EXECUTION COPY
SECOND AMENDED AND RESTATED
CO-SALE AND FIRST REFUSAL AGREEMENT
This SECOND AMENDED AND RESTATED Co-Sale and First Refusal Agreement (this
"Agreement"), is made as of October 26, 2004, by and among Comverge, Inc., a
Delaware corporation (the "Company"), each of the individuals and entities
listed on Schedule A attached hereto (the "Investors") and each of the
individuals and entities listed on Schedule B attached hereto (the "Common
Stockholders" and, together with the Investors, the "Stockholders"). Capitalized
terms not defined herein shall have the meanings given such terms in that
certain Series B Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement").
R E C I T A L S
WHEREAS, the Company and certain of its stockholders are parties to that
certain Amended and Restated Co-Sale and First Refusal Agreement dated as of
September 12, 2003 (the "Prior Agreement");
WHEREAS, the Company desires to sell shares of Series B Preferred Stock
pursuant to the terms of the Purchase Agreement and the amendment and
restatement of the Prior Agreement as set forth herein is a condition to the
Initial Closing (as defined in the Purchase Agreement);
WHEREAS, pursuant to Section 4.6 of the Prior Agreement, the Prior
Agreement may be amended by a written instrument executed by the holders of a
majority of the shares of Common Stock (determined on an as-converted basis)
held by all the Investors under the Prior Agreement; and
WHEREAS, the undersigned represent a majority of the shares of Common
Stock (determined on an as-converted basis) held by all the Investors under the
Prior Agreement and such stockholders desire to amend the Prior Agreement as set
forth below, on behalf of themselves and the other Investors party to the Prior
Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, and the mutual promises
and agreements contained herein, the parties hereby agree as follows:
1. RESTRICTIONS ON TRANSFERS
1.1 General Prohibition on Transfers; Permitted Transfers
(a) Except as otherwise permitted hereby, no Stockholder shall
directly or indirectly sell, assign, pledge or encumber or otherwise transfer to
any person or entity (a "Transferee") any shares of capital stock of the Company
the Stockholder now owns or may hereafter acquire (the "Stock") unless such
Stockholder has complied with all of the terms of this Agreement. Any purported
sale, assignment, pledge, encumbrance or other transfer in violation of any
provision of this Agreement shall be void and ineffectual and shall not operate
to transfer any interest or title to the purported Transferee. No transfer that
is permitted under this Section 1 may be made by any Stockholder without (i) an
opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Act and all applicable state
securities laws, or (ii) registration under such securities laws.
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(b) The restrictions contained in this Agreement with respect
to transfers by each Stockholder of shares of Stock shall not apply to: (i) any
transfer of Stock by the Stockholder to any spouse, parents, siblings (by blood,
marriage or adoption) or lineal descendants (by blood, marriage or adoption);
(ii) any transfer of Stock by the Stockholder to a trust, partnership,
corporation, limited liability company or other similar entity for the benefit
of the Stockholder or the Stockholder's spouse, parents, siblings or lineal
descendants; (iii) any transfer of Stock by the Stockholder, upon the
Stockholder's death, to the executors, administrators, testamentary trustees,
legatees or beneficiaries of the Stockholder; (iv) any transfer of Stock by the
Stockholder to any person who controls, is controlled by or is under common
control with the Stockholder (within the meaning of the Securities Act of 1933,
as amended) (an "Affiliate"); (v) any transfer to any (x) general or limited
partner of a Stockholder that is a partnership or (y) member of a Stockholder
that is a limited liability company or (vi) any transfer of stock by the
Stockholder (A) pursuant to a merger or consolidation of the Company with or
into another corporation or corporations, (B) pursuant to the liquidation,
dissolution or winding up of the Company, (C) at, and pursuant to, a Qualified
Public Offering as defined in the Company's then-current Certificate of
Incorporation, or (D) in connection with a transaction in which stock of the
Company having more than 50% of the voting power of all the then outstanding
stock of the Company is transferred; provided, that in each of the cases
referred to in clauses (i) through (v) above, each transferee, donee, heir or
distributee shall, as a condition precedent to such transfer, become a party to
this Agreement by executing an Adoption Agreement substantially in the form
attached as Annex A and shall have all of the rights and obligations of the
Stockholder hereunder; and provided further, that in each of the cases referred
to in subclauses (A), (B) and (D) of clause (vi) above, the Company's
stockholders of record as constituted immediately prior to such event will,
immediately after such event, hold less than a majority of the voting power of
the surviving or acquiring entity. If a Stockholder intends to transfer any or
all of its Stock under clauses (i) through (v) above, such Stockholder must
provide notice of such transfer to the Company.
(c) Notwithstanding anything to the contrary contained in this
Agreement, no Stockholder may transfer any securities to a person or entity
primarily engaged in a line of business that is competitive with the Company, as
determined in good faith by the Board of Directors, except in connection with
any consolidation or merger of the Company with or into any other corporation or
other entity or person, or any other corporate reorganization, in which the
stockholders of the Company immediately prior to such consolidation, merger or
reorganization, own less than fifty percent (50%) of the Company's voting power
immediately after such consolidation, merger or reorganization, or any
transaction or series of related transactions in which more than fifty percent
(50%) of the Company's voting power is transferred.
(d) Notwithstanding any provision in this Agreement to the
contrary, Data Systems & Software, Inc. ("DSSI") shall have the right to sell or
otherwise transfer up to 480,000 shares (the "DSSI Exception Shares") of its
Series A Preferred Stock in accordance with this Section 1.1(d). In the event
DSSI desires to sell or otherwise transfer any of the DSSI Exception Shares,
DSSI shall provide notice to the Company and the other Investors of the number
of DSSI Exception Shares it desires to sell (the "DSSI Transfer Shares") and the
price per share and any other terms of such proposed transfer. The Company and
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the other Investors shall have 15 days following receipt of notice by the
Company and all Investors (other than DSSI) to purchase all, but not less than
all, of the DSSI Transfer Shares at the price and on the terms set forth in the
notice pertaining to such transfer. The Company and the Investors agree that the
Company shall have the first right to purchase DSSI Transfer Shares and any DSSI
Transfer Shares not elected to be purchased by the Company shall be allocated
among the Investors (excluding DSSI) based on their pro-rata ownership of
Preferred Stock (determined on an as-converted basis). In the event the Company
and the Investors (excluding DSSI) do not collectively purchase all of the DSSI
Transfer Shares, the Company and the Investors shall not have the right to
purchase any DSSI Transfer Shares and DSSI shall be free, for a period of 60
calendar days to sell the DSSI Transfer Shares to any purchaser at a price equal
to or greater than the sale price set forth in the notice relating to such DSSI
Transfer Shares and upon terms no more favorable than those specified in such
notice; provided, however, DSSI shall not transfer shares to any purchaser who
is not an Investor unless such purchaser acquires at least 200,000 shares. Any
transference of DSSI Exception Shares shall, as a condition precedent to such
transfer, become a party to (i) this Agreement by executing an Adoption
Agreement in the form attached as Annex A and (ii) each of the Investors' Rights
Agreement and Voting Agreement in the manner provided by such agreements.
1.2 Right of First Refusal
(a) Except as otherwise permitted in Section 1.1(b) or (d) of
this Agreement or as required by Section 1.6 of this Agreement, transfers of
shares of the Stock by each Stockholder shall not be permitted unless the
Stockholder has complied with this Section 1.2. If the Stockholder intends to
sell any of its shares of Stock (the "Proposed Seller"), it shall give written
notice (the "Seller's Notice") to the Company and each of the Investors stating
that the Proposed Seller intends to make such a sale or transfer, identifying
the party who made the offer (the "Proposed Transferee"), specifying the number
of shares of Stock proposed to be purchased or acquired pursuant to the offer
(the "First Refusal Shares"), the nature of such sale or transfer, all material
terms of the proposed sale, including the per share purchase price which the
Proposed Transferee has offered to pay for the First Refusal Shares (the "Sale
Price") and the name and address of each Proposed Transferee. A copy of the
offer, if available, and a statement of the number of shares held by each of the
Investors shall be attached to the Seller's Notice.
(b) (i) Upon receipt of the Seller's Notice, the Company shall
have the irrevocable and exclusive option to purchase, upon delivery to the
Proposed Seller within fifteen (15) days of its receipt of the Seller's Notice,
all or any portion of the First Refusal Shares. The Company shall deliver a
notice (the "Company Notice") to the Proposed Seller and each of the Investors
of its election to purchase or not to purchase such First Refusal Shares within
such fifteen (15) day period, together with payment to the Proposed Seller of
the Sale Price therefor. To the extent that the Company does not elect to
purchase all of the First Refusal Shares, each Investor shall have the
irrevocable and exclusive option to purchase up to that number of the remaining
First Refusal Shares at the Sale Price as equals the product of (A) the number
of remaining First Refusal Shares multiplied by (B) a fraction, the numerator of
which shall be the number of shares of Common Stock issued or issuable upon
conversion of the Preferred Stock held by such Investor and any Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of such Common Stock (collectively, the "Investor Shares") and
the denominator of which shall be the number of Investor Shares owned by all of
the Investors (the "Proportionate Share"). Within twenty (20) calendar days
after delivery of the Company Notice, each Investor shall deliver to the Company
and the Proposed Seller a written notice stating whether it elects to exercise
its option under this Section 1.2(b) and the maximum number of shares (not to
exceed all of such Investor's Proportionate Share) that it is willing to
purchase, and such notice shall constitute an irrevocable commitment by such
Investor to purchase such shares.
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(ii) If an Investor does not elect to purchase its full
Proportionate Share, the Proposed Seller shall deliver another written notice to
the Company and each Investor that has elected to purchase its full
Proportionate Share (a "Fully Exercising Investor") stating the number of
unpurchased shares. Each Fully Exercising Investor shall be entitled, by
delivering written notice to the Company and the Proposed Seller within five
calendar days following such Investor's receipt of such notice, to purchase up
to all of the remaining shares at the Sale Price. In the event of an
oversubscription, the oversubscribed amount shall be allocated among such Fully
Exercising Investors pro rata based on the number of Investor Shares owned by
each of them. The delivery of the notice of election under this paragraph shall
constitute an irrevocable commitment to purchase such shares.
(iii) Each Investor shall be entitled to assign its rights pursuant
to this Section 1.2 to any of its Affiliates.
(iv) If any of the First Refusal Shares are not elected to be
purchased pursuant to this Section 1.2, then, subject to Section 1.3 hereof, the
Proposed Seller shall be free, for a period of sixty (60) calendar days from the
date of the Seller's Notice, to sell the remaining First Refusal Shares to the
Proposed Transferee, at a price equal to or greater than the Sale Price and upon
terms no more favorable to the Proposed Transferee than those specified in the
Notice. Any transfer of the remaining First Refusal Shares by the Proposed
Seller after the end of such sixty (60) day period or any change in the terms of
the sale as set forth in the Seller's Notice which are more favorable to the
Proposed Transferee shall require a new notice of intent to transfer to be
delivered to the Investors and shall give rise anew to the rights provided in
this Section 1.2.
(c) If the Company and/or the Investors elect to purchase any
or all of the First Refusal Shares mentioned in the Seller's Notice, the Company
and/or such Investor(s) shall have the right to purchase the First Refusal
Shares for cash consideration whether or not part or all of the consideration
specified in the Seller's Notice is other than cash. If part or all of the
consideration to be paid for the First Refusal Shares as stated in the Seller's
Notice is other than cash, the price stated in such Seller's Notice shall be
deemed to be the sum of the cash consideration, if any, specified in such
Seller's Notice, plus the fair market value of the non-cash consideration. The
fair market value of the non-cash consideration shall be determined by the Board
of Directors of the Company (without the participation of any member who has any
interest in the Proposed Transferee or the Proposed Seller), and its judgment as
to the fair market value of such non-cash consideration shall be binding upon
the Proposed Seller and the other Investors.
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1.3 Right of Co-Sale. In the event that all of the First Refusal
Shares are not purchased by the Company or the Investors as provided in Section
1.2 hereof, the Proposed Seller shall deliver a notice to each Investor (other
than the Proposed Seller, if the Proposed Seller is an Investor) who did not
purchase shares pursuant to Section 1.2(b) above (a "Non-Participating
Investor") informing it of the number of shares not elected to be purchased by
the other Investors and the number of First Refusal Shares it still holds (the
"Co-Sale Shares") and intends to sell to the Proposed Transferee. Each such
Non-Participating Investor shall have the right, exercisable upon written notice
to the Company and the Proposed Seller within five (5) calendar days after the
giving of such notice by the Proposed Seller, to participate in the Proposed
Seller's sale of Co-Sale Shares at the Sale Price and upon the terms specified
in the Notice. The delivery of the notice of election under Section 1.3 shall
constitute an irrevocable commitment by such Non-Participating Investor to sell
the number of shares specified in such notice pursuant to this Section 1.3. To
the extent one or more of the Non-Participating Investors exercise such right of
participation in accordance with the terms and conditions set forth below, the
number of shares of Stock which the Proposed Seller may sell to the Proposed
Transferee shall be correspondingly reduced. The right of participation of each
of the Non-Participating Investors shall be subject to the following terms and
conditions:
(a) Each Non-Participating Investor may elect to sell all or
any part of that number of shares of Common Stock of the Company held by such
Non-Participating Investor equal to the product obtained by multiplying (i) the
aggregate number of Co-Sale Shares by (ii) a fraction, the numerator of which is
the number of Investor Shares at the time owned by such Non-Participating
Investor and the denominator of which is the sum of the number of shares of
Common Stock of the Company (assuming full conversion and exercise of all
convertible and exercisable securities into Common Stock) at the time owned by
the Proposed Seller and the number of Investor Shares owned by all of the
Non-Participating Investors (the "Co-Sale Proportionate Share").
(b) If a Non-Participating Investor does not elect to sell his
full Co-Sale Proportionate Share, the Proposed Seller shall deliver another
written notice to the Company and each Non-Participating Investor who has
elected to sell its full Co-Sale Proportionate Share (a "Fully-Exercising
Co-Sale Investor") stating the number of unsold shares. Each Fully-Exercising
Co-Sale Investor shall be entitled, by delivering written notice to the Company
and the Proposed Seller within five calendar days following such notice, to sell
up to all of the shares not sold by the Non-Participating Investors above and
beyond its Co-Sale Proportionate Share. Such election shall constitute an
irrevocable commitment by such Fully-Exercising Co-Sale Investor to sell the
number of shares specified in such notice pursuant to this Section 1.3. In the
event the number of shares requested to be sold by all Fully-Exercising Co-Sale
Investors exceeds the aggregate Co-Sale Shares available for sale by all of the
Fully-Exercising Co-Sale Investors, the remaining shares to be sold shall be
allocated pro rata among such Fully-Exercising Co-Sale Investors (including the
Proposed Seller) based on the number of Investor Shares owned by each.
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(c) Each of the exercising Non-Participating Investors shall
effectuate the sale by promptly delivering to the Proposed Seller for transfer
to the Proposed Transferee one or more certificates, properly endorsed for
transfer (or accompanied by duly executed stock powers), which represent the
number of shares of Common Stock which the Non-Participating Investor elects to
sell.
(d) The stock certificates which the exercising
Non-Participating Investors deliver to the Proposed Seller shall be transferred
by the Proposed Seller to the Proposed Transferee in consummation of the sale of
the Stock pursuant to the terms and conditions specified in the Seller's Notice,
and the Proposed Seller shall promptly thereafter remit to each exercising
Non-Participating Investor that portion of the sale proceeds to which the
exercising Non-Participating Investor is entitled by reason of its participation
in such sale. To the extent that any prospective purchaser or purchasers
prohibits such assignment or otherwise refuses to purchase shares or other
securities from any Non-Participating Investor exercising its rights of co-sale
hereunder, the Proposed Seller shall not sell to such prospective purchaser or
purchasers any Stock unless and until, simultaneously with such sale, the
Proposed Seller shall purchase such shares or other securities from such
Non-Participating Investor for the same consideration and on the same terms and
conditions as the proposed transfer described in the Seller's Notice.
1.4 Additional Transactions. The exercise or non-exercise of the
rights of an Investor hereunder to participate in one or more sales of Stock
made by the Proposed Seller shall not adversely affect their rights to
participate in subsequent sales by the Stockholder.
1.5 Ownership. The Stockholders represent and warrant that each is
the sole legal and beneficial owner of those shares of Stock such Stockholder
currently holds subject to this Agreement and that no other person has any
interest (other than community property interest) in such shares.
1.6 Drag-Along Rights.
(a) Applicability. In the event the holders of a majority of
the then outstanding Preferred Stock of the Company (the "Proposing
Stockholders") approve a sale of the Company or a sale of all or substantially
all of the Company's assets, in a bona fide transaction, whether by means of a
merger, consolidation, sale of stock or assets or otherwise, in a single,
simultaneous or related series of transactions (an "Approved Sale"), then the
Stockholders (collectively, the "Remaining Holders") shall each consent to, vote
for and raise no objections to the Approved Sale. If the proposed acquiror is an
Affiliate of any stockholder of then-outstanding Preferred Stock, then this
Section 1.6(a) shall only apply to the Approved Sale if the Approved Sale is
approved by the holders of a majority of the then-outstanding Preferred Stock
held of record by holders that are not Affiliates of such proposed acquiror. If
the Approved Sale will take the form of an asset sale, merger or consolidation,
the Remaining Holders shall vote in favor of such transaction and shall waive
any appraisal rights or dissenters' rights in connection with such transaction.
If the Approved Sale is structured as a sale of the stock of the Company, each
Remaining Holder shall agree to sell all capital stock in the Company then held
by such Remaining Holder on the terms and conditions approved by the Proposing
Stockholders. A Remaining Holder shall have no obligations under this Section
1.6 to the extent that the terms of the Approved Sale provide that such
Remaining Holder would receive less than the amount that would be distributed to
such Remaining Holder in the event that the proceeds were distributed in
accordance with the Company's then-current Certificate of Incorporation. All
capital stock transferred by the Remaining Holders pursuant to this Section 1.6
shall be sold at the same price and otherwise treated identically with the
capital stock of the same class and series being sold by the Proposing
Stockholders in all respects. The Remaining Holders shall each take such actions
as may be reasonably required and otherwise cooperate in good faith with the
Proposing Stockholders in connection with consummating the Approved Sale,
including the execution of such agreements and such instruments and other
actions reasonably necessary to (i) provide reasonable representations and
warranties and other provisions and agreements relating to such Approved Sale
and (ii) effectuate the allocation and distribution of the aggregate
consideration upon the Approved Sale.
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(b) Notice of Sale. The Proposing Stockholders shall give the
Remaining Holders at least ten (10) days prior written notice of any Approved
Sale as to which the Proposing Stockholders intend to exercise their rights
under this Section 1.6.
(c) Notwithstanding any other provision of this Agreement, no
Stockholder or group of Stockholders (the "Offering Stockholders") shall be a
party to any transaction or series of transactions that involves a transfer to
any person, persons acting in concert or entity (a "Prospective Acquiror") of
shares of the Company if such sale would result in the Prospective Acquiror,
together with its Affiliates, holding 50% or more by voting power of all
outstanding capital stock of the Company, unless the Prospective Acquiror offers
to purchase all of the capital stock of the Company for the same consideration
per share (with appropriate adjustment to reflect the conversion of convertible
securities and the preference and priorities of any preferred stock) and upon
the same terms and conditions for securities of the same type, class and series
as are offered to the Offering Stockholder(s).
2. LEGENDED CERTIFICATES
2.1 Legend on the Stockholders' Stock. Each certificate representing
shares of the Stock now or hereafter owned by each Stockholder or its permitted
Transferees pursuant to clauses (i) through (v) of Section 1.1(b) shall be
endorsed with the following legend:
"THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH
THE TERMS AND CONDITIONS OF A CO-SALE AND FIRST REFUSAL AGREEMENT AMONG THE
HOLDER (OR THE PREDECESSOR IN INTEREST TO THE SHARES), THE CORPORATION AND
CERTAIN OTHER STOCKHOLDERS OF THE CORPORATION. ADDITIONALLY, THIS CERTIFICATE
AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN DRAG-ALONG PROVISIONS
SET FORTH IN THE CO-SALE AND FIRST REFUSAL AGREEMENT. THE CORPORATION WILL UPON
WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE. THE CORPORATION WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE
BOOKS OF THE CORPORATION UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT."
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2.2 The legend required under Section 2.1 hereof shall be removed
upon termination of this Agreement in accordance with the provisions of Section
4.1.
3. PROHIBITED TRANSFERS
3.1 Grant. In the event that any Stockholder should sell any Stock
in contravention of the participation rights of the Non-Participating Investors
under Section 1.3 of this Agreement (a "Prohibited Transfer"), the
Non-Participating Investors shall have the put option provided in Section 3.2.
3.2 Put Option. In the event of a Prohibited Transfer, the
Non-Participating Investors shall have the option to sell to the Proposed Seller
a number of shares of Common Stock of the Company (either directly or through
conversion and delivery of Series A Preferred Stock) equal to the number of
shares that the Non-Participating Investors would have been entitled to sell had
such Prohibited Transfer been effected in accordance with Section 1.3 hereof, on
the following terms and conditions:
(a) The price per share at which the shares are to be sold to
the Proposed Seller shall be equal to the price per share paid to the Proposed
Seller by the third party purchaser or purchasers of the Proposed Seller's
Stock. The Proposed Seller shall also reimburse the Non-Participating Investors
exercising the put option for any and all fees and expenses, including
reasonable out-of-pocket legal fees and expenses incurred pursuant to the
exercise or attempted exercise of rights under this Section 3.
(b) The Non-Participating Investors shall deliver to the
Proposed Seller, within thirty (30) days after they have received notice from
the Proposed Seller or otherwise become aware of the Prohibited Transfer, the
certificate or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer (or accompanied by duly executed stock
powers).
(c) The Proposed Seller shall, upon receipt of the
certificates for the repurchased shares, pay the aggregate purchase price
therefor provided for in this Article 3, by delivery of consideration in the
same form such Proposed Seller received for the Stock sold in the Prohibited
Transfer and shall reimburse the Non-Participating Investors for any additional
expenses, including legal fees and expenses, incurred in effecting such purchase
and resale.
3.3 Company Expenses. In the event of a Prohibited Transfer, the
Proposed Seller in the Prohibited Transfer shall reimburse the Company for any
and all fees and expenses, including reasonable out-of-pocket legal fees and
expenses, incurred by the Company in connection with such Prohibited Transfer.
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4. GENERAL
4.1 Termination. The rights and obligations of an Investor under
this Agreement shall terminate at such time as that Investor shall no longer be
the owner of at least 1,000 shares, or rights to acquire shares, (as
appropriately adjusted for any stock splits, stock dividends, combinations and
recapitalizations) of Common Stock (as determined on an as-converted basis).
Unless sooner terminated with respect to a particular Investor in accordance
with the preceding sentence, this Agreement shall terminate upon the occurrence
of any of the following events:
(a) the liquidation, dissolution or indefinite cessation of
the business operations of the Company, or the acquisition of the Company by
another entity (or group of affiliated entities or entities operating as a
group) by means of any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation) unless the
Company's stockholders of record as constituted immediately prior to such
acquisition or sale will, immediately after such acquisition or sale (by virtue
of securities issued as consideration for the Company's acquisition or sale or
otherwise) hold at least 50% of the voting power of the surviving or acquiring
entity (except that the sale by the Company of shares of its capital stock to
investors in bona fide financing transactions shall not be deemed to be an
acquisition for this purpose);
(b) the consummation of a Qualified Public Offering (as
defined in the Company's Certificate of Incorporation, as the same may be
amended and restated from time to time); or
(c) upon the execution and delivery of a written agreement
signed by the holders of at least 60% of the Preferred Stock, voting or acting
together as a single class.
Notwithstanding this Section 4.1, Section 1.6 shall survive any termination of
this Agreement pursuant to Section 4.1(a) until such transaction has closed and
all proceeds of such transaction (including without limitation any earn-out or
escrowed proceeds) have been fully distributed to all stockholders of the
Company in accordance with the terms of such transaction.
4.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the address for such party set forth beneath such party's name on Schedule A
hereto (or at such other address for a party as shall be specified by like
notice) and, in the case of the Company:
Comverge, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Chief Executive Officer
with a copy to
Xxxxxxx Xxxxx LLP
000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
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Notice given by facsimile shall be confirmed by appropriate answer back and
shall be effective upon actual receipt if received during the recipient's normal
business hours, or at the beginning of the recipient's next business day after
receipt if not received during the recipient's normal business hours. All
notices by facsimile shall be confirmed promptly after transmission in writing
by certified mail or personal delivery. Any party may change any address to
which notice is to be given to it by giving notice as provided above of such
change of address.
4.3 Assignments and Transfers. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives;
provided, however, and other than as set forth in Section 1.1(b) hereunder, the
first refusal and co-sale rights hereunder may be assigned only by an Investor
to a transferee or assignee of such Investor's shares of Preferred Stock of the
Company who, after such assignment or transfer, holds such number of shares of
Preferred Stock that is convertible into at least 250,000 shares of the Common
Stock of the Company (subject to appropriate adjustments for stock splits, stock
dividends, combinations and other recapitalizations) and who executes an
Adoption Agreement in the form attached as Annex A. By their execution hereof or
of an Adoption Agreement, each party hereto hereby appoints the Company as its
attorney-in-fact for the sole purpose of executing Adoption Agreements with any
subsequent permitted transferees.
4.4 Optional Escrow. At the request of any Investor, an escrow shall
be set up to effect the transfer of any certificates or funds hereunder. Costs
of such escrow shall be borne by all of the parties participating therein based
on the aggregate value of the shares held by them which are to be purchased or
sold thereunder.
4.5 Severability. In the event one or more of the provisions of this
Agreement should for any reason be held to be invalid, illegal or unenforceable,
such provisions shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision had never been contained
herein.
4.6 Amendments and Waivers. Other than with respect to amendments to
Schedule A or Schedule B hereto, which may be amended by the Company to reflect
additional Investors or Stockholders or their permitted transferees, any
amendment or modification of this Agreement shall be effective only if evidenced
by a written instrument executed by the holders of at least 60% of the shares of
Common Stock (determined on an as-converted basis) held by all the Investors
hereunder; provided, however, that any amendment or waiver that affects one
Investor in a disproportionately adverse manner as compared to other Investors
must be approved by the disproportionately affected Investor. Any waiver
hereunder shall be effective only if evidenced by a written instrument executed
by the holders of a majority of the shares of Common Stock held by all the
Investors (determined on an as-converted basis) or by the Stockholders
(determined on an as-converted basis), as the case may be, whose rights are
being waived.
10
4.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
conflicts of law principles.
4.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which, when
taken together, shall constitute one and the same instrument.
4.9 Remedies. The parties hereto shall have all remedies for breach
of this Agreement available to them as provided by law or equity. Without
limiting the generality of the foregoing, the parties agree that in addition to
any other rights and remedies available at law or in equity, the parties shall
be entitled to obtain specific performance of the obligations of each party to
this Agreement and immediate injunctive relief and that, in the event any action
or proceeding is brought in equity or to enforce the same, no party will urge,
as a defense, that there is an adequate remedy at law.
4.10 Conflict with Other Rights of First Refusal. Certain of the
Stockholders have entered into a stock purchase agreement with the Company,
which agreement contains a right of first refusal provision in favor of the
Company. The right of first refusal provision contained in this Agreement shall
supersede and replace the right of first refusal provision contained in the
Stockholder's stock purchase agreement; provided, however, that the other
provisions contained in the Stockholder's stock purchase agreement shall remain
in full force and effect and, provided further, that this Agreement is subject
to, and shall in no manner limit the right that the Company may have to
repurchase securities from any Stockholder pursuant to any stock restriction
agreement or other agreement between the Company and the Stockholder.
4.11 Aggregation of Stock. All shares of Common Stock owned or
acquired by an Investor or its Affiliates (assuming full conversion and exercise
of all convertible and exercisable securities into Common Stock) shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
4.12 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof.
[Signature Pages Follow]
11
IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Co-Sale and First Refusal Agreement on the day and year indicated
above.
COMVERGE, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxx
Chief Executive Officer
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
INVESTORS:
DATA SYSTEMS & SOFTWARE INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ENERTECH CAPITAL PARTNERS II L.P.
By: ECP II Management L.P.,
Its General Partner
By: ECP II Management L.L.C.,
Its General Partner
By:
--------------------------------------
Xxxxx X. Xxxxxxx
Managing Director
ECP II INTERFUND L.P.
By: ECP II Management L.L.C.,
Its General Partner
By:
--------------------------------------
Xxxxx X. Xxxxxxx
Managing Director
EASTON XXXX CAPITAL PARTNERS, L.P.
By: EHC GP, L.P.
Its: General Partner
By: EHC, Inc.
Its: General Partner
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
E.ON VENTURE PARTNERS
By:
--------------------------------------
Xxxxx Bachsleitner
Managing Director
By:
--------------------------------------
Xxxxxxx Xxxxxxxxxxxx
Managing Director
NTH POWER TECHNOLOGIES FUND II, L.P.,
NTH POWER TECHNOLOGIES FUND II-A, L.P.
BY: NTH POWER MANAGEMENT II, L.P.
AND
NTH POWER MANAGEMENT II-A, L.L.C.
BY: NTH POWER L.L.C.
THEIR MANAGEMENT AGENT
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
RIDGEWOOD COMVERGE, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SHELL INTERNET VENTURES B.V.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
NORSK HYDRO TECHNOLOGY VENTURES AS
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
ROCKPORT CAPITAL PARTNERS, L.P.
By: RockPort Capital I, LLC,
its General Partner
By:
--------------------------------------
Name:
Title: Managing Member
RP CO-INVESTMENT FUND I, L.P.
By: RP Co-Investment Fund I GP, LLC,
its General Partner
By:
--------------------------------------
Name:
Title: Managing Member
XXXXXXX VENTURES INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
-----------------------------------------
Xxxxxx Xxxxxxx
-----------------------------------------
T. Xxxxx Xxxx
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
STOCKHOLDERS:
DATA SYSTEMS & SOFTWARE INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
-----------------------------------------
Xxxxxx X. Xxxxxx
-----------------------------------------
T. Xxxxx Xxxx
-----------------------------------------
Xxxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
-----------------------------------------
Coral Almog
-----------------------------------------
Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxx
[Signature Page to Comverge, Inc.
Second Amended and Restated Co-Sale and First Refusal Agreement]
SCHEDULE A
SCHEDULE OF INVESTORS
Data Systems & Software Inc.
000 XX 00
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx
Fax: (000) 000-0000
Easton Xxxx Capital Partners, L.P.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
EnerTech Capital Partners II L.P.
700 Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
ECP II Interfund L.P.
700 Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
E.ON Venture Partners
Xxxxxx. 00
00000 Xxxxxxxxxx
Xxxxxxx
Attention: Xxxxx Xxxxxxxx
Fax: x00 000 000 00000
Nth Power
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Fax: (000) 000-0000
A-1
Shell Internet Ventures B.V.
x/x Xxxxx Xxxxxx, XXX XXX
Xxxxxx, XX0 0XX, XX
Attention: Xxxx Xxxxx and
Xxxxxxx Xxxxxx
Fax: x00 000 0000 0000
Ridgewood Comverge, LLC
c/o Ridgewood Capital
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Gold
Fax: (000) 000-0000
Norsk Hydro Technology Ventures AS
Xxxxxxx 00, Xxxxxxxx
X-0000 Xxxx
Xxxxxx
Attention: Xxxx Xxxx
Fax:
Xxxxx Xxxxxxxx
c/o Comverge, Inc.
00 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Xxxxxxx Xxxxxxx
c/o Comverge, Inc.
00 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Xxxx Xxxxx
c/o Comverge, Inc.
00 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
T. Xxxxx Xxxx
c/o Comverge, Inc.
00 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
A-2
Xxxxxx X. Xxxxxx
c/o Comverge, Inc.
00 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Xxxxxx Xxxxxxx
0 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Ventures Inc.
0000 X. Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attention: X. X. Xxxxx
Fax: (000) 000-0000
RockPort Capital Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
RP Co-Investment Fund I, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
A-3
SCHEDULE B
SCHEDULE OF COMMON STOCKHOLDERS
Name and Address of Stockholder
-------------------------------
Data Systems & Software Inc.
Xxxxxx X. Xxxxxx
T. Xxxxx Xxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Coral Almog
Xxxx Xxxxxxx
Xxxx Xxxxx
B-1
ADOPTION AGREEMENT
THIS ADOPTION AGREEMENT (this "Adoption Agreement") is executed by
the undersigned (the "Transferee") pursuant to the terms of that certain Second
Amended and Restated Co-Sale and First Refusal Agreement dated as of October 25,
2004 (the "Agreement") by and among the Company and certain Stockholders and
Investors. Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Agreement. By the execution of
this Adoption Agreement, the Transferee agrees as follows:
1. Acknowledgement. Transferee acknowledges that Transferee is
acquiring certain shares of the capital stock of the Company (the "Stock"),
subject to the terms and conditions, and entitled to benefits, of the Agreement.
2. Agreement. As partial consideration for such transfer, Transferee
(a) agrees that the Stock acquired by Transferee shall be bound by and subject
to the terms, and entitled to benefits, of the Agreement and (b) hereby adopts
the Agreement with the same force and effect as if Transferee were originally a
party thereto. Notwithstanding any other provision of this Adoption Agreement to
the contrary, Transferee shall be deemed an Investor if the transferor of the
Stock was an Investor or a Stockholder if the transferor of the Stock was a
Stockholder.
3. Notice. Any notice required or permitted by the Agreement shall
be given to Transferee at the address listed beside Transferee's signature
below.
4. Joinder. The spouse of the undersigned Transferee, if applicable,
executes this Adoption to acknowledge its fairness and that it is in such
spouse's best interests and to bind to the terms of the Agreement such spouse's
community interest, if any, in the Stock.
EXECUTED AND DATED this ______ day of _________________, ____.
TRANSFEREE:
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address:
-------------------------------
-------------------------------
-------------------------------
Facsimile:
-------------------------------
Spouse (if applicable):
Name:
------------------------------------
ACKNOWLEDGED AND ACCEPTED:
COMVERGE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
