INVESTORS' RIGHTS AGREEMENT
June 8, 1999
TABLE OF CONTENTS
Page
1. Registration Rights. 1
1.1 Definitions. 1
1.2 Request for Registration. 2
1.3 Company Registration. 3
1.4 Obligations of the Company. 3
1.5 Furnish Information. 5
1.6 Expenses of Demand Registration. 5
1.7 Expenses of Company Registration. 6
1.8 Underwriting Requirements. 6
1.9 Delay of Registration. 6
1.10 Indemnification. 7
1.11 Reports Under Securities Exchange Act of 1934. 9
1.12 Form S-3 Registration. 9
1.13 Assignment of Registration Rights. 10
1.14 Limitations on Subsequent Registration Rights. 10
1.15 "Market Stand-Off" Agreement. 11
1.16 Termination of Registration Rights. 11
2. Right of First Offer. 11
3. Miscellaneous. 13
3.1 Successors and Assigns. 13
3.2 Governing Law. 13
3.3 Counterparts. 13
3.4 Titles and Subtitles. 13
3.5 Notices. 13
3.6 Expenses. 14
3.7 Amendments and Waivers. 14
3.8 Severability. 14
3.9 Aggregation of Stock. 14
3.10 Entire Agreement; Amendment; Waiver. 14
INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT is made as of the
8th day of June, 1999, by and between Amerigon Incorporated,
a California corporation (the "Company"), and the investors
listed on the signature page hereof, each of which is herein
referred to as an "Investor."
RECITALS
WHEREAS, the Company and the Investors are parties to
the Securities Purchase Agreement dated March 29, 1999 (the
"Securities Purchase Agreement") pursuant to which the Investors
are acquiring Series A Preferred Stock of the Company and
warrants to purchase Class A Common Stock of the Company (the
"Warrants");
WHEREAS, in order to induce the Company to enter into
the Securities Purchase Agreement and to induce the Investors to
invest funds in the Company pursuant to the Securities Purchase
Agreement, the Investors and the Company hereby agree that this
Agreement shall govern the rights of the Investors to cause the
Company to register shares of Common Stock issuable to the
Investors and certain other matters as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights.
The Company covenants and agrees as follows:
1.1 Definitions.
For purposes of this Section 1:
(a) The term "Act" means the Securities
Act of 1933, as amended.
(b) The term "Common Stock" means the Class A
Common Stock, no par value, of the Company.
(c) The term "Form S-3" means such form under
the Act as in effect on the date hereof or any registration form
under the 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.
(d) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee
thereof in accordance with Section 1.13 hereof.
(e) The term "1934 Act" means the Securities
Exchange Act of 1934, as amended.
(f) The term "register", "registered," and
"registration" refer to a registration effected by preparing and
filing a registration statement or similar document in compliance
with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
(g) The term "Registrable Securities" means (i)
the Common Stock issuable or issued upon conversion of the Series
A Preferred Stock, (ii) the Common Stock issued or issuable upon the
exercise of the Warrants, (iii) 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 the shares referenced in (i) and (ii) above,
excluding in all cases, however, any Registrable Securities sold
by a person in a transaction in which his rights under this
Section 1 are not assigned.
(h) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of
Common Stock issuable pursuant to then exercisable or convertible
securities which are, Registrable Securities.
(i) The term "SEC" means the Securities and Exchange
Commission.
1.2 Request for Registration.
(a) If the Company shall receive at any time after
the date of this Agreement, a written request from the Holders of a
majority of the Registrable Securities then outstanding that the
Company file a registration statement under the Act covering the
registration of at least ten percent (10%) of the Registrable
Securities then outstanding, then the Company shall:
(i) within ten (10) days of the receipt thereof,
give written notice of such request to all Holders; and
(ii) as soon as practicable, and in any event
within 45 days of the receipt of such request, file a registration
statement under the Act covering all Registrable Securities which
the Holders request to be registered, subject to the limitations of
subsection 1.2(b), within twenty (20) days of the mailing of such
notice by the Company in accordance with Section 3.5.
(b) If the Holders initiating the registration
request hereunder ("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 subsection 1.2(a) and the Company shall
include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the Initiating Holders. In such event, 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 (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 (together with the Company as provided
in subsection 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for
such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities
which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Holders
thereof, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder; 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.
(c) Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement
pursuant to this Section 1.2, a certificate signed by the Chief
Executive Officer 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 shareholders 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 taking action with respect to such
filing for a period of not more than 90 days after receipt of the
request of the Initiating Holders; provided, however, that the
Company may not utilize this right more than once in any twelve-
month period.
(d) The Company shall be obligated to effect only
two such registrations pursuant to this Section 1.2. Registrations
effected on Form S-3 pursuant to Section 1.12, however, shall not
be counted as demands pursuant to this Section 2.
1.3 Company Registration.
At any time within five years after the date of
this Agreement, if (but without any obligation to do so) the
Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other
than the Holders) any of its stock or other securities under
the Act in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a
registration on any form which does not include substantially the
same information as would be required to be included in a
registration statement covering the sale of the Registrable
Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt
securities which are also being registered), the Company shall,
at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the
Company in accordance with Section 3.5, the Company shall,
subject to the provisions of Section 1.8, cause to be
registered under the Act all of the Registrable Securities
that each such Holder has requested to be registered.
1.4 Obligations of the Company.
Whenever required under this Section 1 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, upon the request of the Holders of a majority of
the Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to one
hundred twenty (120) days or until the distribution contemplated
in the Registration Statement has been completed; provided, however,
that (i) such 120-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 (or other securities) of the Company;
and (ii) in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be
extended, if necessary, to keep the registration statement
effective until all such Registrable Securities are sold,
provided that Rule 415, or any successor rule under the Act,
permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Act
governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment which
(I) includes any prospectus required by Section 10(a)(3)
of the Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth
in the registration statement, the incorporation by reference
of information required to be included in (I) and (II) above
to be contained in periodic reports filed pursuant to Section
13 or 15(d) of the 1934 Act in the registration statement.
(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 Act with respect
to the disposition of all securities covered by such registration
statement.
(c) Furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity
with the requirements of the 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, unless
the Company is already subject to service in such jurisdiction
and except as may be required by the Act.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter of such offering. Each Holder participating in
such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under
the 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) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on
which similar securities issued by the Company are then listed.
(h) Use its best efforts to furnish, at the request of
any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, 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 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, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable
Securities and (ii) a letter dated 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, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities.
1.5 Furnish Information.
It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable
Securities.
1.6 Expenses of Demand Registration.
All expenses other than underwriting discounts
and commissions incurred in connection with registrations, filings
or qualifications pursuant to Section 1.2, including (without
limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel
for the Company, and the reasonable fees and disbursements (not
to exceed $15,000) of one counsel for the selling Holders (as
selected by the Holders of a majority of the Registrable
Securities to be registered) 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 1.2 if the registration request is subsequently withdrawn
at the request of the Holders of a majority of the Registrable
Securities to be registered (in which case all participating
Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their
right to one demand registration pursuant to Section 1.2;
provided further, however, that if at the time of such
withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have
withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change, then
the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to Section 1.2.
1.7 Expenses of Company Registration.
The Company shall bear and pay all expenses incurred
in connection with any registration, filing or qualification of
Registrable Securities with respect to the registrations pursuant
to Section 1.3 for each Holder (which right may be assigned as
provided in Section 1.13), including (without limitation) all
registration, filing, and qualification fees, printers and
accounting fees relating or apportionable thereto and the fees
and disbursements (not to exceed $15,000) of one counsel for the
selling Holders (as selected by the Holders of a majority of the
Registrable Securities to be registered), but excluding
underwriting discounts and commissions relating to Registrable
Securities.
1.8 Underwriting Requirements.
In connection with any offering involving an
underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.3 to include any of
the Holders' securities in such underwriting unless they accept
the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it (or by other persons entitled
to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities,
requested by shareholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible
with the success of the offering, then the Company shall be
required to include in the offering only that number of such
securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling
shareholders according to the total amount of securities entitled
to be included therein owned by each selling shareholder or in
such other proportions as shall mutually be agreed to by such
selling shareholders) but in no event shall (i) the amount of
securities of the selling Holders included in the offering be
reduced below twenty percent (20%) of the total amount of
securities included in such offering, or (ii) notwithstanding (i)
above, any shares being sold by a shareholder exercising a demand
registration right similar to that granted in Section 1.2 be
excluded from such offering. For purposes of the preceding
parenthetical concerning apportionment, for any selling
shareholder which is a holder of Registrable Securities and which
is a partnership or corporation, the partners, retired partners
and shareholders of such holder, or the estates and family
members of any such partners and retired partners and any trusts
for the benefit of any of the foregoing persons shall be deemed
to be a single "selling shareholder", and any pro-rata reduction
with respect to such "selling shareholder" shall be based upon
the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "selling
shareholder", as defined in this sentence.
1.9 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 1.
1.10 Indemnification.
In the event any Registrable Securities are included
in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any,
who controls such Holder or underwriter within the meaning of the
Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state securities 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"): (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 Act, the 1934 Act, any
rule or regulation promulgated under the Act or the 1934 Act, or
any other federal or state securities law; and the Company will pay
to each such Holder, underwriter or controlling person 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 1.10(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 any such Holder,
underwriter or controlling person.
(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 who has signed the registration
statement, each person, if any, who controls the Company within
the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person
of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act
or other federal or state securities 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 pay any legal or
other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.10(b), in connection
with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity
agreement contained in this subsection 1.10(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, that, in no event shall any indemnity under
this subsection 1.10(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party
under this Section 1.10 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 1.10, 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 (together
with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain
one separate 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 prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.10, 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 1.10.
(d) If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss,
liability, claim, damage, or expense referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability,
claim, damage, or expense 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 statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be
determined 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) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders
under this Section 1.10 shall survive the completion of any
offering of Registrable Securities in a registration statement
under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934.
With a view to making available to the Holders the
benefits of Rule 144 promulgated under the Act and any other rule
or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration
or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available,
as those terms are understood and defined in SEC Rule 144, at all
times;
(b) file with the SEC in a timely manner all
reports and other documents required of the Company under the Act
and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a
written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144 (at any time after ninety
(90) days after the effective date of the first registration
statement filed by the Company), the Act and the 1934 Act (at
any time after it has become subject to such reporting requirements),
or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration
or pursuant to such form.
1.12 Form S-3 Registration.
In case the Company shall receive from any Holder or
Holders a written request or requests that the Company effect a
registration on Form S-3 for the resale of shares from time to
time in broker transactions (and not in connection with an
underwritten offering), 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; 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 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 1.12: (1)
if Form S-3 is not available for such offering by the Holders; (2)
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 (net of any underwriters'
discounts or commissions) of less than $300,000; (3) 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 shareholders 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 90 days after
receipt of the request of the Holder or Holders under this Section
1.12; provided, however, that the Company shall not utilize this
right more than once in any twelve month period; (4) if the Company
has, within the twelve (12) month period preceding the date of
such request, already effected two registrations on Form S-3 for
the Holders pursuant to this Section 1.12; (5) the Company has
previously effected four registrations on Form S-3 for the
Holders pursuant to this Section 1.12, or (6) 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 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. All expenses incurred in connection with a registration
requested pursuant to Section 1.12, including (without
limitation) all registration, filing, qualification, printer's
and accounting fees, and the fees and disbursements (not to exceed
$15,000) of one counsel for the selling Holder (as selected by the
Holders of a majority of the Registrable Securities to be registered)
and counsel for the Company, shall be borne by the Company.
Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected
pursuant to Sections 1.2 or 1.3, respectively.
1.13 Assignment of Registration Rights.
The rights to cause the Company to register Registrable
Securities pursuant to this Section 1 may be assigned (but only with
all related obligations) by a Holder to a transferee or assignee of
such securities, provided: (a) the Company is, within a reasonable
time after such transfer, 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; (b)
such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement, including
without limitation the provisions of Section 1.15 below; and (c)
such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.
1.14 Limitations 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 1.2 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 subsection 1.2(a)
or within one hundred twenty (120) days of the effective date of
any registration effected pursuant to Section 1.2.
1.15 "Market Stand-Off" Agreement.
Each Holder hereby agrees that, during the period
of duration specified by the Company and an underwriter of common
stock or other securities of the Company, following the effective
date of a registration statement of the Company filed under the
Act in connection with an underwritten offering, it shall not, to
the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option
to purchase or otherwise transfer or dispose of (other than to
donees who agree to be similarly bound) any securities of the
Company held by it at any time during such period except common
stock included in such registration; provided, however, that:
(a) 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; and
(b) such market stand-off time period shall not
exceed 90 days.
In order to enforce the foregoing covenant, the Company
may impose stop-transfer instructions with respect to the
Registrable Securities of each Investor (and the shares or
securities of every other person subject to the foregoing
restriction) until the end of such period.
Notwithstanding the foregoing, the obligations
described in this Section 1.15 shall not apply to a registration
relating solely to employee benefit plans on Form S-l or Form S-8
or similar forms which may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction
on Form S-14 or Form S-15 or similar forms which may be
promulgated in the future.
1.16 Termination of Registration Rights.
The right of any Holder to request registration or
inclusion in any registration pursuant to this Agreement shall
terminate if all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any 90-day period.
2. Right of First Offer.
Subject to the terms and conditions specified in this
Section 2, the Company hereby grants to each Major Investor (as
hereinafter defined) a right of first offer with respect to
future sales by the Company of its Shares (as hereinafter
defined). For purposes of this Section 2, a Major Investor shall
mean (i) any Investor who holds at least 30% of the original
investment such Investor makes in the Company pursuant to the
Securities Purchase Agreement and (ii) any person who acquires at
least 15% of the Series A Preferred Stock (or the common stock
issued upon conversion thereof) issued pursuant to the Securities
Purchase Agreement. For purposes of this Section 2, Investor
includes any general partners and affiliates of an Investor. An
Investor shall be entitled to apportion the right of first offer
hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of,
or securities convertible into or exercisable for any shares of,
any class of its capital stock ("Shares"), the Company shall
first make an offering of such Shares to each Major Investor in
accordance with the following provisions:
(a) The Company shall deliver a notice by
certified mail ("Notice") to the Major Investors stating (i) its
bona fide intention to offer such Shares, (ii) the number of
such Shares to be offered, and (iii) the price and terms, if
any, upon which it proposes to offer such Shares.
(b) By written notification received by the
Company, within 20 calendar days after giving of the Notice,
the Major Investor may elect to purchase or obtain, at the price
and on the terms specified in the Notice, up to that portion of
such Shares which equals the proportion that the number of shares
of common stock issued and held, or issuable upon conversion of
the Series A Preferred Stock then held, by such Major Investor
bears to the total number of shares of common stock of the Company
then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities). The Company shall
promptly, in writing, inform each Major Investor which purchases
all the shares available to it ("Fully-Exercising Investor") of
any other Major Investor's failure to do likewise. During the
ten-day period commencing after such information is given, each
Fully-Exercising Investor shall be entitled to obtain that
portion of the Shares for which Major Investors were entitled to
subscribe but which were not subscribed for by the Major
Investors which is equal to the proportion that the number of
shares of common stock issued and held, or issuable upon
conversion of Series A Preferred Stock then held, by such
Fully-Exercising Investor bears to the total number of shares of
common stock issued and held, or issuable upon conversion of the
Series A Preferred Stock then held, by all Fully-Exercising
Investors who wish to purchase some of the unsubscribed shares.
(c) If all Shares which Investors are entitled
to obtain pursuant to (b) are not elected to be obtained as
provided in (b) hereof, the Company may, during the 30-day
period following the expiration of the period provided in (b)
hereof, offer the remaining unsubscribed portion of such Shares
to any person or persons at a price not less than, and upon
terms no more favorable to the offeree than those specified in
the Notice. If the Company does not enter into an agreement
for the sale of the Shares within such period, or if such
agreement is not consummated within 30 days of the execution
thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first
reoffered to the Major Investors in accordance herewith.
(d) The right of first offer in this Section
2 shall not be applicable (i) to the issuance or sale of
shares of common stock (or options therefor) to employees for
the primary purpose of soliciting or retaining their employment
pursuant to a stock option or stock purchase plan, (ii) the
issuance of securities pursuant to the conversion or exercise
of convertible or exercisable securities, (iii) the issuance
of securities in connection with a bona fide business acquisition
of or by the Company, whether by merger, consolidation, sale of
assets, sale or exchange of stock or otherwise or (iv) the
issuance of stock, warrants or other securities or rights to
persons or entities with which the Company has business
relationships provided such issuances are for other than
primarily equity financing purposes and provided that at the
time of any such issuance, the aggregate of such issuance and
similar issuances in the preceding twelve month period do not
exceed 2% of the then outstanding Common Stock of the Company
(assuming full conversion and exercise of all convertible and
exercisable securities).
(e) The right of first refusal set forth in
this Section 2 may not be assigned or transferred, except that
(i) such right is assignable by each Holder to any wholly owned
subsidiary or parent of, or to any corporation or entity that is,
within the meaning of the Act, controlling, controlled by or
under common control with, any such Holder, and (ii) such right
is assignable between and among any of the Holders.
3. Miscellaneous.
3.1 Successors and Assigns.
Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities).
Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
3.2 Governing Law.
This Agreement shall be governed by and construed
under the laws of the State of California as applied to
agreements among California residents entered into and to be
performed entirely within California.
3.3 Counterparts.
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
3.4 Titles and Subtitles.
The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 Notices.
Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and
shall be deemed effectively given upon personal delivery to the
party to be notified or upon deposit with the United States Post
Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated
for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance
written notice to the other parties.
3.6 Expenses.
If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which
such party may be entitled.
3.7 Amendments and Waivers.
Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and
the holders of a majority of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of
all such Registrable Securities, and the Company.
3.8 Severability.
If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement
shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
3.9 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.
3.10 Entire Agreement; Amendment; Waiver.
This Agreement (including the exhibits hereto, if
any) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and
thereof.
IN WITNESS WHEREOF, the parties have executed this
Investors' Rights Agreement as of the date first above written.
AMERIGON INCORPORATED,
a California corporation
By: /s/ Xxx X. Xxxx
Its: Chief Executive Officer
Address:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
INVESTORS:
By: Westar Capital Associates II, LLC
Manager
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Member
Address:
000 Xxxxx Xxxxx Xxxxx,
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
BIG BEAVER INVESTMENTS LLC
By: /s/ X.X. Xxxx III
Its: President
Address:
000 X. Xxx Xxxxxx Xxxx,
Xxxxx 000
Xxxx, Xxxxxxxx 00000
