EXHIBIT 4.2
ENDWAVE CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
MARCH 31, 2000
TABLE OF CONTENTS
PAGE
1. AMENDMENT OF 1999 INVESTORS' RIGHTS AGREEMENT........................................1
2. DEFINITIONS..........................................................................2
3. RESTRICTIONS ON TRANSFER; REGISTRATION...............................................3
3.1 Restrictions on Transfer......................................................3
3.2 Demand Registration...........................................................4
3.3 Piggyback Registrations.......................................................5
3.4 Form S-3 Registration.........................................................6
3.5 Obligations of the Company....................................................7
3.6 Termination of Registration Rights............................................8
3.7 Furnish Information...........................................................8
3.8 Delay of Registration.........................................................8
3.9 Indemnification...............................................................8
3.10 Assignment of Registration Rights............................................11
3.11 Amendment of Registration Rights.............................................11
3.12 Limitation on Subsequent Registration Rights.................................11
3.13 "Market Stand-Off" Agreement.................................................11
4. COVENANTS OF THE COMPANY............................................................12
4.1 Basic Financial Information and Reporting....................................12
4.2 Material Changes and Litigation..............................................13
4.3 Inspection Rights............................................................13
4.4 Confidentiality of Records...................................................13
4.5 Employee Agreements..........................................................13
4.6 Termination of Covenants.....................................................14
5. RIGHTS OF FIRST REFUSAL.............................................................14
5.1 Subsequent Offerings.........................................................14
5.2 Exercise of Rights...........................................................14
5.3 Issuance of Equity Securities to Other Persons...............................14
5.4 Termination of Rights of First Refusal.......................................14
5.5 Transfer of Rights of First Refusal..........................................15
5.6 Excluded Securities..........................................................15
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.7 Sales by Managers and Major Stockholders.....................................15
6. CO-SALE RIGHT.......................................................................16
6.1 Sales by Managers or Major Stockholders......................................16
6.2 Put Right....................................................................17
7. BOARD OF DIRECTORS..................................................................18
7.1 Attendance at Board Meetings.................................................18
7.2 Visitation Privileges........................................................18
7.3 Voting of Shares.............................................................19
7.4 Committee Participation......................................................21
7.5 Additional Voting Provisions.................................................21
8. MISCELLANEOUS.......................................................................21
8.1 Governing Law................................................................21
8.2 Survival.....................................................................21
8.3 Successors and Assigns.......................................................21
8.4 Severability.................................................................22
8.5 Amendment and Waiver.........................................................22
8.6 Delays or Omissions..........................................................22
8.7 Notices, Etc.................................................................23
8.8 Attorneys' Fees..............................................................23
8.9 Titles and Subtitles.........................................................23
8.10 Counterparts.................................................................23
8.11 Aggregation of Stock.........................................................23
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TABLE OF CONTENTS
PAGE
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this paragraph. Do not delete this section break
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TABLE OF CONTENTS
PAGE
1. AMENDMENT OF PRIOR INVESTORS' RIGHTS AGREEMENT.......................................2
2. DEFINITIONS..........................................................................2
3. RESTRICTIONS ON TRANSFER; REGISTRATION...............................................3
3.1 Restrictions on Transfer......................................................3
3.2 Demand Registration...........................................................4
3.3 Piggyback Registrations.......................................................5
3.4 Form S-3 Registration.........................................................6
3.5 Obligations of the Company....................................................7
3.6 Termination of Registration Rights............................................8
3.7 Furnish Information...........................................................8
3.8 Delay of Registration.........................................................8
3.9 Indemnification...............................................................9
3.10 Assignment of Registration Rights............................................11
3.11 Amendment of Registration Rights.............................................11
3.12 Limitation on Subsequent Registration Rights.................................11
3.13 "Market Stand-Off" Agreement.................................................11
4. COVENANTS OF THE COMPANY............................................................12
4.1 Basic Financial Information and Reporting....................................12
4.2 Material Changes and Litigation..............................................13
4.3 Inspection Rights............................................................13
4.4 Confidentiality of Records...................................................13
4.5 Employee Agreements..........................................................13
4.6 Termination of Covenants.....................................................14
5. RIGHTS OF FIRST REFUSAL.............................................................14
5.1 Subsequent Offerings.........................................................14
5.2 Exercise of Rights...........................................................14
5.3 Issuance of Equity Securities to Other Persons...............................14
5.4 Termination of Rights of First Refusal.......................................15
5.5 Transfer of Rights of First Refusal..........................................15
5.6 Excluded Securities..........................................................15
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6. BOARD OF DIRECTORS..................................................................16
7. MISCELLANEOUS.......................................................................16
7.1 Governing Law................................................................16
7.2 Survival.....................................................................16
7.3 Successors and Assigns.......................................................16
7.4 Severability.................................................................16
7.5 Amendment and Waiver.........................................................16
7.6 Delays or Omissions..........................................................17
7.7 Notices, Etc.................................................................17
7.8 Attorneys' Fees..............................................................17
7.9 Titles and Subtitles.........................................................17
7.10 Counterparts.................................................................17
7.11 Aggregation of Stock.........................................................17
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ENDWAVE CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "AGREEMENT") is
entered into as of March 31, 2000, by and among EndWave Corporation, a Delaware
corporation formerly known as Endgate Corporation (the "COMPANY"), and the
parties listed on Exhibit A hereto (the "INVESTORS").
WHEREAS, the Company is a party to an Agreement and Plan of Merger dated as
of February 28, 2000 among TRW Milliwave Inc., TRW Inc. ("TRW") and the Company
(the "MERGER AGREEMENT") and has effected the Closing and filed with the
Delaware Secretary of State the Certificate of Merger (the "CERTIFICATE OF
MERGER") and Amended and Restated Certificate of Incorporation (the "RESTATED
CERTIFICATE") referred to therein; and
WHEREAS, the Certificate of Merger and the Restated Certificate, among
other things, have effected (i) the change of the Company's name from Endgate
Corporation to EndWave Corporation; (ii) the reclassification of the Company's
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock and
Series G Preferred Stock, respectively, as its Series E-1 Preferred Stock,
Series E-2 Preferred Stock, Series E-3 Preferred Stock, Series E-4 Preferred
Stock, Series E-5 Preferred Stock, Series E-6 Preferred Stock and Series E-7
Preferred Stock (collectively, the "E-SERIES PREFERRED STOCK"); and (iii) the
authorization of the Series T-1 Preferred Stock of the Company (the "T-SERIES
PREFERRED STOCK"); and
WHEREAS, pursuant to that certain Amended and Restated Investors' Rights
Agreement, dated as of March 1, 2000 among the Company and the investors named
therein (the "PRIOR INVESTORS' RIGHTS AGREEMENT"), the Company granted the
holders of its Series E-1 Preferred Stock, Series E-2 Preferred Stock, Series
E-3 Preferred Stock, Series E-4 Preferred Stock, Series E-5 Preferred Stock,
Series E-6 Preferred Stock and Series E-7 Preferred Stock certain registration
rights, rights of first refusal and rights to financial information; and
WHEREAS, as of the date hereof, the Company has issued the T-Series
Preferred Stock to TRW in accordance with the terms of the Merger Agreement; and
WHEREAS, in connection with the receipt of the T-Series Preferred Stock and
as a condition of entering into the Merger Agreement, TRW has requested that the
Company extend to it such registration rights, rights of first refusal and
rights to financial information as are set forth below, and the Company has
requested and the holders of the Series E-1 Preferred Stock, Series E-2
Preferred Stock, Series E-3 Preferred Stock, Series E-4 Preferred Stock, Series
E-5 Preferred Stock, Series E-6 Preferred Stock and Series E-7 Preferred Stock
agree that such rights will supersede the rights given to them pursuant to the
Prior Investors' Rights Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
considerations and releases contained herein, the parties hereby agree as
follows:
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1. AMENDMENT OF PRIOR INVESTORS' RIGHTS AGREEMENT
Effective and contingent upon the filing of the Certificate of Merger with
the Delaware Secretary of State, and in accordance with the terms set forth in
the Merger Agreement, all of the provisions of the Prior Investors' Rights
Agreement are hereby declared null and void, and such Prior Investors' Rights
Agreement shall be amended and restated in its entirety and superseded by the
provisions set forth in this Agreement. This Agreement constitutes the full and
entire understanding among the parties with regard to the subject matter hereof,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants relating to the subject matter, except
as specifically set forth herein.
2. DEFINITIONS
2.1 The term "HOLDER" means any Investor owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 3.10 hereof.
2.2 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 of
effectiveness of such registration statement or document.
2.3 The term "REGISTRABLE SECURITIES" means (a) Common Stock of the Company
issued or issuable upon conversion of the Series E-1 Preferred Stock, Series E-2
Preferred Stock, Series E-3 Preferred Stock, Series E-4 Preferred Stock, Series
E-5 Preferred Stock, Series E-6 Preferred Stock, Series E-7 Preferred Stock or
T-Series Preferred Stock held by the Holders (the "PREFERRED STOCK"); (b) shares
of Common Stock purchased by the Holders or issued or issuable to Holders upon
conversion of other securities purchased by Holders pursuant to their right of
first refusal in Section 5 of this Agreement; and (c) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, such above-described
securities. Notwithstanding the foregoing, Registrable Securities shall not
include any securities sold by a person to the public either pursuant to a
registration statement or Rule 144 or sold in a private transaction in which the
transferor's rights under Section 3 of this Agreement with respect to such
registration rights are not assigned.
2.4 The number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall
be determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
2.5 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
2.6 The term "FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
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2.7 The term "SEC" or "COMMISSION" means the Securities and Exchange
Commission.
3. RESTRICTIONS ON TRANSFER; REGISTRATION
3.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Preferred Stock or Registrable Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3.1, provided and to the extent such Section is then applicable
and:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement or an applicable exemption from
registration.
(ii) Notwithstanding the provisions of paragraph (i) above, no
such registration statement shall be necessary for (A) a transfer by a Holder
which is a partnership to its partners in accordance with partnership interests
or to affiliates or (B) a transfer by a Holder to an affiliate of such Holder;
PROVIDED the transferee will be subject to the terms of this Section 3.1 to the
same extent as if he were an original Holder hereunder.
(b) Each certificate representing Preferred Stock or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws or as provided elsewhere in the Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON
OTHER WRITTEN EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
(c) The Company shall reissue promptly unlegended certificates at the
request of any holder thereof if the holder shall have obtained an opinion of
counsel to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
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3.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 3.2, if the Company
shall receive at any time after the earlier of the Initial Offering (as defined
below) or April 1, 2003 a written request from the Holders of not less than
twenty percent (20%) of the Registrable Securities then outstanding (the
"INITIATING HOLDERS") that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities held by such
Initiating Holders, then the Company shall, within fifteen (15) days of the
receipt thereof, give written notice of such request to all Holders, and subject
to the limitations of Section 3.2(b), effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered; PROVIDED that the Company shall not be
required to effect a registration pursuant to this Section 3.2 if such offering
would cover less than 30% of the Registrable Securities then outstanding.
(b) Any registration under this Section 3.2 must be a firmly
underwritten offering with an underwriter or underwriters of nationally
recognized standing selected for such underwriting by a majority in interest of
the Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). The right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters. Notwithstanding any other provision of this Section 3.2, if the
underwriter advises the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten (including Registrable
Securities) then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares that may be included in the underwriting shall be allocated, first, to
the Holders of Registrable Securities on a pro rata basis based on the number of
Registrable Securities held by all such Holders (including the Initiating
Holders); second, to shares to be registered and sold for the Company's own
account; and third, to the stockholders (other than the Holders) invoking
contractual rights to have their securities registered, if any, on a pro rata
basis.
(c) The Company is obligated to effect only three (3) such
registrations pursuant to this Section 3.2. A registration pursuant to this
Section 3.2 may be the first underwritten public offering of the Company's
Common Stock (the "INITIAL OFFERING"); PROVIDED, HOWEVER, that such a
registration must be on a Form S-1 or on a Form SB-2.
(d) The Company shall not be required to effect a registration
pursuant to this Section 3.2 during the period starting with the date of filing
of, and ending on the date ninety (90) days following the effective date of the
registration statement pertaining to the Initial Offering, PROVIDED that the
Company is making reasonable and good faith efforts to cause such registration
statement to become effective. In addition, the Company shall not be required to
effect a registration pursuant to this Section 3.2 if within thirty (30) days of
receipt of a written request from Initiating Holders pursuant to Section 3.2(a),
the Company gives notice to the Holders of the Company's intention to make its
Initial Offering and files the registration
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statement with respect thereto within sixty days of such notice; PROVIDED,
HOWEVER, that the Company may not exercise its rights under this sentence more
than once.
(e) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 3.2, a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Holders; PROVIDED that such right to delay a request shall be
exercised by the Company no more than once in any one-year period.
(f) All expenses incurred in connection with the registrations by the
Holders pursuant to this Section 3.2 (excluding underwriters' discounts and
commissions, which shall be paid by the selling Holders pro rata), including
without limitation all registration, filing, qualification, printers' and
accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of a single counsel for the selling Holders
(to be appointed by the Holders of a majority of the Registrable Securities
requesting registration) shall be borne by the Company; PROVIDED, HOWEVER, that
the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 3.2 if the registration request is
subsequently withdrawn by the Initiating Holders, unless the withdrawal of the
registration request results from either (i) intentional actions by the Company
outside the normal course of business, or (ii) the discovery of information
about the Company that is not known at the time of the Initiating Holders'
request made pursuant to Section 3.2(a), that materially reduces the feasibility
of the registration proceeding.
3.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans and corporate reorganizations) and will afford each such Holder an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder. Each Holder desiring to include in
any such registration statement all or any part of the Registrable Securities
held by it shall, within twenty (20) days after receipt of the above-described
notice from the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable Securities by such
Holder. If a Holder decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(a) If the registration statement under which the Company gives notice
under this Section 3.3 is for an underwritten offering, the Company shall so
advise the Holders of Registrable Securities. In such event, the right of any
such Holder to be included in a registration pursuant to this Section 3.3 shall
be conditioned upon such Holder's participation in
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such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. If the underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company for its own account;
second, to the Holders on a pro rata basis based on the total number of
Registrable Securities held by the Holders; and third, to any stockholder (other
than a Holder) invoking contractual rights to have their securities registered,
if any, on a pro rata basis. No such reduction shall reduce the securities being
offered by the Company for its own account to be included in the registration
and underwriting, except that in no event shall the amount of securities of the
selling Holders included in the registration be reduced below fifty percent
(50%) of the total amount of securities included in such registration, unless
such offering is the Initial Offering and such registration does not include
shares of any other selling stockholders, in which event any or all of the
Registrable Securities of the Holders may be excluded in accordance with the
immediately preceding sentence. If any Holder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter, delivered at least five (5) days prior to the
effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
(b) The Company shall bear all fees and expenses incurred in
connection with any registration under this Section 3.3, including without
limitation all registration, filing, qualification, printers' and accounting
fees, fees and disbursements of counsel to the Company, and the reasonable fees
and disbursements of a single counsel to the selling Holders to be appointed by
the Holders of a majority of the Registrable Securities requesting registration,
except that each participating Holder shall bear its proportionate share of all
amounts payable to underwriters in connection with such offering for discounts
and commissions.
3.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests that
the Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(i) promptly, but in any event within fifteen (15) days, give
written notice of the proposed registration, and any related qualification or
compliance, to all other Holders of Registrable Securities; and
(ii) as soon as practicable, effect such registration and all
such qualifications and requirements for compliance with applicable laws or
regulations 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 other Holder or Holders joining in such
request as are specified in a written request given within fifteen (15) 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 compliance pursuant to this Section 3.4: (a) if the Company is
not eligible to use Form S-3 for such offering by the Holders, (b) if the
Holders,
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together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$3,000,000, (c) if the Company shall furnish to the Holders a certificate signed
by the President of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section
3.4, (d) if the Company has, within the twelve (12) month period preceding the
date of such request, already effected two (2) registrations on Form S-3 for the
Holders pursuant to this Section 3.4, or (e) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(iii) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. The Company shall pay all expenses incurred
in connection with the first three registrations requested pursuant to this
Section 3.4 (excluding underwriters' discounts and commissions, which shall be
paid by the selling Holders pro rata), including without limitation all
registration, filing, qualification, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of a single counsel for the selling Holder or Holders to be
appointed by the Holders of a majority of the Registrable Securities requesting
registration.
3.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective for the earlier of 180 days or until all such Registrable Securities
may be sold under Rule 144(k).
(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 to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they 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.
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(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(s) 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 the light of the circumstances then
existing.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
3.6 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 3 shall terminate and be of no further force and effect after
the date five (5) years following the effective date of the registration
statement relating to the Company's Initial Offering.
3.7 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 3.2, 3.3 or
3.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be reasonably required to
effect the registration of their Registrable Securities.
3.8 DELAY OF REGISTRATION. No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 3.
3.9 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 3.2, 3.3 or 3.4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers and directors of each Holder,
any underwriter (as
8
defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended, (the "1934 ACT"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the 1934 Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the 1934 Act or any state securities law in connection
with the offering covered by such registration statement; and the Company will
reimburse each such Holder, partner, officer or director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the indemnity agreement contained
in this Section 3.9(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, partner, officer, director, underwriter or controlling person of
such Holder.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, or partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 3.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; PROVIDED, FURTHER, that in no event shall
any indemnity under this Section 3.9(b) exceed the net proceeds from the
offering received by such Holder.
9
(c) Promptly after receipt by an indemnified party under this Section
3.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 3.9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 3.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 3.9.
(d) If the indemnification provided for in this Section 3.9 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations; PROVIDED,
HOWEVER, that in no event shall any indemnity under this Section 3.9(d) exceed
the net proceeds from the offering received by such Holder. The relative fault
of the indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The foregoing indemnity agreements of the Company and Holders are
subject to the condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended prospectus on
file with the SEC at the time the registration statement in question becomes
effective or the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) or any successor rule or regulation (the "FINAL PROSPECTUS"), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(f) The obligations of the Company and Holders under this Section 3.9
shall survive the completion of any offering of Registrable Securities in a
registration statement, and otherwise.
10
3.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 3 may be assigned by a
Holder to a transferee or assignee of Registrable Securities; PROVIDED, HOWEVER,
that except as provided below no such transferee or assignee shall be entitled
to registration rights under Sections 3.2, 3.3 or 3.4 hereof unless it owns a
minimum of 500,000 shares of Registrable Securities (as presently constituted
and subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits and similar events), and the Company shall promptly be furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned. Notwithstanding the foregoing, rights to cause the Company to register
Registrable Securities may be assigned to any subsidiary or parent of a Holder
or any partner of any Holder.
3.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 3 may
be amended and the observance thereof 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 not less than two-thirds (2/3)
of the Registrable Securities then outstanding. Any amendment or waiver effected
in accordance with this Section 3.11 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 3, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.
3.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of not less than two-thirds (2/3) of the Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company that would permit such holder to participate in any registration of
securities of the Company or to require that the Company register any securities
held by such holder.
3.13 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that during
the 180-day period following the effective date of a registration statement of
the Company filed under the 1933 Act, it shall not, to the extent requested by
the Company and the managing underwriter, sell or otherwise transfer or dispose
of (other than to donees who agree to be similarly bound) any Common Stock of
the Company held by it at any time during such period except Common Stock
included in such registration; PROVIDED, HOWEVER, that:
(a) Such agreement shall be applicable only to the Initial Offering;
and
(b) All officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Agreement) 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.
11
4. COVENANTS OF THE COMPANY
4.1 BASIC FINANCIAL INFORMATION AND REPORTING.
(a) The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of the
Company, and in any event within 90 days thereafter, the Company will furnish
each Holder an audited consolidated balance sheet of the Company, as at the end
of such fiscal year, and an audited consolidated statement of income and an
audited consolidated statement of cash flows of the Company, for such year, all
prepared in accordance with generally accepted accounting principles and setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail. Such financial statements shall be accompanied by a
report and opinion thereon by independent public accountants of national
standing selected by the Company's Board of Directors.
(c) So long as a Holder shall own at least 500,000 shares of
Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits and similar
events), as soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company, and in any
event within 45 days thereafter, the Company will furnish each such Holder a
consolidated balance sheet of the Company as of the end of each such quarterly
period, and a consolidated statement of income and a consolidated statement of
cash flows of the Company for such period and for the current fiscal year to
date, each showing a comparison to the Company's actual results for the
corresponding period of the prior year and from the budget distributed to the
Board of Directors (when the Company commences preparation of the financial
reports with such comparison), prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made.
Notwithstanding anything to the contrary in the foregoing sentence, the right to
receive information pursuant to this Section 4.1(c) may be assigned to any
entity which is an affiliate of a Holder and the transferee of 100,000 or more
shares of Registrable Securities (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits
and similar events).
(d) So long as a Holder shall own at least 500,000 shares of
Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits and similar
events), the Company will furnish each such Holder (i) at least sixty (60) days
prior to the beginning of each fiscal year an annual budget and operating plans
for such fiscal year; and (ii) within thirty (30) days after the end of each
month, an unaudited balance sheet and statements of income and cash flows,
prepared in accordance with generally accepted accounting principles, which also
set forth applicable budget figures and variances from the Company's actual
results for the corresponding period of the prior year and from budget.
Notwithstanding anything to the contrary in the foregoing sentence, the right to
12
receive information pursuant to this Section 4.1(d) may be assigned to any
entity which is an affiliate of a Holder and the transferee of 100,000 or more
shares of Registrable Securities (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits
and similar events).
4.2 MATERIAL CHANGES AND LITIGATION. So long as a Holder shall own at least
500,000 shares of Registrable Securities (as presently constituted and subject
to subsequent adjustments for stock splits, stock dividends, reverse stock
splits and similar events), as soon as practicable and in any event within ten
(10) days of becoming aware thereof, the Company will notify each such Holder of
any litigation or governmental proceeding or investigation pending or threatened
against the Company, or against any officer or stockholder of the Company, or of
the occurrence of any other event, materially affecting, or which if adversely
determined, would materially adversely affect, the present or presently proposed
business, properties, assets, liabilities or prospects of the Company.
Notwithstanding anything to the contrary in the foregoing sentence, the right to
receive information pursuant to this Section 4.2 may be assigned to any entity
which is an affiliate of a Holder and the transferee of 100,000 or more shares
of Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits and similar
events).
4.3 INSPECTION RIGHTS. So long as a Holder shall own at least 500,000
shares of Registrable Securities (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits
and similar events), each such Holder shall have the right to visit and inspect
any of the properties of the Company or any of its subsidiaries, and to discuss
the affairs, finances and accounts of the Company or any of its subsidiaries
with its officers, all at such reasonable times and as often as may be
reasonably requested; PROVIDED, HOWEVER, that the Company shall not be obligated
under this Section 4.3 with respect to a competitor of the Company or with
respect to information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed.
4.4 CONFIDENTIALITY OF RECORDS. Each Holder agrees to use, and to use its
best efforts to insure that its authorized representatives use, the same degree
of care as such Holder uses to protect its own confidential information to keep
confidential any information furnished to it which the Company identified or
marked as being confidential or proprietary (so long as such information is not
in the public domain), except that such Holder may disclose such proprietary or
confidential information to any partner, subsidiary or parent of such Holder for
the purpose of evaluating or providing periodic reports with respect to its
investment in the Company as long as such partner, subsidiary or parent is
advised of the confidentiality provisions of this Section 4.4.
4.5 EMPLOYEE AGREEMENTS. All future employees of the Company shall be
required to execute a Proprietary Information and Inventions Agreement in the
form attached hereto as EXHIBIT C, and each consultant will execute an agreement
creating a substantially equivalent obligation with such amendments thereto as
the Board of Directors may from time to time deem appropriate. All current and
future employees, directors and consultants of the Company who shall purchase or
receive options to purchase shares of the Company's Common Stock shall be
required to execute stock purchase or option agreements providing for vesting of
shares in accordance with the vesting provisions currently in place under the
Company's stock option plan, with such amendments thereto as the Board of
Directors may approve.
13
4.6 TERMINATION OF COVENANTS. All covenants of the Company contained in
Section 4 of this Agreement shall expire and terminate as to each Holder upon
the closing of a firm commitment public offering of the Common Stock of the
Company at a price per share of not less than $5.06 which results in gross
proceeds to the Company of not less than $15,000,000 ("QUALIFIED OFFERING").
5. RIGHTS OF FIRST REFUSAL
5.1 SUBSEQUENT OFFERINGS. Each Holder shall have a right of first refusal
to purchase its pro rata share of all Equity Securities, as defined below, that
the Company may, from time to time, propose to sell and issue after the date of
this Agreement, other than the Equity Securities excluded by Section 5.6 hereof.
Each Holder's pro rata share is equal to the ratio of the number of shares of
Preferred Stock (or Common Stock issuable upon conversion thereof) with respect
to which such Holder is deemed to be a holder immediately prior to the issuance
of such Equity Securities to the total number of outstanding shares of Preferred
Stock (or Common Stock issuable upon conversion thereof) held by all Holders.
The term "EQUITY SECURITIES" shall mean (a) any stock or similar security of the
Company, (b) any security convertible or exchangeable, with or without
consideration, into any stock or similar security of the Company, (c) any
security carrying any warrant or right to subscribe to or purchase any stock or
similar security of the Company, or (d) any such warrant, right or option.
5.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Holder written notice of its intention,
describing the Equity Securities, the price, and the terms and conditions upon
which the Company proposes to issue the same. Each Holder shall have twenty (20)
days from the receipt of such notice to agree to purchase its pro rata share of
the Equity Securities for the price and upon the terms and conditions specified
in the notice by giving written notice to the Company and stating therein the
quantity of Equity Securities to be purchased. Any Holder electing to purchase
its pro rata share of Equity Securities to be issued may assign its right to
purchase such Equity Securities to any affiliate or to a successor fund or
entity. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Holder who would cause the Company
to be in violation of applicable federal securities laws by virtue of such offer
or sale.
5.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Holders fail to
exercise in full the rights of first refusal within such twenty (20) day period,
the Company shall have ninety (90) days thereafter to sell the Equity Securities
in respect of which the Holders' rights were not exercised, at a price and upon
terms and conditions no more favorable to the purchasers thereof than specified
in the Company's notice to the Holders pursuant to Section 5.2 hereof. If the
Company has not sold such Equity Securities within such ninety (90) days, the
Company shall not thereafter issue or sell any Equity Securities, without first
offering such securities to the Holders in the manner provided above.
5.4 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Section 5 shall terminate upon the closing of a Qualified
Offering.
5.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Holder under this Section 5 may be transferred (a) to any subsidiary or
parent of such Holder or to any
14
successor in interest to all or substantially all the assets of such Holder, (b)
with respect to at least 500,000 shares of Registrable Securities (as presently
constituted and subject to subsequent adjustments for stock splits, stock
dividends, reverse stock splits and similar events), to a transferee other than
a direct competitor of the Company or (c) in the case of any entity which is an
affiliate of a Holder, to a person or entity who is the transferee of 100,000 or
more shares of Registrable Securities (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits
and similar events), PROVIDED that the Company is given written notice by the
Holder stating the name and address of the transferee and identifying the
Registrable Securities with respect to which the rights under this Section 5 are
being assigned.
5.6 EXCLUDED SECURITIES. The rights of first refusal established by this
Section 5 shall have no application to any of the following Equity Securities:
(a) shares of Common Stock (and/or options, warrants or other Common
Stock purchase rights issued pursuant to such options, warrants or other rights)
issued or to be issued to employees, officers or directors of, or consultants or
advisors to the Company or any subsidiary, pursuant to stock purchase or stock
option plans or other arrangements that are in effect on the date hereof or
approved by the Board of Directors of the Company;
(b) any Equity Securities issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, including without limitation
convertible securities, options and warrants; and any Equity Securities issued
pursuant to any such rights or agreements granted after the date of this
Agreement, PROVIDED that the rights of first refusal established by this Section
5 applied with respect to the initial sale or grant by the Company of such
rights or agreements;
(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) any Equity Securities that are issued by the Company as part of an
underwritten public offering referred to in Section 3 hereof;
(e) shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization by the Company;
(f) shares of Common Stock issued upon conversion of the Preferred
Stock; and
(g) any Equity Securities issued pursuant to any venture equipment
leasing arrangement approved by the Board of Directors.
6. BOARD OF DIRECTORS
6.1 RIGHT TO NOMINATE BOARD MEMBERS. For so long as the same is permitted
pursuant to the Restated Certificate:
15
(a) the holders of the E-Series Preferred Stock, voting together as a
single class, shall be entitled to elect two (2) members of the Board of
Directors at or pursuant to each meeting or action by written consent of
Company's stockholders for the election of directors, and to remove from office
such directors and to fill any vacancy caused by the resignation,
disqualification, death or removal of either such director; and
(b) the holders of the T-Series Preferred Stock, voting together as a
single class, shall be entitled to elect two (2) members of the Board of
Directors at or pursuant to each meeting or action by written consent of the
Company's stockholders for the election of directors, and to remove from office
such directors and to fill any vacancy caused by the resignation,
disqualification, death or removal of either such director.
7. MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of California.
7.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
7.3 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
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; PROVIDED, HOWEVER, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
7.4 SEVERABILITY. In case any provision of the 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.
7.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of not less than two-thirds (2/3) of the Registrable Securities then
outstanding.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of not less than two-thirds (2/3) of the
Registrable Securities then outstanding.
16
7.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise
any right, power, or remedy accruing to any Holder, upon any breach, default or
noncompliance of the Company under this Agreement shall impair any such right,
power, or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent, or approval of any kind or character on any
Holder's part of any breach, default or noncompliance under the Agreement or any
waiver on such Holder's part 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, by law, or
otherwise afforded to Holders, shall be cumulative and not alternative.
7.7 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by registered or
certified mail, return receipt requested, postage prepaid, and, if to an address
outside the United States of America, by telex or facsimile transmitted
substantially concurrently with the mailing of such written notice, addressed:
(a) if to a Holder, at such Holder's address as set forth on the Company's
records, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at its address as set forth at the
end of this Agreement, or at such other address as the Company shall have
furnished to the Holders in writing.
7.8 ATTORNEYS' FEES. If legal action is brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and legal costs in connection therewith.
7.9 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.
7.10 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.
7.11 AGGREGATION OF STOCK. All shares of Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
COMPANY: INVESTORS:
ENDWAVE CORPORATION CHANCELLOR PRIVATE CAPITAL PARTNERS III,
L.P.
By: CPCP Associates, L.P., its General
Partner
By: /s/XXXXXX X. XXXXXX, XX. By: INVESCO Private Capital, Inc., its
----------------------------------------- general partner
Xxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer By: /s/[illegible]
----------------------------------------
Its:
---------------------------------------
Title:
-------------------------------------
CITIVENTURE 96 PARTNERSHIP LIMITED
By: INVESCO Private Capital, Inc., as
Investment Advisor
By: /s/[illegible]
----------------------------------------
Its:
---------------------------------------
Title:
-------------------------------------
CHANCELLOR PRIVATE CAPITAL OFFSHORE
PARTNERS II, L.P.
By: CPCP Associates, L.P., Its General
Partner
By: INVESCO Private Capital, Inc., its
general partner
By: /s/[illegible]
----------------------------------------
Its:
---------------------------------------
Title:
-------------------------------------
1
CHANCELLOR PRIVATE CAPITAL OFFSHORE
PARTNERS I, C.V.
By: Chancellor KME IV Partner, L.P., Its
General Partner
By: INVESCO Private Capital, Inc., its
general partner
By: /s/[illegible]
----------------------------------------
Its:
---------------------------------------
Title:
-------------------------------------
FALCON FUND
By: /s/XXXXXX X. XXXX
----------------------------------------
Xxxxxx X. Xxxx, Principal
XXXX CANADA
By: BCE Capital, Inc.
Its Manager
By: /s/XXXXX XXXXXXXX
----------------------------------------
Xxxxx XxXxxxxx, Managing Director-Ottawa
HALLADOR VENTURE FUND II, a California L.P.
By: Hallador Venture Partners
General Partner
By: /s/XXXXX X. XXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxx, General Partner
HALLADOR VENTURE FUND III, L.P.
By: Hallador Venture Partners, LLC
General Partner
By: /s/XXXXX X. XXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxx, Managing Director
2
KINSHIP PARTNERS II, L.P., An Illinois
Limited Partnership
By: Kinship Venture Management, LLP
By: /s/XXXXXX X. XXXX
---------------------------------------
General Partner
XXXXXXXXXXXX VENTURE PARTNERS III L.P.
By: Xxxxxxxxxxxx Management Partners
III Limited Partnership
By: /s/XXXXXX XXXXX
---------------------------------------
General Partner
XXXXXXXXXXXX VENTURE PARTNERS V L.P.
By: Xxxxxxxxxxxx Management Partners V,
LLC
By: /s/XXXXXX XXXXX
----------------------------------------
Member
THE XXXXX COMPANY
By: /s/X. X. XXXXX, XX.
----------------------------------------
GC&H INVESTMENTS
By:
----------------------------------------
OAK INVESTMENT PARTNERS V, LIMITED
PARTNERSHIP
By: /s/[illegible]
----------------------------------------
OAK V AFFILIATES FUND, LIMITED PARTNERSHIP
By: /s/[illegible]
----------------------------------------
3
SIGMA PARTNERS III, L.P.
By: Sigma Management III, L.P.
By: /s/XXXX XXXXXXX
----------------------------------------
Xxxx Xxxxxxx, General Partner
SIGMA ASSOCIATES III, L.P.
By: Sigma Management III, L.P.
By: /s/XXXX XXXXXXX
----------------------------------------
Xxxx Xxxxxxx, General Partner
SIGMA INVESTORS III, L.P.
By: Sigma Management III, L.P.
By: /s/XXXX XXXXXXX
----------------------------------------
Xxxx Xxxxxxx, General Partner
XXXXXX CORPORATION
By:
----------------------------------------
GREYLOCK EQUITY LIMITED PARTNERSHIP
By: Greylock Equity GP Limited
Partnership, Its General Partner
By: /s/XXXXX X. XXXXX
----------------------------------------
General Partner
XXXXXX SBIC L.P.
By: /s/XXXXXX XXXXX
----------------------------------------
Xxxxxx Xxxxx, General Partner
XXXXXX TECHNOLOGY VENTURES II L.P.
By: /s/XXXXXX XXXXX
----------------------------------------
Xxxxxx Xxxxx, General Partner
4
INTERNATIONAL VENTURE CAPITAL INVESTMENT
CORPORATION
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, President
B.I. XXXXXX VENTURES KEDUA SDN BHD
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
SEED VENTURES LIMITED
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
SEED VENTURES II LIMITED
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
O, W & W PACRIM INVESTMENTS LIMITED
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
O, W & W INVESTMENTS LIMITED
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
XXXXXX XX XXXXX VENTURES CO., INC.
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
PACVEN XXXXXX VENTURES IV, L.P.
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
PACVEN XXXXXX VENTURES IV ASSOCIATES FUND,
L.P.
By: /s/LIP-BU TAN
----------------------------------------
Lip-Bu Tan, Director
5
XXXXXXXX FAMILY TRUST DATED AUGUST 4, 1982
By:
----------------------------------------
Xxxxxx X. XxXxxxxx, Trustee
XXXXXXX, SACHS & CO.
VERWALTUNGS GMBH*
By: /s/XXXXXX X. XXXXXXXXX
----------------------------------------
Managing Director
and
By: /s/XXXX X. XXXXXX
----------------------------------------
Xxxx X. Xxxxxx
Registered Agent
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, LLC
Its General Partner
By: /s/XXXX X. XXXXXX
----------------------------------------
Xxxx X. Xxxxxx, VP
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II, LLC
Its General Partner
By: /s/XXXX X. XXXXXX
----------------------------------------
Xxxx X. Xxxxxx
Vice President
-------------------------------------
* Two (2) signatures required to bind this entity
0
XXXXXX XXXXXX XXXX 0000, L.P.
By: Stone Street 1996, LLC
General Partner
By: /s/XXXX X. XXXXXX
----------------------------------------
Xxxx X. Xxxxxx, XX
XXXXX STREET FUND 1996, L.P.
By: Stone Street 1996, LLC
General Partner
By: /s/XXXX X. XXXXXX
----------------------------------------
Xxxx X. Xxxxxx, VP
VERTEX TECHNOLOGY FUND
By: /s/K. MA
----------------------------------------
FSI NO. 2 CORPORATION
By: /s/XXXX X. XXXXX
----------------------------------------
(Mrs.) Xxxx X. Xxxxx
Title: Executive Vice President
-------------------------------------
Its:
---------------------------------------
XXXXX XXXXXXX INVESTMENT PARTNERSHIP NO. 8,
L.P.
By: FSI No. 2 Corporation, General
Partner
By: /s/XXXX X. XXXXX
----------------------------------------
Xxx. Xxxx X. Xxxxx
Executive Vice President
XXXXX XXXXXXX, Individually
/s/[illegible]
-------------------------------------------
XXXXX XXXXXXX
/s/XXXXXX X. XXXX
-------------------------------------------
XXXXXX X. XXXX
7
-------------------------------------------
XXXXX XXXXX
CRESCENDO II, L.P.
By: Crescendo Ventures II, LLC
General Partner
By: /s/XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Its: General Partner
--------------------------------------
EAGLE VENTURES II, L.L.C.
By: /s/XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Its: General Partner
--------------------------------------
CRESCENDO WORLD FUND, L.L.C.
By: Crescendo Ventures WF, LLC
Managing Member
By: /s/XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Its: General Partner
--------------------------------------
EAGLE VENTURES WF, L.L.C.
By: /s/XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Its: General Partner
--------------------------------------
/s/XXXXXX X. XXXX, XX.
-------------------------------------------
XXXXXX X. XXXX, XX.
Vice President
8
XXXXXXXXX INVESTMENTS PTE LTD
By: /s/ONG XXX XXXXX
----------------------------------------
Name: Ong Xxx Xxxxx
--------------------------------------
Title: Company Secretary
-------------------------------------
U.S. BANCORP XXXXX XXXXXXX ECM FUND I. LLC
By: /s/XXXX X. XXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Title: Managing Director
-------------------------------------
THE SOG FUND, L.P.
By: The Special Opportunities Group, LLC,
its general partner
----------------------------------------
Name:/s/XXXXXXXXXXX X. XXXXXX
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
TRW INC.
By: /s/XXXXXX X. XXXX
----------------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------------
Title: Vice President
-------------------------------------
9
EXHIBIT A
INVESTORS
10
NAME OF INVESTOR NAME OF INVESTOR
Xxxx Canada Oak Investment Partners V
0000 Xxxxxxx Xxxxxx Limited Partnership
Suite 412 525 University Avenue
Ottawa, ON K1Z 8P9 Xxxxx 0000
Xxxx Xxxx, XX 00000
Kinship Partners II, L.P. Attn: Xxxxxx X. Xxxxxx
0000 X. Xxxxxx Xxxxxx, Xxxxx
Xxxxx 000 Xxx V Affiliates Fund
Xxxx Xxxxxx, XX 00000 Limited Partnership
Attn: Xx Xxxx 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Falcon Fund Xxxx Xxxx, XX 00000
0000 X. Xxxxxx Xxxxxx, Xxxxx Xxxx: Xxxxxx X. Xxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000 Sigma Partners III, L.P.
0000 Xxxx Xxxx Xxxx
Hallador Venture Fund II Suite 121
000 Xxxxxxxxxx Xxxxxx Xxxxx Xxxx, XX 00000
Suite 110 Attn: Xxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx Sigma Associates III, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx Venture Fund III, L.P. Suite 121
000 Xxxxxxxxxx Xxxxxx Xxxxx Xxxx, XX 00000
Suite 110 Attn: Xxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx Sigma Investors III, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxxxx Venture Partners III Suite 121
000 Xxxxxxxx Xxxx Xxxx Xxxx. Xxxxx Xxxx, XX 00000
000 Xxxxxx Xxxxxx, Xxxxx 000 Attn: Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxx Xxxxxx Corporation
0000 Xxxx XXXX Xxxxxxxxx
Xxxxxxxxxxxx Venture Partners V Xxxxxxxxx, XX 00000
700 National City Bank Bldg. Attn: Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Greylock Equity Limited
Attn: Xxx Xxxxx Partnership
000 Xxxx Xxxx Xxxx
The Xxxxx Company Building A, Suite 100
1109 Xxxx Road Palo Alto, CA 94304
Xxxxxxxxx, XX 00000 Attn: Xxxxx Xxxxx
Attn: Xxxxxx Xxxxx
Xxxxxx - SBIC, L.P.
GC&H Investments 000 Xxxxxxx Xxxxxx
x/x Xxxxxx Xxxxx Xxxxx 000
0 Xxxxxxxx Xxxxx, 00xx Xxxxx Xxx Xxxxxxxxx, XX 00000
Xxx Xxxxxxxxx, XX 00000 Attn: Lip-Bu Tan
Xxxxxx XX Xxxxx Ventures Co., Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Lip-Bu Tan
1
NAME OF INVESTOR NAME OF INVESTOR
Xxxxxx Technology Ventures II L.P. Pacven Xxxxxx Ventures IV
000 Xxxxxxx Xxxxxx Associates Fund, L.P.
Xxxxx 000 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Suite 700
Attn: Lip-Bu Tan Xxx Xxxxxxxxx, XX 00000
Attn: Lip-Bu Tan
International Venture Capital
Investment Corporation XxXxxxxx Family Trust dated
000 Xxxxxxx Xxxxxx August 4, 1982,
Suite 700 Xxxxxx X. XxXxxxxx, Trustee
Xxx Xxxxxxxxx, XX 00000 c/o Technology Venture Investors
Attn: Lip-Bu Tan 0000 Xxxx Xxxx Xxxx
Xxxxx 000
B.I. Xxxxxx Ventures Kedua SDN BHD Xxxxx Xxxx, XX 00000
000 Xxxxxxx Xxxxxx
Xxxxx 000 Xxxxxxx, Xxxxx & Co. Verwaltungs
Xxx Xxxxxxxxx, XX 00000 GmbH
Attn: Lip-Bu Tan 00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Seed Ventures Limited Attn: Xxxxxx X. XxXxxxxx
000 Xxxxxxx Xxxxxx GS Capital Partners II, L.P.
Xxxxx 000 00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Lip-Bu Tan Attn: Xxxxxx X. XxXxxxxx
Seed Ventures II Limited GS Capital Partners II Offshore,
000 Xxxxxxx Xxxxxx X.X.
Xxxxx 000 00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Lip-Bu Tan Attn: Xxxxxx X. XxXxxxxx
O, W & W Investments Ltd. Bridge Street Fund 1996, L.P.
000 Xxxxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxxxx 000 Xxx Xxxx, XX 00000
Xxx Xxxxxxxxx, XX 00000 Attn: Xxxxxx X. XxXxxxxx
Attn: Lip-Bu Tan
Stone Street Fund 1996, L.P.
O, W & W Pacrim Investments 00 Xxxxx Xxxxxx
Xxxxxxx Xxx Xxxx, XX 00000
000 Xxxxxxx Xxxxxx Attn: Xxxxxx X. XxXxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000 Vertex Technology Fund
Attn: Lip-Bu Tan 0 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxxx Ventures IV, L.P. Xxxxxxx Xxxx, XX 00000
000 Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000 Xxxxx Xxxxxxx
Attn: Lip-Bu Tan 0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
2
NAME OF INVESTOR NAME OF INVESTOR
FSI No. 2 Corporation CITIVENTURE 96 Partnership Limited
2907 Two Houston Center INVESCO Private Capital, Inc.
Xxxxxxx, XX 00000 1166 Avenue of the Americas
Attn: Xxxxx Xxxxx Xxx Xxxx, XX 00000
Attention: Mr. Xxxx Radavonovich
Xxxxx Xxxxxxx Investment
Partnership No. 8, X.X. Xxxxxxxxxx Private Capital
2907 Two Houston Center Offshore Partners II, L.P.
Xxxxxxx, XX 00000 INVESCO Private Capital, Inc.
Attn: Xxxxx Xxxxx 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxx Attention: Mr. Xxxx Radavonovich
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Chancellor Private Capital
Xxxxx Xxxxx Offshore Partners I, C.V.
2907 Two Houston Center INVESCO Private Capital, Inc.
Xxxxxxx, XX 00000 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Crescendo II, L.P. Attention: Mr. Xxxx Radavonovich
000 XxXxxxx Xxxxxx
Suite 0000 XX Xxxx & Xx.
Xxxxxxxxxxx, XX 00000 000 Xxxx Xxxxxx Xxxx
Attn: Xxxxx Xxxxxx Xxxxxx, XX 00000
Eagle Ventures II, L.L.C. Finlayson Investments Pte Limited
000 XxXxxxx Xxxxxx 0 Xxxxxxx Xxx
Xxxxx 0000 #38-03 Temasek Tower
Minneapolis, MN 55402 Xxxxxxxxx 000000
Attn: Xxxxx Xxxxxx Attn: Xxxx Xxxx Siew, Secretary
Crescendo World Fund, L.L.C. U.S. Bancorp Xxxxx Xxxxxxx ECM
000 XxXxxxx Xxxxxx Fund I, LLC
Xxxxx 0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000 000 Xxxxx 0xx Xxxxxx
Attn: Xxxxx Xxxxxx Xxxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxxx
Eagle Ventures WF, L.L.C.
000 XxXxxxx Xxxxxx TRW Inc.
Suite 0000 Xxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxxx X. Xxxx, Vie
President
Chancellor Private Capital
Partners III, L.P.
INVESCO Private Capital, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Xxxx Radavonovich
3
