EXHIBIT 4.1
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is
made as of March 24, 2000, by and among Personify Incorporated, a California
corporation (the "Company"), and the persons listed on the attached Exhibit A
who become signatories to this Agreement (collectively, the "Investors").
RECITALS
A. On May 9, 1996, the Company issued 1,400,000 shares of the Company's
Series A Preferred Stock (the "Series A Preferred Shares") to certain of the
Investors pursuant to that certain Series A Preferred Stock Purchase Agreement
by and among the Company and the Investors identified therein (the "Series A
Purchase Agreement"). As a condition to the consummation of the purchase of the
Series A Preferred Shares pursuant to the Series A Purchase Agreement, the
Company agreed to enter into that certain Investor Rights Agreement dated as of
May 9, 1996, with the Investors (the "Original Rights Agreement").
B. On August 25, 1997, the Company issued 2,011,172 shares of the
Company's Series B Preferred Stock (the "Series B Preferred Shares") to certain
of the Investors pursuant to that certain Series B Preferred Stock Purchase
Agreement by and among the Company and the Investors identified therein (the
"Series B Purchase Agreement"). As a condition to the consummation of the
purchase of the Series B Preferred Shares pursuant to the Series B Purchase
Agreement, the Company agreed to enter into the Omnibus Amendment to Investor
Rights Agreement, Rights of First Refusal Agreement and Co-Sale Agreement, dated
as of August 25, 1997, with certain of the Investors (the "Omnibus Amendment").
C. On May 27, 1998, the Company issued 6,282,722 shares of the Company's
Series C Preferred Stock (the "Series C Preferred Shares") to certain of the
Investors pursuant to that certain Series C Preferred Stock Purchase Agreement
by and among the Company and the Investors identified therein (the "Series C
Purchase Agreement"). As a condition to the consummation of the purchase of the
Series C Preferred Shares pursuant to the Series C Purchase Agreement, the
Company agreed to enter into the Amended and Restated Investor Rights Agreement
dated as of May 27, 1998, with certain of the Investors (the "Prior Rights
Agreement (Series C Closing)") which amended and restated the Original Rights
Agreement (including without limitation, the Omnibus Amendment with respect
those provisions which amended the Original Rights Agreement) in its entirety.
D. On August 12, 1999, the Company issued 4,285,716 shares of the
Company's Series D Preferred Stock (the "Series D Preferred Shares") to certain
of the Investors pursuant to that certain Series D Preferred Stock Purchase
Agreement by and among the Company and the Investors identified therein (the
"Series D Purchase Agreement"). As a condition to the consummation of the
purchase of the Series D Preferred Shares pursuant to the Series D Purchase
Agreement, the Company agreed to enter into the Amended and Restated Investor
Rights Agreement dated as of August 12, 1999, with certain of the Investors (the
"Prior Rights Agreement (Series D Closing)") which amended and restated the
Original Rights Agreement (and the Prior Rights Agreement (Series C Closing)) in
its entirety.
E. In connection with the Company's acquisition of Anubis Solutions
Incorporated and as a condition to the consummation of such acquisition, the
parties to the Prior Rights Agreement (Series D Closing) amended the Prior
Rights Agreement (Series D Closing) on September 22, 1999 ("Amendment No. 1") to
grant certain piggyback and Form S-3 registration rights to certain shareholders
of Anubis Solutions Incorporated.
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F. On March 15, 2000, the Company issued 119,626 shares of the Company's
Series E Preferred Stock (the "Series E Preferred Shares") to certain of the
Investors pursuant to that certain Series E Preferred Stock Purchase Agreement
by and among the Company and the Investors identified therein (the "First Series
E Purchase Agreement"). As a condition to the consummation of the purchase of
the Series E Preferred Shares pursuant to the First Series E Purchase Agreement,
the Company agreed to enter into the Amended and Restated Investor Rights
Agreement dated as of March 15, 2000 with certain of the Investors (the "Prior
Rights Agreement (First Series E Closing)") which amended and restated the
Original Rights Agreement (and the Prior Rights Agreement (Series D Closing)) in
its entirety.
G. Concurrent with the execution of this Agreement, the Company is issuing
up to an additional 50,237 shares of the Company's Series E Preferred Stock to
certain investors pursuant to that certain Series E Preferred Stock Purchase
Agreement by and among the Company and the Investors identified therein (the
"Second Series E Purchase Agreement"). As a condition to the consummation of
the purchase of the Series E Preferred Shares pursuant to the Second Series E
Purchase Agreement, the Company agreed to enter into this Agreement, which
amends and restates the Prior Rights Agreement (First Series E Closing)
(including without limitation, Amendment No. 1) in its entirety.
THE PARTIES AGREE AS FOLLOWS:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Commission" shall mean the Securities and Exchange
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Commission or any other federal agency at the time administering the Securities
Act.
(b) "Convertible Securities" shall mean securities of the
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Company convertible into or exchangeable for Common Stock of the Company or into
other securities that are convertible into or exchangeable for Common Stock.
(c) "Form S-3" shall mean Form S-3 promulgated by the Commission
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or any substantially similar form then in effect.
(d) "Holder" shall mean any holder of outstanding Registrable
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Securities which have not been sold to the public, but only if such holder is
one of the Investors or an assignee or transferee of Registration rights as
permitted by Section 15.
(e) "Initiating Holders" shall mean Holders who in the aggregate
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hold at least forty percent (40%) of the Registrable Securities.
(f) "Major Investor" shall mean an Investor who owns at least 5%
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of the outstanding Convertible Securities and/or Registrable Securities.
(g) "Material Adverse Event" shall mean an occurrence having a
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consequence that either (a) is materially adverse to the business, properties,
prospects, or financial condition of the Company or (b) is reasonably
foreseeable, has a reasonable likelihood of occurring, and if it were to occur
would materially adversely affect the business, properties, prospects, or
financial condition of the Company.
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(h) "Preferred Stock" shall mean the Series A Preferred Stock,
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the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock and the Series E Preferred Stock of the Company.
(i) "Qualified IPO" shall mean a firm commitment underwritten
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public offering of the Company's Common Stock registered under the Securities
Act with a total offering price of $15,000,000 or more at a price of not less
than $7.00 per share (as appropriately adjusted for stock splits,
recapitalizations, combinations and the like).
(j) The terms "Register," "Registered," and "Registration" refer
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to a registration effected by preparing and filing a registration statement on
Form S-l, SB-1 or S-3 (or any successor form to such Forms) in compliance with
the Securities Act ("Registration Statement"), and the declaration or ordering
of the effectiveness of such Registration Statement.
(k) "Registrable Securities" shall mean all Common Stock not
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previously sold to the public and issued or issuable upon conversion or exercise
of any of the Company's Convertible Securities purchased by or issued to the
Investors, including Common Stock issued pursuant to stock splits, stock
dividends and similar distributions, and any securities of the Company granted
registration rights pursuant to Section 14 of this Agreement. For purposes of
Sections 7.3 and 8, "Registrable Securities" shall also mean all Common Stock
issued by the Company to Xxxxx Xxxxx'a and Xxxx Xxxxx in connection with the
acquisition of Anubis Solutions Incorporated pursuant to that certain Agreement
and Plan of Merger and Reorganization dated as of September 30, 1999 by and
among the parties thereto.
(l) "Registration Expenses" shall mean all expenses incurred by
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the Company in complying with Sections 7 or 8 of this Agreement, including,
without limitation, all federal and state registration, qualification, and
filing fees, printing expenses, fees and disbursements of counsel for the
Company and one special counsel for all Holders (if different from the Company),
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration.
(m) "Securities Act" shall mean the Securities Act of 1933, as
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amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(n) "Selling Expenses" shall mean all underwriting discounts and
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selling commissions applicable to the sale of Registrable Securities pursuant to
this Agreement.
2. Financial Statements and Reports to Shareholders.
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The Company shall deliver to each Investor:
(a) As soon as practicable after the end of each fiscal year of
the Company, and in any event within 90 days thereafter, an audited balance
sheet of the Company as of the end of such year and audited statements of
income, shareholders' equity and cash flow for such year, which year-end
financial reports shall be in reasonable detail and shall be prepared in
accordance with generally accepted accounting principles and accompanied by the
opinion of independent public accountants of nationally recognized standing
selected by the Company;
(b) As soon as practicable after the end of each month and each
quarter, and in any event within 30 days thereafter, consolidated balance sheets
of the Company and its subsidiaries, if any, as of the end of such period, and
consolidated statements of income and cash flow for such period
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and for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles (other than the accompanying notes) and signed by
the Chief Financial Officer or President of the Company certifying that they
fairly and accurately present the financial condition and results of operation
of the Company, subject to changes resulting from ordinary year-end audit
adjustment;
(c) Contemporaneously with delivery to holders of Common Stock,
a copy of each report of the Company delivered to holders of Common Stock; and
(d) An annual capitalization summary.
3. Additional Information and Inspection Rights.
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The Company will deliver to each Major Investor and holder of Series E
Preferred Stock:
(a) As soon as practicable following submission to and approval
by the Board of Directors of the Company, but in no event later than 30 days
before the end of each fiscal year, an operating budget and plan (the "Plan")
respecting the next fiscal year and a summary of such Plan together with any
update of the Plan as such update is prepared and approved by the Board of
Directors.
(b) The Company shall permit each Major Investor and holder of
Series E Preferred Stock, at such Investor's expense, to visit and inspect the
Company's properties, to examine its books of account and records and to discuss
the Company's affairs, finances, and accounts with its officers, all at such
reasonable times as may be requested by each such Investor; provided, however,
that the Company shall not be obligated pursuant to this Section 3(b) to provide
any information which it reasonably considers to be a trade secret or
confidential information. Subject to Section 15, the rights of an Investor under
this Section 3(b) may not be assigned as part of such Investor's sale of any of
the Registrable Securities or Convertible Securities except with the consent of
the Company, which consent shall not be unreasonably withheld.
4. Other Covenants.
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(a) Unless otherwise determined by the unanimous vote of its
Board of Directors, the Company shall require all future officers, directors,
and employees of, and consultants to, the Company and its Subsidiaries to
execute and deliver Proprietary Information and Inventions Agreements in
substantially the form heretofore made available to the Investors.
(b) Company shall cause all employees, directors and consultants
who purchase, or who are granted options to purchase, shares of the Company's
Common Stock to execute and deliver Stock Restriction Agreements (or Stock
Option Agreements), in a form approved by the Company, but providing for a right
of repurchase in favor of the Company at the lower of cost or fair market value
on unvested shares, a prohibition on the transfer of unvested shares, a lockup
or market standoff commitment of up to 180 days, and a right of first refusal in
favor of the Company on vested shares terminating upon the Company's initial
public offering of Securities. To the extent the Company does not exercise such
right, the Company shall assign such right to the Investors.
(c) The Company may sell shares of stock and grant options to
employees, advisors, officers, and directors of, and consultants to, the Company
and its Subsidiaries only pursuant to a stock option plan or such other
arrangements, contracts, or plans as are recommended by management and approved
by the Board of Directors; provided that, except as may otherwise be determined
by the Board of Directors in any particular instance, options shall be subject
to a four-year vesting schedule (25% after one year and monthly or quarterly
thereafter).
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5. Right of First Refusal.
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5.1 The Company hereby grants to each Investor holding shares of
Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares
or Series D Preferred Shares (or holding shares of Common Stock issuable upon
conversion of such shares) the right of first refusal to purchase up to its Pro
Rata Share of the New Securities (as defined below) which the Company may, from
time to time, propose to sell and issue. Such Investors may purchase said New
Securities on the same terms and at the same price at which the Company proposes
to sell the New Securities. The "Pro Rata Share" of each such Investor, for
purposes of this right of first refusal, is the ratio of (i) the total number of
shares of Common Stock held by such Investor (including any shares of Common
Stock into which shares of the Convertible Securities held by such Investor are
convertible) to (ii) the total number of shares of Common Stock and Common Stock
warrants, rights or options outstanding immediately prior to the issuance of the
New Securities (including any shares of Common Stock into which outstanding
Convertible Securities are convertible).
5.2 "New Securities" shall mean any capital stock of the Company,
whether authorized or not, and any rights, options, or warrants to purchase said
capital stock, and securities of any type whatsoever that are, or may become,
convertible into said capital stock; provided that "New Securities" does not
include (i) the Preferred Stock or the Common Stock issuable upon conversion of
the Preferred Stock, (ii) securities offered in a Qualified IPO, (iii)
securities issued pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all of the assets, or other
reorganization, if approved by the Company's Board of Directors, (iv) shares
issued or issuable either directly or upon exercise of options or warrants to
employees, directors, consultants, advisers and others performing services for
the Company or its subsidiaries pursuant to a plan or arrangement approved by
the Company's Board of Directors (except to the extent the total outstanding and
reserved option level exceeds 8,018,910 shares of Common Stock without the
approval of Investors holding a majority of the Registrable Securities), (v)
shares issued without consideration pursuant to a stock dividend, stock split,
or similar transaction, and (vi) shares issued either directly or upon exercise
of warrants in connection with equipment leasing transactions or other similar
commercial financing arrangements approved by the Company's Board of Directors
but not to exceed an aggregate of 100,000 shares.
5.3 In the event the Company proposes to undertake an issuance of New
Securities, it shall give to each Investor holding such rights of first refusal
written notice (the "Notice") of its intention, describing the type of New
Securities, the price, the terms upon which the Company proposes to issue the
same, the number of shares which Investor is entitled to purchase pursuant to
Section 5.1, and a statement that each Investor shall have twenty (20) business
days to respond to such Notice. Each such Investor shall have twenty (20)
business days from the date of receipt of the Notice to agree to purchase any or
all of its Pro Rata Share of the New Securities for the price and upon the terms
specified in the Notice by giving written notice to the Company and stating
therein the quantity of New Securities to be purchased and forwarding payment
for such New Securities to the Company if immediate payment is required by such
terms. If not all of the Investors holding such rights elect to purchase their
pro rata share of the New Securities, then the Company shall promptly notify in
writing the Investors who do so elect and shall offer such Investors the right
to acquire such unsubscribed shares. Each such Investor shall have five (5) days
after receipt of such notice to notify the Company of its election to purchase
all or a portion thereof of the unsubscribed shares.
5.4 In the event an Investor fails to exercise in full its right of
first refusal within said twenty (20) business day period, the Company shall
have ninety (90) days thereafter to sell or enter into an agreement (pursuant to
which the sale of New Securities covered thereby shall be closed, if at all,
within sixty (60) days from date of said agreement) to sell the New Securities
respecting which such Investor's rights were not exercised, at a price and upon
general terms no more favorable to the purchaser
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thereof than specified in the Notice. In the event the Company has not sold the
New Securities within said ninety (90) day period (or sold and issued New
Securities in accordance with the foregoing within sixty (60) days from the date
of said agreement), the Company shall not thereafter issue or sell any New
Securities without first offering such securities to such Investor in the manner
provided above.
5.5 The right of first refusal granted under this Section 5 is
assignable by the Investors holding such rights of first refusal to any
transferee of a minimum of Seventy Thousand (70,000) shares of Common Stock
(including any shares of Common Stock into which shares of Convertible
Securities then held by it are convertible).
6. Termination of Covenants.
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The covenants of the Company set forth in Sections 2, 3, 4, and 5
shall be terminated and be of no further force or effect immediately prior to
the closing of a Qualified IPO. The covenants of the Company set forth in
Sections 2, 3 and 5 shall be terminated and of no further force and effect with
respect to an Investor on the date such Investor no longer holds any shares of
the capital stock of the Company.
7. Demand Registration.
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7.1 Request for Registration on Form Other Than Form S-3.
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Subject to the terms of this Agreement, in the event that the Company
shall receive from the Initiating Holders at any time after the earlier of (a)
December 31, 2000 or (b) six (6) months after the effective date of the
Company's initial public offering of shares of Common Stock under a Registration
Statement, a written request that the Company effect any Registration with
respect to all or a part of the Registrable Securities on a Form other than Form
S-3, the Company shall (i) promptly give written notice of the proposed
Registration to all other Holders and shall (ii) as soon as practicable, use its
best efforts to effect within ninety (90) days Registration of the Registrable
Securities specified in such request, together with any Registrable Securities
of any Holder joining in such request as are specified in a written request
given within 20 days after written notice from the Company. In the case of the
Company's initial public offering, the demand must be for an offering of at
least 20% of the then outstanding Registrable Securities (or any lesser percent
if the reasonably anticipated aggregate offering price to the public, net of
Selling Expenses, would exceed $10,000,000). The Company shall not be obligated
to take any action to effect any such registration pursuant to this Section 7.1
during the period starting with the date sixty (60) days prior to the Company's
estimated date of filing, and ending on the date six (6) months immediately
following the effective date of a Registration pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan) provided that the Company is employing
all reasonable efforts in good faith to cause such Registration to become
effective.
7.2 Right of Deferral of Registration on Form Other Than Form S-3.
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If the Company shall furnish to all such Holders who joined in the
request 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 for any Registration to be effected as
requested under Section 7.1, the Company shall have the right, exercisable not
more than once in any twelve-month period, to defer the filing of a Registration
Statement with respect to such offering for a period of not more than 90 days
from delivery of the request of the Initiating Holders.
7.3 Request for Registration on Form S-3.
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(a) If a Holder or Holders of the outstanding Registrable
Securities request that the Company file a Registration Statement on Form S-3
(or any successor form to Form S-3) for a public offering of shares of
Registrable Securities the reasonably anticipated aggregate price to the public
of which, net of Selling Expenses, would not be less than $500,000, and the
Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use all reasonable efforts to
cause such Registrable Securities to be Registered for the offering on such form
and to cause such Registrable Securities to be qualified in such jurisdictions
as the Holder or Holders may reasonably request; provided, however, that the
Company shall not be required to effect more than two Registrations pursuant to
this Section 7.3 in any twelve (12) month period. The substantive provisions of
Section 7.5 shall be applicable to each registration initiated under this
Section 7.3.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to file a registration statement pursuant to this Section 7.3:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(ii) if the Company, within ten (10) days of the receipt of
the request of the initiating Holders, gives notice of its bona fide intention
to effect the filing of a Registration Statement with the Commission within
sixty (60) days of receipt of such request, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
Registration Statement to become effective;
(iii) within six months immediately following the effective
date of any public offering of the Company's Common Stock; or
(iv) if the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a Registration Statement to be filed in the
near future, then the Company's obligation to use its best efforts to file a
Registration Statement shall be deferred for a period not to exceed 90 days from
the receipt of the request to file such registration by such Holder provided
that the Company shall not exercise the right contained in this paragraph (iv)
more than once in any twelve (12) month period.
7.4 Registration of Other Securities in Demand Registration.
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Any Registration Statement filed pursuant to the request of the
Initiating Holders under this Section 7 may, subject to the provisions of
Section 7.5, include securities of the Company other than Registrable
Securities.
7.5 Underwriting in Demand Registration.
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7.5.1 Notice of Underwriting.
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If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 7,
and the Company shall include such information in the written notice referred to
in Section 7.1 or 7.3. The right of any Holder to Registration pursuant to
Section 7 shall be
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conditioned upon such Holder's agreement to participate in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting.
7.5.2 Inclusion of Other Holders in Demand Registration.
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If the Company, officers or directors of the Company holding Common
Stock other than Registrable Securities, or holders of securities other than
Registrable Securities, request inclusion in such Registration, the Initiating
Holders, to the extent they deem advisable and consistent with the goals of such
Registration, may, in their sole discretion, on behalf of all Holders, offer to
any or all of the Company, such officers or directors, and such holders of
securities other than Registrable Securities that such securities other than
Registrable Securities be included in the underwriting and may condition such
offer on the acceptance by such persons of the terms of this Section 7.5. In
the event, however, that the number of shares so included exceeds the number of
shares of Registrable Securities included by all Holders, all holders of
securities other than Registrable Securities shall be excluded prior to limiting
the sale of Registrable Securities.
7.5.3 Selection of Underwriter in Demand Registration.
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If requested by the representative of the underwriter (the
"Underwriters' Representative"), the Company shall (together with all Holders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement with the Underwriters' Representative. The
Underwriters' Representative shall be selected by the Holders of a majority of
the Registrable Securities being registered by the Initiating Holders and
reasonably acceptable to the Company.
7.5.4 Marketing Limitation in Demand Registration.
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In the event the Underwriters' Representative advises the Initiating
Holders in writing that market factors (including, without limitation, the
aggregate number of shares of Common Stock requested to be Registered, the
general condition of the market, and the status of the persons proposing to sell
securities pursuant to the Registration) require a limitation of the number of
shares to be underwritten, then (i) first the Common Stock (other than
Registrable Securities) held by officers or directors of the Company, (ii) next
the securities other than Registrable Securities, and (iii) last the securities
requested to be registered by the Company, shall be excluded from such
Registration to the extent required by such limitation. If a limitation of the
number of shares is still required, the Initiating Holders shall so advise all
Holders and the number of shares of Registrable Securities that may be included
in the Registration and underwriting shall be allocated among all Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities entitled to inclusion in such Registration held by such Holders at
the time of filing the Registration Statement. No Registrable Securities or
other securities excluded from the underwriting by reason of this Section 7.5.4
shall be included in such Registration Statement.
7.5.5 Right of Withdrawal in Demand Registration.
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If any Holder of Registrable Securities, or a holder of other
securities entitled (upon request) to be included in such Registration,
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the Underwriters' Representative and
the Initiating Holders delivered at least seven days prior to the effective date
of the Registration Statement. The securities so withdrawn shall also be
withdrawn from the Registration Statement.
7.6 Blue Sky in Demand Registration.
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In the event of any Registration pursuant to this Section 7, the
Company will exercise its best efforts to Register and qualify the securities
covered by the Registration Statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably appropriate for the
distribution of such securities; provided, however, that (i) the Company shall
not be required 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 Securities Act, and (ii) notwithstanding anything in this Agreement to the
contrary, in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
shareholders, such expenses shall be payable pro rata by selling shareholders.
8. Piggyback Registration.
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8.1 Notice of Piggyback Registration and Inclusion of Registrable
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Securities.
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Subject to the terms of this Agreement, in the event the Company
decides to Register any of its Common Stock (either for (i) its own account,
(ii) the account of a security holder or (iii) the account of holders exercising
their respective demand registration rights) on a form that would be suitable
for a registration involving solely Registrable Securities, the Company will:
(i) promptly give each Holder written notice thereof (which shall include a list
of the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable Blue Sky or other state securities laws) and
(ii) include in such Registration (and any related qualification under Blue Sky
laws or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request delivered to the Company
by any Holder within 20 days after delivery of such written notice from the
Company.
8.2 Underwriting in Piggyback Registration.
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8.2.1 Notice of Underwriting in Piggyback Registration.
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If the Registration of which the Company gives notice is for a
Registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
8.1. In such event, the right of any Holder to Registration shall be
conditioned upon such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting to the extent provided in this
Section 8. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
with the Underwriters' Representative for such offering. The Holders shall have
no right to participate in the selection of the underwriters for an offering
pursuant to this Section 8.
8.2.2 Marketing Limitation in Piggyback Registration.
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In the event the Underwriters' Representative advises the
Holders seeking registration of Registrable Securities pursuant to this Section
8 in writing that market factors (including, without limitation, the aggregate
number of shares of Common Stock requested to be Registered, the general
condition of the market, and the status of the persons proposing to sell
securities pursuant to the Registration) require a limitation of the number of
shares to be underwritten, the Underwriters' Representative (subject to the
allocation priority set forth in Section 8.2.3) may limit the number of shares
of Registrable Securities to be included in such Registration and underwriting
to not less than twenty-five percent (25%) of the securities included in such
Registration (based on aggregate market values); provided, however, if such
offering is the Company's initial Qualified IPO and such Registration does not
include shares of any other selling shareholders, any or all of the Registrable
Securities of the Holders
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may be excluded. 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
sixty-six and two-thirds percent (662/3%) of the Registrable Securities proposed
to be sold in the offering.
8.2.3 Allocation of Shares in Piggyback Registration.
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In the event that the Underwriters' Representative limits the number
of shares to be included in a Registration pursuant to Section 8.2.2, the number
of shares to be included in such Registration shall be allocated (subject to
Section 8.2.2) in the following manner: The number of shares that may be
included in the Registration and underwriting by selling shareholders shall be
allocated among all Holders thereof and other holders of securities (other than
Registrable Securities) requesting and legally entitled to include such
securities in such Registration, in proportion, as nearly as practicable, to the
respective amounts of securities (including Registrable Securities) which such
Holders and such other holders would otherwise be entitled to include in such
Registration. Subject to the 25% limitation set forth in Section 8.2.2 hereof,
no Registrable Securities or other securities excluded from the underwriting by
reason of this Section 8.2.3 shall be included in the Registration Statement.
8.2.4 Withdrawal in Piggyback Registration.
------------------------------------
If any Holder disapproves of the terms of any such underwriting, such
person may elect to withdraw therefrom by written notice to the Company and the
Underwriters' Representative delivered at least seven days prior to the
effective date of the Registration Statement. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such Registration.
8.3 Blue Sky in Piggyback Registration.
----------------------------------
In the event of any Registration of Registrable Securities pursuant
to this Section 8, the Company will exercise its best efforts to Register and
qualify the securities covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdictions (not exceeding 20 unless
otherwise agreed to by the Company) as shall be reasonably appropriate for the
distribution of such securities; provided, however, that (i) the Company shall
not be required to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, and (ii) notwithstanding
anything in this Agreement to the contrary, in the event any jurisdiction in
which the securities shall be qualified imposes a non-waivable requirement that
expenses incurred in connection with the qualification of the securities be
borne by selling shareholders, such expenses shall be payable pro rata by
selling shareholders.
9. Expenses of Registration.
------------------------
All Registration Expenses incurred in connection with any Registrations
pursuant to Section 7.3 and two registrations pursuant to each of Section 8 and
Section 7 (excluding Section 7.3), shall be borne by the Company. All
Registration Expenses incurred in connection with any other Registration,
qualification, or compliance, shall be apportioned among the Holders and other
holders of the securities so registered on the basis of the number of shares so
registered. Notwithstanding the above, the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 7 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (which 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 7; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a
10
Material Adverse Event with respect to the condition, business, or prospects of
the Company not known to the Holders at the time of their request, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 7. All Selling Expenses shall be borne by the holders
of the securities Registered pro rata on the basis of the number of shares
Registered, as shall any fees and expenses of any counsel for the Holders beyond
the one special counsel for the Holders included within the Registration
Expenses provided in the first sentence of this Section 9.
10. Termination of Registration Rights.
----------------------------------
The rights to cause the Company to register securities granted under
Sections 7 and 8 of this Agreement shall terminate, with respect to each Holder,
on the earlier of (i) the date five years after the closing date of the
Company's initial Qualified IPO and (ii) upon such Holder holding less than 1%
of the outstanding Registrable Securities.
11. Registration Procedures and Obligations.
---------------------------------------
Whenever required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the Commission 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 up to one hundred
twenty (120) days.
(b) Prepare and file with the Commission 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 numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities 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 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
11
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) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such Registration Statement and a CUSIP number
for all such Registrable Securities, in each case not later than the closing
date of such registration.
(h) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, on the date
that such Registrable Securities are delivered for sale in connection with a
registration pursuant to this Agreement, (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, 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.
(i) Use its best efforts to have such Registrable Securities
listed on the New York or American Stock Exchange or the Nasdaq National Market.
12. Information Furnished by Holder.
-------------------------------
It shall be a condition precedent to the Company's obligations under this
Agreement that each Holder of Registrable Securities included in any
Registration furnish to the Company such information regarding such Holder and
the distribution proposed by such Holder or Holders as the Company may
reasonably request.
12
13. Indemnification.
---------------
13.1 Company's Indemnification of Holders.
------------------------------------
To the extent permitted by law, the Company will indemnify each
Holder, each of its officers, directors, and constituent partners, legal counsel
for the Holders, and each person controlling such Holder, with respect to which
Registration, qualification, or compliance of Registrable Securities has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter against all claims, losses, damages, or
liabilities (or actions in respect thereof) to the extent such claims, losses,
damages, or liabilities arise out of or are based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus or
other document (including any related Registration Statement) incident to any
such Registration, qualification, or compliance, or are based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification,
or compliance; and the Company will reimburse each such Holder, each such
underwriter, and each person who controls any such Holder or underwriter, for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or action;
provided, however, that the indemnity contained in this Section 13.1 shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability,
or action if settlement is effected without the consent of the Company (which
consent shall not unreasonably be withheld); and provided, further, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability, or expense arises out of or is based upon any untrue
statement or omission based upon written information furnished to the Company by
such Holder, underwriter, or controlling person and specifically stated in
writing to be for use in connection with the offering of securities of the
Company.
13.2 Holder's Indemnification of Company.
-----------------------------------
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, qualification or compliance is being effected pursuant to this
Agreement, indemnify the Company, each of its directors and officers, each legal
counsel and independent accountant of the Company, each underwriter, if any, of
the Company's securities covered by such a Registration Statement, each person
who controls the Company or such underwriter within the meaning of the
Securities Act, and each other such Holder, each of its officers, directors, and
constituent partners, and each person controlling such other Holder, against all
claims, losses, damages, and liabilities (or actions in respect thereof) arising
out of or based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any such Registration Statement, prospectus, offering
circular, or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by such Holder of any rule
or regulation promulgated under the Securities Act applicable to such Holder and
relating to action or inaction required of such Holder in connection with any
such Registration, qualification, or compliance, and will reimburse the Company,
such Holders, such directors, officers, partners, persons, law and accounting
firms, underwriters or control persons for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but in
each case only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such Registration
Statement, prospectus, offering circular, or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and specifically stated in writing to be specifically for use in connection with
the offering of securities of the Company, provided, however, that the indemnity
contained in this Section 13.2 shall not apply to amounts paid in settlement
13
of any such claim, loss, damage, liability or action if settlement is effected
without the consent of such Holder (which consent shall not be unreasonably
withheld) and provided, further, that each Holder's liability under this Section
13.2 shall not exceed such Holder's net proceeds from the offering of securities
made in connection with such Registration.
13.3 Indemnification Procedure.
-------------------------
Promptly after receipt by an indemnified party under this Section 13
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 13, notify the indemnifying party in writing of the commencement thereof
and generally summarize such action. The indemnifying party shall have the
right to participate in and to assume the defense of such claim; provided,
however, that the indemnifying party shall be entitled to select counsel for the
.defense of such claim with the approval of any parties entitled to
indemnification, which approval shall not be unreasonably withheld; provided
further, however, that if either party reasonably determines that there may be a
conflict between the position of the Company and the Investors in conducting the
defense of such action, suit, or proceeding by reason of recognized claims for
indemnity under this Section 13, then counsel for such party shall be entitled
to conduct the defense to the extent reasonably determined by such counsel to be
necessary to protect the interest of such party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to the ability of the indemnifying party to defend such action,
shall relieve such indemnifying party, to the extent so prejudiced, of any
liability to the indemnified party under this Section 13, but the omission so to
notify the indemnifying party will not relieve such party of any liability that
such party may have to any indemnified party otherwise other than under this
Section 13.
13.4 Contribution.
------------
If the indemnification provided for in this Section 13 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.
14. Limitations on Registration Rights Granted to Other Securities.
--------------------------------------------------------------
From and after the date of this Agreement, the Company shall not enter into
any agreement with any holder or prospective holder of any securities of the
Company providing for the granting to such holder of any Registration rights,
except that, with the consent of the Holders of a majority of the aggregate of
the Registrable Securities then outstanding, additional holders may be added as
parties to this Agreement with regard to any or all securities of the Company
held by them. Any such additional parties shall execute a counterpart of this
Agreement, and upon execution by such additional parties and by the Company,
shall be considered an Investor for all purposes of this Agreement. The
additional parties and the additional Registrable Securities shall be identified
in an amendment to Schedule A hereto.
14
15. Transfer of Rights.
------------------
The rights to information under Sections 2, 3, and 4 and the right to cause
the Company to Register securities granted by the Company to the Investors under
this Agreement may be assigned by any Holder to a transferee or assignee of any
Registrable Securities not sold to the public acquiring at least twenty percent
(20%) of such Holder's Registrable Securities (equitably adjusted for any stock
splits, subdivisions, stock dividends, changes, combinations or the like);
provided, however, that (i) the Company must receive written notice prior to the
time of said transfer, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such information
and Registration rights are being assigned, and (ii) the transferee or assignee
of such rights must not be a person deemed by the Board of Directors of the
Company, in its best judgment, to be a competitor or potential competitor of the
Company. Notwithstanding the limitation set forth in the foregoing sentence
respecting the minimum number of shares which must be transferred, (i) any
Holder which is a partnership or limited liability company treated as a
partnership for tax purposes may transfer such Holder's Registration rights to
such Holder's constituent partners or members without restriction as to the
number or percentage of shares acquired by any such constituent partner or
member and (ii) any Holder may transfer all or part of such Holder's Registrable
Securities to any family member or trust for the benefit of any individual
holder.
16. Market Stand-off.
----------------
Each Holder hereby agrees that, if so requested by the Company and the
Underwriters' Representative (if any) in connection with the Company's initial
Qualified IPO, such Holder shall not sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise transfer or dispose of any
Registrable Securities or other securities of the Company without the prior
written consent of the Company and the Underwriters' Representative for such
period of time not to exceed 180 days following the effective date of a
Registration Statement of the Company filed under the Securities Act as may be
requested by the Underwriters' Representative. The obligations of Holders under
this Section 16 shall be conditioned upon similar agreements being in effect
with each other shareholder who is an officer, director, or 5% shareholder of
the Company.
17. No-Action Letter or Opinion of Counsel in Lieu of Registration;
--------------------------------------------------------------
Conversion of Preferred Stock.
-----------------------------
Notwithstanding anything else in this Agreement, if the Company shall have
obtained from the Commission a "no-action" letter in which the Commission has
indicated that it will take no action if, without Registration under the
Securities Act, any Holder disposes of Registrable Securities covered by any
request for Registration made under this Section in the specific manner in which
such Holder proposes to dispose of the Registrable Securities included in such
request (such as, without limitation to, inclusion of such Registrable
Securities in an underwriting initiated by either the Company or the holders)
and that such Registrable Securities may be sold to the public without
Registration, or if in the opinion of counsel for the Company concurred in by
counsel for such Holder, which concurrence shall not be unreasonably withheld,
no Registration under the Securities Act is required in connection with such
disposition and that such Registrable Securities may be sold to the public
without Registration, the Registrable Securities included in such request shall
not be eligible for Registration under this Agreement; provided, however, that
any Registrable Securities not so disposed of shall be eligible for Registration
in accordance with the terms of this Agreement with respect to other proposed
dispositions to which this Section 17 does not apply. The Registration rights
of the Holders of the Registrable Securities set forth in this Agreement are
conditioned upon the conversion of the Registrable Securities with respect to
which registration is sought into Common Stock prior to the effective date of
the Registration Statement.
15
18. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission 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 Rule 144, at all times after ninety (90) days
after the effective date of the first Registration Statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Securities Exchange Act of 1934, as
amended (the "1934 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 Company for the offering of its securities
to the general public is declared effective;
(c) file with the Commission in a timely manner all reports
and other documents required of the Company under the 1934 Act; and
(d) 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 Rule 144 (at any
time after ninety (90) days after the effective date of the first Registration
Statement filed by the Company), the Securities 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 Commission which permits
the selling of any such securities without Registration or pursuant to such
form.
19. Miscellaneous.
-------------
19.1 Entire Agreement; Successors and Assigns.
----------------------------------------
This Agreement constitutes the entire contract between the Company and
the Investors relative to the subject matter hereof. Any previous agreement
between the Company and any Investor concerning Registration rights is
superseded by this Agreement. Subject to the exceptions specifically set forth
in this Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective executors, administrators, heirs,
successor, and assigns of the parties.
19.2 Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California excluding those laws that direct the
application of the laws of another jurisdiction.
19.3 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.
16
19.4 Headings.
--------
The headings of the Sections of this Agreement are for convenience and
shall not by themselves determine the interpretation of this Agreement.
19.5 Notices.
-------
Any notice required or permitted hereunder shall be given in writing
and shall be conclusively deemed effectively given upon personal delivery, or
five days after deposit in the United States mail, by certified mail, postage
prepaid, addressed (i) if to the Company, as set forth below the Company's name
on the signature page of this Agreement, and (ii) if to an Investor, at such
Investor's address as set forth on Schedule A, or at such other address as the
Company or such Investor may designate by ten (10) days' advance written notice
to the Investors and the Company, respectively.
19.6 Amendment of Agreement.
----------------------
Any provision of this Agreement may be amended only by a written
instrument signed by the Company and by persons holding a majority of the
Registrable Securities as defined in Section 1 of this Agreement.
19.7 Severability.
------------
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
19.8 Regulatory Matters.
------------------
19.8.1 Cooperation of Other Investors.
-------------------------------
Each Investor agrees to cooperate with the Company in all reasonable
respects in complying with the terms and provisions of the letter agreement
between the Company and Investor, a copy of which is attached hereto as Exhibit
B regarding small business matters (the "Small Business Side Letter"), including
without limitation, voting to approve amending the Company's Articles of
Incorporation, the Company's by-laws or this Agreement in a manner reasonably
acceptable to the Investors and any Regulated Holder (as defined in the Small
Business Side Letter) entitled to make such request pursuant to the Small
Business Side Letter in order to remedy a Regulatory Problem (as defined in the
Small Business Side Letter). Anything contained in this Section 19.8 to the
contrary notwithstanding, no Investor shall be required under this Section 19.8
to take any action that would adversely affect in any material respect such
Investor's rights under this Agreement or as a stockholder of the Company.
19.8.2 Covenant Not to Amend.
----------------------
The Company and each Investor agree not to amend or waive the voting
or other provisions of the Company's Articles of Incorporation, the Company's
By-Laws or this Agreement if such amendment or waiver would cause any Regulated
Holder to have a Regulatory Problem (as defined in the Small Business Side
Letter). The Investor agrees to notify the Company as to whether or not it
would have a Regulatory Problem promptly after the Investor has notice of such
amendment or waiver.
19.9 Audit Conflict/Covenant to Repurchase.
-------------------------------------
17
19.9.1 If, prior to the Company's initial public offering, the
Company proposes to issue or sell any equity securities, or securities
convertible into or exchangeable or exercisable for, equity securities, to any
party other than a natural person, the Company shall give written notice to
Deloitte Consulting LLC ("Deloitte") and Ernst & Young U.S. LLP ("Ernst &
Young") setting forth the identities of the parties to the contemplated issuance
or sale (a "Transaction Notice") not less than ten (10) days prior to such
issuance or the closing of such sale.
19.9.2 Each of Deloitte and Ernst & Young shall determine, in
its reasonable discretion, whether or not the participation of any of the
parties to the proposed issuance or sale would give rise to a violation by the
respective party or any of its affiliates of any applicable regulation of the
Commission or applicable regulation or standard of any professional body,
governing the relationships of accounting and tax practices to their clients (an
"Audit Conflict"). The Company shall cooperate with Deloitte and Ernst & Young,
as applicable, in all reasonable respects in connection with such parties'
making such determination, including without limitation, by promptly providing
any additional information reasonably requested by Deloitte or Ernst & Young, as
applicable, in connection with such determination and available to the Company.
Deloitte and Ernst & Young, as applicable, shall give the Company written notice
of such determination (an "Audit Conflict Determination Notice") promptly upon
its being made, but in no event later than five (5) business days after its
receipt of the related Transaction Notice. Any Audit Conflict Determination
Notice reflecting an Audit Conflict shall list the party or parties whose
participation gives rise to such Audit Conflict (such listed party being a
"Conflicted Party"). If the Company consummates the issuance or sale to a
Conflicted Party, the Company shall repurchase the Series E Preferred Stock held
by Deloitte or Ernst & Young or their affiliates, as applicable, simultaneously
with such issuance or sale at a price equal to the original issue price of the
Series E Preferred Stock.
20. Limited Grant of Form S-3 and Piggyback Registration Rights.
------------------------------------------------------------
20.1 Upon the respective execution of the signature page to the
Agreement, Xxxxx Xxxxx'a and Xxxx Xxxxx (the "ASI Founders") shall each become a
party to the Investors' Rights Agreement; provided, however, that the ASI
Founders shall each be deemed an "Investor" and a "Holder" (and a Holder of
Registrable Securities) thereunder only to the extent necessary to grant the ASI
Founders (i) Form S-3 registration rights set forth in Section 7.3, (ii)
piggyback registration rights set forth in Section 8, and (iii) the rights and
obligations generally applicable to such limited registration rights (pursuant
to subsections 20.1(i) and 20.1(ii)), including without limitation, the
indemnification provisions set forth in Section 13. The Investors (excluding
the ASI Founders) hereby consent to the grant of such registration rights to the
ASI Founders in accordance with Section 14 of the Agreement.
20.2 The consent of the ASI Founders shall not be necessary (and
the amount of Registrable Securities held by the ASI Founders shall not be taken
into account in determining whether the requisite consent has been obtained):
(a) for the granting of any Registration rights to any third party in accordance
with Sections 14, and (b) for the amendment of the Agreement pursuant to Section
19.6. The ASI Founders shall not be entitled to any rights of the Investors,
including without limitation, the rights set forth in Sections 2, 3, 4, 5, 6,
7.1 and 7.2, other than as contemplated by Section 20.1.
18
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investor Rights Agreement as of the day and year first above written.
Company: PERSONIFY INCORPORATED,
a California corporation
By: /s/ XXXXXX XXXXXX
___________________________________
Xxxxxx Xxxxxx, President
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000X
Xxx Xxxxxxxxx, XX 00000
THE INVESTORS: ABS Ventures PSY L.L.C.
By: Calvers Capital II L.L.C.
Its: Managing Member
By: /s/ XXXXXX X. XXXXX
_______________________
Name: Xxxxxx X. Xxxxx
Title: Managing Member
Address: c/o Xxxxx Xxxxx
ABS Ventures
Xxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
XXXXXX-XXXXX INVESTMENTS LLC
By:______________________________
Name:
Title:
Address: c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
XXX XXXX
_________________________________
Address: c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
XXXX XXXXX
_________________________________
Address: c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
U.S. VENTURE PARTNERS IV, L.P.
SECOND VENTURES II, L.P.
USVP ENTREPRENEUR PARTNERS II, L.P.
By: Presidio Management Group IV, L.L.C.
Its General Partner
By: /s/ XXXXXXX X. XXXXX
______________________________
Xxxxxxx X. Xxxxx
Attorney-In-Fact
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
2180 ASSOCIATES FUND, L.P.
By: /s/ XXXXXXX X. XXXXX
______________________________
Xxxxxxx X. Xxxxx
Attorney-In-Fact
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXXXX X. XXXXXXX
_________________________________
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
ALPINE TECHNOLOGY VENTURES, L.P.
ALPINE TECHNOLOGY VENTURES II, L.P.
By: Alpine Management, L.P.
Its General Partner
By:_____________________________
General Partner
Address: 00000 Xxxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
THE JUPITER TRUST
By:____________________________
Xxxxxxxxx Xxxx, Trustee
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
XXXX XXXXXX
_______________________________
Address: 00 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
ASSET MANAGEMENT ASSOCIATES 1996, L.P.
By: AMC Partners 96, L.P.
Its General Partner
By: /s/ ILLEGIBLE
___________________________
General Partner
Address: c/o Alloy Ventures, Inc.
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
AMA98 PARTNERS, L.P.
AMA98 VENTURES, L.P.
AMA98 CORPORATE., L.P.
AMA98 INVESTORS, L.P.
By: Alloy Ventures 1998, LLC
Its General Partner
By: /s/ ILLEGIBLE
___________________________
General Partner
Address: c/o Alloy Ventures, Inc.
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
STANFORD UNIVERSITY
By:____________________________
Xxxxx Xxxxxx
Title:_________________________
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
XXXX XXXXXXXX
_______________________________
Address: 0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
THE PIDWELL FAMILY LIVING TRUST
DATED 6/25/87
By:____________________________
Xxxxx X. Xxxxxxx, Trustee
Address: 00000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
XXXXXX X. XXXXX
_______________________________
Address: 000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
AXA U.S. GROWTH FUND LLC
By:_____________________________
Its:____________________________
By:_____________________________
Name:
Title:
Address: 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
DOUBLE BLACK DIAMOND II LLC
By:_____________________________
Its:____________________________
By:_____________________________
Name:
Title:
Address: 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
45TH PARALLEL LLC
By:______________________________
Its:_____________________________
By:______________________________
Name:
Title:
Address: 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
PARALLEL CAPITAL I LLC
By:___________________________
Its:__________________________
By:___________________________
Name:
Title:
Address: 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
PARALLEL CAPITAL II LLC
By:___________________________
Its:__________________________
By:___________________________
Name:
Title:
Address: 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
______________________________
XXXXX XXXXX'A
Address 000 Xxx Xxxx
Xxxxxxx, XX 00000
______________________________
XXXX XXXXX
Address: 00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
DELOITTE CONSULTING LLC
By:___________________________
Its:__________________________
By:___________________________
Name:
Title:
Address:______________________
______________________________
______________________________
ERNST & YOUNG U.S. LLP
By:___________________________
Its:__________________________
By:___________________________
Name:
Title:
Address:______________________
______________________________
______________________________
Exhibit A
Schedule of Investors
Name of Investor
---------------------------------------
Pyramid Ventures, Inc.
c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxx-Xxxxx Investments LLC
c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxx Xxxx
c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Xxxx Xxxxx
c/o Xxxx X. Xxxxx
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Axa U.S. Growth Fund LLC
Double Black Diamond II LLC
45th Parallel LLC
Parallel Capital I LLC
Parallel Capital II LLC
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxx Xxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
GC&H Investments
c/o Cooley Godward LLP
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Name of Investor
---------------------------------------
U.S. Venture Partners IV, L.P.
U.S.V.P. Entrepreneur Partners II, L.P.
Second Ventures II, L.P.
2180 Associates Fund, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Alpine Technology Ventures, L.P.
Alpine Technology Ventures II, L.P.
00000 Xxxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Asset Management Associates 1996, L.P.
c/o Alloy Ventures, Inc.
000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Xxxxxx X. Xxxxx
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Stanford University
c/o Xxxxx Xxxxxx Stanford Management Co.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
The Pidwell Family Living Trust Dated 6/25/87
c/o Xxxxx Xxxxxxx, Trustee
00000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
The Jupiter Trust
c/o Xxxxxxxxx Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxx'a *
000 Xxx Xxxx
Xxxxxxx, XX 00000
Name of Investor
---------------------------------------
Xxxx Xxxxx *
00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Deloitte Consulting LLC
_______________________
_______________________
_______________________
Ernst & Young U.S. LLP
_______________________
_______________________
_______________________
* The indicated person(s) or entity(ies) shall not be entitled to any rights
under this Agreement other than Form S-3 and piggyback registration rights in
accordance with Sections 7.3 and 8 (and other provisions generally applicable
to such registration rights) of the Agreement.
