ADESSO SPECIALTY SERVICES ORGANIZATION INC.
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
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1. GENERAL......................................................................................................1
1.1 Definitions.........................................................................................1
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 Corporation......................................................................7
2.7 Termination of Registration Rights..................................................................9
2.8 Delay of Registration; Furnishing Information.......................................................9
2.9 Indemnification.....................................................................................9
2.10 Assignment of Registration Rights..................................................................11
2.11 Amendment of Registration Rights...................................................................12
2.12 Limitation on Subsequent Registration Rights.......................................................12
2.13 "Market Stand-Off" Agreement.......................................................................12
2.14 Rule 144 Reporting.................................................................................12
3. COVENANTS OF THE CORPORATION................................................................................13
3.1 Basic Financial Information and Reporting..........................................................13
3.2 Inspection Rights..................................................................................14
3.3 Confidentiality of Records.........................................................................14
3.4 Reservation of Common Stock........................................................................14
3.5 Stock Vesting......................................................................................14
3.6 Proprietary Information and Inventions Agreement...................................................14
3.7 Real Property Holding Corporation..................................................................14
3.8 Assignment of Right to Repurchase..................................................................15
3.9 Termination of Covenants...........................................................................15
4. RIGHTS OF FIRST REFUSAL.....................................................................................15
4.1 Subsequent Offerings...............................................................................15
4.2 Exercise of Rights.................................................................................16
4.3 Issuance of Equity Securities to Other Persons.....................................................16
4.4 Termination of Rights of First Refusal.............................................................16
4.5 Transfer of Rights of First Refusal................................................................16
4.6 Excluded Securities................................................................................16
4.7 Special Series C Right of First Refusal............................................................17
5. AMENDMENT AND RESTATEMENT...................................................................................17
5.1 Amendment and Restatement..........................................................................17
6. MISCELLANEOUS...............................................................................................17
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TABLE OF CONTENTS
(CONTINUED)
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6.1 Governing Law......................................................................................17
6.2 Survival...........................................................................................17
6.3 Successors and Assigns.............................................................................18
6.4 Severability.......................................................................................18
6.5 Amendment and Waiver...............................................................................18
6.6 Delays or Omissions................................................................................18
6.7 Notices............................................................................................18
6.8 Attorneys' Fees....................................................................................19
6.9 Titles and Subtitles...............................................................................19
6.10 Pronouns...........................................................................................19
6.11 Counterparts.......................................................................................19
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INDEX OF EXHIBITS
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Schedule of Purchasers Exhibit A
Restated Articles Exhibit B
Schedule of Exceptions Exhibit C
Amended and Restated Investors' Rights Agreement Exhibit D
Amended and Restated Co-Sale Agreement Exhibit E
Amended and Restated Voting Agreement Exhibit F
List of Shareholders Exhibit G
Proprietary Information and Inventions Agreement Exhibit H
Form of Legal Opinion Exhibit I
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AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement")
is entered into as of the 6th day of April, 2000, by and among ADESSO SPECIALTY
SERVICES ORGANIZATION INC., a California corporation (the "Corporation"), the
holders of the Corporation's Series A Preferred Stock (the "Series A Stock"),
Series B Preferred Stock (the "Series B Stock"), Series C Preferred Stock (the
"Series C Stock"), Series D Preferred Stock (the "Series D Stock"), and Series E
Preferred Stock (the "Series E Stock") set forth on Exhibit A hereto and Xxxxxxx
X. Xxxxxx (the "Founder"). The holders of the Series A Stock, Series B Stock,
Series C Stock, Series D Stock, and Series E Stock shall be referred to
hereinafter as the "Investors" and each individually as an "Investor." This
Agreement is being entered into pursuant to Section 5.1 of that certain Series E
Preferred Stock Purchase Agreement of even date herewith between the Corporation
and the Purchasers set forth on Exhibit A thereto (the "Purchase Agreement").
RECITALS
WHEREAS, certain Investors hold shares of the Corporation's Series A
Stock, Series B Stock, Series C Stock, Series D Stock and/or shares of Common
Stock issued upon conversion thereof and possess registration rights,
information rights, and other rights provided pursuant to an Amended and
Restated Investors' Rights Agreement dated as of December 10, 1997, between the
Corporation, the Founder and such Investors (the "Prior Agreement");
WHEREAS, the Corporation, the Founder and the undersigned Investors who
hold Series A Stock, Series B Stock, Series C, and Series D Stock desire to
terminate the Prior Agreement and to provide to such Investors the rights
created pursuant hereto in lieu of the rights granted to it under the Prior
Agreement;
WHEREAS, the Corporation and certain of the Investors have entered into
an agreement or agreements for sale by the Corporation and purchase by such
Investors of Series E Stock; and
WHEREAS, in connection with the purchase and sale of the Corporation's
Series E Stock pursuant to the Purchase Agreement, the Corporation and the
Investors desire to provide for the registration of the Common Stock issued upon
conversion or exercise of the Series E Stock and the granting of certain other
rights to the Investors according to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and considerations and releases contained herein, the parties hereby agree as
follows:
1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Corporation'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 of the Corporation
issued or issuable upon conversion of the Shares; (ii) Common Stock issued or
issuable upon conversion of any Shares issued upon exercise of the Warrants; and
(iii) any Common Stock of the Corporation 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 the Corporation's 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
Corporation 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 Corporation, reasonable fees and
disbursements not to exceed Twenty-five Thousand Dollars ($25,000) of a single
special counsel for the Holders, blue sky fees and expenses and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Corporation which shall
be paid in any event by the Corporation).
"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 Corporation's Series A Stock, Series B Stock,
Series C Stock, Series D Stock, and Series E Stock.
"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any 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 Corporation with the
SEC.
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
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"WARRANTS" shall mean warrants to purchase Series A Stock held by the
Investors.
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 this Section 2.1, with the exception of transfers made pursuant to Rule
144 following the Initial offering (B) such Holder shall have notified the
Corporation of the proposed disposition and shall have furnished the Corporation
with a detailed statement of the circumstances surrounding the proposed
disposition, and (C) if reasonably requested by the Corporation, such Holder
shall have furnished the Corporation with an opinion of counsel, reasonably
satisfactory to the Corporation, that such disposition will not require
registration of such shares under the Securities Act. It is agreed that the
Corporation 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 that is (A) a partnership to its
partners or former partners in accordance with partnership interests, (B) a
corporation to its shareholders in accordance with their interest 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 Section 2.1 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 the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws or as provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE CORPORATION HAS RECEIVED
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Corporation shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Corporation) reasonably acceptable to the
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Corporation 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 Corporation 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
Corporation shall receive a written request from the Holders of at least a
majority of the Registrable Securities then outstanding (the "Initiating
Holders") that the Corporation file a registration statement under the
Securities Act covering the registration of Registrable Securities having an
aggregate offering price to the public of not less than $5,000,000, then the
Corporation shall, within ten 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, and in any event
within 90 days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered within 20 days of the mailing of such notice by the Corporation in
accordance with Section 6.7.
(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 Corporation as a part of their request made pursuant to
this Section 2.2 and the Corporation 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
Corporation). Notwithstanding any other provision of this Section 2.2, if the
underwriter advises the Corporation that marketing factors require a limitation
of the number of securities to be underwritten (including Registrable
Securities) then the Corporation shall so advise all Holders of Registrable
Securities that 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 Registrable Securities to be
included in the underwriting shall not be reduced unless all other securities
are first entirely excluded from the offering. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
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(c) The Corporation shall not be required to effect a
registration pursuant to this Section 2.2:
(i) prior to the earlier to occur of (A) 180 days
after the Initial Offering and (B) the second anniversary of the date of this
Agreement; or
(ii) after the Corporation has effected two
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 180 days following the effective date of the
registration statement pertaining to the Initial Offering; or
(iv) if within ten days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Corporation
gives notice to the Holders of the Corporation's intention to make its Initial
Offering within 90 days; or
(v) if the Corporation 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 Board of Directors of the Corporation, it would be seriously detrimental to
the Corporation and its shareholders for such registration statement to be
effected at such time, in which event the Corporation shall have the right to
defer such filing for a period of not more than 90 days after receipt of the
request of the Initiating Holders; provided that such right to delay a request
shall be exercised by the Corporation not more than once in any twelve month
period.
2.3 PIGGYBACK REGISTRATIONS. The Corporation shall notify all Holders
and the Founder in writing at least 30 days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Corporation (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Corporation, 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 and the Founder
an opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder or shares of Common Stock held by the
Founder. The Founder and each Holder desiring to include in any such
registration statement all or any part of the Common Stock or Registrable
Securities held by it, respectively, shall, within 15 days after the
above-described notice from the Corporation, so notify the Corporation in
writing. Such notice shall state the intended method of disposition of the
Registrable Securities by such Holder or shares of Common Stock held by the
Founder. If the Founder or a Holder decides not to include all of its Common
Stock or Registrable Securities, respectively, in any registration statement
thereafter filed by the Corporation, such Founder or Holder shall nevertheless
continue to have the right to include any Common Stock or Registrable
Securities, respectively, in any subsequent registration statement or
registration statements as may be filed by the Corporation 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 Corporation gives notice under this Section 2.3 is for an underwritten
offering, the Corporation shall so advise
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the Holders of Registrable Securities and the Founder. In such event, the right
of any such Holder or Founder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's or Founder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
or shares of such Founder's Common Stock in the underwriting to the extent
provided herein. Each Holder and Founder 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 the Corporation. Notwithstanding any other provision of the
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 Corporation; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; third, to the Founder, for
an amount of shares not to exceed 150,000 (as adjusted for stock splits and
combinations); and fourth, to any shareholder of the Corporation (other than a
Holder or the Founder) on a pro rata basis. No such reduction shall reduce the
securities being offered by the Corporation for its own account to be included
in the registration and underwriting, and in no event shall the amount of
securities of the selling Holders included in the registration be reduced below
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 shareholders, 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 shareholder 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
two-thirds of the Registrable Securities proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Corporation 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
Corporation in accordance with Section 2.5 hereof.
2.4 FORM S-3 REGISTRATION. In case the Corporation shall receive from
any Holder or Holders of Registrable Securities a written request or requests
that the Corporation 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 Corporation 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 15 days after receipt of such written notice from the Corporation;
provided, however, that the Corporation shall not be obligated to effect any
such registration, qualification or compliance pursuant to this Section 2.4
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(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 Corporation 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 $500,000, or
(iii) if the Corporation shall furnish to the Holders
a certificate signed by the Chairman of the Board of Directors of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be seriously detrimental to the Corporation and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Corporation 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 2.4; provided, that
such right to delay a request shall be exercised by the Corporation not more
than once in any 12 month period, or
(iv) in any particular jurisdiction in which the
Corporation 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 Corporation 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.
(d) Registrations effected pursuant to this Section 2.4 shall
not be counted as demand for registration or registrations effected pursuant to
Sections 2.2 or 2.3, respectively.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Corporation. 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. The Corporation shall not, however, 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 (a) the withdrawal is based upon material adverse information
concerning the Corporation of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of a majority of Registrable Securities
agree to forfeit their right to one requested registration pursuant to Section
2.2 or Section 2.4, as applicable, in which event such right shall be forfeited
by all Holders. If the Holders are required to pay the Registration Expenses,
such expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Corporation is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.2 or Section
2.4 to a demand registration.
2.6 OBLIGATIONS OF THE CORPORATION. Whenever required to effect the
registration of any Registrable Securities, the Corporation shall, as
expeditiously as reasonably possible:
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(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 90 days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Corporation 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.
(g) 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 Corporation 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
Corporation, 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.
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(h) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Corporation are then listed.
(i) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
to a Holder under this Section 2 shall terminate and be of no further force and
effect five years after the Initial Offering. In addition, a Holder's
registration rights shall expire if (i) the Corporation has completed its
Initial Offering and is subject to the provisions of the Exchange Act, (ii) such
Holder (together with its affiliates, partners and former partners) holds less
than 1% of the Corporation's outstanding Common Stock (treating all shares of
convertible Preferred Stock on an as converted basis) and (iii) all Registrable
Securities held by and issuable to such Holder may be sold under Rule 144 during
any 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 Corporation to take any action pursuant to Section 2.2, 2.3 or 2.4 on behalf
of any selling Holder that such selling Holder shall furnish to the Corporation
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 its Registrable Securities.
(c) The Corporation 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 anticipated
aggregate offering price required to originally trigger the Corporation'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 Corporation will
indemnify and hold harmless each Holder, the partners, officers and directors 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 Corporation: (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
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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 Corporation 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 Corporation will reimburse each
such Holder, partner, officer or director, underwriter or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 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
Corporation, which consent shall not be unreasonably withheld, nor shall the
Corporation 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 that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, partner, officer, director, underwriter or controlling person of
such Holder.
(b) To the extent permitted by law, each Holder will, 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 Corporation, each of its directors and officers
and each person, if any, who controls the Corporation 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 Corporation 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 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 Corporation or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 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 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,
-10-
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 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 proceeds from the offering received by such Holder.
(e) The obligations of the Corporation and Holders under this
Section 2.9 shall survive completion of any offering of Registrable Securities
in a registration statement. 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 that 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.
(f) Notwithstanding this Section 2.9, to the extent the
provisions for indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the provisions of this Section 2.9, the indemnification and
contribution provisions contained in such underwriting agreement shall control.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Corporation to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities that
(i) is a subsidiary, parent, general partner, limited partner or retired partner
or affiliate of a Holder, (ii) is a Holder's family member or trust for the
benefit of an individual Holder, or (iii) acquires at least 50,000 shares of
Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (A) the transferor shall, within ten days after such
transfer, furnish to the Corporation written notice of the name and address of
such transferee or assignee and the securities with respect to which such
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registration rights are being assigned and (B) such transferee shall agree to be
subject to all restrictions set forth in this Agreement.
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Corporation and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon each Holder, the Founder
and the Corporation. By acceptance of any benefits under this Section 2, Holders
of Registrable Securities and the Founder hereby agree to be bound by the
provisions hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Corporation shall not, without the prior written consent of
the Holders of a majority of the Registrable Securities, enter into any
agreement with any holder or prospective holder of any securities of the
Corporation that would grant such holder registration rights equal to or senior
to those granted to the Holders hereunder.
2.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Corporation or
the representative of the underwriters of Common Stock (or other securities) of
the Corporation, each Holder shall not sell or otherwise transfer or dispose of
any Common Stock (or other securities) of the Corporation held by such Holder
(other than those included in the registration) for a period specified by the
representative of the underwriters not to exceed 180 days following the
effective date of a registration statement of the Corporation filed under the
Securities Act, provided that:
(a) such agreement shall apply only to the Corporation's
Initial Offering; and
(b) all officers and directors of the Corporation enter into
similar agreements.
The obligations described in this Section 2.13 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 Corporation 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 said 180 day
period.
2.14 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC that may permit the
sale of the Registrable Securities to the public without registration, the
Corporation 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 Corporation 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 Corporation 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
Corporation as to its compliance with
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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
Corporation; 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.
(d) Take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Corporation for the
offering of its securities to the general public is declared effective.
3. COVENANTS OF THE CORPORATION.
3.1 BASIC FINANCIAL INFORMATION AND REPORTING.
(a) The Corporation 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 Corporation, and in any event within 120 days thereafter, the Corporation
will furnish each Investor a consolidated balance sheet of the Corporation, as
at the end of such fiscal year, and a consolidated statement of operations, a
consolidated statement of cash flows of the Corporation and a consolidated
statement of shareholder equity, for 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 auditors of national standing selected by the
Corporation's Board of Directors.
(c) The Corporation will furnish each Investor, as soon as
practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Corporation, and in any event within 45 days
thereafter, a consolidated balance sheet of the Corporation as of the end of
each such quarterly period, and a consolidated statement of operations and a
consolidated statement of cash flows of the Corporation for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and normal year-end audit adjustments may not have been made.
(d) So long as an Investor (with its affiliates) shall own
not less than 50,000 shares of Registrable Securities (as adjusted for stock
splits and combinations) (a "Major Investor"), the Corporation will furnish
each such Major Investor (i) at least 30 days prior to the beginning of each
fiscal year an annual budget and operating plans for such fiscal year (and as
soon as available, any subsequent revisions thereto); and (ii) as soon as
practicable after the end of each month, and in any event within 30 days
thereafter, a consolidated balance sheet of the Corporation as of the end of
each such month, and a consolidated statement of operations and a
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consolidated statement of cash flows of the Corporation for such month and
for the current fiscal year to date, including a comparison to plan figures
for such period, prepared in accordance with generally accepted accounting
principles consistently applied, with the exception that no notes need be
attached to such statements and normal year-end audit adjustments may not
have been made.
3.2 INSPECTION RIGHTS. Each Major Investor shall have the right to
visit and inspect any of the properties of the Corporation or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the
Corporation or any of its subsidiaries with 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 Corporation shall
not be obligated under this Section 3.2 with respect to a competitor of the
Corporation or with respect to information which the Board of Directors
determines in good faith is confidential and should not, therefore, be
disclosed.
3.3 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 Corporation
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 Corporation as
long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this Section 3.3.
3.4 RESERVATION OF COMMON STOCK. The Corporation 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.
3.5 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall
be subject to vesting over a four year period. With respect to any shares of
stock purchased by any such person, the Corporation's repurchase option shall
provide that upon such person's termination of employment or service with the
Corporation, with or without cause, the Corporation or its assignee (to the
extent permissible under applicable securities laws and other laws) shall have
the option to purchase at cost any unvested shares of stock held by such person.
3.6 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Corporation
shall require all directors, officers, consultants and employees who have access
to confidential information of the Corporation to execute and deliver a
Proprietary Information and Inventions Agreement substantially in the form
attached to the Purchase Agreement.
3.7 REAL PROPERTY HOLDING CORPORATION. The Corporation covenants that
it will operate in a manner such that it will not become a "United States real
property holding corporation" as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder
("FIRPTA"). The Corporation agrees to make determinations as to its status as a
USRPHC, and will file statements concerning those determinations with the
Internal Revenue Service, in the manner and at the times required under
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Reg. Section 1.897-2(h), or any supplementary or successor provision thereto.
Within 30 days of a request from an Investor or any of its partners, the
Corporation will inform the requesting party, in the manner set forth in Reg.
Section 1.897-2(h)(1)(iv) or any supplementary or successor provision thereto,
whether that party's interest in the Corporation constitutes a United States
real property interest (within the meaning of Internal Revenue Code Section
897(c)(1) and the regulations thereunder) and whether the Corporation has
provided to the Internal Revenue Service all required notices as to its USRPHC
status.
3.8 ASSIGNMENT OF RIGHT TO REPURCHASE. The Corporation agrees that in
the event that the Corporation declines to exercise in full the Right of First
Refusal set forth in the Common Stock Purchase Agreement between such Founder
and the Corporation (the "Right of First Refusal"), the Corporation will provide
each Investor with notice of such determination at least 15 days prior to the
end of the period in which the Right of First Refusal expires under such Common
Stock Purchase Agreement. Each Investor shall then have the right, exercisable
by notice prior to the end of such period, to exercise such Right of First
Refusal as the Corporation's assignee on a pro rata basis (based upon the number
of shares of Registrable Securities) held by such Investor relative to the
aggregate number of shares of Registrable Securities held by all Investors);
provided that if fewer than all Investors elect to participate, the Founders
Stock that would otherwise be allocated to non-participating Investors shall be
allocated to each participating Investor in a manner such that each
participating Investor is entitled to purchase at least such participating
Investor's pro rata portion of such unallocated Founders Stock (based upon the
number of Shares of Common Stock held by all participating Investors) or such
different number of shares as the participating Investor shall mutually agree.
Upon expiration or exercise of the Right of First Refusal, the Corporation will
provide notice to all Investors as to whether or not the Right or First Refusal
has been exercised by the Corporation or the Investors.
3.9 TERMINATION OF COVENANTS. All covenants of the Corporation
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.
4. RIGHTS OF FIRST REFUSAL.
4.1 SUBSEQUENT OFFERINGS. Each Major Investor shall have a right of
first refusal to purchase its pro rata share of all Equity Securities, as
defined below, that the Corporation 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 Investor's pro rata share is equal to the
ratio of (A) the number of shares of the Corporation's Common Stock (including
all shares of Common Stock issued or issuable upon conversion of the Shares)
that such Investor is deemed to be a holder of immediately prior to the issuance
of such Equity Securities to (B) the total number of shares of the Corporation's
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 Corporation, (ii) any security convertible, with or
without consideration, into any Common Stock, Preferred Stock or other security
(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 or (iv) any such warrant or right.
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4.2 EXERCISE OF RIGHTS. If the Corporation proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Corporation proposes to issue the same. Each Major Investor shall have
15 days from the giving of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Corporation and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Corporation shall not be required to offer or sell such Equity
Securities to any Investor who would cause the Corporation 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 Corporation 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. Each Major Investor so notified shall have five days after
receipt of such notice to notify the Corporation of its election to purchase all
or a portion thereof of the unsubscribed shares. If the Major Investors fail to
exercise in full the rights of first refusal, the Corporation shall have 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 Corporation's notice to the Investors pursuant to Section 4.2 hereof. If
the Corporation has not sold such Equity Securities within 90 days of the notice
provided pursuant to Section 4.2, the Corporation 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 RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the
effective date of the registration statement pertaining to, the Corporation's
Initial Offering.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal 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 rights of first refusal established by
this Section 4 shall have no application to any of the following Equity
Securities:
(a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Corporation or any subsidiary, 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, options and warrants outstanding
as of the date of this Agreement; and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Section 4 applied with respect to the
initial sale or grant by the Corporation of such rights or agreements;
-16-
(c) any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Corporation;
(e) shares of Common Stock issued upon conversion of the
Shares; or
(f) any Equity Securities issued pursuant to any equipment
leasing arrangement, or debt financing from a bank or similar financial
institution.
4.7 SPECIAL SERIES C RIGHT OF FIRST REFUSAL. Notwithstanding any other
provisions of this Section 4, for so long as New Enterprise Associates VII, L.P.
("NEA VII") or any funds affiliated with New Enterprise Associates hold at least
400,000 shares of Series C Preferred Stock of the Corporation, or shares of
Common Stock issuable upon conversion of Series C Preferred Stock, NEA VII shall
have the right to participate in any subsequent sale of Series C Preferred Stock
by the Corporation, on the same terms and conditions of such subsequent sale, to
the extent necessary to maintain its pro rata share of all outstanding shares of
Series C Preferred Stock. NEA VII's pro rata share of Series C Preferred Stock
is equal to the ratio of (A) the number of shares of Series C Preferred Stock
(including all shares of Common Stock issued or issuable on conversion of the
Series C Preferred Stock) that NEA VII and any funds affiliated with New
Enterprise Associates are deemed to be holders immediately prior to any
subsequent sale of Series C Preferred Stock to (B) the total number of shares of
the Corporation's outstanding Series C Preferred Stock immediately prior to any
subsequent sale of Series C Preferred Stock.
5. AMENDMENT AND RESTATEMENT.
5.1 AMENDMENT AND RESTATEMENT. Effective upon the closing of the sale
and issuance of the Series E Stock on the date hereof, all provisions of, rights
granted and covenants made in the Prior Agreement and any other agreement
between the Corporation, the Investors and the Founder, are hereby waived,
released and terminated in their entirety and shall have no further force or
effect whatsoever. The rights and covenants contained in this Agreement set
forth the sole and entire agreement among the Corporation, the Investors and the
Founder on the subject matter hereof and supersede any and all rights granted or
covenants made under any prior agreement.
6. MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California.
6.2 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 Corporation pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Corporation hereunder solely as of the date of such certificate or instrument.
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6.3 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 Corporation of adequate
written notice of the transfer of any Registrable Securities specifying the full
name and address of the transferee, the Corporation 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.
6.4 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, any term of this
Agreement may be amended or modified only upon the written consent of the
Corporation and the holders of at least a majority of the Registrable
Securities.
(b) Except as otherwise expressly provided, the obligations of
the Corporation and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of at least a majority of the
Registrable Securities; PROVIDED, HOWEVER, that any amendment which would
adversely affect the Founder in a manner different than the Holders, shall
additionally require the consent of the Founder.
(c) Notwithstanding the foregoing, this Agreement may be
amended with only the written consent of the Corporation to include additional
purchasers of Series E Preferred Stock in accordance with Section 2.3 of the
Purchase Agreement as "Investors," "Holders" and parties hereto.
6.6 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 Corporation under this Agreement shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
6.7 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 telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.
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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 days' advance written notice to the
other parties hereto.
6.8 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.
6.9 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.
6.10 PRONOUNS. All pronouns contained herein and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the parties hereto may require.
6.11 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: INVESTORS:
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
ADESSO SPECIALTY SERVICES ----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By:/s/ Xxxxx X. Xxxxxxx By: /s/ XXXXXX XXXXXXXXXX
------------------------------ ------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title: General Partner
----------------------------
Address:
--------------------------
--------------------------
FOUNDER:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, M.D.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
A Delaware Limited Partnership
By: Technology Funding Inc., Managing General Partner
-----------------------------------------------------
(Print Name of Purchaser)
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
(Signature)
Title: Vice President
----------------------------------
Address: 2000 Alameda de las Pulgas
--------------------------------
Xxx Xxxxx, XX 00000
--------------------------------
TECHNOLOGY FUNDING PARTNERS III, L.P.,
A Delaware Limited Partnership
By: Technology Funding Inc.,
Managing General Partner
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Title: Vice President
----------------------------------
TECHNOLOGY FUNDING VENTURE PARTNERS V, TECHNOLOGY FUNDING VENTURE PARTNERS V,
AN AGGRESSIVE GROWTH FUND, L.P. AN AGGRESSIVE GROWTH FUND, L.P.
A Delaware Limited Partnership A Delaware Limited Partnership
By: Technology Funding Inc., By: Technology Funding Inc.,
Managing General Partner Managing General Partner
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
----------------------------------- ------------------------------------
Title: Vice President Title: Vice President
--------------------------------- ----------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
HYBRID VENTURE PARTNERS, L.P., a
Delaware limited partnership
BY: Rosemont Venture Management I, L.L.C.
Its General Partner
By: /s/ XXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Managing Member
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEA Presidents Fund, L.P.
By: NEA General Partners, L.P.
By: General Partner
---------------------------------------
(Print Name of Purchaser)
By: XXXXXX XXXX
------------------------------------
(Signature)
Title: General Partner
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEA Ventures 1997, Limited Partnership
By: Vice President
------------------------------------
(Print Name of Purchaser)
By: /s/ XXXX XXXXXXXXXX
------------------------------------
(Signature)
Title: Vice President
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEW ENTERPRISES ASSOCIATES VII, LIMITED
PARTNERSHIP
By: NEA Partners VII, Limited Partnership
Its General Partner
---------------------------------------
(Print Name of Purchaser)
By: XXXXXX XXXX
-----------------------------------
(Signature)
Title: General Partner
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
---------------------------------------
(Print Name of Purchaser)
By: XXXXXXX X. XXXXXX
-----------------------------------
(Signature)
Title: Venture Member
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx #0-000
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: INVESTORS:
COMDISCO, INC.
ADESSO SPECIALTY SERVICES ---------------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By: /s/ Xxxx X. Xxxxxx
------------------------ ------------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Xxxx X. Xxxxxx
Title: Senior Vice President
---------------------------------
Address: 0000 Xxxxx Xxxxx Xxxx
-------------------------------
Xxxxxxxx XX 00000
-------------------------------
FOUNDER:
------------------------
Xxxxxxx X. Xxxxxx, M.D.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
EXHIBIT A
SCHEDULE OF INVESTORS
TECHNOLOGY FUNDING VENTURES PARTNERS V,
AN AGGRESSIVE GROWTH FUND, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING VENTURE PARTNERS IV,
AN AGGRESSIVE GROWTH FUND, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING PARTNERS III, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
SEQUOIA CAPITAL VI
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA TECHNOLOGY PARTNERS VI
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA 1995
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA 1997
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SQP 1997
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
NEW ENTERPRISE ASSOCIATES VII, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
NEA VENTURES 1997, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
NEA PRESIDENT'S FUND, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
INTERWEST PARTNERS VI, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx, MD
COMDISCO VENTURES
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
HYBRID VENTURE PARTNERS, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXX AND XXXXX XXXXXXX
000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
-22-
XXXXXXX X. AND XXXXXX XXXXXXX XXXXXX
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
STUART AND XXXXXX STREUVER
0000 Xxxxxx Xxxxx
Xxxxx Xx, XX 00000
XXXXXX AND XXXXXXXX XXXXXXXX
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
GC & H INVESTMENTS
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxx
XXXXX X. XXXXXXX
0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXXXX XXXXX
0000 X. Xxxxxxxxxx
0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
XXXXXXX XXXXXXXXX
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
CARDIOVASCULAR MEDICINE & CARDIAC ARRHYTHMIAS AN
INCORPORATED MEDICAL GROUP PROFIT SHARING TRUST FBO: XXXXX X. XXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
CARDIOVASCULAR MEDICINE & CARDIAC ARRHYTHMIAS AN
INCORPORATED MEDICAL GROUP PROFIT SHARING TRUST FBO: XXXXX XXXXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
XXXXX X. XXXXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
R. XXXXXXX XXXX
-23-
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
COMPASS MANAGEMENT PARTNER
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXXXXX XXXXXXXX
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
XXXXXX X. XXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
R. XXXX XXXXXX
00000 Xxx Xxxxxxxxx
Xxxx xx Xxxx,XX 00000
XXXXX XXXXX
00 Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
XXXXX XXXXX
0000 Xxxx'x Xxxx
Xxx Xxxxx, XX 00000
XXXXXXXXX XXXXXX
000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
BERN 1996 TRUST
0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
XXXX XXXXXXXXX
0000 Xxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
XXXX (XXXXX) COMES
000 Xxxxx Xxxx
Xxxxx Xxxx, XX 00000
XXXXX X. XXXXX
00 XxXxxx Xxxxx #000
-00-
Xxx Xxxxx, XX 00000
XXXXXX X. XXXXXX
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
XXXXXXXX XXXXX
000 Xxxxxx Xxxxx
Xxxxx, XX 00000
XXXXXXXX X. XXXXXXX
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
XXXX XXXXXX
000 Xxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
XXXX XXXXXXXX
0000 Xxxxxxxx #0
Xxx Xxxxxxxxx, XX 00000
XXXXXXXX X. XXXX
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
XXXXX REVOCABLE INTERVIVOS TRUST DTD 9/15/93
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
ATTN: Xxxx Xxxxx, MD
XXXXXX X. XXXXXXXX
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
XXXXX LIVING TRUST DTD 7/27/90
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
ATTN: Xxxxx Xxxxx
XXXXXX X. XXXXXXX
41 Castledown
Xxxxxxxxxx, XX 00000
XXXXXX XXXXXX
Champion Fund
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
-25-
XXXXX XXXXX
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXXXXXX XXXXXXX MD (as an Individual)
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-26-
