EXHIBIT 4.3
AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT (the "AGREEMENT")
is made and dated as of the 22nd day of December 2000 by and among the
individuals listed as Common Stockholders on Schedule A hereto (the "COMMON
STOCKHOLDERS"), the individuals and entities listed as Other Stockholders on
Schedule A hereto (the "OTHER STOCKHOLDERS"), the entity listed as a Series 1
Stockholder on Schedule A hereto (the "SERIES 1 STOCKHOLDER") and the
individuals and entities listed as Series A Stockholders on Schedule A hereto
(the "SERIES A STOCKHOLDERS") and SynchronOSS Technologies, Inc., a Delaware
corporation (the "COMPANY").
BACKGROUND
WHEREAS, the Common Stockholders are holders of shares of outstanding
Common Stock of the Company, $0.0001 par value per share (the "COMMON STOCK");
WHEREAS, certain of the Series A Stockholders (the "SUBSEQUENT SERIES
A STOCKHOLDERS") are party to that certain Series A Preferred Stock Purchase
Agreement (the "PURCHASE AGREEMENT"), dated the date hereof, pursuant to which
they are acquiring shares of the Company's Series A Preferred Stock (the "SERIES
A PREFERRED STOCK");
WHEREAS, the Common Stockholders, the Other Stockholders, certain of
the Series A Stockholders and the Company are party to that certain Investors
Rights Agreement, dated as of November 13, 2000 (the "PRIOR AGREEMENT"), entered
into in connection with the issuance of shares of Series A Preferred Stock,
which they now desire to amend and restate in certain respects;
WHEREAS, the Subsequent Series A Stockholders obligations under the
Purchase Agreement are conditioned upon the execution and delivery of this
Amended and Restated Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Agreement, and intending to be legally bound, the parties
agree as follows:
SECTION 1. DEFINITIONS.
1.1 "AFFILIATE" means, with respect to any specified person, (i) any
other person that owns (directly or indirectly), individually or as part of a
group (as determined pursuant to Rule 13d-5 under the Securities Exchange Act of
1934, as amended (the "Act")), greater than fifty percent (50%) of the voting
stock or other capital interest of such specified person, (ii) any other person
of whom greater than fifty percent (50%) of the voting stock or other capital
interest is owned by (directly or indirectly), individually or as part of a
group (as determined pursuant to Rule 13d-5 under the Act, by such person, and
(iii) any other person controlling, controlled by or under common control with
such person.
1.2 "FULLY DILUTED COMMON STOCK" shall mean the Company's outstanding
Common Stock and shares of Common Stock issued or issuable upon conversion of
the Company's outstanding preferred stock, or upon exercise of outstanding
rights, options and warrants to acquire Common Stock.
1.3 "QUALIFIED IPO" shall mean a firm commitment initial public
offering by t he Company pursuant to a registration statement under the
Securities Act of 1933 (i) with an aggregate offering price of at least Twenty
Million Dollars ($20,000,000) and (ii) at a per share price equal to at least
$8.70 (subject to adjustment for stock dividends, recapitalizations, splits and
similar events).
SECTION 2. SALES BY THE COMMON STOCKHOLDERS.
2.1 Rights of Refusal.
(a) Transfer Notice. If at any time any Common Stockholder (the
"SELLING STOCKHOLDER") proposes to transfer any shares of the Company's Common
Stock ("EQUITY SECURITIES") to one or more third parties pursuant to an
understanding with such third parties (a "TRANSFER"), then the Selling
Stockholder shall give to the Company, and to each of the other Common
Stockholders and Series A Stockholders, if any (together, the "NON-SELLING
STOCKHOLDERS"), written notice of the Selling Stockholder's intention to make
the Transfer (the "TRANSFER NOTICE"), which Transfer Notice shall include (i) a
description of the Equity Securities to be transferred (the "OFFERED SHARES"),
(ii) the identity of the prospective transferee(s) and (iii) the consideration
and the material terms and conditions upon which the proposed Transfer is to be
made. The Transfer Notice shall certify that the Selling Stockholder has
received a firm offer from the prospective transferee(s) and in good faith
believes a binding agreement for the Transfer is obtainable on the terms set
forth in the Transfer Notice. The Transfer Notice shall also include a copy of
any written proposal, term sheet or letter of intent or other agreement relating
to the proposed Transfer.
(b) Company's Option. The Company shall have an option for a
period of ten (10) days from receipt of the Transfer Notice to elect to purchase
all or a portion of the Offered Shares at the same price and subject to the same
material terms and conditions as described in the Transfer Notice. The Company
may exercise such purchase option and thereby purchase all (or a portion of) the
Offered Shares by notifying the Selling Stockholder in writing before expiration
of the such ten (10) day period as to the number of such Offered Shares which it
wishes to purchase. If the Company gives t he Selling Stockholder notice that it
desires to purchase such shares, then payment for the Offered Shares shall be by
check, wire transfer or cancellation of indebtedness, against delivery of the
Offered Shares to be purchased at a place agreed upon between the parties and at
the time of the scheduled closing therefor, which shall be no later than
forty-five (45) days after the Company's receipt of the Transfer Notice, unless
the Transfer Notice contemplated a later closing with the prospective third
party transferee(s). If the Company fails to purchase all of the Offered Shares
by exercising the option granted in this Section 2.1(b) within the period
provided, the Offered Shares which the Company has not elected to purchase shall
be subject to the option granted to the Non-Selling Stockholders pursuant to
this Agreement.
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(c) Additional Transfer Notice. Subject to the Company's right
set forth in Section 2.1(b), if at any time the Selling Stockholder proposes a
Transfer, then, after the Company has declined to purchase all, or a portion of,
the Offered Shares, the Selling Stockholder shall give each Non-Selling
Stockholder an "ADDITIONAL TRANSFER NOTICE" which shall include all of the
information and certifications required in a Transfer Notice and shall
additionally identify the Offered Shares which the Company has declined to
purchase (the "REMAINING SHARES") and briefly describe Non-Selling Stockholders'
rights of first refusal and co-sale rights with respect to the proposed
Transfer.
(d) Non-Selling Stockholders' Option. The Non-Selling
Stockholders shall have an option for a period of twenty (20) days from the
Non-Selling Stockholder's receipt of the Additional Transfer Notice to elect to
purchase their respective pro rata shares of the Remaining Shares at the same
price and subject to the same material terms and conditions as described in the
Additional Transfer Notice. Each Non-Selling Stockholder may exercise such
purchase option and thereby purchase all or any portion of his, her or its pro
rata share (with any reallotments as provided below) of the Remaining Shares, by
notifying the Selling Stockholder and the Company in writing, before expiration
of the twenty (20) day period as to the number of such shares which he, she or
it wishes to purchase (including any reallotment). Each Non-Selling
Stockholder's pro rata share of the Remaining Shares shall be a fraction of the
Remaining Shares, of which the number of shares of Common Stock (including
shares of Common Stock issuable upon conversion of Preferred Stock) owned by
such Non-Selling Stockholder on the date of the Transfer Notice shall be the
numerator and the total number of shares of Common Stock (including shares of
Common Stock issuable upon conversion of the Company's Preferred Stock) held by
all Non-Selling Stockholders on the date of the Transfer Notice shall be the
denominator.
2.2 Right of Co-Sale.
(a) To the extent t he Company and t he Non-Selling Stockholders
do not exercise their respective rights of refusal as to all of the Offered
Shares pursuant to Section 2.1, then each Non-Selling Stockholder (a "CO-SELLING
STOCKHOLDER") notifying t he Selling Stockholder in writing within thirty (30)
days after receipt of the Transfer Notice referred to in Section 2.1(a), shall
have the right to participate in such sale of Equity Securities on the same
terms and conditions as specified in the Transfer Notice. Such Co-Selling
Stockholder's notice to the Selling Stockholder shall indicate the number of
shares of Equity Securities the Co-Selling Stockholder wishes to sell under his,
her or its right t o participate. To t he extent one or more of t he Non-Selling
Stockholders exercise such right of participation in accordance with the terms
and conditions set forth below, the number of shares of Equity Securities that
the Selling Stockholder may sell in the Transfer shall be correspondingly
reduced.
(b) Each Co-Selling Stockholder may sell all or any part of t hat
number of shares of Equity Securities equal to the product obtained by
multiplying (i) the aggregate number of shares of Equity Securities covered by
the Transfer Notice by (ii) a fraction, the numerator of which is the number of
shares of Common Stock (including shares of Common Stock issuable upon
conversion of Preferred Stock) owned by the Co-Selling Stockholder on the date
of the Transfer Notice and the denominator of which is the total number of
shares of Common Stock (including shares of Common Stock issuable upon
conversion of Preferred
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Stock) owned by the Selling Stockholder and all of the Co-Selling Stockholders
on the date of the Transfer Notice.
2.3 Non-Exercise of Rights. To the extent that the Company and the
Non-Selling Stockholders have not exercised their rights to purchase the Offered
Shares or the Remaining Shares within the time periods specified in Section 2.1
and the Non-Selling Stockholders have not exercised their rights to participate
in the sale of the Offered Shares or the Remaining Shares within the time
periods specified in Section 2.2, the Selling Stockholder shall have a period of
thirty (30) days from the expiration of such rights in which to sell the Offered
Shares or the Remaining Shares, as the case may be, upon terms and conditions
(including the purchase price) no more favorable than those specified in the
Transfer Notice to the third-party transferee(s) identified in the Transfer
Notice. In the event Selling Stockholder does not consummate the sale or
disposition of the Remaining Shares within the thirty (30) day period from the
expiration of these rights, the Company's first refusal rights and the
Non-Selling Stockholders' first refusal rights and co-sale rights shall continue
t o be applicable to any subsequent disposition of the Offered Shares or the
Remaining Shares by Selling Stockholder until such right lapses in accordance
with the terms of this Agreement. Furthermore, the exercise or non-exercise of
the rights of the Company and the Non-Selling Stockholders under this Section 2
to purchase Equity Securities from t he Selling Stockholder or t o participate
in sales of Equity Securities by the Selling Stockholder shall not adversely
affect their rights to make subsequent purchases from the Selling Stockholder of
Equity Securities or subsequently participate in sales of Equity Securities by
the Selling Stockholder.
2.4 Delivery of Shares. Each Co-Selling Stockholder shall effect it s
participation in a sale on a co-sale basis by promptly delivering to the Selling
Stockholder for transfer to the prospective purchaser one or more certificates,
properly endorsed for transfer, which represent: (a) that number of shares of
Common Stock which such Co-Selling Stockholder elects to sell; or (b) that
number of shares of Preferred Stock which is at such time convertible into the
number of shares of Common Stock which such Co-Selling Stockholder elects t o
sell on a co-sale basis; provided, however, that if the prospective purchaser
objects to the delivery of Preferred Stock in lieu of Common Stock, such
Co-Selling Stockholder shall convert such Preferred Stock into Common Stock and
deliver Common Stock as provided in subparagraph 2.4(a) above. The Company
agrees to make any such conversion concurrent with the actual transfer of such
shares to the purchaser.
2.5 Closing. The stock certificate or certificates, if any, that the
Co-Selling Stockholder delivers to the Selling Stockholder pursuant to Section
2.4 shall be transferred to the prospective purchaser in consummation of the
sale of the Offered Shares pursuant to the terms and conditions specified in the
Transfer Notice, and t he Selling Stockholder shall concurrently therewith remit
to such Co-Selling Stockholder t hat portion of t he sale proceeds to which such
Co-Selling Stockholder 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 a
Co-Selling Stockholder exercising its rights of co-sale hereunder, the Selling
Stockholder shall not sell to such prospective purchaser or purchasers any
Offered Shares unless and until, simultaneously with such sale, the Selling
Stockholder shall purchase such shares or other securities from such Co-Selling
Stockholder. To the extent that a Non-Selling Stockholder elects to purchase any
of the Offered Shares covered in the Transfer
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Notice directly from the Selling Stockholder, then such Selling Stockholder
shall within ninety (90) days of the date of the Transfer Notice (or, if
earlier, simultaneous with the consummation of the sale of the Offered Shares
pursuant to the terms and conditions specified in the Transfer Notice) deliver
certificate(s) for such shares to such acquiring Non-Selling Stockholders who
shall deliver to the Selling Stockholder the consideration of the type and on
the terms set forth in the Transfer Notice.
2.6 XxXxxxxxx Assignment. Xxxxx XxXxxxxxx ("XxXxxxxxx") hereby agrees
that, pursuant to Section 6 of each the Employee Stock Transfer Agreements (as
defined below), he will assign the right of first refusal granted therein (to
the extent not exercised by XxXxxxxxx) first to the Company and second to the
Series A Stockholders with sufficient time to each such party to permit the
exercise thereof; provided that, in the case of the Series A Stockholders,
notice of such assignment by XxXxxxxxx shall be given to the Series A
Stockholders no less than ten (10) days prior to the expiration of such right.
For purposes of this Section 2.6, "Employee Stock Transfer Agreements" shall
mean those certain agreements, each dated October 5, 2000, between Xxxxx
XxXxxxxxx and each of Xxxxx Xxxxxxxxx, Xxxxx XxXxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxxxx and Xxxxxxx XxXxxxxxx.
SECTION 3. EXEMPT TRANSFERS.
3.1 Certain Transfers. The provisions of Sections 2.1 through 2.5
shall not apply to: (a) the transfer of Equity Securities by a Common
Stockholder in one or more transactions representing an aggregate of 5% or less
of the total number of Equity Securities held by such Common Stockholder as of
the date hereof; (b) any transfer of Equity Securities to the ancestors,
descendants or spouse of a Common Stockholder, or to trusts, family limited
partnerships or similar estate planning entities for the benefit of such persons
including such Common Stockholder; and (c) any bona fide gift, provided that, in
any such case the Common Stockholder gives the Company and each of the members
of the Board of Directors of the Company designated by the Series A Stockholders
prior written notice of such transfer or gift and the transferee or donee shall
first furnish the Company with a written agreement to be bound by and comply
with all provisions of Section 2 as well as the terms of any other restrictive
agreement to which such Equity Securities are subject. Such transferred Equity
Securities shall remain "Equity Securities" hereunder, and such pledgee,
transferee or donee shall be treated as a "Common Stockholder" for purposes of
this Agreement.
3.2 Public Offering; Company Transfers. Notwithstanding the foregoing,
the provisions of Section 2 shall not apply to the sale of any Equity Securities
(a) to the public pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission under the Act; or (b) to
the Company.
SECTION 4. PROHIBITED TRANSFERS.
4.1 Put Option Right. In the event a Common Stockholder should sell
any Equity Securities in contravention of the right of first refusal or co-sale
rights under Section 2 of this Agreement (a "PROHIBITED TRANSFER"), each
Non-Selling Stockholder, in addition to such other remedies as may be available
at law, in equity or hereunder, shall have the put option
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provided below, and the Selling Stockholder shall be bound by the applicable
provisions of such option.
4.2 Put Option. In the event of a Prohibited Transfer, each
Non-Selling Stockholder shall have the right to sell to the Selling Stockholder
the number of Equity Securities equal to the number of Equity Securities each
Non-Selling Stockholder would have been entitled to transfer to the purchaser
had the Prohibited Transfer under Section 2 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 Equity Securities are to be
sold shall be equal to t he price per share paid by t he purchaser in t he
Prohibited Transfer. The Selling Stockholder shall also reimburse each
Non-Selling Stockholder for any and all fees and expenses, including legal fees
and expenses, incurred pursuant to the exercise or the attempted exercise of t
he Non-Selling Stockholder's rights under Section 2;
(b) within ninety (90) days after the later of the dates on which
the Non-Selling Stockholder (i) received notice of the Prohibited Transfer or
(ii) otherwise became aware of the Prohibited Transfer, each Non-Selling
Stockholder shall, if exercising the option created hereby, deliver to the
Selling Stockholder the certificate or certificates representing Equity
Securities to be sold, each certificate to be properly endorsed for transfer;
(c) the Selling Stockholder shall, upon receipt of the
certificate or certificates for the Equity Securities to be sold by a
Non-Selling Stockholder, pursuant to this Section 4.2, pay the aggregate
purchase price therefor and the amount of reimbursable fees and expenses, as
specified in Section 4.2(a), in cash or by other means acceptable to the
Non-Selling Stockholder; and
(d) notwithstanding t he foregoing, any attempt by a Selling
Stockholder t o transfer Equity Securities in violation of Section 2 hereof
shall be void and the Company agrees it will not effect such a transfer nor will
it treat any alleged transferee as the holder of such Equity Securities without
the written consent of a majority in interest of the Non-Selling Stockholders.
SECTION 5. LEGEND
5.1 Legend. Each certificate representing Equity Securities now or
hereafter owned by any party to this Agreement, or issued to any person in
connection with a transfer pursuant hereto 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 INVESTORS RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER, THE COMPANY
AND CERTAIN HOLDERS OF STOCK OF THE COMPANY CONTAINING, AMONG OTHER THINGS
CERTAIN AGREEMENTS TO VOTE SUCH SECURITIES AS SPECIFIED IN SUCH AGREEMENT.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY
OF THE COMPANY."
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5.2 Stop Orders. Each Common Stockholder 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 5.1 above
to enforce the provisions of this Agreement and the Company agrees to do so
promptly. The legend shall be removed upon termination of this Agreement.
SECTION 6. COVENANTS OF THE COMPANY. The Company hereby covenants and agrees as
follows:
6.1 Basic Financial Information. So long as any Series A Stockholder
continues to hold outstanding shares of Series A Preferred Stock (or Common
Stock issued upon conversion thereof), the Company will furnish the following
reports to each such Series A Stockholder:
(a) as soon as practicable after the end of each fiscal year of
the Company, and in any event within ninety (90) days thereafter, an audited
consolidated balance sheet of the Company and its subsidiaries, if any, as of
the end of such fiscal year, and audited consolidated statements of income and
cash flows of the Company and its subsidiaries, if any, for such year, prepared
in accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and certified by an independent public
accounting firm of nationally recognized standing selected by the Company;
(b) as soon as practicable after the end of each calendar quarter
in each fiscal year of the Company, and0 in any event within forty-five (45)
days thereafter, an unaudited consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarterly period, and unaudited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such period and for the current fiscal year to date,
prepared in accordance with generally accepted accounting principles
consistently applied (subject to changes resulting from normal year-end audit
adjustments and except that such financial statements need not contain the notes
required by generally accepted accounting principles) and setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year and the corresponding budgeted figures for the current periods, all
in reasonable detail and certified by the principal financial or accounting
officer of the Company; and
(c) as soon as practicable after the end of each month, but in
any event within 30 days thereafter, the unaudited balance sheet of the Company
as of the end of such month and its unaudited statement of income and losses,
stockholders' equity and cash flows for such month (without the footnotes
required under generally accepted accounting principles).
6.2 Additional Information and Rights.
(a) The Company will permit any Series A Stockholder to visit and
inspect any of the properties of the Company, including its books of account and
other records (and make copies thereof and take extracts therefrom), and to
discuss its affairs, finances and
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accounts with the Company's officers and its independent public accountants, all
at such reasonable times and as often as any Series A Stockholder may reasonably
request.
(b) The Company will deliver to each Series A Stockholder
annually (and in any event no later than thirty (30) days before the end of each
fiscal year) the financial plan of the Company, in such manner and form as
approved by the Board of Directors of the Company, which financial plan shall
include at least a projection of income and a projected cash flow statement for
each fiscal quarter in such fiscal year and a projected balance sheet as of the
end of each fiscal quarter in such fiscal year.
(c) The provisions of Section 6.1 and this Section 6.2 shall not
be in limitation of any rights which any Series A Stockholder may have with
respect to the books and records of the Company and its subsidiaries, if any, or
to inspect their properties or discuss their affairs, finances and accounts,
under the applicable law.
(d) Each Series A Stockholder hereby agrees to hold in confidence
and trust and not to misuse or disclose any confidential information provided
pursuant to this Section 6.2.
6.3 Pre-Emptive Right. The Company hereby grants to each Series A
Stockholder (including any permitted transferee under Section 6.3(d)) the right
to purchase a pro rata share of New Securities (as defined in this Section 6.3)
which the Company may, from time to time, propose to sell and issue. Each Series
A Stockholder's pro rata share, for purposes of this right, is the ratio of the
number of shares of Fully Diluted Common Stock owned by such holder immediately
prior to the issuance of New Securities to the total number of shares of Fully
Diluted Common Stock outstanding immediately prior to the issuance of New
Securities. Each Series A Stockholder shall also have the right of
over-allotment to purchase additional New Securities set forth in paragraph (b)
of this Section 6.3. This pre-emptive right shall be subject to the following
provisions:
(a) "NEW SECURITIES" shall mean any capital stock (including
Common Stock and/or Preferred Stock) of the Company whether now authorized or
not, and rights, options or warrants to purchase such capital stock, and
securities of any type whatsoever that are, or may become, convertible into
capital stock; provided that the term "New Securities" does not include: (i)
shares of Common Stock issued or issuable to employees, consultants, officers or
non-employee directors of the Company pursuant to any stock option, stock
purchase or stock bonus plan, agreement or arrangement on terms approved by the
Board of Directors, including the directors elected by the holders of the Series
A Preferred Stock; (ii) securities purchased under the Purchase Agreement; (iii)
securities issued upon conversion of t he Series A Preferred Stock or other
securities issuable upon conversion of securities outstanding as of the date
hereof; (iv) securities issuable as dividends or distributions on shares of the
Company's Series A Preferred Stock; (v) securities issued t o banks and other
similar financial institutions, equipment lessors, or to other persons in
similar commercial situations with the Company if such issuance is approved by
the Board of Directors, including the directors elected by the holders of the
Series A Preferred Stock; (vi) securities issued pursuant to the acquisition of
another business entity or business segment of any such entity by the Company by
merger, purchase of substantially all the assets or other reorganization or
corporate partnering agreement if such
8
issuance is approved by the Board of Directors, including the directors elected
by the holders of the Series A Preferred Stock; (vii) securities issued in a
Qualified IPO; and (viii) securities issued in connection with any stock split,
stock dividend or recapitalization of the Company.
(b) In the event the Company proposes to undertake an issuance of
New Securities, it shall give each Series A Stockholder certified written notice
of its intention, describing the type of New Securities, and their price and the
general terms upon which the Company proposes to issue the same. Each Series A
Stockholder shall have thirty (30) days after any such notice is mailed or
delivered to agree to purchase such holder's pro rata share of such New
Securities for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased. Each Series A Stockholder shall have a right of over-allotment
such that if any Series A Stockholder fails to exercise his, her or its right
under this Section 6.3 to purchase its pro rata share of New Securities, the
other Series A Stockholders may purchase the non-purchasing holder's portion on
a pro rata basis within ten (10) days from the date such non-purchasing holder
fails to exercise its right hereunder to purchase its pro rata share of New
Securities.
(c) In the event the Series A Stockholders fail to exercise fully
the pre-emptive right within such thirty (30) day period and after the
expiration of the ten (10) day period for the exercise of the over-allotment
provisions of this Section 6.3, the Company shall have sixty (60) days
thereafter to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within sixty (60) days
from the date of such agreement) to sell the New Securities respecting which the
holders' pre-emptive right set forth in this Section 6.3 was not exercised, at a
price and upon terms no more favorable to the purchasers thereof or the Company
than specified in the Company's notice to the Series A Stockholders pursuant to
Section 6.3(b). In the event the Company has not sold within such sixty (60) day
period or entered into an agreement to sell the New Securities in accordance
with the foregoing within sixty (60) days from the date of such agreement, the
Company shall not thereafter issue or sell any New Securities, without first
again offering such securities to the Series A Stockholders in the manner
provided in Section 6.3(b) above.
(d) The pre-emptive right set forth in this Section 6.3 may not
be assigned or transferred, except that such right is assignable by each Series
A Stockholder to any partner, retired partner, manager, member, former member,
family member of such holder or a trust for the benefit of any such person.
6.4 Board of Directors.
(a) Subject to Section 6.4(b), each of the parties to this
Agreement shall take all actions within their respective power, including but
not limited to, the voting of all shares of capital stock of the Company owned
by them, required to cause the Board of Directors to consist of seven (7)
members to include:
(i) two representatives designated by the Common
Stockholders and the Series 1 Stockholders, voting together as a single class;
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(ii) three representatives designated by the Series A
Stockholders; and
(iii) two representatives, who shall have the expertise in
the industry in which the Company operates, (1) nominated by the Common
Stockholders and the Series 1 Stockholders, voting together as a single class
and (2) approved by the Series A Stockholders, voting as a separate class.
Additionally, Ascent Venture Partners III, L.P. ("Ascent"), for so
long as it, or one of its Affiliates, holds at least 50% of the shares of Series
A Preferred Stock purchased pursuant to the Purchase Agreement, shall be
entitled to appoint one person as an observer director, who shall be entitled to
notice of and to attend all meetings of the Board of Directors, and to receive
all information provided to the members of the Board of Directors, subject to
applicable law. Notwithstanding the foregoing, the Company reserves the right to
exclude such observer director from access to any meeting of the Board of
Directors, or any portion thereof, or from access to any information, if the
Company reasonably believes such exclusion is reasonably necessary to protect
the attorney-client privilege. Ascent agrees that, upon the request of the
Company, Ascent shall cause such observer director to execute and deliver a
confidentiality agreement requiring such observer director to make commercially
reasonable efforts to hold in trust and confidence any confidential information
learned by such observers as a result of his or her status as such.
(b) The directors of the Company shall be insured by the Company,
through the purchase of director's liability insurance at such time and in such
amount as is determined by the Board of Directors, and shall be indemnified by
the Company to the fullest extent provided under applicable law.
(c) All reasonable expenses incurred by a director or an observer
director of the Company in attending Board meetings or meetings of Board
committees of which such director is a member and performing Company duties
shall be borne by the Company.
(d) The holders of shares of Series A Preferred Stock hereby
agree to vote their shares of Series A Preferred Stock pursuant to Section
6.4(a)(ii) to elect two representatives to the Board of Directors nominated by
ABS Ventures SYN L.L.C. (or its successor) and one representative to the Board
of Directors nominated by Rosewood Venture Group.
(e) The parties hereto will not vote for any amendment or change
to the Company's Certificate of Incorporation or Bylaws providing for the
election of more or less than seven (7) directors, or any other amendment or
change to the Company's Certificate of Incorporation or Bylaws inconsistent with
the terms of this Agreement or any proposed amendment thereto.
(f) The voting agreements contained herein are coupled with an
interest and may not be revoked during the term of this Agreement.
6.5 Compensation Committee. The representatives to the Board of
Directors nominated by the holders of the Series A Preferred Stock also shall be
members of the
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Company's Audit Committee and Compensation Committee, each of which shall meet
at least once per year. Any grant by the Company of a stock option or other
equity interest to Xxxxxxx Xxxxxx shall require approval of the Compensation
Committee, including approval by the members thereof designated by the Series A
Stockholders. Any compensation plan applicable to any senior officer of the
Company shall require the approval of the Compensation Committee. It is
understood and agreed that Xxxxxxx X. Xxxxxx shall receive an option pursuant to
the Company's 2000 Stock Plan for the purchase of up to 1,120,700 shares of
Common Stock (the "Option"). The Option shall vest as to 25% of the shares
covered by the grant as of one year following the date of grant and thereafter
in equal monthly installments over the subsequent three (3) year period.
6.6 Key Person Life Insurance. The Company has as of t he date hereof
and will continue to maintain term life insurance from financially sound and
reputable insurers on the life of Xxxxxxx X. Xxxxxx in the amount of at least
Two Million Dollars ($2,000,000) payable to the Company.
6.7 Qualified Small Business Stock Status. The Company will use
reasonable efforts to comply with the reporting and record keeping requirements
of Section 1202 of the Code and any regulations promulgated thereunder, which
efforts shall include submitting to the Series A Stockholders and to the
Internal Revenue Service any reports that may be required under Section
1202(d)(1)(C) of the Code, any applicable state taxing jurisdictions and any
regulations promulgated thereunder. For so long as shares of Series A Preferred
Stock (the "Shares" for purposes of this Section 6.7) are held by Series A
Stockholders, or transferee thereof, in whose hands the Shares and the shares of
Common Stock issuable upon the conversion of the Shares (the "Conversion Shares"
for purposes of this Section 6.7) are eligible for treatment as Qualified Small
Business Stock under Section 1202 of the Code, the Company will use commercially
reasonable efforts t o cause t he Shares (and Conversion Shares) to qualify as
Qualified Small Business Stock. After any Series A Stockholder has delivered to
the Company a written request seeking confirmation that such Series A
Stockholder's interest in the Company derived as a result of the transactions
contemplated by this Agreement constitutes Qualified Small Business Stock, the
Company shall deliver to such Series A Stockholder a written statement (a "QSBS
Notice") informing the Series A Stockholder whether such Series A Stockholder's
interest in the Company, to the reasonably ascertainable knowledge of the
Company and in the opinion of the Company, constitutes Qualified Small Business
Stock, or would constitute Qualified Small Business Stock if determination of
whether stock constitutes Qualified Small Business Stock were made by taking
into account t he modifications set forth in Section 1045(b)(4) of the Code. The
QSBS Notice shall not constitute a legal opinion of any kind, and the Series A
Stockholder shall not construe it as such. The Company's obligation to furnish a
QSBS Notice shall continue notwithstanding the fact that a class of the
Company's stock may be an established securities market. The Company provides no
assurance that Section 1202 treatment for t he Shares or Conversion Shares will
actually be available at such time as a Series A Stockholder decides to sell
such Shares (or Conversion Shares).
6.8 Assigned Agreements. The Company hereby agrees that, unless
otherwise agreed by Series A Stockholders holding a majority of the then
outstanding shares of Series A Preferred Stock, it shall, within 180 days of the
date of this Agreement, use its best efforts to obtain the written consent of
each of the parties (other than Vertek Corporation) to the Assigned
11
Agreements (as defined in Section 2.28 of the Purchase Agreement) to the
assignment of such agreements or shall have entered into similar agreements in
replacement thereof with such parties on substantially similar terms to the
Assigned Agreement so replaced.
SECTION 7. MISCELLANEOUS.
7.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware, without regard to that state's
conflicts of laws principles.
7.2 Amendment. Any provision of this 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 the
Company and the holders of a majority of the shares of Series A Preferred Stock
then outstanding; provided, however, that if such amendment or waiver has the
effect of materially and adversely affecting the interests of the Common
Stockholders, then such amendment or waiver shall also require the written
consent of the Common Stockholders holding a majority of shares of Common Stock
subject to this Agreement; provided further that waiver Section 6.8 of this
Agreement shall require only the approval of the Series A Stockholders as
provided for therein. Any such amendment or waiver shall be binding on each
party hereto and each such party's successors, heirs and assigns.
7.3 Termination. The rights and obligations set forth in Sections 6.1
and 6.2 shall terminate upon a public offering by the Company expected to result
in the Company being required to file periodic reports under the Act. All other
rights and obligations established in this Agreement shall terminate upon the
earlier of (a) the closing of a Qualified IPO, and (b) the closing of the
Company's sale of all or substantially all of its assets or the acquisition of
the Company by another entity by means of a merger or consolidation resulting in
the exchange of the outstanding shares of the Company's capital stock for
securities or consideration issued, or caused to be issued, by the acquiring
entity, its subsidiary or another third party.
7.4 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, sent by facsimile or delivered by a
nationally recognized overnight courier addressed (a) if to a Common Stockholder
or Series A Stockholder, as may be indicated on Schedule A hereto, or at such
other address as such holder or permitted assignee shall have furnished to the
Company in writing, or (b) if to the Company, at t he address or facsimile
number indicated for t he Company on the signature page hereof. All such notices
and other written communications shall be effective on the date of mailing, the
time of confirmed facsimile transmission or t he date of delivery to a
representative of a nationally recognized overnight courier, as the case may be.
Notwithstanding the foregoing, the telephone notice permitted by Sections 2.3(c)
shall be effective at the time it is given.
7.5 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 in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
12
7.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Entire Agreement. This 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,
including without limitation the Prior Agreement, is superseded by this
Agreement.
7.8 Further Assurances. The parties agree, from time to time and
without further consideration, to execute and deliver such further documents and
take such further actions as reasonably may be required to implement and
effectuate the transactions contemplated in this Agreement.
7.9 Transfers of Rights. The rights and obligations of each Series A
Stockholder (each, a "TRANSFERRING HOLDER") hereunder, may be transferred or
assigned by such Transferring Holder to any person or entity who acquires not
less than five percent (5%) of the shares of Common Stock (on an as-converted
basis) owned by such Transferring Holder (as presently constituted and subject
to subsequent adjustments for stock splits, stock dividends, reverse stock
splits, and the like), and such transferee or assignee shall be deemed a Series
A Stockholder; provided that, in any case (i) the Company is given written
notice at the time of, or within thirty (30) days after, transfer or assignment,
stating the name and address of the transferee or assignee and identifying the
securities with respect to which the rights and obligations of such Transferring
Holder are being transferred or assigned, (ii) the transferee or assignee of
such rights assumes in writing the obligations of such Transferring Holder under
this Agreement, and (iii) the proposed transferee is not, in the Company's
reasonable judgment, a competitor of the Company or a party who is demonstrably
hostile towards the Company. Notwithstanding the foregoing, the transfer of
rights and obligations pursuant to this Section 7.9 to a partner, retired
partner, manager, member, former member, stockholder, Affiliate or family member
of a Transferring Holder or a t rust for t he benefit of any such person, shall
be without restriction, and such transferee shall be deemed a Series A
Stockholder; provided that, such transferee assumes in writing the obligations
of such Transferring Holder under this Agreement. Other than as provided for
herein, this Agreement is intended to inure to the benefit of the parties hereto
only, and no other person shall have any rights, express or implied, by reason
of this Agreement.
7.10 Additional Investors. Notwithstanding anything to the contrary
herein, if the Company shall issue additional shares of its Series A Preferred
Stock as contemplated by Section 1.1(d) of the Purchase Agreement, any purchaser
of such shares may become a party to this Agreement by executing and delivering
an additional counterpart signature page to this Agreement and no further action
shall be required in connection therewith of a stockholder already party hereto.
7.11 Attorney Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such
13
reasonable fees and expenses of attorneys and accountants, which shall include,
without limitation, all fees, costs and expenses of appeals.
7.12 "Market Stand-Off" Agreement. In connection with t he initial
public offering of the Company's securities and if requested by the Company and
an underwriter of Common Stock (or other securities) of the Company, each Common
Stockholder, each Other Stockholder and each Series 1 Stockholder agrees that
he, she or it shall not sell or otherwise transfer or dispose of any Common
Stock (or other securities) of the Company held by such stockholder (other than
those included in the registration) during the one hundred eighty (180) day
period following the effective date of a registration statement of the Company
filed under the Securities Act, provided that all officers and directors of the
Company, all other persons with registration rights (whether or not pursuant to
this Agreement) and holders of at least 1% of the Company's equity securities
are bound by and have entered into similar agreements.
The obligations described in this Section 7.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-3 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of such one
hundred eighty (180) day period.
14
The foregoing Amended and Restated Investors Rights Agreement is
hereby executed as of the date first above written.
SYNCHRONOSS TECHNOLOGIES, INC.
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Address: 0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (___) - __________
SCHEDULE A
COMMON STOCKHOLDERS
Xxxxxxx X. Xxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxx XxXxxxxxx
c/o SynchronOSS Technologies, Inc.
000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
OTHER STOCKHOLDERS
Xxxxxxx XxXxxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxxxx Xxxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxxxx Xxxxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxx XxXxxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxx Xxxxxxxxx
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___)
S-1
Waldis Family Limited Partnership LP
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxx XxXxxxxxx Children's Trust
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
Xxxxx XxXxxxxxx Grandchildren's Trust
c/o SynchronOSS Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (___) ___-____
SERIES 1 STOCKHOLDER
Vertek Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: (___) ___-____
SERIES A STOCKHOLDERS
ABS Ventures SYN L.L.C.
c/o ABS Ventures
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxx X. Xxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
ABS Investors L.L.C.
c/o ABS Ventures
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
S-2
RVG III, L.P.
c/o Rosewood Venture Group
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
RVG IV, L.P.
c/o Rosewood Venture Group
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
VLG SynchronOSS Investors
c/o Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
fax: 000-000-0000
Attn: Xxxxxx X. Xxxxxx, Xx.
Green Mountain Ventures, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
fax: ____________________
G & H Partners
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
fax: ____________________
Xxxx X. Xxxxxxxxxx, Xx. and Xxxxxxxx X.
Xxxxxxxxxx, JTWROS
0 Xxxxx Xxxx Xxxxx 000 Xxxxxx, XX 00000
fax: ____________________
Moses Venture Partners L.P.
0 Xxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
fax: ____________________
S-3
Merrimack Partners LLC
x/x Xxxxxx X. Xxxxxxx
Xxxxxxx & Xxxx, X.X.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
fax: ___________________
North Shore LLC
x/x Xxxxxx X. Xxxxxxx
Xxxxxxx & Xxxx, X.X.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
fax: ___________________
Ascent Venture Partners III, L.P.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, XX 00000
fax: 000-000-0000
S-4
