AMENDED AND RESTATED CO-SALE AGREEMENT
This Amended and Restated Co-Sale Agreement, dated as of the 29th day of
September, 2000, is by and among Xx. Xxxx X. Xxxxxxxx (the "Executive"),
Educational Video Conferencing, Inc., a Delaware corporation (the "Company") and
the Investors.
This Agreement amends and restates the Amended Restated and Co-Sale
Agreement dated as of September 27, 2000, among the Executive, the Company,
Paloma Strategic Fund L.P., Seneca Capital International, Ltd. and Seneca
Capital, L.P.
In consideration of the mutual covenants set forth herein, the parties
agree as follows:
1. DEFINITIONS.
(a) "Common Stock" shall mean the Company's common stock, $.0001 par
value per share.
(b) "Co-Sale Shares" shall mean all Shares now owned or subsequently
acquired by the Executive and all Shares acquired by the Investors pursuant to
the Stock Purchase Agreement.
(c) "Co-Sale Transaction" shall mean a privately negotiated sale or
transfer of any Shares with any third party or a block lot sale or transfer of
any Shares with a broker and shall not include sales pursuant to Rule 144.
(d) "Investors" shall mean, collectively, Paloma Strategic Fund L.P.,
Seneca Capital International, Ltd., Seneca Capital, L.P., Merced Partners
Limited Partnership, Lakeshore International, Ltd. and the other purchasers of
Preferred Stock and Warrants pursuant to the Stock Purchase Agreement that
become parties to this Agreement in accordance with Section 5(l) below.
(e) "Preferred Stock" shall mean the Company's outstanding Series B
Preferred Stock owned by the Investors.
(f) "Rule 144" shall mean Rule 144 promulgated under the Securities Act
of 1933 (or any successor to such rule).
(g) "Shares" shall mean all shares of Common Stock and all Common Stock
equivalents (including without limitation, shares of Preferred Stock and Warrant
Shares). For the purposes of any computation of the amount of Shares either
outstanding or held by a stockholder who or which is a party to this Co-Sale
Agreement, all Common Stock equivalents held by such stockholder shall be deemed
to be converted, exercised or exchanged for shares of Common Stock whether or
not such conversion, exercise or exchange has actually been effected and whether
or not then convertible, exercisable or exchangeable (but only to the extent any
such Common Stock equivalents shall be vested).
(h) "Stock Purchase Agreement" shall mean, collectively, the Series B
Stock Purchase Agreements between the Company and the Investors, respectively.
(i) "Warrant Shares" shall mean, with respect to the Investors, all
shares which are issuable in the form of Common Stock upon exercise of the
Warrants issued pursuant to the Stock Purchase Agreement.
2. CO-SALE TRANSACTION.
(a) Except as set forth in Section 3, if the Executive (the "Selling
Party") proposes to sell or transfer any of its Shares, then such Selling Party
shall give written notice (the "Notice") to the Company and to each of the
Investors at least 10 days prior to the closing of a Co-Sale Transaction and at
least 3 days prior to the closing or settlement of any other sale or transfer.
The Notice shall indicate the number of Shares to be sold or transferred, the
nature of such sale or transfer and, if known, the consideration to be paid, and
the name and address of each prospective purchaser or transferee. In the event
that the sale or transfer is being made pursuant to the provisions of Section 3
hereof, the Notice shall state under which paragraph and subparagraph the sale
or transfer is being made. A notice of proposed sales under Rule 144 shall be
sufficient if the Executive provides the Investors with a copy of the
Executive's Form 144.
(b) To the extent that the Notice pertains to a Co-Sale Transaction, each
Investor shall have the right, exercisable upon written notice to such Selling
Party (the "Notice of Acceptance") within 5 days after receipt of the Notice, to
participate in such sale on the same terms and conditions specified in the
Notice. To the extent that one or more of the Investors exercise such right of
participation in accordance with the terms and conditions set forth below, the
number of Co-Sale Shares that the Selling Party may sell in the transaction
shall be correspondingly reduced.
(c) In a Co-Sale Transaction, each Investor may sell all or any part of
that number of shares of Common Stock equal to the product obtained by
multiplying (i) the aggregate number of Co-Sale Shares covered by the Notice by
(ii) a fraction, the numerator of which is the number of Shares owned by the
Investor at the time of the sale or transfer and the denominator of which is the
total number of Shares owned by the Executive and Investors at the time of the
sale or transfer. An Investor may request in the Notice of Acceptance to sell in
excess of its pro rata percentage of the Co-Sale Shares in which case the right
to sell any Co-Sale Shares not elected to be sold by other Investors shall be
allocated among Investors who so elect. Each such electing Investor shall be
permitted to sell up to that portion of such excess Co-Sale Shares equal to the
ratio that its pro rata percentage bears to the pro rata percentage of all such
electing Investors.
(d) Each Investor shall effect its participation in a Co-Sale Transaction
by promptly delivering to the Selling Party for transfer to the prospective
purchaser one or more certificates, properly endorsed for transfer, which
represent:
(i) the type and number of Co-Sale Shares which such Investor
elects to sell; or
(ii) that number of shares of Preferred Stock which is at such
time convertible into the number of shares of Common Stock which such
Investor elects to sell; provided, however, that if the prospective
purchaser objects to the delivery of Preferred Stock in lieu of Common
Stock, such Investor shall convert such Preferred Stock into Common
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Stock and deliver Common Stock as provided in subparagraph 2(d)(i) above,
and the Company agrees to make any such conversion concurrent with the
actual transfer of such Co-Sale Shares to the purchaser; or
(iii) that number of Warrant Shares which is at such time
exercisable into the number of shares of Common Stock which such Investor
elects to sell; provided, however, that if the prospective purchaser
objects to the delivery of Warrant Shares in lieu of Common Stock, such
Investor shall exercise such Warrant Shares into shares of Common Stock
and deliver such Common Stock as provided in subparagraph 2(d)(i) above,
and the Company agrees to make any such exercise of Warrant Shares
concurrent with the actual transfer of such Co-Sale Shares to the
purchaser.
(e) The stock certificate or certificates that the Investor delivers to
the Selling Party pursuant to paragraph 2(d) shall be transferred to the
prospective purchaser in consummation of the sale of the Co-Sale Shares pursuant
to the terms and conditions specified in the Notice, and the Selling Party shall
concurrently therewith remit to such Investor that portion of the sale proceeds
to which such Investor is entitled by reason of such Investor's participation in
such sale. To the extent that any prospective purchaser(s), prohibits such
assignment or otherwise refuses to purchase shares or other securities from an
Investor exercising rights of co-sale hereunder, the Selling Party shall not
sell to such prospective purchaser or purchasers any Co-Sale Shares unless and
until, simultaneously with such sale, the Selling Party shall purchase such
shares or other securities from such Investor.
(f) The exercise or non-exercise of the rights of an Investor hereunder
to participate in one or more sales of Co-Sale Shares made by a Selling Party
shall not adversely affect such Investor's rights to participate in subsequent
sales of Co-Sale Shares subject to paragraph 2(a).
(g) If none of the Investors elects to participate in the sale of the
Co-Sale Shares subject to the Notice, the Selling Party may, not later than 60
days following delivery to the Company and each of the Investors of the Notice,
enter into an agreement providing for the closing of the transfer of the Co-Sale
Shares covered by the Notice within 30 days of such agreement on terms and
conditions not more favorable to the transferor than those described in the
Notice. Any proposed transfer on terms and conditions more favorable than those
described in the Notice, as well as any subsequent proposed transfer of any of
the Co-Sale Shares by the Selling Party, shall again be subject to the co-sale
rights of the Investors and shall require compliance by the Selling Party with
the procedures described in this Section 2.
(h) (i) In the event a Selling Party should sell any Co-Sale Shares in a
Co-Sale Transaction in contravention of the co-sale rights of the Investors
under this Co-Sale Agreement (a "Prohibited Transfer"), each Investor, in
addition to such other remedies as may be available at law, in equity or
hereunder, shall have the option, exercisable by written notice to the Selling
Party within 90 days after becoming aware of the Prohibited Transfer as provided
below, and the Selling Party shall be bound by the applicable provisions of such
option.
(ii) In the event of a Prohibited Transfer by a Selling Party,
each Investor shall have the right to sell to such Selling Party the type
and number of shares of Common Stock equal to the number of shares each
Stockholder would have been entitled to
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transfer to the purchaser under Section 2(c) had the Prohibited Transfer
hereof been effected pursuant to and in compliance with the terms hereof.
Such sale shall be made on the following terms and conditions:
(A) The price per share at which the shares are to be sold to the
Selling Party shall be equal to the price per share paid by the
purchaser to the Selling Party in the Prohibited Transfer. The Selling
Party shall also reimburse each Investor for any and all fees and
expenses, including legal fees and expenses, incurred pursuant to the
exercise or the attempted exercise of the Investor's rights under
Section 2.
(B) Within 90 days after the later of the dates on which the
Investor (i) received notice of the Prohibited Transfer or (ii)
otherwise became aware of the Prohibited Transfer, each Investor
shall, if exercising the option created hereby, deliver to the Selling
Party the certificate or certificates representing shares to be sold,
each certificate to be properly endorsed for transfer.
(C) The Selling Party shall, upon receipt of the certificate or
certificates for the shares to be sold by an Investor, pursuant to
this subparagraph 2(h)(ii), pay the aggregate purchase price therefor
and the amount of reimbursable fees and expenses, as specified in
subparagraph 2(h)(ii)(A), in cash or by other means acceptable to the
Investor.
(D) Notwithstanding the foregoing, any attempt by a Selling Party
to transfer Co-Sale Shares in violation of Section 2 hereof shall be
void. The Company agrees it will not knowingly effect such a transfer
nor will it knowingly treat any alleged transferee in such transfer as
the holder of such shares without the written consent of a majority in
interest of the Investors.
3. EXEMPT TRANSFERS.
Notwithstanding the foregoing, the provisions of Sections 2 shall not
apply to (i) any transfer or transfers of Shares to any third party (subject to
compliance with Federal and State securities laws) not exceeding, in the
aggregate, twenty-five percent (25%) of the Executive's total number of Shares
outstanding as of the date hereof; or (ii) any transfer to the ancestors,
descendants, siblings or spouse of the Executive; or to trusts, for the benefit
of such persons; provided, that, (A) the Executive shall inform the Investors of
such transfer prior to effecting it and (B) the transferee or beneficiary shall
furnish the Investors with a written agreement to be bound by and comply with
all provisions of Section 2 or (iii) any gift for no consideration to an
organized charity that is not an affiliate of the Executive or any of the
persons or trusts referred to in Section 3(ii). Transferred Co-Sale Shares
referred to in Section 3 (ii) shall remain "Co-Sale Shares" hereunder, and such
transferee or beneficiary shall be treated as an Executive, for the purposes of
this Co-Sale Agreement.
4. LEGEND.
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(a) Each certificate representing shares of Common Stock now or hereafter
owned by the Executive or issued to any person in connection with a transfer
pursuant to Section 2 and Section 3 hereof shall be endorsed with the following
legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN CO-SALE AGREEMENT BY AND AMONG THE EXECUTIVE, THE COMPANY
THE INVESTORS. COPIES OF SUCH CO-SALE AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY."
(b) The Executive agrees that the Company may instruct its transfer agent
to impose transfer restrictions on the shares represented by certificates
bearing the legend referred to in Section 4(a) above to enforce the provisions
of this Co-Sale Agreement and the Company agrees promptly to do so. The legend
shall be removed upon termination of this Co-Sale Agreement.
5. MISCELLANEOUS.
(a) CONDITIONS TO EXERCISE OF RIGHTS. Exercise of the Investors' rights
under this Co-Sale Agreement shall be subject to and conditioned upon compliance
with applicable laws.
(b) GOVERNING LAW. This Co-Sale Agreement shall be governed by and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of laws principles thereof. Parties hereto shall submit
to the exclusive jurisdiction of the United States District Court for the
Southern District of New York or any state court located in New York County,
State of New York with respect to matters pertaining to the transactions
discussed herein and any related transaction documents to be prepared herewith.
(c) AMENDMENT. Any provision of this Co-Sale Agreement may be amended and
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by the written consent
of (i) as to the Company, only by the Company, (ii) as to the Investors, by
persons holding more than sixty-six and two-thirds percent (66 2/3%) in interest
of the Preferred Stock, provided, however, that written consent of an Investor
is required for amendments or waivers in connection with such Investor's co-sale
rights in connection with a particular transaction or otherwise affecting such
Investor disproportionately or in connection with this Co-Sale Agreement, and
(iii) as to the Executive, only by the Executive. Any amendment or waiver
effected in accordance with clauses (i), (ii) and (iii) of this paragraph shall
be binding upon each Investor, such Investor's successors and assigns, the
Company, and the Executive.
(d) ASSIGNMENT OF RIGHTS. This Co-Sale Agreement and the rights and
obligations of the parties hereunder shall inure to benefit of, and be binding
upon, the parties' respective successors, permitted assigns and legal
representatives. The rights of the Investors hereunder are only assignable (i)
by each of such Investors to any other Investor or (ii) to an affiliate of such
Investor or (iii) to an assignee or transferee who acquires all of the Shares
purchased and purchasable by an Investor of at least twenty-five percent (25%)
of such Shares, and such assignee shall then become a party to this Co-Sale
Agreement.
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(e) TERM. This Co-Sale Agreement shall terminate upon the earlier of: (i)
the date that the Executive is no longer a member of the management of the
Company and (ii) the date that an Investor no longer holds any capital stock or
securities convertible, exercisable or exchangeable for Common Stock of the
Company.
(f) OWNERSHIP. The Executive represents and warrants that such party is
the sole legal and beneficial owner of the 668,961 Shares subject to this
Co-Sale Agreement and that no other person has any interest in such Shares.
(g) NOTICES. All notices required or permitted hereunder shall be in made
in accordance with Section 9(f) of the Stock Purchase Agreement.
(h) SEVERABILITY. In the event one or more of the provisions of this
Co-Sale Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Co-Sale Agreement, and this
Co-Sale Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
(i) COUNTERPARTS. This Co-Sale 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.
(j) ENTIRE AGREEMENT. This Co-Sale Agreement constitutes the entire
agreement between the parties relative to the specific subject matter hereof.
Any previous agreement among the parties relative to the specific subject matter
hereof is superseded by this Co-Sale Agreement.
(k) REMEDIES. Each party acknowledges and agrees that, in the event it
should fail to perform its obligations under this Co-Sale Agreement, the remedy
at law available to any party hereto aggrieved by such failure would be
inadequate and that, in addition to any other rights or remedies such aggrieved
party may have at law or in equity, the aggrieved party shall be entitled to
specific performance of the provisions of this Co-Sale Agreement or an
injunction against any breach thereof, without the necessity of proof of actual
damage.
(l) ADDITIONAL INVESTORS. Additional parties shall become parties to this
Agreement by completing, executing and delivering to the Company and each other
Investor an Investor Counterpart Signature Page, provided such party has
acquired the Additional Securities (as defined in Section 18(b) of the
Certificate of Designations relating to the Preferred Stock) specified on such
Counterpart Signature Page in accordance with the provisions of Section 18(b) of
the Certificate of Designations. The consent of the other Investors shall not be
required to the addition of any Investor as a party to this Agreement in
compliance with this Section 5(l), provided that no additional amendments are
made to this Agreement at the time such party is added to this Agreement as an
Investor.
[SIGNATURE PAGES FOLLOW]
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The foregoing Amended and Restated Co-Sale Agreement is hereby executed
as of the 29th day of September, 2000.
EDUCATIONAL VIDEO CONFERENCING, INC
By: /s/Xx. Xxxx X. Xxxxxxxx
---------------------------------------
---------------------------------------
Name: Xx. Xxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
/s/Xxxx X Xxxxxxxx
---------------------------------------
Xx. Xxxx X Xxxxxxxx
[INVESTOR COUNTERPART SIGNATURE PAGES FOLLOW]
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INVESTOR
COUNTERPART SIGNATURE PAGE
The undersigned hereby executes the Amended and Restated Co-Sale
Agreement, dated as of September 29, 2000, relating to the Series B 7%
Convertible Preferred Stock and Warrants issued by Educational Video
Conferencing, Inc.
Date: SEPTEMBER 29, 2000
------------------
PALOMA STRATEGIC FUND L.P.
By: Amaranth Advisors L.L.C
Attorney-in-Fact
By: /s/Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Stated Value of shares of Preferred Stock
Owned: $10,000,000
--------------------------------------
No. of Warrant Shares underlying
Warrants: 555,556
-----------------------------------
INVESTOR
COUNTERPART SIGNATURE PAGE
The undersigned hereby executes the Amended and Restated Co-Sale
Agreement, dated as of September 29, 2000, relating to the Series B 7%
Convertible Preferred Stock and Warrants issued by Educational Video
Conferencing, Inc.
Date: SEPTEMBER 29, 2000
------------------
SENECA CAPITAL INTERNATIONAL, LTD.
By: /s/Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Partner
Stated Value of shares of Preferred Stock
Owned: $1,308,000
---------------------------------
No. of Warrant Shares underlying
Warrants: 72,667
---------------------------------
INVESTOR
COUNTERPART SIGNATURE PAGE
The undersigned hereby executes the Amended and Restated Co-Sale
Agreement, dated as of September 29, 2000, relating to the Series B 7%
Convertible Preferred Stock and Warrants issued by Educational Video
Conferencing, Inc.
Date: SEPTEMBER 29, 2000
------------------
SENECA CAPITAL, L.P.
By: /s/Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
Title: Partner
Stated Value of shares of Preferred Stock
Owned: $692,000
-----------------------------------
No. of Warrant Shares underlying
Warrants: 38,444
-----------------------------------
INVESTOR
COUNTERPART SIGNATURE PAGE
The undersigned hereby executes the Amended and Restated Co-Sale
Agreement, dated as of September 29, 2000, relating to the Series B 7%
Convertible Preferred Stock and Warrants issued by Educational Video
Conferencing, Inc.
Date: SEPTEMBER 29, 2000
------------------
MERCED PARTNERS LIMITED PARTNERSHIP
By: Global Capital Management, Inc.
General Partner
By: /s/Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Offier
Stated Value of shares of Preferred Stock
Owned: $500,000
----------------------------------
No. of Warrant Shares underlying
Warrants: 27,778
---------------------------------
INVESTOR
COUNTERPART SIGNATURE PAGE
The undersigned hereby executes the Amended and Restated Co-Sale
Agreement, dated as of September 29, 2000, relating to the Series B 7%
Convertible Preferred Stock and Warrants issued by Educational Video
Conferencing, Inc.
Date: SEPTEMBER 29, 2000
------------------
LAKESHORE INTERNATIONAL, LTD.
By: Hunter Capital Management, L.L.C.
Investment Manager
By: Global Capital Management, Inc.
Member
By: /s/Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
Stated Value of shares of Preferred Stock
Owned: $500,000
-----------------------------------
No. of Warrant Shares underlying
Warrants: 27,778
-----------------------------------
