Exhibit 10.1
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this “
Agreement ”) is made and entered into as of June [__],
2009 among Unify Corporation, a Delaware corporation (the “
Company ”), and each of the investors executing this
Agreement and listed on Schedule 1 attached hereto (the
“ New Investors ”), each of the investors
executing this Agreement and listed on Schedule 2 attached
hereto (the “ Prior Investors ”) and each of the
investors executing this Agreement and listed on Schedule 3
attached hereto (the “ Management Investors ”
and, collectively with the New Investors and the Prior Investors,
the “ Investors ”).
WHEREAS, the Company has entered into the
Agreement and Plan of Merger, dated as of April 16, 2009 (the
“ Merger Agreement ”), by and among the Company,
a wholly-owned subsidiary of the Company (“ Merger Sub
”) and AXS-One Inc., a Delaware corporation (“
AXS-One ”), which provides for the merger (the “
Merger ”) of Merger Sub with and into the Company,
subject to the terms and conditions set forth therein;
WHEREAS, each of the Prior Investors and the
Management Investors are entitled to receive a certain number of
shares (the “ Earn-Out Shares ”) of the
Company’s Common Stock, par value $0.001 per share (the
“ Common Stock ”), pursuant to Section 4.7 of
the Merger Agreement;
WHEREAS, this Agreement is being entered into
pursuant to the Standby Convertible Note Purchase Agreement, dated
as of the date hereof, by and among AXS-One and the New Investors
(the “ Purchase Agreement ”); and
WHEREAS, the Company wishes to induce the New
Investors to purchase the Series 2009 5% Secured Convertible
Promissory Notes (the “ Notes ”) in accordance
with the terms and conditions of the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual
covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and the Investors hereby agree as
follows:
1.
Definitions .
Capitalized terms used and not otherwise defined
herein shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall
have the following meanings:
“ Advice ” shall have the
meaning set forth in Section 3(m).
“ Affiliate ” means, with
respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such
Person. For the purposes of this definition, “control,”
when used with respect to any Person, means the possession, direct
or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the
terms of “affiliated,” “controlling” and
“controlled” have meanings correlative to the
foregoing.
“ Board ” shall have the
meaning set forth in Section 3(n).
“ Business Day ” means any
day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of
California generally are authorized or required by law or other
government actions to close.
“ Commission ” means the
Securities and Exchange Commission.
“ Conversion Shares ” means
the shares of Common Stock issuable upon conversion of the Notes
purchased by the New Investors pursuant to the Purchase
Agreement.
“ Effectiveness Date ” means,
with respect to the Initial Registration Statement required to be
filed hereunder, the 60th calendar day following the last date of
the Filing Period (or, in the event of a “review” by
the Commission, the 90th calendar day following the last date of
the Filing Period) and with respect to any additional Registration
Statements which may be required pursuant to Section 3(b), the 60th
calendar day following the date on which an additional Registration
Statement is required to be filed hereunder; provided ,
however , that in the event the Company is notified by the
Commission that one or more of the above Registration Statements
will not be reviewed or is no longer subject to further review and
comments, the Effectiveness Date as to such Registration Statement
shall be no later than the fifth trading day following the date on
which the Company is so notified if such date precedes the dates
otherwise required above.
“ Effectiveness Period ”
shall have the meaning set forth in Section 2.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended.
“ Filing Period ” means the
period, if any, commencing with the closing of the Merger and
ending June 30, 2010 and, with respect to any additional
Registration Statements which may be required pursuant to Section
3(b), the earliest practical date on which the Company is permitted
by SEC Guidance to file such additional Registration Statement
related to the Registrable Securities.
“ Holder ” or “
Holders ” means the holder or holders, as the case may
be, from time to time of Registrable Securities, including without
limitation the Investors and their assignees.
“ Indemnified Party ” shall
have the meaning set forth in Section 5(c).
“ Indemnifying Party ” shall
have the meaning set forth in Section 5(c).
“ Initial Registration Statement
” means the initial Registration Statement which includes the
Initial Shares filed pursuant to this Agreement.
“ Initial Shares ” means a
number of Registrable Securities equal to the lesser of (a) the
total number of Registrable Securities, (b) one-third of the number
of issued and outstanding shares of Common Stock that are held by
non-affiliates of the Company on the day immediately prior to the
filing date of the Initial Registration Statement and (c) such
lesser amount of Registrable Securities as may be required by SEC
Guidance.
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“ Losses ” shall have the
meaning set forth in Section 5(a).
“ Person ” means an
individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
“ Proceeding ” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
“ Prospectus ” means the
prospectus included in any Registration Statement (including,
without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
“ Registrable Securities ”
means (a) the Conversion Shares, Earn-Out Shares or other
securities issued or issuable to each Investor or its transferee or
designee (i) upon conversion of the Notes or upon any dividend or
distribution with respect to, any exchange for or any replacement
of such Notes, Conversion Shares or Earn-Out Shares or (iii) upon
any conversion, exercise or exchange of any securities issued in
connection with any such dividend, distribution, exchange or
replacement, (b) securities issued or issuable upon any stock
split, stock dividend, recapitalization or similar event with
respect to the foregoing and (c) any other security issued as a
dividend or other distribution with respect to, in exchange for, in
replacement or redemption of or in reduction of the liquidation
value of any of the securities referred to in the preceding
clauses; provided, however, that such securities shall cease to be
Registrable Securities when such securities have been sold to or
through a broker or dealer or underwriter in a public distribution
or a public securities transaction or when such securities may be
sold without any volume limitations pursuant to Rule 144 as
determined by counsel to the Company pursuant to a written opinion
letter, addressed to the Company’s transfer agent to such
effect.
“ Registration Statement ”
means the registration statements and any additional registration
statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by
reference in such registration statement.
“ Rule 144 ” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“ Rule 415 ” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
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“ Rule 416 ” means Rule 416
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Rule 424 ” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Rule 430A ” means Rule 430A
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Rule 461 ” means Rule 461
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Rule 501 ” means Rule 501
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ SEC Guidance ” means (i)
any written or oral guidance, comments, requirements or requests of
the Commission staff and (ii) the Securities Act.
“ Securities Act ” means the
Securities Act of 1933, as amended.
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2.
Termination; Registration . During the Filing Period, the
Company shall prepare and file with the Commission an Initial
Registration Statement for the resale of all or such maximum
portion of the Registrable Securities as permitted by SEC Guidance
(provided that the Company shall use diligent efforts to advocate
with the Commission for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without
limitation, the Manual of Publicly Available Telephone
Interpretations D.29) that are not then registered on an effective
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (as promulgated under the Securities Act) (or if such form
is not available to the Company on another form appropriate for
such registration in accordance herewith). The Company shall use
its reasonable best efforts to cause the Registration Statement to
be declared effective under the Securities Act not later than the
Effectiveness Date (including filing with the Commission a request
for acceleration of effectiveness in accordance with Rule 461
within five (5) Business Days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be
“reviewed,” or not be subject to further review) and to
keep such Registration Statement continuously effective under the
Securities Act until such date as is the earlier of (x) the date
when all Registrable Securities covered by such Registration
Statement have been sold or (y) the first anniversary date of the
effectiveness of such Registration Statement (the “
Effectiveness Period ”). For purposes of the
obligations of the Company under this Agreement, no Registration
Statement shall be considered “effective” with respect
to any Registrable Securities unless such Registration Statement
lists the Holders of such Registrable Securities as “Selling
Stockholders” and includes such other information as is
required to be disclosed with respect to such Holders to permit
them to sell their Registrable Securities pursuant to such
Registration Statement, unless any such Holder is not included as a
“Selling Stockholder” pursuant to Section 3(m). Such
Registration Statement also shall cover, to the extent allowable
under the Securities Act and the Rules promulgated thereunder
(including Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends
or similar transactions with respect to the Registrable Securities.
Notwithstanding the foregoing or any other provision of this
Agreement, if any SEC Guidance sets forth a limitation on the
number of Registrable Securities permitted to be registered on a
particular Registration Statement (and notwithstanding that the
Company used diligent efforts to advocate with the Commission for
the registration of all or a greater portion of Registrable
Securities), unless otherwise directed in writing by a Holder as to
its Registrable Securities or unless otherwise required by SEC
Guidance, the number of Registrable Securities to be registered on
such Registration Statement shall be reduced on a pro rata basis
based on the total number of unregistered Registrable Securities
held by the Holders, to the extent permitted by SEC Guidance;
provided, however, that, prior to any reduction in the number of
Registrable Securities included in a Registration Statement as set
forth in this sentence, the number of shares of Common Stock that
are not Registrable Securities and which shall have been included
on such Registration Statement shall be reduced by up to 100%, if
such reduction will permit the registration of additional
Registrable Securities.
3.
Registration Procedures .
In
connection with the Company’s registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission during
the Filing Period, a Registration Statement on Form S-3 (as
promulgated under the Securities Act) (or if such form is not
available to the Company on another form appropriate for such
registration in accordance herewith) (which shall include a Plan of
Distribution substantially in the form of Exhibit A attached
hereto), and cause the Registration Statement to become effective
and remain effective as provided herein; provided, however, that
not less than three (3) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment
or supplement thereto, the Company shall (i) furnish to the Holders
or their counsel, copies of all such documents proposed to be
filed, which documents (other than those incorporated by reference)
shall be subject to the review of the Holders or their counsel, and
(ii) at the request of any Holder cause its officers and directors,
counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of
counsel to such Holders, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities or their counsel shall
reasonably object within three (3) Business Days after their
receipt thereof. In the event of any such objection, the Holders
shall provide the Company with any requested revisions to such
prospectus or supplement within two (2) Business Days of such
objection.
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(b) (i) Prepare and file with the Commission
such amendments, including post-effective amendments, to the
Registration Statement as may be necessary to keep the Registration
Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and to the extent any
Registrable Securities are not included in such Registration
Statement for reasons other than the failure of the Holder to
comply with Section 3(m), shall prepare and file with the
Commission such amendments to the Registration Statement or such
additional Registration Statements as are appropriate in order to
register for resale under the Securities Act all Registrable
Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably practicable to any comments
received from the Commission with respect to the Registration
Statement or any amendment thereto and as promptly as reasonably
practicable provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the
Registration Statement, but not, without the prior written consent
of the Holders, any comments that would result in the disclosure to
the Holders of material and non-public information concerning the
Company; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect
to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance
with the intended methods of disposition by the Holders thereof set
forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notify Holders of Registrable Securities to
be sold as promptly as reasonably practicable (i) when a Prospectus
or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (ii) when the
Commission notifies the Company whether there will be a
“review” of such Registration Statement and whenever
the Commission comments in writing on such Registration Statement;
and (iii) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, and
after the effectiveness thereof: (A) of any request by the
Commission or any other federal or state governmental authority for
amendments or supplements to the Registration Statement or
Prospectus or for additional information; (B) of the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose;
(C) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding
for such purpose; and (D) if the financial statements included in
the Registration Statement become ineligible for inclusion therein
or of the occurrence of any event that makes any statement made in
the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that,
in the case of the Registration Statement or the Prospectus, as the
case may be, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Without limitation to any remedies to which the Holders may be
entitled under this Agreement, if any of the events described in
Section 3(c)(iii) occur, the Company shall use its reasonable best
efforts to respond to and correct the event.
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(d) Use its reasonable best efforts to avoid the
issuance of or, if issued, use reasonable best efforts to obtain
the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the
earliest practicable time.
(e) If requested by any Holder, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment
to the Registration Statement such information as the Company
reasonably agrees should be included therein and (ii) make all
required filings of such Prospectus supplement or such
post-effective amendment as soon as reasonably practicable after
the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment.
(f) Furnish to each Holder, without charge, at
least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules,
and all exhibits to the extent requested by such Person (including
those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission.
(g) Promptly deliver to each Holder, without
charge, as many copies of the Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto
as such Persons may reasonably request; and the Company hereby
consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable
Securities, use its reasonable best efforts to register or qualify
or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale
under the securities or “Blue Sky” laws of such
jurisdictions within the United States as any Holder requests in
writing, to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and
to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or
to take any action that would subject it to general service of
process in any jurisdiction where it is not then so subject or
subject the Company to any material tax in any such jurisdiction
where it is not then so subject.
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(i) Cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent
permitted by applicable law and the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to
be in such denominations and registered in such names as any Holder
may request at least two (2) Business Days prior to any sale of
Registrable Securities.
(j) Following the occurrence of any event
contemplated by Section 3(c)(iii)(D), as promptly as possible,
prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration
Statement nor such Prospectus will contain 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, in the
light of the circumstances under which they were made, not
misleading.
(k) Cause all Registrable Securities relating to
such Registration Statement to be listed on any United States
securities exchange, quotation system, market or over-the-counter
bulletin board on which similar securities issued by the Company
are then listed.
(l) Comply in all material respects with all
applicable rules and regulations of the Commission with respect to
the Registration Statement.
(m) Request each selling Holder to furnish to
the Company information regarding such Holder and the distribution
of such Registrable Securities as is required by law or the
Commission to be disclosed in the Registration Statement, and the
Company may exclude from such registration the Registrable
Securities of any such Holder who fails to furnish such information
within a reasonable time prior to the filing of each Registration
Statement, supplemented Prospectus and/or amended Registration
Statement.
If
the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such
Holder shall have the right to require (if such reference to such
Holder by name or otherwise is not required by the Securities Act
or any similar federal statute then in force) the deletion of the
reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time
that such reference ceases to be required.
Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in
Section 3(c)(iii) or 3(n), such Holder shall forthwith discontinue
disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing
(the “ Advice ”) by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement.
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(n) If (i) there is material non-public
information regarding the Company which the Company’s Board
of Directors (the “ Board ”) reasonably
determines not to be in the Company’s best interest to
disclose and which the Company is not otherwise required to
disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction)
available to the Company which the Board reasonably determines not
to be in the Company’s best interest to disclose and which
the Company would be required to disclose under the
Regist
