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EXHIBIT 10.2
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of February 19, 1999 by and among
PERSISTENCE SOFTWARE, INC., a California corporation (the "Company") and those
purchasers of its Preferred Stock and other parties listed on the Schedule of
Investors attached as Exhibit A hereto (each an "Investor" and collectively, the
"Investors," except as provided below in Section 1.1(a) below).
R E C I T A L S
A. In connection with the closing of a Series A Preferred and Common
Stock Purchase Agreement dated February 14, 1994 (the "Stock Purchase
Agreement"), the Company and the purchasers of the Series A Preferred Stock and
Common Stock purchased thereunder entered into an Investor Rights Agreement
dated as of February 14, 1994 (the "1994 Investor Rights Agreement") providing
certain rights to registration of the Company's securities under the Securities
Act and certain additional rights.
B. In connection with an equipment lease between the Company and
Venture Lending & Leasing, Inc. ("Venture Lending"), the Company issued a
Warrant (the "Venture Lending Warrant") to Venture Lending to acquire 55,556
shares of the Company's Common Stock (the "Venture Lending Warrant Shares") and
entered into a First Amendment to the 1994 Investor Rights Agreement dated as of
December 28, 1995, to grant certain registration rights to Venture Lending with
respect to the Venture Lending Warrant Shares.
C. In connection with a line of credit between the Company and General
Bank, the Company issued a Warrant (the "General Bank Warrant") to General Bank
to acquire 25,000 shares of the Company's Common Stock (the "General Bank
Warrant Shares") and entered into a Second Amendment to the 1994 Investor Rights
Agreement dated February 6, 1996 to grant certain registration rights to General
Bank with respect to the General Bank Warrant Shares.
D. In connection with the closing of a Series B Preferred Stock
Purchase Agreement between the Company and certain of the Investors on March 12,
1996 (the "First Series B Stock Purchase Agreement"), pursuant to which certain
of the Investors purchased 1,753,276 shares of Series B Preferred Stock (the
"First Series B Shares") from the Company, certain of the Investors and the
Company entered into a First Amended and Restated Investor Rights Agreement
dated March 8, 1996 (the "First Amended and Restated Investor Rights Agreement")
to amend and restate the 1994 Investor Rights Agreement in its entirety.
E. In connection with the closing of a Series B Preferred Stock
Purchase Agreement between the Company and certain of the Investors on November
27, 1996 (the "Second Series B Stock Purchase Agreement"), pursuant to which
certain of the Investors purchased an aggregate of 1,484,716 shares of Series B
Preferred Stock from the Company, (the "Second Series B Shares," and, together
with the First Series B Shares, the "Series B Shares"), certain of the
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Investors and the Company entered into a Second Amended and Restated Investor
Rights Agreement, dated November 27, 1996 (the "Second Amended and Restated
Investor Rights Agreement") to amend and restate the First Amended and Restated
Investor Rights Agreement in its entirety. The Second Amended and Restated
Rights Agreement was subsequently amended on June 13, 1997.
F. In connection with the closing of a Series C Preferred Stock
Purchase Agreement between the Company and certain of the Investors dated
December 31, 1997 (the "First Series C Stock Purchase Agreement"), pursuant to
which certain of the Investors purchased an aggregate of 431,965 shares of
Series C Preferred Stock (the "First Series C Shares") from the Company, certain
of the Investors and the Company entered into a Third Amended and Restated
Investor Rights Agreement, dated December 31, 1997, as amended (the "Third
Amended and Restated Investor Rights Agreement") to amend and restate the Second
Amended and Restated Investor Rights Agreement in its entirety.
G. In connection with the closing of a Series C Preferred Stock
Purchase Agreement between the Company and certain of the Investors dated August
4, 1998 (the "Second Series C Stock Purchase Agreement"), pursuant to which
certain of the Investors purchased an aggregate of 1,155,508 shares of Series C
Preferred Stock (the "Second Series C Shares" and, together with the First
Series C Shares, the "Series C Shares") from the Company, certain of the
Investors and the Company entered into a Fourth Amended and Restated Investor
Rights Agreement, dated August 13, 1998, as amended (the "Fourth Amended and
Restated Investor Rights Agreement") to amend and restate the Third Amended and
Restated Investor Rights Agreement in its entirety.
H. In connection with the closing of a Series D Preferred Stock
Purchase Agreement between the Company and the Purchasers (as defined therein)
dated February 19, 1999 (the "Series D Stock Purchase Agreement"), pursuant to
which the Purchasers are purchasing an aggregate of up to 747,664 shares of
Series D Preferred Stock (the "Series D Shares") from the Company and with the
requisite consent of the Company and the Investors holding more than two-thirds
of the Registrable Securities (as defined in the Fourth Amended and Restated
Investor Rights Agreement), such Investors and the Company desire to amend and
restate the Fourth Amended and Restated Investor Rights Agreement in its
entirety so that the Purchasers of the Series D Shares pursuant to the Series D
Stock Purchase Agreement shall become Investors hereunder and shall have the
same registration rights as the other Investors.
I. The Investors desire to waive the right of first refusal set forth
in Article II of the Fourth Amended and Restated Investor Rights Agreement with
respect to issuance of the Series D Shares issued pursuant to the Series D Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, terms and conditions contained herein, the parties hereto hereby
agree follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 Definitions. As used in this Article I:
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(a) The term "Holder" means any Investor and any other holder
of outstanding Registrable Securities who acquired such Registrable Securities
in accordance with Section 1.11 hereof. The term "Investors" includes Venture
Lending and General Bank for purposes of Sections 1.1, 1.2, 1.5, 1.6, 1.7, 1.8,
1.9, 1.10, 1.11, 1.12, 1.13, 1.14 and Articles IV and V of this Agreement;
provided, however, that Venture Lending and General Bank and their respective
transferees shall not be deemed to be "Holders" for purposes of Sections 1.3 or
1.4 of this Agreement or "Investors" for purposes of Articles II and Article III
of this Agreement.
(b) The term "Initiating Holders" means any Holder or Holders
of not less than 10% of the Registrable Securities then outstanding and any
other securities then convertible into Registrable Securities, and which have
not been sold to the public.
(c) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
by the Securities and Exchange Commission ("SEC") of the effectiveness of such
registration statement.
(d) The term "Registrable Securities" means: (i) the Common
Shares (as defined in the Stock Purchase Agreement); (ii) the shares of the
Company's Common Stock issued or issuable upon conversion of the Series A
Shares, Series B Shares, Series C Shares and Series D Shares; (iii) the Warrant
Shares; (iv) the Common Stock issued to Intel Corporation ("Intel") pursuant to
a Common Stock Purchase Agreement of approximately even date herewith and (v)
the shares of the Company's Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right, or other security that is issued
as) a dividend or other distribution with respect to, or in exchange or in
replacement of, any of the securities referred to in clauses (i), (ii), (iii)
and (iv) above. In the event of any recapitalization by the Company, whether by
stock split, reverse stock split, stock dividend or the like, the number of
shares of Registrable Securities used throughout this Agreement for various
purposes shall be proportionately increased or decreased.
(e) The term "Securities Act" means the Securities Act of
1933, as amended.
(f) The term "Securities Exchange Act" means the Securities
Exchange Act of 1934, as amended.
(g) The term "Warrants" means the Venture Lending Warrant and
the General Bank Warrant.
(h) The term "Warrant Shares" means the shares of Common Stock
issued or issuable upon exercise of the Warrants.
Section 1.2 "Piggy-back" Registration.
(a) Registration Rights. If at any time or from time to time
the Company shall determine to register any of its securities for its own
account, other than a registration on Form S-l or S-8 (or other form) relating
solely to employee stock option or purchase plans, a
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registration on Form S-4 relating solely to an SEC Rule 145 transaction, or a
registration on any other form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company shall:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) except as set forth in Section 1.2(b), include
in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests by any Holder made within
twenty-five (25) days after mailing or personal delivery of such written notice
by the Company.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.2(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such person's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 1.2, if the
underwriter reasonably determines that marketing factors require a limitation of
the number of shares to be underwritten, the underwriter may exclude from such
registration and underwriting some or all of the Registrable Securities which
would otherwise be underwritten pursuant to this Agreement; provided, however,
that, except in connection with the Company's initial public offering of
securities, the underwriter may not limit the number of Registrable Securities
to be included in the registration and underwriting to less than forty percent
(40%) of the total securities included therein (based on aggregate market
values). The Company shall so advise all holders of the Company's securities
requesting registration of any such limitation, and the number of shares of
securities, including Registrable Securities, that are entitled to be included
in the registration and underwriting shall be allocated in the following manner:
shares, other than Registrable Securities, requested to be included in such
registration by shareholders shall be excluded, and if a limitation on the
number of shares is still required, the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by each such Holder at the
time of filing the registration statement; securities to be registered by the
Company for its own account shall be excluded only if a limit on the number of
shares is still required after exclusion of Registrable Securities held by each
such Holder. With respect to any "selling Holder" that is selling securities
hereunder and which is a partnership, corporation or trust, in the event of any
underwriter cutback, the partners, retired partners, stockholders and trustee
(if the selling Holder is a trust) of such "selling Holder," or the estates and
family members of any such partners, retired partners, stockholders and
trustees, and
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any trusts for the benefit of any of the foregoing persons shall be deemed to be
a single "selling Holder," and any pro rata allocation with respect to such
"selling Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling Holder," as defined in this sentence. No securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in registration.
If any Holder disapproves of the terms of any such underwriting, it may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any securities so withdrawn shall also be withdrawn from
registration. If by the withdrawal of such securities a greater number of
Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion used in determining the underwriter limitation
in this Section 1.2(b).
Section 1.3 Demand Registration.
(a) Request for Registration. In case the Company shall
receive from Initiating Holders a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities (other
than a registration on Form S-3 or any related form of registration statement,
such a request being provided for under Section 1.4 below), the Company shall:
(i) promptly (but in any event within ten (10) days
after such written request) give written notice of the proposed registration to
all other Holders; and
(ii) as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications and compliances
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under the applicable blue
sky or other securities laws of other states and appropriate compliance with
exemptive regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Initiating
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within thirty (30) days after mailing for personal delivery of such
written notice by the Company; provided that the Company shall not be obligated
to take any action to effect any such registration, qualification or Compliance
pursuant to this Section 1.3:
(A) Prior to the earlier of: (i) August 13,
2001 or (ii) six (6) months after the effective date of the first registration
statement for a public offering of securities of the Company (other than a
registration statement relating solely to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan or to an
SEC Rule 145 transaction);
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(B) In any jurisdiction in which the Company
would be required to qualify as a dealer in securities under the securities or
blue sky laws of such jurisdiction or in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance;
(C) If, after the Company gives the notice
specified in Section 1.3(a)(i), the Holders propose to sell a number of
Registrable Securities having an aggregate proposed offering price of less than
$5,000,000; or
(D) After the Company has effected two (2)
such registrations pursuant to this Section 1.3(a), such registrations have been
ordered or declared effective and such registrations have been kept effective
for the periods required under Section 1.6 below.
Subject to the foregoing clauses (A) through
(D), the Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable, but in any
event within 90 days after receipt of the request or requests of the Initiating
Holders; provided, however, that if the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company and its stockholders for such registration statement to be filed at
the date filing would be required and it is therefore essential to defer the
filing of such registration statement, the Company shall have an additional
period of not more than 90 days within which to file such registration
statement; and further provided, that the Company shall not be required to cause
a registration statement requested pursuant to this Section 1.3 to become
effective less than 60 days before or prior to 90 days following the effective
date of a registration statement pertaining to an underwritten public offering
of securities initiated by the Company for its own account (other than a
registration on Form S-4 relating solely to an SEC Rule 145 transaction or a
registration relating solely to employee benefit plans).
(b) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 1.3(a), and the Company shall include such information in
the written notice referred to in Section 1.3(a)(i). In such event, the right of
any Holder to registration pursuant to Section 1.3 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting. The Company (together with
all Holders proposing to distribute their securities through such underwriting)
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a
majority-in-interest of the Initiating Holders and reasonably satisfactory to
the Company. Notwithstanding any other provision of this Section 1.3, if the
underwriter advises the Initiating Holders and the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, the Initiating Holders shall so advise all Holders of Registrable
Securities that would otherwise be registered and underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective
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amounts of Registrable Securities held by such Holders at the time of filing the
registration statement. In such event, no Registrable Securities excluded from
the underwriting by reason of the underwriter's marketing limitation shall be
included in such registration.
If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. The Registrable Securities
so withdrawn shall also be withdrawn from the registration. If by the withdrawal
of such Registrable Securities a greater number of Registrable Securities held
by other Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 1.3(b).
If the underwriter has not limited the number of Registrable
Securities to be underwritten, the Company may include securities for its own
account (or for the account of other shareholders) in such registration if the
underwriter so agrees and if the number of Registrable Securities that would
otherwise have been included in such registration and underwriting will not
thereby be limited.
Section 1.4 Form S-3 Registration. Following the initial offering of
the Company's securities to the general public, the Company will use its best
efforts to qualify for the registration of its securities on Form S-3 (or any
comparable or successor form which allows inclusion or incorporation of
substantial information by reference to other documents filed with the SEC) and,
to that end, the Company shall register (whether or not required by law to do
so) its Common Stock under the Securities Exchange Act in accordance with the
provisions of the Securities Exchange Act within twelve (12) months following
the effective date of the first registration of any securities of the Company on
Forms S-1 or S-2 (or any comparable or successor form or forms). After the
Company has qualified for the use of Form S-3, the Holders shall have the right
to request an unlimited number of registrations of Registrable Securities on
Form S-3 (or such comparable or successor forms). Such requests shall be in
writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended methods of disposition of such shares by such
Holder or Holders). If the Company receives such a written request from the
Holders of not less than one percent (1%) of the Registrable Securities
outstanding from time to time, the Company shall:
(a) promptly give written notice of the proposed registration
and any related qualification or compliance to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request given within ten
(10) business days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification, or
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compliance pursuant to this Section 1.4 (i) if the Holders, together with
holders of any other securities of the Company entitled to inclusion in such
registration, if any, propose to sell Registrable Securities and such other
securities, if any, having an aggregate proposed offering price of less than
$1,000,000; (ii) in any jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance and in which it has not already filed such a
consent; (iii) if the Company shall furnish to the Holders a President's
certificate of the type described in Section 1.3(a) above, in which case the
Company's obligation to effect such registration shall be deferred as provided
in that Section; or (iv) if such registration would exceed the limitation that
the Holders may not demand more than one (1) registration on Form S-3 at the
Company's expense during any twelve-month period and may not in any event demand
any registration on Form S-3 (whether or not at the Company's expense) within
six (6) months after the effective date of another registration effected under
this Section 1.4. Registrations effected pursuant to this Section 1.4 shall not
be counted as piggy-back registrations or demand registrations under Sections
1.2 or 1.3, respectively.
Section 1.5 Expenses of Registration. All expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Article I, including without limitation, all registration, filing and
qualification fees (including blue sky fees and expenses), printing expenses,
accounting fees, escrow fees, the fees and disbursements of counsel for the
Company with respect to such registration, the reasonable fees and disbursements
of one counsel for the Holders participating in such registration, and expenses
of any special audits incidental to or required by such registration, shall be
borne by the Company; provided, however, that the Company shall bear such
expenses with respect to only one (1) registration on Form S-3 during any
twelve-month period; and further provided, that the following expenses shall be
borne by the Holders and any other participating security holders of the
Company, pro rata according to their securities so registered:
(a) Withdrawn Demands. If a registration proceeding begun
pursuant to Section 1.3 is withdrawn by the Initiating Holders, the reasonable
expenses of such registration proceeding shall be borne by the Holders, pro
rata, according to the number of shares of Registrable Securities requested to
be registered by Holders who requested to participate in such registration;
provided, however, that if such request is withdrawn after the Holders have
learned of a material adverse change in the condition, business or prospects of
the Company from that known to the Holders at the time of their request, of
which the Company had knowledge at the time of the request, such withdrawn
request shall not be counted as a request for purposes of Section 1.3 or
considered a withdrawn demand for purposes of this Section 1.5(a);
(b) Attorneys Fees. All fees and disbursements of counsel for
the Holders, other than those specifically required herein to be borne by the
Company; and
(c) Underwriters' Fees. Underwriters' fees, discounts and
commissions relating to Registrable Securities and securities of any other
participating security holders being sold in such registration.
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Section 1.6 Registration Procedures. In the case of each registration,
qualification or compliance required to be effected by the Company pursuant to
this Article I, the Company shall, upon written request, inform any Holder
participating therein as to the status of each registration, qualification and
compliance. At its expense the Company shall as expeditiously as possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its diligent best efforts to
cause such registration statement to become effective and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration, qualification or compliance pursuant to Section 1.2, 1.3
or 1.4 effective for a period of 90 days or until the Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs;
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish such number of prospectuses and other documents
incident thereto as a Holder participating in such registration from time to
time may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions in which it has not
already done so.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
Section 1.7 Indemnification.
(a) To the extent permitted by law, the Company shall
indemnify each Holder, each of its respective officers and directors, and each
person controlling such person, with respect to which registration,
qualification or compliance has been effected pursuant to this Article I, and
each underwriter, if any, and each person who controls any underwriter, against
all
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claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or (ii) any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, or (iii) any violation by
the Company of any rule or regulation promulgated under the Securities Act or
any state securities law applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such person, each of its
officers and directors, and each person controlling such person, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by an
instrument duly executed by any such person or underwriter and stated to be
specifically for use therein, and except that the foregoing indemnity agreement
is subject to the condition that, insofar as it relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC pursuant to Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter, or any Indemnified Party (as defined below) if there is no
underwriter, if a copy of the Final Prospectus was not furnished to the person
or entity asserting the claim, loss, damage or liability at or prior to the time
such furnishing is required by the Securities Act; and provided, further, that
the indemnity agreement contained in this Section 1.7(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage or liability if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld.
(b) To the extent permitted by law, each Holder shall, if
securities held by or issuable to such person are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers who sign such
registration statement, each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
within the meaning of the Securities Act and each other such Holder, each
officer and director and each person controlling each such underwriter, or other
Holder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or (ii) any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made, and will reimburse the Company,
and such other Holders, such directors, officers, persons or underwriters for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
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registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein and provided that in no event shall the liability
of any Holder pursuant to this Section 1.7(b) exceed the amount of the net
proceeds received by such person from the sale of his securities in such
liability resulted from such Holder's willful misconduct.
(c) Each party entitled to indemnification under this Section
1.7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein within a reasonable amount of time, if such
failure is prejudicial to the Indemnifying Party's ability to defend such
action, shall relieve the Indemnifying Party of its obligations under this
Article I, but not of any obligation arising apart from this Article I. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. If any
such Indemnified Party shall have reasonably concluded that there may be one or
more legal defenses available to such Indemnified Party which are different from
or additional to those available to the Indemnifying Party, or that such claim
or litigation involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section 1.7, the Indemnifying Party
shall not have the right to assume the defense of such action on behalf of such
Indemnified Party and such Indemnifying Party shall reimburse such Indemnified
Party and any person controlling such Indemnified Party for that portion of the
fees and expenses of any counsel retained by the Indemnified Party which are
reasonably related to the matters covered by the indemnity agreement provided in
this Section 1.7.
Section 1.8 Information by Holder. Each Holder whose securities are
included in any registration shall furnish in writing to the Company such
information regarding such person and the distribution proposed by such person
as the Company may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this Article
I. The Company's obligations under this Article I are conditioned upon
compliance by such persons with the provisions of this Section 1.8.
Section 1.9 Sale Without Registration. At the time of any transfer of
any Shares or Registrable Securities which shall not be registered under the
Securities Act, the Company may require, as a condition of allowing such
transfer, that the holder or transferee furnish to the Company: (a) such
information as is reasonably necessary in order to establish that such transfer
may be made without registration under the Securities Act; and (b) at the
expense of the holder
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or transferee, an opinion of counsel, satisfactory in form and substance to the
Company, to the effect that such transfer may be made without registration under
such Act; provided that nothing contained in this Section 1.9 shall relieve the
Company from complying with any request for registration, qualification or
compliance made pursuant to the other provisions of this Article I.
Section 1.10 Rule 144 Reporting. With a view to making available to the
Investors the benefits of certain rules and regulations of the SEC which may
permit the sale of their securities to the public without registration, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after 90 days after the
effective date of the first registration filed by the Company for an offering of
its securities to the general public;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as an Investor owns any Shares (or Registrable
Securities), to furnish to such Investor forthwith upon request at any time
after 90 days after the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public, a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, and of the Securities Act and the Securities
Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company with the
SEC as an Investor may reasonably request in availing itself of any rule or
regulation of the SEC permitting the sale of any such securities without
registration.
Section 1.11 Transfer of Registration Rights. The rights to cause the
Company to register securities granted by the Company under Sections 1.2, 1.3
and 1.4 may only be assigned by an Investor to a transferee or assignee of not
less than 100,000 Series A Shares, Series B Shares, Series C Shares, Series D
Shares or Registrable Securities (as adjusted for stock splits and the like);
provided that such transfer may otherwise be effected in accordance with
applicable securities laws and provided further that the Company is given
written notice at the time of or within a reasonable time after such transfer,
stating the name and address of such transferee or assignee and identifying the
securities with respect to which such registration rights are being assigned.
The share limitations set forth above shall not apply to transfers by any
Investor to such Investor's Affiliated Parties, as defined below, but shall
apply to further transfers to non-Affiliated Parties.
Section 1.12 Limitations on Subsequent Registration Rights. From and
after the date of this Agreement so long as not less than fifty percent (50%) of
the Series A Shares, Series B Shares, Series C Shares and Series D Shares
(and/or Registrable Securities into which they are converted and as adjusted for
stock splits, combinations and the like) are outstanding and held by Holders,
the Company shall not, without the prior written consent, which consent shall
not be unreasonably withheld, of the Holders of Series A Shares, Series B
Shares, Series C Shares and Series D Shares (and/or Registrable Securities into
which they are converted and as adjusted for
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stock splits, combinations and the like) having more than fifty percent (50%) of
the voting power of such securities, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder: (a) to include such securities in any registration
filed under Section 1.2, 1.3 or 1.4 hereof unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of such securities will
not reduce the amount of Registrable Securities of the Holders which are
included in such registration; or (b) to demand that the Company register any
securities of the Company.
Section 1.13 Stand-Off Agreement. Each Holder agrees in connection with
any registration of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters; provided, however, that (a) such
agreement shall be applicable only to the first such registration statement of
the Company which covers Common Stock (or other securities) to be sold on its
behalf to the public in an underwritten offering; and (b) all officers and
directors of the Company and all other holders of securities to be included in
such registration statement enter into similar agreements. In order to enforce
the foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Registrable Securities of each Holder (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.
Section 1.14 Termination of Rights. The rights of any particular Holder
to cause the Company to register securities under Sections 1.2, 1.3 and 1.4
shall terminate with respect to such Holder on the earlier of (i) five years
following a bona fide public offering of shares of Common Stock registered under
the Securities Act (provided that the aggregate offering price, net of
underwriting discounts and commissions, exceeds $12,000,000 and the per share
offering price is at least $7.00) or (ii) at such time as one (1) year after the
end of the first three month period in which such Holder is able to dispose of
all of his or its Registrable Securities in one three month period pursuant to
the provisions of Rule 144 (or similar successor rule), provided that such
Holder holds Registrable Securities constituting less than two percent (2%) of
the outstanding voting stock of the Company.
ARTICLE II
RIGHTS OF FIRST REFUSAL
Section 2.1 "New Securities". For purposes of this Article II, the term
"New Securities" shall mean shares of Common Stock, Preferred Stock or any other
class of capital stock of the Company issued after the date hereof, whether or
not now authorized, securities of any type that are convertible into shares of
such capital stock, and options, warrants or rights to acquire shares of such
capital stock; provided, however, that the term "New Securities" does not
include (i) securities issuable pursuant to the Series D Stock Purchase
Agreement; (ii) securities
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issuable upon conversion of the shares of Preferred Stock outstanding as of the
date hereof, or issuable upon the conversion of Series D Shares, or issuable
upon exercise of the Warrants, or upon the conversion of any other convertible
securities or the exercise of any other options, warrants or similar rights the
Company may have issued or may hereafter issue in compliance with the provisions
of this Section 2.1; (iii) other than as set forth in Section 3.9, securities
offered to the public pursuant to a registration statement filed under the
Securities Act, which term shall include any successor federal statute; (iv)
securities issued pursuant to the acquisition of another corporation by the
Company by merger, purchase of all or substantially all of the assets, or other
reorganization whereby the Company owns not less than fifty-one percent (51%) of
the voting power of such corporation; (v) shares of capital stock or securities
exercisable for or convertible into shares of capital stock issued (a) to
lessors, and (b) to banks, commercial lenders, other financial institutions or
lenders in connection with the borrowing of money by the Company; (vi) shares of
capital stock or securities exercisable for or convertible into capital stock
issued or issuable at any time to existing or future employees, directors,
officers or consultants of the Company, pursuant to the Company's 1994 Stock
Purchase Plan, the 1997 Stock Plan or any other employee stock offering, plan,
or arrangement unanimously approved by the Board of Directors; (vii) shares of
Common Stock or Preferred Stock issued in connection with any stock split, stock
dividend, or recapitalization by the Company; and (viii) shares or options or
warrants to purchase shares of Common Stock or Preferred Stock in connection
with transactions involving the acquisition of licenses or other rights, assets
or technology from third parties or equipment purchase or lease transactions
approved by not less than a two-thirds vote of the entire Board of Directors.
Section 2.2 Grant of Rights of First Refusal. Subject to the terms
specified in this Article II, the Company hereby grants to the Investors the
right of first refusal to purchase pro rata any issue of New Securities which
the Company hereafter may from time to time propose to issue and sell. The "pro
rata" share of each Investor is the ratio of (a) the number of shares of Common
Stock then held by such Investor or issued or issuable to such Investor upon the
conversion of the Series A Shares, Series B Shares, Series C Shares and Series D
Shares and upon the conversion of any other securities convertible into Common
Stock then held by such Investor plus the shares of Common Stock indicated on
Exhibit A to be treated as held by such Investor for purposes of this Section
2.2, divided by (b) the sum of the total number of shares of Common Stock then
outstanding plus the total number of shares of Common Stock issuable upon
conversion of all the Series A Shares, Series B Shares, Series C Shares and
Series D Shares and other outstanding securities convertible into Preferred
Stock or Common Stock.
Section 2.3 Procedure.
(a) In the event the Company proposes to undertake an issuance
of New Securities, it shall give the Investors written notice of its intention,
describing the type of New Securities, the price and material terms upon which
the Company proposes to issue the same. Each Investor shall have twenty-five
(25) days from the date of receipt of any such notice to agree to purchase up to
its pro rata share of such New Securities for the price and upon the terms
specified in the Company's notice by giving written notice to the Company to
such effect and stating therein the quantity of New Securities to be purchased.
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(b) Each Investor shall have a right of overallotment such
that if any Investor fails to exercise its right hereunder to purchase its full
pro rata portion of New Securities, the Company shall promptly give written
notice of such fact to each of the other Investors who have properly exercised
their right to purchase their full pro rata portions thereof, whereupon each
such fully participating Investor shall have ten (10) business days from the
date of receipt of any such notice to agree to purchase up to its pro rata share
of the nonpurchasing investor's unexercised portion by giving written notice to
the Company to such effect and stating therein the quantity of such
nonpurchasing Investor's unexercised portion to be so purchased.
(c) In the event that the Investors fail to exercise in full
their rights of first refusal within such twenty-five (25) plus ten (10) day
period, the Company shall have one hundred fifty (150) days thereafter to sell
or enter into an agreement (pursuant to which the sale of all New Securities
covered thereby shall be closed, if at all, within sixty (60) days from the date
of such agreement) to sell the New Securities, with respect to which such rights
of first refusal were not exercised, at the price and upon terms no more
favorable to the Investor than the terms specified in the Company's notice to
the Investors. In the event the Company has not sold the New Securities within
such 150-day period (or entered into an agreement to sell the New Securities
within such 150-day period and actually sold them in accordance with such
agreement within sixty (60) days from the date of such agreement), the Company
shall not thereafter issue or sell any New Securities without first offering a
portion to the investors in accordance with this Article II.
Section 2.4 Termination of Rights. The preemptive rights granted under
Section 2.2 above shall expire upon the first of the following to occur:
(a) The closing of an underwritten public offering pursuant to
an effective registration statement on Form S-1 (or a successor form) under the
Securities Act of 1933, as amended, covering the offer and sale of Common Stock
for the account of the Company to the public at an aggregate offering price of
not less than Twelve Million Dollars ($12,000,000) and at a public offering
price per share (prior to underwriter commissions and expenses) that is not less
than $7.00 (as adjusted to reflect subdivisions and combinations of shares of
Common Stock and stock dividends paid in shares of Common Stock (a "Qualified
Initial Public Offering");
(b) the consummation of an acquisition of the Company pursuant
to which a Public Market exists for the Company's capital stock (or other stock
issued in exchange therefore). For the purpose of this Agreement, a "Public
Market" shall be deemed to exist if (i) such stock is listed on a national
securities exchange (as that term is used in the Securities Exchange Act of
1934, as amended) or (ii) such stock is traded on the over-the-counter market
and prices are published daily on business days in a recognized financial
journal; or
(c) with respect to an individual Investor, when such Investor
no longer holds at least 50% of the Series A Shares, Series B Shares, Series C
Shares or Series D Shares (or the Common Stock issued upon conversion thereof)
purchased by such Investor, respectively.
Section 2.5 Assignment. The rights granted by the Company under this
Article II may only be assigned by an Investor to a transferee or assignee of
not less than 100,000 of the
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Series A Shares, Series B Shares, Series C Shares, Series D Shares or
Registrable Securities (as adjusted for stock splits and the like); provided
that such transfer may otherwise be effected in accordance with applicable
securities laws and provided further that the Company is given written notice at
the time of or within a reasonable time after such transfer, stating the name
and address of such transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned. The share
limitations set forth above shall not apply to transfers by any Investor to such
Investor's Affiliated Parties, as defined below, but shall apply to further
transfers to non-Affiliated Parties.
Section 2.6 Waiver of Right of First Refusal. The Investors hereby
waive the right of first refusal (including but not limited to any notice
provisions) set forth in Article II of the Fourth Amended and Restated Investor
Rights Agreement with respect to issuance of the Series D Shares issued pursuant
to the Series D Stock Purchase Agreement, as may be amended.
ARTICLE III
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
Section 3.1 Financial Information. The Company shall furnish the
following reports to each Investor so long as such Investor owns not less than
ten percent (10%) of the Series A Shares, Series B Shares, Series C Shares and
Series D Shares (and/or shares of Common Stock issued upon conversion thereof)
purchased by such Investor.
(a) Annual Financial Statements. As soon as practicable after
the end of each fiscal year, and in any event within ninety (90) days
thereafter, consolidated balance sheets of the Company and its subsidiaries, if
any, as at the end of such fiscal year, and consolidated statements of income
and of shareholders equity and consolidated statements of cashflows of the
Company and its subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and, at least once every second year,
certified by nationally recognized independent public accountants selected by
the Company.
(b) Monthly Financial Statements. As soon as practicable after
the end of each calendar month, and in any event within thirty (30) days
thereafter, consolidated balance sheets of the Company and its subsidiaries, if
any, consolidated statements of income and of shareholder equity and
consolidated statements of cash flows of the Company and its subsidiaries, if
any, for such period and for the current fiscal year to date, prepared on a
basis substantially consistent with the principles by which the Company's
year-end financial statements are prepared, except that they are subject to
year-end adjustments and will not contain all footnotes required under GAAP, in
reasonable detail.
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(c) Annual Operating Plan. As soon as available, but not later
than thirty (30) days after the end of each fiscal year of the Company, a copy
of the Company's annual operating plan for the forthcoming fiscal year,
including a projected balance sheet and statement of operations prepared on a
monthly basis, and any material amendments to such projections as approved from
time to time during such fiscal year by the Board of Directors.
(d) Other Information. Such other information relating to the
financial condition, business, prospects or corporate affairs of the Company as
such Investor may from time to time reasonably request; provided, however, that
the Company shall not be obligated to provide information which it reasonably
considers to constitute a trade secret or to contain similarly confidential
information. Exchanges of confidential information between the Company and Intel
Corporation shall be governed by the terms of the Corporate Non-Disclosure
Agreement No. 83942, dated as of _____, between the Company and Intel and any
Confidential Information Transmittal Records provided in connection therewith
(the "Intel Nondisclosure Agreement").
Section 3.2 Inspection. For so long as an Investor is entitled to
receive reports under Section 3.1, the Company shall permit such Investor, at
such Investor's expense, to visit and inspect the Company's properties, to
examine its books of account and records and to discuss the Company's affairs,
finances and accounts with its officers, all at such reasonable times as may be
requested by such Investor upon reasonable notice to the Company; provided,
however, that the Company shall not be obligated pursuant to this Section 3.2 to
provide access to any information which it reasonably considers to constitute a
trade secret or to contain similarly confidential information. Exchanges of
confidential information between the Company and Intel shall be governed by the
terms of the Intel Nondisclosure Agreement.
Section 3.3 Series A Board Representation. For so long as the Investors
holding Series A Shares shall own Series A Shares sold and issued to them under
the Stock Purchase Agreement (and/or shares of Common Stock into which such
Series A Shares are convertible, and as adjusted for stock splits, combinations
and the like), the Company shall use its reasonable best efforts to cause one
(1) person designated by the majority-in-interest (in terms of the total number
of shares of such Common Stock issued or issuable upon conversion of such
Shares) of such Investors then holding Series A Shares (and/or such Common
Stock) to be elected to the Company's Board of Directors.
Section 3.4 Series B Board Representation. For so long as the Investors
holding Series B Shares shall own Series B Shares sold and issued to them under
the Series B Stock Purchase Agreement (and/or shares of Common Stock into which
such Series B Shares are convertible, as adjusted for stock splits, combinations
and the like), the Company shall use its reasonable best efforts to cause one
(1) person designated by the majority-in-interest (in terms of the total number
of shares of such Common Stock issued or issuable upon conversion of such
Shares) of such Investors then holding Series B Shares (and/or such Common
Stock) to be elected to the Company's Board of Directors.
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Section 3.5 Outside Directors. For so long as there are any shares of
Preferred Stock outstanding, the Company shall use its reasonable best efforts
to cause at least a majority of the members of the Company's Board of Directors
(including the persons designated by the Investors pursuant to the preceding
Sections 3.3 and 3.4) to be "outside directors" (meaning they are not officers
or employees of the Company).
Section 3.6 Insurance. The Company shall keep its assets and those of
its subsidiaries which are of an insurable character insured by financially
sound and reputable insurers against loss and damage by fire, extended coverage,
explosion and other risks customarily insured against by companies in the
Company's line of business, to the extent and in the manner customary for
companies in similar businesses similarly situated.
Section 3.7 Proprietary Information and Employee Confidentiality
Agreements. The Company shall require each technical and management employee and
consultant of the Company to enter into a proprietary information and employee
confidentiality agreement in substantially the form of the Employee Agreement
attached as Exhibit F to the Series D Stock Purchase Agreement, or such other
form as may be approved by the Board of Directors.
Section 3.8 Future Stock Issuances. The Company shall not issue any of
its capital stock, or grant an option to purchase any of its capital stock,
unless such issuance or grant is approved by the Company's Board of Directors by
not less than a two-thirds' majority.
Section 3.9 Right to Purchase Shares in Public Offering. In connection
with an initial public offering of the Company's shares of Common Stock pursuant
to a registration statement under the Act, each Holder that owns (together with
its Affiliated Parties) not less than 755,940 shares of Series C Shares (each a
"Major Investor"), shall, to the extent permitted by and in accordance with
applicable laws and regulations, have the right to purchase shares offered to
the public by the Company in such public offering (the "Proposed Offering") as
follows:
(a) The Company shall give the Major Investors notice of its
intention to effect the Proposed Offering, which notice shall include the
proposed price range in which the Company intends to offer the securities sold
to the public;
(b) Each Major Investor shall, within five (5) business days
after the delivery of such notice by the Company in accordance with Section
3.9(a) hereof, notify the Company and the managing underwriter of such Major
Investor's election to purchase its Allocation (defined below) of the shares to
be offered in the Proposed Offering by the Company (excluding shares sold
pursuant to the underwriters' over-allotment option) within the range specified
by the Company, and of the maximum price (the "Ceiling Price"), if any, above
which range such Major Investor will purchase its Allocation. Failure to so
notify the Company and the managing underwriter within the five (5) business day
period specified in this Section 3.9(b) shall constitute a complete and
irrevocable waiver of the rights granted to a Major Investor under this Section
3.9. Other than as specified in Section 3.9(a) and as may otherwise be required
by applicable law or by this Agreement, the Company shall have no obligation to
provide notices to a Major Investor with respect to the Proposed Offering.
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(c) Any election made by a Major Investor pursuant to Section
3.9(b) constitutes a binding obligation to purchase such Major Investor's
Allocation at a price up to and including the Ceiling Price, subject only to the
occurrence of a Material Adverse Change (defined below), which occurrence shall
permit such Major Investor, by written notice delivered to the Company and the
managing underwriter no later than one (1) business day before the effectiveness
of the final registration statement covering the Proposed Offering, to revoke
its election to purchase its Allocation in the Proposed Offering. If the price
at which the Company's securities are ultimately sold to the public in the
Proposed Offering exceeds a Major Investor's Ceiling Price, such Major Investor
shall have no obligation to purchase its Allocation and the Company and the
managing underwriter may conclusively presume that such Major Investor does not
wish to purchase its Allocation.
(d) If a Major Investor elects to purchase securities in the
Proposed Offering, the managing underwriter will deliver the preliminary and
final prospectuses for such offering to such Major Investor in accordance with
applicable law;
(e) If a Major Investor elects to purchase its Allocation in
the Proposed Offering, it shall do so on the terms of such Proposed Offering and
for a price per share which shall be equal to the price to the public set forth
in the final prospectus delivered to such Major Investor pursuant to Section
3.9(d);
(f) For the purposes of this Section 3.9, a Major Investor's
"Allocation" shall be determined by dividing (A) the total number of shares of
Common Stock owned by such Major Investor (assuming conversion of all
outstanding shares of Series C Preferred Stock) by (B) the total number of
shares of Common Stock issued and outstanding (calculated on a fully-diluted,
fully-converted basis assuming exercise or conversion of all options, warrants
and other convertible securities then outstanding); provided, however, that such
Allocation shall in no event exceed 3% of the shares to be offered by the
Company in the Proposed Offering (excluding shares sold pursuant to the
underwriters' over-allotment option).
(g) A "Material Adverse Change" shall mean a change in the
Company's business, assets (including intangible assets), liabilities, financial
condition or results of operations since the date of the notification given by
the Company pursuant to Section 3.9(a) which has had or is likely to have a
material adverse effect upon the Company.
(h) Each Major Investor hereby agrees that during the ninety
(90) day period following the effective date of the registration statement of
the Company filed under the Act in connection with the Proposed Offering, it
shall not sell, offer to sell, or otherwise transfer or dispose of the shares of
the Company acquired though exercise of the rights granted to such Major
Investor pursuant to this Section 3.9. To enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the shares held by
each Major Investor (and the shares of every other person subject to the
foregoing restriction) until the end of such period. Each Major Investor agrees
to execute the form of such market stand-off agreement as may be reasonably
requested by the underwriters.
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(i) Notwithstanding Section 6.3 to the contrary, any term of
this Section 3.9 may be amended and the observance of any term of this Section
3.9 may only be waived with the written consent of the Company and the holders
of a majority of the Registrable Securities issued or issuable on the conversion
of the Series C Shares.
Section 3.10 Termination of Covenants. The covenants set forth in this
Article III, Section 4.3 and Article V, to the extent not previously terminated,
shall terminate on the earlier to occur of: (i) the closing date of a Qualified
Initial Public Offering (provided however that Section 3.9(h) shall survive
until 90 days after the closing thereof), (ii) the date on which the Company
first becomes subject to the periodic reporting requirements of Section 12(g) or
15(d) of the Securities Exchange Act, or (iii) the consummation date of an
acquisition of the Company pursuant to which a Public Market exists for the
Company's capital stock (or other stock issued in exchange therefore).
ARTICLE IV
AFFIRMATIVE COVENANTS OF THE INVESTORS
Each Investor hereby severally covenants and agrees as follows:
Section 4.1 Confidentiality of Information; Securities Laws. Subject to
Section 5.3, each Investor, except Intel, agrees not to disclose to third
parties or use for purposes other than the evaluation, monitoring and
preservation of such Investor's investment in the Company, except to the extent
required by law or otherwise consented to in writing by the Company, any
information obtained by such Investor from the Company contemplated by this
Agreement, which may be proprietary to the Company or otherwise confidential and
which has not been made available to the public or to any other third party on a
non-confidential basis. Exchanges of confidential information between the
Company and Intel shall be governed by the Intel Nondisclosure Agreement. Each
Investor further acknowledges and understands that any information so obtained
(whether or not of a proprietary nature) may be considered "inside" non-public
information. Except as contemplated by this Agreement, each Investor agrees that
it will not utilize such information in connection with the purchase and/or sale
of the Company's securities, except in compliance with applicable state and
federal securities laws.
Section 4.2 Requests to Waive Accrued Dividends. In connection with the
Company's first registered offering of the sale of the Company's securities to
the public, if the underwriter of such offering reasonably determines that the
offering cannot be made due to the amount of accrued dividends to which the
holders of the Series A Shares are entitled pursuant to the Company's Restated
Articles of Incorporation, the holders of the Series A Shares shall meet with
officers of the Company to consider in good faith any request by the Company
that such Investors waive their right to receive such dividends.
Section 4.3 Voting and other Covenants.
(a) Agreement to Vote. Each Investor (and its permitted
assigns) hereby agrees to vote all shares of the Company's Common Stock and
Preferred Stock now or hereafter owned by it, whether beneficially or otherwise
at any regular or special meeting of shareholders
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of the Company, or, in lieu of any such meeting, to give its written consent, as
provided in this Section 4.3.
(b) Series A Board Representation. For so long as the
Investors holding Series A Shares shall own Series A Shares sold and issued to
them under the Stock Purchase Agreement (and/or shares of Common Stock into
which such Series A Shares are convertible, and as adjusted for stock splits,
combinations and the like), then the Investors (and their permitted assigns)
shall vote or act with respect to all shares of the Company's Common Stock and
Preferred Stock held by the Investors, as needed, to elect to the board of
directors of the Company a designee of Xxxxxxxx Xxxxx Investment Plc (the
"Xxxxxxxx Xxxxx Director").
(c) Series B Board Representation. For so long as the
Investors holding Series B Shares shall own Series B Shares sold and issued to
them (and/or shares of Common Stock into which such Series B Shares are
convertible, and as adjusted for stock splits, combinations and the like), then
the Investors (and their permitted assigns) shall vote or act with respect to
all shares of the Company's Common Stock and Preferred Stock held by the
Investors, as needed, to elect to the board of directors of the Company a
designee of Xxxxxx Xxxxxxx Venture Capital Fund (the "Xxxxxx Xxxxxxx Director").
(d) Vacancy. In the event of any termination, removal or
resignation of the Xxxxxxxx Xxxxx Director or the Xxxxxx Xxxxxxx Director, the
Investors (and their permitted assigns) shall take all actions necessary and
appropriate to cause such vacancy to be filled in the manner by which such
director was elected pursuant to the terms of this Section 4.3.
(e) Successors in Interest. The provisions of this Section 4.3
shall be binding upon the successors in interest of any of the shares of the
Company's Common Stock or Preferred Stock held by the Investors. The Company
shall not permit the transfer of any shares of Common Stock or Preferred Stock
on its books or issue a new certificate representing any such shares unless and
until the person to whom such security is transferred shall have executed a
written agreement pursuant to which such person becomes subject to the
provisions of this Section 4.3 and agrees to be bound by all the provisions
hereof.
(f) Legend. Each certificate representing any of the Company's
shares of Common Stock or Preferred Stock held by an Investor shall be endorsed
by the Company with a legend reading as follows:
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT
CONTAINED IN AN INVESTOR RIGHTS AGREEMENT (A COPY OF WHICH MAY
BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST
IN SUCH SHARES, THE PERSON ACCEPTING SUCH INTEREST SHALL BE
DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SAID VOTING AGREEMENT.
(g) Pooling Transaction Voting. MSIT Holdings, Inc., Xxxxxx
Xxxxxxx Venture Investors, L.P., and Xxxxxx Xxxxxxx Venture Capital Fund II,
C.V. agree that for so long
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22
as they hold any shares of capital stock of the Company, they will vote their
shares with respect to any acquisition or merger transaction that is accounted
for on a pooling of interests basis in a manner consistent with the vote of
Xxxxxx Xxxxxxx Venture Capital Fund II, L.P. on such matter.
ARTICLE V
CONFIDENTIALITY
Section 5.1. Disclosure of Terms. The terms and conditions of this
Agreement, the Series D Stock Purchase Agreement, the Fourth Amended and
Restated Co-Sale Agreement among the Company and certain investors dated
concurrently herewith, the Common Stock Purchase Agreement between the Company
and Intel dated concurrently herewith, the Supplemental Agreement between the
Company and Intel dated concurrently herewith (the "Supplemental Agreement") and
the Tuning Lab Agreement between the Company and Intel dated concurrently
herewith, (collectively, the "Agreements"), including their existence, shall be
considered confidential information and shall not be disclosed by any party
hereto to any third party except in accordance with the provisions set forth
below.
Section 5.2 Press Releases, Etc. Within sixty (60) days of the Closing,
the Company may issue a press release disclosing that Intel has invested in the
Company; provided that the release does not disclose any of the terms of the
Agreements and the final form of the press release is approved in advance in
writing by the Intel. Intel's name and the fact that Intel is an investor in the
Company can be included in a reusable press release boilerplate statement in the
form attached hereto as Exhibit B, which may be used on an ongoing basis
regarding disclosure of such investment. No other announcements regarding Intel
in a press release, conference, advertisement, announcement, professional or
trade publication, mass marketing materials or otherwise to the general public
may be made without Intel's prior written consent.
Section 5.3 Permitted Disclosures. Notwithstanding the foregoing, (i)
any party may disclose any of the terms of the Agreements to its current or bona
fide prospective investors, employees, investment bankers, lenders, accountants
and attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations; (ii) any party may disclose (other than
in a press release or other public announcement described in subsection (b))
solely the fact that the Investors are investors in the Company to any third
parties without the requirement for the consent of any other party or
nondisclosure obligations; and (iii) Intel may disclose its investment in the
Company and the terms of the Agreements to third parties or to the public at its
sole discretion and, if it does so, the other parties hereto shall have the
right to disclose to third parties any such information disclosed in a press
release or other public announcement by Intel.
Section 5.4 Legally Compelled Disclosure. In the event that any party
is requested or becomes legally compelled (including without limitation,
pursuant to securities laws and regulations) to disclose the existence of any of
the Agreements or any of the terms thereof in contravention of the provisions of
this Article V, such party (the "Disclosing Party") shall provide the other
parties (the "Non-Disclosing Parties") with prompt written notice of that fact
so that the appropriate party may seek (with the cooperation and reasonable
efforts of the other parties) a protective order, confidential treatment or
other appropriate remedy. In such event, the
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23
Disclosing Party shall furnish only that portion of the information which is
legally required and shall exercise reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded such information to the
extent reasonably requested by any Non-Disclosing Party.
Section 5.5 Other Information. The provisions of this Agreement shall
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby. Additional disclosures and exchange of
confidential information between the Company and Intel (including without
limitation, any exchanges of information with any Intel board observer) shall be
governed by the terms of the Intel Nondisclosure Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California without application of
principles of conflicts of law.
Section 6.2 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
Section 6.3 Entire Agreement; Amendment.
(a) This Agreement and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement among the
parties with regard to the subjects hereof and thereof. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
more than two-thirds (2/3rds) of the voting power of the securities entitled to
the rights being amended or waived, based on the number of shares of Common
Stock into which the Series A Shares, Series B Shares, Series C Shares and/or
Series D Shares, as applicable, are convertible and for which the Warrants are
exercisable, provided, however, that in the event an amendment or waiver of a
provision contained in other than Sections 3.3, 3.4, 3.5, 4.2 or 4.3 of this
Agreement adversely affects the rights and/or obligations of any holder of
Preferred Stock under this Agreement in a different manner than the other
holders of Preferred Stock (it being understood that, without limiting the
foregoing, different Investors shall not be affected differently because of
proportional differences that arise out of differences in the original issue
price for the Preferred Stock held by such Investor or the number of shares of
Preferred Stock held by such Investor) such amendment or waiver shall also
require the written consent of such adversely affected Investor, and provided
further that any amendment or waiver of Article 5 shall require the written
consent of Intel.
(b) Any amendment or waiver effected in accordance with this
Section shall be binding upon each Investor holding any securities of the
Company at the time outstanding (including securities into which such securities
are convertible), each future holder of all such securities, and the Company.
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24
Section 6.4 Notices and Other Communications. Every notice or other
communication required or contemplated by this Agreement by either party shall
be delivered either by (i) personal delivery, (ii) postage prepaid return
receipt requested registered or certified mail or the equivalent of registered
or certified mail under the laws of the country where mailed, (iii) nationally
recognized overnight courier, such as Federal Express or UPS, or (iv) facsimile
with a confirmation copy sent simultaneously by postage prepaid, return receipt
requested, registered or certified mail, in each case addressed to the Company
at the following address:
To the Company: Persistence Software, Inc.
0000 X. Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxxxx Xxxxxxx, Secretary
Facsimile: (000) 000-0000
With a copy to: Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
and addressed to any Investor at the address set forth for such Investor in
Exhibit A to this Agreement, or at such other address as the intended recipient
previously shall have designated by written notice to the other party. Notice by
registered or certified mail shall be effective on the date it is officially
recorded as delivered to the intended recipient by return receipt or equivalent,
and in the absence of such record of delivery, the effective date shall be
presumed to have been the third (3rd) business day after it was deposited in the
mail. All notices and other communications required or contemplated by this
Agreement delivered in person or sent by courier shall be deemed to have been
delivered to and received by the addressee and shall be effective on the date of
personal delivery; notices delivered by facsimile with simultaneous confirmation
copy by registered or certified mail shall be deemed delivered to and received
by the addressee and effective on the date sent. Notice not given in writing
shall be effective only if acknowledged in writing by a duly authorized
representative of the party to whom it was given.
Section 6.5 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Series A Shares, Series B
Shares, Series C Shares, Series D Shares or Common Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
-24-
25
Section 6.6 Separability of Agreements; Severability of this Agreement.
Unless otherwise expressly provided herein, the rights of the Investors
hereunder are several rights, not rights jointly held with any of the other
Investors. Any invalidity, illegality or limitation on the enforceability of any
part of this Agreement with respect to any Investor, whether arising by reason
of the law of the Investor's domicile or otherwise, shall in no way affect or
impair the validity, legality or enforceability of this Agreement with respect
to any other Investor. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 6.7 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
Section 6.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. Execution and delivery of this Agreement by
exchange of facsimile copies bearing the facsimile signature of a party hereto
shall constitute a valid and binding execution and delivery of this Agreement by
such party. Such facsimile copies shall constitute enforceable original
documents.
Section 6.9 Gender. The use of the neuter gender herein shall be deemed
to include the masculine and feminine gender, if the context so requires.
Section 6.10 Attorneys' Fees. If any action or proceeding shall be
commenced to enforce this Agreement or any right arising in connection with this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the other party, the reasonable attorneys' fees, costs and
expenses incurred by such prevailing party in connection with such action or
proceeding.
Section 6.11 Affiliated Parties. For purposes of this Agreement, the
term "Affiliated Parties" shall include controlling shareholders of a corporate
Investor, controlling partners of a partnership Investor, trustees of an
Investor that is a trust, managing members of an Investor that is a limited
liability company, or a majority-owned subsidiary or an affiliated corporation
or partnership of the Investor where such affiliation is through
majority-ownership, provided, however that any such Affiliated Parties shall not
be in a business that competes with the Company, and provided further that any
and all transferees must agree in writing to be bound by the terms of this
Agreement as if it were an Investor hereunder. Series A Shares, Series B Shares,
Series C Shares and Series D Shares (and/or Common Stock issuable upon
conversion of such shares) held by Affiliated Parties shall be deemed to be held
by a single Investor. Affiliated Parties shall designate one member to receive
the information or exercise the rights to which the group is entitled under
Article III. The Amerindo Purchasers (as defined in the Second Series C Stock
Purchase Agreement) shall be deemed Affiliated Parties of each other.
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26
Section 6.12 Further Assurances. The parties hereto shall each perform
such acts, execute and deliver such instruments and documents, and do all such
other things as may be reasonably necessary to accomplish the transactions
contemplated in this Agreement.
Section 6.13 Specific Performance. It is recognized and agreed by all
parties that certain of the rights which are subject to this Agreement are
unique and are of such a nature as to be inherently difficult or impossible to
value monetarily. It is thus agreed that, in the event of a breach of this
Agreement by any party, an action at law or damages or other remedies at law
would be inadequate to protect the unique rights and interests of the parties
hereto. Therefore each party agrees that in the event of any controversy
concerning the subject matter of this Agreement, the terms of this Agreement
shall be enforceable in a court of equity by a decree of specific performance.
Such a remedy shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which the parties may have.
The remainder of this page is intentionally blank.
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27
IN WITNESS WHEREOF, the parties have executed this Fifth Amended and
Restated Investor Rights Agreement as of the date first above written.
COMPANY:
PERSISTENCE SOFTWARE, INC.
a California corporation
By: /s/ Xxxxxxxxxxx Xxxxx
--------------------------
Name: Xxxxxxxxxxx Xxxxx
--------------------------
Title: President and CEO
--------------------------
INVESTORS:
CISCO SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
--------------------------------
Title: Vice President, Treasurer
--------------------------------
XXXXXX XXXXXXX VENTURE INVESTORS, L.P.
By: Xxxxxx Xxxxxxx Venture Partners II, L.P.
its General Partner
By: Xxxxxx Xxxxxxx Venture Capital II, Inc.
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
--------------------------------
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
28
XXXXXX XXXXXXX VENTURE CAPITAL FUND II, L.P.
By: Xxxxxx Xxxxxxx Venture Partners II, L.P.
its General Partner
By: Xxxxxx Xxxxxxx Venture Capital II, Inc.
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
XXXXXX XXXXXXX VENTURE CAPITAL FUND II, C.V.
By: Xxxxxx Xxxxxxx Venture Partners II, L.P.
its Investment General Partner
By: Xxxxxx Xxxxxxx Venture Capital II, Inc.
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
MSIT HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
------------------------------------
Title: Senior Advisor
------------------------------------
XXXXXXXX XXXXX INVESTMENTS PLC,
a United Kingdom Public Limited Company
By: /s/ X. Xxxxxxxxxxx/ /s/ X.X. Xxxxxxxx
Name: X. Xxxxxxxxxxx/X.X. Xxxxxxxx
-------------------------------------
Title: Authorized Signatory/
Company Secretary
-------------------------------------
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
29
XXXXXXXX XXXXX INC.
401(K) FBO Xxxx Xxxxx
By: /s/ Xxxxxxxx Xxxxxxxxx
Name: Xxxxxxxx Xxxxxxxxx
-----------------------------
Title: Trustee
-----------------------------
XXXXXXXX XXXXX INC.
401(K) FBO Xxxxx X. Xxxxxxxxx
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
-----------------------------
Title: Trustee
-----------------------------
VENTURE LENDING & LEASING, INC.
By:
Name:___________________________
Title:__________________________
GENERAL BANK
By:
Name:___________________________
Title:__________________________
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
30
NEXUS CAPITAL PARTNERS I, L.P.
By: /s/ Will Xxxxxxxxxx
Name: Will Xxxxxxxxxx
___________________________
Title: General Partner
__________________________
XXXXX XXXXXXX INC.
By: /s/ Buzz Xxxxxx
Name: Buzz Xxxxxx
___________________________
Title: Managing Director
__________________________
THE ENTREPRENEURS' FUND, L.P.
By: BW Management, LLC, its general partner
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
___________________________
Title: Managing Director
__________________________
XXXXXX MASTER TRUST
By: Amerindo Investment Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
___________________________
Title: Attorney-in-fact
__________________________
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
31
ATGF II, A Panamanian Corporation
By: Amerindo Investment Advisors, Inc.
By: /s/ Xxxxxxx X. Xxxxx
_____________________________
Xxxxxxx X. Xxxxx, Director
/s/ Xxxxx Xxxxxxxxxx
___________________________________
XXXXX XXXXXXXXXX
/s/ Xxxx Xxxxx
___________________________________
XXXX XXXXX
XXXXX X. XXXXXXXXXX 1995 TRUST
By: /s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
___________________________
Title:__________________________
INTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
___________________________
Title: Vice President and Treasurer
__________________________
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
32
REUTERS HOLDINGS SWITZERLAND SA
By: [Illegible]
Name: [Illegible]
___________________________
Title:__________________________
SIGNATURE PAGE FOR PERSISTENCE SOFTWARE, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
33
EXHIBIT A
SCHEDULE OF INVESTORS
Common Series A Series B Series C Series D Warrant
Name Shares Shares Shares Shares Shares Shares
---- ------ ------ ------ ------ ------ ------
ATGF II 574,915
Xxxxxx Master Trust 161,987
Xxxxx Xxxxxxxxxx 5,000
Xxxx Xxxxx 3,239
Xxxxx X. Xxxxxxxxxx 1995 Trust 10,799
c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Nexus Capital Partners I, L.P. 215,983
0 Xxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxx, Inc. 53,996
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
The Entrepreneurs' Fund, L.P. 53,996 28,037
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
Cisco Systems, Inc. 431,965
000 X. Xxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
MSIT Holdings, Inc. 1,484,716
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Six
Xxxxxx Xxxxxxx Venture Capital Fund II, L.P. 1,013,065 14,316
Xxxxxx Xxxxxxx Venture Investors, L.P. 262,927 3,715
Xxxxxx Xxxxxxx Venture Capital Fund II, C.V. 252,392 3,567
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxx Investments Plc 2,084,715 218,341 10,799
Xxxxxxxx Xxxxx Inc. 401(K) FBO Xxxx Xxxxx 52,120*
34
Common Series A Series B Series C Series D Warrant
Name Shares Shares Shares Shares Shares Shares
---- ------ ------ ------ ------ ------ ------
Xxxxxxxx Xxxxx Inc. 401(K) FBO Xxxxx X. 52,120*
Ziebelman
0000 Xxxx Xxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxx Xxxx, XX 00000
Venture Lending and Leasing 55,556
General Bank 25,000
Intel Corporation 560,748
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: Treasurer
Fax Number: (000) 000-0000
With copies to:
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Fax Number: (000) 000-0000
Reuters Holdings Switzerland SA 186,916
------- --------- --------- --------- ------- ------
TOTALS 104,240 2,084,715 3,231,441 1,544,277 775,701 80,556
* Shares designated with an asterisk are shown only for purposes of inclusion in
the calculations of an Investor's "pro rata" share for purposes of Article II of
the Fifth Amended and Restated Investor Rights Agreement.
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