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EXHIBIT 4.1
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), made as of this
31st day of March, 1997, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, a resident of Georgia
("▇▇▇▇"); E. ▇▇▇▇ ▇▇▇▇▇▇▇▇, a resident of Georgia ("▇▇▇▇▇▇▇▇"); ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇, all residents of Georgia (collectively,
"Other Employees"; ▇▇▇▇, ▇▇▇▇▇▇▇▇ and Other Employees collectively being
referred to hereinafter as "Management"); ▇▇▇▇▇ ▇▇▇▇▇ FUND IV L.P., a Delaware
limited partnership ("SR4"); NORO-▇▇▇▇▇▇▇ PARTNERS II, L.P., a Georgia limited
partnership ("NMP"); APERTURE ASSOCIATES, L.P., a Delaware limited partnership
("Aperture"); ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a resident of New York, AS TRUSTEE OF THE PROFIT
SHARING PLAN DLJSC-CUSTODIAN FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"); ▇▇▇▇▇ ▇▇▇▇▇▇, a
resident of Pennsylvania ("▇▇▇▇▇▇"); ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a resident of
Indiana ("▇▇▇▇▇▇▇"); INTERWEST PARTNERS V, L.P., a Delaware limited partnership
("Interwest"); INTERWEST INVESTORS V, a Delaware limited partnership ("Interwest
Investors"); ▇▇▇▇▇▇ ▇. ▇▇▇▇, a resident of Texas ("Cash"); CROWN ASSOCIATES III,
a Delaware limited partnership ("Crown"); CROWN ▇▇▇▇▇ ASSOCIATES, a Delaware
limited partnership ("Crown ▇▇▇▇▇"); THE CROWN TRUST, a New York trust ("Crown
Trust"); ▇▇▇ FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ DLJSC as CUSTODIAN ("▇▇▇▇▇▇ ▇▇▇"); ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, a New Jersey resident ("▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇ BLOCK, a New Jersey resident
("Block"); ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a New York resident ("Davidson"); ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, a resident of Switzerland ("▇▇▇▇▇▇▇"); STANFORD UNIVERSITY, a
California trust ("Stanford"); ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, a Georgia resident
("Kohlsdorf") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, a Georgia resident ("▇▇▇▇") (SR4, NMP,
Aperture, Hockett, Bellet, ▇▇▇▇▇▇, Interwest, Interwest Investors, Cash, Crown,
Crown ▇▇▇▇▇, Crown Trust, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, Block, Davidson, Erdmann,
Stanford, Kohlsdorf and ▇▇▇▇ collectively being referred to hereinafter as the
"Investors") and T/R SYSTEMS INC., a Georgia corporation (the "Company"); and
W I T N E S E T H:
WHEREAS, the Company, Management and the Investors (or their
predecessors-in-interest) are parties to that certain Registration Rights
Agreement dated as of March 4,
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1994, which was amended and restated by that certain Amended and Restated
Registration Rights Agreement among the Company, Management and certain of the
Investors dated as of January 31, 1996 (the "1996 Registration Rights
Agreement") in connection with the sale and issuance on such date of 2,961,585
shares of Series B Preferred Stock of the Company to certain of the Investors;
WHEREAS, in connection with the sale by the Company to certain of the
Investors of 1,111,111 shares of the Company's Series C Preferred Stock, the
parties to the 1996 Registration Rights Agreement desire to amend and restate
(in its entirety) such agreement and add additional Investors as parties to such
agreement as so amended and restated, to confirm and grant certain registration
rights with respect to securities of the Company owned by all of such parties;
NOW, THEREFORE, in consideration of the premises, as a condition to the
purchase of the above referenced shares of Series C Preferred Stock, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do agree to amend and restate the 1996
Registration Rights Agreement in its entirety and to enter into the other
agreements contained hereinbelow as follows:
1. REGISTRATION RIGHTS.
1.1 Certain Definitions. As used in this Agreement, in addition to
the terms defined above, the following terms shall have the following respective
meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean common stock, $.01 par value per share, of
the Company.
"Common Option Shares" shall mean all shares of Common Stock that may
be acquired by Holders by exercise of options granted by the Company, together
with any shares of Common Stock issued with respect to the foregoing upon any
stock split, stock dividend, recapitalization or similar event.
"Conversion Shares" shall mean as of any particular time the shares of
Common Stock that have been acquired by the holders of any of the Preferred
Shares as of such time upon conversion of such shares pursuant to Subsection
(d)(1), (d)(2)(A), or (d)(2)(B) of the Certificate of Designations establishing
the Preferences and Rights of each of the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock (such Certificate being
contained in the Company's Amended and Restated Articles of Incorporation), as
well as upon conversion pursuant to any of such subsections of any additional
shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock issued with respect to the same upon any stock split, stock
dividend, recapitalization or similar event, but excluding any Common Stock
acquired upon conversion of any Preferred Shares pursuant to Subsection
(d)(2)(C) of said Certificate of Designations.
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"First Initiating Holders" shall mean a Holder or Holders who in the
aggregate own Preferred Shares and Conversion Shares representing at least a
majority of the voting power of all then outstanding Preferred Shares and all
Conversion Shares.
"Holders" shall mean the Investors, members of Management and any other
person holding Registrable Securities to whom these registration rights have
been transferred pursuant to Section 1.10 hereof.
"Initial Public Offering" shall mean the effectiveness of the filing of
the first registration statement under the Securities Act that covers the offer
and sale to the public of Common Stock by the Company.
"Initiating Holders" shall mean either the First Initiating Holders or
the Subsequent Initiating Holders.
"Management's Common Stock" shall mean the shares of Common Stock owned
by Management as of the date of this Agreement together with any shares of
Common Stock issued with respect to the foregoing upon any stock split, stock
dividend, recapitalization or similar event.
"Other Stockholders" shall mean persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their securities
in a registration effected pursuant to this Agreement.
"Preferred Shares" as of any particular time shall mean shares of
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
of the Company, all of the same, or any combination thereof, whenever issued;
together with all shares of Series A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock, if any, issued with respect to the foregoing upon
any stock split, stock dividend, recapitalization or similar event.
The terms "register," "registered" and "registration" refer to the
effectiveness of a registration statement prepared and filed in compliance with
the Securities Act.
"Registrable Securities" shall mean the Common Option Shares,
Management's Common Stock, all Conversion Shares, and all shares of Common Stock
issuable, yet not actually issued, upon conversion of the Preferred Shares.
"Registration Expenses" shall mean all expenses incurred by the Company
in complying with Sections 1.2 and 1.3 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and expenses of a single counsel for
the selling Holders, state "blue sky" fees and expenses, and accountants'
expenses, including without limitation any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by the Company and
any additional disbursements of counsel for the selling Holders, which shall be
paid by such selling Holders).
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"Securities Act" shall mean the federal Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Securities Exchange Act" shall mean the federal Securities Exchange
Act of 1934, as amended, or any similar federal statute and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and any other
securities of the Company being sold in the same registration as the Registrable
Securities by Other Stockholders.
"Series A Preferred Stock" shall mean Series A Preferred Stock, $.01
par value per share, of the Company.
"Series B Preferred Stock" shall mean Series B Preferred Stock, $0.01
par value per share, of the Company.
"Series C Preferred Stock" shall mean Series C Preferred Stock, $.01
par value per share, of the Company.
"Subsequent Initiating Holder" shall mean a Holder or Holders who in
the aggregate own Preferred Shares and Conversion Shares representing at least
twenty-five percent (25%) of the voting power of all then outstanding Conversion
Shares and Preferred Shares.
1.2 Requested Registration.
(a) Demand Registration Rights. The First Initiating
Holders and the Subsequent Initiating Holders may make certain demands on the
Company to register all or a part of the Registrable Securities (each being
referred to hereinafter as a "Demand Registration") subject to the following
conditions:
(i) following the earlier of February 28, 1997,
or the date that is six (6) months after the Initial Public
Offering, the First Initiating Holders may make one demand on
the Company to register all or a portion of the Registrable
Securities -- provided such securities have an aggregate
offering price to the public of not less than fifteen million
dollars ($15,000,000) and a public offering price per share of
not less than $5.00 (as adjusted for changes in the capital
structure of the Company by stock split, stock dividend,
recapitalization, or the like occurring after the date of this
Agreement) (such registration upon effectiveness being
hereinafter referred to as the "First Demand Registration");
(ii) following the First Demand Registration, the
Subsequent Initiating Holders may make one demand on the
Company to register all or a part of the Registrable
Securities having an aggregate offering price to the public of
not less than fifteen million dollars ($15,000,000) and a
public
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offering price per share of $5.00 (as adjusted for
changes in the capital structure of the Company by stock
split, stock dividend, recapitalization, or the like occurring
after the date of this Agreement) (such registration upon
effectiveness being hereinafter referred to as the "Second
Demand Registration"); and
(iii) at any time after the date of this
Agreement, the Subsequent Initiating Holders may make up to
six (6) demands on the Company to register all or a part of
the Registrable Securities having an aggregate offering price
to the public of not less than five hundred thousand dollars
($500,000) on a Form S-3 Registration Statement under the
Securities Act ("Form S-3"), if such form is then available to
the Company, provided, however, that such demands shall not be
made so as to result in a registration in respect thereof more
frequently than once in a six (6)-month period.
(b) Request for Registration. In the event the Company
shall receive from the Initiating Holders a written request that the Company
effect a Demand Registration with respect to all or a part of the Registrable
Securities, other than a registration pursuant to Rule 415 under Regulation C
promulgated under the Securities Act, the Company shall:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) as soon as practicable, use its diligent
best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable "blue sky" or other state securities laws, and
appropriate compliance with applicable regulations issued
under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of such portion
of such Registrable Securities as is specified in such
request, together with such portion of the Registrable
Securities of any Holder or Holders joining in such request as
is specified in a written request given within thirty (30)
days after receipt of such written notice from the Company;
provided that the Company shall not be obligated to take any
action to effect any such registration pursuant to this
Section 1.2:
(A) in any particular jurisdiction in
which the Company would be required to execute a
general consent to service of process in effecting
such registration, qualification or compliance unless
the Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act;
(B) during the period following an
Initial Public Offering that is contemplated by
Section 1.11 hereof, as such period may be extended
by request of the underwriter representative,
provided that the "market stand-off" effected by any
such extension is applicable against the persons
described in Section 1.11(b); or
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(C) in the case of a demand for
registration on Form S-3 in accordance with Section
1.2(a)(iii), if such form is not then available to
the Company for such purpose.
In the event the Company is not obligated to effect any request for
Demand Registration by virtue of the foregoing clauses (A) through (C), such
request shall not be deemed to be a demand for registration for purposes of
Section 1.2(a)(i), (ii) or (iii). Subject to the foregoing clauses (A) through
(C), the Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Initiating Holders; provided, however, that if
the Company shall furnish to such Initiating Holders a certificate signed by the
Chairman of the Board of the Company stating that in the good-faith judgment of
the Board of Directors of the Company it would be seriously detrimental to the
Company and its stockholders for such registration statement to be filed and it
is therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days after receipt of the request of the Initiating
Holders.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 1.2(c) below,
include securities offered by the Company for its own account and/or other
securities of the Company that are held by Other Stockholders.
(c) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 1.2(a) and the Company shall include such information in the
written notice referred to in Section 1.2(b)(i). The right of any Holder to
registration pursuant to Section 1.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
the Initiating Holders and such Holder) to the extent provided herein.
If Management or Other Stockholders request inclusion in such
registration, the Initiating Holders shall, on behalf of all Holders other than
Management, offer to Management or such Other Stockholders to include the
securities held by them in the underwriting and may condition such offer on the
acceptance of the further applicable provisions of this Section 1. The Company
shall (together with all Holders and Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form and containing customary terms reasonably acceptable to the
Initiating Holders, with the representative of the underwriter or underwriters
selected for such underwriting by the Company and reasonably acceptable to the
Initiating Holders; provided, however, that if the Company has not selected an
underwriter reasonably acceptable to the Initiating Holders within thirty (30)
days after the Company's receipt of the request for registration from the
Initiating Holders, then the Initiating Holders may select an underwriter
reasonably acceptable to the Company in connection with such registration.
Notwithstanding any other provision of this Section 1.2, if the underwriter
representative advises the Initiating Holders in writing that marketing
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factors require a limitation of the number of shares to be underwritten, the
securities of the Company held by Other Stockholders shall be excluded from such
registration to the extent so required by such limitation and, if a further
limitation on the number of shares is required, the securities of the Company
held by Management shall be excluded from such registration to the extent so
required by such limitation and, if a limitation on the number of shares is
still required, the Initiating Holders and the other Holders other than
Management shall be entitled to include shares of each Holder who requests
inclusion in such registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities that they had requested to be
included in such registration and the remainder of such shares shall be excluded
from such registration. The Company shall advise all holders of securities
requesting registration as to the number of shares of securities that may be
included in the registration and underwriting as allocated in the foregoing
manner. If any Other Stockholder or Holder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holders. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of shares to be underwritten, the Company may include its securities for
its own account in such registration if the underwriter so agrees and if the
number of Registrable Securities and other securities of the Holders that would
otherwise have been included in such registration and underwriting will not be
limited thereby.
1.3 Company Registration.
(a) If the Company shall determine to register any of its
securities in connection with the public offering of such securities solely for
cash on a form that would permit the registration of the Registrable Securities,
the Company shall:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any
related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or
requests, made within fifteen (15) days after receipt of such
written notice from the Company, by any Holder or Holders,
except as set forth in Section 1.3(b) hereof.
(b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 1.3(a)(i) hereof. In such event the right of
any Holder to registration pursuant to Section 1.3(i) shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein and (ii) shall terminate as to each Holder upon the availability of Rule
144(k) to such Holder and such Holder holding not more than one percent (1%) of
the outstanding Shares. All Holders
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proposing to distribute their securities through such underwriting shall
(together with the Company and Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for underwriting by the
Company. Notwithstanding any other provision of this Section 1.3, if the
underwriter reasonably determines that marketing factors require a limitation on
the number of shares to be underwritten, the securities of the Company held by
Other Stockholders shall be first excluded from such registration to the extent
so required by such limitation, and, if a limitation on the number of shares is
still required, the number of shares that may be included in the registration
shall be allocated among the Holders requesting registration of securities in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities and other securities that such Holders had requested to be included
in such registration. The Company shall advise all Holders requesting
registration as to the number of shares or securities that may be included in
the registration and underwriting as allocated in the foregoing manner. No such
reduction shall be made with respect to securities offered by the Company for
its own account. If any Holder or Other Stockholder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice to
the Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall also be withdrawn from such
registration.
1.4 Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Agreement shall be borne by the Company; and all Selling Expenses shall be
borne by the Initiating Holders, the non-Initiating Holders and the Other
Stockholders of the securities so registered pro rata on the basis of the number
of their shares so registered; provided, however, that the Company shall not be
required to pay any Registration Expenses if, as a result of the withdrawal of a
request for registration by the Initiating Holders pursuant to Section 1.2
hereof, the registration statement does not become effective, in which case the
Initiating Holders, the non-Initiating Holders and Other Stockholders requesting
registration shall bear such Registration Expenses pro rata on the basis of the
number of their shares so included in the registration request (except for the
fees of any counsel for the Holders, which shall be borne only by the persons
whom such counsel represented, pro rata on the basis of the number of their
shares so included in the registration request); provided, further, that such
registration shall not be counted as a registration pursuant to Section
1.2(a)(i), (ii) or (iii) hereof; and provided, further, that if any jurisdiction
in which the securities shall be qualified shall require that expenses incurred
in connection with the qualification of the securities in that jurisdiction be
borne by the selling stockholders, then such expenses shall be payable by the
selling stockholders pro rata, to the extent required by such jurisdiction.
1.5 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company shall keep each
Holder advised in writing as to the initiation of each registration and as to
the completion thereof. At its expense the Company shall:
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(a) keep such registration effective for a period of one
hundred twenty (120) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; and
(b) furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may reasonably request.
1.6 Indemnification.
(a) The Company shall indemnify each Holder, each of such
Holder's officers, directors and partners, and each person controlling (as
defined in paragraph (d) below) such Holder, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, each
underwriter, if any, and each person who controls any underwriter against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and shall reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter, and each person who controls such underwriter, for any legal and
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based upon written
information furnished to the Company in an instrument duly executed by the
Holder or underwriter seeking to be indemnified, where such information is
stated to be specifically for use in such prospectus, offering circular or
related document.
(b) Each Holder and Other Stockholder shall, if
securities held by him are included among the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each legal counsel and independent
accountant of the Company, each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter, and each other such Holder and Other Stockholder, each of
its officers, directors and partners and each person controlling such Holder or
Other Stockholder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
the Company and such Holders, Other Stockholders, directors, officers, partners,
persons, underwriters and control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action,
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in each case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder or Other Stockholder specifically for use therein;
provided, however, that the obligations of such Holder or Other Stockholder
hereunder shall be limited to an amount equal to the net proceeds to such Holder
or Other Stockholder of securities sold as contemplated herein.
(c) Each party entitled to indemnification under this
Section 1.6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be withheld unreasonably), and the Indemnified Party
may participate in such defense at such Indemnified Party's expense, provided,
however, that the Indemnified Party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnifying Party, if
representation of such indemnified party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding. The failure of any Indemnified Party to give notice
as provided herein shall relieve the Indemnifying Party of its obligations under
this Section 1.6 only if such failure is prejudicial to the ability of the
Indemnifying Party to defend such action, and such failure shall in no event
relieve the Indemnifying Party of any liability that it may have to any
Indemnified Party otherwise than under this Section 1.6. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement that 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 with respect to such claim or litigation.
(d) For purposes of this Section 1.6, the term "control"
shall have the meaning ascribed thereto under the Securities Act.
1.7 Information by Holders and Other Stockholders. Each Holder or
Other Stockholder of securities included in any registration shall furnish to
the Company such information regarding such Holder or Other Stockholder and the
distribution proposed by such Holder or Other Stockholder as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
1.8 Limitations on Registration of Issues of Securities. From and
after the date of this Agreement, without the consent of the holders of a
majority of the shares of Common Stock, on a fully converted basis, represented
by the then outstanding shares of Preferred Shares and Conversion Shares, the
Company shall not enter into any agreement with any holder or prospective holder
of any securities of the Company providing that such holder or prospective
holder may require the Company to initiate any registration of any
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11
securities of the Company, and shall not enter into any agreements with any
holder or prospective holder of any securities of the Company that, upon any
registration of any of its securities, the Company will include among the
securities that it then registers securities owned by such holder or prospective
holder. In any event, any registration rights given by the Company to any holder
or prospective holder of its securities shall be consistent with the
registration and other rights provided in this Agreement.
1.9 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission that may permit the
sale of shares of Common Stock to the public without registration, the Company
shall:
(a) make and keep public information available as those
terms are understood and defined in Rule 144 promulgated by the Commission under
the Securities Act ("Rule 144"), at all times after one hundred and eighty (180)
days after the Initial Public Offering;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Securities Exchange Act at any time after it has become subject to the
reporting requirements thereunder; and
(c) so long as any Investor owns any Registrable
Securities, furnish to such Investor forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(at any time after ninety (90) days after the Initial Public Offering), and of
the Securities Act and the Securities Exchange Act (at any time after it has
become subject to the reporting requirements thereunder), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed by the Company as such Investor may reasonably request in
availing itself of any rule or regulation of the Commission allowing an Investor
to sell any such securities without registration.
1.10 Transfer of Registration Rights. The rights to cause the
Company to register securities of the Company under Sections 1.2 and 1.3 hereof
may be assigned by an Investor to (a) a purchaser of an aggregate of Conversion
Shares and Preferred Shares that together represent at least five hundred
thousand (500,000) shares of Common Stock on a fully converted basis and (b)
upon distribution by an Investor that is an entity of Preferred Shares or
Conversion Shares to the direct or indirect beneficial owners of the securities
of such Investor (including direct or indirect general or limited partners
thereof), together with the securities being transferred, provided that the
Company is given written notice, at the time or within a reasonable time after
said transfer, stating the name and address of said transferee and identifying
the securities with respect to which such registration rights are being
assigned.
1.11 "Market Stand-Off" Agreement. If requested by the Company upon
the recommendation of the Board of Directors of the Company and an underwriter
of Common Stock (or other securities) of the Company, the Holders shall not sell
or otherwise transfer or dispose of any Common Stock (or other securities) of
the Company held by them during the period up to one hundred eighty (180) days
(or such lesser period as the Company's
- 11 -
12
Board of Directors determines to be in the best interest of the Company)
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that:
(a) such agreement apply only with respect to an
underwritten Initial Public Offering (whether such offering was initiated by the
Company or any Initiating Holders); and
(b) Other Stockholders selling securities pursuant to
such registration statement and all officers and directors of the Company enter
into similar agreements.
Such agreement shall be in writing in form satisfactory to the Company
and such underwriter. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said one hundred eighty (180)-day period.
2. MISCELLANEOUS.
2.1 Governing Law. This Agreement shall be governed by the law of
the State of Georgia.
2.2 Amendment. This Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by Holders who in
the aggregate own more than two-thirds (66 2/3%) of the Common Stock represented
on a fully converted basis by the Preferred Shares and the Conversion Shares
then held by the Investors, provided that the consent of those members of
Management who are then still employed by the Company and then hold a majority
of the shares of Management's Stock and the Option Stock, collectively, shall be
required if the rights of Management would be adversely affected other than on a
pro rata basis with respect to the issuance following the date hereof of new
shares of Common Stock or securities convertible into or exchangeable for shares
of Common Stock as to which registration rights substantially similar to those
contained in this Agreement are granted; provided further that such amendment,
supplement or modification shall not be effective with respect to any person not
signing such instrument unless and until such person receives written notice of
such amendment, supplement or modification.
2.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
Investors and Management. The Company may not assign its rights hereunder.
2.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one agreement, binding on the
parties hereto.
[SIGNATURES APPEAR ON SUCCEEDING PAGES]
- 12 -
13
IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Registration Rights Agreement on the date first written above.
MANAGEMENT:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ E. ▇▇▇▇ ▇▇▇▇▇▇▇▇
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E. ▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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14
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
THE INVESTORS:
▇▇▇▇▇ ▇▇▇▇▇ FUND IV L.P.
By: SRB Associates IV L.P.
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
A General Partner
NORO-▇▇▇▇▇▇▇ PARTNERS II, L.P.
By: ▇▇▇▇▇▇▇ and Company II
General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
General Partner
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15
APERTURE ASSOCIATES, L.P.
By: ▇▇▇▇▇▇▇ Bridge Partners, Inc.,
General Partner
By: /s/ N. ▇▇▇ ▇▇▇▇▇
-------------------
N. ▇▇▇ ▇▇▇▇▇
Managing Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as TRUSTEE
FOR THE PROFIT SHARING PLAN
DLJSC-CUSTODIAN FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇▇▇▇▇▇
- 15 -
16
INTERWEST PARTNERS V, L.P.
By: Interwest Management Partners V,
L.P., General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
A General Partner
INTERWEST INVESTORS V
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇ Self-Directed ▇▇▇
- 16 -
17
CROWN ASSOCIATES III,
A Limited Partnership
By: Crown Partners III,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
A General Partner
CROWN ▇▇▇▇▇ ASSOCIATES,
A Limited Partnership
By: Crown ▇▇▇▇▇ Partners,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
A General Partner
THE CROWN TRUST
By: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Trust
Company, Trustee
By: /s/
---------------------
▇▇▇ FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
DLJSC as Custodian
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ Block
----------------------------
▇▇▇▇▇▇▇▇ BLOCK
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18
'
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
STANFORD UNIVERSITY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Secretary
to Board of Trustees
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
THE COMPANY:
T/R SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Title: CEO
----------------------
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19
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT,
SECOND AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT AND
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made and entered into as of the 20th day of
June, 1997 by and between T/R Systems, Inc., a Georgia corporation, with its
principal offices in Norcross, Georgia (the "Company"); ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, a
Georgia resident ("▇▇▇▇"); E. ▇▇▇▇ ▇▇▇▇▇▇▇▇, a Georgia resident ("▇▇▇▇▇▇▇▇");
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a Georgia resident ("▇▇▇▇▇▇▇"); ▇▇▇▇▇ ▇▇▇▇▇ Fund IV L.P., a
Delaware limited partnership ("SRIV"); Noro-▇▇▇▇▇▇▇ Partners II, L.P., a Georgia
limited partnership ("NMP"); Aperture Associates, L.P., a Delaware limited
partnership ("Aperture"); Interwest V, L.P., a Delaware limited partnership
("Interwest"); and Interwest V, a Delaware limited partnership ("Interwest
Investors", and Interwest Investors together with SRIV, NMP, Aperture, and
Interwest are referred to herein as the "Principal Preferred Holders")
W I T N E S S E T H:
WHEREAS, the Company and certain shareholders of the Company
are parties to a certain Stock Purchase Agreement dated March 31, 1997 (the
"Stock Purchase Agreement") pursuant to which such shareholders, including the
Principal Preferred Holders, purchased shares of Series C Preferred Stock of the
Company ("Series C Preferred Stock");
WHEREAS, the Company desires to sell and the Purchaser desires
to acquire one hundred eleven thousand one hundred eleven (111,111) shares of
Series C Preferred Stock ("Purchased Shares"); and the Principal Preferred
Holders have consented to amendments to the Stock Purchase Agreement to
accommodate such sale and purchase;
WHEREAS, the parties hereto have consented to amend each of
the Company's Second Amended and Restated Shareholders' Agreement and Second
Amended and Restated Registration Rights Agreement, each dated March 31, 1997
(the "Shareholders' Agreement" and the "Registration Rights Agreement,"
respectively) coincident with the issuance of the Purchased Shares to Purchaser
and to make
20
the Purchaser as a party thereto in order to provide the Purchaser the rights
therein afforded to holders of Series C Preferred Stock;
WHEREAS, the Stock Purchase Agreement provides that it may be
amended by the Company and by holders of at least a majority of the Company's
Series C Preferred Stock; and
WHEREAS, the Shareholders' Agreement provides that it may be
amended with the written consent of the holders of not less than three-quarters
of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock, voting together as a single class, and those holders of common stock of
the Company who are parties to such Agreement voting as a class holding at least
three-quarters of such common shares;
WHEREAS, the Registration Rights Agreement of the Company
provides that it may be amended with the consent of holders of preferred stock
of the Company who hold more than two-thirds of such preferred stock of the
Company, measured on a fully diluted (into common shares) basis and with the
consent of certain holders of common stock;
WHEREAS, the parties hereto represent the requisite number of
parties necessary to effect an amendment to the three agreements which are
amended by virtue of this Agreement;
NOW, THEREFORE, BE IT AGREED AS FOLLOWS:
1. Authorization of Shares. Coincident with the
execution and delivery of this Agreement the Company shall adopt and file with
the Secretary of State of the State of Georgia Articles of Amendment to the
Amended and Restated Articles of Incorporation of the Company so as to increase
the designation of the number of shares of its Series C Preferred Stock, $0.01
par value per share, of the Company (the "Series C Preferred Stock") from
1,200,000 to 1,500,000.
2. Sale of Shares of Series C Preferred Stock.
Coincident with the execution and delivery of this Agreement, the Company shall
issue and sell to the Purchaser, and the Purchaser shall purchase from the
Company,the Purchased Shares at a purchase price of $2.25 per share (or an
aggregate purchase price of $249,999.75).
3. Amendment to Stock Purchase Agreement. The parties
hereto agree that this Agreement shall constitute an amendment to the Stock
Purchase Agreement such that Purchaser shall be deemed to be a party thereof for
all purposes so as to accommodate the purchase and sale of Series C Preferred
Stock and shall be entitled to rely on the representations and warranties made
therein by the
2
21
Company and shall be the beneficiary of the covenants provided for therein by
the Company and shall be deemed generally and for all purposes to be a
"Purchaser" thereunder. The Company represents and warrants that the
representations and warranties provided in Article III thereof are true and
correct as of the date hereof in all material respects, giving effect to the
purchase and sale of Series C Preferred Stock provided for in such Stock
Purchase Agreement. The parties agree that the sale of the Purchased Stock
hereunder shall not be subject to the provisions of Section 7.4 of the Stock
Purchase Agreement.
4. Amendment to Shareholders' Agreement. The parties
hereto agree that the Purchaser shall be deemed to be a party to the
Shareholders' Agreement for all purposes and that such Agreement is amended to
permit same, with the Purchaser being deemed an Investor and Shareholder as
those terms are used therein, and being entitled to all rights and benefits
provided for therein by virtue of the foregoing amendments.
5. Amendment to Registration Rights Agreement. The
parties hereto agree that the Purchaser shall be deemed to be a party to the
Registration Rights Agreement for all purposes and that such Agreement is
amended to permit same, with the Purchaser being deemed an Investor and Holder
as those terms are used therein, and being entitled to all rights and benefits
provided for therein by virtue of the foregoing amendments.
6. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute one agreement, binding on
the parties hereto.
IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Agreement as of the day and year first written above.
T/R SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and
Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
3
22
/s/ E. ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
E. ▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ FUND IV L.P.
By: SRB Associates IV L.P.,
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
A General Partner
NORO-▇▇▇▇▇▇▇ PARTNERS II, L.P.
By: ▇▇▇▇▇▇▇ and Company II,
General Partner
By: /s/
------------------------------------
A General Partner
APERTURE ASSOCIATES, L.P.
By: ▇▇▇▇▇▇▇ Bridge Partners, Inc.
General Partner
By: /s/ N. ▇▇▇ ▇▇▇▇▇
------------------------------------
N. ▇▇▇ ▇▇▇▇▇
Managing Director
4
23
INTERWEST PARTNERS V, L.P.
By: Interwest Management Partners V,
L.P.
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
A General Partner
INTERWEST INVESTORS V
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
FSC CORP.
By: /s/
-------------------------------------
5