EXHIBIT 10.1
VOLTERRA SEMICONDUCTOR CORPORATION
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
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TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL.......................................................... 1
1.1 Definitions.......................................................... 1
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER........................... 3
2.1 Restrictions on Transfer............................................. 3
2.2 Demand Registration.................................................. 4
2.3 Piggyback Registrations.............................................. 5
2.4 Form S-3 Registration................................................ 6
2.5 Expenses of Registration............................................. 7
2.6 Obligations of the Company........................................... 8
2.7 Termination of Registration Rights................................... 9
2.8 Delay of Registration; Furnishing Information........................ 9
2.9 Indemnification...................................................... 10
2.10 Assignment of Registration Rights.................................... 12
2.11 Limitation on Subsequent Registration Rights......................... 12
2.12 "Market Stand-Off" Agreement......................................... 12
2.13 Rule 144 Reporting................................................... 13
SECTION 3. COVENANTS OF THE COMPANY......................................... 13
3.1 Basic Financial Information and Reporting............................ 13
3.2 Material Changes and Litigation...................................... 14
3.3 Inspection Rights.................................................... 14
3.4 Confidentiality of Records........................................... 15
3.5 Reservation of Common Stock.......................................... 15
3.6 Termination of Covenants............................................. 15
SECTION 4. RIGHT OF FIRST OFFER............................................. 15
4.1 Subsequent Offerings................................................. 15
4.2 Exercise of Rights................................................... 15
4.3 Issuance of Equity Securities to Other Persons....................... 16
4.4 Termination of Right of First Offer.................................. 16
4.5 Transfer of Right of First Offer..................................... 16
4.6 Excluded Securities.................................................. 16
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 5. RIGHT OF CO-SALE................................................. 17
5.1 Notice of Intended Disposition....................................... 17
5.2 Grant of Co-Sale Rights.............................................. 17
5.3 Participation........................................................ 17
5.4 Non-Participation.................................................... 18
5.5 Certificate Tender................................................... 18
5.6 Payment of Proceeds.................................................. 18
5.7 Non-Exercise......................................................... 19
5.8 Exempt Transfers..................................................... 19
5.9 Termination of Co-Sale Rights........................................ 19
SECTION 6. CONFIDENTIAL INFORMATION......................................... 19
6.1 Protection of Confidential Information............................... 19
6.2 Disclosure of Terms; Press Releases.................................. 20
SECTION 7. MISCELLANEOUS.................................................... 21
7.1 Governing Law........................................................ 21
7.2 Survival............................................................. 21
7.3 Successors and Assigns............................................... 21
7.4 Severability......................................................... 21
7.5 Amendment and Waiver................................................. 21
7.6 Delays or Omissions.................................................. 21
7.7 Notices.............................................................. 22
7.8 Attorneys' Fees...................................................... 22
7.9 Prior Registration Rights............................................ 22
7.10 Entire Agreement..................................................... 22
7.11 Titles and Subtitles................................................. 22
7.12 Counterparts......................................................... 22
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VOLTERRA SEMICONDUCTOR CORPORATION
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is
entered into as of the 2nd day of October, 2001, by and among VOLTERRA
SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Company"), the investors
listed on EXHIBIT A hereto and the holders of Series A Preferred Stock Warrants
and Series B Preferred Stock Warrants listed on EXHIBIT B hereto, each of which
is referred to herein individually as an "Investor" and all of which are
referred to herein collectively as the "Investors" and, for purposes of Sections
5 and 6 only, the founders listed on EXHIBIT C hereto, each of which is referred
to herein individually as a "Founder" and all of which are referred to herein
collectively as the "Founders."
RECITALS
WHEREAS, the Company and certain of the Investors are parties to a certain
Series E Preferred Stock Purchase Agreement of even date herewith (the "Series E
Agreement");
WHEREAS, certain of the Investors are presently holders of the Company's
Series A Preferred Stock Warrants, Series B Preferred Stock Warrants
(collectively, the Warrantholders"), Series A Preferred Stock (the "Series A
Preferred Stock"), Series B Preferred Stock (the "Series B Preferred Stock"),
Series C Preferred Stock (the "Series C Preferred Stock") and Series D Preferred
Stock (the "Series D Preferred Stock"), and have entered into an Investor Rights
Agreement with the Company dated October 13, 1999 (the "Prior Agreement"); and
WHEREAS, in order to induce the Company to enter into the Series E
Agreement and to induce certain of the Investors to purchase shares of the
Company's Series E Preferred Stock (the "Series E Preferred Stock") pursuant to
the Series E Agreement, the Investors and the Company wish to amend and restate
the Prior Agreement so that this Agreement shall govern the rights of all the
Investors to cause the Company to register shares of the Company's Common Stock
("Common Stock") issuable upon conversion of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock and certain other matters as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Series E Agreement, the parties mutually agree as follows:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms
shall have the following respective meanings:
"AFFILIATE" shall have the meaning set forth in Rule 12b-2 promulgated
under the Exchange Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
1.
"HOLDER" means any person owning of record Shares or Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Company's first firm commitment underwritten
public offering of its Common Stock registered under the Securities Act.
"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.
"REGISTRABLE SECURITIES" means (i) Common Stock issued or issuable upon
conversion of the Shares (or Shares issuable upon the conversion or exercise of
any warrant to purchase Shares); and (ii) any Common Stock 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 2 of this Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of Common Stock that are
Registrable Securities and either (1) are then issued and outstanding or (2) are
issuable pursuant to then exercisable or convertible securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
(i) the compensation of regular employees of the Company which shall be paid in
any event by the Company, (ii) underwriting discounts relating to the
Registrable Securities and (iii) commissions relating to the Registrable
Securities), as well as the reasonable fees and disbursements not to exceed Ten
Thousand Dollars ($10,000) of a single special counsel for the Holders.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean the Company's Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock.
"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.
2.
"SEC" OR "COMMISSION" means the Securities and Exchange Commission.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or
any portion of the Shares or Registrable Securities unless and until:
(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
(ii) (A) The transferee has agreed in writing to be
bound by the terms of this Agreement, (B) such Holder shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i)
and (ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
or former partners in accordance with partnership interests, (B) a corporation
to its Affiliates or to its shareholders in accordance with their interests in
the corporation, (C) a limited liability company to its members or former
members in accordance with their interest in the limited liability company, or
(D) to the Holder's family member or trust for the benefit of an individual
Holder, provided the transferee will be subject to the terms of this Agreement
to the same extent as if he were an original Holder hereunder.
(b) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of this
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 this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of
3.
counsel (which counsel may be counsel to the Company) reasonably acceptable to
the Company 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.
2.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if the
Company shall receive a written request from the Holders of more than a majority
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 having an aggregate offering price to the
public not less than $7,500,000, with a per share price of at least $5.00 (a
"Qualified Public Offering"), then the Company shall, within thirty (30) days of
the receipt thereof, give written notice of such request to all Holders, and
subject to the limitations of this Section 2.2, use its best efforts to effect,
as soon as practicable, the registration under the Securities Act of all
Registrable Securities that the Holders request to be registered.
(b) 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
this Section 2.2 and the Company shall include such information in the written
notice referred to in Section 2.2(a). In such event, the right of any Holder to
include its 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 (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) 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 selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.2, if the underwriter
advises the Company 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 to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders);
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other securities
are first entirely excluded from the underwriting. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
(c) The Company shall not be required to effect a
registration pursuant to this Section 2.2:
4.
(i) prior to the fifth anniversary of the date of this
Agreement (except that this period shall be reduced to match any shorter demand
registration period granted by the Company to any other party and shall be
reduced to the date that is 270 days after the effective date of a registration
statement in connection with the Initial Offering); or
(ii) after the Company has effected two (2)
registrations pursuant to this Section 2.2, and such registrations have been
declared or ordered effective; or
(iii) during the period starting with the date of filing
of, and ending on the date two hundred seventy (270) days following the
effective date of the registration statement pertaining to the Initial Offering;
provided that the Company makes reasonable good faith efforts to cause such
registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to subsection 2.2(a), the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days; or
(v) if the Company shall furnish to Holders requesting
a registration statement pursuant to this Section 2.2, a certificate signed by
the Chairman of the Board stating that in the good faith judgment of the
Company's Board of Directors (the "Board of Directors"), it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be effected at such time, in which event 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 not more than once in any twelve (12)
month period.
2.3 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 or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) 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 fifteen (15) days after 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. The Company
shall, subject to the provisions of subsections 2.3(a) and (b) below, cause to
be registered under the Securities Act all of the Registrable Securities that
each such Holder has requested to be registered. 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) UNDERWRITING. If the registration statement under which
the Company gives notice under this Section 2.3 is for an underwritten offering,
the Company shall
5.
so advise the Holders of Registrable Securities at the time of the Company's
notice described above in this Section 2.3. In such event, the right of any such
Holder to be included in a registration pursuant to this Section 2.3 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 Registrable
Securities through such underwriting shall 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
Agreement, 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; 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 of the Company (other than a Holder) on a pro rata basis. In no
event shall the amount of securities of the selling Holders included in the
registration be reduced below twenty-five percent (25%) 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.
In no event will shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than a majority of
the Registrable Securities proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.5 hereof.
2.4 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 (or any successor to Form
S-3) or any similar short-form registration statement 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:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders
of Registrable Securities; 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 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 2.4:
6.
(i) if Form S-3 (or any successor or similar form) is
not available for such offering by the Holders, or
(ii) if the Holders, 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 $2,500,000, or
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors 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 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 2.4; provided, that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12) month period, or
(iv) 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.
(c) 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. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration pursuant to Section
2.2 hereof.
2.5 EXPENSES OF REGISTRATION.
(a) All Registration Expenses incurred in connection with
the first two (2) registrations by the Holders pursuant to Section 2.2 shall be
borne by the Company.
(b) All Registration Expenses incurred in connection with
the registrations by the Holders pursuant to Sections 2.3 and 2.4 shall be borne
by the Company.
(c) All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.
(d) The Company shall not be required to pay for expenses of
any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of
which has been subsequently withdrawn by the Initiating Holders unless the
withdrawal of the registration results from either (i) intentional actions by
the Company outside the normal course of business or (ii) the discovery of
material adverse information concerning the Company that is not known by the
Initiating Holders at the time of such request, or unless, in the case of a
registration pursuant to Section 2.2 hereof, a majority of the Registrable
Securities to be registered agree to forfeit one (1) of their demand
registrations under Section 2.2 hereof.
7.
2.6 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 all reasonable 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 statement effective for up to ninety (90) days or, if
earlier, until the Holder or Holders have completed the distribution related
thereto, provided, however, that such ninety (90) day period shall be extended
for a period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock.
(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 all reasonable 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.
(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. The Company will use reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any untrue statement
of a material or omit 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.
8.
(g) Cause all such Registrable Securities registered
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Furnish, at the request of a majority of the Holders
participating in the registration, 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 if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights
granted under this Section 2 shall terminate and be of no further force and
effect three (3) years after the date of the Initial Offering. In addition, a
Holder's registration rights shall expire if both of the following conditions
occur: (i) the Company has completed its Initial Offering and is subject to the
provisions of the Exchange Act and (ii) all Registrable Securities held by and
issuable to such Holder may be sold under Rule 144 during any ninety (90) day
period.
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) 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 2.
(b) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 2.2, 2.3 or 2.4 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 required to effect the registration
of their Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.8(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the
9.
anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in Section 2.2
or Section 2.4, whichever is applicable.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors and
legal counsel of each Holder, any underwriter (as 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 Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange 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 Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the 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 subsection 2.9(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, underwriter or
controlling person of such Holder.
(b) To the extent permitted by law, each selling Holder
will, severally and not jointly, if Registrable Securities held by such Holder
are included in the securities as to which such registration qualifications or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, and legal counsel and 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 Exchange 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 under an instrument duly executed
by such Holder
10.
and stated to be specifically 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
subsection 2.9(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 2.9
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 2.9 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 2.9, 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 2.9, 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 2.9.
(d) If the indemnification provided for in this Section 2.9
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. 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; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and Holders under this
Section 2.9 shall survive completion of any offering of Registrable Securities
in a registration statement.
11.
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.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities which
(i) is a subsidiary, parent, general partner, limited partner or retired partner
of a Holder, (ii) is a Holder's family member or trust for the benefit of an
individual Holder, (iii) if the Holder is a corporation, to its shareholders in
accordance with their interest in the corporation, (iv) if the Holder is a
limited liability company, to its members or former members in accordance with
their interests in the limited liability company, or (v) acquires at least fifty
thousand (50,000) shares of Registrable Securities (as adjusted for stock splits
and combinations); provided, however, (A) the transferor shall, within ten (10)
days after such transfer, furnish to the Company 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 and (B) such transferee shall agree
to be subject to all restrictions set forth in this Agreement. For the purposes
of determining the number of shares of Registrable Securities held by a
transferee or assignee, the holdings of transferees and assignees of a
partnership who are partners or retired partners of such partnership (including
spouses and ancestors, lineal descendants, and siblings of such partners or
spouses who acquire Registrable Securities by gift, will, or intestate
succession) shall be aggregated together with the partnership; provided that all
assignees and transferees who would not qualify individually for assignment of
registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices, or taking any action under this
Section 2.
2.11 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable 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 2.2, 2.3 or 2.4
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 his securities will not reduce the amount of the
Registrable Securities of the Holders which is included, or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Section 2.2
hereof or within one hundred eighty (180) days of the effective date of any
registration effected pursuant to Section 2.2 hereof.
2.12 "MARKET STAND-OFF" AGREEMENT. If requested by the Company or
the representative of the underwriters of Common Stock (or other securities) of
the Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration, those purchased by such Holder in the
Initial Offering or those purchased by such Holder in the open market following
the Initial Offering) for a period specified by the representative of the
underwriters not to exceed one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act
in connection with the
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Initial Offering, provided that 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.
The obligations described in this Section 2.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of the periods
referenced in the preceding paragraph.
2.13 RULE 144 REPORTING. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144 or any similar or analogous
rule promulgated under the Securities Act, at all times 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 Exchange Act;
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144 of
the Securities Act, and of the 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 as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
SECTION 3. COVENANTS OF THE COMPANY
3.1 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 one hundred twenty (120) days
thereafter, the Company will, upon request, furnish to each Investor who holds
at least 1,000,000 shares (as adjusted) of Preferred Stock (or Common Stock
issued upon conversion of Preferred Stock), a consolidated balance sheet of the
Company, as at the end of such fiscal year, a consolidated statement of income
of the Company for such year, a consolidated statement of cash flows of the
Company
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for such year and a statement of stockholders' equity as of the end of such
year, all prepared in accordance with generally accepted accounting principles
consistently applied 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 selected by the Company's Board of Directors.
(c) The Company, upon request, will also furnish to each
such Investor, 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 sixty (60) days thereafter, a consolidated balance sheet of the
Company as of the end of each such quarterly period, a consolidated statement of
income for such quarterly period, a consolidated statement of cash flows of the
Company for such quarterly period and for the current fiscal year to date and a
statement of stockholders' equity as of the end of such quarterly period,
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.
(d) The Company, upon request, will also furnish to each
such Investor (i) at least thirty (30) 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 flow, 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, which also set forth applicable budget figures and variances from budget;
provided, however, that the Company shall not be obligated under this Section
3.1(d) to provide such information to a competitor, customer or supplier of the
Company or with respect to information which the Board of Directors determines
in good faith is confidential and would create a conflict of interest and should
not, therefore, be disclosed.
3.2 MATERIAL CHANGES AND LITIGATION. The Company shall notify each
Investor who holds at least 1,000,000 shares (as adjusted) of Preferred Stock
(or Common Stock issued upon conversion of Preferred Stock) as soon as
practicable, and in any event within fourteen (14) days of becoming aware
thereof, of (i) any litigation or governmental proceeding or investigation
("Litigation") pending or, to the knowledge of the Company, threatened against
the Company, or (ii) any Litigation pending or, to the knowledge of the Company,
threatened against any officer or stockholder of the Company, if such
Litigation, if adversely determined, could materially adversely affect the
present or presently proposed business, assets, properties, assets, liabilities
or prospects of the Company, or (iii) the occurrence of any other event which
materially affects or, if adversely determined, could materially adversely
affect, the present or presently proposed business, assets, properties, assets,
liabilities or prospects of the Company; provided, however, that the Company
shall not be obligated under this Section 3.2 to provide information which the
Board of Directors determines in good faith is confidential and would create a
conflict of interest and should not, therefore, be disclosed.
3.3 INSPECTION RIGHTS. Each Investor who holds at least 1,000,000
shares (as adjusted) of Preferred Stock (or Common Stock issued upon conversion
of Preferred Stock) 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
14.
its officers, and to review such information as is reasonably requested 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 3.3 to
provide information which the Board of Directors determines in good faith is
confidential and would create a conflict of interest and should not, therefore,
be disclosed.
3.4 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and
to use its best efforts to insure that its authorized representatives use, the
same degree of care as such Investor uses to protect its own confidential
information to keep confidential any information furnished to it which the
Company identifies as being confidential or proprietary (so long as such
information is not in the public domain), except that such Investor may disclose
such proprietary or confidential information to any partner, subsidiary or
parent of such Investor for the purpose of evaluating its investment in the
Company as long as such partner, subsidiary or parent is advised of the
confidentiality provisions of this Section 3.4.
3.5 RESERVATION OF COMMON STOCK. The Company will at all times
reserve and keep available, solely for issuance and delivery upon the conversion
of the Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.6 TERMINATION OF COVENANTS. All covenants of the Company
contained in Section 3 of this Agreement shall expire and terminate as to each
Investor on the effective date of the registration statement pertaining to the
Initial Offering.
SECTION 4. RIGHT OF FIRST OFFER.
4.1 SUBSEQUENT OFFERINGS. Each Investor who holds at least 40,000
shares (as adjusted) of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock
(a "Major Investor") shall have a right of first offer 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 4.6 hereof. Each Major Investor's
pro rata share is equal to the ratio of (A) the number of shares of Common Stock
(including all shares of Common Stock issued or issuable upon conversion of the
Shares) of which such Major Investor is deemed to be a holder immediately prior
to the issuance of such Equity Securities to (B) the total number of shares of
outstanding Common Stock (including all shares of Common Stock issued or
issuable upon conversion of the Shares or upon the exercise of any outstanding
warrants or options) immediately prior to the issuance of the Equity Securities.
The term "Equity Securities" shall mean (i) any Common Stock, Preferred Stock or
other security of the Company, (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security of the
Company (including any option to purchase such a convertible security), (iii)
any security carrying any warrant or right to subscribe to or purchase any
Common Stock, Preferred Stock or other security of the Company or (iv) any such
warrant or right. A Major Investor shall be entitled to apportion the right of
first offer hereby granted it among itself, its partners, and its affiliates in
such proportions as it deems appropriate.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any
Equity Securities, it shall give each Major Investor written notice of its
intention, describing the number
15.
and type of Equity Securities, the price and the terms and conditions upon which
the Company proposes to issue the same. Each Major Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase up to 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. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Major Investor who would cause the Company to be in violation
of applicable federal securities laws by virtue of such offer or sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of
the Major Investors elect to purchase their pro rata share of the Equity
Securities, then the Company shall promptly notify in writing the Major
Investors who do so elect and shall offer such Major Investors the right to
acquire such unsubscribed shares. The Major Investors shall have five (5) days
after receipt of such notice to notify the Company of its election to purchase
all or a portion thereof of the unsubscribed shares. If the Major Investors fail
to exercise in full the right of first offer, the Company shall have ninety (90)
days thereafter to sell the Equity Securities in respect of which the Major
Investor's rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Company's notice to the Major Investors pursuant to Section 4.2 hereof.
If the Company has not sold such Equity Securities within ninety (90) days of
the notice provided pursuant to Section 4.2, the Company shall not thereafter
issue or sell any Equity Securities, without first offering such securities to
the Major Investors in the manner provided above.
4.4 TERMINATION OF RIGHT OF FIRST OFFER. The right of first offer
established by this Section 4 shall terminate immediately prior to the closing
of an Initial Offering.
4.5 TRANSFER OF RIGHT OF FIRST OFFER. The right of first offer of
each Major Investor under this Section 4 may be transferred to the same parties,
subject to the same restrictions as any transfer of registration rights pursuant
to Section 2.10.
4.6 EXCLUDED SECURITIES. The right of first offer established by
this Section 4 shall have no application to any of the following Equity
Securities:
(a) up to one million three hundred twenty-four thousand one
hundred eighty-eight (1,324,188) shares (or such greater number of shares
approved by the Board of Directors and a majority in interest of the Company's
stockholders) of Common Stock issuable or issued pursuant to options, warrants
or other Common Stock purchase rights (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like) after the Original Issue
Date of the Series E Preferred Stock to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary of the Company pursuant
to stock purchase or stock option plans or other arrangements that are approved
by the Board of Directors;
(b) stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement and options and warrants
outstanding as of the date of this Agreement;
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(c) any Equity Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) up to five million (5,000,000) shares of Series E
Preferred Stock and the Common Stock issuable upon conversion thereof;
(e) shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
(f) the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities;
(g) any Equity Securities issued pursuant to any equipment
leasing arrangement, or debt financing from a bank or similar financial
institution;
(h) any Equity Securities that are issued by the Company
pursuant to a registration statement filed under the Securities Act; and
(i) any Equity Securities issued in connection with
strategic transactions involving the Company and other entities, including (A)
joint ventures, manufacturing, marketing or distribution arrangements or (B)
technology transfer or development arrangements; provided that such strategic
transactions and the issuance of shares therein, have been approved by the Board
of Directors and that such issuances are for other than primarily equity
financing purposes.
SECTION 5. RIGHT OF CO-SALE.
5.1 NOTICE OF INTENDED DISPOSITION. In the event that any
Founder(s) desire(s) to accept a bona fide third-party offer (the "Purchase
Offer") for the transfer, sale or exchange of any or all of the Common Stock
held by him or them (the shares subject to the Purchase Offer to be hereafter
called the "Target Shares"), the prospective transferor(s) shall promptly
deliver to each of the Investors written notice of the intended disposition
("Disposition Notice") and the basic terms and conditions thereof, including the
identity of the proposed purchaser.
5.2 GRANT OF CO-SALE RIGHTS. Each Investor shall have the right,
exercisable upon written notice to the prospective transferor within fifteen
(15) business days after receipt of a Disposition Notice, to participate in the
sale of the Target Shares on the same terms and conditions as those set forth in
the Disposition Notice. To the extent one or more Investors exercise such right
of participation in accordance with the terms and conditions set forth below,
the number of Target Shares that the prospective transferor(s) may sell in the
transaction shall be correspondingly reduced.
5.3 PARTICIPATION. Each Investor may sell all or any part of that
number of shares of Common Stock equal to the product obtained by multiplying
(i) the aggregate number of shares of Common Stock covered by the Disposition
Notice by (ii) a fraction the numerator of which is the number of shares of
Common Stock (including shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, the Series B Preferred Stock, the Series C
17.
Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock
or upon exercise of any outstanding options or warrants) at the time owned by
Investor and the denominator of which is the total number of shares of Common
Stock (including shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock and the Series E Preferred Stock or upon exercise of
any outstanding options or warrants) at the time owned by all of the Investors
and the prospective transferor(s).
5.4 NON-PARTICIPATION. If any Investor fails to elect to fully
participate in such prospective transferor's sale pursuant to this Section 5,
the prospective transferor shall give notice of such failure to the Investors
who did so elect (the "Participants"). Such notice may be made by telephone if
confirmed in writing within two (2) days. The Participants shall have five (5)
days from the date such notice was given to agree to sell their pro rata share
of the unsold portion. For purposes of this Section 5.4, a Participant's pro
rata share shall be the ratio of (x) the number of shares of Common Stock held
by or issuable upon conversion of the shares of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series
E Preferred Stock held by such Participant to (y) the total number of shares of
Common Stock held by or issuable upon conversion of the shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock held by all of the Participants and
the number of shares of Common Stock held by the prospective transferor.
5.5 CERTIFICATE TENDER. Each Participant shall effect its
participation in the sale by promptly delivering to the prospective
transferor(s) for transfer to the purchase offeror one or more certificates,
properly endorsed for transfer, which represent:
(a) the number of shares of Common Stock which the party
elects to sell pursuant to Section 5.2 hereof; or
(b) that number of shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or
Series E Preferred Stock which is at such time convertible into the number of
shares of Common Stock which the party has elected to sell pursuant to Section
5.2 hereof; provided, however, that if the purchase offeror objects to the
delivery of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series E Preferred Stock in lieu of
Common Stock, the Participant may convert and deliver Common Stock as provided
in subparagraph (a) above.
5.6 PAYMENT OF PROCEEDS. The stock certificates that the
Participant delivers to prospective transferor(s) pursuant to Section 5.2 hereof
shall be transferred by the prospective transferor(s) to the third-party offeror
in consummation of the sale of the Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock or Common Stock, as the case may be, pursuant to the terms and conditions
specified in the Disposition Notice to the Investors, and the prospective
transferor(s) shall promptly thereafter remit to such Participant that portion
of the sale proceeds to which such Participant is entitled by reason of its
participation in such sale. To the extent that any prospective purchaser or
purchaser prohibits such assignment or otherwise refuses to purchase shares or
other securities from a Participant exercising its right of co-sale hereunder,
the
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prospective transferor(s) shall not sell to such prospective purchaser or
purchaser any securities of the Company unless and until, simultaneously with
such sale, the prospective transferor shall purchase such shares or other
securities from the Participant.
5.7 NON-EXERCISE. The exercise or non-exercise of the rights of
the Investors hereunder to participate in one or more sales of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Common Stock made by a Founder
shall not adversely affect its rights to participate in subsequent Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Common Stock sales by a Founder.
5.8 EXEMPT TRANSFERS.
(a) Notwithstanding the foregoing, the co-sale rights
granted in this Section 5 shall not apply to (i) any pledge of Common Stock made
pursuant to a bona fide loan transaction that creates a mere security interest,
(ii) any transfer to the ancestors, descendants or spouse or to trusts for the
benefit of such persons or to a Founder, (iii) any transfer or transfers by a
Founder to another Founder (the "Transferee-Founder") so long as the
Transferee-Founder is, at the time of the transfer, employed by or acting as a
director of the Company or (iv) any bona fide gifting of up to thirty percent
(30%) of the number of shares of Common Stock held by such Founder; provided
that (A) the transferring Founder shall inform the Investors of such pledge,
transfer or gift prior to effecting it and (B) the pledgee, transferee or donee
shall furnish the Investors with a written agreement to be bound by and comply
with all provisions of this Section 5. Such transferred Common Stock shall
remain "Common Stock" hereunder, and such pledgee, transferee or donee shall be
treated as a "Founder" for purposes of this Agreement.
(b) This Agreement is subject to, and shall in no manner
limit the right which the Company may have to repurchase securities from the
Founder pursuant to (i) a stock restriction agreement or other agreement between
the Company and the Founder and (ii) any right of first refusal set forth in the
Bylaws of the Company.
5.9 TERMINATION OF CO-SALE RIGHTS. The co-sale rights granted in
this Section 5 shall terminate immediately prior to the closing of an Initial
Offering.
SECTION 6. CONFIDENTIAL INFORMATION.
6.1 PROTECTION OF CONFIDENTIAL INFORMATION. Confidential or
proprietary information disclosed by any party under this Agreement, as well as
the terms of this Agreement and the Series E Agreement shall be considered
confidential information (the "Confidential Information") and shall not be
disclosed by the Company or any other party to this Agreement to any third
party, subject to Section 6.2 below. Notwithstanding the preceding sentence, no
party hereto shall be prohibited by this Section 6 from disclosing its own
Confidential Information (other than the terms of this Agreement and the Series
E Agreement) or from disclosing its own investment in the Company and the terms
thereof to third parties or to the public at its discretion. The term
"Confidential Information" shall not be deemed to include information which: (a)
is now, or hereafter becomes, through no act or failure to act on the part of
the receiving party, generally known or available; (b) is known by the receiving
party at the time of receiving such
19.
information as evidenced by its records; (c) is hereafter furnished to the
receiving party by a third party, as a matter of right and without restriction
on disclosure; (d) is independently developed by the receiving party without any
breach of this Agreement; or (e) is the subject of a written permission to
disclose provided by the disclosing party to the receiving party. Each party
shall immediately notify the other parties of any information that comes to its
attention which might indicate that there has been a loss of confidentiality
with respect to the Confidential Information protected by this Section 6. In the
event that the Company or any other party is requested or becomes legally
compelled (by statute or regulation or by oral questions, interrogatories,
request for information or documents, subpoena, criminal or civil investigative
demand or similar process, including without limitation, in connection with any
public or private offering of the Company's capital stock) to disclose any of
the Confidential Information, such party (the "Disclosing Party") shall provide
the other party (the "Non-Disclosing Party") with prompt written notice of that
fact and shall seek (with the cooperation and reasonable efforts of the
Non-Disclosing Party) a protective order, confidential treatment or other
appropriate remedy. In such event, the Disclosing Party shall furnish only that
portion of the Confidential Information which is legally required and shall
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information to the extent reasonably
requested by the Non-Disclosing Party. The provisions of this Section 6.1 shall
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto with respect to the
transaction contemplated hereby. Any party to this Agreement may disclose
Confidential Information as necessary to establish rights or enforce obligations
under this Agreement, but only to the extent that any such disclosure is
necessary.
6.2 DISCLOSURE OF TERMS; PRESS RELEASES. Notwithstanding the
provisions of Section 6.1 above, from and after the Closing, the Company and
each of the Investors may disclose the existence of this Agreement and the
general terms hereof, as well as Intel's investment in the Company solely to the
Company's and each Investor's investors, investment bankers, lenders,
accountants, legal counsel, business partners, and bona fide prospective
investors, employees, lenders and business partners, in each case only where
such persons or entities are under confidentiality obligations to the Company or
the Investor, as applicable. In addition, the Company and each Investor may
disclose the fact that Intel is an investor in the Company to third parties
without the requirement for nondisclosure agreements. No announcement regarding
Intel's investment in the Company in a press conference, in any professional or
trade publication, in any marketing materials or otherwise to the general public
may be made without the prior written consent of Intel, which consent may be
withheld at the sole discretion of Intel. Notwithstanding the foregoing, Intel
may disclose its investment in the Company and the terms thereof to third
parties or to the public at its discretion, and the Company and each Investor
shall have the right to disclose to third parties any such information disclosed
by Intel in a press release or other public announcement. If the Company or
Intel determines that any disclosure not otherwise authorized by this Agreement
is required by law or regulation, then the provisions of Section 6.1 regarding
disclosure of Confidential Information by a disclosing Party shall govern.
20.
SECTION 7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California without giving effect to the
principles of conflicts of law.
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 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.
7.5 AMENDMENT AND WAIVER.
(a) Subject to subsection 7.5(b) below, except as otherwise
expressly provided herein, this Agreement may be amended or modified 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 upon the
written consent of the Company and the holders of at least a majority of the
Registrable Securities. Each Investor acknowledges and agrees that any amendment
or waiver effected in accordance with this Section 7.5 shall be binding upon all
holders of Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company, whether or not such holder in fact
consented to such amendment or waiver.
(b) Notwithstanding the foregoing, Section 5 of this
Agreement may be amended or modified only upon the written consent of the
Company, the holders of at least a majority of the Registrable Securities and by
those Founders collectively holding at least a majority of the Common Stock held
by the Founders.
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
21.
therein, or of any similar breach, default or noncompliance thereafter
occurring. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.
7.7 NOTICES. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed facsimile transmission if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the party to be notified at the address as set forth on the signature
pages hereof or EXHIBIT A hereto or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.
7.8 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
7.9 PRIOR REGISTRATION RIGHTS. Each of the undersigned
Warrantholders listed on EXHIBIT B hereto, agrees that any prior registration
rights such Warrantholder may have had with the Company is hereby superceded in
their entirety and the registration rights under Section 2 of this Agreement
shall be substituted.
7.10 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits to this Agreement, if any) constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all prior agreements and understandings with
respect to the subject matter hereof (including without limitation the Prior
Agreement). The Prior Agreement is hereby superseded, rendered void and replaced
in its entirety by this Agreement.
7.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.12 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.
22.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND
RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: INVESTORS:
VOLTERRA SEMICONDUCTOR CORPORATION TDK USA CORPORATION
By:/s/ Xxxxxxx Xxxxxxx By: /s/ Kenichi Aoshima
--------------------------------------- --------------------------------
Xxxxxxx Xxxxxxx, Kenichi Aoshima,
President and Chief Executive President
Officer
FOUNDERS (WITH RESPECT TO SECTIONS 5 AND 6
ONLY):
XXXXXXX XXXXXXX XXXXXXXX & XXXXX
VIII, L.P.
/s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
General Partner
/s/ Xxxxx Xxxxxx
--------------------------------------- KPCB VIII FOUNDERS FUND
Xxxxx Xxxxxx
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------- --------------------------------
Xxxx Xxxxxxxxxx Xxxxx X. Xxxxxxx
General Partner
/s/ Xxxxx Xxxxxxxx
--------------------------------------- CITIVENTURE 96 PARTNERSHIP, L.P.
Xxxxx Xxxxxxxx
By: INVESCO PRIVATE CAPITAL, INC.,
/s/ Xxxxx Xxxxxx ITS INVESTMENT ADVISOR
---------------------------------------
Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
--------------------------------
/s/ Xxxx X. Xxxx Xxxxx Xxxxxx
---------------------------------------
Xxxx X. Xxxx
CHANCELLOR PRIVATE CAPITAL
PARTNERS III, LP
By: CPCP ASSOCIATES, L.P.,
ITS GENERAL PARTNER
By: INVESCO PRIVATE CAPITAL, INC.,
ITS GENERAL PARTNER
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
CHANCELLOR PRIVATE CAPITAL OFFSHORE
PARTNERS II, LP
BY: CPCO ASSOCIATES, L.P., ITS INVESTMENT
GENERAL PARTNER
BY: INVESCO PRIVATE CAPITAL, INC., ITS
GENERAL PARTNER
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
CHANCELLOR PRIVATE CAPITAL OFFSHORE
PARTNERS I, C.V.
BY: CHANCELLOR KME IV PARTNERS, L.P., ITS
INVESTMENT GENERAL PARTNER
BY: INVESCO PRIVATE CAPITAL, INC., ITS
GENERAL PARTNER
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
MESBIC VENTURES, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
EVP + CFO
XXXXXXXXXXXX VENTURE PARTNERS V, L.P.
BY: XXXXXXXXXXXX MANAGEMENT PARTNERS V,
LLC, ITS MANAGING PARTNER
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxx,
Managing Member
INTEGRAL CAPITAL PARTNERS IV, L.P.
BY: INTEGRAL CAPITAL MANAGEMENT IV, LLC,
ITS GENERAL PARTNER
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Xxxxxx Xxxxxxx, Manager
INTEGRAL CAPITAL PARTNERS IV MS SIDE FUND,
L.P.
BY: INTEGRAL CAPITAL PARTNERS NBT, LLC,
ITS GENERAL PARTNER
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Xxxxxx Xxxxxxx, Manager
THE XXXXXXX XXXXX GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx
Attorney-in-Fact
HOOK PARTNERS III, A TEXAS LIMITED
PARTNERSHIP
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
HALLADOR VENTURE FUND III, LP
BY: HALLADOR VENTURE PARTNERS LLC
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx
Managing Director
HALLADOR VENTURE FUND II, LP
BY: HALLADOR VENTURE PTRS.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxx
General Partner
/s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx
VP Manufacturing Operations
/s/ Low Xx Xxxx
-------------------------------------------
Low Xx Xxxx
Director
XXXXXXX FAMILY TRUST
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Xxxx Xxxxxxx
Trustee
GC&H INVESTMENTS, LLC
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
Executive Partner
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx
President
TSMC North America
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxx Xxxxxx
-----------------------------------
Xxx Xxxxxx
/s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxx X. Xxxxxxx
Trustee
/s/ Xx Xxxx Chye
-----------------------------------
Xx Xxxx Chye
VP/MD
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx XxXxxxxxx
----------------------------------------
Xxxxx XxXxxxxxx
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President and Senior Analyst
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
INTERNIX, INC.
By: /s/ Xxxxxxxxx Xxxxxxxx
-----------------------------------
Xxxxxxxxx Xxxxxxxx
President and CEO
/s/ Xxxxxxxxx Xxxxxxxx
----------------------------------------
Xxxxxxxxx Xxxxxxxx
NORTHERN CALIFORNIA TECHNICAL
REPRESENTATIVES, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
Sr. V.P. & Secretary
/s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
/s/ Xxx X. Xxxxxx
----------------------------------------
Xxx X. Xxxxxx
/s/ Xxxxxxx Xxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxx Xxxxxx
/s/ Xxxxxxxxx Xx Xxxx Kit
----------------------------------------
Xxxxxxxxx Xx Chun Kit
