REGISTRATION RIGHTS AGREEMENT
This Agreement is made and entered into as of this 8th day of July,
1994, among Pixsys, Inc., a Colorado corporation (the "Company"), and the
undersigned holders of the Company's Series A Preferred Stock (the "Series A
Holders").
In consideration of the mutual promises contained herein, the parties
hereto do hereby agree as follows:
1. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(a) CERTAIN DEFINITIONS. As used in this Section 1, the
following terms shall have the following respective meanings:
"BLUE SKY LAWS" shall mean the securities regulation laws of
any political subdivision of the United States.
"COMMISSION" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"HOLDER" shall mean any holder of Registrable Securities.
For purposes of Section 1(g) entitled indemnification," "Holder" includes each
of the Holder's officers, directors, partners, and each person controlling the
Holder.
"INITIATING HOLDERS" shall mean, unless otherwise provided,
the holders of at least a majority of the aggregate of all the outstanding
Registrable Securities requesting a registration under Section 1(d) below.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means (i) any shares of the
Company's Common Stock, no par value (the "Common Stock"), issued or issuable
upon conversion of the Series A Preferred Stock purchased by the Series A
Holders, and (ii) any other securities issued with respect to any of the above
securities by way of dividends, stock-splits, recapitalization, merger,
consolidation or other reorganization. Registrable Securities do not include
any of the above securities (i) which have been registered pursuant to a
registration statement under the Act and
sold pursuant thereto or (ii) where the Holder owns less than three percent (3%)
of the Company's outstanding Common Stock (including any Registrable Securities
convertible into Common Stock) and such Registrable Securities may be sold
pursuant to Rule 144(k).
"REGISTRATION EXPENSES" shall mean all expenses incurred by
the Company in complying with this Agreement, including, by way of illustration
only and without limitation, all registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company,
underwriting expenses not included in Selling Expenses, the expense of any
audits or financial statement reviews incident to or required by any such
registration (including the expense of any cold comfort letters), and Blue Sky
fees and expenses (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean the underwriting discounts and
selling commission applicable to the sale of Registrable Securities.
(b) LIMITATIONS ON DISPOSITION. The Holder of each certificate
representing Registrable Securities, by accepting those securities, agrees to
comply in all respects with the following provisions:
(1) Prior to any proposed disposition of any Registrable
Securities (other than under circumstances described in Sections 1(c) and 1(d)
below), the Holder of those Registrable Securities shall give written notice to
the Company of the proposed disposition and shall have furnished the Company
with a detailed statement of the circumstances surrounding the proposed
disposition; provided, however, that the Holder need not provide such notice
with respect to Registrable Securities for which the Company has previously
issued unlegended certificates.
(2) Except with respect to transactions not involving a
change in beneficial ownership or transactions involving the distribution
without consideration of Registrable Securities by any of the Holders to any of
its partners, retired partners, or any estate of its partners or retired
partners, or transfer by gift, will or intestate succession by any partner to
his spouse or lineal descendants or ancestors, or to any stockholder, affiliate
or affiliated venture capital partnership, such notice shall, if reasonably
requested by the Company, also be accompanied by a written opinion of legal
counsel (who shall be reasonably satisfactory to the Company and its counsel)
stating that the proposed disposition of the Registrable Securities may be
effected without registration under the Securities Act and without Blue Sky
qualification. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
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(3) Having satisfied Subsection 1(b)(2) above, the Holder
of such Registrable Securities shall be entitled to transfer the Registrable
Securities in accordance with the terms of the notice delivered by the Holder to
the Company; provided, however, that such transferee shall agree to be bound by
the terms of this Agreement.
(4) Each certificate evidencing the Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially in the following form
in addition to any legend required under applicable state securities laws:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Company shall remove such restrictive legend upon the request of any Holder
if (i) the Company has received an opinion of counsel who is reasonably
acceptable to it and its counsel to the effect that registration of any and all
future transfers is not required, (ii) an appropriate registration statement
with respect to such Registrable Securities has been filed by the Company with
the Commission and been declared effective by the Commission, or (iii) such
transfer may be made in compliance with the requirements of Rule 144 or its
successor. In these events, the Company shall cause new certificates without
the above legend to be issued promptly to the Holder in exchange for outstanding
legended certificates.
(c) COMPANY REGISTRATION.
(1) NOTICE AND PIGGYBACK RIGHTS. If at any time after
twelve (12) months after the effective date of the Company's initial public
offering the Company shall decide to register any of its securities, the Company
shall:
(A) promptly give to each Holder written notice of the
registration (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable Blue
Sky laws); and
(B) include in such registration (and any related Blue
Sky qualification or other compliance reasonably requested by Holders in order
to sell such securities), and in any underwriting involved, all the Registrable
Securities specified in a written request, made within 30 days after receipt of
such written notice from the Company, by any Holder or Holders, except as set
forth in Subsection 1(c)(2) below.
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The provisions of this subsection do not apply to any of the
following: (i) a registration on any registration form which would not permit
secondary sales by a Holder, (ii) a registration which relates solely to
employee benefit plans, or (iii) a registration which relates solely to a
Commission Rule 145 transaction.
(2) UNDERWRITING; LIMITS. 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 Subsection 1(c)(l). All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriters selected
by the Company. Notwithstanding any other provision of this Section (c), if the
underwriter determines that marketing factors require a limitation of the amount
of securities to be registered, the Company shall include in such registration,
prior to the inclusion of any other securities which are not Registrable
Securities (except those held by the Company), the number of Registrable
Securities requested to be included which in the opinion of such underwriters
can be sold, pro rata among the respective Holders on the basis of the amount of
Registrable Securities requested to be registered by each Holder. In any event,
all limitations on the number of Registrable Securities to be included in the
applicable underwriting shall be pro rata with respect to the number of
Registrable Securities requested to be registered as between Holders as of the
date of the notice provided pursuant to Subsection 1(c)(1)(A). If any Holder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter within five (5)
days after receipt of such notice, and any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from registration.
(d) REGISTRATION AT THE REQUEST OF THE HOLDERS.
(1) ONE REQUEST; MECHANICS. At any time after twelve (12)
months after the effective date of the Company's initial public offering,
Initiating Holders may, upon delivery of written notice to the Company
specifying this Section 1(d), require the Company to use its best efforts to
prepare and file a registration statement and other qualifications or
compliances with respect to all or part of the Registrable Securities.
In the event of such a request, the Company shall:
(A) Promptly give written notice of the proposed
registration, qualification, or compliance to all other Holders.
(B) Use its diligent best efforts to file as soon as
practicable, but in any event within ninety (90) days after receipt of the
request or requests of the Initiating Holders, all such registrations,
qualifications, and compliances as may be so requested and as would facilitate
the sale and distribution of all or such portion of the Holders' Registrable
Securities as are specified in their request.
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(C) Include in such registrations, qualifications, and
compliances the Registrable Securities of any Holders who ask in writing, within
thirty (30) days after receipt of notice under Subsection 1(d)(1)(A), to join in
such request.
(D) The Company may be required to prepare, file, and
keep effective a registration statement under this Section 1(d) on no more than
one (1) occasion.
(2) EXCEPTIONS. The Company shall not be obligated to
effect any registration, qualification, or compliance requested by a Holder with
respect to a proposed distribution of Registrable Securities by a Holder under
this Section 1(d):
(A) if the Company has not previously effected an
initial public offering; or
(B) 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; or
(C) within six (6) months following the effective
date of any public offering to the general public of the Company's securities
for its own account; or
(D) the Company has effected one (1) such registration
pursuant to this Section 1(d) and such registration has been declared and
ordered effective.
If the Company shall furnish to such Holders a certificate signed
by the President of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company and its
shareholders for a registration statement to be filed in the near future, then
the Company's obligation to use its best efforts to file a registration
statement under this Section 1(d) shall be deferred for a period during which
such filing of a registration statement would be seriously detrimental, provided
that this period will not exceed sixty (60) days.
(3) 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(d).
(A) The Company shall include such information in the
written notice referred to in Subsection 1(d)(1)(A).
(B) The Initiating Holders shall negotiate with an
underwriter selected by the Initiating Holders and reasonably approved by the
Company, with regard to the underwriting of the requested registration. But if
a majority in interest of the initiating Holders have not agreed with the
underwriter as to the terms and conditions of the underwriting within
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ten (10) days following commencement of such negotiations, a majority in
interest of the Initiating Holders may select another underwriter of their
choice.
(C) The right of any Holder to include his Registrable
Securities in a registration pursuant to Section 1(d) shall be conditioned upon
the Holder's participation in such underwriting, on the terms and conditions of
such underwriting and upon the inclusion of the Holder's Registrable Securities
in the underwriting (unless otherwise mutually agreed by a majority in interest
of the Initiating Holders and such Holder).
(D) The Company shall (together with all Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by a majority in interest of the Initiating
Holders.
(E) Notwithstanding any other provision of this
Section 1(d), if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, the Initiating Holders shall so advise all holders of Registrable
Securities. The Company shall then include in such registration, prior to the
inclusion of any other securities which are not Registrable Securities, the
number of shares of Registrable Securities that the underwriter believes may be
included in the registration in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held at that time by such Holders.
(F) If any Holder of Registrable Securities
disapproves of the terms of the underwriting, he may elect to withdraw from the
underwriting by written notice to the Company, the underwriter and the
Initiating Holders within five (5) days of notice to such Holder of the terms of
the underwriting. Any Registrable Securities which are excluded from the
underwriting by reason of the underwriter's marketing limitation or withdrawn
from the underwriting shall be withdrawn from the registration.
(e) EXPENSES OF REGISTRATION.
(1) REGISTRATION EXPENSES. All Registration Expenses
incurred in connection with registration, filing, qualification, and compliance
under Section 1(c) and the registration under Section 1(d)(1) shall be borne by
the Company provided that Holders of securities being registered pursuant to
Section 1(c) agree that they will pay (on a pro rata basis among those Holders
selling Registrable Securities in a particular state) all Blue Sky fees
associated with the registration of Registrable Securities in those states in
which the Company is not otherwise registering or qualifying shares of its stock
for sale in such registration.
(2) SELLING EXPENSES. All Selling Expenses incurred in
connection with these transactions shall be borne by the Holders of the
securities so registered pro rata on the basis of the amount of Common Stock so
registered.
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(3) LEGAL EXPENSES. Each Holder shall bear its own
expenses, if any, for the fees and disbursements of counsel to such Holder
incurred in connection with these transactions.
(4) INEFFECTIVE REQUESTED REGISTRATION. The Company shall
not be required to pay any Registration Expenses if the registration statement
does not become effective as a result of the withdrawal of a request for
registration by the Initiating Holders pursuant to Subsection 1(d)(1), which
withdrawal was not caused by the Company's failure to comply with applicable
registration requirements and regulations. In such case, the Initiating Holders
shall bear such Registration Expenses pro rata on the basis of the number of
shares of each Initiating Holder included in the registration request, and such
registration shall not be counted as a registration pursuant to Subsection
1(d)(1), or the Initiating Holders will not bear such expenses and such
registration shall be counted as a registration pursuant to Subsection 1(d)(1).
(f) REGISTRATION PROCEDURES. In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Agreement,
the Company shall keep each Holder advised in writing as to the initiating of
each registration, qualification, and compliance and as to the completion
thereof. At its expense the Company shall:
(1) Keep such registration statement effective until the
Holders have completed the distribution described in the registration statement
but for not more than one hundred twenty (120) days (or, if the registration is
underwritten, ninety (90) days).
(2) Furnish such number of prospectuses (including
preliminary prospectuses) and other documents incident to the registration as a
Holder from time to time may reasonably request.
(3) At the time when any registration statement becomes
effective, and at the time when any post-effective amendment becomes effective,
furnish to the Holders registering securities, an opinion of counsel
satisfactory to the Holders relating to those matter as to which opinions of
counsel are customarily provided at the time of such registration.
(4) Notify each Holder of Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and at the request of any such Holder, the Company will prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading.
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(5) Cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the NASD automated quotation
system.
(6) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement.
(7) Obtain a cold comfort letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by cold comfort letters as the Holders may
reasonably request (provided that such Registrable Securities constitute at
least 10% of the securities covered by such registration statement).
(g) INDEMNIFICATION.
(1) COMPANY'S OBLIGATION TO INDEMNIFY.
(A) GENERALLY. With respect to any registration,
qualification, or compliance which has been effected pursuant to this
Agreement, the Company shall indemnify each Holder, its officers, directors, and
partners and each person controlling such Holder, each legal counsel, and each
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue or alleged untrue
statement of, or omission or alleged omission of a material fact contained in,
or required to be stated in, any registration statement, including any
preliminary or final prospectus, offering circular or other document incident to
any such registration, qualification, or compliance. The Company shall further
indemnify them against any violation or alleged violation by the Company of any
rule or regulation promulgated under the Securities Act or any applicable state
securities law in connection with any such registration, qualification, or
compliance.
(B) REIMBURSEMENT. The Company shall promptly
reimburse each such Holder, and each of its officers, directors, partners, and
controlling persons, each legal counsel and each such underwriter, for any legal
and any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such claim, loss, damage,
liability, or action.
(C) LIMITS OF OBLIGATION. The Company shall not be
liable in any such case to the extent that any claim, loss, damage, liability,
or expense arises out of any untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in such registration statement, including
any preliminary or final prospectus, offering circular or other document, is
based upon written information furnished to the Company by an instrument duly
executed by such Holder or underwriter, and which is stated to be specifically
for use therein.
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(D) SURVIVAL OF OBLIGATION. The obligations of the
Company under this Section 1(g) shall survive the completions of the offerings
of Registrable Securities under the registration statements and otherwise.
(2) HOLDER'S OBLIGATION TO INDEMNIFY.
(A) GENERALLY. If Registrable Securities held by any
Holder are included in the securities as to which the registration,
qualification, or compliance is being effected, each such Holder shall indemnify
the Company, each of its officers and directors, each legal counsel and
independent accountant of the Company, each underwriter of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Act and each other such Holder, each of
its officers, directors and partners, each person controlling such Holder, and
each legal counsel against all claims, losses, damages, and liabilities (or
actions in respect thereof) arising out of or based on any untrue or alleged
untrue statement of, or omission or alleged omission of a material fact
contained in, or required to be stated in, any registration statement, including
any preliminary or final prospectus, offering circular, or other document.
(B) REIMBURSEMENT. Furthermore, each such Holder
shall promptly reimburse the Company, such Holders, underwriters, legal counsel
and independent accountants and all of their respective officers, directors,
partners, and controlling persons for any legal or any other expenses reasonably
incurred, as such expenses are incurred, in connection with investigating or
defending any such claim, loss, damage, liability, or action.
(C) LIMITS OF OBLIGATION. In any case, (i) any
Holder's obligation under this Subsection 1(g)(2) shall extend only so far as
the untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, including any preliminary or
final prospectus, offering circular, or other document in reliance upon written
information furnished to the Company by an instrument duly executed by such
Holder and which is stated to be specifically for use therein; and (ii) any
Holder's liability under this Section 1(g)(2) shall not exceed the amount of
proceeds to the Holder from the sale of its Registrable Securities in that
offering.
(D) SURVIVAL OF OBLIGATION. The obligations of the
Holders under this Section 1(g) shall survive the completions of the offerings
of Registrable Securities under the registration statements and otherwise.
(3) INDEMNIFYING PARTY MAY ASSUME DEFENSE.
(A) GENERALLY. Each party entitled to indemnification
under this Section 1(g) (the "Indemnified Party") shall give written 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. Unless in such Indemnified
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Party's reasonable judgment a conflict of interest between such Indemnified and
Indemnifying Parties may exist with respect to such claim, the Indemnified Party
shall permit the Indemnifying Party to assume the defense of any such claim or
any resulting litigation; provided, however, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at its own
expense. Failure by the Indemnified Party to provide such written notice shall
not relieve the Indemnifying Party from its obligation under this Section 1(g).
(B) SETTLEMENT APPROVAL, RELEASE REQUIRED. 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 which does not include as an unconditional
term the giving by the claimant or plaintiff to the Indemnified Party of a
release from all liability in respect to such claim or litigation. Furthermore,
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement.
(4) CONTRIBUTION.
(A) If recovery is not available under the foregoing
indemnification provisions of this section for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution for liabilities and expenses, except to the
extent that contribution is not permitted under the Securities Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the securities (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the party who supplied or failed to supply the information as to which
the claim is asserted, the opportunity to correct and prevent any statement or
omission, and any other equivalent considerations appropriate under the
circumstances; provided that in no event will any Holder be required to
contribute an amount in excess of the proceeds to the Holder from the sale of
its Registrable Securities included in that offering. The Company and the
Holders agree that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocations.
(h) INFORMATION BY HOLDER. The Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding the Holders and the distribution proposed by the Holders,
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.
(i) RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of the Registrable
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Securities to the public without registration, the Company agrees that at all
times after ninety (90) days after the effective date of the first registration
statement filed by the Company for a public offering of its securities the
Company shall:
(1) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act.
(2) Use its 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 Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(3) So long as a Holder owns any Registrable Securities,
furnish to such Holder upon request: (i) a written statement by the Company as
to its compliance with the reporting requirements of Rule 144, the Securities
Act and the Exchange Act; (ii) a copy of the most recent annual or quarterly
report of the Company; and (iii) such other reports and documents so filed by
the Company as such person may reasonably request in availing itself of any rule
or regulation of the Commission allowing that person to sell any such securities
without registration.
(j) TRANSFER OF REGISTRATION RIGHTS. The right to cause the
Company to register Registrable Securities pursuant to this Section may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities who (1) is a partner, shareholder, affiliate, equity
holder or officer of the transferor Holder; or (2) after such assignment or
transfer, holds at least 300,000 shares of Registrable Securities (subject to
appropriate adjustment for stock splits, stock dividends, combinations and
other recapitalizations), provided the Company is, within ten (10) business days
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
(k) TERMINATION OF REGISTRATION RIGHTS. The registration rights
granted pursuant to this Section 1 shall terminate with respect to any
particular Registrable Securities upon the earlier to occur of: (i) July 7,
1999; or (ii) the date on which such Registrable Securities are eligible for
resale pursuant to the provisions of Rule 144(k) of the Commission (so long as
the Holder of such Registrable Securities owns less than 3% of the Company's
outstanding Common Stock, including any Registrable Securities convertible into
Common Stock).
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2. MISCELLANEOUS
(a) SURVIVAL OF COVENANTS; SUCCESSORS AND ASSIGNS. All
covenants, agreements, representations and warranties made by the parties in
this Agreement shall survive the closing of the transactions contemplated by
this Agreement. All such covenants, agreements, representations and warranties
will inure to the benefit of, and be binding upon, any successors, assigns,
heirs, transferees, executors, and administrators of the parties hereto.
(b) ASSIGNABILITY OF RIGHTS. The Company may not assign any of
its rights or delegate any of its duties under this Agreement without the
written consent of Holders of greater than 50% of the voting power of the then
outstanding Registrable Securities.
(c) COMMUNICATIONS AND NOTICES. Except as otherwise provided
for in this Agreement, all communications and notices provided for in this
Agreement shall be in writing and will be given by telegram, facsimile (with
delivery confirmed by the party giving notice), express courier holding itself
out as able to make delivery within one business day of receipt, hand delivery
receipted by the addressee, or by mail (postage-paid, certified mail, return
receipt requested) to such address and for such attention, as any party may from
time to time designate by notice in writing to the Company or to the Holders, as
the case may be. Notice will be effective one business day after delivery to a
telegraph company or express courier, three business days after deposit in the
U.S. Mail as provided above, or upon receipt if hand-delivered or facsimile-
delivered, as the case may be.
(d) LAW GOVERNING. This Agreement shall be governed by the Laws
of the State of Colorado in all respects, as such laws are applied to agreements
among Colorado residents entered into and to be performed entirely within
Colorado.
(e) SUBSEQUENT INSTRUMENTS AND ACTS. The parties agree that
they will execute any further instruments and perform any acts that may become
necessary to carry out this Agreement.
(f) SEVERABILITY. If any term, provision, covenant, or
condition of this Agreement, or its application to any person or circumstance,
shall be held by a court of competent jurisdiction to be invalid, unenforceable,
or void, the remainder of this Agreement and such term, provision, covenant, or
condition as applied to other persons or circumstances shall remain in full
force and effect.
(g) ENTIRE AGREEMENT; AMENDMENTS.
(1) This Agreement and the other documents and agreements
delivered pursuant hereto constitute the full and entire agreement and
understanding among the parties with regard to the subjects hereof and thereof.
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(2) This Agreement may not be amended orally. Amendment to
this Agreement, or of any supplement, and of the rights and obligations of the
Company and of the Holders, may be made with the consent of the Company and the
affirmative vote or written consent of the holders of greater than 50% of the
voting power of the Registrable Securities then outstanding. But no such
amendment shall alter the provisions of this Agreement so as to reduce the
percentage of Registrable Securities which is required to consent to any such
amendment, without the vote or consent of the Holders of all of the then
outstanding Registrable Securities.
(h) DELAYS, OMISSIONS, AND WAIVERS. No delay or omission to
exercise any right, power or remedy (with the exception of a delay by an
Indemnified Party in providing notice to the Indemnifying Party pursuant to
Section 1(g)(3) hereof) accruing to the Company or any Holder, upon any breach
or default of any party hereto under this Agreement, will impair any such right,
power or remedy of the Company or such Holder nor will it be construed to be a
waiver of any such breach or default, or an acquiescence therein, nor will any
similar breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring; nor will any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Company or any Holder of any breach or default
under this Agreement or any waiver on the part of the Company or any Holder of
any provisions or conditions of this Agreement, must be in writing and will be
effective only to the extent specifically set forth in such writing. No waiver
by the Holders of any provision of this Agreement will be effective without a
written consent signed by Holders of greater than 50% of the voting power of the
then outstanding Registrable Securities.
(i) AUTHORIZATION. Each of the undersigned representatives of
the parties warrants and represents that he is duly authorized to execute this
Agreement on behalf of the respective party for which he signs, that the
organization on whose behalf he signs is currently in good standing in the
jurisdiction where organized.
(j) GENDER, NUMBER, AND TENSE. Throughout this Agreement, as
the context may require:
(1) The masculine gender includes the feminine and neuter;
and the neuter gender includes the masculine and feminine;
(2) The singular number includes the plural, and the plural
number includes the singular; and
(3) The past tense includes the present, and the present
tense includes the past.
(k) HEADINGS. The headings of the Sections and Subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
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(l) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(m) REMEDIES. No remedy herein conferred upon the parties
hereto is intended to be exclusive of any other remedy herein or provided by
law, but each shall be cumulative and shall be in addition to every other remedy
set forth in this Agreement or existing at law, in equity, or by statute. The
parties specifically acknowledge that under certain circumstances the parties
may be entitled to specific performance and/or injunctive relief where without
such remedies the damage to the injured parties may be irreparable and money
damages inadequate. Moreover, in any suit between or among the parties hereto
for such breach of the provisions hereof, the prevailing party in such suit
shall be entitled to receive from the breaching party, reasonable attorneys'
fees and disbursements incurred in the prosecution of such suit.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above.
THE COMPANY: PIXSYS, INC.
By:/S/ PAUL L. RAY
--------------------------------
Paul L. Ray, President
THE HOLDERS: /S/ DERACE SCHAFFER
-----------------------------------
Derace Schaffer
Paradigm Capital Network, Ltd.
By:/S/ CHESTER M. WINTER
--------------------------------
Chester M. Winter
Edgewater Private Equity Fund, L.P.
By:/S/ JAMES A. GORDAN
--------------------------------
James A. Gordon, President
Gordon Management, Inc.
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/S/ FRITZ KEEFNER
-----------------------------------
Fritz Keefner
FBL Ventures of South Dakota
By:/S/ JEFF TOLLEFSON
---------------------------------
Jeff Tollefson
Investment VP - Alternative
Investments
/S/ JOHN PAPPAJOHN
-----------------------------------
John Pappajohn
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