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EXHIBIT 4(c)
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INVESTOR RIGHTS AGREEMENT
among
SYMIX SYSTEMS, INC.,
THE SEVERAL INVESTORS NAMED IN SCHEDULE I
and
THE SHAREHOLDER NAMED HEREIN
Dated as of May 10, 2000
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions......................................................................1
ARTICLE 2
SECURITIES TRANSFER RESTRICTIONS
SECTION 2.01. Restrictive Legends..............................................................4
SECTION 2.02. Notice of Proposed Transfer......................................................4
SECTION 2.03. Termination of Restrictions......................................................4
SECTION 2.04. Non-Applicability of Restrictions on Transfer....................................5
SECTION 2.05. Shareholder Sales................................................................6
ARTICLE 3
INFORMATION RIGHTS
SECTION 3.01. Financial Statements, Reports, Etc...............................................6
SECTION 3.02. Inspection, Consultation and Advice..............................................7
SECTION 3.03. Confidentiality Agreement........................................................7
ARTICLE 4
PRE-EMPTIVE RIGHTS
SECTION 4.01. Pre-emptive Rights...............................................................8
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Registration on Form S-3........................................................10
SECTION 5.02. Incidental Registration.........................................................10
SECTION 5.03. Registration Procedures.........................................................11
SECTION 5.04. Expenses........................................................................14
SECTION 5.05. Rule 144 Requirements...........................................................14
SECTION 5.06. Investors' Information..........................................................15
SECTION 5.07. Transfer of Registration Rights.................................................15
SECTION 5.08. Hold-back Agreement.............................................................15
SECTION 5.09. Other Shareholders..............................................................15
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PAGE
ARTICLE 6
INDEMNIFICATION
SECTION 6.01. Indemnification.................................................................16
ARTICLE 7
TAG-ALONG RIGHTS
SECTION 7.01. Tag-Along Right.................................................................17
SECTION 7.02. Notice of Intent to Participate.................................................18
SECTION 7.03. Sale of Tag-Along Shares........................................................18
ARTICLE 8
REPRESENTATION RIGHTS
SECTION 8.01. Board of Directors..............................................................18
SECTION 8.02. Voting Restriction..............................................................20
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Term of Agreement...............................................................20
SECTION 9.02. Severability; Governing Law.....................................................20
SECTION 9.03. Injunctive Relief...............................................................21
SECTION 9.04. Binding Effect..................................................................21
SECTION 9.05. Modification or Amendment.......................................................21
SECTION 9.06. Aggregation.....................................................................21
SECTION 9.07. Counterparts....................................................................21
SECTION 9.08. Notices.........................................................................21
SECTION 9.09. Entire Agreement................................................................22
SCHEDULE I Investors
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INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT, dated as of May 10, 2000 among SYMIX
SYSTEMS, INC., an Ohio corporation (the "COMPANY"), the several investors named
in the attached Schedule I who are purchasing Series A Convertible Participating
Preferred Shares and Warrants to purchase common shares (individually, an
"INVESTOR" and collectively, the "INVESTORS") pursuant to a Securities Purchase
Agreement dated May 10, 2000 (the "SECURITIES PURCHASE AGREEMENT") and the
shareholder of the Company listed on the signature page hereof (the
"SHAREHOLDER").
WHEREAS, the Company wishes to issue and sell to the Investors an
aggregate of 566,933 shares (the "PREFERRED SHARES") of the authorized but
unissued Series A Convertible Participating Preferred Shares, without par value,
of the Company (the "SERIES A PREFERRED SHARES"), which are convertible into
common shares, without par value, of the Company (the "COMMON SHARES ") as
contemplated by the Securities Purchase Agreement and warrants (the "WARRANTS")
to purchase an aggregate of 453,546 shares of the authorized but unissued Common
Shares; and
WHEREAS, one of the conditions to the investment in the Company by the
Investors is the execution of this Investor Rights Agreement providing for,
inter alia, the ability of the Investors to purchase and/or participate in
subsequent sales of equity securities of the Company by the Company or the
Shareholder;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and the investment by the Investors pursuant to the Securities
Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" shall mean any entity controlling, controlled by or under
common control with a designated Person. For the purposes of this definition,
"control" shall have the meaning specified for that word in Rule 405 promulgated
by the Securities and Exchange Commission under the Securities Act.
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"COMMISSION" shall mean the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
prior or after the date hereof, or any federal statute or statutes which shall
have been enacted to take the place of such Act, together with all rules and
regulations promulgated thereunder.
"FAEF" means Fallen Angel Equity Fund, L.P.
"HOLDER" means the Persons who shall, from time to time, own of record
any Restricted Security.
"MSDW INVESTOR" means any of Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture
Partners IV, L.P., Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture Investors IV, L.P.,
Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture Offshore Investors IV, L.P. or Xxxxxx
Xxxxxxx Xxxx Xxxxxx Equity Funding, Inc.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or a government
organization or an agency or political subdivision thereof.
"REGISTRABLE STOCK" shall mean all Common Shares held by the Investors
from time to time, including all of the Common Shares into which the Preferred
Shares may be converted and for which the Warrants may be exercised; provided,
however, that such Common Shares shall only be treated as Registrable Stock if
and so long as they have not been (i) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (ii)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect to such Common Shares
are removed upon the consummation of such sale.
"REGISTRATION STATEMENT" shall mean a registration statement filed by
the Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form X-0, Xxxx X-0, or
successor forms, or any registration statement covering only securities proposed
to be issued in exchange for securities or assets of another corporation).
"RESTRICTED SECURITY" means any of the Preferred Shares, Warrants or
the Common Shares issuable upon conversion of the Preferred Shares or exercise
of the Warrants to the extent such securities are not registered under the
Securities Act.
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"SECURITIES ACT" means the Securities Act of 1933, as amended prior to
or after the date hereof, or any federal statute or statutes which shall be
enacted to take the place of such Act, together with all rules and regulations
promulgated thereunder.
"TRANSFER" means any direct or indirect sale, transfer, assignment,
pledge or other disposition (whether with or without consideration and whether
voluntary or involuntary or by operation of law). Derivatives thereof will be
similarly defined.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
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COMPANY Preamble
SHAREHOLDER Preamble
LLC 2.04
BOARD OF DIRECTORS 4.01(a)(ii)
NOTICE PERIOD 4.01(a)(iii)
RIGHT OF OVERALLOTMENT 4.01(a)(iii)
INDEMNIFIED PERSON 6.01(a)
COMPANY INDEMNIFIED PERSON 6.01(b)
INDEMNIFIED PARTY 6.01(c)
PROPOSED TRANSFEREE 7.01
TAG-ALONG SHARES 7.01
CHANGE IN CONTROL LIQUIDATION EVENT 9.01(a)(ii)
ARTICLE 2
SECURITIES TRANSFER RESTRICTIONS
Each Holder agrees that Restricted Securities shall not be Transferable
except upon the conditions specified in this Article 2, which conditions are
intended to insure compliance with the provisions of the Securities Act and
state securities laws in respect of the Transfer of any Restricted Security.
Shareholder agrees that shares of Common Stock held by him shall not be
Transferable except upon compliance with the conditions specified in Section
2.05 and Article 7 hereof.
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SECTION 2.01. Restrictive Legends.
(a) Unless and until otherwise permitted by this Article 2, each
certificate for a Restricted Security issued to a Holder, or to any subsequent
transferee of such certificate shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER, VOTING AND OTHER MATTERS AS SET
FORTH IN THE INVESTOR RIGHTS AGREEMENT DATED AS OF MAY __, 2000, COPIES
OF WHICH MAY BE OBTAINED UPON REQUEST FROM THE COMPANY."
(b) The Company may order the transfer agent for any Restricted
Security to stop the Transfer of any Restricted Security bearing the legend set
forth in subsections (a) of this Section 2.01 until the conditions of this
Article 2 with respect to the Transfer of such shares have been satisfied.
SECTION 2.02. Notice of Proposed Transfer. If, prior to any Transfer of
any Restricted Security, the Holder desiring to effect such Transfer delivers to
the Company a written notice describing briefly the manner of such Transfer and
a written opinion of counsel for such Holder (who may be inside counsel in the
case of an institutional holder), provided that such counsel and the form and
substance of such opinion are reasonably satisfactory to the Company, or counsel
for the Company, to the effect that such Transfer may be effected without the
registration of such securities under the Securities Act or registration or
qualification under applicable state securities laws or regulations, the Company
shall thereupon permit or cause its transfer agent (if any) to permit such
Transfer to be effected; provided, that if in such written notice the
transferring holder represents and warrants to the Company that the Transfer is
to (i) an Affiliate of the Holder or (ii) a purchaser or transferee whom the
transferring holder knows or reasonably believes to be a "qualified
institutional buyer", as that term is defined in Rule 144A promulgated under the
Securities Act, then in each such case, no opinion shall be required.
SECTION 2.03. Termination of Restrictions.
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(a) Notwithstanding the foregoing provisions of this Article 2, the
restrictions imposed by this Article 2 upon the Transferability of Restricted
Securities shall terminate as to any particular Restricted Security when (i)
such Restricted Security shall have been effectively registered under the
Securities Act and sold by the Holder thereof in accordance with such
registration; (ii) a written opinion of counsel for the Holder thereof (provided
that such counsel, and the form and substance of such opinion, are reasonably
satisfactory to the Company) or counsel for the Company to the effect that such
restrictions are no longer required or necessary under any federal or state
securities law or regulation has been received by the Company; (iii) such
Restricted Security shall have been sold without registration under the
Securities Act in compliance with Rule 144 promulgated by the Commission under
the Securities Act and the Company is reasonably satisfied that the Holder of
the Restricted Security, in accordance with the terms of subsection (k) of Rule
144 promulgated by the Commission under the Securities Act, shall be entitled to
sell such securities pursuant to such subsection; or (iv) a letter or an order
shall have been issued to the Holder thereof by the staff of the Commission or
the Commission in form and substance reasonably satisfactory to the Company,
stating that no enforcement action shall be recommended by such staff or taken
by the Commission, as the case may be, if such Restricted Security is
transferred without registration under the Securities Act in accordance with the
conditions set forth in such letter or order and such letter or order specifies
that no restrictions on Transfer are required.
(b) Whenever the restrictions imposed by this Article 2 shall
terminate, as herein above provided, the Holder of any Restricted Securities
then outstanding as to which such restrictions shall have terminated shall be
entitled to receive from the Company, without expense to such Holder, one or
more new certificates for the Restricted Securities so held not bearing the
restrictive legend set forth in Subsection (a) of Section 2.01 hereof, as
applicable.
SECTION 2.04. Non-Applicability of Restrictions on Transfer.
Notwithstanding the provisions of Section 2.02 hereof, any Holder may from time
to time Transfer all or part of such Holder's Restricted Securities to (i) a
nominee identified in writing to the Company as being the nominee of or for such
Holder, and any nominee of or for a beneficial owner of Restricted Securities
identified in writing to the Company as being the nominee of or for such
beneficial owner may from time to time Transfer all or part of the Restricted
Securities registered in the name of such nominee but held as nominee on behalf
of such beneficial owner, to such beneficial owner, (ii) to an Affiliate of such
Holder, or (iii) if such Holder is a partnership, limited liability company
("LLC"), or the nominee of a partnership or an LLC, to a partner, retired
partner, or estate of a partner or retired partner, of such partnership or a
member, retired member, or estate of a member or retired member of such LLC, so
long as such Transfer is in accordance with the
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transferee's interest in such partnership or LLC and is without consideration;
provided, that each such transferee referred to in clauses (i), (ii) and (iii)
above shall remain subject to all restrictions on the Transfer of the Restricted
Securities herein contained and shall agree in writing to be bound by the other
terms and conditions of this Agreement.
SECTION 2.05. Shareholder Sales. Prior to the second anniversary of the
date hereof, Shareholder agrees not to Transfer any Common Shares (or any
derivative thereof) that he beneficially owns; provided that Shareholder shall
have the right to Transfer in any twelve month period up to ten percent (10%) of
the Common Shares that he beneficially owns.
ARTICLE 3
INFORMATION RIGHTS
SECTION 3.01. Financial Statements, Reports, Etc. The Company shall
furnish to each Investor:
(a) within forty-five (45) days after the end of each quarter in each
fiscal year (other than the last quarter in each fiscal year) a balance sheet of
the Company, if any, and the related statements of income, shareholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of the
Company, such balance sheet to be as of the end of such quarter and such
statements of income, shareholders' equity and cash flows to be for such quarter
and for the period from the beginning of the fiscal year to the end of such
quarter, in each case with comparative statements for the prior fiscal year,
provided that, the Company may comply with this provision by delivering to each
Investor a copy of its quarterly report on Form 10-Q for such quarter;
(b) within thirty (30) days after the end of each month in each fiscal
year (other than the last month in each quarter) a summary balance sheet of the
Company and the related summary statements of income, shareholder's equity and
cash flows, unaudited but prepared in accordance with generally accepted
accounting principles;
(c) at the time of delivery of each quarterly statement pursuant to
Section 3.01(a), a management narrative report explaining all significant
variances from forecasts and all significant current developments in staffing,
marketing, sales and operations;
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(d) prior to the start of each fiscal year, capital and operating
expense budgets, cash flow projections, income and loss projections and annual
business plan for the Company in respect of such fiscal year, all itemized in
reasonable detail and prepared on a monthly basis, and, promptly after
preparation, any revisions to any of the foregoing;
(e) promptly following receipt by the Company, each audit response
letter, accountant's management letter and other written report submitted to the
Company by its independent public accountants in connection with an annual or
interim audit of the books of the Company;
(f) promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, and to the knowledge of the Company, investigations
and inquiries that could materially adversely affect the Company, if any;
(g) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the Company sends or makes
available to its shareholders or files with the Commission; and
(h) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of the
Company as such Investor reasonably may request.
SECTION 3.02. Inspection, Consultation and Advice. The Company shall
permit each Investor and such persons as it may designate, at such Investor's
expense, to visit and inspect any of the properties of the Company, examine its
books and take copies and extracts therefrom, discuss the affairs, finances and
accounts of the Company with its officers, employees and public accountants (and
the Company hereby authorizes said accountants to discuss with such Investor and
such designees such affairs, finances and accounts), and consult with and advise
the management of the Company as to its affairs, finances and accounts, all at
reasonable times and upon reasonable notice to the Company.
SECTION 3.03. Confidentiality Agreement. Each Investor receiving
information pursuant to Section 3.01 or 3.02 shall use its best efforts to
ensure that any information which is delivered by the Company to such Investor
pursuant to Section 3.01 or 3.02 will be kept confidential, not be copied except
for internal use and for provision to attorneys, accountants and other
fiduciaries with duties to maintain confidentiality, and be used solely to
evaluate and protect such Investor's investment in the Restricted Securities,
including through the provision of routine reports to limited partners of the
Investors; provided, that the foregoing obligation shall not prohibit any such
Investor from divulging any information, whether or not confidential, to any
regulatory authority having jurisdiction over such Investor,
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if such Investor is compelled to do so by any judicial or administrative process
or by other requirements of law provided such Investor seeks a protective order
with respect to such information, or to any prospective purchaser of Restricted
Securities from such Investor so long as such prospective purchaser agrees to be
bound by the confidentiality provisions contained herein; and provided, further,
that the foregoing obligation shall remain in effect as to any confidential
information except to the extent that such information can be shown to have been
(i) previously known on a non-confidential basis by such Investor, (ii) in the
public domain through no fault of such Investor or (iii) later lawfully acquired
by such Investor from sources other than the Company other than information
known by such Investor to be acquired in violation of an existing
confidentiality agreement. The obligation of each Investor to hold any
confidential information in confidence shall be satisfied if such Investor
exercises the same care with respect to such information as it would take to
preserve the confidentiality of its own confidential and proprietary
information.
ARTICLE 4
PRE-EMPTIVE RIGHTS
SECTION 4.01. Pre-emptive Rights. (a) Each Investor shall have a
preemptive right to purchase all or any portion of an offering by the Company,
or any subsidiary of the Company, of any equity security (or any security which
is or may become convertible into or exchangeable or exercisable for an equity
security) equal to the number or amount of securities being offered, multiplied
by a fraction, the numerator of which shall be the number of Common Shares held
by such Investor and the denominator of which shall be the number of Common
Shares held by all shareholders (including the Investors); provided that, in the
case of any such offering by a subsidiary of the Company, if the number of
equity securities that the Investors collectively have preemptive rights to
purchase from the company is less than 20% of the equity securities being
offered by such subsidiary then the number of equity securities that each
Investor has a preemptive right to purchase shall be increased pro rata so that,
collectively, the Investors have a preemptive right to purchase at least 20% of
such equity securities; provided further that there will be no such preemptive
right in the case of (i) shares issued or issuable pursuant to the exercise of
options or warrants or the conversion of convertible securities (including the
Preferred Shares) that were issued or outstanding on the date hereof; (ii) any
shares issued or issuable to officers, directors, employees, agents or
consultants of the Company or any subsidiary of the Company, upon exercise of
any option granted or to be granted pursuant to any stock option plan or
arrangements approved by the Board of Directors of the Company (the "BOARD OF
DIRECTORS"), or the board of directors of
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such subsidiary, as the case may be, or any options granted or to be granted
thereunder; or (iii) shares issued or issuable in the acquisition by the Company
or by a subsidiary of the Company of any other corporation, association,
partnership or another entity or the assets or securities thereof. Each Investor
shall have such right to purchase when the securities are issued or sold by the
Company, or any subsidiary of the Company, on the best terms and conditions as
such securities are offered to other purchasers thereof. For purposes of this
Section 4.01 it shall be assumed that all securities held by the Investors which
may be converted into or exercised for Common Shares have been so converted or
exercised. The Company shall give the Investors at least thirty (30) days prior
written notice (the "NOTICE PERIOD") of any proposed securities issuance that
would give rise to preemptive rights as contemplated in this Section 4.01
describing the amount and type of securities to be issued, and the price and
other terms upon which the Company, or any subsidiary of the Company, proposes
to issue the same. Each Investor exercising all of its preemptive rights in such
offering shall have a further pro rata right (a "RIGHT OF OVER ALLOTMENT") to
purchase the securities refused by any Investor who declines to fully exercise
its preemptive right. Each Investor desiring to exercise its preemptive right
must notify the Company in writing prior to the close of business on the last
day of the Notice Period, stating (i) its intent to purchase, (ii) whether or
not it intends to exercise its right of over allotment; and (iii) the maximum
amount of securities it is willing to purchase.
(b) In the event that the Investors have not elected pursuant to this
Section 4.01(b) to purchase all of the contemplated offering, the Company shall
have ninety (90) days thereafter to sell the securities not elected to be
purchased by the Investors at the price and upon the terms no more favorable to
the purchasers of such securities than specified in the Company notice
hereunder. In the event the Company has not sold some or all of the securities
within such ninety (90) day period, the Company shall not thereafter issue or
sell any unsold securities without first offering such securities to the
Investors in the manner provided above.
(c) The rights of each Investor under this Article 4 shall be subject
to the ability of such Investor to make representations to the Company
reasonably required to comply with Rule 506 of Regulation D under the Securities
Act in connection with the purchase of any restricted securities.
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ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. Registration on Form S-3. (a) Within ninety (90) days of
the date of this Agreement, the Company shall file with the Commission a shelf
Registration Statement on Form S-3 covering all of the shares of Registrable
Stock beneficially owned by the Investors and the Company shall use its
reasonable best efforts to effect the registration of the Registrable Stock in
order to permit the sale and distribution of all of the Registrable Stock on a
continuous basis under Rule 415. Except as expressly provided in paragraph
5.01(b), the Company shall use its reasonable best efforts to cause such
Registration Statement to become and remain effective until such time as each
Investor can sell all of its Registrable Stock pursuant to Rule 144 promulgated
by the Commission under the Securities Act without volume restrictions under
subsection (k) thereof.
(b) Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to make any filing in any particular jurisdiction
in which the Company would be required to execute a general consent to service
of process in order to effect such registration, qualification or compliance
unless the Company is already subject to service in such jurisdiction in the
opinion of the Company's counsel. If the Company shall furnish to the Investors
a certificate signed by the Chief Executive Officer or Chief Financial Officer
of the Company stating that in the good faith judgment of the Board of Directors
it would be seriously detrimental to the Company or its shareholders for the
Investors to continue to sell or distribute Registrable Stock under the shelf
Registration Statement filed by the Company pursuant to paragraph 5.01(a), then
the Investors shall cease any such sale or distribution of Registrable Stock for
a period not to exceed sixty (60) days as specified by the Company. The Company
may not deliver the certificate specified in the preceding sentence more than
once in any 360-day period.
(c) The Investors, in consultation with the Company and subject to the
Company's reasonable approval, may designate the managing underwriter(s), if
any, of any underwritten distribution made under the shelf Registration
Statement filed pursuant to Section 5.01(a) hereof; provided that Xxxxxx Xxxxxxx
& Co. Incorporated or any successor entity shall be reasonably acceptable to the
Company. The Company shall cause its senior management to participate in any
"road show" as and to the extent reasonably requested by the managing
underwriters.
SECTION 5.02. Incidental Registration. At such time when the Company is
no longer required to maintain the effectiveness of the shelf registration
statement pursuant to Section 5.01(a), each time the Company shall determine to
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file a Registration Statement in connection with the proposed offer and sale for
money of any of its securities by it or any of its securityholders, the Company
will give written notice of its determination to the Investors. Upon the written
request of the Investors given within thirty (30) days after the giving of any
such notice by the Company, the Company will use its reasonable efforts to cause
all shares of Registrable Stock which the Investors have requested to register
to be included in such Registration Statement, all to the extent requisite to
permit the sale or other disposition by the prospective seller of the
Registrable Stock to be so registered. If the Registration Statement is to cover
an underwritten distribution, the Company shall use its reasonable efforts to
cause the Registrable Stock requested for inclusion pursuant to this Section
5.02 to be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters. If, in the good faith
judgment of the managing underwriter(s) of such public offering, the inclusion
of all of the Registrable Stock requested for inclusion pursuant to this Section
5.02 would interfere with the successful marketing of the shares to be offered,
then the number of shares of Registrable Stock to be included in the offering
shall be reduced to the required level with the participation in such offering
to be pro rata among the Holders thereof requesting such registration, based
upon the number of shares of Registrable Stock owned by such Holders; provided
that commencing nine months after the date hereof, each Investor shall have a
priority right (prior to the Company and any other securityholder) to have
included pursuant to this Section 5.02 not less 30% of the Registrable Stock
requested for inclusion by such Investor.
SECTION 5.03. Registration Procedures. If and whenever the Company is
required by the provisions of Section 5.01 or 5.02 hereof to effect the
registration of shares of Registrable Stock under the Securities Act, the
Company will, at its expense, as expeditiously as reasonably possible:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission a
Registration Statement with respect to such securities and use its reasonable
efforts to cause such Registration Statement to become and remain effective;
(b) (i) Prepare and file with the Commission such amendments and
supplements to such Registration Statement and prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective (x)
until the time specified in Section 5.01(a) or (y) in the case of any
Registration Statements filed under Section 5.02 for at least one hundred twenty
(120) days after the effective date of such Registration Statement; and comply
with the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such Registration Statement during such
periods in
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accordance with the intended method or methods of disposition by the sellers
thereof set forth in such Registration Statement;
(c) If the offering is to be underwritten in whole or in part, enter
into a written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter of the public offering and the
Investors;
(d) Furnish to the Investors and to the underwriters such reasonable
number of copies of the Registration Statement, preliminary prospectus, final
prospectus and such other documents as such underwriters and Investors may
reasonably request in order to facilitate the public offering of such
securities;
(e) Use its reasonable efforts to register or qualify the securities
covered by such Registration Statement under such state securities or blue sky
laws of such jurisdictions (i) as shall be reasonably appropriate for the
distribution of the securities covered by such Registration Statement or (ii) as
the Investors and the underwriters may reasonably request within twenty (20)
days following the original filing of such Registration Statement, except that
the Company shall not for any purpose be required to execute a general consent
to service of process, to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified or to subject itself to taxation in
such jurisdiction;
(f) Notify the Investors promptly after it shall receive notice
thereof of the date and time when such Registration Statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been filed;
(g) Notify the Investors promptly of any request by the Commission or
any state securities commission or agency for the amending or supplementing of
such Registration Statement or prospectus or for additional information;
(h) Prepare and file with the Commission, promptly upon the request of
the Investors, any amendments or supplements to such Registration Statement or
prospectus which, in the opinion of counsel representing the Company in such
Registration (and which counsel is Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP or
another nationally recognized law firm reasonably acceptable to the Investors),
is required under the Securities Act or the rules and regulations thereunder in
connection with the distribution of the Registrable Stock by the Investors;
(i) Prepare and promptly file with the Commission, and promptly notify
the Investors of the filing of, such amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
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securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(j) During the time period during which the Company is required,
pursuant to Section 5.03(a), to cause a Registration Statement to be effective,
in case the Investors or any underwriter for the Investors is required to
deliver a prospectus at a time when the prospectus then in circulation is not in
compliance with the Securities Act or the rules and regulations of the
Commission, prepare promptly upon request such amendments or supplements to such
Registration Statement and such prospectus as may be necessary in order for such
prospectus to comply with the requirements of the Securities Act and such rules
and regulations;
(k) Advise the Investors, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the Commission or
any state securities commission or agency suspending the effectiveness of such
Registration Statement or the initiation or threatening of any proceeding for
that purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued;
(l) Not file any amendment or supplement to such Registration
Statement or prospectus to which counsel for the Investors has reasonably
objected on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the rules and
regulations thereunder, after having been furnished with a copy thereof at least
three (3) business days prior to the filing thereof (which advance furnishing of
copies the Company hereby agrees to);
(m) At the request of the Investors (i) furnish to the Investors on
the effective date of the Registration Statement or, if such registration
includes an underwritten public offering, at the closing provided for in the
underwriting agreement, an opinion, dated such date, of the counsel representing
the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the Investors, covering such matters with respect
to the Registration Statement, the prospectus and each amendment or supplement
thereto, proceedings under state and Federal securities laws, other matters
relating to the Company, the securities being registered and the offer and sale
of such securities as are customarily the subject of opinions of issuer's
counsel provided to underwriters in underwritten public offerings, and (ii) use
its best efforts to furnish to the Investors letters dated each such effective
date and such closing date, from the
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independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the Investors, stating that they are independent
certified public accountants within the meaning of the Securities Act and
dealing with such matters as the underwriters may request, or, if the offering
is not underwritten, that in the opinion of such accountants the financial
statements and other financial data of the Company included in the Registration
Statement or the prospectus or any amendment or supplement thereto comply in all
material respects with the applicable accounting requirements of the Securities
Act, and additionally covering such other financial matters, including
information as to the period ending not more than three (3) business days prior
to the date of such letter with respect to the Registration Statement and
prospectus, as the Investors may reasonably request;
(n) With respect to any public offering made by any Investor under a
Registration Statement filed pursuant to Section 5.02, refrain from making any
sale or distribution of its securities except pursuant to any stock option plan
or other employee benefit plan, any pre-existing agreement for the sale of such
securities or the issuance of securities in connection with future acquisitions
or a private placement for at least one hundred twenty (120) days after the
closing of the public offering pursuant to such Registration Statement; and
(o) Use its best efforts to ensure the obtaining of all necessary
approvals from the applicable stock exchange or electronic quotation system.
SECTION 5.04. Expenses. (a) With respect to each registration effected
pursuant to Sections 5.01 or 5.02 hereof, all fees, costs and expenses of and
incidental to such registration and the public offering in connection therewith
shall be borne by the Company; provided that the Investors shall bear their pro
rata share of the underwriting discounts and selling commissions.
(b) The fees, costs and expenses of registration to be borne as
provided in paragraph (a) above, shall include, without limitation, all
registration, filing and stock exchange fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, all legal fees and
disbursements and other expenses of complying with state securities laws in
states where the securities are to be registered or qualified and the costs and
expenses of the Company relating to investor presentations on any "road-show"
undertaken in connection with the marketing of the offering of the securities.
SECTION 5.05. Rule 144 Requirements. The Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;
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(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any Holder of Registrable Stock upon written request
(x) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c) and the reporting requirements of the
Securities Act or the Exchange Act (at any time after it has become subject to
such reporting requirements), (y) a copy of the most recent annual or quarterly
report of the Company and (z) such other reports and documents of the Company as
such Holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities without
registration.
SECTION 5.06. Investors' Information. Each Investor agrees to furnish
in writing to the Company in a timely manner such information with respect to
itself and the distribution of such Registrable Stock as the Company may from
time to time reasonably request in writing and as shall be required by law or by
the Commission in connection therewith.
SECTION 5.07. Transfer of Registration Rights. Each Investor may at any
time Transfer to any Person that acquires at least fifty one percent (51%) of
the then outstanding Common Share equivalents then held by such Investor the
registration rights set forth in Sections 5.01 and 5.02 hereof. Such Transfer
shall be subject to the transferee agreeing in writing to be bound by the terms
of this Agreement.
SECTION 5.08. Hold-back Agreement. If requested by the underwriter,
each Investor will agree not to offer, sell, contract to sell or Transfer any
Registrable Stock, during the fourteen (14) days prior to, and during the ninety
(90) day period beginning on, the effective date of any Registration Statement
filed pursuant to Section 5.02 other than the Registrable Stock to be sold
pursuant to such Registration Statement.
SECTION 5.09. Other Shareholders. The Company may grant to any Person
other than the Investors the right to request a registration of securities of
the Company under the Securities Act and the right to be included as a selling
shareholder in connection with any registration of Registrable Stock; provided,
however, that without the consent of Investors holding a majority of the
Registrable Stock, the granting of any such rights shall not conflict with or
otherwise alter any rights granted under Section 5.01 above and, in all cases,
the rights of the Investors to include shares in any Registration Statement
shall be
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given priority over any registration rights granted to other Persons as
permitted by this Section 5.09.
ARTICLE 6
INDEMNIFICATION
SECTION 6.01. Indemnification. (a) To the fullest extent permitted by
law, the Company will indemnify and hold harmless the Investors and their
respective directors, officers, employees, partners, members and Affiliates
(each such person, an "INDEMNIFIED PERSON"), whether or not their shares have
been sold in the offering, and any underwriter (as defined in the Securities
Act) for the Investors, and any person who controls any such underwriter within
the meaning of the Securities Act, from and against, and will reimburse the
Indemnified Persons and each such underwriter and controlling person with
respect to, any and all claims, actions, demands, losses, damages, liabilities,
costs and expenses to which any Indemnified Persons or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such claims, actions, demands, losses, damages, liabilities, costs or
expenses arise out of or are based upon any untrue statement or alleged untrue
statement or omission of any material fact contained in a Registration
Statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company will not be liable in
any such case to the extent that any such claim, action, demand, loss, damage,
liability, cost or expense is caused by an untrue statement or alleged untrue
statement or omission or alleged omission so made in reliance upon information
furnished in writing by one or more of the Investors, any such underwriter or
any such controlling person for use in the preparation of such Registration
Statement, prospectus or any amendment or supplement thereto.
(b) Each Indemnified Person severally (not jointly), will indemnify
and hold harmless the Company, its directors, officers, employees and Affiliates
(each such person, a "COMPANY INDEMNIFIED PERSON") from and against, and will
reimburse the Company Indemnified Persons with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs or expenses to which any
Company Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement or omission of any material
fact contained in a Registration Statement, any prospectus contained therein or
any amendment or supplement thereto, or are caused by the omission or alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, in each case to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon information furnished in writing by the Indemnified Person for
use in the preparation of such Registration Statement, prospectus or any
amendment or supplement thereto.
(c) Promptly after receipt by a party to be indemnified pursuant to
the provisions of paragraph (a) or (b) of this Section 6.01 (an "INDEMNIFIED
PARTY") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant to the provisions
of paragraph (a) or (b), notify the indemnifying party of the commencement
thereof. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of such paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof. No indemnifying party shall be liable to an indemnified party for any
settlement of any action or claim without the consent of the indemnifying party.
No indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
ARTICLE 7
TAG-ALONG RIGHTS
SECTION 7.01. Tag-Along Right. Except as permitted under Section 2.05
hereof, if Shareholder desires to sell all or any part of his shares of capital
stock of the Company (the "TAG-ALONG SHARES") to a third-party purchaser (a
"PROPOSED TRANSFEREE"), Shareholder shall provide to the Investors notice of
such intention to sell and of the terms and conditions, including price, of such
proposed sale. Each Investor shall have the right to sell to the Proposed
Transferee, at the same price per share and on the same terms and conditions as
involved in such sale by Shareholder, up to that number of Common Shares then
held by such Investor (calculated on a fully diluted basis) that equals a
portion of the Tag-Along Shares
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equal to the product of (i) the Tag-Along Shares multiplied by (ii) a fraction,
the numerator of which is the aggregate number of Common Shares then owned by
such Investor (calculated on a fully diluted basis) and the denominator of which
is the aggregate number of Common Shares then owned by all of the Investors and
the Shareholder (calculated on a fully diluted basis).
SECTION 7.02. Notice of Intent to Participate. If an Investor wishes to
participate in any sale under this Article 7, such Investor shall notify
Shareholder and the Company in writing of such intention as soon as practicable
after the Investor's receipt of the notice made pursuant to Section 7.01, and in
any event within twenty (20) days after the date of receipt of the notice.
SECTION 7.03. Sale of Tag-Along Shares. Any purchase of less than all
of the Tag-Along Shares and the Common Shares (calculated on a fully diluted
basis) that the Investors are entitled to and elect to sell to the Proposed
Transferee pursuant to Sections 7.01 and 7.02 hereof, considered collectively,
by the Proposed Transferee shall be made from Shareholder and the Investors who
elect to participate pro rata based upon the relative amount of the shares that
Shareholder and the Investors who elect to participate are otherwise entitled to
sell pursuant to Section 7.01. If the Investors do not wish to participate in
any sale under this Article 7, Shareholder shall sell to the Proposed Transferee
all, or at the option of the Proposed Transferee, any part of the shares
proposed to be sold at not less than the price and upon other terms and
conditions, if any, not more favorable to the Proposed Transferee than those in
the notice provided by Shareholder pursuant to 7.01. If the Tag-Along Shares and
the shares of the Investors are sold under this Article 7 to any purchaser who
is not a party to this Agreement, the Tag-Along Shares and the share of the
Investors so sold shall no longer be subject to any of the restrictions imposed
by this Agreement, except for any restrictions imposed by Article 2, which shall
continue in force until such time as they lapse pursuant to the terms of such
Article 2 or Article 7 hereof.
ARTICLE 8
REPRESENTATION RIGHTS
SECTION 8.01. Board of Directors. (a) Each Holder (other than the MSDW
Investors) shall vote such Holder's voting securities and shall take all other
reasonably necessary or desirable actions within its control (whether in such
Holder's capacity as a shareholder, director, member of a Board of Directors
committee or officer of the Company or otherwise and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the
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Company shall take all reasonably necessary or desirable legal actions within
its control, including in preparation of proxy materials, the recommendation of
a management slate of directors in elections for directors, and in proposing and
effecting amendments to the articles of incorporation and code of regulations of
the Company, so that:
(i) At Closing, the authorized number of directors on the
board of directors of the Company shall be increased from six (6) to
nine (9) directors;
(ii) FAEF shall have the right to have one representative,
currently expected to be Xxxxx Xxxxxxxxx, to be nominated as a
Director of the Company;
(iii) the management slate of directors, including the
representative of FAEF, shall be elected to the Board of Directors;
(iv) at least one of the representatives of the Investors, if
at least one such representative is elected to the Board of Directors,
shall be designated a member of every committee of the Board of
Directors existing now or in the future;
(v) if a representative of Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture
Partners IV, L.P. is not a Director of the Company, a representative
of such Investor, which representative shall not be a member of the
Board of Directors, shall have the right to attend all meetings
of the Board of Directors as a non-voting observer and to receive all
notices and other written information sent to Directors by the
Company;
(vi) the required quorum for Board of Directors action shall
be the presence at a Board of Directors meeting of at least a majority
of directors, except that a majority of the directors in office shall
constitute a quorum for filling a vacancy in the Board of Directors;
(vii) all action of the Board of Directors shall require (a)
the affirmative vote of at least a majority of the directors at a duly
convened meeting of the Board of Directors at which a quorum is present
or (b) the unanimous written consent of the Board of Directors;
provided that in the event there is a vacancy on the Board of Directors
and an individual has been nominated to fill such vacancy, the first
order of business shall be to fill such vacancy; and
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(viii) in the event any director nominated by FAEF ceases to
serve as a member of the Board of Directors during his or her term of
office, FAEF shall be entitled to nominate a designee to fill such
vacancy, and the Board of Directors as constituted immediately prior to
such time shall designate a replacement director, nominated by FAEF and
reasonably satisfactory to the Board of Directors, to fill the
remainder of the term of the director who has ceased to be a member of
the Board of Directors.
SECTION 8.02. Voting Restriction. Each MSDW Investor hereby irrevocably
agrees with the Company to vote all Common Shares and Series A Preferred Shares
beneficially owned by the MSDW Investors in excess of 9.9% of the total voting
power of the outstanding Common Shares and Series A Preferred Shares in
proportion to all votes cast by the other holders of Common Shares and Series A
Preferred Shares (as determined by the Company and excluding for these purposes
all Common Shares and Series A Preferred Shares beneficially owned by the MSDW
Investors).
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Term of Agreement. Except as otherwise provided herein,
the provisions of this Agreement shall terminate upon the earliest to occur of
any one of the following events:
(i) the voluntary or involuntary liquidation or dissolution
of the Company;
(ii) the occurrence of a Change-in-Control Liquidation Event
(as such term is defined in the amendment to the Company's Amended
Articles of Incorporation, as amended, as set forth in Exhibit A to
the Securities Purchase Agreement);
(iii) the Investors beneficially own in aggregate less than
twenty percent (20%) of the Common Shares equivalents initially
purchased by the Investors pursuant to the Securities Purchase
Agreement.
SECTION 9.02. Severability; Governing Law. If any provisions of this
Agreement shall be determined to be illegal or unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio.
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SECTION 9.03. Injunctive Relief. It is acknowledged that it will be
impossible to measure the damages that would be suffered by the parties if any
party fails to comply with the provisions of this Agreement. Accordingly, the
parties shall be entitled to obtain specific performance of this Agreement and
to obtain immediate injunctive relief.
SECTION 9.04. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns, legal representatives and heirs.
SECTION 9.05. Modification or Amendment. This Agreement or any term
hereof may be amended or waived, only with the written consent of the Company
and Investors holding more than seventy-five percent (75%) of the Common Shares
issued or issuable upon conversion of any Restricted Securities; additionally,
Section 2.05 and Article 7 hereof may not be amended or waived without the
written consent of Shareholder.
SECTION 9.06. Aggregation. All Restricted Securities held or acquired
by affiliated Persons shall be aggregated for the purpose of determining the
availability of any rights under this Agreement.
SECTION 9.07. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
SECTION 9.08. Notices. All notices to be given or otherwise made to any
party to this Agreement shall be deemed to be sufficient if contained in a
written instrument, delivered by hand in person, or by express overnight courier
service, or by electronic facsimile transmission, or by registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or at such other address as may hereafter be designated
in writing by the addressee to the Company:
If to the Company to:
Symix Systems, Inc..
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: President and Chief Executive Officer
Fax No.: (000) 000-0000
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with a copy to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax No.: 000-000-0000
If to Shareholder:
to his address set forth on the signature pages hereto
If to any Investor:
to its address set forth on the signature pages hereto
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxx, Esq.
Fax No.: 000-000-0000
and, if not an addressee of any notice to an Investor, with a copy to:
Xxxxxx Xxxxxxx Venture Partners IV, L.P., at its address set forth on
the signature pages hereto
All such notices shall, when mailed or telegraphed, be effective when
received or when attempted delivery is refused.
SECTION 9.09. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be executed as of the date first above written.
SYMIX SYSTEMS, INC.,
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
SHAREHOLDER:
XXXXXXXX X. XXX, IN HIS INDIVIDUAL CAPACITY
/s/Xxxxxxxx X. Xxx
------------------------------------------
Address: 0000 Xxxxxxxxx Xxxxxxxx Xxxxx
--------------------------------
Xxxxxxxx, Xxxx 00000
--------------------------------
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XXXXXX XXXXXXX XXXX XXXXXX VENTURE PARTNERS IV, X.X.
XXXXXX XXXXXXX XXXX XXXXXX VENTURE INVESTORS IV, X.X.
XXXXXX XXXXXXX XXXX XXXXXX VENTURE OFFSHORE
INVESTORS IV, L.P.
By: MSDW Venture Partners IV, LLC,
as General Partner of each of the limited partnerships
By: MSDW Venture Partners IV, Inc.,
as Member
By: /s/Xxx xx Xxxxxx
-------------------------------------
Name: Xxx xx Xxxxxx
Title: Managing Director
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Controller
XXXXXX XXXXXXX XXXX XXXXXX
EQUITY FUNDING, INC.
By: /s/Xxxxxx Xxxxxxx
--------------------------------------------
Name: /s/Xxxxxx Xxxxxxx
Title: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Controller
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FALLEN ANGEL EQUITY FUND, L.P.
By: Fallen Angel Capital, L.L.C.
as its General Partner
By: Xxxxx Xxxxxxxxx,
as Member
By: /s/Xxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Member
Address: 000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Fax: 000-000-0000
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SCHEDULE 1
The following is a full and complete list of the Investors who are
purchasing Series A Convertible Participating Preferred Shares and Warrants of
the Company:
NUMBER OF
INVESTOR PREFERRED SHARES NUMBER OF WARRANTS %
-------------------------------- ---------------- ------------------ ------------
Xxxxxx Xxxxxxx Xxxx Xxxxxx 271,650 217,320 48.40
Venture Partners IV, X.X.
Xxxxxx Xxxxxxx Xxxx Xxxxxx 31,516 25,212 5.62
Venture Investors IV, X.X.
Xxxxxx Xxxxxxx Xxxx Xxxxxx 10,598 8,478 1.89
Venture Offshore
Investors IV, X.X.
Xxxxxx Xxxxxxx Xxxx Xxxxxx 86,502 69,202 14.70
Equity Funding, Inc.
Fallen Angel Equity 166,667 133,334 29.40
Fund, L.P.
Total: 566,933 453,546 100.00
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s
