Document:

Edgewater/Epic - Trademark Security Agreement (8/01)

EXHIBIT 4.31

TRADEMARK AND LICENSE

SECURITY AGREEMENT

 

TRADEMARK AND

LICENSE SECURITY AGREEMENT (“Agreement”) dated as of April        , 2002, is between EPICEDGE, INC., a

Texas corporation (the “Company”), and Edgewater Private Equity Fund

III, L.P., a Delaware limited partnership, as agent (“Agent”) on behalf

of the lenders (together with their successors and assigns, the “Lenders”)

party to the Purchase Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the

Company, Lenders, Agent and certain other parties have entered into that

certain Note and Preferred Stock Purchase Agreement of even date herewith (as

amended or modified from time to time, the “Purchase Agreement”)

pursuant to which, among other things, the Company has granted to Agent, on behalf

of the Lenders, a security interest in substantially all of its assets to

secure the Company’s prompt and complete payment of its monetary obligations

under the Notes (as defined in the Purchase Agreement) (the “Obligations”);

and

 

WHEREAS, Agent

has required, as a further condition to entering into the Purchase Agreement

and to secure the obligations thereunder that Company execute this Agreement.

 

NOW,

THEREFORE, in consideration of the premises set forth herein and for other good

and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, Company agrees as follows:

 

1.             Defined Terms.

 

(a)           Unless otherwise

defined herein, the capitalized terms used herein which are defined in the

Purchase Agreement shall have the meanings specified in the Purchase Agreement.

 

(b)           The words “hereof,”

“herein” and “hereunder” and words of like import when used in this Agreement

shall refer to this Agreement as a whole and not to any particular provision of

this Agreement, and section and schedule references are to this Agreement

unless otherwise specified.

 

(c)           All terms defined in

this Agreement in the singular shall have comparable meanings when used in the

plural, and vice versa, unless otherwise specified.

 

(d)           For purposes of this

Agreement, the term “Event of Default” shall mean an Event of Default under the

Purchase Agreement occurring prior to the full payment of all amounts due under

the Notes or the conversion of the Notes in accordance with the terms thereof.

 

(e)           Obligations

mean all monetary obligations of the Company to the Lenders under the Notes.

 

 

2.             Security

Interest in Trademarks.  To secure

the complete and timely payment, performance and satisfaction of all of the

Obligations, the Company hereby grants to Agent a continuing security interest,

with power of sale (upon the occurrence of and during the continuance of an

Event of Default and to the extent permitted by applicable law) in all of

Company’s interest in now owned or existing and hereafter acquired or arising (collectively,

the “Collateral”):

 

(a)           trademarks,

registered trademarks and trademark registrations, trade names, service marks,

registered service marks and service mark registrations, including, without

limitation, the registered trademarks and registered service marks listed on Schedule A,

and (i) the reissues, continuations, all renewals and extensions thereof,

(ii) all income, royalties, damages and payments now and hereafter due

and/or payable under and with respect thereto, including, without limitation,

payments under all licenses entered into in connection therewith and damages

and payments for past or future infringements or dilutions thereof,

(iii) the right to sue for past, present and future infringements and

dilutions thereof, and (iv) all of such Company’s rights corresponding

thereto throughout the world (all of the foregoing registered trademarks and

registered service marks together with the items described in clauses (i)-(iv)

in this paragraph 2(a), being sometimes hereinafter individually and/or

collectively referred to as the “Trademarks”);

 

(b)           the goodwill of such

Company’s business connected with and symbolized by the Trademarks; and

 

(c)           license agreements

with any other party in connection with any Trademarks or such other party’s

trademarks, registered trademarks, trademark registrations, trade names,

service marks, registered service marks and service mark registrations, whether

such Company is a licensor or licensee under any such license agreement,

including, but not limited to, the license agreements listed on Schedule B,

and the right upon the occurrence of and during the continuance of an Event of

Default to use the foregoing in connection with the enforcement of Agent’s

rights under the Purchase Agreement (all of the foregoing being hereinafter

referred to collectively as the “Licenses”).  Notwithstanding the foregoing provisions of this Section 2,

the Licenses shall not include any license agreement with respect to which the

grant of the security interest contemplated by this Agreement would be a breach

or default thereunder; it being understood that upon request of the

Agent, Company will in good faith use commercially reasonable efforts to obtain

consent for the creation of a security interest in favor of the Agent in

Company’s rights under such license agreement.

3.             Restrictions on

Future Agreements.  The Company will

not, without Agent’s prior written consent, enter into any agreement,

including, without limitation, any license agreement, which is inconsistent

with this Agreement, and Company further agrees that it will not take any

action, and will use its best efforts not to permit any action to be taken by

others subject to its control, including licensees, or fail to take any action,

which would in any material respect affect the validity or enforcement of the

rights transferred to Agent under this Agreement or the rights associated with

those Trademarks which are necessary or desirable in the operation of Company’s

business.

 

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4.             New Trademarks

and Licenses.  The Company

represents and warrants that the Trademarks and Licenses listed on Schedule A

and Schedule B, respectively, include all of the Trademarks and

Licenses now owned or held by such Company. 

If, prior to the termination of this Agreement, Company shall

(i) obtain rights to any new Trademark or Licenses or (ii) become

entitled to the benefit of any new or existing Trademark or License, the

provisions of Section 2 shall automatically apply thereto and

Company shall notify Agent in writing (with reasonable detail) upon request of

Agent of such changes.  Provided that

Company shall, within ten (10) days of approval, notify Agent and provide

Agent with copies of all relevant documents relating to the approval of an application

for a domestic Trademark by the United States Patent and Trademark Office.  The Company hereby authorizes Agent to

unilaterally modify this Agreement by (a) amending Schedule A

or Schedule B, as the case may be, to include any Trademarks or

Licenses which are described under Section 2, or under this Section 4,

and (b) filing with the United States Patent and Trademark Office, in

addition to and not in substitution for, this Agreement, a duplicate original

of this Agreement containing on Schedule A or Schedule B

thereto, as the case may be, the revised list of Trademarks and/or Licenses

under Section 2 or this Section 4.  Notwithstanding the foregoing, the Company

hereby agrees that Agent’s security interest shall extend to all of the

collateral listed in Section 2 and this Section 4,

regardless of whether Agent actually amends Schedule A and Schedule B.

 

5.             Royalties.  Company hereby agrees that the use by Agent

of the Trademarks and Licenses and as authorized hereunder exclusively for

collateral security purposes (upon the occurrence of and during the continuance

of an Event of Default) shall be co-extensive with such Company’s rights

thereunder and with respect thereto and without any liability for royalties or

other related charges from Agent to Company.

 

6.             Nature and

Continuation of Agent’s Security Interest. 

This Agreement is made for collateral security purposes only.  This Agreement shall create a continuing

security interest in the Trademarks and Licenses and shall remain in full force

and effect until the Obligations have been paid in full and the Purchase

Agreement terminated.  At such time, the

rights granted to Agent hereunder shall also terminate, and Agent agrees to

execute a release and termination as necessary to effectuate the release of the

security interest granted to it.  If at

any time all or any part of any payment theretofore applied by the Agent or any

Lender to any of the Obligations is or must be rescinded or returned by the

Agent or such Lender for any reason whatsoever (including the insolvency,

bankruptcy or reorganization of the Company), such Obligations shall, for the

purposes of this Agreement, to the extent that such payment is or must be

rescinded or returned, be deemed to have continued in existence, notwithstanding

such application by the Agent or such Lender, and this Agreement shall continue

to be effective or be reinstated, as the case may be, as to such Obligations,

all as though such application by the Agent or such Lender had not been made.

 

7.             Right to Inspect;

Further Assignments and Security Interests.  Agent shall have the right, at any reasonable time and from time

to time, to inspect the premises and to examine the books, records, and

operations of Company relating to the Trademarks and the Licenses including,

without limitation, Company’s quality control processes.  From and after the occurrence of, and during

the continuance of, an Event of Default, and subject to the terms of the

Purchase Agreement, the Company agrees that Agent or a conservator appointed by

Agent, shall have the right to establish such reasonable additional product

quality controls as Agent or such 

 

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conservator, in its sole

judgment, may deem necessary to assure maintenance of the quality of products

sold by Company under the Trademarks or the Licenses.  The Company agrees (i) not to sell or assign its respective

interests in, or grant any license under, the Trademarks or the Licenses outside

the ordinary course of business in accordance with past practices without the

prior written consent of Agent, (ii) to maintain the quality of any and

all products in connection with which the Trademarks are used, consistent with

the quality of said products as of the date hereof, and (iii) not to reduce

the quality of such products in any material respect without the prior written

consent of Agent.

 

8.             Duties of

Company.

 

(a)           The Company shall

have the duty:  (i) to prosecute

diligently any trademark applications or registrations or service mark applications

or registrations that are part of the Trademarks pending as of the date hereof

or thereafter until the termination of this Agreement; (ii) to make

applications for trademarks and service marks as Company deems appropriate, and

(iii) to take commercially reasonable steps to preserve and maintain all

of Company’s rights in the trademark and service mark applications and

trademark and service mark registrations that are part of the Trademarks.  Any expenses incurred in connection with the

foregoing shall be borne by Company. 

The Company shall not abandon any material trademark or service mark

which is the subject of a registered trademark, service mark or application

therefor and which is or shall be, in such Company’s commercially reasonable

business judgment, necessary or economically desirable in the operation of such

Company’s business.  Company agrees to

retain an experienced trademark attorney reasonably acceptable to Agent for

filing and prosecution of all applications and other proceedings.

 

(b)           Agent shall not have

any duty with respect to the Trademarks or Licenses.  Without limiting the generality of the foregoing, Agent shall not

be under any obligation to take any steps necessary to preserve rights in the

Trademarks and Licenses against any other parties, but may do so at Agent’s

option upon the occurrence of and during the continuance of an Event of

Default, and all reasonable expenses incurred in connection therewith shall be

for the sole account of Company and added to the Obligations secured hereby.

 

9.             Agent’s Right to

Sue.  Upon the occurrence of and

during the continuance of an Event of Default, and subject to the terms of the

Purchase Agreement, Agent shall have the right, but shall not be obligated, to

bring suit to enforce the Trademarks and the Licenses and, if Agent shall

commence any such suit, Company shall, at the request of Agent, do any and all

lawful acts and execute any and all proper documents reasonably required by

Agent in aid of such enforcement.  The

Company shall, upon demand, promptly reimburse and indemnify Agent for all

reasonable costs and expenses incurred by Agent in the exercise of its rights

under this Section 9 (including, without limitation, all attorneys’

and paralegals’ fees).  If, for any

reason whatsoever, Agent is not reimbursed with respect to the costs and

expenses referred to in the preceding sentence, such reasonable costs and

expenses shall be added to the Obligations secured hereby.

 

10.           Waivers.  No course of dealing between Company and

Agent, and no failure to exercise or delay in exercising on the part of Agent

any right, power or privilege hereunder or under any of the other Transaction

Documents shall operate as a waiver of any of Agent’s rights, 

 

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powers or privileges.  No single or partial exercise of any right,

power or privilege hereunder or under any of the other Transaction Documents

shall preclude any other or further exercise thereof or the exercise of any

other right, power or privilege.

 

11.           Agent’s Exercise

of Rights and Remedies Upon Default. 

Notwithstanding anything set forth herein to the contrary, it is hereby

expressly agreed that upon the occurrence of and during the continuance of an

Event of  Default, Agent may exercise

any of the rights and remedies provided in this Agreement and any of the other

Transaction Documents.  Without limiting

the foregoing, Company acknowledges and agrees that upon the occurrence of and

during the continuance of an Event of 

Default, Agent or its nominee may use the Trademarks and Licenses to

complete the manufacture of, assemble, package, distribute, prepare for sale

and sell the inventory, or for any other purpose in connection with the conduct

of Company’s business.

 

12.           Intent-to-Use

Applications.  Notwithstanding any

provision of this Agreement, the applicable Uniform Commercial Code or any

other agreement or law, in no event shall any party be required or permitted

under this Agreement to assign, convey or transfer any trademark or service

mark that is the subject of an application for registration under Section 1(b)

of the Lanham Act (15 U.S.C. § 1051(b)), as amended, prior to the filing

of the verified statement of use under Section 1(d) of the Lanham

Act (15 U.S.C. § 1051(d)), as amended except in connection with the

ongoing business to which such trademark or service mark pertains.

 

13.           Severability.  The provisions of this Agreement are

severable, and if any clause or provision shall be held invalid or

unenforceable in whole or in part in any jurisdiction, then such invalidity or

unenforceability shall affect only such clause or provision, or part thereof,

in such jurisdiction, and shall not in any manner affect such clause or

provision in any other jurisdiction, or any other clause or provision of this

Agreement in any jurisdiction.

 

14.           Modification.  This Agreement cannot be altered, amended or

modified in any way, except as specifically provided in Section 2

and Section 4 hereof or by a writing signed by the parties hereto.

 

15.           Cumulative Remedies;

Power of Attorney.  All of Agent’s

rights and remedies with respect to the Trademarks and the Licenses, whether

established hereby, by any other agreements or by law, shall be cumulative and

may be exercised singularly or concurrently. 

The Company hereby irrevocably appoints Agent as Company’s  attorney-in-fact, with full authority in the

place and stead of Company and in the name of Company or otherwise to carry out

the acts described below.  Subject to

the terms of the Purchase Agreement, upon the occurrence of and during the

continuance of an Event of Default, the Company hereby authorizes Agent to, in

its sole discretion, (i) endorse Company’s name on all applications,

documents, papers and instruments necessary or desirable for Agent to exercise

its rights and remedies regarding the Trademarks and the Licenses,

(ii) take any other actions to exercise its rights and remedies regarding

the Trademarks and the Licenses as Agent deems are in its best interest,

(iii) grant or issue any exclusive or nonexclusive license under the

Trademarks to anyone on commercially reasonable terms, and (iv) assign,

pledge, convey or otherwise transfer title in or dispose of the Trademarks to

anyone on commercially reasonable terms. 

Agent shall take no action pursuant to subsection (i), (ii), (iii) or

(iv) of this Section 15 without taking like action with respect to

the 

 

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entire goodwill of Company’s

business connected with the use of, and symbolized by, such Trademarks.  The Company hereby ratifies all such actions

that such attorney-in-fact shall lawfully do or cause to be done by virtue

hereof.  This power of attorney is

coupled with an interest and shall be irrevocable until this Agreement shall

have been terminated pursuant to Section 6 hereof.  The Company acknowledges and agrees that

this Agreement is not intended to limit or restrict in any way the rights and

remedies of Agent under the Purchase Agreement or other Transaction Documents,

but rather is intended to facilitate the exercise of such rights and

remedies.  Agent shall have, in addition

to all other rights and remedies given it by the terms of this Agreement, all

rights and remedies allowed by law and the rights and remedies of a secured

party under the Uniform Commercial Code as enacted in any jurisdiction in

which, respectively, either (y) the Trademarks may be located or deemed

located, or (z) the Licenses were granted (the “UCC”).

 

16.           Binding Effect;

Benefits.  This Agreement shall be

binding upon Company and its successors and assigns, and shall inure to the

benefit of Agent and its nominees, successors and assigns. Company’s successors

and assigns shall include, without limitation, a receiver, trustee or

debtor-in-possession of or for Company; provided, however that Company shall

not voluntarily assign its obligations hereunder without the prior written

consent of Agent.

 

17.           Governing Law.  This Agreement shall be construed in

accordance with and governed by the laws of the State of Illinois applicable to

contracts made and to be performed entirely within such State, subject,

however, to the applicability of the UCC of any jurisdiction in which any

Collateral may be located or deemed located at any given time.

 

18.           Forum

Selection.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER

OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, SHALL

BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED

THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY

MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION

WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE LOCATED OR DEEMED LOCATED.  COMPANY HEREBY EXPRESSLY AND IRREVOCABLY

SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE

PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY

REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS OF THE COMPANY SPECIFIED IN,

OR PURSUANT TO, THE PURCHASE AGREEMENT OR BY PERSONAL SERVICE WITHIN OR WITHOUT

THE STATE OF ILLINOIS.  COMPANY HEREBY

EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY

OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY

SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT

ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

6

 

19.           Jury

Trial.  EACH OF COMPANY, AGENT AND (BY ACCEPTING THE BENEFITS HEREOF) EACH LENDER

HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO

ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER

TRANSACTION DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT

DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH

OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION

WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL

BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

20.           Notices.  All notices or other communications

hereunder shall be given in the manner and to the addresses set forth in the

Purchase Agreement.

 

21.           Section Headings.  The section headings herein are for

convenience of reference only and shall not affect in any way the

interpretation of any of the provisions hereof.

 

22.           Execution in

Counterparts.  This Agreement may be

executed in any number of counterparts and by different parties hereto in

separate counterparts, each of which when so executed shall be deemed to be an

original and all of which taken together shall constitute one and the same

agreement.  Delivery of an executed

counterpart of this Agreement by telefacsimile shall be equally as effective as

delivery of a manually executed counterpart of this Agreement.  Any party delivering an executed counterpart

of this Agreement by telefacsimile shall also deliver a manually executed

counterpart of this Agreement, but the failure to deliver a manually executed

counterpart shall not affect the validity, enforceability, and binding effect

of this Agreement.

 

23.           Right of Recordal

of Security Interest.  Agent shall

have the right, but not the obligation, at the expense of Company, to record

this Agreement in the United States Patent and Trademark Office and with such

other recording authorities deemed reasonable and proper by Agent.  Upon satisfaction in full of the Obligations

and termination of the Purchase Agreement, Company shall have the right to

effect recordal of such satisfaction or termination at the expense of Company

in the United States Patent and Trademark Office and with such other recording

authorities deemed reasonable and proper by Company.  Agent and Company shall cooperate to effect all such recordals

hereunder.

 

[SIGNATURE

PAGE FOLLOWS]

 

7

 

Trademark and

License Security Agreement Signature Page

 

IN WITNESS

WHEREOF, the parties hereto have duly executed this Agreement on the day and

year first above written.

 

	

   

  	

  Company:  

  
	

   

  	

   

  
	

   

  	

  EPICEDGE,

  INC., a Texas corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

  	

   

  
				

 

 

	

  ACCEPTED AND

  AGREED BY:

  	

   

  
	

   

  	

   

  
	

  EDGEWATER

  PRIVATE EQUITY FUND 

  III, L.P., as Agent

  	

   

  
	

   

  	

   

  
	

  By:  Edgewater III Management, L.P

  	

   

  
	

  Its:  General Partner

  	

   

  
	

   

  	

   

  
	

  By:  Gordon Management, Inc

  	

   

  
	

  Its:  General Partner

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

   

  
					

 

8

 

	

  STATE OF

  	

  )

  
	

   

  	

  ) SS

  
	

  COUNTY OF

  	

  )

  

 

 

The foregoing

Trademark and License Security Agreement was executed and acknowledged before

me this         day of                           , 2002, by                                    ,

personally known to me to be the                                      of EpicEdge, Inc., a Texas corporation, on behalf of such

entity.

 

(SEAL)

 

	

   

  	

  Notary

  Public

  	

   

  
	

   

  	

  My

  commission expires

  	

   

  
				

 

9

 

	

  STATE OF

  	

  )

  
	

   

  	

  ) SS

  
	

  COUNTY OF

  	

  )

  

 

 

The foregoing

Trademark and License Security Agreement was executed and acknowledged before

me this         day of                           , 2002, by                                    ,

personally known to me to be the                                      of Edgewater Private Equity

Fund III, L.P., as Agent on behalf of itself and certain Lenders.

 

(SEAL)

 

	

   

  	

  Notary

  Public

  	

   

  
	

   

  	

  My

  commission expires

  	

   

  
				

 

10

 

SCHEDULE A

to Trademark and License Security Agreement

 

TRADEMARKS

 

[COMPANY TO COMPLETE]

 

 

SCHEDULE B

to Trademark and License Security Agreement

 

LICENSES

 

[COMPANY TO COMPLETE]Edgewater/Epic - Amendment to Registration Agreement (2/02)

EXHIBIT 4.32

 

AMENDMENT TO

REGISTRATION AGREEMENT

 

THIS AMENDMENT

TO REGISTRATION AGREEMENT (this “Amendment”) is made as of April       , 2002, by and among EpicEdge, Inc., a

Texas corporation (the “Company”), Edgewater Private Equity Fund III,

L.P., a Delaware limited partnership (“Edgewater”), Fleck T.I.M.E. Fund,

LP, a Connecticut limited partnership (“TIME”), all of the parties that

shall become the holders of the Series B Preferred Stock (as defined

herein) in accordance with the terms and conditions set forth in the Preferred

Purchase Agreement (as defined herein) (the “Series B Holders”), and all

of the parties that shall become the holders of the Series A Preferred

Stock (as defined herein) in accordance with the terms and conditions set forth

in the Preferred Purchase Agreement (as defined herein) (the “Series A

Holders” and, together with Edgewater, TIME and the Series B Holders

are sometimes collectively referred to herein as the “Investors” and

individually as an “Investor”). 

Any person or entity that is not already a party to the Prior

Registration Agreements (as defined herein) on the date hereof that purchases a

Note (as defined in the Preferred Purchase Agreement) or shares of Series B

Preferred Stock (as defined herein) upon the terms and conditions set forth in

the Preferred Purchase Agreement at a Subsequent Closing (as defined in the

Preferred Purchase Agreement) shall become a party hereto by executing an

Investor’s Assent, in the form and substance attached hereto as Exhibit A,

and shall have the rights and obligations of a Series B Holder hereunder.

 

WHEREAS,

pursuant to a Stock Purchase Agreement dated as of February 18, 2000 (the

“February Purchase Agreement”), as the same may be amended, modified or

restated from time to time, by and among the Company, certain of the Investors

and certain other parties named therein (collectively, the “February

Investors”), the February Investors purchased shares of the Company’s

Common Stock, $0.01 par value per share (the “Common Stock”);

 

WHEREAS, pursuant

to a Stock Purchase Agreement dated as of September 29, 2000 (the “September

Purchase Agreement”), as the same may be amended, modified or restated from

time to time, by and among the Company, certain of the Investors and certain

other parties named therein (collectively, the “September Investors”),

the September Investors purchased shares of Common Stock;

 

WHEREAS,

pursuant to a Note and Preferred Stock Purchase Agreement of even date herewith

(the “Preferred Purchase Agreement”), as the same may be amended,

modified or restated from time to time, by and among the Company, the

Series A Holders and the Series B Holders, and subject to the terms

and conditions contained therein, the Series A Holders will cancel the

Convertible Debt (as defined in the Preferred Purchase Agreement) in exchange

for shares of Series A Convertible Preferred Stock, $0.01 par value per

share (the “Series A Preferred Stock”) and the Series B Holders

will convert the Notes purchased thereunder into shares of Series B

Convertible Preferred Stock, $0.01 par value per share (the “Series B

Preferred Stock”);

 

WHEREAS, in

order to induce the February Investors to enter into the February Purchase

Agreement, the Company agreed to provide certain registration rights to such

February Investors

 

 

pursuant to that certain

Registration Rights Agreement dated as of February 18, 2000 (the “February

Registration Agreement”), by and among the Company and the February

Investors;

 

WHEREAS, in

order to induce the September Investors to enter into the September Purchase

Agreement, the Company agreed to provide certain registration rights to such

September Investors pursuant to that certain Registration Rights Agreement

dated as of September 29, 2000 (the “September Registration Agreement”;

and, together with the February Registration Agreement, the “Prior

Registration Agreements”), by and among the Company and the September

Investors;

 

WHEREAS, in

order to induce the Series B Holders and the Series A Holders to

enter into the Preferred Purchase Agreement, the Company has agreed to provide

certain registration rights to such Series B Holders and Series A

Holders on the terms set forth in this Amendment;

 

WHEREAS,

pursuant to Section 10(d) of the February Registration Agreement and the

operative paragraph in the September Registration Agreement which incorporates

all of the terms of the February Registration Agreement therein, the Prior

Registration Agreements may be amended by the Company and the holders of a

majority of the Registrable Securities (as defined therein); and

 

WHEREAS, in

order to provide the Series B Holders and the Series A Holders with

certain registration rights, the Company and the holders of a majority of the

Registrable Securities wish to amend the Prior Registration Agreements pursuant

to the terms set forth herein.

 

NOW,

THEREFORE, for and in consideration of the premises and mutual agreements

herein contained and for the purposes of setting forth the terms and conditions

of this Amendment, the parties, intending to be bound, hereby agree as follows:

 

1.             Incorporation of the Agreement.  All capitalized terms which are not defined

hereunder shall have the same meanings as set forth in the Prior Registration

Agreements.  To the extent any terms and

provisions of the Prior Registration Agreements are inconsistent with the

amendments set forth in Paragraph 2 below, such terms and provisions shall

be deemed superseded hereby.  Except as

specifically set forth herein, the Prior Registration Agreements shall remain

in full force and effect and their provisions shall be binding on the parties

hereto.

 

2.             Amendments to the Prior

Registration Agreements.

 

(a)           The introductory paragraph to the

February Registration Agreement is hereby amended to include the Series A

Holders and the Series B Holders as if they had originally signed

thereunder as Investors.

 

(b)           Section 1 of the February

Registration Agreement is hereby amended and restated in its entirety as

follows:

 

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1.             Demand Registrations.

 

(a)           Requests for Registration.  Upon written request by the holders of a

majority of the Series A Preferred Stock or the holders of a majority of the

Series B Preferred Stock (the “Notice”), the Company shall (i) file

as soon as practicable after receipt of such Notice, but in no event later than

thirty (30) days after the receipt therefor with respect to a Short-Form

Registration (as defined below) or forty-five (45) days after the receipt

therefor with respect to a Long-Form Registration (as defined below), a

Registration Statement (the “Demand Registration”) covering all of the

Registrable Securities, and (ii) take all necessary actions to cause such

registration statement to become effective within thirty (30) days of

filing or as soon thereafter as is permissible by the Securities and Exchange

Commission.  Each request for a Demand

Registration shall specify the approximate number of Registrable Securities

requested to be registered and the anticipated per share price range for such

offering.  Within ten (10) days

after receipt of any request for a Demand Registration, the Company will give

written notice of such requested registration to all other holders of

Registrable Securities and, subject to paragraph 1(b) below, will include

in such registration all Registrable Securities with respect to which the

Company has received written requests for inclusion therein within

fifteen (15) days after receipt of the Company’s notice.  The holders of Registrable Securities shall

be entitled to request (x) one (1) Demand Registration annually on Form S-1 or

any similar long-form registration (a “Long-Form Registration”), and

(y)  two (2) Demand Registration on Form

S-3 (or any successor form) (a “Short-Form Registration”) annually, if

available, in each case in which the Company will pay all Registration

Expenses.

 

(b)           Priority on Demand Registrations.  The Company will not include in any Demand

Registration any securities which are not Registrable Securities without the

prior written consent of the holders of a majority of the Registrable

Securities.  If a Demand Registration is

an underwritten offering and the managing underwriters advise the Company in

writing (with a copy to each party hereto requesting registration of Registrable

Securities) that in their opinion the number of Registrable Securities and, if

permitted hereunder, other securities requested to be included in such offering

exceeds the number of Registrable Securities and other securities, if any,

which can be sold therein without adversely affecting the marketability of the

offering, the Company will include in such registration, prior to the inclusion

of any securities which are not Registrable Securities, (i) first, the

Conversion Securities requested to be included therein by the Series A

Holders and the Series B Holders, pro rata among such holders on the basis

of the number of shares that each holder has requested to be included in such

registration, and (ii) second, the number of Registrable Securities

requested to be included by the other Investors, pro rata among the respective

holders thereof on the basis of the number of shares of Registrable Securities

that each such holder has requested to be included in such registration.

 

(c)           Selection of Underwriters.  The holders of a majority of the Registrable

Securities who request or elect to be included in the Demand Registration and

the Company shall jointly select the investment banker(s) and managing

underwriter(s) to administer an offering initiated as a Demand Registration.  It is understood and agreed that the Company

may delay the registration of Registrable Securities hereunder if such delay is

requested in writing by such managing underwriter(s) or by any managing

underwriter(s) jointly selected by such holders of a majority of the Registrable

Securities and the Company with respect to any offering of equity securities by

the Company.

 

3

 

(d)           Other Registration Rights.  The Company will not grant to any Person the

right to request the Company to register any equity securities of the Company,

or any securities convertible or exchangeable into or exercisable for such

securities, which would be superior to or otherwise interfere with the

Investors’ registration rights hereunder; provided, however, the granting by

the Company of registration rights to any other Person which would in any way

limit the Investors’ registration rights hereunder shall be subject to the

approval of the Purchaser Representatives (as defined in the Preferred Purchase

Agreement).  The Company represents and

warrants to the Investors that no Person has the right to register any equity

securities of the Company which are superior to or would otherwise interfere

with the Investors’ registration rights hereunder except for the Persons and

corresponding number of shares of Common Stock identified on Schedule A

attached hereto and made a part hereof, whose registration rights are pari

passu (but not superior) to those of the Investors (the registrable equity

securities held by such Persons are referred to herein as the “Equal

Securities”).

 

(c)           Section 2(c) of the February

Registration Agreement is hereby amended and restated in its entirety as

follows:

 

(c)           Priority on Primary Registrations.  If a Piggyback Registration is an underwritten

primary registration on behalf of the Company, and the managing underwriters

advise the Company in writing (with a copy to each party hereto requesting

registration of Registrable Securities) that in their opinion the number of

securities requested to be included in such registration exceeds the number

which can be sold in such offering without adversely affecting the

marketability of such offering, the Company will include in such registration

(i) first, the securities the Company proposes to sell, (ii) second,

the Conversion Securities requested to be included in such registration by the

Series A Holders and the Series B Holders, pro rata among the holders

of such Registrable Securities on the basis of the number of shares that each such

holder has requested to be included in such registration and (iii) third,

the other Registrable Securities requested to be included in such registration

and the Equal Securities requested to be included in such registration, pro

rata among the holders of such Registrable Securities and such Equal Securities

on the basis of the number of shares that each such holder has requested to be

included in such registration.  If,

after giving effect to the inclusion in the applicable registration of the

equity securities referred to in clauses (i), (ii) and (iii) above,

there are additional equity securities of the Company available to be included

in such registration, the Company shall be entitled to designate the Persons,

if any, it would submit to the managing underwriter(s) for participation in

such registration; provided, however, that in no event shall the Conversion

Securities included in such offering be reduced below thirty percent (30%) of

the total securities included in such registration.

 

(d)           Section 2(d) of the February

Registration Agreement is hereby amended and restated in its entirety as

follows:

 

(d)           Priority on Secondary

Registrations.  If a Piggyback

Registration is an underwritten secondary registration on behalf of the Company

or on behalf of holders of the Company’s securities other than holders of

Registrable Securities, and the managing underwriters advise the Company in

writing that in their opinion the number of securities requested to be included

in such registration exceeds the number which can be sold in such offering

without adversely affecting the marketability of the offering, subject to

paragraph 2(e)

 

4

 

below, the Company will include

in such registration (i) first, the securities requested to be included

therein by the holders requesting such registration and the Conversion

Securities requested to be included in such registration by the Series A

Holders and the Series B Holders, pro rata among the holders thereof on

the basis of the number of shares that each such holder has requested to be

included in such registration, and (ii) second, the other Registrable

Securities requested to be included in such registration, pro rata among the

holders thereof on the basis of the number of shares that each such holder

requested to be included in such registration; provided, however, that in no

event shall the Conversion Securities included in such offering be reduced

below thirty percent (30%) of the total securities included in such

registration.

 

(e)           The parenthetical set forth in

Section 2(e) of the February Registration Agreement is hereby deleted in

its entirety.

 

(f)            Section 5 of the February

Registration Agreement is hereby amended and restated in its entirety as

follows:

 

5.             Registration Expenses.

 

(a)           All expenses incident to the

Company’s performance of or compliance with this Agreement, including, without

limitation, all registration and filing fees, fees and expenses of compliance

with securities or blue sky laws, printing expenses, messenger and delivery

expenses, and fees and disbursements of counsel for the Company and all

independent certified public accountants, underwriters (excluding underwriting

discounts and commissions) and other Persons retained by the Company (all such

expenses being herein called “Registration Expenses”), will be borne by

the Company, exclusive of underwriting discounts and commissions or fees of

counsel of the sellers of Registrable Securities.

 

(b)           In connection with each Demand

Registration and each Piggyback Registration, the Company will reimburse the

holders of Registrable Securities covered by such registration for the

reasonable fees and disbursements of one (1) counsel chosen by the holders

of a majority of the Registrable Securities.

 

(g)           Section 9 of the February Registration

Agreement is hereby amended to include the following definitions:

 

“Conversion

Securities” means the Common Stock issued upon the conversion of the

Series A Preferred Stock and the Series B Preferred Stock.

 

“Person”

means any individual, corporation, partnership, company, limited liability

company, joint venture, association, bank, business trust or other entity,

whether or not legal entities, or any governmental entity or agency or

political subdivision thereof.

 

“Rule 144”

means Rule 144 adopted by the Securities and Exchange Commission under the

Securities Act.

 

“Series A

Preferred Stock” means the Series A Convertible Preferred Stock, $0.01 par

value per share, of the Company.

 

5

 

“Series B

Preferred Stock” means the Series B Convertible Preferred Stock, $0.01 par

value per share, of the Company.

 

(h)           The definition of “Registrable

Securities” set forth in Section 9 of the February Registration Agreement

is hereby amended and restated in its entirety as follows:

 

“Registrable

Securities” means (i) any Common Stock or Conversion Securities owned

by the Investors or by any of their respective transferees and (ii) any

Common Stock issued or issuable directly or indirectly with respect to the

securities referred to in clause (i) by way of stock dividend, stock

conversion or stock split or in connection with a combination of shares,

recapitalization, merger, consolidation or other reorganization.  As to any particular shares constituting

Registrable Securities, such shares will cease to be Registrable Securities

when they have been (x) effectively registered under the Securities Act

and disposed of in accordance with the registration statement covering them, or

(y) sold to the public through a broker, dealer or market maker pursuant

to Rule 144 (or any similar provision then in force) under the Securities

Act.  For purposes of this Agreement, a

Person will be deemed to be the holder of Registrable Securities whenever such

Person has the right to acquire directly or indirectly such Registrable

Securities (upon conversion or exercise in connection with a transfer of

securities or otherwise, but disregarding any restrictions or limitations upon

the exercise of such right), whether or not such acquisition has actually been

effected.

 

(i)            Section 10(d) of the February

Registration Agreement is hereby amended and restated in its entirety as

follows:

 

(d)           Amendments and Waivers.   Except as otherwise provided herein, the

provisions of this Agreement may be amended, restated, modified or waived only

upon the prior written consent of the Company, the holders of a majority of the

Series A Preferred Stock and the holders of a majority of the Series B

Preferred Stock.

 

(j)            Section 10(j) of the February

Registration Agreement is hereby amended to delete the notice information for

Philip Shiekman and to add the following notice information:

 

With a copy

to:

 

Paul E.

Hurdlow

Gray Cary Ware & Freidenrich, L.L.P.

1221 S. Mopac Expressway, Suite 400

Austin, Texas 78746

Telecopy: (512) 457-7001

 

(k)           Schedule A to the February

Registration Agreement is hereby amended and restated in its entirety by Schedule A

attached hereto.

 

3.             Effectuation.  The amendments to the Prior Registration

Agreements contemplated by this Amendment shall be deemed effective immediately

upon the full execution of this Amendment and without any further action

required by the parties hereto.  There

are no conditions precedent or subsequent to the effectiveness of this

Amendment.

 

6

 

[SIGNATURE PAGE

FOLLOWS]

 

*     *     *    

*     *

 

7

 

IN WITNESS

WHEREOF, the parties have executed this Amendment to Registration Agreement as

of the date first written above.

 

EpicEdge, Inc.

(d/b/a EpicEdge), a Texas corporation

 

	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  John Paul

  DeJoria

  
	

  Its:  President

  	

   

  
	

   

  	

   

  
	

  Edgewater

  Private Equity Fund III, L.P.

  	

   

  
	

   

  	

   

  
	

  By:

  	

  Edgewater

  III Management, L.P.

  	

   

  
	

  Its:

  	

  General

  Partner

  	

   

  
	

   

  	

   

  	

  Arne Ray, as

  Trustee for Patrick Loche

  
	

  By:

  	

  Gordon

  Management, Inc.

  	

   

  
	

  Its:

  	

  General

  Partner

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Its:

  	

   

  	

   

  	

   

  
	

   

  	

   

  
	

  FLECK

  T.I.M.E. FUND, LP, a Connecticut

  limited partnership

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

  Its:

  	

  Managing

  Partner

  	

   

  
						

 

 

 

EXHIBIT A

 

Investor’s Assent

 

The

undersigned hereby assents to the Registration Rights Agreement dated as of

February 18, 2000, as amended (the “Agreement”), by and among EpicEdge,

Inc., a Texas corporation, and certain other parties named therein, as such

Agreement may be further amended from time to time, and hereby agrees to become

a party to such Agreement and be bound by all of the applicable terms and

provisions thereof as fully as if the undersigned had been named as a Series B

Holder in such Agreement.

 

Executed as

of                              .

 

	

   

  	

   

  
	

   

  	

  [Signature]

  
	

   

  	

   

  
	

  Print Name

  and Address:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  

 

 

Schedule A

 

Other Registration Rights

 

 

See Attached.

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