SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. 2)*
ACCOM, INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
00434 10 8
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(CUSIP Number)
Katharine A. Martin, Esq.
Pillsbury Madison & Sutro LLP
2550 Hanover Street
Palo Alto, CA 94304
(650) 233-4500
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 10, 1998
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box |_|.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the Schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 00434-10-8 Amendment No. 2 to Schedule 13D Page 2 of 5 Pages
1. NAME OF REPORTING PERSON Michael Luckwell
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom
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NUMBER OF 7. SOLE VOTING POWER 3,418,750
SHARES
BENEFICIALLY -------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER -0-
EACH
REPORTING -------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER 3,418,750
WITH
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10. SHARED DISPOSITIVE POWER -0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 3,418,750
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES / /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 33.8%
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14. TYPE OF REPORTING PERSON IN
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CUSIP No. 00434-10-8 Amendment No. 2 to Schedule 13D Page 3 of 5 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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Michael Luckwell used personal funds to purchase the securities
reported on this Amendment No. 2 to Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
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Mr. Luckwell purchased 2,500,000 shares of Accom Common Stock from the
Issuer for an aggregate purchase price of $1,500,000. The purchase was completed
pursuant to a Stock Purchase Agreement, a copy of which is attached hereto as
Exhibit 1. The purpose of Mr. Luckwell's acquisition of additional shares was to
provide the Issuer with additional capital in connection with the purchase by
the Issuer of substantially all of the assets of Scitex Digital Video, Inc. The
Issuer purchased the assets of Scitex concurrently with the purchase of shares
by Mr. Luckwell.
In connection with the purchase of Accom Common Stock, Mr. Luckwell
received the right, but not the obligation, to designate himself to be nominated
as a director of the Issuer. Mr. Luckwell will retain this right so long as he
owns at least 15% of the outstanding shares of Common Stock of the Issuer.
Furthermore, in connection with the purchase of Accom Common Stock reported on
this Amendment No. 2 to Schedule 13D, Mr. Luckwell received certain demand and
piggyback registration rights. These registration rights are set forth in the
Investor's Rights Agreement attached hereto as Exhibit 2.
Mr. Luckwell has been advised by the Issuer that it has taken actions
to amend the Issuer's Preferred Shares Rights Agreement, dated as of September
13, 1996, to permit Mr. Luckwell to acquire up to 3,425,000 shares of Common
Stock (as adjusted for any stock splits, stock dividends, recapitalizations or
the like). Mr. Luckwell has also been advised by the Issuer that his purchase of
Accom Common Stock was approved by the Board of Directors for purposes of
Section 203 of the Delaware General Corporation Law.
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CUSIP No. 00434-10-8 Amendment No. 2 to Schedule 13D Page 4 of 5 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
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According to the most recently available information furnished by
Accom, Inc. to Michael Luckwell, there are approximately 10,125,164 shares of
Common Stock issued and outstanding as of the date hereof.
(a) Amount beneficially owned: 3,418,750
Percent of class: 33.8%
(b) The number of shares as to which Michael Luckwell has: (i)
Sole power to vote or direct the vote: 3,418,750 shares; (ii)
Shared power to vote or direct the vote: none; (iii) Sole
power to dispose or direct the disposition of: 3,418,750
shares; (iv) Shared power to dispose or direct the disposition
of: none.
(c) Michael Luckwell purchased 2,500,000 shares of Accom Common Stock
at a price per share of $0.60 from the Issuer in a private transaction on
December 10, 1998. The purchase was completed pursuant to a Stock Purchase
Agreement, a copy of which is attached hereto as Exhibit 1.
(d) Not applicable.
(e) Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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Exhibit 1. Stock Purchase Agreement, by and among Accom, Inc. and
Michael Luckwell, dated December 10, 1998.
Exhibit 2. Investor's Rights Agreement, by and among Accom, Inc. and
Michael Luckwell, dated December 10, 1998.
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CUSIP No. 00434-10-8 Amendment No. 2 to Schedule 13D Page 5 of 5 Pages
SIGNATURE
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of January 3, 1999.
/s/ Michael Luckwell
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Michael Luckwell
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ACCOM, INC.
Stock Purchase Agreement
December 10, 1998
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TABLE OF CONTENTS
PAGE
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1. Purchase and Sale of Stock...........................................1
1.1 Sale and Issuance of Common Stock...........................1
1.2 Closing.....................................................1
2. Representations and Warranties of the Company........................1
2.1 Organization; Good Standing; Qualification..................2
2.2 Due Authorization...........................................2
2.3 Valid Issuance of Common Stock..............................2
2.4 Governmental Consents.......................................2
2.5 Capitalization and Voting Rights............................3
2.6 Registration Rights.........................................3
2.7 Compliance With Other Instruments...........................3
2.8 Disclosure..................................................4
2.9 SEC Documents; Company Financial Statements.................4
3. Representations and Warranties of the Investors......................5
3.1 Purchase Entirely for Own Account...........................5
3.2 Reliance Upon Investors'Representations.....................5
3.3 Receipt of Information......................................5
3.4 Investment Experience.......................................5
3.5 Accredited Investor.........................................5
3.6 Restricted Securities.......................................5
3.7 Legends.....................................................6
4. Conditions of the Investor's Obligations at Closing..................6
4.1 Representations and Warranties..............................6
4.2 Performance.................................................6
4.3 Compliance Certificate......................................7
4.4 Qualifications..............................................7
4.5 Proceedings and Documents...................................7
4.6 Opinion of Company Counsel..................................7
4.7 Investor's Rights Agreement.................................7
5. Conditions of the Company's Obligations at Closing...................7
5.1 Representations and Warranties..............................7
5.2 Qualifications..............................................7
6. Covenants of the Company.............................................7
6.1 Grant of Stock Options......................................7
6.2 Right to Nominate Director..................................8
6.3 Consulting Services.........................................8
7. Miscellaneous........................................................8
7.1 Entire Agreement............................................8
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7.2 Survival of Representations, Warranties and Covenants.......8
7.3 Successors and Assigns......................................8
7.4 Governing Law...............................................8
7.5 Counterparts................................................8
7.6 Titles and Subtitles........................................8
7.7 Attorneys'Fees..............................................9
7.8 Amendments and Waivers......................................9
7.9 Severability................................................9
7.10 California Corporate Securities Law.........................9
Exhibit A - Asset Purchase Agreement
Exhibit B - Investor's Rights Agreement
Exhibit C - Schedule of Exceptions
Exhibit D - Opinion of Gibson Dunn & Crutcher LLP
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ACCOM, INC.
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 10th day
of December, 1998, by and between ACCOM, INC., a Delaware corporation (the
"Company"), and MICHAEL LUCKWELL (the "Investor").
WITNESSETH
WHEREAS, the Company intends to enter into that certain Asset Purchase
Agreement, the form of which is attached hereto as Exhibit A (the "Asset
Purchase Agreement") of even date herewith by and among the Company, Scitex
Digital Video, Inc., a Massachusetts corporation ("SDV"), Scitex Digital Video
(Europe) Limited, a private limited company incorporated in England and Wales,
Scitex Digital Video (Asia Pacific), Inc., a California corporation, Scitex
Development Corp., a Massachusetts corporation, and Scitex Corporation Ltd., an
Israel corporation (collectively, the "Sellers"); and
WHEREAS, the Company intends to finance a portion of its obligations under
the Asset Purchase Agreement with pursuant to this Agreement and $3,500,000 (the
"Borrowed Funds"), from LaSalle Business Credit, Inc. (the "Lender") pursuant to
a revolving credit line; and
WHEREAS, the execution of this Agreement and delivery of the Purchase Price
hereunder by the Investor is contingent upon the contemporaneous delivery of the
Borrowed Funds by the Lender;
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and conditions
of this Agreement, the Investor agrees to purchase at the Closing (as such term
is defined below) and the Company agrees to sell and issue to the Investor at
the Closing 2,500,000 shares of the Company's Common Stock at a price of $0.60
per share, for an aggregate of $1,500,000 (the "Purchase Price").
1.2 CLOSING. The purchase and sale of the Common Stock shall take place at
the offices of Gibson, Dunn & Crutcher LLP, 1530 Page Mill Road, Palo Alto,
California, at 10:00 a.m. on December 10, 1998, or at such other time and place
as the Company and the Investor shall mutually agree, either orally or in
writing (which time and place are designated as the "Closing"). At the Closing,
the Company shall deliver to the Investor a certificate representing the
2,500,000 shares of Common Stock that the Investor is purchasing against payment
of the Purchase Price by check, wire transfer or such other form of payment as
shall be mutually agreed upon by the Investor and the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby repre-
sents and warrants to the Investor that, except as set forth on a Schedule of
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Exceptions furnished to the Investor and counsel for the Investor and
attached hereto as EXHIBIT C (the "Schedule of Exceptions"), specifically
identifying the relevant subparagraph(s) hereof, which exceptions shall be
deemed to be representations and warranties as if made hereunder:
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted, to execute and deliver this
Agreement, the Investor's Rights Agreement, and any other agreement to which the
Company is a party, the execution and delivery of which is contemplated hereby
(the "Ancillary Agreements"), to issue and sell the Common Stock, and to carry
out the provisions of this Agreement, the Investor's Rights Agreement, and any
Ancillary Agreement. The Company is duly qualified and is authorized to transact
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure so to qualify would have a material adverse effect on its
business, properties or financial condition.
2.2 DUE AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the Investor's Rights Agreement and any
Ancillary Agreement, the performance of all obligations of the Company hereunder
and thereunder at the Closing and the authorization, issuance, sale and delivery
of the Common Stock being sold hereunder has been taken or will be taken prior
to the Closing, and this Agreement, the Investor's Rights Agreement and any
Ancillary Agreement, when executed and delivered, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
respective terms except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (b) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies, and (c) to the extent the indemnification provisions contained in the
Investor's Rights Agreement may be limited by applicable laws.
2.3 VALID ISSUANCE OF COMMON STOCK. The Common Stock that is being
purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and the Investor's Rights Agreement and under applicable state
and federal securities laws.
2.4 GOVERNMENTAL CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any local, state or federal governmental
authority is required on the part of the Company in connection with the
Company's valid execution, delivery or performance of this Agreement, the offer,
sale or issuance of the Common Stock by the Company, except such filings as have
been made prior to the Closing, except that any notices of sale required to be
filed with the Securities and Exchange Commission under Regulation D of the
Securities Act of 1933, as amended (the "Securities Act"), or such post-closing
filings as may be required under applicable state securities laws, which will be
timely filed within the applicable periods therefor. Notwithstanding any
provisions of this Agreement, the Company is not making and does not make any
representations or warranties with respect to the applicability of the laws or
regulations of any foreign country to, or the effect of any such laws or
regulations upon, the sale of the Common Stock to Investor.
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2.5 CAPITALIZATION AND VOTING RIGHTS.
(a) The authorized capital of the Company consists, or will consist prior
to the Closing, of shares of Preferred Stock, par value $.001 (the "Preferred
Stock") and shares of Common Stock, par value $.001(the "Common Stock"), in the
amounts set forth on SECTION 2.5 OF THE SCHEDULE OF EXCEPTIONS attached hereto.
The number of issued and outstanding shares of Preferred Stock and Common Stock
as of the date hereof is as set forth on SECTION 2.5 OF THE SCHEDULE OF
EXCEPTIONS attached hereto.
(b) The outstanding shares of Common Stock have been issued in accordance
with the registration or qualification provisions of the Securities Act and any
relevant state securities laws or pursuant to valid exemptions therefrom. Except
for (i) currently outstanding options to purchase shares of Common Stock granted
to employees pursuant to the Company's stock option plans (the "Plans") in the
amounts set forth on SECTION 2.5 OF THE SCHEDULE OF EXCEPTIONS attached hereto,
(ii) 750,000 shares to be sold to Phil Bennett concurrently with the Closing
hereunder, (iii) 1,000,000 warrants to be issued to Scitex Digital Video, Inc.,
a Massachusetts corporation ("Scitex"), concurrently with the Closing hereunder
pursuant to the terms of the Asset Purchase Agreement, (iv) that number of
options to purchase shares of Common Stock to be granted to employees of Scitex
in connection with the Asset Purchase Agreement set forth on SECTION 2.5 OF THE
SCHEDULE OF EXCEPTIONS attached hereto, there are not outstanding any options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), or agreements for the purchase or acquisition from the Company of any
shares of its capital stock. The aggregate number of options currently
outstanding pursuant to clause (i) above or to be granted pursuant to clause
(iv), the exercise prices of such options and the vesting schedule for such
options are as set forth on SECTION 2.5 OF THE SCHEDULE OF EXCEPTIONS. Except
for pursuant to the Investors' Rights Agreement of even date herewith between
the Company and Scitex (the "Scitex Investors' Rights Agreement"), the Company
is not a party or subject to any agreement or understanding, and, to the best of
the Company's knowledge, there is no agreement or understanding between any
persons that affects or relates to the voting or giving of written consents with
respect to any security or the voting by a director of the Company.
2.6 REGISTRATION RIGHTS. Except as provided in the Investor's Rights
Agreement and the Scitex Investors' Rights Agreement, the Company is not
obligated to register under the Securities Act any of its presently outstanding
securities or any of its securities that may subsequently be issued.
2.7 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation or
default in any material respect of any provision of its Certificate of
Incorporation or Bylaws or in any material respect of any provision of any
mortgage, agreement, instrument or contract to which it is a party or by which
it is bound or, to the best of its knowledge, of any federal or state judgment,
order, writ, decree, statute, rule or regulation applicable to the Company. The
execution, delivery and performance by the Company of this Agreement, the
Investor's Rights Agreement and any Ancillary Agreement, and the consummation of
the transactions contemplated hereby and thereby will not result in any such
violation or be in material conflict with or constitute, with or without the
passage of time or giving of notice, either a material default under any such
provision or an event that results in the creation of any material lien, charge
or encumbrance upon any assets of the Company or the suspension, revocation,
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impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Company, its business or operations,
or any of its assets or properties.
2.8 DISCLOSURE. The Company has provided the Investor with all the
information reasonably available to the Company without undue expense that the
Investor has requested for deciding whether to purchase the Common Stock and all
information that the Company believes is reasonably necessary to enable the
Investor to make such decision. To the best of the Company's knowledge after
reasonable investigation, neither this Agreement nor any other written
statements or certificates made or delivered at the Closing contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein, in the light of the circumstances under which
they were made, not misleading.
2.9 SEC DOCUMENTS; COMPANY FINANCIAL STATEMENTS. The Company has furnished
or made available to the Investor true and complete copies of all reports,
schedules, forms, statements or other documents filed or required to be filed
with the Securities and Exchange Commission (the "SEC") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the Securities Act
since January 1, 1997, all in the form (including exhibits) so filed
(collectively, the "SEC Documents"). As of their respective filing dates, such
SEC Documents filed by the Company complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC thereunder, as the case may be, and none of the SEC
Documents contained as of the date filed any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent such SEC Documents have been
corrected, updated or superseded by a document subsequently filed with the SEC.
The financial statements of the Company, including the notes thereto, included
in the SEC Documents (the "Company Financial Statements") comply as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied in a manner
consistent with past practice of the Company (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q
under the Exchange Act) and present fairly the financial position, assets and
liabilities of the Company at the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited financial statements, to normal year-end adjustments). There has been
no change in the Company's accounting policies except as described in the notes
to the Company Financial Statements. Except as reflected or reserved against in
the Company Financial Statements, the Company has no material Liabilities (as
defined below) or other obligations, except (i) since the date of the most
recent audited balance sheet included in the Company Financial Statements,
Liabilities and obligations incurred in the ordinary course of business consis-
tent with the past practices of the Company or (ii) that would not be required
to be reflected or reserved against in the balance sheet of the Company prepared
in accordance with GAAP applied in a manner consistent with past practice of the
Company. "Liabilities" means all Indebtedness (as defined below), obligations
and other liabilities (or contingencies that have not yet become liabilities) of
a person, whether absolute, accrued, contingent (or based upon any contin-
gency), known or unknown, fixed or otherwise, or whether due or to become due as
determined in accordance with GAAP. "Indebtedness" of any person means all
obligations of such person (a) for borrowed money, (b) evidenced by notes,
bonds, debentures or similar instruments, (c) for the deferred purchase price of
goods or services (other than trade payables or
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accruals incurred in the ordinary course of business), (d) under capital leases
and (e) in the nature of guarantees of the obligations described in clauses (a)
through (d) above of any other person.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. The Investor hereby
represents and warrants that:
3.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the
Investor in reliance upon the Investor's representation to the Company, which by
the Investor's execution of this Agreement the Investor hereby confirms, that
the Common Stock to be purchased by the Investor will be acquired for investment
for the Investor's own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that the Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Investor further
represents that the Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Common Stock.
3.2 RELIANCE UPON INVESTORS' REPRESENTATIONS. The Investor understands that
the Common Stock is not registered under the Securities Act on the ground that
the sale provided for in this Agreement and the issuance of securities hereunder
is exempt from registration under the Securities Act pursuant to section 4(2)
thereof, and that the Company's reliance on such exemption is based on the
Investor's representations set forth herein. The Investor realizes that the
basis for the exemption may not be present if, notwithstanding such
representations, the Investor has in mind merely acquiring the Common Stock for
a fixed or determinable period in the future, or for a market rise, or for sale
if the market does not rise. The Investor has no such intention.
3.3 RECEIPT OF INFORMATION. The Investor believes he has received all the
information he considers necessary or appropriate for deciding whether to
purchase the Common Stock. The Investor further represents that he has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Common Stock and the business,
properties, prospects and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to such Investor or to which such Investor
had access. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the right of the
Investors to rely thereon.
3.4 INVESTMENT EXPERIENCE. The Investor represents that he is experienced
in evaluating and investing in securities of companies in the development stage
and acknowledges that he is able to fend for himself, can bear the economic risk
of his investment, and has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
investment in the Common Stock.
3.5 ACCREDITED INVESTOR. The Investor is an "Accredited Investor" as such
term is defined in Regulation D of the Securities Act.
3.6 RESTRICTED SECURITIES. The Investor understands that the Common Stock
may not be sold, transferred or otherwise disposed of without registration under
the Securities Act or an
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exemption therefrom, and that in the absence of an effective registration
statement covering the Common Stock or an available exemption from registration
under the Securities Act, the Common Stock must be held indefinitely. In
particular, the Investor is aware that the Common Stock may not be sold pursuant
to Rule 144 promulgated under the Securities Act unless all of the conditions of
that Rule are met.
3.7 LEGENDS. To the extent applicable, each certificate or other document
evidencing any of the Common Stock issued pursuant to this Agreement shall be
endorsed with the legends set forth below, and the Investor covenants that,
except to the extent such restrictions are waived by the Company, the Investor
shall not transfer the shares represented by any such certificate without
complying with the restrictions on transfer described in the legends endorsed on
such certificate:
(a) The following legend under the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF
REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF
FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT
REQUIRED."
(b) Any legend imposed or required by applicable state securities laws.
4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of
the Investor under subparagraph 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 2 shall be true on and as of the Closing.
4.2 PERFORMANCE. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with on or before the Closing, including,
but not limited to, the items set forth below:
(a) Concurrently with the Closing hereunder, the Company shall close the
transactions contemplated under the Asset Purchase Agreement.
(b) Immediately prior to the Closing hereunder, the Company shall amend
Section 1(a) of its Preferred Shares Rights Agreement, dated as of September 13,
1996, as amended effective July 14, 1998 (the "Rights Agreement"), to provide
that Michael Luckwell shall not be deemed to be an Acquiring Person so long as
such Person, together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of not more than 3,425,000 Common Shares (as adjusted
for any stock splits, stock dividends, recapitalizations or the like) (including
all Common Shares beneficially owned by such Person as of the date of this
Agreement (any capitalized terms used in this subsection shall have the meaning
given to such terms in the Rights Agreement).
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(c) Immediately prior to or concurrently with the Closing hereunder, Phil
Bennett shall be named the Vice President of Engineering of the Company. In
connection therewith, Mr. Bennett shall purchase an aggregate of 750,000 shares
of Common Stock from the Company.
4.3 COMPLIANCE CERTIFICATE. The President of the Company shall deliver to
the Investor at the Closing a certificate certifying that the conditions
specified in Sections 4.1, 4.2, 4.4, 4.5 and 4.7 have been fulfilled.
4.4 QUALIFICATIONS. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Common Stock pursuant to this Agreement shall be duly obtained and effective as
of the Closing.
4.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Investor's counsel, which shall have received all such counterpart original and
certified or other copies of such documents as it may reasonably request.
4.6 OPINION OF COMPANY COUNSEL. The Investor shall have received from
Gibson, Dunn & Crutcher LLP, counsel for the Company, an opinion, dated the date
of the Closing, in form and substance satisfactory to counsel to the Investor,
in substantially the form attached hereto as EXHIBIT D.
4.7 INVESTOR'S RIGHTS AGREEMENT. The Company and the Investor shall have
entered into the Investor's Rights Agreement in the form attached hereto as
EXHIBIT B.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to the Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by that Investor:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Investor contained in Section 3 shall be true on and as of the Closing with
the same effect as though such representations and warranties had been made on
and as of the Closing.
5.2 QUALIFICATIONS. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Common Stock pursuant to this Agreement shall be duly obtained and effective as
of the Closing.
6. COVENANTS OF THE COMPANY.
6.1 GRANT OF STOCK OPTIONS. Except as set forth on Section 2.5 of the
Schedule of Exceptions, the Company will not grant any stock options under the
Plans or otherwise for a period of 12 months from the date hereof, except with
the prior written consent of the Investor.
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6.2 RIGHT TO NOMINATE DIRECTOR. For so long as the Investor holds more than
15% of the outstanding shares of Common Stock, the Investor shall have the
right, but not the obligation, to designate himself to be nominated to be a
member of the Company's Board of Directors. The Company and the Company's Board
of Directors shall use its best efforts to take all required steps to effect the
nomination of the Investor to the Company's Board of Directors, including, but
not limited to, amendment of the Company's Certificate of Incorporation and
Bylaws (if such amendments would be required by the terms thereof to effect such
nomination).
6.3 CONSULTING SERVICES. In the event that the Investor performs consulting
services for the Company, the Investor and the Company shall enter into the
Company's standard form of Consulting Agreement, which Consulting Agreement
shall set forth the terms and conditions of the Investor's service as a
consultant to the Company, including, but not limited to, the Investor's salary
and the number of required hours of service per month.
6.4 EXPENSES.
The Company shall reimburse the Investor for the reasonable fees and
disbursements of the Investor's counsel, Pillsbury Madison & Sutro LLP, incurred
by such counsel after November 30, 1998 in connection with the transactions
contemplated hereby, within five (5) business days of receipt from the Investor
of a written request for such reimbursement.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.
7.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The warranties,
representations and covenants of the Company and the Investor contained in or
made pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the Closing.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including permitted
transferees, if any, of any shares of Common Stock sold hereunder). Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.4 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of Delaware.
7.5 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.
7.6 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
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7.7 ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement the prevailing party shall be
entitled to reasonable attorneys' fees, costs and disbursements in addition to
any other relief to which such party may be entitled.
7.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor.
7.9 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
7.10 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ACCOM, INC., a Delaware corporation
By /s/ Junaid Sheikh
-----------------------------------------
Its C.E.O.
----------------------------------------
INVESTOR
--------
/s/ Michael Luckwell
--------------------------------------------
Michael Luckwell
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INVESTOR'S RIGHTS AGREEMENT
This Investor's Rights Agreement (this "AGREEMENT") is made and entered
into as of December 10, 1998 by and among Accom, Inc., a Delaware corporation
(the "COMPANY"), and Michael Luckwell (the "INVESTOR").
RECITALS
A. The Investor has agreed to acquire from the Company, and the Company has
agreed to issue to the Investor, 2,500,000 shares of the Company's Common Stock
(the "NEW SHARES") on the terms and conditions set forth in the Stock Purchase
Agreement dated as the date hereof by and between the Company and the Investor
(the "STOCK PURCHASE AGREEMENT").
B. As a condition to the issuance of the New Shares the Investor, the
Company has agreed to certain restrictions related to the ownership of stock of
the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. ACQUISITION OF ADDITIONAL SHARES, VOTING, TRANSFER AND OTHER RESTRICTIONS.
1.1 CERTAIN DEFINITIONS. All capitalized terms used but not defined in this
Agreement shall have the meaning as defined for such term in the Stock Purchase
Agreement. In addition, as used in this Agreement, the following terms shall
have the following respective meanings:
"AFFILIATE" of any Person, means (i) any other Person controlling,
controlled by or under common control with such Person, (ii) any director or
executive officer of such Person or of any Affiliate of such Person and (iii)
any immediate family member of any director or executive officer of such Person
or any director or executive officer of any Affiliate of such Person.
"STOCK PURCHASE CLOSING" means the Closing as defined in the Stock
Purchase Agreement.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
"COMMON STOCK" means the Company's common stock, $0.001 par value.
"COMPANY SECURITIES" mean any option, warrant, other right to acquire
Voting Securities or other capital stock of the Company.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time.
"INVESTOR SHARES" means the New Shares plus all shares of Common Stock
of the Company owned by the Investor on the date hereof.
"PERSON" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, "group" within the meaning of
Section 13(d)(3) of the Exchange Act, government, governmental agency, or other
legal entity, whether acting in an individual, fiduciary or other capacity.
"PERMITTED TRANSFEREE" means, with respect to each Person bound by the
terms of this Agreement, (i) in respect of the Investor, any descendant,
Affiliate or associate (as such term is defined in Rule 405 of the Securities
Act) of the Investor or any other Permitted Transferee of such Affiliate; (ii)
the Company; (iii) in the event of the dissolution, liquidation or winding up of
any such Person that is a corporation or a partnership, the partners of a
partnership that is such Person, the stockholder of a corporation that is such
Person or a successor partnership all of the partners of which or a successor
corporation all of the stockholder of which are the Persons who were the
partners of such partnership or the stockholder of such corporation immediately
prior to the dissolution, liquidation or winding up of such Person; (iv) a
transferee by testamentary or intestate disposition; (v) a transferee by inter
vivos transfer to the transferring Person's spouse, children and/or other lineal
descendants; (vi) a trust transferee by inter vivos transfer, the beneficiaries
of which are the transferring Person, spouse, children and/or other lineal
descendants; (vii) a successor nominee or trustee for the beneficial owner of
the shares for which such Person acts as nominee or trustee, as the case may be,
or (viii) a Person who acquires all or substantially all of the stock or assets
of such Person; provided, however, that any such Permitted Transferee shall have
agreed in writing in form and substance satisfactory to the Company to be bound
by, and hold the Registrable Securities acquired by it subject to, the terms of
this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, as the same shall be in effect at
the time.
"TOTAL VOTING POWER" at any time means the total combined voting power
in the general election of directors of all the Voting Securities then
outstanding.
"TRANSFER" means any sale, transfer, pledge, encumbrance or other
disposition.
"VOTING SECURITIES" means any shares of any class of capital stock of
the Company which are then entitled to vote generally in the election of
directors.
1.2 ACQUISITION OF ADDITIONAL SHARES.
(a) The Investor covenants and agrees with the Company that, for so
long as Junaid Sheikh is the Chief Executive Officer of the Company, the
Investor will not, and will not
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permit any of its Affiliates, in either case without the prior written consent
of the Company, to acquire Beneficial Ownership of any Company Securities
other than the Investor Shares.
(b) If at any time, as the result of any transaction or circumstances,
the Investor and its Affiliates shall acquire Beneficial Ownership of any
Company Securities other than the Investor Shares, inadvertently or otherwise,
in violation of this Agreement, then the Investor shall promptly take such
action as may be necessary or appropriate to divest such Beneficial Ownership of
Company Securities.
1.3. FURTHER RESTRICTIONS ON CONDUCT. The Investor covenants and agrees
with the Company that, for so long as Junaid Sheikh is the Chief Executive
Officer of the Company, neither it nor any of its Affiliates shall:
(a) initiate, commence or propose, directly or indirectly, any
"SOLICITATION" of "PROXIES" to vote, or seek to influence any Person with
respect to the voting of, any Company Securities, in connection with a
"SOLICITATION" or "ELECTION CONTEST" (as such terms are defined or used in
Regulation 14A under the Exchange Act) with respect to the election or removal
of the members of the Board. Notwithstanding the foregoing, or any other
provision of this Agreement, nothing in this Agreement shall prevent the
Investor from voting the Investor Shares in connection with any matter
(including the election or removal of members of the Board) however the Investor
decides to vote such Investor Shares;
(b) other than a transaction permitted by Section 1.4(b)(iii) hereof,
solicit, offer, seek or propose to acquire shares of Company Securities in
excess of the number of shares permitted by this Agreement, whether directly or
indirectly through a tender offer, proxy or consent solicitation, exchange
offer, merger proposal or otherwise; or
(c) become a member of a "GROUP" within the meaning of Section
13(d)(3) of the Exchange Act with any person other than the Investor and its
Affiliates.
1.4 RESTRICTIONS ON TRANSFER. The Investor covenants and agrees with the
Company that:
(a) until the first anniversary of the date of this Agreement, the
Investor will not Transfer any of the Investor Shares to any Person other than a
Permitted Transferee except through:
(i) a Transfer through a bona fide underwritten public offering
registered under the Securities Act effected in accordance with the provisions
of Section 2.5 hereof, with an underwriter or underwriters and pursuant to
procedures reasonably acceptable to the Company, intended to achieve a broad
public distribution of the Investor Shares covered thereby; or
(ii) Transfers in normal and customary open-market transactions
on a national securities exchange, the Nasdaq National Market or an over-the
counter market, provided that the total number of Investor Shares so transferred
by the Investor in any one-week
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period shall not exceed the greater of (a) one percent (1%) of the outstanding
shares of the Common Stock or (b) the average weekly trading volume for Common
Stock for the four weeks immediately preceding the week in which the relevant
Transfer occurs.
(b) after the first anniversary of the date of this Agreement, the
Investor will not Transfer any Investor Shares except through:
(i) a Transfer through a bona fide underwritten public offering
registered under the Securities Act effected in accordance with the provisions
of Section 2 hereof, with an underwriter or underwriters and pursuant to
procedures reasonably acceptable to the Company, intended to achieve a broad
public distribution of the Investor Shares covered thereby;
(ii) Transfers in normal and customary open-market transactions
on a national securities exchange, the Nasdaq National Market or an over-the
counter market, provided that the total number of Investor Shares so transferred
by the Investor in any one-week period shall not exceed the greater of (a) one
percent (1%) of the outstanding shares of the Common Stock or (b) the average
weekly trading volume for Common Stock for the four weeks immediately preceding
the week in which the relevant Transfer occurs;
(iii) a Transfer of all or substantially all of the Investor
Shares in a transaction involving the opportunity for all holders of Company
Securities (including the Investor) to dispose of all or a proportionate part of
such Company Securities for the same consideration as, and on terms and
conditions not materially less favorable than those available to the Investor;
or
(iv) a Transfer by the Investor to a Permitted Transferee.
2. REGISTRATION RIGHTS.
2.1 DEFINITIONS. For purposes of this Section 2:
(a) REGISTRATION. 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 effectiveness of such registration statement
(b) REGISTRABLE SECURITIES. The term "REGISTRABLE SECURITIES" means
(i) the Investor Shares and (ii) any Common Stock or other shares of capital
stock of the Company issued by way of stock dividend or stock split or other
distribution, recapitalization or reclassification with respect to, or in
exchange for, or in replacement of, any other Registrable Securities.
Notwithstanding the foregoing, "REGISTRABLE SECURITIES" shall exclude any
Registrable Securities sold by a person in a transaction in which rights under
this Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold in a public offering, whether sold pursuant to Rule
144 promulgated under the Securities Act, or in a registered offering, or
otherwise.
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(c) REGISTRABLE SECURITIES THEN OUTSTANDING. The number of shares of
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the number of shares of
Common Stock of the Company that are Registrable Securities and are then issued
and outstanding.
(d) HOLDER. For purposes of this Section 2, the term "HOLDER" means
any person owning of record Registrable Securities that have not been sold to
the public or pursuant to Rule 144 promulgated under the Securities Act or any
permitted assignee of record of such Registrable Securities to whom rights under
this Section 2 have been duly assigned in accordance with this Agreement.
(e) SEC. The term "SEC" or "COMMISSION" means the U.S. Securities and
Exchange Commission.
2.2 DEMAND REGISTRATION.
(a) REQUEST BY HOLDERS. If the Company shall at any time after the
first anniversary of the date hereof receive a written request from any of the
Holders of the Registrable Securities then outstanding that the Company file a
registration statement under the Securities Act covering the registration of
Registrable Securities pursuant to this Section 2.2, then the Company shall,
within fifteen (15) business days of the receipt of such written request, give
written notice of such request ("REQUEST NOTICE") to all Holders, and effect, as
soon as practicable, the registration under the Securities Act of all
Registrable Securities that Holders request to be registered and included in
such registration by written notice given such Holders to the Company within
fifteen (15) days after receipt of the Request Notice, subject only to the
limitations of this Section 2.2; PROVIDED that the Registrable Securities
requested by all Holders to be registered pursuant to such request must be at
least fifty percent (50%) of all Registrable Securities then outstanding; and
PROVIDED FURTHER that the Company shall not be obligated to effect any such
registration if the Company has, within the six (6) month period preceding the
date of such request, already effected a registration under the Securities Act
pursuant to this Section 2.2, or in which the Holders had an opportunity to
participate pursuant to the provisions of Section 2.3 if at least 50% of the
number of Registrable Securities as to which registration was requested by the
Holders were registered therein.
(b) UNDERWRITING. If the Holders initiating the registration request
under this Section 2.2 ("INITIATING HOLDERS") intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
then they shall so advise the Company as a part of their request made pursuant
to this Section 2.2 and the Company shall include such information in the
written notice referred to in subsection 2.2(a). In addition, the right of any
Holder to include his Registrable Securities in such registration 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 a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting by the Company and reasonably
acceptable to a majority of the Holders participating in such offering. Such
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underwriting agreement shall include a market stand-off agreement of up to 180
days if required by such underwriter. Notwithstanding any other provision of
this Section 2.2, if the underwriter advises the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten then the Company shall so advise all Holders of Registrable
Securities which would otherwise be registered and underwritten pursuant hereto,
and the number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter and allocated among
the Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities then outstanding held by each Holder requesting
registration (including the initiating Holders). If any such exclusion causes
less than 50% of the number of shares of Registrable Securities as to which
registration was requested by the Holders to be registered, such registration
may be withdrawn at the request of a majority of the Holders of Registrable
Securities to be included in such offering and, if so withdrawn within ten (10)
days after such Holders are notified of such exclusion, such registration shall
not constitute a request for registration under Section 2.2(e). Any Registrable
Securities excluded and withdrawn from such underwriting shall be withdrawn from
the registration.
(c) MAXIMUM NUMBER OF DEMAND REGISTRATIONS. The Company shall be
obligated to effect only two (2) such registrations pursuant to this Section
2.2.
(d) DEFERRAL. Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting the filing of a registration statement pursuant to
this Section 2.2, a certificate signed by the President or Chief Executive
Officer of the Company stating that in the good faith judgment of the Board, it
would be materially detrimental to the Company for such registration statement
to be filed, then the Company shall have the right to defer such filing for a
period of not more than ninety (90) days after receipt of the request of the
Initiating Holders; PROVIDED, HOWEVER, that the Company may not utilize this
right more than once in any twelve (12) month period.
(e) EXPENSES. All expenses incurred in connection with any
registration pursuant to this Section 2.2, including without limitation all
federal and state securities and "blue sky" registration fees, filing and
qualification fees, printer's and accounting fees, and fees and disbursements of
counsel for the Company (but excluding underwriters' discounts and commissions
relating to shares sold by the Holders and legal fees of counsel for any of the
Holders), shall be borne by the Company. Each Holder participating in a
registration pursuant to this Section 2.2 shall bear such Holder's proportionate
share (based on the total number of shares sold in such registration other than
for the account of the Company) of all discounts, commissions or other amounts
payable to underwriters or brokers. In addition, each Holder shall bear such
Holders' legal fees, in connection with such offering by the Holders.
Notwithstanding the foregoing, the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to this Section 2.2 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered, unless the Holders
of a majority of the Registrable Securities to be registered pursuant to such
request agree that such registration constitutes the use by the Holders of one
(1) demand registration pursuant to this Section 2.2 (in which case such
registration shall also constitute the use by all Holders of Registrable
Securities of one (l) such demand registration); PROVIDED,
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FURTHER, HOWEVER, that if at the time of such withdrawal, such Holders have
learned of a material adverse change in the condition, business, or prospects
of the Company not known to the Holders at the time of their request for such
registration and have withdrawn their request for registration with reasonable
promptness after learning of such material adverse change, then the Holders
shall not be required to pay any of such expenses and such registration shall
not constitute the use of a demand registration pursuant to this Section 2.2.
2.3 PIGGYBACK REGISTRATIONS.
(a) The Company shall notify all Holders of Registrable Securities in
writing at least thirty (30) days prior to filing any registration statement
under the Securities Act for purposes of effecting a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
EXCLUDING registration statements relating to any registration under Section 2.2
of this Agreement, to any employee benefit plan, to any corporate reorganization
or to a sale solely in connection with a Rule 145 transaction or a registration
statement which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities) and will afford each such Holder an opportunity to
include in such registration statement all or any part of the Registrable
Securities then held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by
such Holder shall within fifteen (15) days after receipt of the above-described
notice from the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Securities such Holder
wishes to include in such registration statement. If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(b) UNDERWRITING. If a registration statement under which the Company
gives notice under this Section 2.3 is for an underwritten offering, then the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 2.3 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. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriters selected by the Company for such
underwriting (including a market stand-off agreement of up to 180 days if
required by such underwriters) on terms no less favorable to such Holders than
available to the Company if the Company is participating in such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, then the managing underwriters may
exclude shares from the registration and the underwriting, and the number of
shares that may be included in the registration and the underwriting shall be
allocated, FIRST to the Company, and SECOND, to each of the Holders requesting
inclusion of their Registrable Securities in such
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registration statement and each of the other holders of Common Stock with
similar registration rights, if any, on a pro rata basis based on the total
number of Registrable Securities then held by each such Holder and Common Stock
of any other holder participating in such registration. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For
any Holder that is a partnership, the Holder and the partners and retired
partners of such Holder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing
persons, and for any Holder that is a corporation, the Holder and all
corporations that are affiliates of such Holder shall be deemed to be a
single "Holder," and any pro rata reduction with respect to such "Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder," as defined in this
sentence.
(c) EXPENSES. All expenses incurred in connection with any
registration pursuant to this Section 2.3, including without limitation all
federal and state securities and "blue sky" registration fees, filing and
qualification fees, printer's and accounting fees, and fees and disbursements of
counsel for the Company (but excluding underwriters' discounts and commissions
relating to shares sold by the Holders and legal fees of counsel for any of the
Holders), shall be borne by the Company. Each Holder participating in a
registration pursuant to this Section 2.3 shall bear such Holder's proportionate
share (based on the total number of shares sold in such registration other than
for the account of the Company) of all discounts, commissions or other amounts
payable to underwriters or brokers. In addition, each Holder shall bear such
Holders' legal fees, in connection with such offering by the Holders.
(d) NOT DEMAND REGISTRATION. Registration pursuant to this Section 2.3
shall not be deemed to be a demand registration as described in Section 2.2
above. Except as otherwise provided herein, there shall be no limit on the
number of times the Holders may request registration of Registrable Securities
under this Section 2.3.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from the
Investor a written request that the Company effect a registration on Form S-3
(or any comparable successor form or forms) and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
the Investor, the Company shall effect, as soon as practicable, such registra-
tion and all such qualifications and compliances as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of
the Investor's Registrable Securities as are specified in such request,
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 2.4:
(a) if Form S-3 is not available for such offering by the Holders;
(b) if the Company has already effected two registrations pursuant to
this Section 2.4;
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(c) if the Investor proposes to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000;
(d) if the Company shall furnish to the Investor a certificate signed
by the President or Chief Executive Officer of the Company stating that in the
good faith judgment of the Board, it would be materially detrimental to the
Company for such registration statement to be filed, then the Company shall have
the right to defer such filing for a period of not more than ninety (90) days
after receipt of the request of the Investor; PROVIDED, HOWEVER, that the
Company may not utilize this right more than once in any twelve (12) month
period; or
(e) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance (except for
California and New York).
Registrations effected pursuant to this Section 2.4 shall not be counted as
requests for registration effected pursuant to Section 2.2.
2.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, provided, HOWEVER, that the Company
shall not be required to keep any such registration statement effective for more
than one hundred twenty (120) days. Prior to filing a registration statement or
prospectus relating to the sale of Registrable Securities, or any amendments or
supplements thereto, the Company will furnish to counsel representing the
Holders of the Registrable Securities covered by such registration statement
copies of all documents proposed to be filed, which documents will be subject to
the review of such counsel within five (5) business days after receipt thereof.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to keep such registration statement
effective during the distribution period and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations of the SEC there
under with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such number of copies of such registration
statement, and of each amendment and supplement thereto, such prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by them that
are included in such registration.
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(d) Use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of each of the 50 states of the United States (or such jurisdic-
tions as each seller shall reasonably request), or obtain appropriate exemptions
therefrom, and keep such state securities/"blue sky" registrations effective, or
keep the appropriate exemption therefrom effective, during the effective period
of such registration statement, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller in accordance with their intended method of distribution thereof, except
that the Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction where, but for the
requirements of this case (d), it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction (except for California and New
York). Notwithstanding the foregoing, if the Registrable Securities are not
listed for trading on the New York Stock Exchange, Nasdaq National Market or any
other equivalent United States stock market or exchange at the time the Company
is required to effect the registration of any Registrable Securities pursuant
hereto, then the Company's obligations under this Section 2.5(d) shall be
limited to the states of California and New York.
(e) Notify promptly each seller of any such Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act within the
appropriate period mentioned in clause (b) of this Section 2.5, of the Company's
becoming aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact in light of the circumstances then existing, and at the
request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(f) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable (but not more than eighteen months) after the
effective date of the registration statement, if required, an earnings statement
which shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;
(g) (i) Use reasonable efforts to list such Registrable Securities on
any securities exchange on which the Common Stock is then listed, if any, if
such Registrable Securities are not already so listed and if such listing is
then permitted under the rules of such exchange and desired by the Company; and
(ii) use reasonable efforts to provide a transfer agent and registrar for such
Registrable Securities covered by such registration statement not later than
when such distribution so requires an agent or registrar, if any;
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(h) to the extent permitted by the rules of the AICPA, if requested by
the underwriters in any underwritten offering, use reasonable efforts to obtain
for such underwriters a "cold comfort" letter or letters from the Company's
independent public accountants in customary form;
(i) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) notify the Holders of Registrable Securities included in such
registration statement promptly (i) when the registration statement, or any
post-effective amendment to the amendment prospectus shall have been filed, (ii)
of the receipt of any comments from the SEC and (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of the registration statement or
of any order preventing or suspending the use of any preliminary prospectus, or
of the suspension of the qualification of the registration statement for
offering or sale in any jurisdiction, or of the institution or threatening of
any proceedings for any of such purposes;
(k) if requested by the managing underwriter or agent or any Holder of
Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder reasonably
requests to be included therein, including, without limitation, the number of
Registrable Securities being sold by such Holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering; and make all required filings of such prospectus
supplement or post-effective amendment as soon practicable after being notified
of the matters incorporated in such prospectus supplement or post-effective
amendment;
(l) cooperate with the Holders of Registrable Securities covered by
the registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or such Holders may
request;
(m) obtain for delivery to the Holders of Registrable Securities being
registered and to the underwriter or agent an opinion or opinions of counsel for
the Company in customary form and in form, substance and scope reasonably
satisfactory to such Holders, underwriters or agents and their counsel; and
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(n) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD.
2.6 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2 or 2.3
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to timely effect the
Registration of their Registrable Securities.
2.7 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 2.2 or 2.3:
(a) BY THE COMPANY. To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors and
Affiliates of each Holder, any underwriter (as determined in the Securities Act)
for such Holder and each person, if any, who controls, is under common control
or is controlled by such Holder or underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended, (the "1934
ACT"), against any and all losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the 1934 Act
or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof whether or not such identified party
is a party thereto) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "VIOLATION"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the
statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any federal or state securities law or
any rule or regulation promulgated under the Securities Act, the 1934
Act or any federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer, director or
Affiliate thereof, underwriter or controlling person for any legal or other
expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
2.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss,
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claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration through an instrument or document provided by such Holder, partner,
officer, director, underwriter or controlling person of such Holder specifi-
cally stating that it is for use in preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such seller or any indemnified party and shall survive the transfer
of such securities by such seller.
(b) BY SELLING HOLDERS. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its Affiliates, each of its officers who have signed the registration
statement, each person, if any, who controls or is under common control or
controlled by the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
person who controls such Holder within the meaning of the Securities Act or the
1934 Act, against any and all losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling person,
underwriter or other such Holder, partner or director, officer or controlling
person of such other Holder may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto whether or not such identified
party is a party thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder specifically stating that it is for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, Affiliate,
controlling person, underwriter or other Holder, partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action: PROVIDED, HOWEVER,
that the indemnity agreement contained in this subsection 2.7(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; and PROVIDED, FURTHER, that the
total amounts payable in indemnity by a Holder under this Section 2.7(b) in
respect of any Violation shall not exceed the net proceeds received by such
Holder in the registered offering out of which such Violation arises; PROVIDED
FURTHER, HOWEVER, that such Holder shall not be obligated to provide such
indemnity to the extent that such losses, claims or liabilities result from the
failure of the Company to promptly amend or take action to correct or supplement
any such registration statement or prospectus on the basis of corrected or
supplemental information furnished in writing to the Company by such Holder
expressly for such purpose. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any
indemnified party.
(c) NOTICE. Promptly after receipt by an indemnified party under this
Section 2.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to
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the extent the indemnifying party so desires, jointly with any other indemni-
fying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, HOWEVER, that an 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 conflict of interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall relieve such indemnifying party of
liability to the indemnified party under this Section 2.7 to the extent the
indemnifying party is prejudiced as a result thereof, but the omission so to
deliver written notice to the indemnified party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.7.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that, insofar
as they relate to any Violation made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was timely furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(e) CONTRIBUTION. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 2.7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 2.7 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
2.7; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; PROVIDED, HOWEVER,
that, in any such case: (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
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(f) SURVIVAL. The obligations of the Company and Holders under this
Section 2.7 shall survive until the first anniversary of the completion of any
offering of Registrable Securities in a registration statement, regardless of
the expiration of any statutes of limitation or extensions of such statutes.
2.8 TERMINATION OF THE COMPANY'S OBLIGATIONS. The Company shall have no
obligations pursuant to Sections 2.2 or 2.3 with respect to any Registrable
Securities proposed to be sold by a Holder in a registration pursuant to Section
2.2 or 2.3 if, in the opinion of counsel to the Company, all such Registrable
Securities proposed to be sold by a Holder may then be sold under Rule 144 in
any three month period without exceeding the volume limitations thereunder.
2.9 TRANSFER OF REGISTRATION RIGHTS. The registration rights may only be
transferred to a Holder reasonably acceptable to the Company that acquires all
of the Investor's Registrable Securities or to any party acquiring all or
substantially all of the stock or assets of a Holder.
2.10 RULE 144 AND RULE 144A. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the 1934 Act and
the rules and regulations adopted by the SEC thereunder (or, if the Company is
not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available such information), and it will
take such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 and Rule
144A under the Securities Act, as such rules may be amended from time to time or
(ii) any similar rule or regulation hereafter adopted by the SEC.
3. MISCELLANEOUS PROVISIONS
3.1 CONSTRUCTION. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
3.2 NOTICES.
All notices, requests, demands and other communications called for or
contemplated hereunder shall be in writing and shall be deemed to have been duly
given when delivered to the party to whom addressed or when sent by telecopy (as
indicated by a telecopy confirmation and if promptly confirmed by registered or
certified mail, return receipt requested, prepaid and addressed) to the parties,
their successors in interest, or their assignees at the following addresses, or
at such other addresses as the parties may designate by written notice in the
manner aforesaid::
If to Buyer: Accom, Inc.
1490 O'Brien Drive
Menlo Park, CA 94025
Attn: President
Fax: 650-327-2511
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With copies to: Gibson, Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Attn: Gregory T. Davidson
Fax: 650-849-5333
If to Investor: Michael Luckwell
26 Catherine Place
London SW1E 6HF
Fax: 011-44-171-828-1390
With copies to: Pillsbury Madison & Sutro LLP
2550 Hanover Street
Palo Alto, CA 94304
Attn: Katherine A. Martin
Fax: 650-233-4545
3.3 ASSIGNMENT. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof nor any of the documents
executed in connection herewith may be assigned by any party without the consent
of the other parties provided, however, that any party may freely assign this
Agreement to any party acquiring all or substantially all of the stock or assets
of such assigning party. Nothing contained herein, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their successors in interest and permitted assignees any rights or remedies
under or by reason of this Agreement unless so stated herein to the contrary.
3.4 AMENDMENTS AND WAIVERS. This Agreement and all exhibits may be modified
only by a written instrument duly executed by each party. No condition to any
party's obligations and no breach of any covenant, agreement, warranty or
representation shall be deemed waived unless expressly waived in writing by the
party whose obligations are subject to such condition or who might assert such
breach. No waiver of any right hereunder shall operate as a waiver of any other
right or of the same or a similar right on another occasion.
3.5 SURVIVAL. The covenants, agreements, warranties and representations
entered into or made pursuant to this Agreement, irrespective of any
investigation made by or on behalf of any party, shall be continuing.
3.6 REMEDIES. No remedy conferred by any of the specific provisions of this
Agreement is intended to be exclusive of any other remedy. Each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder now or hereafter existing at law or in equity or by statute or
otherwise, and the election by a party of one or more remedies shall not
constitute a waiver of the party's right to pursue any other available remedies.
3.7 ATTORNEYS' FEES. In the event that any action or proceeding, including
arbitration, is commenced by any party hereto for the purpose of enforcing any
provision of this Agreement, the parties to such action, proceeding or
arbitration may receive as part of any award, judgment, decision or other
resolution of such action, proceeding or arbitration their costs and reasonable
attorneys' fees as determined by the person or body making such award, judgment,
decision or
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resolution. Should any claim hereunder be settled short of the commencement of
any such action or proceeding, including arbitration, the parties in such
settlement shall be entitled to include as part of the damages alleged to have
been incurred reasonable costs of attorneys or other professionals in investiga-
tion or counseling on such claim.
3.8 BINDING NATURE OF AGREEMENT. The Agreement includes each of the
exhibits which are referred to herein or attached hereto, all of which are
incorporated by reference herein. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective executors, heirs, legal representatives, successors and assigns.
3.9 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties, supersedes all prior agreements and understandings relating to the
subject matter hereof.
3.10 SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
3.11 COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
3.12 SECTION HEADINGS. The headings of each Section, subsection or other
subdivision of this Agreement are for reference only and shall not limit or
control the meaning thereof.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Investor Right
Agreement on the date first above written.
ACCOM, INC., a Delaware corporation
By: /s/ Junaid Sheikh
-----------------------------------------
Name: Junaid Sheikh
---------------------------------------
Title: C.E.O.
--------------------------------------
MICHAEL LUCKWELL
By: /s/ Michael Luckwell
-----------------------------------------
Name:_______________________________________
Title:______________________________________
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