EXHIBIT 10.13
EXECUTION COPY
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Second Amended and Restated Investor Rights Agreement (the
"AGREEMENT") dated as of April 16, 2004 is among athenahealth, Inc., a Delaware
corporation (the "COMPANY"), Xxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxx Xxxxxx, Xxx
Xxxxxx, Xxxxx Xxxxxx and The Xxxx 2004 Gift Trust (collectively, the
"FOUNDERS"), the holders of the Company's Series A-1 Convertible Preferred
Stock, $0.01 par value per share (the "SERIES A-1 PREFERRED"), as listed on
Schedule 1 hereto (the "SERIES A-1 HOLDERS"), the holders of the Company's
Series A-2 Convertible Preferred Stock, $0.01 par value per share (the "SERIES
A-2 PREFERRED"), as listed on Schedule 1 hereto (THE "SERIES A-2 HOLDERS" and
collectively with the Series A-1 Holders, the "SERIES A HOLDERS"), the holders
of the Company's Series C Convertible Preferred Stock, $0.01 par value per share
(the "SERIES C PREFERRED"), as listed on Schedule 1 hereto, the ("SERIES C
HOLDERS"), the holders of the Company's Series D Convertible Preferred Stock,
$0.01 par value per share (the "SERIES D PREFERRED"), as listed on Schedule 1
hereto (the "SERIES D HOLDERS", and the purchasers of the Company's Series E
Convertible Preferred Stock, $0.01 par value per share (the "SERIES E
PREFERRED"), as listed on Schedule 1 hereto (the "SERIES E HOLDERS", and
together with the Series C Holders and the Series D Holders, the "INVESTORS"),
GATX Ventures, Inc. ("GATX"), General Electric Capital Corporation ("GE"),
Silicon Valley Bancshares ("SVB"), Orix Venture Finance LLC ("ORIX") and Pentech
Financial Services, Inc. ("PENTECH", collectively with GATX, GE, SVB and Orix,
the "FINANCIAL LENDERS"). The Series A Holders, Series C Holders, Series D
Holders and Series E Holders are sometimes collectively referred to herein as
the "HOLDERS" and the Series A-1 Preferred, Series A-2 Preferred, Series C
Preferred, Series D Preferred and Series E Preferred are sometimes collectively
referred to herein as the "PREFERRED STOCK".
WHEREAS, concurrently with the execution of this Agreement the Company is
issuing to the Series E Holders an aggregate of 1,289,684 shares of Series E
Preferred pursuant to a Series E Convertible Preferred Stock Purchase Agreement
dated of even date herewith by and among the Company and the Series E Holders
(the "STOCK PURCHASE AGREEMENT");
WHEREAS, the Company, the Founders, the Series A Holders, the Series C
Holders and the Series D Holders are parties to that certain Amended and
Restated Investor Rights Agreement dated as of November 17, 2000, as amended
from time to time (the "ORIGINAL AGREEMENT") which is to be amended and restated
in its entirety as set forth herein;
WHEREAS, the Financial Lenders are parties to amendments to the Original
Agreement and/or separate Registration Rights Agreements with the Company, or in
the case of GE, has acquired the interest of a party to an amendment to the
Original Agreement and/or separate Registration Rights Agreement, and desire to
become parties to the Agreement with respect to Section 1.1, Sections 1.4
through 1.14 and Sections 3 through 11 hereof;
WHEREAS, the requisite parties as required by Article 5 of the Original
Agreement consent that the Original Agreement be amended and restated as set
forth below to, among other things, include the Series E Holders as parties
thereto; and
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WHEREAS, it is a condition precedent to the Series E Holders' obligation to
consummate the Stock Purchase Agreement that this Agreement be executed by the
parties hereto.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and intending to be legally bound by the terms and
conditions of this Agreement, the parties hereto hereby agree as follows:
1. REGISTRATION
1.1. "PIGGY-BACK" REGISTRATIONS. If at any time the Company shall
determine to register for its own account or the account of others, under the
Securities Act of 1933, as amended (the "SECURITIES ACT") any of its equity
securities, it shall send to each holder of Registrable Shares (as defined
below), including each holder who has the right to acquire Registrable Shares,
written notice of such determination and, if within fifteen (15) days after
receipt of such notice, such holder shall so request in writing, the Company
shall include in such registration statement all or any part of the Registrable
Shares such holder requests to be registered. Nothing herein shall be construed
so as to require the Company, in connection with any proposed offering, to
engage the services of an underwriter under this Section 1.1 as, for example, if
the Company shall file a registration statement under Rule 145 of the Securities
Act without the services or engagement of any underwriter. "REGISTRABLE SHARES"
shall consist of any and all shares of common stock, $0.01 par value per share
(the "COMMON STOCK") held by the Holders issued or issuable upon conversion of
the Series C Preferred, Series D Preferred or Series E Preferred; provided,
however, that with respect to this Section 1.1, Sections 1.4 through 1.14 and
Sections 3 through 11, "Registrable Shares" shall also consist of (i) the Common
Stock held by GATX, GE, SVB and Orix issued or issuable upon conversion of their
Preferred Stock, which is in turn issuable upon exercise of certain warrants to
purchase Preferred Stock (the "PREFERRED WARRANTS"); and (ii) the Common Stock
held by Pentech issuable upon exercise of that certain warrant to purchase
Common Stock held by Pentech (the "PENTECH WARRANT").
If, in connection with any offering involving an underwriting of
Common Stock to be issued by the Company, the managing underwriter shall impose
a limitation on the number of shares of such Common Stock which may be included
in the registration statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution, then the Company may reduce
the number of Registrable Shares to be included in such an underwriting (pro
rata among the requesting stockholders based upon the number of Registrable
Shares owned by such stockholders), provided, however that in no event may less
than twenty percent (20%) of the total number of shares of Common Stock to be
included in such underwriting be made available for Registrable Shares.
No incidental right under this Section 1.1 shall be construed to limit
any registration required under Section 1.2. The obligations of the Company
under this Section 1.1 may be waived at any time upon the written consent of
holders of a majority of the outstanding Registrable Shares.
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This Section 1.1 shall not apply to a registration of shares of Common
Stock on Form S-4 or Form S-8 or their then equivalents relating to an offering
of shares of Common Stock to be issued solely in connection with any acquisition
of any entity or business or otherwise issuable in connection with any stock
option, stock purchase or employee benefit plan.
1.2. DEMAND REGISTRATIONS. Commencing with the earlier of six (6)
months following a Qualified Public Offering (as defined in Section 2.2(f)) or
April 16, 2007, if on any occasion one or more holders of thirty percent (30%)
in interest or more of the Registrable Shares shall notify the Company in
writing that it or they intend to offer or cause to be offered for public sale
Registrable Shares held by such holders with an aggregate offering price of at
least $5,000,000 (net of any underwriting discounts or commissions), the Company
will so notify all holders of Registrable Shares, including all holders who have
a right to acquire Registrable Shares. Upon written request of any holder of
Registrable Shares given within twenty (20) days after the receipt by such
holder from the Company of such notification, the Company shall use its best
efforts to cause such of the Registrable Shares as may be requested by any
holder thereof (including the holder or holders giving the initial notice of
intent to offer) to be registered under the Securities Act as expeditiously as
possible.
The Company shall not be required to effect more than two (2)
registrations pursuant to this Section 1.2 (counting for these purposes only (i)
registrations that have been declared or ordered effective and pursuant to which
securities have been sold, and (ii) registrations that have been declared or
ordered effective and that have been withdrawn by the participating holders and
as to which the participating holders are not required to bear the registration
expenses pursuant to Section 1.11 below). If the Company determines to include
shares to be sold by it or by other selling stockholders in any registration
request pursuant to this Section 1.2, such registration shall be deemed to have
been a "piggy back" registration under Section 1.1, and not a "demand"
registration under this Section 1.2 if the holders of Registrable Shares are
unable to include in any such registration statement all of the Registrable
Shares initially requested for inclusion in such registration statement. Any
offering of Registrable Shares pursuant to this Section shall have a minimum
market value (valued at the public offering price of the Company's securities as
of the effective date of the registration statement for such offering) of at
least $5,000,000 of the securities so registered (net of underwriting discounts
and commissions).
If, in connection with any offering involving an underwriting of
Common Stock to be issued by the Company, the managing underwriter shall impose
a limitation on the number of shares of such Common Stock which may be included
in the registration statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution, then the Company may reduce
the number of shares of Registrable Shares to be included in such underwriting,
but only if all other shares are first excluded. Any exclusion of Registrable
Shares shall be made pro rata among the holders of Registrable Shares (or their
assigns) seeking to include such shares, in proportion to the number of such
shares held by such holders of Registrable Shares (or their assigns).
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1.3. SHORT FORM REGISTRATIONS ON FORM S-3. In addition to the rights
provided the holders of Registrable Shares in Sections 1.1 and 1.2 above, if the
registration of Registrable Shares under the Securities Act can be effected on
Form S-3 (or any similar form having similar requirements promulgated by the
Securities and Exchange Commission (the "COMMISSION")), then upon the written
request of either (i) one or more holders of at least thirty percent (30%) of
the Registrable Shares held by the Series E Holders, (ii) one or more holders of
at least thirty percent (30%) of the Registrable Shares held by the Series D
Holders, or (ii) one or more holders of at least forty percent (40%) of the
Registrable Shares held by the Series C Holders, the Company will so notify each
holder of Registrable Shares, including each holder who has a right to acquire
Registrable Shares, and then shall, as expeditiously as possible, effect
qualification and registration under the Securities Act on Form S-3 of all or
such portion of the Registrable Shares as the holder or holders making such
written request shall specify.
The Company shall not be required to effect more than one (1)
registration under this Section 1.3 during any twelve-month period. Any offering
of Registrable Shares pursuant to this Section 1.3 shall have a minimum market
value (valued at the public offering price of the Company's securities as of the
effective date of the registration statement for such offering) of at least
$1,000,000.
1.4. EFFECTIVENESS. The Company will use its best efforts to maintain
the effectiveness for up to ninety (90) days (or such shorter period of time as
the underwriters need to complete the distribution of the registered offering in
any Company primary offering, or nine (9) months in the case of a "shelf"
registration statement on Form S-3 pursuant to Sections 1.2 or 1.3) of any
registration statement pursuant to which any of the Registrable Shares are being
offered, and from time to time will amend or supplement such registration
statement and the prospectus contained therein to the extent necessary to comply
with the Securities Act and any applicable state securities statute or
regulation. The Company will also provide each holder of Registrable Shares with
as many copies of the prospectus contained in any such registration statement as
such holder may reasonably request.
1.5 INDEMNIFICATION OF HOLDERS OF REGISTRABLE SHARES. In the event
that the Company registers any Registrable Shares, the Company will indemnify
and hold harmless each holder and each underwriter of the Registrable Shares
(including their officers, directors, affiliates and partners) so registered
(including any broker or dealer through whom such shares may be sold) and each
person, if any, who controls such holder or any such underwriter within the
meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several, to which
they or any of them become subject under the Securities Act or the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), applicable state
securities laws or under any other statute or at common law or otherwise, as
incurred, and, except as hereinafter provided, will reimburse each such holder,
each such underwriter and each such controlling person, if any, for any legal or
other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement under which
such securities
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were registered under the Securities Act or the Exchange Act, in any filing with
any state securities commission in any preliminary or amended preliminary
prospectus or in the final prospectus (or the registration statement or
prospectus as from time to time amended or supplemented by the Company), or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or the Exchange Act or any state securities
laws applicable to the Company and relating to the action or inaction required
of the Company in connection with such registration, or arise out of or are
based upon any violation or alleged violation by the Company of the Securities
Act or the Exchange Act or any state securities laws applicable to the Company
and relating to action or inaction required of the Company in connection with
such registration.
Notwithstanding the foregoing, the Company shall have no obligation to
indemnify any holder, underwriter or controlling person if: (i) such untrue
statement or omission was made in such registration statement, preliminary or
amended preliminary prospectus or final prospectus in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by such holder of Registrable Shares (in the case of indemnification
of such holder), such underwriter (in the case of indemnification of such
underwriter) or such controlling person (in the case of indemnification of such
controlling person) expressly for use therein, or (ii) in the case of a sale
directly by such holder of Registrable Shares (including a sale of such
Registrable Shares through any underwriter retained by such holder of
Registrable Shares to engage in a distribution solely on behalf of such holder
of Registrable Shares), such untrue statement or alleged untrue statement or
omission or alleged omission was contained in a preliminary prospectus and
corrected in a final or amended prospectus copies of which were delivered to
such holder of Registrable Shares or such underwriter on a timely basis, and
such holder of Registrable Shares failed to deliver a copy of the final or
amended prospectus at or prior to the confirmation of the sale of the
Registrable Shares to the person asserting any such loss, claim, damage or
liability in any case where such delivery is required by the Securities Act or
the Exchange Act.
The indemnity provided in this Section 1.5 shall survive the transfer of
any Registrable Shares by such holder or any termination of this Agreement.
1.6. INDEMNIFICATION OF COMPANY. In the event that the Company
registers any of the Registrable Shares under the Securities Act, each holder of
the Registrable Shares so registered, severally and not jointly, will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed or otherwise participated in the preparation of the registration
statement, each underwriter of the Registrable Shares so registered (including
any broker or dealer through whom such of the shares may be sold) and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, from and against any and all losses, claims, damages, expenses
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, applicable state securities laws or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Company and each such director, officer,
underwriter or controlling person for any
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legal or other expenses reasonably incurred by them or any of them in connection
with investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement of a material fact
contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or in the registration
statement or prospectus as from time to time amended or supplemented) or arise
out of or are based upon the omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, but only to the extent that any such statement or omission was made
in reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by such holder of Registrable Shares expressly
for use therein. The liability of each holder hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense which is equal
to the proportion that the public offering price of the shares sold by such
holder under such registration statement bears to the total public offering
price of all securities sold thereunder, but in no event shall any indemnity
under this Section 1.6 exceed the amount of net proceeds received by such holder
in such registration.
1.7. INDEMNIFICATION PROCEDURES AND CONTRIBUTION.
(A) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any person entitled to indemnification under Sections 1.5 or
1.6 above (an "INDEMNIFIED PARTY") in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification (an "INDEMNIFYING
PARTY"), the Indemnifying Party shall assume the defense thereof, including the
employment of counsel selected by the Indemnifying Party and reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
expenses. Such Indemnified Party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party has agreed to pay such fees and expenses or
(ii) the named parties to any such action or proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying Party, and
such Indemnified Party shall have been advised by counsel that there is a
conflict of interest on the part of counsel employed by the Indemnifying Party
to represent such Indemnified Party, or there may be defenses available to the
Indemnified Party that are different from or in addition to those available to
the Indemnifying Party and that the Indemnifying Party is not able to assert on
behalf of or in the name of the Indemnified Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party; it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
proceeding or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such Indemnified Parties, which firm shall be
designated in writing by such Indemnified Parties). The Indemnifying Party shall
not be liable for any settlement of any such action or proceeding effected
without its written consent, which consent shall not be unreasonably withheld or
delayed, but if settled with its written consent, or if
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there be a final judgment for the plaintiff in any such action or proceeding,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
(B) CONTRIBUTION. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
the Company or any holder of Registrable Shares exercising its rights under this
Section 1, makes a claim for indemnification pursuant to Sections 1.5 or 1.6,
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding that Sections 1.5 or 1.6 provide for
indemnification, in such case, then, the Company and such holder of Registrable
Shares will contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and of the holder of Registrable Shares on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations or, if the
allocation provided herein is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and any holder of Registrable Shares from the offering of the
securities covered by such registration statement. The relative fault of the
Company on the one hand and of the holder of Registrable Shares on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or by the holder of Registrable Shares on the other, and each party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
(A) no such holder of Registrable Shares will be required to contribute any
amount in excess of the net proceeds received by such holder of Registrable
Shares offered by it pursuant to such registration statement; and (B) no person
or entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
1.8. EXCHANGE ACT REGISTRATION. The Company shall use its best efforts
to timely file with the Commission such information as the Commission may
require under Section 13 or 15(d) of the Exchange Act; and in such event, the
Company shall use its best efforts to take all action pursuant to Rule 144(c) as
may be required as a condition to the availability of Rule 144 or Rule 144A
under the Securities Act (or any successor exemptive rule hereinafter in effect)
with respect to such Common Stock. The Company shall furnish to any holder of
Registrable Shares forthwith upon written request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144(c),
(ii) a copy of the most recent annual or quarterly report of the Company as
filed with the Commission, and (iii) such other publicly filed reports and
documents as a holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a holder to sell any such Registrable
Securities without registration. The Company agrees to use its best efforts to
facilitate and expedite transfers of the Registrable Shares pursuant to Rule 144
under the Securities Act, which efforts shall include
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timely notice to its transfer agent to expedite such transfers of shares and
timely filing of all reports required to be filed with the Commission within any
applicable time period (such as Form 10-K, Form 10-Q and Form 8-K).
1.9. DAMAGES. The Company recognizes and agrees that the holders of
Registrable Shares will not have an adequate remedy if the Company fails to
comply with this Section 1 and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holders of Registrable Shares or any other
person entitled to the benefits of this Section 1 requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Section 1.
1.10. FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the preceding
sections of this Section 1, the Company is required hereunder to register
Registrable Shares, it agrees that it shall also do the following:
(A) Furnish to each selling holder such copies of each
preliminary and final prospectus and such other documents as said holder may
reasonably request to facilitate the public offering of its Registrable Shares;
(B) Use its best efforts to register or qualify the Registrable
Shares covered by said registration statement under the applicable securities or
Blue Sky laws of such jurisdictions as any selling holder may reasonably
request; provided, however, that the Company shall not be obligated to qualify
to do business in any jurisdictions where it is not then so qualified or to take
any action which would subject it to local taxation or the service of process in
suits other than those arising out of the offer or sale of the securities
covered by the registration statement in any jurisdiction where it is not then
so subject or to conform the composition of its assets at the time to the
securities or "Blue Sky" laws of any jurisdiction;
(C) Furnish, addressed to the selling holders of Registrable
Shares:
(I) an opinion of counsel for the Company dated the
effective date of the registration statement, and
(II) "comfort" letters signed by the Company's independent
public accountants who have examined and reported on the
Company's financial statements included in the registration
statement, to the extent permitted by the standards of the
American Institute of Certified Public Accountants.
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of the
accountants' "comfort" letters) with respect to events subsequent to the date of
the financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of securities, but the Company shall be obligated
hereunder only to
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the extent that the Company is required to deliver or cause the delivery of such
opinion or "comfort" letters to the underwriters in an underwritten public
offering of securities;
(D) Permit each selling holder of Registrable Shares or his
counsel or other representatives to inspect and copy such corporate documents
and records as may reasonably be requested by them after reasonable advance
notice and without undue interference with the operation of the Company's
business;
(E) Furnish to each selling holder of Registrable Shares a copy
of all documents filed with and all correspondence from or to the Commission in
connection with any such offering of securities;
(F) Use its best efforts to ensure the obtaining of all necessary
approvals from the National Association of Securities Dealers, Inc. (the
"NASD");
(G) Use its best efforts to ensure the obtaining of a CUSIP
number with the CUSIP Bureau; and
(H) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
Whenever under the preceding sub-sections of this Section 1 the
holders of Registrable Shares are registering such shares pursuant to any
registration statement, each such holder agrees to (i) timely provide to the
Company, at its request, such written information and materials as it may
reasonably request in order to effect the registration of such Registrable
Shares and (ii) convert Preferred Stock to be included in any registration
statement to shares of Common Stock, such conversion to be effective immediately
prior to the effectiveness, closing and consummation of such offering pursuant
to such registration statement.
1.11. EXPENSES. In the case of each registration effected under
Sections 1.1, 1.2 or 1.3, the Company shall bear all reasonable costs and
expenses of each such registration on behalf of the selling holders of
Registrable Shares (except as otherwise prohibited by state securities law or
regulation), including, but not limited to, the Company's printing, legal and
accounting fees and expenses, Commission and NASD filing fees and "Blue Sky"
fees and expenses and the reasonable fees and disbursements of one counsel
competent in securities matters for the selling holders of Registrable Shares in
connection with the registration of their Registrable Shares; provided, however,
that the Company shall have no obligation to pay or otherwise bear any portion
of the underwriters' commissions or discounts attributable to the Registrable
Shares being offered and sold by the holders of Registrable Shares, or the fees
and expenses of more than one counsel for the selling holders of Registrable
Shares in connection with the registration of the Registrable Shares. The
Company shall pay all expenses (including reasonable attorneys' fees subject to
the limitations set forth immediately above) of the holders of the Registrable
Shares in connection with any registration initiated pursuant to this Section 1
which is withdrawn, delayed or abandoned, except if such withdrawal, delay or
abandonment is requested by the holders of the Registrable Shares or is caused
by the fraud, material
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misstatement or omission of a material fact to be included in writing in such
registration by a holder of Registrable Shares, or other act attributable to the
holders of Registrable Shares relating to a material violation by such holders
of the provisions of this Agreement; provided, however, that the Company shall
pay all such expenses if the registration is withdrawn by participating holders
because of material adverse information concerning the Company of which the
participating holders were not aware at the time of their request for
registration.
1.12. TRANSFERABILITY AND EXPIRATION OF REGISTRATION RIGHTS. For all
purposes of this Agreement, the "holders of Registrable Shares" shall include
(i) the Investors, (ii) any assignee or transferee of the Registrable Shares,
who acquires from an Investor at least 500,000 shares of the Series C Preferred
and/or at least 500,000 shares of the Series D Preferred, and/or at least
200,000 shares of the Series E Preferred, (iii) any single assignee or
transferee of Registrable Shares who acquired all of the shares of an Investor,
or (iv) any assignee or transferee of the Registrable Shares who is a
constituent partner of an Investor or a liquidating trust or similar entity
established for the purpose of holding such Investor's assets prior to
distribution to its partners, stockholders or other equity owners, so long as
such assignee or trustee is not a competitor of the Company; provided, however,
that with respect to Section 1.1, Sections 1.4 through 1.14 and Sections 3
through 11, the "holders of Registrable Shares" shall also include (in addition
to the holders referred to in subsections (i) through (iv) above) the Financial
Lenders, any single assignee or transferee of Registrable Shares who acquired
all of the shares of any individual Financial Lender and any assignee or
transferee of Registrable Shares who is a constituent partner of any individual
Financial Lender or a liquidating trust or similar entity established for the
purpose of holding any individual Financial Lender's assets prior to
distribution to its partners, stockholders or other equity owners, so long as
such assignee or trustee is not a competitor of the Company. With respect to any
Registrable Shares held by any transferee or assignee referred to in the
preceding paragraph, the registration rights set forth in Section 1.1 of this
Agreement shall terminate and expire three (3) years following the consummation
of a Qualified Public Offering.
1.13. "LOCK-UP" AND MARKET STANDSTILL. Each holder of Registrable
Shares agrees that in the event the Company proposes to offer for sale to the
public any of its equity securities in any registration statement under the
Securities Act (whether for its own account or the account of others, including
the holders of Registrable Shares), and all other "affiliates" and all 5%
stockholders, directors and officers similarly situated are requested by the
Company and such underwriter to sign, and actually do sign, any "LOCK-UP
AGREEMENT" (as described herein), then such holder will not sell, grant any
option or right to buy or sell, or otherwise transfer or dispose of in any
manner or in any hedging or other derivative security transaction, to the public
in open market transactions, any Common Stock or other securities of the Company
held by it during the lesser of (a) 180 days or (b) the time period specified in
the Lock-Up Agreements entered into by the other "affiliates" and 5%
stockholders, directors and officers (such time period to be referred to as the
"LOCK-UP PERIOD") following the effective date of the registration statement of
the Company filed under the Securities Act. The Company agrees that it will sign
a Lock-Up Agreement upon substantially similar terms and conditions in the event
of a registration effected pursuant to Section 1.2 or 1.3 hereof. All such
Lock-Up Agreements will be in writing and in form and substance pursuant to
customary and prevailing terms and conditions for such
-11-
Lock-Up Agreements. The Company may impose stop-transfer instructions with
respect to the securities subject to the foregoing restrictions until the end of
the Lock-Up Period.
1.14. DELAY OF REGISTRATION. For a period not to exceed 120 days, the
Company shall not be obligated to prepare and file, or be prevented from
delaying or abandoning, a registration statement pursuant to this Agreement at
any time when the Company, in its good faith judgment by the Board of Directors
with the advice of counsel, reasonably believes:
(A) that the filing thereof at the time requested, or the
offering of Registrable Shares pursuant thereto, would materially and adversely
affect (i) a pending or scheduled public offering or private placement of the
Company's securities, (ii) an acquisition, merger, consolidation or similar
transaction by or on behalf of the Company, (iii) pre-existing and continuing
negotiations, discussions or pending proposals with respect to any of the
foregoing transactions, or (iv) the financial condition of the Company in view
of the disclosure of any pending or threatened litigation, claim, assessment or
governmental investigation which may be required thereby; and
(B) that the failure to disclose any material information with
respect to the foregoing would cause a violation of the Securities Act or the
Exchange Act.
In the event the Company's Board of Directors exercises its right to
delay or abandon a registration statement as provided herein it shall cause the
President or other executive officer of the Company to furnish to the holders of
Registrable Shares a certificate certifying that the Company's Board of
Directors has determined in good faith that one or more conditions of this
Section 1.14 have been satisfied; provided, however, that such right to delay or
abandon shall be exercised not more than once in any twelve (12) month period.
2. COMPANY COVENANTS.
2.1. AFFIRMATIVE COVENANTS OF THE COMPANY. Without limiting any other
covenants or provisions hereof and except to the extent the following covenants
and provisions of this Section 2.1 are waived in any instance by the holders of
at least 60% of the outstanding Series C Preferred, Series D Preferred and
Series E Preferred, voting together as a single class on an as-converted to
Common Stock basis, or as otherwise specifically approved by the Board of
Directors, which approval must include the affirmative vote or consent of the
directors designated by the Investors (the "INVESTOR DIRECTORS"), the Company
covenants and agrees that until the occurrence of a Qualified Public Offering or
until it becomes subject to the reporting requirements of the Exchange Act, it
will perform and observe the following covenants and provisions:
(A) INSPECTION RIGHTS. Permit during normal business hours, upon
reasonable request and at least five (5) days prior notice, and without undue
disruption of the Company's business, each of the Investors (through a
designated representative who is a partner or employee of such holder or its
organization), to examine and make copies of and extracts from the records and
books of account of, and visit and inspect the properties, assets, operations
and
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business of the Company, and to discuss the affairs, finances and accounts of
the Company with any of its officers, directors, employees, attorneys or
independent accountants; provided, however, that any Investor and designated
representative agree in writing prior to the receipt of any information to hold
all such information confidential.
(B) MEETINGS OF DIRECTORS, COMMITTEES AND OTHER RIGHTS. The
Company shall hold meetings on at least four (4) occasions per each fiscal year
and convene one or more special meetings of the Board of Directors at any time,
or on a monthly basis, with agendas to be prepared by management, upon the
request of any Investor Director or any two directors; and hold meetings of each
of the Company's Compensation Committee and Audit Committee of the Board of
Directors not less than two (2) times a year. The Company shall reimburse the
non-employee directors for their travel and other expenses reasonably incurred
in connection with their duties as directors.
(C) REPORTS. Furnish the items in subsections (i) - (v) to the
Investors and the item in subsection (vi) to the members of the Board of
Directors of the Company, and to the "Granite Observer" as such term is defined
in that certain Board Visitation Rights Letter by and between the Company and
Granite Global Ventures (Q.P.) L.P. and Granite Global Ventures L.P. of even
date herewith:
(I) MONTHLY AND QUARTERLY REPORTS: as soon as available and
in any event within thirty (30) days after the end of each
calendar month or within forty-five (45) days after the end of
each fiscal quarter, as the case may be, balance sheets,
statements of income and retained earnings and a summary
statement of monthly or quarterly cash flow of the Company for
such month or quarter and for the period commencing at the end of
the previous fiscal year and ending with the end of such month or
fiscal quarter, as the case may be, setting forth in each case in
comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, and including comparisons to
the monthly budget or business plan and an analysis of the
variances from the budget or business plan;
(II) ANNUAL REPORTS: as soon as available and in any event
within ninety (90) days after the end of each fiscal year of the
Company, a copy of the annual audited report for such year for
the Company, including balance sheets for the Company as of the
end of such fiscal year and statements of income and retained
earnings and of changes in financial position of the Company for
such fiscal year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, all such
statements to be duly certified by the chief financial officer of
the Company and an independent public accountant of recognized
national standing approved by a majority of the members of the
Board of Directors;
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(III) BUDGETS AND OPERATING PLAN: as soon as available and
in any event at least thirty (30) days before the beginning of
each fiscal year of the Company, a business plan and annual
operating budget for the forthcoming fiscal year;
(IV) ACCOUNTANT'S REPORTS: promptly following receipt by the
Company, each audit response letter, accountant's management
letter and other written report submitted to the Company by its
independent public accountants in connection with an annual or
interim audit of the books of the Company or any of its
subsidiaries;
(V) OTHER INFORMATION. promptly, from time to time, such
other information regarding the Company and its subsidiaries as
an Investor may reasonably request; and
(VI) NOTICES. promptly after the commencement thereof,
notice of all actions, suits, claims, proceedings, investigations
and inquiries of the type described in Section 3.18 of the Stock
Purchase Agreement that could materially adversely affect the
Company or its subsidiaries, if any.
(D) QUALIFIED SMALL BUSINESS STOCK. The Company covenants that so
long as any Preferred Stock or Registrable Shares are held by an Investor (or a
transferee in whose hands the Preferred Stock or Registrable Shares are eligible
to quality as Qualified Small Business Stock as defined in Section 1202(c) of
the Internal Revenue Code of 1986, as amended (the "CODE")), it shall make all
filings required under Section 1202(d)(l)(C) of the Code and any applicable
Treasury Regulations.
(E) MAINTENANCE OF KEY MAN INSURANCE. The Company will, at its
expense, use its best efforts to maintain life insurance policies with a
responsible and reputable insurance company payable to the Company on the lives
of Xxxxxxxx Xxxx, Xxxx Xxxx and Xx Xxxx, in each case, for so long as such
person shall remain employed by the Company, in the face amount of at least
$1,000,000 each. The Company represents and warrants that it is not aware of any
facts or circumstances that will prevent such insurance from being issued.
(F) VESTING OF OPTIONS. Unless otherwise approved by a majority
of the Board of Directors, including the Investor Directors: (i) securities
issued to any officers, directors or employees of or consultants to the Company
pursuant to a stock option plan, employee stock purchase plan, restricted stock
plan or other employee stock plan shall become exercisable as follows: 25% on
the first anniversary of the date of grant, and the remaining 75% in equal
monthly installments over the following three years until fully exercisable on
the fourth anniversary of the date of grant; and (ii) securities issued to any
officers, directors or employees of or consultants to the Company pursuant to a
restricted stock agreement shall vest in accordance with the foregoing schedule
and shall contain a right of repurchase such that upon termination of such
stockholder's business relationship with the Company, the Company may repurchase
at cost any unvested shares held by such stockholder.
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(G) DIRECTORS' AND OFFICERS' INSURANCE. At its expense, the
Company will use its reasonable best efforts to maintain directors' and
officers' liability insurance on terms reasonably satisfactory to Oak Investment
Partners IX, L. P.
2.2. PREEMPTIVE RIGHTS.
(A) So long as there are any shares of Preferred Stock
outstanding, the Company hereby grants to each Holder a right of first refusal
to purchase that number of New Securities (as defined below) multiplied by such
Holder's Pro Rata Fraction (as defined below) which the Company may, from time
to time, propose to sell or otherwise issue, subject to the terms and conditions
set forth below. Each Holder shall be entitled to purchase all or any part of
its Pro Rata Fraction.
(B) Each Holder shall have a right of oversubscription such that
if any Holder declines to purchase all or a portion of its Pro Rata Fraction
(such declined shares being referred to herein as "REFUSED SHARES"), the other
Holders shall, among them, have the right to purchase the Refused Shares.
(C) "NEW SECURITIES" shall mean any (i) shares of Common Stock;
(ii) any other equity security of the Company; (iii) any debt security of the
Company with an equity feature or which is a combination of debt and equity,
including without limitation, any debt security which by its terms is
convertible into or exchangeable for any equity security of the Company; or (iv)
any option, warrant or other right to subscribe for, purchase or otherwise
acquire any equity security or any such debt security of the Company; provided,
however, that the term "NEW SECURITIES" does not include (i) the Preferred Stock
or any shares of Common Stock issuable upon conversion of the Preferred Stock,
or the shares of Common Stock issuable upon conversion of any other preferred
stock if such other preferred stock has been offered pursuant to this Section
2.2; (ii) securities offered to the public in a Qualified Public Offering; (iii)
securities issued as a result of any stock split, stock dividend or
reclassification of Common Stock, distributable on a pro rata basis to all
holders of Common Stock; (iv) securities issued to any officers, directors or
employees of or consultants to or joint venturers with, or vendors or customers
of, the Company pursuant to a stock option plan, employee stock purchase plan,
restricted stock plan or other employee stock plan or other agreement approved
by the Company's Board of Directors, including the Investor Directors; (v)
securities issued in connection with any merger or consolidation or acquisition
approved by the Company's Board of Directors, including the Investor Directors;
or (vi) Preferred Stock, Common Stock, options or warrants to be issued with the
approval of the Investor Directors, to (1) lenders in conjunction with the
borrowing of working capital by the Company or (2) equipment leasing
organizations in conjunction with any equipment leasing arrangements to which
the Company is a party.
(D) In the event the Company intends to issue New Securities, it
shall give each Holder written notice of such intention, describing in full
detail the type and number of New Securities to be issued, the price thereof and
the terms upon which the Company proposes to effect such issuance (the "PURCHASE
NOTICE"). Each Holder shall have fifteen (15) days from
-15-
the date of any such Purchase Notice to agree to purchase all or part of its Pro
Rata Fraction of such New Securities (the "INITIAL PURCHASE PERIOD") for the
price and upon the terms and conditions specified in the Company's Purchase
Notice, by giving written notice to the Company stating the quantity of New
Securities to be so purchased. If, at the end of the Initial Purchase Period,
there are any Refused Shares, the Company shall promptly give each Holder who
has timely agreed to purchase its full Pro Rata Fraction of such offering of New
Securities (a "PURCHASING HOLDER") written notice of the number Refused Shares
available for purchase (the "REFUSED SHARES NOTICE"). Each Purchasing Holder
shall have ten (10) days from the date of the Refused Shares Notice to agree to
purchase such Purchasing Holder's pro rata share of the Refused Shares (the
"REFUSED SHARES PERIOD"), by giving written notice of the same to the Company.
(E) "PRO RATA FRACTION" shall mean a fraction, the numerator of
which shall be the number of shares of Common Stock issuable upon conversion of
the Preferred Stock owned by such Holder and the denominator of which shall be
the aggregate number of shares of Common Stock outstanding (with all shares of
Preferred Stock included on an as-if-converted basis).
(F) "QUALIFIED PUBLIC OFFERING" shall mean the closing of an
underwritten, firm commitment public offering of shares of Common Stock of the
Company at a public offering price of at least Seven dollars and Fifty-Six Cents
($7.56) per share (as adjusted for a stock dividend, stock split, combination,
reorganization, recapitalization, reclassification, or other similar event
affecting the Preferred Stock) resulting in aggregate gross proceeds to the
Company equal to or greater than Fifty Million Dollars ($50,000,000.00).
(G) In the event the Holders fail to exercise the foregoing right
of first refusal with respect to all of the New Securities within the Initial
Purchase Period and the Refused Shares Period, the Company may within 120 days
after the end of the Refused Shares Period sell any or all of such New
Securities not agreed to be purchased by the Holders at a price and upon terms
no more favorable to the purchasers thereof than specified in the Purchase
Notice. In the event the Company has not sold such New Securities within such
120 day period, the Company shall not thereafter issue or sell any New
Securities without first offering such New Securities to the Holders in the
manner provided above.
(H) In the event the Company shall propose to sell less than all
the New Securities not subscribed for by Holders under Section 2.3(d), each
Holder may in its discretion reduce the number of the New Securities so
subscribed for to that number which is equal to such Holder's Pro Rata Fraction
multiplied by a fraction, the numerator of which is the total amount of New
Securities actually sold by the Company, and the denominator of which is the
total amount of New Securities initially proposed to be sold by the Company.
(I) The rights of the Holders under this Section 2.2 shall
terminate immediately upon the consummation of Qualified Public Offering.
2.3 RIGHT OF FIRST REFUSAL ON DISPOSITIONS BY FOUNDERS.
-16-
(A) Until such time as there shall occur a Qualified Public
Offering, no Founder shall sell, assign or otherwise transfer or agree to sell,
assign or otherwise transfer any shares of capital stock of the Company now held
or beneficially owned or hereafter acquired or controlled by him, whether by
purchase, conversion of other securities, exercise of rights, warrants or
options, stock dividends or otherwise (collectively, the "FOUNDER STOCK") to any
third party (the "PROPOSED TRANSFEREE"), unless in each such case the Founder
(an "OFFERING FOUNDER") shall have first offered to sell those shares (the
"OFFERED SHARES") to the Company and to the holders of Preferred Stock, on terms
and conditions, including price, not less favorable to the Company and the
holders of Preferred Stock than those on which the Offering Founder proposes to
sell such Offered Shares to the Proposed Transferee, in accordance with this
Section. Any sale, assignment or other transfer contrary to the provisions of
this Agreement shall be void, and shall not be recorded on the Company's stock
transfer records. In the event of any attempt to make such a transfer, the
Company shall continue to treat the purported transferor as the owner of the
Founder Stock purported to be transferred for all purposes, including without
limitation, voting and dividend rights.
(B) The Offering Founder shall give notice to the Company and the
holders of Preferred Stock in writing of the Offering Founder's intention to
sell the Founder Stock (the "NOTIFICATION") specifying the number of shares of
Founder Stock proposed to be transferred and the price and terms of the proposed
transfer (the "TERMS") and offering to sell the Founder Stock to the Company and
such holders on the Terms specified.
(C) The Company will have thirty (30) days from the date of such
Notification to purchase all or any portion of the Offered Shares on the Terms
specified in the Notification (the "COMPANY PURCHASE PERIOD"). If, for any
reason whatever, the Company does not exercise its right to purchase all of the
Offered Shares as provided herein, then the Company shall so notify each Holder
(the "HOLDER NOTICE") and each Holder shall have the absolute right, by delivery
of written notice to the Company, the Offering Founder and each other Holder (as
hereinafter provided) to purchase all, but not less than all of its Pro Rata
Fraction (as calculated in Section 2.2(e)) of such Founder's Stock; provided,
however, for purposes of this Section 2.3, the Offered Shares shall be
subtracted from the denominator in such calculation.
(D) After the end of the Company Purchase Period and receipt of
the Holder Notice, each Holder shall have an additional fifteen (15) days from
the date of the Holder Notice (the "HOLDER PERIOD") to agree to purchase all or
part of its Pro Rata Fraction of such Offered Shares for the price and upon the
Terms specified in the Notification, by giving written notice to the Company and
the Offering Founder stating the quantity of Offered Shares to be so purchased.
(E) In the event a Holder fails to exercise the foregoing right
of first refusal with respect to any Founder Stock within the Holder Period, the
Offering Founder may, subject to the requirements of Section 2.4 below, within
120 days after the end of the Holder Period and/or the Co-Sale Period (as such
term is defined in Section 2.4 below) sell any or all of such Founder Stock not
agreed to be purchased by such Holder at a price and upon terms no
-17-
more favorable to the purchasers thereof than the Terms specified in the
Notification. In the event the Offering Founder has not sold such Founder Stock
within such 120 day period, the Offering Founder shall not thereafter issue or
sell any Founder Stock without first offering such Founder Stock to the Company
and the Holders in the manner provided above.
(F) Notwithstanding the foregoing, each Founder shall be entitled
to transfer, without compliance with this Section 2.3, shares of Founder Stock
held by it:
(i) to the trustees of a trust, the beneficiaries of which
consist solely of the Founder and transferees
enumerated in subsection (iv) below;
(ii) to the Founder's guardian or conservator;
(iii) upon the death of a Founder, to the Founder's
executors or administrators or to trustees under his
will;
(iv) to the Founder's spouse, to any of his children or
their issue (or to custodians for the benefit of minor
children or issue), or to the Founder's parents or
siblings;
(v) if the Founder is a partnership or corporation, to its
partners, stockholders or other equity owners, as the
case may be, or to a liquidating trust or similar
entity established for the purpose of holding its
assets prior to distribution to its partners,
stockholders or other equity owners;
(vi) to any entity which is controlled by or under common
control with such Founder; or
(vii) in the case of a Founder who is or becomes an employee
of the Company, to the Company or other employees of
the Company in accordance with written agreements
entered into in connection with the original issuance
of Founder Stock to such Holder (or the grant of a
right to acquire such Founder Stock) giving the Company
or other employees a right of first refusal or a right
to repurchase such Stock.
Each such transferee is referred to herein as a "PERMITTED TRANSFEREE." All such
Permitted Transferees (other than the Company) shall remain subject to the terms
of this Agreement and shall be deemed to be "FOUNDERS" for the purposes hereof.
2.4 RIGHT TO PARTICIPATE IN SALES.
Until such time as there shall occur a Qualified Public Offering, upon
compliance by an Offering Founder with the provisions of Section 2.3 hereof and
prior to any transfer under Section 2.3 hereof, the Offering Founder shall
provide each Holder with written notice (the "TRANSFER NOTICE") of, and the
opportunity to participate in, such transfer upon the same Terms as set forth in
the original Notification under Section 2.3(b). Any Holder which elects to
participate in such transfer shall notify the Offering Founder no later than
fifteen (15) days after the date of the Transfer Notice (the "CO-SALE
PERIOD")specifying the number of shares which the
-18-
Holder desires to transfer. The Offering Founder will not transfer any shares of
stock held by him in such transaction unless the transferee thereof at the same
time purchases from each Holder who elects to participate in the transfer as
aforesaid at least the lesser of (1) the number of shares of stock set forth in
such Holder's notice to the Offering Founder or (2) that number of shares
computed by multiplying the total number of shares of stock to which the
proposed transfer relates by a fraction, the numerator of which is the aggregate
number of shares of stock owned by such Holder and the denominator of which is
the aggregate number of shares of stock owned by all Holders.
3. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall bind and
inure to the benefit of the respective successors, assigns, heirs, executors,
and administrators of the parties hereto.
4. NOTICES. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be delivered by hand, by
telecopier, by express overnight courier service or mailed by first class mail,
postage prepaid, if to the Company or a Founder, to the Company's principal
executive offices, with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx, Esq.
if to a Holder or Financial Lender, to the most recent address for
such Holder or Financial Lender in the records of the Company.
Notices provided in accordance with this Section 4 shall be deemed
delivered upon personal delivery, receipt by telecopy or overnight mail, or 48
hours after deposit in the mail in accordance with the above.
5. AMENDMENTS AND WAIVERS. Except as otherwise expressly set forth in this
Agreement, any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the holders of at least two-thirds in interest of the Preferred
Stock including the Preferred Stock issuable to GATX and GE upon exercise of
their Preferred Warrants; provided, however, that no waiver or amendment may
materially limit the rights or expand the obligations of any party in a way
different from all similarly situated parties without the written consent of
such party. 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. FACSIMILE; COUNTERPARTS. This Agreement may be executed by facsimile
signature and in several counterparts, all of which together shall constitute
one and the same instrument.
-19-
7. CAPTIONS. The captions of the sections, subsections and paragraphs of
this Agreement have been added for convenience only and shall not be deemed to
be a part of this Agreement.
8. SEVERABILITY. Each provision of this Agreement shall be interpreted in
such manner as to validate and give effect thereto to the fullest lawful extent,
but if any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable under applicable law, such provision
shall be ineffective only to the extent so determined and such invalidity or
unenforceability shall not affect the remainder of such provision or the
remaining provisions of this Agreement.
9. GOVERNING LAW. This Agreement shall be governed by and interpreted and
construed in accordance with the laws of the State of Delaware.
10. TERMINATION OF PRIOR AGREEMENTS. The parties hereto agree and
acknowledge that this Agreement amends and restates the Original Agreement, in
its entirety and that the Original Agreement shall be of no further force and
effect.
11. SPECIFIC PERFORMANCE. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives or assigns by reason of a failure to
perform any of the obligations under this Agreement and agree that the terms of
this Agreement shall be specifically enforceable. If any party hereto or his
heirs, personal representatives or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company, the Founders and the Holders have executed
this Second Amended and Restated Investor Rights Agreement as of the day and
year first above written.
ATHENAHEALTH, INC.
By: /s/ Xxxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxxx X. Xxxx
Title: CEO
FOUNDERS:
/s/ Xxxxxxxx Xxxx
----------------------------------------
Xxxxxxxx Xxxx
/s/ Xxxx Xxxx
----------------------------------------
Xxxx Xxxx
THE XXXX 2004 GIFT TRUST
/s/ Xxxx Xxxx
----------------------------------------
Name: Xxxx Xxxx
Title: Trustee
Address: Illegible
Fax:
-----------------------------------
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
Fax:
-----------------------------------
[Signature Page to the Second Amended and Restated Investor Rights Agreement]
The undersigned Holder hereby executes the Second Amended and Restated
Investors' Rights Agreement and authorizes this signature page to be attached to
be a counterpart to such document.
VENROCK ASSOCIATES
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Partner
Address: 0000 Xxxx Xxxx Xx., Xxx. 000
Xxxxx Xxxx, XX 00000
Fax: (000) 000-0000
VENROCK ASSOCIATES II, L.P.
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: General Partner
Address: Same as above
Fax: Same as above
VENROCK ENTREPRENEURS FUND, L.P.
BY: VENROCK MANAGEMENT LLC
ITS: GENERAL PARTNER
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Member
Address: Same as above
Fax: Same as above
[Signature Page to the Second Amended and Restated Investor Rights Agreement]
CARDINAL HEALTH PARTNERS, L.P.
By: /s/ Illegible
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
Fax:
-----------------------------------
CHP II, L.P.
By: /s/ Illegible
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
Fax:
-----------------------------------
[Signature Page to the Second Amended and Restated Investor Rights Agreement]
XXXXXX XXXXXX JURVETSON FUND VI, L.P.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Managing Director
Address: 0000 Xxxx Xxxx Xxxx, Xxx. 000
Xxxxx Xxxx, XX 00000
Fax: 000-000-0000
XXXXXX XXXXXX JURVETSON PARTNERS VI, LLC
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Managing Member
Address: 0000 Xxxx Xxxx Xxxx, Xxx. 000
Xxxxx Xxxx, XX 00000
Fax: 000-000-0000
XXXXXX ASSOCIATES, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxx. 000
Xxxxx Xxxx, XX 00000
Fax: 000-000-0000
[Signature Page to the Second Amended and Restated Investor Rights Agreement]
OAK INVESTMENT PARTNERS IX, LIMITED
PARTNERSHIP
By: Oak Associates IX, LLC,
Its General Partner
By: /s/ Xxx X. Xxxxxx
------------------------------------
Name: Xxx X. Xxxxxx
Title: Managing Member
Address: One Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
OAK IX AFFILIATES FUND, LIMITED
PARTNERSHIP
By: Oak IX Affiliates, LLC,
Its General Partner
By: /s/ Xxx X. Xxxxxx
------------------------------------
Name: Xxx X. Xxxxxx
Title: Managing Member
Address: One Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
OAK IX AFFILIATES FUND-A, LIMITED
PARTNERSHIP
By: Oak IX Affiliates IX, LLC,
Its General Partner
By: /s/ Xxx X. Xxxxxx
------------------------------------
Name: Xxx X. Xxxxxx
Title: Managing Member
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
[Signature Page to the Second Amended and Restated Investor Rights Agreement]
GRANITE GLOBAL VENTURES (Q.P.) L.P.
By: Granite Global Ventures L.L.C.
Its general partner
By: /s/ Hany Nada
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Name: Hany Nada
Title: Managing Director
Address:
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Fax:
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GRANITE GLOBAL VENTURES L.P.
By: Granite Global Ventures L.L.C.
Its general partner
By: /s/ Hany Nada
------------------------------------
Name: Hany Nada
Title: Managing Director
Address:
-------------------------------
Fax:
-----------------------------------
/s/ Xxxx Xxxxxxxx
----------------------------------------
Xxxx Xxxxxxxx
Address: 0000 X. Xx. Xxxxxxxxxx XX 00000.
Fax: 000-000-0000
/s/ Xxxx Xxxxx Propper
----------------------------------------
Xxxx Xxxxx Propper
Address: 00 Xxxxxxxxx Xxx Illegible
Fax: 000-000-0000
PRINT NAME OF HOLDER:
By:
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Name:
----------------------------------
Title:
---------------------------------
Address:
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Fax:
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[Signature Page to the Second Amended and Restated Investor Rights Agreement]
Schedule 1 - Holders
SERIES A-1 HOLDERS:
3 Springs LLC
Xxxxxxx Xxxxxx
Bessemer Trust Company, Trustee for G/BB
Xxxxxxxx Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxxx and Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx
Xxxxxxx X. Xxxx
Xxxxx and Xxxxxxxx Xxxxx
Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx X. Xxxx (XXX)
Xxxxxx X. Xxxxxxxx Foundation
Xxxxxxx Xxxxxxxxx MD, for the 1995 Xxxxxxx Xxxxxxxxx Revocable Trust
Xxx X. Xxxxxx
Lambda IV, LLC
Xxxxxxxx Associates LLC
Xxxxxx Equities Corp.
Xxxxx Xxxx
Xxxx Xxxxx Propper
Xxxxxxx Xxxxxxx
Xxxxx X. Xxxxxxx MD for the 1995 Xxxxx Xxxxxxxx Xxxxxxx Revocable Trust
Xxxxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxx
SERIES A-2 HOLDERS
Xxxxxxx Xxxxxx
Bessemer Trust Company, Trustee for G/BB
Bhartibala Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxxx Xxxx, Sr.
Xxxxxxxxxxx Xxxx
Xxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxx
Xxx X. Xxxxxx
Xxxxxxx Xxxx
Lambda IV, LLC
Xxxxxx Xxxxxx
Xxxx X. Xxxx
Xxxxxxxx Associates LLC
Xxxxxx Equities Corp.
Xxxx Xxxxx Propper
RockSolid Investments, LLC
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxxxx
SERIES C HOLDERS:
Argus Capital LLC
Cardinal Health Partners, X.X.
Xxxxxx Xxxxxxx Jurvetson Fund VI, X.X.
Xxxxxx Xxxxxx Jurvetson Partners VI, X.X.
Xxxxxx Xxxxxxxx, X.X.
GreenAcre Ventures, LLC
Xxxxxx X. Xxxxxx, or Trustee, Separate Property Revocable Trust dated 11/29/99
Xxxxxxxx Xxxxxx
Venrock Associates
Venrock Associates II, L.P.
Venrock Entrepreneurs Fund L.P.
SERIES D HOLDERS:
Oak Investment Partners IX, Limited Partnership
Oak IX Affiliates Fund, Limited Partnership
Oak Affiliates Fund-A, Limited Partnership
CHP II, X.X.
Xxxxxx Xxxxxxx Jurvetson Fund VI, X.X.
Xxxxxx Xxxxxx Jurvetson Partners VI, L.L.C.
Xxxxxx Xxxxxxxx, X.X.
Venrock Associates
Venrock Associates II, L.P.
Venrock Entrepreneurs Fund L.P.
Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx
LAMBDA Funds
Xxxxxxxx X. Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxx
Xxxx Xxxxx Propper
Xxxxxx Xxxxxxx Trust - 1999
SERIES E HOLDERS:
Granite Global Ventures (Q.P.) L.P.
Granite Global Ventures L.P.
Venrock Associates
Venrock Associates II, X.X.
Xxxxxx Xxxxxx Jurvetson Fund VI, X.X.
Xxxxxx Xxxxxx Jurvetson Partners VI, LLC
Xxxxxx Associates, L.P.
Oak IX Affiliates Fund, Limited Partnership
Oak IX Affiliates Fund-A, Limited Partnership
Oak Investment Partners IX, Limited Partnership
Xxxx Xxxxxxxx
Xxxx Xxxxx Propper
