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IMPROVENET, INC.
FOURTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
DATED NOVEMBER 23, 1999
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TABLE OF CONTENTS
PAGE
SECTION 1. TERMINATION OF PRIOR AGREEMENT.. . . . . . . . . . . . . . . . . . . . .1
1.1 Termination of Prior Agreement . . . . . . . . . . . . . . . . . . . . .1
SECTION 2. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 3. REGISTRATION; RESTRICTIONS ON TRANSFER.. . . . . . . . . . . . . . . . .3
3.1 Restrictions on Transfer.. . . . . . . . . . . . . . . . . . . . . . . .3
3.2 Demand Registration. . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.3 Piggyback Registrations. . . . . . . . . . . . . . . . . . . . . . . . .5
3.4 Form S-3 Registration. . . . . . . . . . . . . . . . . . . . . . . . . .6
3.5 Expenses of Registration.. . . . . . . . . . . . . . . . . . . . . . . .7
3.6 Obligations of the Company.. . . . . . . . . . . . . . . . . . . . . . .8
3.7 Termination of Registration Rights.. . . . . . . . . . . . . . . . . . .9
3.8 Delay of Registration; Furnishing Information. . . . . . . . . . . . . .9
3.9 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.10 Assignment of Registration Rights. . . . . . . . . . . . . . . . . . . 11
3.11 Amendment of Registration Rights.. . . . . . . . . . . . . . . . . . . 11
3.12 Limitation on Subsequent Registration Rights.. . . . . . . . . . . . . 11
3.13 "Market Stand-Off" Agreement.. . . . . . . . . . . . . . . . . . . . . 12
3.14 Rule 144 Reporting.. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4. COVENANTS OF THE COMPANY.. . . . . . . . . . . . . . . . . . . . . . . 12
4.1 Basic Financial Information and Reporting. . . . . . . . . . . . . . . 12
4.2 Additional Information and Rights. . . . . . . . . . . . . . . . . . . 13
4.3 Inspection Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4 Confidentiality of Records.. . . . . . . . . . . . . . . . . . . . . . 14
4.5 Reservation of Common Stock. . . . . . . . . . . . . . . . . . . . . . 14
4.6 Stock Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Key Man Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.8 Proprietary Information and Inventions Agreement.. . . . . . . . . . . 14
4.9 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.10 Corporate Properties.. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.12 Material Obligations.. . . . . . . . . . . . . . . . . . . . . . . . . 15
4.13 Laws and Regulations.. . . . . . . . . . . . . . . . . . . . . . . . . 15
i.
TABLE OF CONTENTS, CONT.
4.14 Indebtedness.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.15 Hiring of Key Employees. . . . . . . . . . . . . . . . . . . . . . . . 15
4.16 Observer Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.17 Board and Observer Compensation. . . . . . . . . . . . . . . . . . . . 15
4.18 Board Meetings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.19 Directors' and Officers' Liability Insurance.. . . . . . . . . . . . . 16
4.20 Budget.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.21 Small Business Concern.. . . . . . . . . . . . . . . . . . . . . . . . 16
4.22 Patent Diligence.. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.23 Nonsolicitation Convenant. . . . . . . . . . . . . . . . . . . . . . . 16
4.24 Termination of Covenants.. . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5. RIGHTS OF FIRST OFFER. . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Subsequent Offerings.. . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Exercise of Rights.. . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Issuance of Equity Securities to Other Persons.. . . . . . . . . . . . 17
5.4 Termination of Rights of First Offer.. . . . . . . . . . . . . . . . . 17
5.5 Transfer of Rights of First Offer. . . . . . . . . . . . . . . . . . . 17
5.6 Excluded Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Successors and Assigns.. . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Entire Agreement.. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Amendment and Waiver.. . . . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Delays or Omissions. . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Titles and Subtitles.. . . . . . . . . . . . . . . . . . . . . . . . . 20
6.11 Additional Investors.. . . . . . . . . . . . . . . . . . . . . . . . . 20
6.12 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ii.
IMPROVENET, INC.
FOURTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"AGREEMENT") is entered into as of the 23rd day of November, 1999, by and
among IMPROVENET, INC., a Delaware corporation (the "COMPANY"), and the
holders of the Company's Series A Preferred Stock ("SERIES A STOCK"), the
holders of the Company's Series B Preferred Stock (the "SERIES B STOCK"), the
holders of the Company's Series C Preferred Stock (the "SERIES C STOCK"), the
holders of the Company's Series D Preferred Stock (the "SERIES D STOCK") and
the purchasers of the Company's Series E Preferred Stock (the "SERIES E
STOCK"), all as set forth on EXHIBIT A hereto. The holders of the Series A
Stock, Series B Stock, Series C Stock, and Series D Stock and purchasers of
the Series E Stock shall be referred to collectively hereinafter as the
"INVESTORS" and each individually as an "INVESTOR."
RECITALS
WHEREAS, the Company issued Series D Stock to certain Investors and
entered into a Third Amended and Restated Investor Rights Agreement dated
September 10, 1999 (the "PRIOR AGREEMENT") by and between the Company, the
holders of Series A Stock, Series B Stock and Series C Stock and the
purchasers of Series D Stock. The holders of Series A Stock, Series B Stock,
Series C Stock and Series D Stock possess certain registration rights,
information rights and other rights under such Prior Agreement;
WHEREAS, the Company and the undersigned holders of Series A Stock,
Series B Stock, Series C Stock and Series D Stock desire to terminate the
Prior Agreement and to accept the rights and obligations created pursuant
hereto in lieu of the rights granted to them under the Prior Agreement;
WHEREAS, the Company proposes to sell and issue up to three million
(3,000,000) shares of its Series E Stock pursuant to the First Series E
Preferred Stock and Warrant Purchase Agreement and the Second Series E
Preferred Stock and Warrant Purchase Agreement (the "PURCHASE AGREEMENTS");
and
WHEREAS, as a condition of entering into the Purchase Agreements, the
purchasers of Series E Stock have requested that the Company extend to them
registration rights, information rights and other rights as set forth below.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase Agreements, the parties mutually agree as
follows:
SECTION 1. TERMINATION OF PRIOR AGREEMENT.
1.1 TERMINATION OF PRIOR AGREEMENT. The Prior Agreement is terminated
in its entirety and restated herein. Such termination and restatement is
effective upon execution of this Agreement by the holders of at least a
majority in interest of the Registrable Securities (as the term is defined in
the Prior Agreement). Upon such execution, all provisions of, rights granted
and covenants made in the Prior Agreement are hereby waived, released and
terminated in their entirety and shall have no further force or effect. The
rights and covenants contained in this Agreement set forth the sole and
entire agreement
1.
among the Company and the Investors on the subject matter hereof and
supersede any and all rights granted and covenants made under any prior
agreements.
SECTION 2. GENERAL.
2.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"HOLDER" means (i) any person owning of record Registrable
Securities (as hereinafter defined) that have not been sold to the public or
(ii) any assignee of record of such Registrable Securities in accordance with
Section 3.10 hereof.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its common stock registered under the
Securities Act (as hereinafter defined).
"QUALIFIED PUBLIC OFFERING" means the Company's first underwritten
public offering of its common stock registered under the Securities Act
pursuant to which all outstanding shares of preferred stock have converted
into common stock of the Company.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (i) common stock of the Company
issued or issuable upon conversion of the Shares (as hereinafter defined) or
pursuant to exercise of warrants held by GE Capital Equity Investments, Inc.
and General Electric Appliances; and (ii) any common stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right
or other security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, such any securities
described in subsection (i) above. Notwithstanding the foregoing,
Registrable Securities shall not include any securities sold by a person to
the public either pursuant to a registration statement, Rule 144 or sold in a
private transaction in which the transferor's rights under Section 3 of this
Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of
shares determined by calculating the total number of shares of the Company's
common stock that are Registrable Securities and either (1) are then issued
and outstanding or (2) are issuable pursuant to then exercisable or
convertible securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 3.2, 3.3 and 3.4 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, reasonable fees and
disbursements not to exceed twenty-five thousand dollars ($25,000) of a
single special counsel for the Holders, blue sky fees and expenses and the
expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
2.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale.
"SHARES" shall mean the Company's Series A Stock issued pursuant to
the Series A Preferred Stock and Warrant Purchase Agreement dated June 30,
1997 and shares of Series A Stock issued upon exercise of Warrants to
purchase Series A Stock held by the Investors listed on EXHIBIT A hereto and
their permitted assigns, the Company's Series B Stock issued pursuant to the
Series B Preferred Stock and Warrant Purchase Agreement dated March 17, 1997
and shares of Series B Stock issued upon exercise of the Warrants to purchase
Series B Stock held by the Investors listed on EXHIBIT A hereto and their
permitted assigns, the Company's Series C Stock held by the Investors listed
on EXHIBIT A hereto, the Company's Series D Stock held by the Investors
listed on EXHIBIT A hereto and the Company's Series E Stock held by the
Investors listed on EXHIBIT A hereto and Shares of Common Stock issued upon
the exercise of the Warrants to purchase Common Stock held by the Investors
listed on EXHIBIT A hereto.
"FORM S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC (as hereinafter defined) which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
SECTION 3. REGISTRATION; RESTRICTIONS ON TRANSFER.
3.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company
of the proposed disposition and (C) if reasonably requested by the Company,
such Holder shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. It is agreed
that the Company will not require opinions of counsel for transactions made
pursuant to Rule 144.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its
partners or former partners in accordance with partnership interests, (B) a
corporation to its shareholders in accordance with their interest in the
corporation, (C) a limited liability company to its members or former members
in accordance with their interest in the limited liability company or (D) to
a Holder's family member or trust for the benefit of an individual Holder;
provided that in each case the transferee will be subject to the terms of
this Agreement to the same extent as if he were an original Holder hereunder,
or (E) an affiliate of a Holder.
3.
(b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state
securities laws or as provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT")
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder thereof if the Holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company
or in-house counsel of a Holder) reasonably acceptable to the Company to the
effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
3.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 3.2, if the Company
shall receive a written request from the Holders of more than a majority of
the Registrable Securities then outstanding (the "INITIATING HOLDERS") that
the Company file a registration statement under the Securities Act covering
the registration of Registrable Securities having a net aggregate offering
price to the public in excess of twenty million dollars ($20,000,000), then
the Company shall, within thirty (30) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the limitations
of this Section 3.2, use its best efforts to effect, as soon as practicable,
the registration under the Securities Act of all Registrable Securities that
the Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 3.2 or any request pursuant to Section 3.4 and the Company shall
include such information in the written notice referred to in Section 3.2(a)
or Section 3.4(a), as applicable. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of
such Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 3.2 or Section 3.4, if
the underwriter advises the Company that marketing factors require a
limitation of the number of securities to be underwritten
4.
(including Registrable Securities) then the Company shall so advise all
Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities
on a pro rata basis based on the number of Registrable Securities held by all
such Holders (including the Initiating Holders). Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 3.2:
(i) prior to the earlier of (i) March 17, 2001 or (ii) six
months after the closing of the Initial Offering; or
(ii) after the Company has effected three (3) registrations
pursuant to this Section 3.2, and such registrations have been declared or
ordered effective; or
(iii) during the period starting with the date of filing of,
and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to the Initial Offering;
provided that the Company makes reasonable good faith efforts to cause such
registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 3.2(a), the Company gives
notice to the Holders of the Company's intention to file a registration
statement with the SEC in connection with its Initial Offering within ninety
(90) days and the Company shall make reasonable good faith efforts to cause
such registration statement to become effective within ninety (90) days of
such filing with the SEC; provided that such right to delay a request shall
be exercised by the Company not more than once in any twelve (12) month
period; or
(v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 3.2, a certificate signed by
the Chairman of the Board 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 stockholders for such registration statement to be effected
at such time, in which event the Company shall have the right to defer such
filing for a period of not more than sixty (60) days after receipt of the
request of the Initiating Holders; provided that such right to delay a
request shall be exercised by the Company not more than once in any twelve
(12) month period.
3.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the
filing of any registration statement under the Securities Act for purposes of
a public offering of securities of the Company (including, but not limited
to, registration statements relating to secondary offerings of securities of
the Company, but excluding registration statements relating to employee
benefit plans or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act) and will afford each such
Holder an opportunity to include in such registration statement all or part
of such Registrable Securities held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by it shall, within twenty (20) days after the
above-described notice from the Company, so notify the Company in writing.
Such notice shall state the intended method of disposition of the Registrable
Securities by such Holder. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by the
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
5.
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 3.3 is for an underwritten offering,
the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder to be included in a registration pursuant
to this Section 3.3 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of the Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the
Holders on a pro rata basis based on the total number of Registrable
Securities held by the Holders; and third, to any stockholder of the Company
(other than a Holder) on a pro rata basis. No such reduction shall (i)
reduce the securities being offered by the Company for its own account to be
included in the registration and underwriting, or (ii) reduce the amount of
securities of the selling Holders included in the registration below
thirty-three percent (33%) of the total amount of securities included in such
registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in
which event any or all of the Registrable Securities of the Holders may be
excluded in accordance with the immediately preceding sentence. In no event
will shares of any other selling stockholder be included in any such
registration which would reduce the number of shares which may be included by
Holders without the written consent of holders of not less than a majority of
the Registrable Securities proposed to be sold in the offering. For purposes
of pro rata apportionment pursuant to this Section 3.3, for any Holder that
is a partnership or corporation, the partners, retired partners and
shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling Holder," and any
pro rata reduction with respect to such "selling Holder" shall be based upon
the aggregate amount of Registrable Securities owned by all such related
entities and individuals.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 3.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 3.5 hereof.
3.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests
that the Company effect a registration on Form S-3 or any similar short-form
registration statement and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such
6.
request as are specified in a written request given within twenty (20) 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 3.4:
(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 of less than five hundred thousand dollars
($500,000);
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors 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
stockholders 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 sixty (60) days
after receipt of the request of the Holder or Holders under this Section 3.4;
provided, that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period;
(iv) if the Company has within the twelve (12) month period
preceding the date of such request, already effected one (1) such
registration on Form S-3 for the Holders pursuant to this Section 3.4; or
(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.
(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. All such Registration Expenses
incurred in connection with registrations requested pursuant to this Section
3.4 after the first three (3) registrations shall be paid by the selling
Holders pro rata in proportion to the number of shares sold by each.
3.5 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 3.2 or the first three
registrations under each of Section 3.3 and Section 3.4 herein shall be borne
by the Company. All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered. The
Company shall not, however, be required to pay for expenses of any
registration proceeding begun pursuant to Section 3.2 or 3.4, the request of
which has been subsequently withdrawn by the Holders unless (a) the
withdrawal is based upon material adverse information concerning the Company
of which the Initiating Holders or Holders, as applicable, were not aware at
the time of such request or (b) the Holders of a majority of Registrable
Securities agree to forfeit their right to one requested registration
pursuant to Section 3.2 or Section 3.4, as applicable, in which event such
right shall be forfeited by all Holders. If the Holders are required to pay
the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares for which registration was requested. If
the Company is required to pay the Registration Expenses of a withdrawn
offering pursuant to clause (a) above, then the Holders shall not
7.
forfeit their rights pursuant to Section 3.2 or Section 3.4 to a demand
registration pursuant to the limitations of Section 3.2 and Section 3.4,
respectively.
3.6 OBLIGATIONS OF THE COMPANY. Whenever required 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 all reasonable efforts to
cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one hundred
twenty (120) days or, if earlier, until the Holder or Holders have completed
the distribution related thereto.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by
them.
(d) Use all reasonable 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(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering and reasonably satisfactory to a majority
in interest of the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company,
8.
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
3.7 TERMINATION OF REGISTRATION RIGHTS. A Holder's registration rights
shall expire if (a) the Company has completed its Initial Offering and is
subject to the provisions of the Exchange Act, (b) such Holder (together
with its affiliates, partners and former partners) holds less than 1% of the
Company's outstanding Common Stock (treating all shares of convertible
Preferred Stock on an as converted basis) and (c) all Registrable Securities
held by and issuable to such Holder (and its affiliates, partners and former
partners) may be sold under Rule 144 during any ninety (90) day period.
3.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 3.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 3.2, 3.3 or 3.4 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method
of disposition of such securities as shall reasonably be required to effect
the registration of their Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 3.2 or Section 3.4 if, due to the
operation of subsection 3.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's
obligation to initiate such registration as specified in Section 3.2 or
Section 3.4, whichever is applicable.
3.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 3.2, 3.3 or 3.4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, affiliates, shareholders
and directors of each Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"VIOLATION") by the Company: (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 in connection
with the offering covered by such registration statement; and the Company
will reimburse each such Holder, partner,
9.
affiliate, shareholder, officer, director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED HOWEVER, that the indemnity agreement contained in this
Section 3.9(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably
withheld, nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by such Holder, partner, officer, director, legal counsel,
underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will severally,
but not jointly, if Registrable Securities held by such Holder are included
in the securities as to which such registration, qualification or compliance
is being effected, indemnify and hold harmless the Company, each of its
directors, its officers, and legal counsel and each person, if any, who
controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or
any person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, or partner,
director, officer or controlling person of such other Holder may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
under an instrument duly executed by such Holder and stated to be
specifically for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter or
other Holder, or partner, officer, director or controlling person of such
other Holder in connection with investigating or defending any such loss,
claim, damage, liability or action if it is judicially determined that there
was such a Violation; PROVIDED, HOWEVER, that the indemnity agreement
contained in this Section 3.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 3.9(b) exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 3.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 3.9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 3.9, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 3.9.
10.
(d) If the indemnification provided for in this Section 3.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute
to the amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the Violation(s) that
resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, that
in no event shall any contribution by a Holder hereunder exceed the net
proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section
3.9 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this Agreement. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement 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.
3.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 3 may be assigned
by a Holder to a transferee or assignee of Registrable Securities which (a)
is a subsidiary, parent, affiliate, general partner, limited partner or
retired partner of a Holder, (b) is a Holder's family member or trust for the
benefit of an individual Holder, or (c) acquires at least twenty-five
thousand (25,000) shares of Registrable Securities (as adjusted for stock
splits and combinations); PROVIDED, HOWEVER, (A) the transferor shall, within
ten (10) days after such transfer, furnish to the Company 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 (B) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.
3.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 3
may be amended and the observance thereof may be waived (either generally or
in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Holders of at least a
majority of the Registrable Securities then outstanding. Notwithstanding the
foregoing, any amendment adversely affecting the rights or privileges of a
particular series of preferred stock will require the consent of a majority
in interest of the holders of such series so affected. Any amendment or
waiver effected in accordance with this Section 3.11 shall be binding upon
each Holder and the Company. By acceptance of any benefits under this
Section 3, Holders of Registrable Securities hereby agree to be bound by the
provisions hereunder.
3.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the Registrable Securities then outstanding,
enter into any agreement with any holder or prospective holder of any
securities of the Company that would grant such holder registration rights
senior to or pari passu or otherwise conflict with those granted to the
Holders hereunder.
11.
3.13 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that such
Holder shall not sell or otherwise transfer, dispose of, make any short sale
of, grant any option for the purpose of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any common stock (or
other securities) of the Company held by such Holder (other than those
included in the registration) for a period specified by the representative of
the underwriters of common stock (or other securities) of the Company not to
exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act,
provided that:
(i) such agreement shall apply only to the Company's Initial
Offering; and
(ii) all officers and directors of the Company and holders of
at least one percent (1%) of the Company's voting securities enter into
similar agreements.
Each Holder agrees to execute and deliver such other agreements as may
be reasonably requested by the Company or the underwriter which are
consistent with the foregoing or which are necessary to give further effect
thereto. The obligations described in this Section 3.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-8 or similar
forms that may be promulgated in the future, or a registration relating
solely to a Commission Rule 145 transaction on Form S-4 or similar forms that
may be promulgated in the future. The Company may impose stop-transfer
instructions with respect to the shares of common stock (or other securities)
subject to the foregoing restriction until the end of said one hundred eighty
(180) day period.
3.14 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date
of the first registration filed by the Company for an offering of its
securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish
to such Holder forthwith upon request: a written statement by the Company as
to its compliance with the reporting requirements of said Rule 144 of the
Securities Act, and of the Exchange Act (at any time after it has become
subject to such reporting requirements); a copy of the most recent annual or
quarterly report of the Company; and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
SECTION 4. COVENANTS OF THE COMPANY.
4.1 BASIC FINANCIAL INFORMATION AND REPORTING.
(a) The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied and
12.
will set aside on its books all such proper accruals and reserves as shall be
required under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of
the Company, and in any event within sixty (60) days thereafter, the Company
will furnish each Investor a balance sheet of the Company, as at the end of
such fiscal year, and a statement of income and a statement of cash flows of
the Company, for such year, all prepared in accordance with generally
accepted accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail. Such financial statements shall be accompanied by a
report and opinion thereon by independent public accountants of national
standing selected by the Company's Board of Directors.
(c) The Company will furnish each Investor, as soon as practicable
after the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company, and in any event within thirty (30) days
thereafter, a balance sheet of the Company as of the end of each such
quarterly period, and a statement of income and a statement of cash flows of
the Company for such period and for the current fiscal year to date, prepared
in accordance with generally accepted accounting principles, with the
exception that no notes need be attached to such statements and year-end
audit adjustments may not have been made.
4.2 ADDITIONAL INFORMATION AND RIGHTS.
(a) So long as an Investor (with its affiliates) shall own not
less than one hundred thousand (100,000) shares of Registrable Securities (as
adjusted for stock splits and combinations) (a "MAJOR INVESTOR"), the Company
will furnish each such Major Investor at least thirty (30) days prior to the
beginning of each fiscal year an annual budget and operating plans for such
fiscal year (and as soon as available, any subsequent revisions thereto).
(b) The Company will provide to each Major Investor as soon as
practical after the end of the month and in any event within twenty (20) days
thereafter, a consolidated balance sheet of the Company and its subsidiaries,
if any, as at the end of the month and consolidated statements of income and
cash flows of the Company and its subsidiaries, for each month and for the
current fiscal year of the Company to date, all subject to normal year-end
adjustments, prepared in accordance with generally accepted accounting
principles consistently applied and certified by the principal financial or
accounting officer of the Company, together with a comparison of such
statements to the corresponding periods of the prior fiscal year and to the
Company's operating plan then in effect and approved by the Board of
Directors.
(c) The Company will furnish other information reasonably
requested by a Major Investor, including, but not limited to, a monthly
report regarding the Company's key metrics.
4.3 INSPECTION RIGHTS. Each Major Investor shall have the right to
visit and inspect any of the properties of the Company or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the
Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as
often as may be reasonably requested; PROVIDED, HOWEVER, that the Company
shall not be obligated under this Section 4.3 with respect to a competitor of
the Company or with respect to information which the Board of Directors
determines in good faith is confidential and should not, therefore, be
disclosed.
13.
4.4 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to
use commercially reasonable efforts to ensure that its authorized
representatives use, the same degree of care as such Investor uses to protect
its own confidential information to keep confidential any information
furnished to it which the Company identifies as being confidential or
proprietary (so long as such information is not in the public domain), except
that such Investor may disclose such proprietary or confidential information
(a) to any partner, subsidiary, parent, affiliate, attorney, accountant or
other professional advisor of such Investor for the purpose of evaluating its
investment in the Company as long as such partner, subsidiary or parent is
advised of the confidentiality provisions of this Section 4.4, (b) in any
statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over any Investor or
upon the request or demand of any regulatory agency or authority having
jurisdiction over any Investor or as may otherwise be required by law
(provided that such Investor shall give the Company prior notice of the
disclosure permitted by this clause unless such notice is prohibited by the
subpoena, order or law), and (c) as may be required, to any rating agency
that rates the financial condition or claims paying ability of Allstate
Insurance Company.
4.5 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of
the Shares, all common stock issuable from time to time upon such conversion.
4.6 STOCK VESTING. Unless otherwise approved by the Board of
Directors, all stock options and other stock equivalents issued after the
date of this Agreement to employees, directors, consultants and other service
providers shall be subject to vesting as follows: (a) twenty-five percent
(25%) of such stock shall vest at the end of the first year following the
date of issuance or such person's services commencement date with the
Company, as applicable, and (b) seventy-five percent (75%) of such stock
shall vest over the remaining three (3) years. With respect to any unvested
shares of stock purchased by any such person, the Company's repurchase option
shall provide that upon such person's termination of employment or service
with the Company, with or without cause, the Company or its assignee (to the
extent permissible under applicable securities laws and other laws) shall
have the option to purchase at cost any unvested shares of stock held by such
person.
4.7 KEY MAN INSURANCE. For so long as any shares of Series A Stock,
Series B Stock, Series C Stock, Series D Stock or Series E Stock remain
outstanding and subject to the approval of the Board of Directors, the
Company will use its best efforts to obtain and maintain in full force and
effect term life insurance in an amount to be determined by the Board of
Directors, on each of the lives of Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx,
naming the Company as beneficiary; provided, however, the amount covering
Xxxxxx Xxxxxxx shall be no less than $1 million and the amount covering
Xxxxxx Xxxxxx shall be no less than $2 million and the Company shall have
thirty (30) days from the date hereof to put such a policy in place.
4.8 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company
shall require all employees and consultants to execute and deliver a
Proprietary Information and Inventions Agreement in the form attached to the
Purchase Agreements.
4.9 CORPORATE EXISTENCE. The Company shall at all times cause to be
done all things necessary to maintain, preserve and renew its corporate
existence and all material licenses and permits necessary for the conduct of
its business.
4.10 CORPORATE PROPERTIES. The Company shall maintain and keep its
properties in good repair, working order and condition, reasonable wear and
tear excepted, and from time to time make all
14.
necessary or desirable repairs, renewals and replacements, so that its
business may be properly and advantageously conducted at all times.
4.11 TAXES. The Company shall pay and discharge, when payable, all
taxes, assessments and governmental charges imposed upon its properties or
upon the income or profits therefrom (in each case before the same become
delinquent and before penalties accrue thereon) and all claims for labor,
materials or supplies which if unpaid might by law become a lien upon any of
its property, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings and adequate reserves, determined
in accordance with generally accepted accounting principles, have been set
aside on its books with respect thereto.
4.12 MATERIAL OBLIGATIONS. The Company shall comply with all other
material obligations which it incurs pursuant to any contract or agreement,
whether oral or written, express or implied, as such obligations become due,
unless and to the extent that the same are being contested in good faith and
by appropriate proceedings.
4.13 LAWS AND REGULATIONS. The Company shall comply with all applicable
laws, rules and regulations of all foreign and domestic governmental
authorities (and, to the extent the Company is subject to the laws thereof,
any foreign jurisdiction), the violation of which would have a material
adverse effect upon its businesses or financial condition.
4.14 INDEBTEDNESS. The Company shall not, without the prior approval of
the Board of Directors, have indebtedness at any given time in excess of
three hundred fifty thousand dollars ($350,000) (the "MAXIMUM INDEBTEDNESS"),
unless the Board of Directors has previously approved an increase of the
permitted Maximum Indebtedness.
4.15 HIRING OF KEY EMPLOYEES. The Company shall as soon as possible
after the date hereof initiate a search for and use its best efforts to hire
a Chief Financial Officer, subject to the approval of the Board of Directors.
4.16 OBSERVER RIGHTS. Each Major Investor (or its representative) shall
have the right to attend all meetings of the Board of Directors in a
nonvoting observer capacity (an "OBSERVER"), to receive notice of such
meetings and to receive the information provided by the Company to the Board
of Directors; provided, however, that the Company may require as a condition
precedent to any Holder's rights under this Section 4.16 that each person
proposing to attend any meeting of the Board of Directors and each person to
have access to any of the information provided by the Company to the Board of
Directors shall agree to hold in confidence and trust all information so
received during such meetings or otherwise; and, provided further, that the
Company reserves the right not to provide information and to exclude such
Observer from any meeting or portion thereof if delivery of such information
or attendance at such meeting by such Observer would result in disclosure of
trade secrets to such Observer or its representative or would adversely
affect the attorney-client privilege between the Company and its counsel or
if such Observer is a direct competitor of the Company.
4.17 BOARD AND OBSERVER COMPENSATION. The Company shall reimburse the
reasonable travel and out-of-pocket expenses of each Board member and
Observer against documented receipts incurred in connection with (a) such
Board member's and Observer's attendance at any meeting of the Company's
Board of Directors and (b) such Board member's duties in connection with
representation of the Company.
15.
4.18 BOARD MEETINGS. The Company shall hold at least six (6) Board of
Directors' meetings each calendar year with at least one (1) such meeting per
calendar quarter.
4.19 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company will
obtain and keep directors' and officers' liability insurance for all
directors and key officers of at least the current level of coverage at all
times.
4.20 BUDGET. The Company agrees to prepare and submit a proposed budget
to the Board of Directors of the Company and each of the Major Investors at
least 30 days prior to the beginning of each fiscal year (the "BUDGET"). The
Budget shall be accepted as the Budget for such fiscal year when it has been
approved by the Board of Directors of the Company. The Budget shall be
reviewed by the Company periodically and all material changes therein and all
material deviations therefrom which are proposed to be made by the Company
shall be resubmitted and approved in accordance with procedures established
by the Board of Directors, and the Company shall not make any such changes or
material deviations to or from the Budget without compliance with such
procedures.
4.21 SMALL BUSINESS CONCERN. So long as any Small Business Investment
Company (an "SBIC INVESTOR") is an investor in the Company, the Company will
provide the SBIC Investor any information that is reasonably requested by the
Small Business Administration (the "SBA"). The Company will provide SBA
examiners access to its books and records for SBA audit purposes in
accordance with normal SBA procedures.
4.22 PATENT DILIGENCE. The Company agrees within forty-five (45) days
of the date hereof to engage Xxxxxx Godward LLP to perform a website audit
and related patent diligence regarding the Company's intellectual property
(the "AUDIT") within a scope mutually agreed upon by GE Capital Equity
Investments, Inc. and the Company and to prepare a report to the Board of
Directors regarding its findings in the course of such Audit. The Company
agrees within forty-five (45) days of the date that such report is delivered
to the Board of Directors to take commercially reasonable efforts to
implement those items from such Audit that the Board of Directors deems
appropriate. The cost that the Company shall incur in connection with such
Audit shall not exceed an amount deemed reasonable by the Board of Directors.
4.23 NONSOLICITATION COVENANT. Within thirty (30) days of the date
hereof, the Company agrees to enter into non-solicitation agreements with
director level employees and higher to the extent permitted by California law.
4.24 TERMINATION OF COVENANTS. All covenants contained in this Section
4 shall expire and terminate as to each Investor on the effective date of the
registration statement pertaining to the Company's Qualified Public Offering.
Notwithstanding the foregoing, Section 4.21 hereto shall terminate upon the
expiration or termination of the Internet Development, Marketing and
Distribution Agreement attached hereto as Exhibit B.
SECTION 5. RIGHTS OF FIRST OFFER.
5.1 SUBSEQUENT OFFERINGS. Each Major Investor shall have a right of
first offer to purchase its pro rata share of all Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 5.6 hereof. Each Investor's pro rata share is equal to
the ratio of (a) the number of shares of the Company's common stock
(including all shares of common stock issued or issuable upon conversion of
16.
the Shares) which such Investor is deemed to hold immediately prior to the
issuance of such Equity Securities to (b) the total number of shares of the
Company's outstanding common stock (including all shares of common stock
issued or issuable upon conversion of the Shares or upon the exercise of any
outstanding warrants or options) immediately prior to the issuance of the
Equity Securities. The term "EQUITY SECURITIES" shall mean (i) any common
stock, preferred stock or other security of the Company, (ii) any security
convertible, with or without consideration, into any common stock, preferred
stock or other security (including any option to purchase such a convertible
security), (iii) any security carrying any warrant or right to subscribe to
or purchase any common stock, preferred stock or other security or (iv) any
such warrant or right.
5.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its
intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. Each Major
Investor shall have twenty (20) days from the giving of such notice to agree
to purchase its pro rata share of the Equity Securities for the cash
equivalent price and upon the terms and conditions specified in the notice by
giving written notice to the Company and stating therein the quantity of
Equity Securities to be purchased. Notwithstanding the foregoing, the Company
shall not be required to offer or sell such Equity Securities to any Investor
who would cause the Company to be in violation of applicable federal or state
securities laws by virtue of such offer or sale through no fault of the
Company.
5.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Major Investors elect to purchase their pro rata share of the Equity
Securities, then the Company shall promptly notify in writing the Major
Investors who do so elect and shall offer such Major Investors the right to
acquire such unsubscribed shares. Such Major Investors shall have five (5)
days after receipt of such notice to notify the Company of their election to
purchase all or a portion thereof of the unsubscribed shares. If the
Investors fail to exercise in full the rights of first offer, the Company
shall have ninety (90) days thereafter to sell the Equity Securities in
respect of which the Major Investors' rights were not exercised, at a price
and upon general terms and conditions materially no more favorable to the
purchasers thereof than specified in the Company's notice to the Major
Investors pursuant to Section 5.2 hereof. If the Company has not sold such
Equity Securities within ninety (90) days of the notice provided pursuant to
Section 5.2, the Company shall not thereafter issue or sell any Equity
Securities, without first offering such securities to the Major Investors in
the manner provided above.
5.4 TERMINATION OF RIGHTS OF FIRST OFFER. The rights of first offer
established by this Section 5 shall not apply to and shall terminate upon the
effective date of the registration statement pertaining to the Company's
Qualified Public Offering.
5.5 TRANSFER OF RIGHTS OF FIRST OFFER. The rights of first offer of
each Major Investor under this Section 5 may be transferred to the same
parties, subject to the same restrictions as any transfer of registration
rights pursuant to Section 3.10.
5.6 EXCLUDED SECURITIES. The rights of first offer established by this
Section 5 shall have no application to any of the following Equity Securities:
(a) shares of common stock (and/or options, warrants or other
common stock purchase rights issued pursuant to such options, warrants or
other rights) issued or to be issued to employees, officers or directors of,
or consultants or advisors to the Company or any subsidiary, pursuant to
stock purchase or stock option plans or other arrangements that are approved
in good faith by the Board of Directors including the representatives
designated by the holders of the Shares;
17.
(b) stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement as set forth on EXHIBIT G of the Purchase Agreement[s];
and stock issued pursuant to any such rights or agreements granted after
the date of this Agreement, provided that the rights of first offer
established by this Section 5 applied with respect to the initial sale or
grant by the Company of such rights or agreements;
(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination unanimously approved by the Board of Directors;
(d) shares of common stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(e) shares of common stock issued upon conversion of the Shares;
(f) shares of Series A Stock issued upon exercise of certain
Warrants to purchase Series A Stock held by certain Investors;
(g) shares of Series B Stock issued upon exercise of certain
Warrants to purchase Series B Stock held by certain Investors;
(h) shares of common stock or preferred stock and/or options,
warrants or other common stock or preferred stock purchase rights issued
pursuant to any equipment leasing arrangement, debt financing from a bank or
similar financial institution or strategic transaction approved by the Board
(so long as Board approval constitutes consent by at least a majority of the
members of the Board representing holders of preferred stock);
(i) shares of Series D Stock issued upon exercise of certain
warrants to purchase Series D Stock held by certain Investors;
(j) 5,666 shares of Series C Stock issued to Xxxxxx Xxxxxx in
connection with recruiting services rendered to the Company or Series D Stock
issued by the Company; and
(k) any Equity Securities that are issued by the Company pursuant
to a registration statement filed under the Securities Act.
(l) shares of Common Stock issued upon exercise of certain
warrants to purchase Common Stock held by certain Investors.
SECTION 6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York as applied to agreements among New
York residents entered into and to be performed entirely within New York
Each party hereto hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of the state and federal courts located in the State
of New York for any actions, suits or proceedings arising out of or relating
to this Agreement or any of the Related Agreements (as defined in the
Purchase Agreements) and the transactions contemplated hereby or thereby.
Each party hereto agrees not to commence any action, suit or proceeding
relating thereto except in such courts. The parties hereto irrevocably and
unconditionally waive any objection to the laying of
18.
venue in any action, suit or proceeding arising out of this Agreement or any
of the Related Agreements or the transactions contemplated hereby or thereby,
in such state or federal courts aforesaid and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO
WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT OR ANY OF THE
RELATED AGREEMENTS.
6.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by
or on behalf of the Company pursuant hereto in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate
or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
PROVIDED, HOWEVER, that prior to the receipt by the Company of adequate
written notice of the transfer of any Registrable Securities specifying the
full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such shares in its records as the absolute
owner and holder of such shares for all purposes, including the payment of
dividends or any redemption price.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits hereto, the Related
Agreements (as defined in the Purchase Agreements) and the other documents
delivered pursuant thereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein
and therein.
6.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
6.6 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the
Holders of at least a majority of the Registrable Securities.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the Holders of at least a majority of the
Registrable Securities; provided that any amendment adversely affecting the
rights or privileges of a particular series of preferred stock will require
consent of a majority in interest of the holders of such series so affected.
19.
(c) Notwithstanding the foregoing, this Agreement may be amended
with only the written consent of the Company to include additional purchasers
of Shares as Investors, Holders and parties hereto.
6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character
on any Holder's part of any breach, default or noncompliance under the
Agreement or any waiver on such Holder's part of any provisions or conditions
of this Agreement must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under
this Agreement, by law, or otherwise afforded to Holders, shall be cumulative
and not alternative.
6.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified; (b) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall
be sent to the party to be notified at the address as set forth on EXHIBIT A
hereto or at such other address as such party may designate by ten (10) days
advance written notice to the other parties hereto.
6.9 ATTORNEYS' FEES. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
6.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.11 ADDITIONAL INVESTORS. Notwithstanding anything to the contrary
contained herein, if the Company shall issue additional shares of its Series
E Stock and warrants to purchase additional shares of its Common Stock
pursuant to the Purchase Agreements, any purchaser of such shares of Series E
Stock or Warrants, as the case may be may become a party to this Agreement by
executing and delivering an additional counterpart signature page to this
Agreement and shall be deemed an "INVESTOR" hereunder.
6.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
20.
IN WITNESS WHEREOF, the parties hereto have executed this FOURTH AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: INVESTORS:
/s/ All Preferred Stock Investors
IMPROVENET, INC. ----------------------------------
NAME OF INVESTOR ENTITY
By: /s/ Xxx Xxxxxx By:
------------------------------------ -------------------------------
Xxxxxx Xxxxxx, President and Chief
Executive Officer
Title:
----------------------------
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
EXHIBIT A
LIST OF INVESTORS
NAME AND ADDRESS
----------------------------------------------
Allstate Insurance Company
0000 Xxxxxxx Xxxx
Xxxxx X0
Xxxxxxxxxx, XX 00000
c/o Xxxxxxx Xxxxxx
Alta California Partners, L.P.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Alta Embarcadero Partners, L.P.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
ARCH Venture Fund III, L.P.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
August Capital II, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxxx Xxxxxx
0000 Xxxxxxxxx
Xxxx Xxxx, XX 00000
Xxxxxxx Xxxx
Burr, Egan, Deleage & Co.
Xxx Xxxx Xxxxxx Xxxxxx, #0000
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxx Xxxxxx & Company, LLC
Xxx Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
EXHIBIT A-1
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
GC&H Investments
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Xxxx Xxxxxx
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx
000 00xx Xxxxxx
Xxxxxxx, XX 00000
Madrona Investment Group, LLC
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx, Trustees for the Xxxxx X. Xxxxx
and Xxxxxx X. Xxxxx Family Trust Dated 0/0/00
Xxxx Xxxxxx Xxx 000
Xxxxxx, XX 00000
Xxxx Xxxxx Xxxxxxx and Xxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx
000 Xxx Xxxx Xxx
Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Zero Stage Capital VI, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
MGN Opportunity Group LLC
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
MGN Opportunity LLC
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
EXHIBIT A-1
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
Xxxxxx X. Xxxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxx X. Xxxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxxxxx & Xxxxx California
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxxxxx & Xxxxx Employee Venture Fund, X.X. XX
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
H&Q ImproveNet Investors, LLC
x/x Xxxxxxxxx & Xxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Access Technology Partners, L.P.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Access Technology Partners Brokers Fund, L.P.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxx Xxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Partners, L.P.
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Clear Fir Partners, LP
0000 00xx Xxxxxx, X.X.
Xxxxxxx, XX 00000
XX-XX Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
EXHIBIT A-6
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
Xxxxxxx, XX 00000
J2 JV, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx-Xxxxxxxxx Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Staenberg Private Capital, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
KFIT-JRS Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxx-Xxxxxxxxx Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Carmel Fund LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Blackshirts Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
JR-JS JV, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Alco JV, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
GT-JS JV, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
ANV Joint Venture, LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxx
Xxxx Xxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
EXHIBIT A-6
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
Xxxx Xxxxx
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxxxx Xxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Stanford University
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxx
X.X. Xxx 000x
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
GE Capital Equity Investments, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxx Corning
Xxx Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
The Dow Chemical Company
0000 Xxx Xxxxxx
Xxxxxxx, XX 00000
E.I. du Pont de Nemours and Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Global Financial Manager
Xxxxxxxxx.Xxx Holding Co.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
QBB MGMT I, L.L.C.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
EXHIBIT A-6
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
