EXECUTION COPY
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this
"AGREEMENT") is madeasof this 6th day of July, 1997, by and among
SOUNDVIEW TECHNOLOGIES INCORPORATED, a Delaware corporation (the
"COMPANY"), H. Lee Browne ("BROWNE"), a natural person, David H.
Schmidt ("SCHMIDT"), a natural person, and ACACIA RESEARCH
CORPORATION, a California corporation ("ACACIA").
BACKGROUND
The Company was formed in March 1996 for the purpose,
among other things, of owning, developing and exploiting United
States patent number 4,554,584 and all related technology (the
"PATENT").
The Company was initially capitalized by issuing
7,500,000 shares of Common Stock, par value $0.001 per share (the
"COMMON STOCK"), in 1996 and the parties hereto entered into a
Stockholders' Agreement relating to election of directors and
various other matters. As of the date hereof, Acacia is
purchasing shares from Browne and Schmidt and consequently Acacia
owns approximately 51% of the total number of issued and
outstanding shares of Common Stock on a fully diluted basis, and
Browne and Schmidt each own approximately 9.5% of the total
number of issued and outstanding shares of Common Stock on a
fully diluted basis. Carl M. Elam and Dale A. Leavy (the
"INVENTORS") each owns 525,000 shares of Common Stock
representing in the aggregate 14% of the total number of issued
and outstanding shares of Common Stock on a fully diluted basis.
The remaining shares are owned by other investors.
The Company, Acacia, Browne and Schmidt desire to enter
into this Agreement to set forth certain rights and obligations
in respect of the Common Stock and the Company.
In consideration of the foregoing and the agreements set
forth below, the parties agree with each other, as follows:
BOARD OF DIRECTORS.
1.1 DESIGNATED BOARD. As of the date hereof, the only
members of the Board of Directors are H. Lee Browne, David H.
Schmidt, Paul R. Ryan and CarlM. Elam. Acacia, Browne and
Schmidt desire to expand the size of the Board to five (5)
directors and will take all necessary action to adjust the size
of the Board. At each meeting of the stockholders for the
election of directors or any solicitation of written consents for
such purpose or in filling any vacancies on the Board, Acacia,
Browne and Schmidt shall vote all shares of the Company's Common
Stock and any other shares of equity securities of the Company
now owned or hereafter acquired or controlled by them
(collectively, the "STOCK"), and otherwise use their best efforts
as stockholders and directors of the Company, to elect the
Designated Board (as defined below) which shall constitute the
entire Board of Directors. The "DESIGNATED BOARD" shall consist
of (i) three members designated by Acacia, (ii) one member
designated by Browne and (iii) one member designated by Schmidt;
provided, however, that in the event that (and for so long as)
Acacia holds less than 50% of the Common Stock as a result of
events arising out of Acacia's failure to timely pay principal of
and interest on two Notes, each dated the date hereof, each made
by Acacia in the principal amount of $450,000, one in favor of
Browne and the other in favor of Schmidt, respectively, the
"DESIGNATED BOARD" shall consist of (i) two members designated by
Acacia, (ii) one member designated by Browne, (iii) one member
designated by Schmidt, and (iv) one member elected by the
Company's shareholders voting independently. In the event of any
vacancy on the Board of Directors, Acacia, Browne and Schmidt
covenant and agree that each shall vote all of their Stock in
accordance with the procedure described above in order to fill
such vacancy. The Company, Acacia, Browne and Schmidt hereby
agree that the size of the Board of Directors shall not be
increased or decreased without the prior written consent of each
of Browne, Schmidt and Acacia.
1.2 BOARD APPROVAL OF CERTAIN ACTIONS. Each of the
Company, Acacia, Browne and Schmidt hereby agrees that each of
the following actions shall require (i) that a majority of the
Company's Board of Directors approve the action, (ii) that such
majority shall at a minimum include either the Browne designee or
the Schmidt designee to the Company's Board of Directors, and
(iii) that each director, in casting his or her vote on such
action, shall consider whether such action would be fair and
reasonable to the Company and shall consider the best interests
of the Company's shareholders as a whole.
(i) Any sale, pledge, assignment (by operation of law
or otherwise) or other disposition of the Patent; provided
that the Company may, without such approval, grant
non-exclusive licenses for the use of the Patent to third
parties on terms and conditions that are fair to the
Company.
(ii) Any transaction of merger or consolidation, or
liquidation, winding-up or dissolution of the Company, or
conveyance, sale, lease or sub-lease (as lessor or
sub-lessor), transfer or other disposition of, in one
transaction or a series of transactions, all or
substantially all of the Company's business, property or
assets, whether now owned or hereafter acquired.
(iii) Any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or
the rendering of any service) with any officer, director or
holder of 5% or more of any class of equity securities of
the Company or with any affiliate of the Company or of any
such officer, director or holder; provided that the Company
may, without the unanimous approval of the Board of
Directors, pay reasonable and customary fees to non-employee
members of the Board of Directors.
(iv) Any issuance of additional shares of Common Stock
or other equity of the Company (including, without
limitation, preferred stock, options, warrants, convertible
debentures, and similar instruments).
(v) Any amendment, repeal or alteration in any way of
any provision of the Certificate of Incorporation or Bylaws
of the Company.
TRANSFER OF SHARES.
2.1 PERMITTED TRANSFERS. (a) Acacia, Browne and
Schmidt may sell or otherwise transfer Stock, in accordance with
the terms and conditions of this Agreement, in a transaction that
is a bona fide sale for value in which the transferor and any
affiliate parts with their economic and voting interests in such
Stock (each, a "Bona Fide Transaction"). Stock sold in a Bona
Fide Transaction will not be subject to this Agreement so long as
the sale is otherwise permitted under this Agreement.
(b) No party hereto may sell or otherwise transfer
Stock in a transaction that is not a Bona Fide Transaction unless
the transferee in such transaction agrees in writing to be bound
by the terms of this Agreement as if such transferee were the
transferor.
2.2 INVALID TRANSFERS. Any sale, assignment or other
transfer of Common Stock by Acacia, Browne or Schmidt contrary to
the provisions of this Section2 shall be null and void, and the
purchaser shall not be recognized by the Company as the holder or
owner of the shares of Common Stock sold, assigned or transferred
for any purposes (including, without limitation, voting or
dividend rights), unless and until the transferring party has
satisfied the requirements of this Section2 with respect to such
sale, assignment or other transfer. The transferring party shall
provide the Company with written evidence that the requirements
of this Section2 have been or will be met or waived by the
Company and the non-transferring party prior to consummating any
sale, assignment or other transfer of shares of Common Stock, and
no shares of Common Stock shall be transferred on the books of
the Company until such written evidence has been received by the
Company.
MISCELLANEOUS.
3.1 TERMINATION. This Agreement shall terminate on
the earlier of (i) the date immediately prior to the closing of a
"Qualified Public Offering" or (ii) the date on which this
Agreement is terminated in writing by the parties hereto. As
used in this Section 3.1, "Qualified Public Offering" means and
includes the closing of an underwritten public offering pursuant
to an effective registration statement under the Securities Act
of 1933, as amended.
3.2 LEGEND. Each certificate representing shares of
Common Stock owned by Acacia, Browne and Schmidt shall state
thereon:
"THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF
SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS
ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED
AND RESTATED STOCKHOLDERS' AGREEMENT DATED JULY 6,
1997, AMONG SOUNDVIEW TECHNOLOGIES INCORPORATED AND
CERTAIN STOCKHOLDERS THEREOF. COPIES OF SUCH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF SOUNDVIEW TECHNOLOGIES INCORPORATED."
3.3 NOTICES. All notices or other communications
required or permitted to be delivered hereunder shall be in
writing signed by the party giving the notice to the other
parties hereto at their respective addresses set forth on the
signature page to this Agreement. The Company, Acacia, Browne
and Schmidt may at any time change the address to which notice to
it shall be mailed by giving notice of such change to the other
parties, and such notice shall be deemed given when received by
the other parties hereto.
3.4 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties with respect to the matters
contemplated herein. This Agreement supersedes any and all prior
understandings between the parties as to the subject matter of
this Agreement.
3.5 AMENDMENTS, WAIVERS AND CONSENTS. Any provision
in this Agreement to the contrary notwithstanding, changes in or
additions to this Agreement may be made only by a writing signed
by each of the Company, Acacia and Browne and Schmidt, and
compliance with any covenant or provision herein set forth may be
omitted or waived only by a writing signed by the party waiving
party.
3.6 BINDING EFFECT; ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the personal
representatives and successors of the respective parties.
3.7 GENERAL. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement. In this
Agreement the singular includes the plural, the plural the
singular, the masculine gender includes the neuter, masculine and
feminine genders. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
3.8 SEVERABILITY. If any provision of this Agreement
shall be found by any court of competent jurisdiction to be
invalid or unenforceable, the parties hereby waive such provision
to the extent that it is found to be invalid or unenforceable.
Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as
modified, shall be enforced as any other provision hereof, all
the other provisions hereof continuing in full force and effect.
3.9 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute one and the
same instrument.
3.10 ATTORNEYS' FEES. In the event of any controversy,
claim or dispute among the parties hereto arising out of or
relating to this Agreement, or breach hereof, the prevailing
party shall be entitled to recover from the losing party
reasonable attorneys' fees, expenses and costs.
3.11 VOTING OF SHARES. Each of Acacia, Browne and
Schmidt shall vote or cause to be voted the respective shares of
Common Stock of the Company held of record or owned beneficially
by it in such manner as will carry out the intents and purposes
of, and cause the effectuation and implementation of all of the
covenants and agreements contained in, this Agreement.
3.12 THIRD PARTIES. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than
the parties hereto and their respective permitted transferees,
successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of
any third person to any party to this Agreement, nor shall any
provision hereof give any third person any right of subrogation
or action over or against any party to this Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY
BLANK.]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first above written.
SOUNDVIEW TECHNOLOGIES INCORPORATED
By: /s/ H. LEE BROWNE
Name: H. Lee Browne
Title: President
Address: Two Soundview Drive
Greenwich, Connecticut 06830
"BROWNE"
/s/ H. LEE BROWNE
H. Lee Browne
Address: Two Soundview Drive
Greenwich, Connecticut 06830
"SCHMIDT"
/s/ DAVID H. SCHMIDT
David H. Schmidt
Address: Two Soundview Drive
Greenwich, Connecticut 06830
ACACIA RESEARCH CORPORATION
By: /s/ KATHRYN KING-VAN WIE
Name: Kathryn King-Van Wie
Title: Chief Operating Officer
Address: 12 South Raymond Avenue,
Suite B
Pasadena, California 91105