SECOND AMENDED AND RESTATED CO-SALE AGREEMENT
SECOND AMENDED AND RESTATED CO-SALE AGREEMENT, dated as of July 26, 1995,
by and among C. Xxxxxx Xxxxx, residing at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000;
Xxxxxxx X. Xxxxxx, residing at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000; and
Xxxxx X. Xxxxxx, residing at 00000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000
(collectively, the "Founders"); 3DX TECHNOLOGIES INC., a Delaware corporation
(the "Company"); the parties listed as Prior Investors on Schedule 1 annexed
hereto (the "Prior Investors"); and the parties listed as Purchasers on Schedule
2 annexed hereto (the "Purchasers" and, together with the Prior Investors, the
"Investors").
WHEREAS, the Prior Investors acquired from the Company units consisting of
shares of its Redeemable Preferred Stock, Series B, par value $.01 per share
("Series B Preferred"), and Common Stock, par value $.01 per share ("Common
Stock"), pursuant to a Stock Purchase Agreement dated as of November 9, 1993
(the "Prior Purchase Agreement") among the Company, the Prior Investors and, as
to certain provisions thereof, the Founders; and
WHEREAS, in connection with the execution of the Prior Purchase Agreement
and the consummation of the transactions contemplated thereby, the Founders, the
Company and the Prior Investors entered into an Amended and Restated Co-Sale
Agreement dated as of November 9, 1993 (the "Original Co-Sale Agreement"); and
WHEREAS, concurrently herewith the Purchasers are acquiring from the
Company 3,000,000 shares of its Senior Redeemable Convertible Preferred Stock,
Series C, par value $.01 per share ("Series C Preferred"), pursuant to a Series
C Preferred Stock Purchase Agreement dated as of the date hereof (the "Series C
Agreement") among the Company, the Purchasers, the Prior Investors and, as to
certain provisions thereof, the Founders; and
WHEREAS, the Founders are presently the legal owners of an aggregate of
2,220,780 shares of the outstanding Common Stock of the Company, 233,780 of
which were purchased pursuant to the Prior Purchase Agreement; and
WHEREAS, the Purchasers would not enter into the Series C Agreement without
the delivery by the Founders, the Company and the Prior Investors of this
Agreement; and
WHEREAS, in order to induce the Purchasers to enter into and carry out the
transactions contemplated by the Series C Agreement, the Founders, the Company
and the
Prior Investors are willing to terminate the Original Co-Sale Agreement and
enter into this Agreement in lieu thereof;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties hereby agree as follows:
SALES BY FOUNDERS
1.01 None of the Founders shall sell, assign, transfer, pledge,
hypothecate, mortgage or dispose of, by gift or otherwise, or in any way
encumber all or any of the shares of Common Stock now owned or hereafter
acquired by him, other than shares of Common Stock acquired under the Prior
Purchase Agreement, as to which this Agreement shall not be applicable (such
shares, excluding those acquired under the Prior Purchase Agreement, are
hereinafter collectively referred to as the "Securities"), except as
specifically provided in Section 1.05 of this Agreement. Should any Founder
receive one or more bona fide offers (collectively, the "Purchase Offer"), from
any person or entity (the "Offeror") to purchase from a Founder any of the
Securities that would result in aggregate sales of Securities by such Founder in
excess of (i) five percent (5%) of the number of shares of the Securities held
by such Founder in any 12-month period, based on the number of shares of the
Securities held by such Stockholder at the beginning of such period, or (ii) ten
percent (10%) of the Securities held by such Founder as of the date hereof, then
such Founder shall promptly notify the Investors of the name and address of the
Offeror and the terms and conditions of such Purchase Offer (the "Section 1.01
Notice").
1.02 In the event of a contemplated sale by a Founder of Securities to an
Offeror, the selling Founder will provide to the Investors the right to sell
certain of their shares of Registrable Stock (as defined in the Series C
Agreement) to the third party on the same terms and conditions, so that up to
50% of the aggregate shares of the Company's capital stock sold to such Offeror
shall consist of Investors' Registrable Stock and the remainder shall consist of
the Founder or Founders' Securities proposed to be sold. Each of the Investors
shall have the right, exercisable upon written notice to such Founder within
fifteen (15) business days after receipt of the Section 1.01 Notice, to
participate in the Founder's sale of Securities pursuant to the specified terms
and conditions of such Purchase Offer. To the extent one or more of the
Investors exercise such right of participation in accordance with the terms and
conditions set forth below, the number of shares of Securities that the Founder
may sell pursuant to such Purchase Offer shall be correspondingly reduced. Each
Investor's pro rata share shall be the ratio of the number of shares of
Registrable Stock then held by such Investor as of the date of the Purchase
Offer to the sum of the total number of shares of (i) Registrable Stock held by
all Investors and (ii) Securities held by the selling Founder as of such date.
The right of participation of each of the Investors shall be subject to the
following terms and conditions:
(a) Each of the Investors may sell all or any part of that number of
shares of Registrable Stock as is equal to the product obtained by multiplying
the aggregate number of
2
shares of Securities covered by the Purchase Offer by such Investor's pro
rata share, subject in all events to the limitations in Section 1.02 hereof.
(b) If any Investor elects not to sell the full number of shares such
Investor is entitled to sell pursuant to subparagraph (a) above, the other
Investors shall have the right to sell the portion not sold by such Investor, on
a pro rata basis, by giving notice within three (3) business days after receipt
of notice from such Founder that an Investor has failed to exercise its right
hereunder to sell all of its pro rata share, but no later than twenty-five (25)
days from the date of mailing of the Section 1.01 Notice.
(c) Each Investor may effect his or its participation in the sale by
delivering to the Offeror or to such Founder for transfer to the Offeror, one or
more certificates, properly endorsed for transfer, which represent that number
of shares of (i) Common Stock and/or (ii) Series C Preferred that is at such
time convertible into the number of shares of Common Stock, in either such case,
that such Investor elects to sell pursuant to this Section 1.02; PROVIDED,
HOWEVER, that if the Offeror objects to the delivery of Series C Preferred in
lieu of Common Stock, the participating Investors may convert into Common Stock
the number of shares of Series C Preferred referred to in clause (ii) and
deliver such shares of Common Stock to the Offeror.
1.03 If an Investor elects to participate in the sale contemplated by the
Purchase Offer, its stock certificates representing the number of shares to be
sold by the Investor shall be transferred to the Offeror in consummation of the
sale of the Common Stock pursuant to the terms and conditions specified in the
Section 1.01 Notice. Upon its receipt of the stock certificates, the Offeror
shall promptly remit to each Investor in immediately available funds that
portion of the sale proceeds to which such Investor is entitled by reason of its
participation in such sale.
1.04 The exercise or non-exercise of the rights of the Investors hereunder
to participate in one or more sales of Securities made by a Founder shall not
adversely affect their rights to participate in subsequent Securities sales by
any Founder.
1.05 Notwithstanding the foregoing, the participation rights of the
Investors shall not pertain or apply to, and each Founder may effect without
incurring any liability under this Agreement, any (a) pledge of Common Stock
that creates a mere security interest made by such Founder in good faith to
secure bona fide full recourse debt of the Founder, which debt such Founder has,
at the time of such incurrence, a good faith and reasonable belief in his
ability to repay in accordance with its terms, and (b) sales or transfers of
securities to members of such Founder's immediate family (spouse, parents,
children or grandchildren) or to a trust or trusts of which such Founder or such
members of the immediate family are the sole beneficiaries, PROVIDED that such
transferee shall furnish the Investors with a written agreement to be bound by
and comply with all provisions of this Agreement applicable to such Founder.
All pledges of Common Stock made by a Founder in effect as of the date of this
3
Agreement in compliance with Section 1.05 herein are set forth on Schedule 1.05
attached hereto.
RIGHTS UPON PROHIBITED TRANSFERS
2.01 In the event any Founder should sell any Securities in contravention
of the participation rights of the Investors under this Agreement (a "Prohibited
Transfer"), the Investors may, upon the determination of holders of 66-2/3% in
interest of the shares of Registrable Stock held by such Investors, proceed to
protect and enforce their rights by suit in equity or by action at law, whether
for the specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in furtherance of the exercise
of any power granted in this Agreement, or to enforce any other legal or
equitable right of the Investor or to take one or more of such actions. In
addition to any other remedy at law or in equity available to the Investors, the
Investors shall have the option to sell to such Founder, on a pro rata basis, a
number of shares of Common Stock of the Company equal to the number of shares of
Securities sold by the Founder in contravention of such rights on the following
terms and conditions:
(a) The price per share at which the shares are to be sold to such Founder
shall be equal to the price per share paid to such Founder by the third party
purchaser or purchasers of such Founder's Securities.
(b) The Investors shall deliver to such Founder, within ninety (90) days
after they have received notice from such Founder or otherwise become aware of
the Prohibited Transfer, the certificate or certificates representing shares to
be sold, each certificate to be properly endorsed for transfer.
(c) Such Founder shall, upon receipt of the certificates for the
repurchased shares, pay the aggregate Section 2.01 purchase price therefor, by
certified check or bank draft made payable to the order of each Investor and
shall reimburse each Investor for any additional expenses, including legal fees
and expenses, incurred in effecting such purchase and resale.
LEGENDED CERTIFICATES
3.01 Each certificate representing Securities of each Founder shall be
endorsed with the following legend:
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN SECOND AMENDED AND
RESTATED CO-SALE AGREEMENT DATED JULY 26, 1995 BY AND AMONG THE HOLDER
HEREOF, 3DX TECHNOLOGIES INC.
4
(THE "COMPANY"), CERTAIN FOUNDERS OF THE COMPANY AND CERTAIN INVESTORS
IN THE CAPITAL STOCK OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
3.02 The Section 3.01 legend shall be removed upon termination of this
Agreement.
3.03 The Company shall make appropriate notation in its stock transfer
records of the restriction on transfer provided for in this Agreement.
MISCELLANEOUS PROVISIONS
4.01 The rights granted to the Investors under this Agreement may be
transferred but only
(a) to a transferee who shall acquire not less than twenty percent (20%)
of all of the shares of Series B Preferred, Series C Preferred, and Common Stock
owned by such Investor; or
(b) in connection with the distribution by Prior Investor of Series B
Preferred or of Common Stock to the beneficial owners (including without
limitation to partners of a limited or general partnership, stockholders of a
corporation and beneficiaries of a trust) of securities of the Investor.
4.02 All notices, requests, consents and other communications herein shall
be in writing and shall be deemed to be delivered (i) on the date delivered, if
personally delivered or transmitted via facsimile with return confirmation of
such transmission; (ii) on the business day after the date sent, if sent by
recognized overnight courier service and (iii) on the fifth day after the date
sent, if mailed by first-class certified mail, postage prepaid and return
receipt requested, as follows:
5
(a) If to the Founders, at their respective addresses
set forth in the preamble hereto;
(b) If to the Company:
3DX Technologies Inc.
00000 Xxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: C. Xxxxxx Xxxxx, President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxx Xxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Facsimile: (000) 000-0000
(c) If to the Investors, at their respective addresses set forth in
Schedule 1 and Schedule 2 hereto;
with copies to:
Xxxx X. Xxxxxxxxxx, Esq.
Jenkens & Xxxxxxxxx, a Professional Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
and
Xxxxxx X. Xxxxxxxx, Xx., Esq.
Xxxxxxxx Xxxxxxxx & Xxxxxx
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
or such other addresses as each of the parties hereto may provide from time to
time in writing to the other parties in accordance with this Section 4.02.
6
4.03 This Agreement and the rights and obligations of the parties hereunder
shall inure to the benefit of, and be binding upon, their respective successors,
assigns and legal representatives.
4.04 This Agreement contains the entire agreement among the parties with
respect to the transactions contemplated hereby, and supersedes all
negotiations, agreements, representations, warranties, commitments, whether in
writing or oral, prior to the date hereof, including without limitation the
Original Co-Sale Agreement, which is hereby terminated and of no further force
or effect. Any amendment or modification of this Agreement shall be effective
only if evidenced by a written instrument executed by duly authorized
representatives of the parties hereto. Any waiver by a party of its rights
hereunder shall be effective only if evidenced by a written instrument executed
by a duly authorized representative of such party.
4.05 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas, without regard to principles of
conflicts of law, and will, to the maximum extent practicable, be deemed to call
for performance in Xxxxxx County, Texas.
4.06 This Agreement may be executed one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
document.
7
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year indicated above.
THE COMPANY:
3DX TECHNOLOGIES INC.
By:
-------------------------------------
Name:
Title:
PURCHASER:
- - - - - - - - - - - - - - - - - - - - - - - - -
By:
-------------------------------------
Name:
Title:
PRIOR INVESTOR:
- - - - - - - - - - - - - - - - - - - - - - - - -
By:
-------------------------------------
Name:
Title:
FOUNDERS:
-------------------------------------
C. Xxxxxx Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
