INVESTOR RIGHTS AGREEMENT
Exhibit 99.2
THIS INVESTOR RIGHTS AGREEMENT (the “Agreement””) dated as of July 9, 2007, is by and
among VMWARE, INC., a Delaware corporation (the “Company”), INTEL CAPITAL CORPORATION, a
Delaware corporation (“Investor”), and, solely for purposes of Section 12(e), Section
12(f) and Section 14, XXX XXXXXXXXXXX, a Massachusetts corporation (“Parent”).
(i) the term “Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder;
(ii) the term “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common control with such
specified Person. For the purposes of this definition, “Control” (including, with
correlative meanings, the terms “Controlling,” “Controlled By” and “Under
Common Control With”), as used with respect to any Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management or policies of such
Person whether through the ownership of voting securities or by agreement or otherwise.
(iii) the term “Change of Control” means (i) a transfer of all or substantially the
assets of the Company to a Person that is not an Affiliate of the Company or Parent which is
expected to be followed by a liquidation of the Company and a distribution of its assets to
stockholders, or (ii) the transfer by the stockholders of the Company, or a merger, consolidation,
reorganization, recapitalization or other event involving or affecting the Company, following which
the Company is no longer directly or indirectly controlled by Parent.
(iv) the term “Commission” means the Securities and Exchange Commission or any other
federal agency at the time administering the Act;
(v) the term “Common Stock” means any and all classes of the Company’s common stock as
authorized pursuant to the Company’s Amended Restated Certificate of Incorporation, as may be
amended or restated from time to time;
(vi) the term “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder;
(vii) the term “Holder” means Investor, as long as Investor owns Registrable
Securities and any Affiliate of Investor to whom Registrable Securities are transferred in
accordance with the requirements of this Agreement and to whom the registration rights conferred by
this Agreement have been
transferred in compliance with Section 19;
(viii) the terms “Register,” “Registered” and “Registration” mean a
registration effected by preparing and filing a registration statement in compliance with the Act
(and any post-effective amendments filed or required to be filed) and the declaration or ordering
of effectiveness of such registration statement;
(ix) the term “Person” means an individual, corporation, limited liability company,
trust, partnership, general partnership, or other entity;
(x) the term “Qualified IPO” means a firm commitment underwritten public offering of
the Company’s Class A Common Stock pursuant to an effective registration statement under the Act
for an aggregate price to the public of at least $250 million;
(xi) the term “Registrable Securities” means (A) any Class A Common Stock issued to
Investor by the Company pursuant to the Stock Purchase Agreement and held by a Holder (the
“Shares”), (B) any shares of Class A Common Stock issued or issuable upon conversion of any
Series A Preferred Stock of the Company issued in exchange for the Shares, and (C) any Common Stock
of the Company issued as a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares or Series A Preferred Stock issued in exchange for the Shares, in each
case, held from time to time by a Holder;
(xii) the term “Registration Expenses” means all third-party expenses incurred by the
Company in compliance with Section 2 and Section 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, accounting fees and expenses, fees and
disbursements of counsel for the Company, the underwriters and one special counsel for the selling
Holders, if any, blue sky fees and expenses and the third-party expenses of any special audits
incident to or required by any such registration (but excluding underwriters’ and brokers’
discounts and commissions); and
(xiii) the term “Series A Preferred Stock” means the Company’s Series A Preferred
stock, par value $0.01 per share, which shall have the rights, preferences and privileges described
in Exhibit A hereto, and shall otherwise be in form and substance mutually satisfactory to
the Company and Investor.
(b) Right to Terminate Registration. The Company shall have the right to terminate,
withdraw or delay any registration initiated by it under this Section 2 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities in such
registration. The Company shall give
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written notice of such determination to each Holder that has elected to include securities in such
registration and, in the case of a determination to terminate or withdraw the registration
statement, the Company shall be relieved of its obligation to register any Registrable Securities
in connection with such registration statement, and in the case of a determination to delay
effectiveness, the Company shall be permitted to delay effectiveness for any period. The expenses
of such terminated, withdrawn or delayed registration shall be borne by the Company in accordance
with Section 3(a)(iv).
(i) Request by Holders. Subject to Section 10 below, if the Company shall receive at
any time after six (6) months after the effective date of the Company’s initial public offering of
its securities pursuant to a registration filed under the Act, a written request from the Holders
of a majority of the Registrable Securities then outstanding (“Demand Request”) that the
Company file a registration statement under the Act covering the registration of Registrable
Securities pursuant to this Section 3(a), then the Company shall, within twenty (20) days after the
receipt of such written request, give written notice of such request (the “Request Notice”)
to all Holders, and use reasonable best efforts to effect, as soon as practicable, the 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 the Registrable Securities as are
specified in such request and any additional requests by other Holders received by the Company
within ten (10) business days after receipt of the Request Notice, subject only to the limitations
of this Section 3(a);
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provided that the Registrable Securities requested to be registered pursuant to such request must
have an anticipated aggregate price to the public (before any underwriting discounts and
commissions) of not less than $54.6 million.
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(A) if Form S-3 is not available for such offering by the Holder;
(B) if the Holder, together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than $22 million;
(C) if the Company shall furnish to the Holder a certificate signed by the President or Chief
Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its shareholders for such Form
S-3 Registration to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement no more than once during any twelve (12)
month period for a period of not more than one hundred eighty (180) days following receipt of the
request of the Holder under this Section 3;
(D) if the Company has, within the 12 month period preceding the date of such request, already
effected one (1) registration on Form S-3 pursuant to this Section 3; provided, however, if all of
the Holders’ Registrable Securities requested to be included in the prior registration were not
included in the prior registration as a result of cutback provisions imposed by a managing
underwriter pursuant to Section 3(c) below, then the Holders shall have the right to demand one (1)
additional registration on Form S-3 during such 12-month period;
(E) if the Company has, within the six month period preceding the date of such request,
effected a Piggyback Registration in which all Holders were given registration rights pursuant to
Section 2(a) and at least 50% of the number of Registrable Securities requested by such Holders to
be included in the Piggyback Registration were included;
(F) if the Company has, within the six month period preceding the date of such request,
effected a Demand Registration; or
(G) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.
(c) Underwriting. If the Holders initiating the registration request under this
Section 3 (the “Initiating Holders”) intend to distribute the Registrable Securities
covered by their request by means of an underwriting, then they shall so advise the Company as a
part of the request made pursuant to this Section 3 and the Company shall include such information
in the notices referred to in Section 3(a)(i) and Section 3(b)(i), as applicable. In such event,
the right of any Holder to include his, her or 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 managing underwriter or underwriters selected for
such underwriting by the Company and approved by a majority in interest of the Initiating Holders.
Notwithstanding any other provision of Section 3, if the underwriter(s) advise(s) the Company in
writing that marketing factors require a limitation of the number of securities to be underwritten
then the Company shall so advise all Holders of Registrable Securities that would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable Securities that may be
included in the underwriting shall be reduced as required by the underwriter(s) and allocated (i)
first, to each of the Holders, on a pari passu basis based upon the Registrable Securities held by
such Holders; (ii) second, to any other holders of incidental or “piggyback” registration rights
requesting inclusion of their Registrable Securities in such registration statement, on a pari
passu basis based upon the Registrable Securities held by such holders; and (iii) third, other
securities of the Company to be registered on behalf of any other holder. If, as a result of the
cutback provisions of
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the preceding sentence, a Holder is not entitled to include all of its requested Registrable Shares
in such registration, then the Holder may elect to withdraw its request to include any or all of
its Registrable Shares in such registration. Any Registrable Securities excluded and withdrawn from
such underwriting shall be withdrawn from the registration.
(a) Prepare and file with the Commission a registration statement with respect to such
Registrable Securities and use commercially reasonable efforts to cause such registration statement
to become effective (provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the counsel selected by the Holders
of a majority of the Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed, including each preliminary prospectus, which documents shall
be subject to the review and comment of such counsel);
(b) Prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective until the earlier to occur of: (i) the sale or other disposition
of all of the Registrable Securities and (ii) the expiration of a period of not less than thirty
(30) days and comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement during such period in accordance with the
intended methods of disposition thereof by the Holders holding the securities covered by the
registration statement as set forth in such registration statement;
(c) Furnish to each Holder promptly, and in no event more than five business days after the
same is prepared and filed with the Commission, such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as such Holder may
reasonably request in order to facilitate the disposition of the Registrable Securities owned by
such Holder;
(d) Use reasonable best efforts to register or qualify the Registrable Securities covered by
the registration statement under such other securities or blue sky laws of such United States
jurisdictions as the Holder thereof may reasonably request and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Holder to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such Holder, provided that the Company
will not be required to (a) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify for this subparagraph, (b) subject itself to taxation in any such
jurisdiction or (c) consent to general service of process in any such jurisdiction;
(e) Notify each Holder promptly, but in no event more than two business days after the
occurrence of the event, at any time when a registration statement under the Act that registers any
of such Holder’s Registrable Securities is effective, of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not misleading, and, at
the request of such Holder, the Company will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state a fact necessary to make
the statements therein not misleading;
(f) use reasonable best efforts to cause all such Registrable Securities to be listed on such
securities exchange or market on which the Company’s Common Stock is then listed; and
(g) Furnish, at a Holder’s request, on the date that the Holder’s Registrable Securities are
delivered to the underwriters for sale in connection with a registration pursuant to this
Agreement, if such securities
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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, (A) an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to a Holder, if Holder
requests registration and (B) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any.
(a) The Company agrees to indemnify and hold harmless, to the extent permitted by law, each
Holder, its directors and officers and each person who controls the Company (within the meaning of
the Act) and any of such person’s agents or representatives, its legal counsel and accountants, any
underwriter and any controlling person of such underwriter, and its legal counsel against all
losses, liabilities, claims, damages and expenses (“Losses”) caused by (A) any untrue or
alleged untrue statement of material fact contained in any registration statement in which such
Holder is participating, or any prospectus, preliminary prospectus, summary or free writing
prospectus, or any amendment thereof or supplement to any of the foregoing or any omission or
alleged omission of material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in any information
furnished in writing to the Company or any underwriter by such Holder expressly for use therein or
results from such Holder’s failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Company has furnished such Holder
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with the number of copies of the same requested by such Holder or (B) any violation or alleged
violation by the Company of the Act, the Exchange Act, any state securities laws or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities laws in connection
with the sale of securities by such Holder pursuant to any registration statement in which such
Holder is participating, and the Company, in each case, will reimburse each such Holder, officer,
director, controlling person or other aforementioned person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such losses,
liabilities, claims, damages or expenses or action as such expenses are incurred; provided,
however, that the indemnity agreement contained in this Section 8 shall not apply to amounts paid
in settlement of any such Losses if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld).
(b) Each Holder, severally and not jointly, will indemnify, to the extent permitted by law,
the Company, its directors and officers and each person who controls Company (within the meaning of
the Act) and any of such person’s agents or representatives, its legal counsel and accountants, any
underwriter and any controlling person of such underwriter, against any Losses resulting from (A)
any untrue or alleged untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such Holder expressly for use
in such registration statement, or (B) such Holder’s failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the Company has furnished
such Holder with the number of copies of the same requested by such Holder; and each such Holder
will reimburse any person intended to be indemnified pursuant to this Section 8(b) for any legal or
other expenses reasonably incurred by such person in connection with investigating or defending any
such losses, liabilities, claims, damages or expenses or action as such expenses are incurred
provided, however, that (i) the indemnity agreement contained in this Section 8(b) shall not apply
to amounts paid in settlement of any Losses if such settlement is made without the consent of the
Holder, which consent shall not be unreasonably withheld, and (ii) the obligations of such Holders
hereunder shall be limited to an amount equal to the net proceeds to each such Holder from the sale
of Registrable Securities in the transaction giving rise to the Losses.
(c) The indemnification provided for under this Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Party (as defined herein)
or any officer, director, or controlling person of such Indemnified Party and will survive the
transfer of Registrable Securities. The Indemnifying Party also agrees to make such provisions, as
are reasonably requested by an Indemnified Party, for contributions (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 actions that gave rise to any Losses) to such
party in the event such Indemnifying Party’s indemnification is unavailable for any reason;
provided, however, that in no event shall any contribution by a Holder under this Section 8(c)
exceed the net proceeds to such Holder from the sale of Registrable Securities in the transaction
giving rise to the Losses.
(d) Each party entitled to indemnification under this Section 8 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld) and the Indemnified Party may participate in such defense at the Indemnified Party’s
expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict
of interest between the Indemnifying Party and the Indemnified Party in such action, in which case
the fees and expenses of counsel shall be at the expense of the Indemnifying Party), and provided
further that the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 8 unless the Indemnifying
Party is materially prejudiced thereby. No
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Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent
of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or litigation. The
Indemnified Party shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(e) If the indemnification provided for in this Section 8 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any Losses, 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 which resulted in Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall any contribution by a Holder under this
Section 8(e) exceed the net proceeds to such Holder from the sale of Registrable Securities in the
transaction giving rise to the Losses. 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.
(f) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with any
underwritten public offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.
(g) The obligations of the Company and Holders under this Section 8 shall survive the
completion of any offering of Registrable Securities in a registration statement under Section 2 or
Section 3 and otherwise.
(a) keep public information available as those terms are understood and defined in Rule 144,
at all times from and after ninety (90) days following the effective date of the first registration
under the Act filed by the Company for an offering of its Common Stock to the general public;
(b) file with the Commission all reports and other documents required of the Company under the
Act and the Exchange Act at any time after it has become subject to such reporting requirements;
and
(c) so long as any Holder owns any Registrable Securities, furnish to such Holder upon
request, a written statement by the Company as to its compliance with the reporting requirements of
Rule 144 (at any time from and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to the general
public), and of the Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed as such Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such Holder to sell any such securities
without registration.
10. “Market Stand-off” Agreement; Limit on Sale. (a) In connection with the Company’s
initial public offering, each Holder agrees not to sell or otherwise transfer or dispose of any
capital stock or other securities of the Company, excluding capital stock acquired in the Company’s
initial public offering, held by such Holder during any time period (not to exceed 180 days, which
period may be extended for up to 18
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days) required by any underwriting agreement in connection with such initial public offering,
provided that (i) all directors and officers of the Company and stockholders owning at least 1% of
the Company’s capital stock agree to the same transfer restrictions or to transfer restrictions
which are more restrictive and (ii) if any waiver or early termination of such restrictions (in
whole or in part) is granted to any person described in clause (i), then Investor shall be granted
an equivalent waiver, applicable to the same percentage of Investor’s shares as the percentage of
such other person’s shares subject to such waiver or early termination. If requested by a managing
underwriter in connection with the Company’s initial public offering, such Holder shall execute a
separate agreement to the foregoing effect. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until the end of such
period.
(b) Investor hereby agrees that, except as set forth in Section 12 below, Investor will not
sell or otherwise transfer any shares of the Class A Common Stock acquired by it pursuant to the
Stock Purchase Agreement (other than to an Affiliate of Investor that agrees to be bound by this
Agreement and provided that Investor remains liable for any breach of this Agreement by such
Affiliate and such Affiliate transfers all such shares back to Investor if at any time within the
period described in this Section 10(b) it is no longer an Affiliate of Investor) prior to the first
anniversary of the Closing under the Stock Purchase Agreement.
(c) Each certificate representing Class A Shares shall contain the following legends:
THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER, A RIGHT
OF REPURCHASE BY THE COMPANY AND OTHER TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OR HIS PREDECESSOR IN INTEREST.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY.
(b) Investor’s Put Right. At any time on or after January 1, 2008 and prior to the
earlier of (i) the
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closing of a Qualified IPO in connection with which the Company has made to Investor the IPO
Payment (if any) described below and (ii) the third anniversary of the Closing under the Stock
Purchase Agreement, the holders of all such shares may, by written notice (which notice must be
given at the times specified on Exhibit A to the extent applicable) to the Company, require that
the Company purchase all (but not less than all) of the Class A Common Stock issued to Investor
pursuant to the Stock Purchase Agreement and the related Series A Preferred Stock, at a purchase
price (the “Repurchase Price”) sufficient to provide a cumulative internal rate of return
of 15% per annum on the initial investment in the Company’s capital stock (including, for the
avoidance of doubt, any cash dividends paid on such stock) from the date of the Closing under the
Stock Purchase Agreement through the date of payment of the Repurchase Price, or if the Company
elects to pay the Repurchase Price in installments pursuant to Section 12(d) below, the date of
payment of the applicable installment of the Repurchase Price. If the per share price to the
public (before underwriting discount) in any Qualified IPO that closes on or after January 1, 2008
is less than the Repurchase Price, the Company shall pay the difference (i.e, the amount by which
the Repurchase Price exceeds the price to the public in the Qualified IPO, multiplied by the number
of Investor’s Original Shares (as defined in the Stock Purchase Agreement) as adjusted pursuant to
the Stock Purchase Agreement and this Investor Rights Agreement) to the holders in cash or shares
at the closing of such Qualified IPO (the “IPO Payment”). If the IPO Payment is made in
shares, the number of shares to be issued shall be equal to the quotient of the amount of the IPO
Payment otherwise payable in cash divided by the price to the public (before underwriting discount)
in the Qualified IPO.
(e) Parent Guaranty. Parent hereby unconditionally guarantees the timely performance
of the Company’s obligations under Section 12(b) above, and agrees that if for any reason the
Company is unable to or is legally prohibited from performing such obligations, then the Parent
shall purchase the shares that
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Investor desires to sell under Section 12(b), on the terms contained in this Section 12.
16. Notices. All communications provided for hereunder shall be sent by first-class
mail or facsimile and (a) if addressed to a Holder, addressed to the Holder at the address or fax
number set forth below such Holder’s signature, or at such other address or fax number as such
Holder shall have furnished to the Company in writing or (b) if addressed to the Company, to the
address or fax number set forth below the Company’s signature or at such other address or fax
number, or to the attention of such other officer, as the Company shall have furnished to Holder in
writing. Notices sent by first-class mail shall be deemed received three days after the date of
deposit of such notice in the United States mail with certified mail receipt requested, postage
prepaid, and addressed to the other party as set forth below. Notices sent by
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facsimile shall be deemed received upon receipt by the notified party’s facsimile machine if sent
during normal business hours of the recipient with confirmation of sending to the fax number set
forth below, or if sent outside normal business hours with confirmation of sending, then notice
shall be deemed to have been duly given on the next business day.
20. Governing Law. This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of Delaware.
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COMPANY | ||
VMWARE, INC. | ||
By: |
/s/ Xxxxx Xxxxx | |
Name:
|
||
Title: |
CEO and President |
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Legal Department
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Legal Department
Phone: (000) 000-0000
Fax: (000) 000-0000
INVESTOR | ||
INTEL CAPITAL CORPORATION | ||
By: |
/s/ Xxxxxx Xxxxxxx | |
Name: Xxxxxx Xxxxxxx Title: President |
||
c/o Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx., X/X XX0-00
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Intel Capital Portfolio Manager
Fax: (000) 000-0000
With a copy by e-mail to:
xxxxxxxxx.xxxxxxx@xxxxx.xxx
0000 Xxxxxxx Xxxxxxx Xxxx., X/X XX0-00
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Intel Capital Portfolio Manager
Fax: (000) 000-0000
With a copy by e-mail to:
xxxxxxxxx.xxxxxxx@xxxxx.xxx
Solely for purposes of Section 12(e), Section 12(f) and Section 14 of this Agreement:
PARENT | ||
XXX XXXXXXXXXXX | ||
By: |
/s/ Xxxx Xxxx | |
Name:
|
||
Xxxxx: |
Senior Vice President and Chief Accounting Officer |
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Office of the General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Office of the General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
Exhibit A
Terms of Series A Preferred Stock
Protective Provisions: | For so long as Investor holds a number of shares of Series A Preferred representing at least 50% of the number of shares of Class A common stock originally issued at the closing, Company would not, without the written consent of the then-current holders of at least 50% of the Series A Preferred, either directly or by amendment, merger, consolidation or otherwise: | |||
create or authorize the creation of or issue any other security convertible into or exercisable for any equity security, having rights, preferences or privileges senior to the securities held by Investor, whether by reclassification, merger or otherwise, or increase the authorized number of Series A Preferred; | ||||
create or authorize the creation of any debt or debt security, including any debt secured by any material assets of Company, other than debt issued in the ordinary course of business; or | ||||
amend, alter or repeal any provision of the Certificate of Incorporation which alters or changes the powers, preferences or special rights of the Series A Preferred so as to affect them adversely. | ||||
provided, however, that nothing contained above will give rise to a separate class vote to approve a merger where the consideration consists entirely of cash. | ||||
Dividends: | Annual 4% cumulative dividend compounded annually, payable upon a liquidation or redemption. | |||
Anti-dilution: | Full-ratchet for issues below Repurchase Price, other than in a Qualified IPO for which the Company has made the payment described under Mandatory Conversion, below. Subject to standard exceptions. Any payment to Investor made under this provision shall be treated for U.S. federal income tax purposes as an adjustment of the purchase price paid by Investor for the Shares to the extent permitted by U.S. federal income tax law. | |||
Mandatory |
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Conversion: | Mandatory conversion upon (i) a Qualified IPO (provided that if the price per share in the Qualified IPO is less than the Repurchase Price, the Company shall pay the difference (i.e, the amount by which the Repurchase Price exceeds the price to the public in the Qualified IPO, multiplied by the number of Investor’s Original Shares (as defined in the Stock Purchase Agreement) as adjusted pursuant to the Stock Purchase Agreement and this Investor Rights Agreement) to Investor in cash or shares immediately prior to such conversion) or (ii) upon conversion of more than 50% of the then outstanding Series A Preferred (with the consent of the Investor so long as the Investor owns any Series A Preferred). |
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If the IPO Payment is made in shares, the number of shares to be issued shall be equal to the quotient of the amount of the IPO Payment otherwise payable in cash divided by the price to the public (before underwriting discount) in the Qualified IPO. | ||||
The Company shall give Investor notice of its intention to file a registration statement relating to a Qualified IPO not later than the date of filing of a registration statement which includes a price per share range on the prospectus cover page, which notice shall specify the anticipated pricing date of such offering which shall be a date not less than 45 days or more than 90 days after to the notice date. The Company shall advise Investor promptly of any change in such price per share range. Investor shall then notify the Company not less then 30 days before the anticipated pricing date whether it intends to exercise its put right under Section 12(b) of the Class A Common Stock Purchase Agreement. Any failure to provide such put notice shall preclude the Investor from exercising its put right for any Qualified IPO which is completed within 90 days after the anticipated pricing date at a price within the range provided to Investor. | ||||
Any payment to Investor made under this provision shall be treated for U.S. federal income tax purposes as an adjustment of the purchase price paid by Investor for the Shares to the extent permitted by U.S. federal income tax law. | ||||
Investor Rights: | Standard pro-rata preemptive rights (which terminate at Qualified IPO), registration rights, information rights and restrictions on transfer which rights and restrictions are substantially on the terms set forth in the Class A Common Stock Purchase Agreement. | |||
Right of Co-Sale: | Investor would have right of co-sale with respect to any shares proposed to be sold by Parent or executive officers of Company on substantially the terms set forth in the Class A Common Stock Purchase Agreement. |
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