Exhibit 10.1
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
     THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) dated November 2, 2005 by
and among MTI TECHNOLOGY CORPORATION, a Delaware corporation (the “Company”),
and the entities listed on the signature pages hereto (the “Investors”) amends
and restates the Investor Rights Agreement, dated as of June 17, 2004, as
amended by Amendment No. 1 to Investor Rights Agreement, dated as of August 30,
2004, and as further amended by Amendment No. 2 to Investor Rights Agreement,
dated as of November 30, 2004, by and among the Company and the Investors (the
original agreements and such amendments, collectively the “Original IRA”).
BACKGROUND
     A. The Company sold and the Investors purchased Series A Stock and Warrants
(defined below) pursuant to a Securities Purchase Agreement, dated as of
June 17, 2004. The Company and the Investors entered into the Original IRA in
connection with the issuance of the Series A Stock and associated Warrants.
     B. The Company and the Investors have entered into another Securities
Purchase Agreement, dated as of August 19, 2005, pursuant to which such
Investors are acquiring shares of Series B Convertible Preferred Stock, par
value $0.001 per share, and Warrants as provided for therein, of the Company
contemporaneously with the execution and delivery of this Agreement.
     C. Under Sections 7.01(p) and 7.02(c) of such Purchase Agreement, the
delivery of this Agreement is a condition to the Investors’ acquisition, and the
Company’s sale, of such shares of Series B Convertible Preferred Stock and
Warrants.
AGREEMENT
     NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto hereby amend and restate the Original IRA in
its entirety to be follows:
     1. Definitions. As used in this Agreement, the following terms shall have
the indicated meanings:
     “Advent” means Advent International Corporation, a Delaware corporation.
     “Adverse Disclosure” means public disclosure of material non-public
information, which disclosure in the good faith judgment of the Board of
Directors (after consultation with external legal counsel) (i) would be required
to be made in any Registration Statement so that such Registration Statement
would not be materially misleading, (ii) would not be required to be made at
such time but for the filing, effectiveness or continued use of such
Registration Statement, and (iii) would be materially detrimental to the
Company’s ability to effect a material proposed merger, acquisition,
disposition, financing, reorganization, recapitalization, or similar
transaction, or otherwise be materially detrimental to the Company.

 

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     “Board of Directors” means the Board of Directors of the Company.
     “Certificate” means the Series A Certificate and/or the Series B
Certificate as the context may require.
     “Commission” means the Securities and Exchange Commission.
     “Common Stock” means the common stock, par value $0.001 per share, of the
Company, or any common stock or other securities issued in respect of such
Common Stock, or into which such Common Stock is converted, due to stock splits,
stock dividends or other distributions, merger, consolidation,
reclassifications, recapitalizations or otherwise.
     “Company” has the meaning ascribed to it in the introductory paragraph
hereto.
     “Company Election Notice” has the meaning ascribed to it in Section 3.2(a)
below.
     “Company Policies” means the Company’s (a) Insider Trading Policy (Control
No. 10-010-R2), (b) Pre-Clearance and Blackout Policy (Control No. 10-011-R3)
and (c) Section 16 Compliance Program (Control No. 10-012-R3), as such policies
may be amended or modified from time to time.
     “Director” means the Series A Director and/or the Series B Director as the
context may require.
     “DMC III” means Digital Media & Communications III Limited Partnership, a
Delaware limited partnership.
     “EMC” means EMC Corp., a Massachusetts corporation.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
     “GAAP” means U.S. generally accepted accounting principles consistently
applied and maintained throughout the applicable periods.
     “Increased Maximum Vote Allowed” has the meaning ascribed to it in
Section 4.4(a) below.
     “Indemnified Person” means a Person entitled to indemnification pursuant to
Sections 2.6(a) or (b).
     “Indemnifying Person” means a Person obligated to provide indemnification
pursuant to Sections 2.6(a) or (b).
     “Investor” has the meaning ascribed to it in the introductory paragraph
hereto.
     “Investor Indemnified Person” has the meaning ascribed to it in
Section 2.6(a) below.
     “Original IRA” has the meaning set forth in the introductory paragraph
hereto.

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     “Other Registration Rights” means written agreements under which the
Company has agreed to include securities of the Company (other than Registrable
Shares) in a Registration Statement.
     “Other Registration Rights Holders” means holders of securities subject to
Other Registration Rights.
     “Person” means an individual or a corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
     “Preferred Stock” means the Series A Stock and Series B Stock.
     “Prospectus” means the prospectus included in any Registration Statement,
as amended or supplemented by an amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
     “Purchase Agreement” means the Securities Purchase Agreement, dated as of
August 19, 2005, by and among the Company and the Investors.
     “Registrable Shares” means (a) the Series A Registrable Shares, (b) the
Series B Registrable Shares, (c) any other shares of Common Stock issued or
issuable upon the conversion or exercise of any other securities held by an
Investor, including the Warrants, and (d) any other shares of Common Stock held
by an Investor; provided, however, that shares of Common Stock that are
Registrable Shares shall cease to be Registrable Shares upon any sale pursuant
to a Registration Statement or Rule 144 or at such time at which such
Registrable Shares may be sold pursuant to paragraph (k) of Rule 144.
     “Registration Expenses” means all expenses incurred by the Company in
complying with the provisions of Section 2, including all registration and
filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company and the fees and expenses of Registration Selling
Investor Counsel, state Blue Sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of
Registration Selling Investors’ own counsel (other than the Registration Selling
Investor Counsel).
     “Registration Initiating Investors” means the Investors initiating a
request for registration pursuant to Section 2.1(a).
     “Registration Selling Investor” means any Investor owning Registrable
Shares included in a Registration Statement.
     “Registration Selling Investor Counsel” means, if Investors are
participating as Registration Selling Investors with respect to a registration,
counsel selected by Advent to represent all Registration Selling Investors with
respect to such registration. Any notice or other delivery requirement
deliverable by the Company to the Registration Selling Investor

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Counsel shall be made to such person at such address as Advent may reasonably
request from time to time through written notice to the Company.
     “Registration Statement” means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company, other than (a) a registration statement on Form S-4 or Form S-8, or
their successors, or any other form for a similar limited purpose, or (b) any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation.
     “Registration Threshold Amount” has the meaning ascribed to it in
Section 2.1(a) below.
     “Rule 144” means Rule 144 promulgated under the Securities Act, and any
successor rule or regulation thereto, and in the case of any referenced section
of such rule, any successor section thereto, collectively and as from time to
time amended and in effect.
     “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations promulgated thereunder.
     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
     “Series A Certificate” means the Certificate of Designations of Series A
Convertible Preferred Stock forming a part of the Certificate of Incorporation
of the Company, as amended from time to time in accordance with the terms
thereof.
     “Series A Director” means the member of the Board of Directors designated
by the holders of shares of Series A Stock pursuant to the Series A Certificate.
     “Series A Nominator” has the meaning ascribed to it in Section 3.2(b)
below.
     “Series A Registrable Shares” means (a) the shares of Common Stock issued
or issuable upon conversion of the Series A Stock held by an Investor from time
to time, and (b) the shares of Common Stock issued or issuable upon the exercise
of the Warrants issued contemporaneously with the Series A Stock and held by an
Investor from time to time.
     “Series A Stock” means the Series A Convertible Preferred Stock of the
Company issued pursuant to a Securities Purchase Agreement, dated June 17, 2004,
between the Investors and the Company.
     “Series B Certificate” means the Certificate of Designations of Series B
Convertible Preferred Stock forming a part of the Certificate of Incorporation
of the Company, as amended from time to time in accordance with the terms
thereof.
     “Series B Director” means the member of the Board of Directors designated
by the holders of shares of Series B Stock pursuant to the Series B Certificate.
     “Series B Nominator” has the meaning ascribed to it in Section 3.2(b)
below.

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     “Series B Registrable Shares” means (a) the shares of Common Stock issued
or issuable upon conversion of the Series B Stock held by an Investor from time
to time, (b) the shares of Common Stock issued or issuable upon the exercise of
the Warrants issued contemporaneously with the Series B Stock and held by an
Investor from time to time.
     “Series B Stock” means the Series B Convertible Preferred Stock of the
Company issued pursuant to the Purchase Agreement.
     “Shares” means the shares of Series A Stock and Series B Stock held by the
Investors.
     “Shelf Registration Statement” means the Registration Statement filed by
the Company with the Commission pursuant to Section 2.3 covering the resale of
all Registrable Shares for an offering to be made on a continuous basis pursuant
to Rule 415 promulgated under the Securities Act.
     “Subsidiary” means any corporation or other entity of which the capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
is at the time directly or indirectly owned by the Company.
     “Trading Day” means (a) any day on which the Common Stock is listed or
quoted and traded on the Nasdaq National Market, the New York Stock Exchange,
the American Stock Exchange or the Nasdaq SmallCap Market or (b) if the Common
Stock is not traded on any such market, then a day on which trading occurs on
the New York Stock Exchange (or any successor thereto).
     “Transfer” means, as the context requires, (a) any sale, transfer,
distribution or other disposition, whether voluntarily or by operation of law,
or (b) the act of effecting such a sale, transfer, distribution or other
disposition.
     “Warrants” means the warrants to purchase shares of Common Stock, par value
$0.001 per share, originally issued to an Investor in connection with the
issuance of either the Series A Stock or Series B Stock.
     2. Registration Rights
     2.1. Demand Registrations
     (a) Investors holding in the aggregate at least a majority of the shares of
Preferred Stock then outstanding may, at any time, request, in writing, that the
Company file a Registration Statement on Form S-3 (or any successor form) to
effect the registration of an offering of Registrable Shares owned by such
Investor(s) and having an aggregate value of at least $5,000,000, based on the
last reported sale price of the Common Stock on the trading day immediately
preceding the date of such request (the “Registration Threshold Amount”);
provided, however, that, if at the time of such request the Company is not
eligible to register for resale the Registrable Shares on Form S-3, the Company
shall register the Registrable Shares on such other form as the Company is
eligible to use. The Company shall set forth in such Form S-3 any

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information that may be required in a registration that is filed on Form S-1 and
that the lead underwriter managing the offering reasonably requests be expressly
included in the Registration Statement.
     (b) Upon receipt of any request for registration pursuant to this
Section 2, the Company shall promptly (but in any event within 10 days) give
written notice of such proposed registration to all other Investors. Such other
Investors shall have the right, by giving written notice to the Company within
20 days after the Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Investors may request in
such notice of election, subject in the case of an underwritten offering to the
terms of Section 2.1(c). Thereupon, the Company shall, as expeditiously as
possible, use its best efforts to effect the registration on an appropriate
registration form of all Registrable Shares that the Company has been requested
to so register.
     (c) If the Registration Initiating Investors intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant to
Section 2.1(a) and the Company shall include such information in its written
notice referred to in Section 2.1(b). In such event, (i) the right of any other
Investor to include its Registrable Shares in such registration pursuant to
Section 2.1(a) shall be conditioned upon such other Investor’s participation in
such underwriting on the terms set forth herein, and (ii) all Investors
including Registrable Shares in such registration shall enter into an
underwriting agreement upon customary terms with the underwriter or underwriters
managing the offering; provided that such underwriting agreement shall not
provide for indemnification or contribution obligations on the part of the
Investors materially greater than the obligations of the Investors pursuant to
Section 2.6.
     If the Company and the Registration Initiating Investors are unable to
mutually agree on the managing underwriter(s) for any underwritten offering
pursuant to Section 2.1(a) within 15 days after the Company receives the
Registration Initiating Investors’ request, the Company shall select an
underwriter out of a pool of three underwriting firms chosen by the Registration
Initiating Investors, each of which firms shall have a national reputation and
shall have prior experience with software companies.
     If any Investor that has requested inclusion of its Registrable Shares in
such registration as provided above disapproves of the terms of the
underwriting, such Person may elect, by written notice to the Company, to
withdraw its Registrable Shares from such Registration Statement and
underwriting; provided, however, that, if Registration Selling Investors holding
a majority of the remaining Registrable Shares mutually agree, the Company shall
continue to effect the registration of such remaining Registrable Shares
regardless of whether the aggregate value of the remaining Registrable Shares is
less than the Registration Threshold Amount, in which case the registration,
once effective, shall be counted as a registration for the purposes of
Section 2.1(d).

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     If the lead managing underwriter advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the number of Registrable Shares to be included in the
Registration Statement and underwriting shall be allocated first among Investors
holding the Series B Registrable Shares, in proportion, as nearly as
practicable, to the respective number of Series B Registrable Shares each
Investor has requested be included in such registration. In the event all
Series B Registrable Shares have been included, then the number of Registrable
Shares to be included in the Registration Statement and underwriting shall be
allocated second among Investors holding the Series A Registrable Shares, in
proportion, as nearly as practicable, to the respective number of Series A
Registrable Shares each Investor has requested be included in such registration.
In the event all Series A Registrable Shares have been included, then the number
of remaining Registrable Shares to be included in the Registration Statement and
underwriting shall be allocated finally among Investors holding of the remaining
Registrable Shares, in proportion, as nearly as practicable, to the respective
number of Registrable Shares each Investor has requested be included in such
registration.
     (d) The Company shall not be required to effect more than a total of three
(3) registrations requested pursuant to Section 2.1(a). The Investors shall not
deliver a notice pursuant to Section 2.1(a) requesting registration of any
underwritten offering until at least 6 months after the closing of any prior
underwritten offering registered pursuant to a request under Section 2.1(a). For
purposes of this Section 2.1(d), a Registration Statement shall not be counted
until such time as such Registration Statement has been declared effective by
the Commission. Notwithstanding the foregoing, any request for registration that
is withdrawn by the Registration Initiating Investors primarily as a result of
material adverse information concerning the business or financial condition of
the Company, where such information is made known to the Registration Initiating
Investors after the date on which such registration statement was filed, shall
not count as a Registration Statement.
     (e) If, at the time of any request to register Registrable Shares by
Registration Initiating Investors pursuant to this Section 2.1, such
registration would require Adverse Disclosure, or the Company is engaged or has
plans to engage in a registered public offering or is engaged in a material
proposed merger, acquisition, disposition, financing, reorganization,
recapitalization or similar transaction that, in the good faith determination of
the Board of Directors, could be adversely affected by the requested
registration, then the Company may at its option direct that such request be
delayed for a period not in excess of 90 days from the date of such request,
such right to delay a request to be exercised by the Company not more than once
in any 12-month period.
     2.2. Incidental Registrations
     (a) Whenever the Company proposes to file a Registration Statement covering
shares of Common Stock (other than a Registration Statement filed (i) pursuant
to Section 2.1 or 2.3 or (ii) in accordance with the requirements of a written
agreement entered into prior to the date hereof, except in any such case to the
extent expressly permitted therein) at any time and from time to time, it shall,
prior to such filing, give

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written notice to all Investors of its intention to do so; provided that no such
notice need be given if no Registrable Shares are to be included therein as a
result of a written notice from the managing underwriter pursuant to
Section 2.2(b). Upon the written request of an Investor or Investors given
within 10 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares that the Company has
been requested by such Investor or Investors to register to be registered under
the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Investor or Investors; provided that the Company shall have
the right to postpone or withdraw any registration effected pursuant to this
Section 2.2 without obligation upon 10 days’ advance written notice to the
Investors. Upon receipt of any such notice, the Investors may elect to exercise
their right to demand a registration in accordance with Section 2.1.
     (b) If the registration for which the Company gives notice pursuant to
Section 2.2(a) is a registered public offering involving an underwriting, the
Company shall so advise the Investors as a part of the written notice given
pursuant to Section 2.2(a). In such event, (i) the right of any Investor to
include its Registrable Shares in such registration pursuant to this Section 2.2
shall be conditioned upon such Investor’s participation in such underwriting on
the terms set forth herein and (ii) all Investors including Registrable Shares
in such registration shall enter into an underwriting agreement upon customary
terms with the underwriter or underwriters selected for the underwriting by the
Company. If any Investor who has requested inclusion of its Registrable Shares
in such registration as provided above disapproves of the terms of the
underwriting, such Investor may elect, by written notice to the Company, to
withdraw its shares from such Registration Statement and underwriting.
     If the managing underwriter advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
shares held by Persons other than the Investors shall be excluded from such
Registration Statement and underwriting to the extent deemed advisable by the
managing underwriter, and if a further reduction of the number of shares is
required, the number of shares that may be included in such Registration
Statement and underwriting shall be allocated first among Investors holding
Series B Registrable Shares requesting registration in proportion, as nearly as
practicable, to the respective number of shares of Common Stock (on an as
converted basis that are Series B Registrable Shares) held by them on the date
the Company gives the notice specified in Section 2.2(a). If all such Series B
Registrable Shares are included, then the number of shares that may be included
in such Registration Statement and underwriting shall be allocated second among
Investors holding Series A Registrable Shares requesting registration in
proportion, as nearly as practicable, to the respective number of shares of
Common Stock (on an as converted basis that are Series A Registrable Shares)
held by them on the date the Company gives the notice specified in Section
2.2(a). If all such Series A Registrable Shares are included, then the number of
shares that may be included in such Registration Statement and underwriting
shall be allocated finally among Investors holding any remaining Registrable
Shares requesting registration in proportion, as

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nearly as practicable, to the respective number of shares of Common Stock (on an
as converted basis) held by them on the date the Company gives the notice
specified in Section 2.2(a). If any Investor would be entitled to include more
shares than such holder has requested to be registered, the excess shall be
allocated among other requesting Investors pro rata in the manner described in
the preceding sentences. In no event shall the number of shares permitted to be
offered by the Company be reduced pursuant to the terms of this paragraph.
     2.3. Shelf Registration. The Company shall prepare and file with the
Commission a Shelf Registration Statement as promptly as practicable after the
date hereof (and in any event by no later than 30 days after the Closing Date),
and shall use its best efforts to take such steps as are necessary to enable the
Shelf Registration to be declared effective by the Commission as promptly as
practicable after the date hereof. The Shelf Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Shares on Form S-3, in which case such Shelf Registration Statement
shall be on such other form as the Company is eligible to use). The Company
shall notify Registration Selling Investor Counsel in writing promptly (in any
event within one Trading Day) after receiving notification from the Commission
that the Shelf Registration Statement has been declared effective.
     2.4. Registration Procedures
     (a) If and whenever the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of any Registrable
Shares under the Securities Act, the Company shall:

  (i)   prepare and file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become effective as soon as possible;     (ii)   not
less than (a) five (5) Trading Days prior to the filing of the Shelf
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), or (b) ten (10) Trading Days prior to the
filing of any other Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall (i) furnish to Registration Selling Investor Counsel copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of each
Registration Selling Investor and its counsel, and (ii) 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 respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act; and the Company shall not file any Registration Statement or any
such

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      Prospectus or any amendments or supplements thereto to which the
Registration Selling Investors holding a majority of the Registrable Shares to
be registered thereunder and their counsel shall reasonably object, provided
that such objection is communicated to the Company within three (3) Trading Days
of receipt of such documents;     (iii)   as expeditiously as possible prepare
and file with the Commission any amendments and supplements to the Registration
Statement and the prospectus included in the Registration Statement as may be
necessary to comply with the provisions of the Securities Act (including the
anti-fraud provisions thereof) and use its best efforts to keep the Registration
Statement continuously effective:

  (A)   in the case of the Shelf Registration Statement filed pursuant to
Section 2.3, until the earliest of (1) the date on which all of the Registrable
Shares covered by the Shelf Registration Statement have been sold, and (2) the
date on which all of such Registrable Shares may be sold pursuant to paragraph
(k) of Rule 144, as determined by the Company after consultation with legal
counsel; provided that if the Company ceases to keep the Registration Statement
effective by reason of clause 2 herein, the Company must certify to the
Investors, by delivery of a certificate to that effect to each Registration
Selling Investor, that the Registrable Shares may be sold pursuant to paragraph
(k) of Rule 144; and     (B)   in the case of all other registrations, for
(1) 180 days from the effective date or such greater period, up to 360 days, as
an underwriter may require, or (2) such lesser period until all such Registrable
Shares are sold; provided that the number of days specified in this clause
(B) shall not include any day on which a Registration Selling Investor is
restricted from offering or selling Registrable Shares pursuant to
Sections 2.4(b) or (c) below;

  (iv)   in all cases respond as promptly as possible to any comments received
from the Commission with respect to any Registration Statement or any amendment
thereto;     (v)   as expeditiously as possible furnish to each Registration
Selling Investor, without charge, at least one conformed copy of the applicable
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, 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;     (vi)   as
expeditiously as possible furnish to each Registration Selling Investor such
reasonable numbers of copies of the Prospectus, including any

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      preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such Registration Selling Investor
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by such Registration Selling
Investor; and the Company hereby consents to the use of any such Prospectus and
each amendment or supplement thereto by each Registration Selling Investor in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto;     (vii)   use its
best efforts to avoid the issuance of or, if issued, obtain the withdrawal of
(x) any order suspending the effectiveness of any Registration Statement or
(y) any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction as soon as reasonably
practicable;     (viii)   as expeditiously as possible (and in the case of the
Shelf Registration Statement, prior to the public offering of Registrable
Securities pursuant thereto) use its best efforts to register or qualify the
Registrable Shares covered by the Registration Statement under the securities or
Blue Sky laws of such states as the Registration Selling Investors shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Registration Selling Investors to
consummate the public sale or other disposition in such states of the
Registrable Shares owned by the Registration Selling Investors; provided,
however, that the Company shall not be required in connection with this
paragraph (viii) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction; as expeditiously as possible,
cause all such Registrable Shares to be listed on each securities exchange or
automated quotation system on which the same securities issued by the Company
are then listed;     (ix)   promptly provide a transfer agent and registrar for
all such Registrable Shares not later than the effective date of such
registration statement;     (x)   cooperate with the Registration Selling
Investors to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
an effective Registration Statement, which certificates shall be free, to the
extent permitted hereunder and in compliance with applicable law, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Registration Selling
Investors may request;     (xi)   promptly make available for inspection by the
Registration Selling Investors, any managing underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant

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      or other agent retained by any such underwriter or selected by the
Registration Selling Investors, all financial and other records, pertinent
corporate documents and properties of the Company and cause the Company’s
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement; provided
that, unless otherwise mutually agreed by the Company and the recipient
Investor, the Company will not make any material nonpublic information available
to an Investor; and     (xii)   in connection with an underwritten disposition
of Registrable Shares, provide such reasonable assistance in the marketing of
the Registrable Shares as is customary of issuers in primary underwritten public
offerings (including participation by its senior management in “road shows”).

     (b) At any time when a Prospectus is required to be delivered under the
Securities Act, the Company shall promptly notify each Registration Selling
Investor of any of the following events: (i) the Commission notifies the Company
whether there will be a “review” of the Registration Statement; (ii) the
Commission comments in writing on the Registration Statement (in which case the
Company shall deliver to each Registration Selling Investor a copy of such
comments and of all written responses thereto); (iii) the Registration Statement
or any post-effective amendment is declared effective or a supplement to any
Prospectus forming a part of such Registration Statement has been filed;
(iv) the Commission or any other Federal or state governmental authority
requests any amendment or supplement to the Registration Statement or Prospectus
or requests additional information related thereto; (v) the Commission issues
any stop order suspending the effectiveness of the Registration Statement or
initiates any Suit (as defined in the Purchase Agreement) for that purpose;
(vi) the Company receives notice of any suspension of the qualification or
exemption from qualification of the Registrable Securities for sale in any
jurisdiction, or the initiation or threat of any Suit for such purpose; or
(vii) the financial statements included in the Registration Statement become
ineligible for inclusion therein or any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference is untrue in any material respect or any
revision to the Registration Statement, Prospectus or other document is required
so that 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 light of the circumstances under which they were made,
not misleading. If requested, the Registration Selling Investors shall
immediately cease making offers of Registrable Shares pursuant to the
Registration Statement until their receipt of the copies of the supplemented or
amended Prospectus. Following receipt of the revised Prospectuses, the
Registration Selling Investors shall be free to resume making offers of the
Registrable Shares.
     (c) In the event that it is advisable to suspend use of a Prospectus
included in a Registration Statement because continued use would require Adverse
Disclosure, the

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Company shall notify each Registration Selling Investor to such effect, and,
upon receipt of such notice, each such Registration Selling Investor shall
immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Registration Selling Investor has received
copies of a supplemented or amended Prospectus or until such Registration
Selling Investor is advised in writing by the Company that the then current
Prospectus may be used and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in such
Prospectus. Notwithstanding anything to the contrary herein, the Company shall
not exercise its rights under this Section 2.4(c) to suspend sales of
Registrable Shares for a period in excess of 60 consecutive days or a total of
90 days in any 365-day period; provided that the Company may suspend such sales
for a period of up to 90 consecutive days (and a total of 120 days in a 365-day
period) if the reason for the continued suspension beyond 60 days relates solely
to the preparation of financial statements required to be filed in accordance
with Item 9.01 of Form 8-K under the Exchange Act (in which event the Company
shall use its best efforts to cause such financial statements to be prepared as
promptly as reasonably practicable in the circumstances), and such suspension
period shall automatically terminate two Trading Days after the filing of such
financial statements. In no event shall the Company’s right under this
Section 2.4(c) be exercised to suspend sales of Registrable Shares beyond the
period during which sales of Registrable Shares would require Adverse
Disclosure. After the end of any suspension period under this Section 2.4, the
Company shall use its best efforts (including filing any required supplemental
prospectus) to restore, as promptly as reasonably possible, the effectiveness of
the Registration Statement and the ability of the Registration Selling Investors
to publicly resell their Registrable Securities pursuant to such effective
Registration Statement.
     2.5. Payment of Expenses. The Company will pay all Registration Expenses
for all registrations under this Agreement.
     2.6. Indemnification and Contribution
     (a) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, the Company shall indemnify and
hold harmless each Registration Selling Investor and each underwriter of such
Registrable Shares, their respective partners, members, agents, directors,
officers, fiduciaries, investment advisors, brokers (including brokers who offer
and sell Registrable Securities as principal as a result of a pledge or any
failure to perform under a margin call of Common Stock) and employees of each of
them, and each other Person, if any, who controls such Registration Selling
Investor or underwriter within the meaning of the Securities Act or the Exchange
Act and the officers, directors, partners, members, agents and employees of each
such controlling Person (each such Person an “Investor Indemnified Person”), to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, settlement costs and expenses, as
incurred, joint or several, that arise out of, relate to or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the

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Registration Statement or any amendment or supplement to such Registration
Statement or Prospectus, (ii) the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the Registration Statement or the
offering contemplated thereby; and the Company will reimburse such Investor
Indemnified Person for any legal or any other expenses reasonably incurred by
such Investor Indemnified Person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable to any Investor Indemnified Person, in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission made (x) in such Registration
Statement, preliminary prospectus or prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the
Company, in writing, by such Person specifically for use in the preparation
thereof, or (y) in any Registration Statement, preliminary prospectus or
prospectus, or any amendment or supplement thereto, which was corrected in a
subsequent prospectus, or any amendment or supplement thereto, and such Investor
Indemnified Person failed to deliver or provide a copy of such subsequent
prospectus, or amendment or supplement thereto, to a purchaser of Registrable
Shares at or prior to the confirmation of the sale of such Registrable Shares in
any case where such delivery is required by the Securities Act, provided that
the limitation on indemnification provided by this paragraph shall not apply if
such Investor Indemnified Person’s failure to deliver or provide a copy of the
prospectus resulted from the Company’s failure to furnish such Investor
Indemnified Person such prospectus, or amendment or supplement thereto, on a
timely basis to permit such delivery or provision.
     (b) In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, each Registration Selling
Investor, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each Person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any and all losses,
claims, damages, liabilities, settlement costs and expenses arising solely out
of (i) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement or Prospectus, or (ii) any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if and to the extent
(and only to the extent) that the statement or omission was made in reliance
upon and in conformity with information relating to such Registration Selling
Investor furnished in writing to the Company by such Registration Selling
Investor specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment or supplement; provided, however,
that the obligations of a Registration Selling Investor hereunder shall be
limited to an amount equal to the net proceeds to

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such Registration Selling Investor of Registrable Shares sold in connection with
such registration.
     (c) Each Indemnified Person shall give notice to the Indemnifying Person
promptly after such Indemnified Person has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Person to
assume the defense of any such claim or any litigation resulting therefrom;
provided, that counsel for the Indemnifying Person, who shall conduct the
defense of such claim or litigation, shall be approved by the Indemnified Person
(whose approval shall not be unreasonably withheld, conditioned or delayed); and
provided further, that the failure of any Indemnified Person to give notice as
provided herein shall not relieve the Indemnifying Person of its obligations
under this Section 2.6 except to the extent that the Indemnifying Person is
actually prejudiced by such failure. The Indemnified Person may participate in
such defense at such party’s expense; provided, however, that the Indemnifying
Person shall pay such expense if the Indemnified Person reasonably concludes
that representation of such Indemnified Person by the counsel retained by the
Indemnifying Person would be inappropriate due to actual or potential conflicts
of interests between the Indemnified Person and any other party represented by
such counsel in such proceeding; and provided further, that in no event shall
the Indemnifying Person be required to pay the expenses of more than one law
firm per jurisdiction as counsel for the Indemnified Person. The Indemnifying
Person also shall be responsible for the expenses of such defense if the
Indemnifying Person does not elect to assume such defense. No Indemnifying
Person, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Person, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Person of a release from
all liability in respect of such claim or litigation, and no Indemnified Person
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Person, which consent
shall not be unreasonably withheld, conditioned or delayed.
     (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.6 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Person in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Person shall, in lieu of indemnifying
such Indemnified Person, contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Registration Selling
Investors on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities. The relative fault of
the Company and the Registration Selling Investors shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of material fact related to information supplied by the Company or the
Registration Selling Investors and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Registration Selling Investors agree that it would
not be just and equitable if

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contribution pursuant to this Section 2.6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 2.6(d), in no case shall any one Registration Selling Investor
be liable or responsible for any amount in excess of the net proceeds received
by such Registration Selling Investor from the offering of Registrable Shares;
provided, however, that no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 2.6(d), notify such party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not relieve such party from
any other obligation it or they may have thereunder or otherwise under this
Section 2.6(d). No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed.
     (e) The indemnity and contribution agreements contained in this Section 2.6
are in addition to any other liability that any Indemnifying Person may have to
any Indemnified Person.
     2.7. Other Matters with Respect to Underwritten Offerings. In the event
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2.1, the Company agrees to (a) enter
into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of the Company and
customary covenants and agreements to be performed by the Company, including
customary provisions with respect to indemnification by the Company of the
underwriters of such offering; (b) use its best efforts to cause its legal
counsel to render customary opinions to the underwriters with respect to the
Registration Statement; and (c) use its best efforts to cause its independent
public accounting firm to issue customary “cold comfort letters” to the
underwriters with respect to the Registration Statement.
     2.8. Information by Holder. Each holder of Registrable Shares included in
any registration shall furnish to the Company such customary information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably request in writing and that is required under applicable
laws, rules and regulations. Each holder of Registrable Shares included in any
registration shall provide the Company with written notice within 10 business
days of the sale of any Registrable Shares pursuant to such registration.
     2.9. Termination. The rights and obligations under this Section 2 shall
terminate with respect to an Investor on the earlier of (a) the date on which
all of the Registrable Shares owned by that Investor and covered by the Shelf
Registration Statement or another Registration Statement have been sold, and
(b) the date on which all of the Registrable

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Shares owned by that Investor may be sold within a single 90-day period under
Rule 144 (as determined by such Investor after consultation with legal counsel).
Notwithstanding the foregoing, the right and obligations of the Company and the
Registration Selling Investors under Section 2.6 (relating to indemnification)
shall survive any termination of this Agreement or any part thereof.
     3. Board of Directors.
     3.1. Series B Director and Series A Director.
     (a) If the Series B Director was named prior to the Closing, then the
Company confirms that, effective contemporaneously with the execution and
delivery of this Agreement, such individual has become a director of the
Company, pursuant to the right of the Investors holding Series B Stock to
designate the Series B Director and that Michael Pehl is the Series A Director,
pursuant to the right of the Investors holding Series A Stock to designate the
Series A Director. If the Series B Director was not so named in advance of the
Closing, then the Company shall take all necessary action to cause such person,
promptly but in no event later than fifteen days after his designation, to
become a member of the Board.
     (b) The Company agrees that, if at any time (i) Series A Shares are
outstanding and the Investors holding the Series A Stock are unable to designate
a Director under Section 3(b) of the Series A Certificate by reason of the
operation of the formula set forth therein, or (ii) Series B Shares are
outstanding and the Investors holding the Series B Stock are unable to designate
a Director under Section 3(b) of the Series B Certificate by reason of the
operation of the formula set forth therein the Board of Directors shall, to the
extent permitted by the Bylaws of the Company, increase the size of the Board of
Directors to such number as will then enable the Investors to designate the
Series A Director or Series B Director, as applicable (in either case, such
number of Directors is referred to herein as the “Required Number of
Directors”). If at any time the Bylaws of the Company prevent the Board of
Directors from increasing the size of the Board of Directors to the Required
Number of Directors, the Board of Directors shall submit to the Company’s
stockholders for their approval an amendment to the Bylaws that will allow an
increase in the size of the Board of Directors to at least the Required Number
of Directors.
     (c) In the event that the board of directors of any Subsidiary is expanded
beyond the number of members existing as of the date hereof (for reasons other
than compliance with local law), the Company shall cause the Directors to be
elected to the board of directors of such Subsidiary and to provide to the
Directors the same rights with respect to such Subsidiary as provided by the
Company to the Series B Director and the Series A Director hereunder.
     (d) The Company and the Investors agree to take any such further actions as
may be necessary or desirable to effect the election, from time to time in the
future, of the Directors to (i) the Board of Directors and (ii), if and when
applicable, the board of directors of each Subsidiary.

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     (e) No individual designated to serve on the Board of Directors as a
Director shall be deemed to be the deputy of or otherwise required to discharge
his or her duties under the direction of, or with special attention to the
interests of, the Investors.
     3.2. Designation of Series B Director and Series A Director.
     (a) The Company shall provide each Investor with at least 20 days’ prior
written notice (a “Company Election Notice”) of any intended mailing of a notice
to stockholders for a meeting or other action relating to an election of
directors. The Company Election Notice shall specify (i) the date of such
meeting, (ii) the date on which such mailing is intended to be made, and
(iii) the name or names of the directors of the Company whose terms are to
expire at such meeting.
     (b) If (i) the term of the Series B Director is expiring as indicated in
the Company Election Notice and (ii) DMC III (the “Series B Nominator”) owns any
shares of Series B Stock on the record date for such election, then the Series B
Nominator shall confer with the other Investors holding shares of Series B Stock
regarding the individual to be nominated for election as the Series B Director,
and after such discussion shall have the right to nominate, in its sole
discretion, the individual who shall be presented for election by the holders of
the Series B Stock, in accordance with the Certificate relating to the Series B
Stock, as the Series B Director. If (i) the term of the Series A Director is
expiring as indicated in the Company Election Notice and (ii) DMC III (the
“Series A Nominator” owns any shares of Series A Stock on the record date for
such election, then the Series A Nominator shall confer with the other Investors
holding shares of Series A Stock regarding the individual to be nominated for
election as the Series A Director, and after such discussion shall have the
right to nominate, in its sole discretion, the individual who shall be presented
for election by the holders of the Series A Stock, in accordance with the
Certificate relating to the Series A Stock, as the Series A Director. The
Series B Nominator or the Series A Nominator, as the case may be, shall give
written notice to the other Investors and the Company, no later than 15 days
after receipt of the applicable Company Election Notice, of such individual to
be nominated for election as the Series B Director or the Series A Director,
respectively, for election to the Board of Directors as of the date of such
meeting.
     (c) If (i) a Director is one of the directors whose term is indicated in
Company Election Notice as expiring and (ii) DMC III does not own any shares of
Series B Stock or Series A Stock, as applicable, on the record date for such
election, the Investors holding in the aggregate at least a majority of the
shares of Series B Stock or Series A Stock, as the case may be, on the record
date for such election shall give written notice to the other Investors and the
Company, no later than 15 days after receipt of the Company Election Notice, of
the individual to be designated by them for election to the Board of Directors
as of the date of such meeting.
     (d) If the Company fails to receive notice from either the Series B
Nominator or the Series A Nominator, or other applicable Investors as provided
in Section 3.2(b) or 3.2(c), respectively, then the individual then serving as
the Series B Director or the

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Series A Director, as the case may be, shall be deemed to have been designated
for reelection.
     (e) The Investors agree to vote any Shares or Common Stock owned or
controlled by them in favor of the election of the individuals designated
pursuant to Section 3.2(b), 3.2(c) or 3.2(d), as the case may be, or otherwise
in accordance with the applicable Certificate, to the Board of Directors as the
Series B Director or the Series A Director, as the case may be, at such meeting
or in any consent in lieu of a meeting of the shareholders that is the subject
of a Company Election Notice.
     3.3. Observer Rights. The Company shall give EMC written notice of each
meeting of the Board of Directors and each committee thereof at least at the
same time and in the same manner as notice is given to the directors, and the
Company shall permit a representative of EMC to attend as a non-voting observer
all meetings of the Board of Directors and all committees thereof. The Company
shall deliver to the representative of EMC all written materials and other
information (including without limitation copies of meeting minutes) given to
directors in connection with such meetings at the same time such materials and
information are given to the directors. EMC understands and acknowledges that
the Board of Directors (or a committee of the Board of Directors, as the case
may be) shall have and reserve the right to exclude the observer from all or any
portion of a meeting to the extent (i) necessary to preserve attorney client
privilege or (ii) the Board of Directors (or such committee), in its sole
discretion, deems the presence of such observer to be inconsistent with the
Company’s goal of adhering to best practices of corporate governance or
otherwise inadvisable under then-current laws, rules, regulations, including any
guidelines and interpretations thereof set forth or proposed by the Nasdaq Stock
Market or any exchange on which the Common Stock is then traded. The Company
shall use its best efforts to provide such observer with as much advance notice
as is reasonably practicable of such need for exclusion. If any action is
proposed to be taken by written consent in lieu of a meeting of the Board of
Directors or any committee thereof, the Company shall give written notice
thereof to EMC on or before the effective date of such consent describing in
reasonable detail the nature and substance of such proposed action. If and to
the extent that the board of directors of a Subsidiary shall be expanded and
include the Series B Director and the Series A Director, pursuant to Section
3.1(c), then the Company shall cause the applicable Subsidiary to provide to EMC
the same rights with respect to such Subsidiary as provided by the Company to
EMC hereunder. Notwithstanding the foregoing, (a) the observer rights granted
pursuant to this Section 3.3 shall be subject to EMC and the observer complying
with the Company Policies, and (b) EMC agrees, and any EMC observer will agree,
to hold in confidence all confidential information concerning the Company
provided to EMC or learned by EMC in connection with its rights under this
Section 3.3, using the same degree of care as EMC uses to protect its own
confidential information, except to the extent otherwise required by law and any
other regulatory process to which EMC is subject. The Company agrees to grant
Advent or any affiliate thereof observer rights for one individual under the
same terms and conditions set forth above for EMC upon receipt of written notice
from Advent requesting observer rights for itself or any affiliate.

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     3.4. Other Covenants.
     (a) For so long as any Director is serving on the Board of Directors:

  (i)   The Company shall reimburse the Director for his or her respective
reasonable out-of-pocket expenses incurred in attending meetings of the Board of
Directors or any committee thereof, to the extent provided in, and in accordance
with, the Company’s reimbursement policy in effect from time to time with
respect to other directors who are not employees of the Company or a Subsidiary.
A Director shall be entitled to receive such fees or other compensation as may
be paid by the Company from time to time to directors who are not employees of
the Company or a Subsidiary.     (ii)   The Company’s Certificate of
Incorporation shall at all times provide for the indemnification of the members
of the Board of Directors to the fullest extent provided by the Delaware General
Corporation Law and to the maximum extent provided in any indemnification
agreement entered into between the Company and any of its directors and
officers. In the event that the Company or any of its successors or assigns
(i) consolidates with or merges into any other entity and shall not be the
continuing or surviving corporation in such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
entity, then, and in each such case, to the extent necessary, proper provision
shall be made so that the successors and assigns of the Company assume the
obligations of the Company with respect to indemnification of members of the
Board of Directors as contained in the Company’s Certificate of Incorporation.  
  (iii)   The Company shall use its best efforts to carry and maintain any
insurance against directors’ and officers’ liability to cover each Director to
the same extent as directors elected by the holders of Common Stock; provided,
however, that the amount of such coverage shall not be less than $15,000,000.

     (b) For so long as the representative of EMC attends as a non-voting
observer all meetings of the Board of Directors and all committees thereof, the
Company shall reimburse the representative of EMC for his or her reasonable
out-of-pocket expenses incurred in attending meetings of the Board of Directors
or any committee thereof, to the extent provided in, and in accordance with, the
Company’s reimbursement policy in effect from time to time with respect to
directors who are not employees of the Company or a Subsidiary.
     (c) By executing the signature page to this Agreement, each of the
Investors hereby (i) acknowledges the receipt of a copy of each Company Policy
as in effect on the date hereof, and (ii) agrees to comply with such Company
Policies.

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     4. Additional Covenants.
     4.1. Compliance with Federal Securities Laws. With a view to making
available to the Investors the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit a Holder to sell
securities of the Company to the public without registration, and with a view to
making it possible for Investors to have the Registrable Shares registered for
resale pursuant to a registration on Form S-3 (or any successor form), the
Company shall:
     (a) use its best efforts to make and keep current public information about
the Company available, as those terms are understood and defined in Rule 144, at
all times;
     (b) use its best efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act;
     (c) use its best efforts to comply with the applicable provisions of the
Sarbanes-Oxley Act that are currently in effect and to comply with any other
applicable provisions of the Sarbanes-Oxley Act not currently in effect as such
provisions become effective; and
     (d) furnish to any Investor upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and
(ii) such other reports and documents of the Company as such Investor may
reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any Registrable Shares without registration.
     4.2. Other Registration Rights. Subsequent to the date hereof, the Company
shall not enter into any Other Registration Rights with any Other Registration
Rights Holder unless such Other Registration Rights do not conflict in any
material respect with the provisions of this Agreement. Other Registration
Rights shall not be deemed to conflict with this Agreement solely as a result of
a grant of incidental registration rights to the Other Registration Rights
Holders with respect to a Registration Statement filed pursuant to Section 2.1;
provided that:

  (i)   Investors are granted the right to exercise incidental registration
rights with respect to any registration required by such Other Registration
Rights Holders to be made by the Company;     (ii)   if a managing underwriter
advises the Company that marketing factors require a limitation on the number of
shares to be underwritten in an offering made at the request of the Other
Registration Rights Holders, the shares held by such Other Registration Rights
Holders shall be excluded first, before any shares of the Investors are
excluded; and     (iii)   if a managing underwriter advises the Company that
marketing factors require a limitation on the number of shares to be
underwritten in an

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      offering requested under Section 2.1, the shares held by such Other
Registration Rights Holders shall be excluded first, before any shares of the
Investors are excluded.

     4.3. Financial and Business Information. From and after the date hereof,
the Company shall deliver to each Investor:
     (a) Annual Statements. As soon as practicable after the end of each fiscal
year of the Company, and in any event within ninety (90) days thereafter:

  (i)   consolidated and consolidating balance sheets of the Company and any
subsidiaries at the end of such year;     (ii)   consolidated and consolidating
statements of income, stockholders’ equity and cash flows of the Company and any
subsidiaries for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and accompanied
by an opinion thereon of independent certified public accountants of recognized
national standing selected by the Company, which opinion shall state that such
financial statements fairly present the financial position of the Company and
any subsidiaries on a consolidated basis and have been prepared in accordance
with GAAP (except as described in the notes thereto and for changes in
application in which such accountants concur) and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and accordingly included
such tests of the accounting records and such other auditing procedures as were
considered necessary in the circumstances; and     (iii)   comparisons of each
pertinent item in (i) and (ii) above to the operating and capital budget
referred to in Section 4.3(b) below.

     (b) Quarterly Statements. As soon as practicable after the close of each of
the first three (3) fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet, statement of income and statement of cash flows of
the Company and any subsidiaries as at the close of such quarter and covering
operations for such quarter and the portion of the Company’s fiscal year ending
on the last day of such quarter, all in reasonable detail and prepared in
accordance with GAAP, subject to audit and year-end adjustments, setting forth
in each case in comparative form the figures for the comparable period of the
previous fiscal year, and a summary written analysis of such comparison.
     (c) Audit Reports. As soon as practicable after receipt thereof, a copy of
any financial report and internal control letter submitted to the Company by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Company.

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     (d) Other Reports. As soon as practicable after receipt thereof, one copy
of each financial statement, report, notice of proxy statement, if any, sent by
the Company to stockholders generally, of each written communication received by
the Company from any domestic or foreign securities exchange, the Commission or
any foreign regulatory authority performing functions similar to the Commission.
     (e) Corporate Governance. The Investors and the Company agree that the
preparation and discussion of the information set forth in Section 4.3(e)(i),
(ii) and (iii) below are in the best interests of the Company and that the
Company will (x) prepare such information and make it available to any member of
the Board of Directors and (y) discuss the information with its Board of
Directors unless otherwise directed by the Board of Directors. The Company shall
deliver such information to an Investor upon an investors written request only
after compliance with Section 5 hereof by such Investor and the Company.

  (i)   Business Plans and Budgets. At least thirty (30) days prior to the end
of each fiscal year, (A) an annual business plan setting forth the anticipated
strategic business activities and goals, including an expected operating budget,
of the Company and projections of operating results, prepared on a quarterly
basis, and (B) an annual capital budget describing the intended capital
investment strategy of the Company that has been approved and adopted by the
Board.     (ii)   Quarterly Statements. As soon as practicable after the close
of each of the first three (3) fiscal quarters of each fiscal year of the
Company, the Company shall also provide comparisons of each pertinent item
required by 4.3(b) to the operating and capital budget referred to in
Section 4.3(e)(i) above.     (iii)   Monthly Statements. Within thirty (30) days
after the end of each month, a consolidated balance sheet, statement of income
and statement of cash flows of the Company and any subsidiaries as at the close
of such month and covering operations for such month and the portion of the
Company’s fiscal year ending on the last day of such quarter, all in reasonable
detail and prepared in accordance with GAAP, subject to audit and year-end
adjustments, setting forth in each case in comparative form the figures for the
comparable period of the previous fiscal year, and a summary written analysis of
such comparison. The Company shall also provide comparisons of each pertinent
item to the operating and capital budget referred to in Section 4.3(e)(i) above.

     (f) Company Policies. The business and financial information rights granted
pursuant to this Section 4.3 shall be subject to the Investors’ continuing
compliance with the Company Policies.

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     4.4. Amendments to Series B Certificate and Series A Certificate.
     (a) If, due to a future change in the applicable rules or regulations of
the Nasdaq Stock Market or other applicable market or exchange, shares of
Series A Stock and/or Series B Stock may be afforded a greater number of votes
(the “Increased Maximum Vote Allowed”) than the Maximum Per Share Preferred Vote
(as defined in the applicable Series A Certificate and Series B Certificate)
without requiring approval of the stockholders of the Company, the Company and
the Investors shall take such actions as may be necessary to amend Section 3(a)
of the Series A Certificate and Series B Certificate to increase the Maximum Per
Share Preferred Vote to equal the Increased Maximum Vote Allowed.
     (b) If, due to a future change in the applicable rules or regulations of
the Nasdaq Stock Market or other applicable market or exchange, the Series A
Stock may be converted into a greater number of shares of Common Stock (the
“Increased Conversion Threshold Allowed”) than the Conversion Threshold (as
defined in the Series A Certificate) without requiring approval of the
stockholders of the Company, the Company and the Investors shall take such
actions as may be necessary to amend Section 4(a)(ii) of the Series A
Certificate to increase the Conversion Threshold to equal the Increased
Conversion Threshold Allowed.
     4.5. Available Copy. The Secretary of the Company shall maintain an
original copy of this Agreement, duly executed by each of the parties hereto, at
the principal executive office of the Company and shall make such copy available
for inspection by any Person requesting it.
     5. Nonpublic Information. Neither the Company nor any Person acting on its
behalf shall provide any Investor with any material, nonpublic information about
the Company unless, in advance of the delivery of such information, the Investor
consents to the receipt of such information and agrees to maintain the
confidentiality of such information in writing, regardless of whether the
delivery of such information is otherwise required pursuant to the terms of this
Agreement or any other Transaction Document (as defined in the Purchase
Agreement). The Company understands and confirms that each of the Investors will
rely on the foregoing covenant in effecting transactions in securities of the
Company.
     6. General.
     6.1. Use of Best Efforts. Where this Agreement requires the “best efforts”
of the Company, it is understood and agreed that the Company shall not be
required by its obligation to undertake “best efforts” to incur any
extraordinary and material expense or undertake or engage in any litigation.
     6.2. Notices. All notices, certificates, deliverables required by this
Agreement, requests and other communications to any party hereunder shall be in
writing (including facsimile or similar writing) and shall be given to such
party at its address or facsimile number set forth on the signature page hereof,
or such other address or facsimile number as such party may hereinafter specify
for the purpose of this Section 6.2 to the party giving such notice. Each such
notice, request or other communication shall be effective (a) if

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given by facsimile transmission, when such facsimile is transmitted to the
facsimile number specified on the signature pages of this agreement and the
appropriate confirmation is received or, (b) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or, (c) if given by any other means, when delivered at
the address specified on the signature pages of this Agreement. Copies of
anything sent pursuant to this Agreement to any party shall be sent at the same
time to the address or facsimile number of the persons designated on the
signature page hereof to receive copies, or such other person, address or
facsimile number as such party may hereinafter specify for the purpose of this
Section 6.2 to the party giving such notice.
     6.3. Amendments and Waivers. Other than with regard to the provisions of
Section 2, this Agreement may be amended or terminated and the observance of any
term of this Agreement may be waived with respect to all parties to this
Agreement (either generally or in a particular instance and either retroactively
or prospectively), with the written consent of the Company and Investors holding
at least a majority of the Series A Stock and Series B Stock, each voting as a
separate class, then held by Investors. The provisions of Section 2 may be
amended or terminated and the observance of any term of Section 2 may be waived
with respect to all parties to this Agreement (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and Investors holding at least a eighty-five percent
(85%) of the Series B Stock and Series A Stock, each voting as a separate class,
then held by Investors. Notwithstanding the foregoing, this Agreement may not be
amended or terminated and the observance of any term hereunder may not be waived
with respect to any Investor without the written consent of such Investor unless
such amendment, termination or waiver applies to all Investors in the same
fashion. The Company shall give prompt written notice of any amendment or
termination of this Agreement or waiver hereunder to any party hereto that did
not consent in writing to such amendment, termination or waiver. Any amendment,
termination or waiver effected in accordance with this Section 6.3 shall be
binding on all parties hereto, even if they do not execute such consent. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
     6.4. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that the Company may not assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the written consent of Investors holding at least a majority of the Series B
Stock and Series A Stock, each voting as a separate class, then held by
Investors.
     6.5. Transfer of Rights. Provided that the Company is given written notice
by the Investor at the time of each transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being assigned, the rights under this Agreement may be
transferred in whole or in part in connection with the transfer of Registrable
Shares, Series A Stock, Series B Stock or Warrants. Notwithstanding the
foregoing, if such transfer is subject to covenants, agreements or other
undertakings restricting transferability of the rights under this Agreement
shall not be transferred in connection with such transfer unless such transfer

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unless such transfer complies with all such covenants, agreements and other
undertakings. In all cases, such rights shall not be transferred unless the
transferee thereof executes a Counterpart. If any Investor transfers to another
Person and such Person becomes a party to this Agreement, such Person shall be
deemed an Investor for all purposes hereof.
     6.6. Governing Law; Venue; Waiver of Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of Delaware. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the State of
Delaware, for the adjudication of any dispute hereunder or in connection with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each of the parties hereby
waives all rights to a trial by jury.
     6.7. Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the parties hereto with respect to the subject matter of
this Agreement and supersedes any and all prior agreements and understandings,
written or oral, relating to such subject matter, including without limitation
the Original IRA.
     6.8. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
     6.9. Headings. The headings in this Agreement are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
     6.10. Counterparts; Facsimile Signatures; Effectiveness. This Agreement may
be executed in any number of counterparts (including facsimile signature) each
of which shall be an original with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other party hereto.
[signature pages follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be duly executed by their respective authorized signatories as of
the date first above written.

            MTI TECHNOLOGY CORPORATION
      By:   /s/ Thomas P. Raimondi, Jr.       Name:   Thomas P. Raimondi, Jr.   
  Title:   President and Chief Executive Officer     

     
 
  Address for notices:
 
   
 
  MTI Technology Corporation
 
  17595 Cartwright Road
 
  Irvine, California 92614
 
  Attention: Chief Financial Officer
 
  Facsimile: (949) 251-1101
 
   
 
  with a copy to:
 
  Morrison & Foerster LLP
 
  19900 MacArthur Boulevard, 12th Floor
 
  Irvine, California 92612
 
  Attention: Tamara Tate, Esq.
 
  Facsimile: (949) 251-0900

[Investor signature pages follow]

S-1

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  INVESTORS:
 
   
 
 
DIGITAL MEDIA & COMMUNICATIONS III LIMITED PARTNERSHIP
 
 
DIGITAL MEDIA & COMMUNICATIONS III-A LIMITED PARTNERSHIP
 
 
DIGITAL MEDIA & COMMUNICATIONS III-B LIMITED PARTNERSHIP
 
 
DIGITAL MEDIA & COMMUNICATIONS III-C LIMITED PARTNERSHIP
 
 
DIGITAL MEDIA & COMMUNICATIONS III-D C.V.
 
 
DIGITAL MEDIA & COMMUNICATIONS III-E C.V.

            By:   Advent International Limited Partnership,
General Partner    

            By:   Advent International Corporation,
General Partner    

            By:   /s/ Michael Pehl       Name:   Michael Pehl      Title:  
Partner   

              Address for notices:
 
            c/o Advent International Corporation
 
            75 State Street     Boston, Massachusetts 02109
 
  Attention:   Michael Pehl
 
      Partner
 
  Facsimile:   617.951.0566 
 
            With a copy to:
 
            Pepper Hamilton LLP     3000 Two Logan Square     18th and Arch
Streets     Philadelphia, Pennsylvania 19103
 
  Attention:   Julia D. Corelli, Esquire
 
  Facsimile:   215.981.4750 

Investor Signature Page to Investor Rights Agreement

 

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  ADVENT PARTNERS DMC III LIMITED PARTNERSHIP
 
  ADVENT PARTNERS II LIMITED PARTNERSHIP

                  By:   Advent International Corporation,
General Partner    

            By:   /s/ Michael Pehl       Name:   Michael Pehl      Title:  
Partner   

              Address for notices:
 
            c/o Advent International Corporation
 
            75 State Street     Boston, Massachusetts 02109     Attention:
Michael Pehl
 
      Partner
 
  Facsimile:   617.951.0566 
 
            With a copy to:

    Pepper Hamilton LLP     3000 Two Logan Square     18th and Arch Streets    
Philadelphia, Pennsylvania 19103
 
  Attention:   Julia D. Corelli, Esquire
 
  Facsimile:   215.981.4750 

Investor Signature Page to Investor Rights Agreement

 

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            EMC CORP.
      By:   /s/ Michael J. Cody       Name:   Michael J. Cody      Title:   Vice
President – Corporate Development   

              Address for notices:
 
            176 South Street     Hopkinton, Massachusetts 01748     Attention:
C. Matthew Olton, Esquire
 
      Senior Corporate Counsel
 
  Facsimile:   508.497.6915 
 
            With a copy to:
 
            Pepper Hamilton LLP     3000 Two Logan Square     18th and Arch
Streets     Philadelphia, Pennsylvania 19103
 
  Attention:   Julia D. Corelli, Esquire
 
  Facsimile:   215.981.4750 

Investor Signature Page to Investor Rights Agreement