuant to Rule 144 (except as part of such underwritten registration, if
permitted), other than pursuant to any tender offer by StreamLogic to holders of
its currently outstanding subordinated debt securities.
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SECTION 3. MISCELLANEOUS
3.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of
any party 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.
3.2 ADDRESSES FOR NOTICES, ETC. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and mailed, by certified or registered mail, or telegraphed or
delivered to the applicable party at the addresses indicated below:
If to StreamLogic: StreamLogic Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
with copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
If to the Company: FWB Software, LLC
0000 Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
with copy to: McCutchen, Doyle, Xxxxx & Enersen
Three Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Either party to this Agreement may change its address by a written notice
to the other party complying as to delivery with the terms of this Section. All
such notices, requests, demands and other communications shall, when mailed or
telegraphed, respectively, be effective when deposited in the mails or delivered
to the telegraph company, respectively, addressed as aforesaid.
3.3 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of each party and its respective successors and assigns,
except that neither of the parties shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the other,
which shall not be unreasonably withheld.
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3.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Agreement, or any other instrument or document delivered
in connection herewith, shall survive the execution and delivery hereof or
thereof until one year from the Closing Date.
3.5 PRIOR AGREEMENTS. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the subject matter hereof.
3.6 SEVERABILITY. The invalidity or unenforceability of any provision
hereto shall in no way affect the validity or enforceability of any other
provision.
3.7 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
3.8 HEADINGS. Article, Section and Subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
3.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
3.10 FURTHER ASSURANCES. From and after the date of this Agreement, upon
the reasonable request of either party, the other party shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
STREAMLOGIC CORPORATION
By: /s/ Xxx Xxxxxxx
------------------------------------
Xxx Xxxxxxx, Chief Financial Officer
FWB SOFTWARE, LLC
By: FWB Software, Inc., its Manager
By: /s/ Xxxxxx Xxxx
-----------------------------------
Xxxxxx Xxxx, President
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