ASANA, INC. AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
Exhibit 4.2
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
This Amended and Restated Investors’ Rights Agreement (this “Agreement”) is made and entered into as of November 15, 2018, by and among Asana, Inc., a Delaware corporation (the “Company”), Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxxx and Xxxxxx Xxxxxxxxx Xxxx XXX (the “Founders”), and the purchasers of Preferred Stock of the Company listed on Schedule 1 hereto (the “Investors”).
RECITALS
WHEREAS, the Company, certain Investors and the Founders previously entered into an Amended and Restated Investors’ Rights Agreement, dated January 19, 2018 (the “Prior Rights Agreement”).
WHEREAS, certain Investors have agreed to purchase shares of the Series E Preferred Stock of the Company, par value $0.00001 per share (the “Series E Preferred Stock”), pursuant to a Series E Preferred Stock Purchase Agreement by and among the Company and such Investors, dated of even date herewith, as may be amended from time to time (the “Purchase Agreement”).
WHEREAS, the Investors, the Founders, and the Company now wish to amend and restate the Prior Rights Agreement in connection with the purchase of shares of Series E Preferred Stock by certain Investors pursuant to the Purchase Agreement.
WHEREAS, the obligations of the Company and certain of the Investors under the Purchase Agreement are conditioned on, among other things, the execution and delivery of this Agreement by the parties hereto.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree to amend and restate the Prior Rights Agreement in its entirety as follows:
AGREEMENT
A. Amendment and Restatement of Prior Rights Agreement; Waiver of Right of First Offer. Effective and contingent upon execution of this Agreement by (i) the Company, (ii) the holders of at least a majority of the voting power of the outstanding shares of the Company’s Preferred Stock (as defined in the Prior Rights Agreement), and (iii) the holders of at least a majority of the voting power of the outstanding Founders’ Shares (as defined in the Prior Rights Agreement), the Prior Rights Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and the Company, the Investors and the Founders hereby agree to be bound by the provisions hereof as the sole agreement of the Company, the Investors and the Founders with respect to the rights set forth herein. The undersigned Investors hereby waive, on behalf of themselves and all other Investors that are parties to the Prior Rights Agreement, the right of first offer, including any notice requirements, set forth in Section 2.3 of the Prior Rights Agreement, with respect to the sale and issuance of the Series E Preferred Stock pursuant to the Purchase Agreement, as may be amended from time to time, and the shares of Common Stock issuable upon conversion thereof. The undersigned Investors additionally hereby waive, on behalf of themselves and all other Investors that are parties to the Prior Rights Agreement, the covenants set forth in Section 2.6 of the Prior Rights Agreement with respect to the Series E Preferred Stock.
1. Registration Rights.
1.1 Definitions. For purposes of this Agreement:
(a) The term “Exchange Act” means the Securities Exchange Act of 1934, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.
(b) The term “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company’s subsequent public filings under the Exchange Act.
(c) The term “Founders’ Stock” means the shares of Common Stock issued or issuable to the Founders.
(d) The term “Holder” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.12 of this Agreement.
(e) The term “Preferred Stock” means, collectively, shares of the Company’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series D-1 Preferred Stock and Series E-1 Preferred Stock.
(f) The term “Qualified IPO” means a public offering by the Company of shares of its Common Stock pursuant to a registration statement under the Securities Act, in connection with which all the then-outstanding shares of Preferred Stock are converted into shares of Common Stock pursuant to the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “Restated Certificate”).
(g) The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.
(h) The term “Registrable Securities” means (i) the shares of Class A Common Stock and Class B Common Stock (together, the “Common Stock”) issuable or issued upon conversion of the Preferred Stock, other than shares for which registration rights have terminated pursuant to Section 1.15 hereof, (ii) the shares of Founders’ Stock, provided, however, that for the purposes of Section 1.2, 1.4, 1.13 and 2.3 the Founders’ Stock shall not be deemed Registrable Securities and the Founders shall not be deemed Holders, and (iii) any other
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shares of Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares listed in (i) and (ii); provided, however, that the foregoing definition shall exclude in all cases any Registrable Securities sold by a person in a transaction in which such person’s rights under this Agreement are not assigned. Notwithstanding the foregoing, Common Stock or other securities shall only be treated as Registrable Securities if and so long as (A) they have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) they have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale, and (C) the Holder thereof is entitled to exercise any right provided in Section 1 in accordance with Section 1.12 below.
(i) The number of shares of “Registrable Securities then-outstanding” shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities.
(j) The term “SEC” means the U.S. Securities and Exchange Commission.
(k) The term “Securities Act” means the U.S. Securities Act of 1933, as amended (and any successor thereto) and the rules and regulations promulgated thereunder.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the earlier of (i) the 5th anniversary of the Initial Closing (as defined in the Purchase Agreement), or (ii) six months after the effective date of the first registration statement for a public offering of securities of the Company (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145 transaction), a written request from the Holders of at least 50% of the Registrable Securities then-outstanding that the Company file a registration statement under the Securities Act covering the registration of at least such number of the Registrable Securities having an anticipated aggregate offering price, net of underwriting discounts and commissions, of at least $15,000,000, then the Company shall, within 10 days of the receipt thereof, give written notice of such request to all Holders and shall, subject to the limitations of subsection 1.2(b), use its best efforts to file as soon as practicable, and in any event within 90 days of the receipt of such request, a registration statement under the Securities Act covering all Registrable Securities which the Holders request to be registered within 20 days of the mailing of such notice by the Company.
(b) If the Holders initiating the registration request hereunder (“Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in subsection 1.2(a). The underwriter will be selected by a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company. In such event, the right of any
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Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 1.5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated among all participating Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. For purposes of the preceding apportionment, for any participating Holder that is a venture capital fund, partnership or corporation, the partners, retired partners, members, retired members, affiliated venture capital funds and holders of capital stock of such holder, or the estates and family members of any such partners, members, retired members and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling security holder,” and any pro-rata reduction with respect to such “selling security holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling security holder,” as defined in this sentence.
(c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its holders of capital stock for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 1.2:
(i) after the Company has effected 2 registrations pursuant to this Section 1.2 and such registrations have been declared or ordered effective;
(ii) during the period starting with the date 90 days prior to the Company’s good faith estimate of the date of filing of, and ending on a date 90 days after the effective date of, a registration subject to Section 1.3 unless such offering is the initial public offering of the Company’s securities, in which case, ending on a date 180 days after the effective date of such registration subject to Section 1.3; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or
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(iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 1.4.
1.3 Company Registration. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for holders of capital stock other than the Holders) any of its stock under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a transaction covered by Rule 145 under the Securities Act, a registration in which the only stock being registered is Common Stock issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within 20 days after mailing of such notice by the Company in accordance with Section 4.4, the Company shall, subject to the cut back provisions of Section 1.7(c) cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered.
1.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of at least 30% of the Registrable Securities then-outstanding a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly, and in any event within ten (10) days, give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, and in any event within forty-five (45) days, file a registration statement on Form S-3 and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 1.4: (i) if Form S-3 is not available for such offering by the Holders; (ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $10,000,000; (iii) if the Company shall furnish to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its holders of capital stock for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the request of the Holder or Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than once in any 12-month period; (iv) if the Company has, within the 12-month
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period preceding the date of such request, already effected two registrations on Form S-3 for the Holders pursuant to this Section 1.4; (v) 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; or (vi) during the period starting 30 days prior to the Company’s good faith estimate of the date of the filing of and ending 90 days after the effective date of a registration statement subject to Section 1.3; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective.
(c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 1.2 or 1.3, respectively.
1.5 Obligations of the Company. Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 120 days, or until the distribution described in such registration statement is completed, if earlier.
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to 120 days, or until the distribution described in such registration statement is completed, if earlier.
(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
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(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, such obligation to continue for 120 days after the effectiveness of such registration statement.
(g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.
(i) Use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 1, if such securities are being sold through underwriters, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters 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.
(j) Promptly make available for inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith.
(k) Notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed.
(l) After such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.
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1.6 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities. The Company shall have no obligation with respect to any registration requested pursuant to Section 1.2 or Section 1.4 of this Agreement if, as a result of the application of the preceding sentence, the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in subsection 1.2(a) or subsection 1.4(b), whichever is applicable.
1.7 Expenses of Registration.
(a) Demand Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 1.2, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 1.2; provided further, however, that if at the time of such withdrawal, the Holders (i) have learned of a material adverse change in the condition, business, or prospects of the Company that was not known to the Holders at the time of their request and (ii) have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall not forfeit their rights pursuant to Section 1.2.
(b) Company Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications of Registrable Securities pursuant to Section 1.3 for each Holder (which right may be assigned as provided in Section 1.12), including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.
(c) Registration on Form S-3. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications of Registrable Securities pursuant to Section 1.4 for each Holder (which right may be assigned as provided in Section 1.12), including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.
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1.8 Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by holders of capital stock to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling security holders according to the total amount of securities entitled to be included therein owned by each selling security holder or in such other proportions as shall mutually be agreed to by such selling security holders) but in no event shall (a) the amount of securities of the selling Holders included in the offering be reduced below 30% of the total amount of securities included in such offering, unless such offering is the initial public offering of the Company’s securities, in which case, the selling security holders may be excluded if the underwriters make the determination described above and no other holder’s securities are included, (b) any securities of the selling Holders be excluded from such offering unless all other stockholders’ securities have been first excluded or (c) any securities held by a Founder be included if any securities held by any non-Founder selling Holder are excluded. For purposes of the preceding parenthetical concerning apportionment, for any selling security holder which is a holder of Registrable Securities and which is a venture capital fund, partnership or corporation, the partners, retired partners, members, retired members, affiliated venture capital funds and holders of capital stock of such holder, or the estates and family members of any such partners, members, retired members and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling security holder,” and any pro-rata reduction with respect to such “selling security holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling security holder,” as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors and security holders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims,
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damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 1.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any Holder, underwriter or controlling person for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 1.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 1.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided that in no event shall any indemnity under this subsection 1.10(b) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.10 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other
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indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 1.10 to the extent of such prejudice, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, 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; provided that in no event shall any contribution by a Holder under this Subsection 1.10(d), when combined with the amounts paid or payable by such Holder pursuant to subsection 1.10(b), exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder. 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 or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f) The obligations of the Company and Holders under this Section 1.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise.
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1.11 Reports Under the Exchange Act. 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 SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after 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 so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;
(b) take such action, including the voluntary registration of its Common Stock under Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange 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 SEC Rule 144 (at any time after 90 days after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.
1.12 Assignment of Registration Rights. Subject to the restrictions set forth under Article X of the Company’s Bylaws, as the same may be amended from time to time (the “Bylaws”), the rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee (a) of at least 50% of the transferring Holder’s aggregate Registrable Securities originally obtained from the Company (or if the transferring Holder then owns less than 50% of such originally acquired securities, then all remaining Registrable Securities then held by the transferring Holder), (b) that is a subsidiary, parent, partner, limited partner, retired partner, member, retired member or holder of capital stock of a Holder, (c) that is an affiliated fund or entity of the Holder, which means with respect to a limited liability company or a limited liability partnership, a fund or entity managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company (such a fund or entity, an “Affiliated Fund”), (d) who is a Holder’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (such a relation, a Holder’s “Immediate
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Family Member”, which term shall include adoptive relationships), or (e) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member, provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if the transferee agrees to be bound by this Agreement and immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of (i) a partnership who are partners or retired partners of such partnership or (ii) a limited liability company who are members or retired members of such limited liability company (including Immediate Family Members of such partners or members who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership or limited liability company; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under Section 1.
1.13 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the holders of at least a majority of the then-outstanding shares of Common Stock issuable or issued upon conversion of the Preferred Stock, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 1.2, Section 1.3 or Section 1.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders which is included or (b) to make a demand registration.
1.14 Lock-Up Agreement.
(a) Lock-Up Period; Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, each Holder hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company (other than those included in the registration) held immediately prior to the effectiveness of the registration statement for such offering without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements.
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(b) Limitations. The obligations described in Section 1.14(a) shall apply only if all officers, directors and 1% securityholders of the Company enter into similar agreements, and shall not apply to a registration relating solely to employee benefit plans, or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act.
(c) Stop-Transfer Instructions. In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to the securities of each Holder (and the securities of every other person subject to the restrictions in Section 1.14(a)).
(d) Transferees Bound. Each Holder agrees that it will not transfer securities of the Company unless each transferee agrees in writing to be bound by all of the provisions of this Section 1.14; provided that this Section 1.14(d) shall not apply to transfers pursuant to a registration statement or transfers after the expiration date of the restricted period described in Section 1.14(a).
1.15 Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in this Section 1.15 after the earlier of (a) five years following the consummation of a Qualified IPO, (b) such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares during a 90-day period without registration, or (c) upon termination of this Agreement, as provided in Section 3.
2. Covenants of the Company.
2.1 Delivery of Financial Statements. Upon the request by a Major Investor (as hereinafter defined), the Company shall deliver to each Major Investor (other than a Major Investor reasonably deemed by the Company to be a competitor of the Company; provided however that venture capital firms shall not be considered competitors of the Company):
(a) as soon as practicable, but in any event within 120 days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and, as and to the extent otherwise required by the Company’s Board of Directors, audited and certified by an independent public accounting firm of nationally recognized standing selected by the Company;
(b) as soon as practicable, but in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, an unaudited profit or loss statement, a statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter;
(c) within 30 days of the end of each month, an unaudited income statement and a statement of cash flows and balance sheet for and as of the end of such month, in reasonable detail;
(d) as soon as practicable, but in any event 60 days prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, an updated list of all stockholders of the Company that includes the name of each stockholder and the number and class of shares held by each stockholder, and, as soon as prepared, any other budgets or revised budgets prepared by the Company;
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(e) promptly following the end of each fiscal quarter of each fiscal year of the Company, an updated list of all stockholders of the Company that includes the name of each stockholder and the number and class of shares held by each stockholder; and
(f) with respect to any unaudited financial statements called for in this Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company and certifying that such financials were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment, provided that the foregoing shall not restrict the right of the Company to change its accounting principles consistent with GAAP, if the Board of Directors determines that it is in the best interest of the Company to do so.
Notwithstanding anything else in this Section 2.1 to the contrary, the Company may cease providing the information set forth in this Section 2.1 during the period starting with the date 60 days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section 2.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.
2.2 Inspection. The Company shall permit each Major Investor (except for a Major Investor reasonably deemed by the Company to be a competitor of the Company; provided however that venture capital firms shall not be considered competitors of the Company), at such Major 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 the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information which it reasonably considers to be privileged or a trade secret or similar confidential information.
2.3 Right of First Offer. Subject to the terms and conditions specified in this Section 2.3, the Company hereby grants to each Major Investor a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Agreement, a “Major Investor” shall mean any Investor (or its permitted transferees and assigns) who holds (i) at least 5,000,000 shares (subject to adjustment for stock splits, stock dividends, reclassifications or the like) of Registrable Securities or (ii) 468,818 shares (subject to adjustment for stock splits, stock dividends, reclassifications or the like) of Common Stock issued or issuable upon conversion of Series C Preferred Stock. For purposes of this Section 2.3, the term “Major Investor” includes any general partners, managing members and Affiliates of a person that is otherwise a Major Investor, including Affiliate funds. A Major Investor who chooses to exercise the right of first offer may designate as purchasers under such right itself or its partners or affiliates, including Affiliate funds, in such proportions as it deems appropriate. Each time the Company proposes to offer any shares of, or securities exchangeable for, convertible into or exercisable for any shares of, any class of its capital stock (“Shares”), the Company shall first make an offering of such Shares to each Major Investor in accordance with the following provisions:
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(a) The Company shall deliver a notice (the “RFO Notice”) to the Major Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such Shares.
(b) Within 15 calendar days after delivery of the RFO Notice, each Major Investor may elect to purchase or obtain, at the price and on the terms specified in the RFO Notice, up to that portion of such Shares which equals the proportion that the number of shares of Common Stock issued and held upon conversion of the Preferred Stock, or issuable upon conversion of the Preferred Stock then held, by such Major Investor bears to the sum of (i) the total number of shares of Common Stock then-outstanding (assuming full exchange, conversion and exercise of all exchangeable, convertible or exercisable securities) and (ii) shares of Common Stock issuable to employees, consultants or directors pursuant to outstanding options or rights pursuant to a stock option plan, restricted stock plan, or other stock plan approved by the Board of Directors. Such purchase shall be completed at the same closing as that of any third party purchasers or at an additional closing thereunder. The Company shall promptly, in writing, inform each Major Investor that purchases all the shares available to it (each, a “Fully-Exercising Investor”) of any other Major Investor’s failure to do likewise. During the 10-day period commencing after receipt of such information, each Fully-Exercising Investor shall be entitled to obtain that portion of the Shares for which Major Investors were entitled to subscribe but which were not subscribed for by the Major Investors that is equal to the proportion that the number of shares of Common Stock issued and held, or issuable upon exchange, conversion and exercise of all exchangeable, convertible or exercisable securities then held, by such Fully-Exercising Investor who wishes to purchase additional Shares bears to the total number of shares of Common Stock then-outstanding (assuming full exchange, conversion and exercise of all exchangeable, convertible or exercisable securities) issued and held, or issuable upon conversion of the Preferred Stock then held, by all Fully-Exercising Investors who wish to purchase additional Shares.
(c) The Company may, during the 45-day period following the expiration of the period provided in subsection 2.3(b) hereof, offer the remaining unsubscribed portion of the Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than those specified in the RFO Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within 60 days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Investors in accordance herewith.
(d) The right of first offer in this Section 2.3 shall not be applicable to (i) the issuance of any securities of the Company that are excluded from the definition of “Additional Stock” as such term is defined in the Restated Certificate, (ii) the issuance of shares of Series A Preferred Stock pursuant to that certain Series A Preferred Stock Purchase Agreement, dated November 20, 2009, by and among the Company and certain Investors, as may be amended from time to time, shares of Series B Preferred Stock pursuant to that certain Series B Preferred Stock Purchase Agreement, dated July 18, 2012, by and among the Company and certain Investors, as may be amended from time to time, shares of Series C Preferred Stock pursuant to that certain Series C Preferred Stock Purchase Agreement, dated March 29, 2016, by and among the Company and certain Investors, as may be amended from time to time, or shares of Series D
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Preferred Stock pursuant to that certain Series D Preferred Stock Purchase Agreement, dated January 19, 2018, by and among the Company and certain Investors, as may be amended from time to time, (iii) the issuance of shares of Series E Preferred Stock pursuant to the Purchase Agreement, as may be amended from time to time, or (iv) the issuance of Convertible Promissory Notes (and any Shares issued upon conversion thereof) pursuant to the Convertible Note Purchase Agreement, dated as of January 19, 2018, by and between the Company and Xxxxxx X. Xxxxxxxxx TTEE Xxxxxx X. Xxxxxxxxx Trust DTD 12/27/2015, as may be amended from time to time.
(e) In addition to the foregoing, the right of first offer in this Section 2.3 shall not be applicable with respect to any Major Investor and any subsequent securities issuance, if (i) at the time of such subsequent securities issuance, the Major Investor is not an “accredited investor,” as that term is then defined in Rule 501(a) under the Securities Act, and (ii) such subsequent securities issuance is otherwise being offered only to accredited investors.
2.4 Confidentiality. Each Investor shall keep confidential and shall not disclose, divulge or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 2.4 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 2.4; (iii) to any Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such person that such information is confidential and directs such person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.
2.5 Employee Agreements. Unless otherwise approved by the Board of Directors, all future employees, officers, consultants, advisors and other service providers of the Company who shall purchase, or receive options to purchase, shares of the Company’s Common Stock following the date hereof shall be required to execute stock purchase or option agreements providing for (i) vesting of shares over a four-year period with the first 25% of such shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly installments over the following 36 months thereafter, (ii) restrictions on transferability prior to vesting except for certain estate planning purposes, and (iii) a 180-day lockup period in connection with the Company’s initial public offering. The Company shall retain a right of first refusal on transfers until the Company’s initial public offering and the right to repurchase unvested shares at cost upon the termination of such service provider.
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2.6 Subsequent Offerings. In the event that the Company issues securities which have rights, preferences or privileges with respect to dividends, liquidation preference, redemption, anti-dilution protection or, in case of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, voting that are more favorable than the terms of the Preferred Stock, the Company shall use its commercially reasonable efforts to amend its Restated Certificate to provide such terms to the holders of Preferred Stock.
2.7 D&O Insurance. As of the date hereof, the Company has Directors and Officers liability insurance in an amount and on terms and conditions satisfactory to the Company’s Board of Directors, and will use commercially reasonable efforts to cause such insurance policy to be maintained.
2.8 Termination of Certain Covenants.
(a) Each of the covenants set forth in this Section 2 (other than the covenant set forth in Section 2.4) shall terminate as to each Holder and be of no further force or effect (i) immediately prior to the consummation of a Qualified IPO, or (ii) upon termination of this Agreement, as provided in Section 3.
(b) The covenants set forth in Sections 2.1 and 2.2 shall terminate as to each Holder and be of no further force or effect when the Company first becomes subject to the periodic reporting requirements of Sections 13 or 15(d) of the Exchange Act, if this occurs earlier than the events described in Section 2.8(a).
3. Termination of Agreement. This Agreement shall terminate and have no further force or effect upon the consummation of a transaction or series of related transactions deemed to be a liquidation, dissolution or winding up of the Company pursuant to the Restated Certificate, pursuant to which the Investors receive cash and/or marketable securities.
4. Miscellaneous.
4.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, and supersedes any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto, including without limitation the Prior Rights Agreement.
4.2 Successors and Assigns; Third Party Beneficiaries. Subject to the restrictions set forth under Article X of the Bylaws, and except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors, assigns and legal representatives of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors, assigns and legal representatives any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
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4.3 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of (a) the Company, (b) the holders of at least a majority of the voting power of the then-outstanding Founders’ Shares (or their respective successors, assigns and legal representatives) with respect to amendments to the rights of the Founders hereunder and (c) the holders of at least a majority of the voting power of the then-outstanding shares of the Company’s Preferred Stock; provided, however, that any amendment to the definition of “Major Investor” that would cause an Investor that qualifies as a “Major Investor” prior to such amendment to no longer qualify as a “Major Investor” as a result of such amendment (each such Investor, a “Specified Investor”) shall further require the written consent of the holders of at least a majority of the voting power of the then-outstanding shares of the Company’s Preferred Stock held by all Specified Investors. Any amendment or waiver effected in accordance with this Section 4.3 shall be binding upon the Company, the Founders, the Investors, and each of their respective successors and assigns.
4.4 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by email or fax (upon customary confirmation of receipt), or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address or fax number as set forth on the signature page or on Schedule 1 hereto, or as subsequently modified by written notice.
4.5 Aggregation of Stock. All shares of capital stock of the Company held or acquired by Affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated entities or persons may apportion such rights as among themselves in any manner they deem appropriate. As used herein, “Affiliate” means, with respect to any specified Investor, any other person who, directly or indirectly, controls, is controlled by or is under common control with such Investor, including, without limitation, any general partner, managing member, officer or director of such Investor, or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of, or shares the same management company with, such Investor. In addition, the share ownership of all Designated Permitted Entities shall be aggregated together for purposes of determining whether any Designated Permitted Entity is entitled to any rights under this Agreement and the other agreements to which the Designated Permitted Entities are a party. A “Designated Permitted Entity” shall be defined as Founders Fund, LLC, The Founders Fund Management, LLC, The Founders Fund, LP, The Founders Fund II Management, LLC, The Founders Fund II, LP, The Founders Fund II Entrepreneurs Fund, LP, The Founders Fund II Principals Fund, LP, The Founders Fund III, LP, The Founders Fund III Principals Fund, LP, The Founders Fund III Entrepreneurs Fund, LP, The Founders Fund III Management LLC, The Founders Fund IV, LP, The Founders Fund IV Principals Fund, LP, The Founders Fund IV Management, LLC, Lembas IV (or, in the alternative, one (1) similar Founders Fund investment vehicle), Xxxxx Xxxxx, up to three (3) Founders Fund employee investment vehicles, one (1) newly created Founders Fund successor fund and up to three (3) side funds of such successor fund, any partner or affiliate of any Designated Permitted Entity, or any retirement accounts held on behalf of any such partner, or any stockholder of record of the Company as of the applicable date.
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4.6 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of this Agreement shall be interpreted as if such provision were so excluded and (c) the balance of this Agreement shall be enforceable in accordance with its terms.
4.7 Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.
4.8 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Preferred Stock pursuant to the Purchase Agreement, any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor” and a party hereunder.
4.9 Arbitration. The parties agree first to negotiate in good faith to resolve any disputes arising out of or relating to or affecting the subject matter of this Agreement. Any dispute arising out of or relating to or affecting the subject matter of this Agreement not resolved by negotiation shall be settled by binding arbitration in San Francisco County, California before the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) under the JAMS Rules of Practice and Procedure. The arbitrator shall be a former judge of a court of California. Discovery and other procedural matters shall be governed as though the proceeding were an arbitration. Any judgment upon the award may be confirmed and entered in any court having jurisdiction thereof. The arbitrator shall be required to, in all determinations, apply California law without regard to its conflicts of law provisions. Notwithstanding the foregoing, the arbitrator shall apply the substantive law of the state of incorporation of the Company, where applicable. The arbitrator is afforded the jurisdiction to order any provisional remedies, including, without limitation, injunctive relief. The arbitrator may award the prevailing party the costs of arbitration, including reasonable attorneys’ fees and expenses. The arbitrator’s award shall be in writing and shall state the reasons for the award. The parties stipulate that a JAMS employee may be appointed as a judge pro tempore of the Superior Court of San Francisco County if required to carry out the terms of this provision. Arbitration shall be the sole and exclusive means to resolve any dispute.
4.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 200, e.g., xxx.xxxxxxxx.xxx) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4.11 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
[Signature Page Follows]
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The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE COMPANY: | ||
| ASANA, INC. | ||
| By: | /s/ Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | ||
| Title: Chief Executive Officer | ||
| Address: | ||
| 0000 Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxx Xxxxxxxxx, XX 00000 | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE FOUNDERS: |
| XXXXXX XXXXXXXXX |
| /s/ Xxxxxx Xxxxxxxxx (Signature) |
| Address: |
| 0000 Xxxxxx Xxxxxx, Xxxxx 000 |
| Xxx Xxxxxxxxx, XX 00000 |
| THE INVESTORS: | ||
| XXXXXX XXXXXXXXX TTEE XXXXXX XXXXXXXXX TRUST DTD 12/27/05 | ||
| By: | /s/ Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | ||
| Title: Trustee | ||
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE FOUNDERS: | ||
| XXXXXX XXXXXXXXXX | ||
| /s/ Xxxxxx Xxxxxxxxxx (Signature) | ||
| Address: | ||
| 0000 Xxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxx Xxxxxxxxx, XX 00000 | ||
| THE INVESTORS: | ||
| XXXXXX XXXXXXX XXXXXXXXXX TTEE XXXXXX XXXXXXX XXXXXXXXXX REV TR DTD 11/24/08 | ||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
| Name: | Xxxxxx Xxxxxxxxxx | |
| Title: | Trustee | |
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| BENCHMARK CAPITAL PARTNERS VI, L.P. | ||
| as nominee for | ||
| Benchmark Capital Partners VI, L.P., | ||
| Benchmark Founders’ Fund VI, L.P., | ||
| Benchmark Founders’ Fund VI-B, L.P. and related individuals | ||
| By: | Benchmark Capital Management Co. VI, L.L.C., general partner | |
| By: | /s/ Xxxxxx X. Xxxxxxxx | |
| Xxxxxx X. Xxxxxxxx, Managing Member | ||
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| GENERATION IM CLIMATE SOLUTIONS FUND II, L.P. | ||
| By: its general partner, Generation IM Climate Solutions II GP, Ltd | ||
| By: | /s/ Xxxxx Xxxxx | |
| Name: | Xxxxx Xxxxx | |
| Title: | Director | |
| Address: | ||
| [Address] | ||
| Fax: [Fax] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| THE FOUNDERS FUND IV, LP | ||
| By: The Founders Fund IV Management, LLC | ||
| Its: General Partner | ||
| By: | /s/ Xxxxx Xxxxxxxxx | |
| Name: | Brain Xxxxxxxxx | |
| Title: | Managing Member | |
| Address: | ||
| [Address] | ||
| THE FOUNDERS FUND IV PRINCIPALS FUND, LP | ||
| By: The Founders Fund IV Management, LLC | ||
| Its: General Partner | ||
| By: | /s/ Xxxxx Xxxxxxxxx | |
| Name: | Xxxxx Xxxxxxxxx | |
| Title: | Managing Member | |
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| 8VC FUND I, L.P. | ||
| By: 8VC GP I, LLC | ||
| Its General Partner | ||
| By: | /s/ Xxx Xxxxxxxx | |
| Name: | Xxx Xxxxxxxx | |
| Title: | Managing Member | |
| Address: | ||
| [Address] | ||
| 8VC ENTREPRENEURS FUND I, L.P. | ||
| By: 8VC GP I, LLC | ||
| Its General Partner | ||
| By: | /s/ Xxx Xxxxxxxx | |
| Name: | Xxx Xxxxxxxx | |
| Title: | Managing Member | |
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| LEC ASANA HOLDINGS, LLC | ||
| By: | /s/ Xxxxx Xxxxxx | |
| Name: | ||
| Title: | ||
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| XXXXXX MAKAN AND DISHA MAKAN | ||
| TRUSTEES OF THE MAKAN FAMILY TRUST | ||
| By: | /s/ Xxxxxx Makan | |
| Name: Xxxxxx Makan | ||
| Title: Trustee | ||
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| XXXXXX XXXXXXX & XXXXX XXXXXXX TTEES RA TRUST DTD 7/30/10 | ||
| By: | /s/ Xxxxxx Xxxxxxx | |
| Name: | Xxxxxx Xxxxxxx | |
| Title: | Trustee | |
| THE AGARWAL/XXXXXXX 2011 IRREVOCABLE TRUST | ||
| By: | /s/ Xxxxxx Xxxxxxx | |
| Name: | Xxxxxx Xxxxxxx | |
| Title: | Trustee | |
| XXXXXX XXXXXXX | ||
| /s/ Xxxxxx Xxxxxxx | ||
| (Signature) | ||
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
The parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.
| THE INVESTORS: | ||
| WIL FUND I, L.P. | ||
| a Cayman Islands exempted limited partnership | ||
| Its General Partner | ||
| By: WiL GP I, L.P., a Cayman Islands exempted limited partnership | ||
| By: WiL Management I Ltd., a Cayman Islands exempted company | ||
| By: | /s/ Gen Isayama | |
| Name: | Gen Isayama | |
| Title: | Director | |
| Address: | ||
| [Address] | ||
SIGNATURE PAGE TO ASANA, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
SCHEDULE 1
INVESTORS
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| Name and Address |
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| The Founders Fund IV, LP | ||||
| Address: | ||||
| [Address] |
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| The Founders Fund IV Principals Fund, LP | ||||
| Address: | ||||
| [Address] |
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| Rivendell 23 LLC | ||||
| Address: | ||||
| [Address] |
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| Benchmark Capital Partners VI, L.P. | ||||
| Address: | ||||
| [Address] |
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| Andreessen Xxxxxxxx Fund I, L.P., as nominee | ||||
| Address: | ||||
| [Address] |
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| Name and Address |
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| Xxxxxx & Xxxxx Xxxxxx as Trustees of The Xxxxxx Family Trust, Dtd. 9/25/96 | ||||
| Address: | ||||
| [Address] |
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| Xxxx Xxx Xxxxx | ||||
| Address: | ||||
| [Address] |
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| Lining Deng & Song Cui | ||||
| Address: | ||||
| [Address] |
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| Xxxxxx Xxxxx | ||||
| Address: | ||||
| [Address] |
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| XXXXXX MAKAN AND XXXXXX MAKAN Trustees of the MAKAN FAMILY TRUST dtd 10/10/2005 | ||||
| Address: | ||||
| [Address] |
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| Xxx Xxxxxxx | ||||
| Address: | ||||
| [Address] |
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| Xxxxxx Xxxxxxx | ||||
| Address: | ||||
| [Address] |
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-2-
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| Name and Address |
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| XXXXXX XXXXXXX & XXXXX XXXXXXX TTEES RA TRUST DTD 7/30/10 | ||||
| Address: | ||||
| [Address] |
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| XXXX X’XXXXXX Trustee XXXX X’XXXXXX REVOCABLE TRUST DTD 3/13/08 | ||||
| Address: | ||||
| [Address] |
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| Xxxxx Xxxxx | ||||
| Address: | ||||
| [Address] |
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| Xxxx Xxxxxx | ||||
| Address: | ||||
| [Address] |
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| With a copy to: | ||||
| [Address] |
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| Xxxxx Xxxxx | ||||
| Address: | ||||
| [Address] |
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-3-
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| Name and Address |
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| Xxxxxxxx X. Xxxxx Trust dated 12/03/99 | ||||
| Address: | ||||
| [Address] |
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|
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| TMG Partners, a California corporation | ||||
| Address: | ||||
| [Address] |
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| Xxxxxx Family LLC | ||||
| Address: | ||||
| [Address] |
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|
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| Xxxx Xxxxxxxxxx Trust DTD 7/7/2006 | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxxxxxxxx X. Xxx Revocable Trust DTD 5/29/2009 | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxxx Xxxxxxx Xxxxxxxxxx TTEE Xxxxxx Xxxxxxx Xxxxxxxxxx REV TR DTD 11/24/08 | ||||
| Address: | ||||
| [Address] |
||||
-4-
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| Name and Address |
||||
| The Agarwal/Xxxxxxx 2011 Irrevocable Trust | ||||
| Address: | ||||
| [Address] |
||||
|
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| Makan Family Trust DTD October 10, 2005 | ||||
| Address: | ||||
| [Address] |
||||
|
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| 8VC Fund I, L.P. | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxx Xxxx | ||||
| Address: | ||||
| [Address] |
||||
|
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| SEV-VTF V, LP | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxx X. and Xxx X. XxXxxxx Trust U/T/A/D 3/27/96 | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxx Xxxxx Living Trust | ||||
| Address: | ||||
| [Address] |
||||
-5-
|
|
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| Name and Address |
||||
| Mandible Media Investments LLC | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxxx X. Xxxxxxxxx TTEE Xxxxxx X. Xxxxxxxxx Trust DTD 12/27/05 | ||||
| Address: | ||||
| [Address] |
||||
|
|
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| Xxxxxx X Xxxxxxxxx 2008 Annuity Trust DTD 3/10/08 | ||||
| Address: | ||||
| [Address] |
||||
|
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| Xxxxxxxxx Investment Holdings, LLC | ||||
| Address: | ||||
| [Address] |
||||
|
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| 8VC Entrepreneurs Fund I, L.P. | ||||
| Address: | ||||
| [Address] |
||||
|
|
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| Generation IM Climate Solutions Fund II, L.P. | ||||
| Address: | ||||
| [Address] |
||||
-6-
|
|
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| Name and Address |
||||
| LEC Asana Holdings, LLC | ||||
| Address: | ||||
| [Address] |
||||
|
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| WiL Fund I, L.P. | ||||
| Address: | ||||
| [Address] |
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-7-
