EXHIBIT 10.5
FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Agreement, dated as of December 27, 2001, is entered into by
and among each of the following parties: (I) Phase Forward Incorporated, a
Delaware corporation (the "Company"); (II) Xxxxxxxx Ventures International Life
Sciences Fund II LP1, Xxxxxxxx Ventures International Life Sciences Fund II LP2,
Xxxxxxxx Ventures International Life Sciences Fund II LP3, Xxxxxxxx Ventures
International Life Sciences Fund Strategic Partners L.P., Xxxxxxxx Ventures
International Life Sciences Fund II Group Co-Investment Scheme, Xxxxxxxx
Ventures Investments Limited (collectively, "Xxxxxxxx"), North Bridge Venture
Partners II, L.P. ("North Bridge II"), North Bridge Venture Partners III, L.P.
("North Bridge III," and together with North Bridge II, "North Bridge"), Atlas
Venture Fund III, L.P. ("Atlas Venture Fund"), Atlas Venture Entrepreneurs' Fund
III, L.P. ("Atlas Venture Entrepreneurs", and, together with Atlas Venture Fund,
"Atlas Xxxxxxx"), XXX Xxxxxxx Xxxx. ("XXX Xxxxxxx"), XXX ESC II, L.P. ("DLJ
ESC"), Sprout Capital VIII, L.P. ("Sprout Capital"), Sprout Venture Capital,
L.P. ("Sprout Venture"), The Sprout CEO Fund, L.P. ("Sprout CEO", and, together
with DLJ Capital, DLJ ESC, Sprout Capital and Sprout Venture, "Sprout"), HLM/UH
Fund, L.P. ("HLM"), Pacific Venture Group II, L.P. ("Pacific"), PVG Associates
II, L.P., BioVentures Investors Limited Partnership ("BioVentures"), Xxxxxxx
Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxxx Xxxxx, and Xxxxxx X. Xxxxxxxxx, Xxxxxxxx
Xxxxxx, Xxxxxx Xxxxx and Xxxxxxx Xxxxxxxxx (each individually, an "Original
Series C Purchaser" and collectively, the "Original Series C Purchasers"); (III)
Silicon Valley Bank ("Silicon"); (IV) Xxxxxx Xxxxxx Capital Partners L.P.,
Xxxxxx Xxxxxx Capital Partners Employee Fund, L.P., TWP CEO Founders Circle
(QP), L.P., TWP CEO Founders Circle (AI), L.P., TWP 2000 Co-Investment Fund,
L.P., Xxxxxx Xxxxxx Capital Partners (Dutch), L.P. and Xxxxxx Xxxxxx Capital
Partners (Dutch II), L.P. (collectively, "Xxxxxx"), Atlas Venture Fund III,
L.P., Atlas Venture Entrepreneurs' Fund III, L.P., Atlas Venture Fund V, L.P.,
Atlas Venture Parallel Fund V-A, C.V., Atlas Venture Parallel Fund V-B, C.V.,
Atlas Venture Entrepreneurs' Fund V, L.P., DLJ Capital Corp., DLJ ESC II, L.P.,
Sprout Capital VIII, L.P., Sprout Venture Capital, L.P., Sprout CEO Fund, L.P.,
Xxxxxxxx Ventures International Life Sciences Fund II LP1, Xxxxxxxx Ventures
International Life Sciences Fund II LP2, Xxxxxxxx Ventures International Life
Sciences Fund II LP3, Xxxxxxxx Ventures International Life Sciences Fund II
Strategic Partners L.P., Xxxxxxxx Ventures International Life Sciences Fund II
Group Co-Investment Scheme, Xxxxxxxx Ventures Investments Limited, North Bridge
Venture Partners II, L.P., North Bridge Venture Partners III, L.P., HLM/UH Fund,
L.P., Pacific Venture Group II, L.P., PVG Associates II, L.P., BioVentures
Investors Limited Partnership (each individually, a "New Series C Purchaser" and
collectively, the "New Series C Purchasers", and together with the Original
Series C Purchasers, the "Series C Purchasers", each of which is referred to
individually as a "Series C Purchaser") (V) Sprout, Atlas Venture, North Bridge
II, Xxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx, X. Xxxxxx M.
Large, Xxxx Xxxxxx, and Xxxxxxx Xxxxxxxxx (each individually, a "Series B
Purchaser" and collectively, the "Series B Purchasers"); (VI) Atlas Venture,
North Bridge II, Xxxxxx X.
Xxxxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxxx Xxxxx, Xxxxxx X.
Xxxxxxxxx, and Xxxxxxx X. Xxxxxxxxx (each individually, a "Series A Purchaser"
and collectively, the "Series A Purchasers"); (VII) ABS Capital Partners, L.P.;
ABS Capital Partners II, L.P.; St. Xxxx Fire and Marine Insurance Company; St.
Xxxx Venture Capital IV, LLC; St. Xxxx Venture Capital V, LLC; Housatonic Equity
Investors SBIC, L.P.; Onset Enterprise Associates, LP; Onset Enterprise
Associates II, LP; Onset Ventures Services Corporation; Salix Ventures, L.P.;
New Enterprise Associates VI, LP.; FSC Corporation, Inc.; Xxxx X. Xxxxxx Xx.
Trust; Xxxx X. Xxxxxxxx; Xxxxxx X. Xxxxxx; Xxxx X. XxXxxxxxxx; Xxxxxxx Xxxx;
Xxxxxx X. Xxxxx; Xxxxxxxx Xxxxxxx; Xxxxxxxx X. Xxxxxxx; and PharmaSoft, Inc.
(each, individually, an "Original Series D Purchaser" and collectively, the
"Original Series D Purchasers"); (VIII) ABS Capital Partners, L.P., ABS Capital
Partners II, L.P., Atlas Venture Fund III, L.P., Atlas Venture Entrepreneurs'
Fund III, L.P., Atlas Venture Fund V, L.P., Atlas Venture Parallel Fund V-A,
C.V., Atlas Venture Parallel Fund V-B, C.V., Atlas Venture Entrepreneurs' Fund
V, L.P., BioVentures Investors Limited Partnership, DLJ Capital Corp., DLJ ESC
II, L.P., Xxx Lilly and Company, Sprout Capital VIII, L.P., Sprout Venture
Capital, L.P., Sprout CEO Fund, L.P., HLM/UH Fund, L.P., Housatonic Equity
Investors SBIC, L.P., International Business Machines Corporation, New
Enterprise Associates VI, LP., North Bridge Venture Partners II, L.P., North
Bridge Venture Partners III, L.P., Pacific Venture Group II, L.P., PVG
Associates II, L.P., Salix Ventures, L.P., Xxxxxxxx Ventures International Life
Sciences Fund II LP1, Xxxxxxxx Ventures International Life Sciences Fund II LP2,
Xxxxxxxx Ventures International Life Sciences Fund II LP3, Xxxxxxxx Ventures
International Life Sciences Fund II Strategic Partners L.P., Xxxxxxxx Ventures
International Life Sciences Fund II Group Co-Investment Scheme, Xxxxxxxx
Ventures Investments Limited, St. Xxxx Venture Capital VI, LLC, and Xxxxxx (each
individually, a "New Series D Purchaser" and collectively, the "New Series D
Purchasers", and together with the Original Series D Purchasers, the "Series D
Purchasers", each of which is referred to individually as a "Series D
Purchaser", and the Series D Purchasers, together with the Series A Purchasers,
Series B Purchasers, and the Series C Purchasers, the "Purchasers"; solely for
the purposes of Article III and Article VI hereof, the term "Purchasers" shall
be deemed to include Silicon) and (IX) Xxxx Xxxxxxxx, Xxxx X. Xxxxxxxx 1999
Irrevocable Trust, Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxx X. Xxxxxxx, Xxxxxxx-Xxxx
Children 1999 Irrevocable Trust, dated July 8, 1999, Xxxxxxx Xxxxxx, X. Xxxxxx
M. Large, Xxxxxxx Xxxxx, Xxxx Xxxxxx, The Xxxxxx Children 1999 Irrevocable
Trust, Xxxxxxx Xxxxxx (individually, a "Founder" and collectively, the
"Founders"). The Purchasers and the Founders are sometimes referred to in this
Agreement as the "Stockholders."
BACKGROUND
WHEREAS, the Founders hold 2,505,266 shares of the Common Stock of
the Company, par value $0.01 per share (the "Common Stock");
WHEREAS, the Series A Purchasers hold 4,000,000 shares of the Series
A Preferred Stock of the Company, par value $0.01 per share (the "Series A
Preferred Stock");
WHEREAS, the Series B Purchasers hold 4,531,063 shares of the Series
B Preferred Stock of the Company, par value $0.01 per share (the "Series B
Preferred Stock");
WHEREAS, the Series C Purchasers hold 9,187,640 shares of the Series
C Preferred Stock of the Company, par value $0.01 per share (the "Series C
Preferred Stock");
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WHEREAS, the Original Series D Purchasers either hold directly or
have a right to receive upon release from escrow 3,879,482 shares of the Series
D Preferred Stock of the Company, par value $0.01 per share (the "Series D
Preferred Stock") ;
WHEREAS, Silicon is the holder of a Warrant to Purchase Stock to
purchase shares of Series C Preferred Stock issued on August 9, 2000 in the
amount of 34,330 shares (the "SVB Warrant");
WHEREAS, the Company, the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers, the Original Series D Purchasers, Silicon
and the Founders have previously entered into that certain Fourth Amended and
Restated Investors' Rights Agreement, dated as of August 14, 2001, (the "Prior
Agreement");
WHEREAS, the Company and the New Series D Purchasers have entered
into a Series D Convertible Preferred Stock Purchase Agreement of even date
herewith (the "New Purchase Agreement") pursuant to which the New Series D
Purchasers have agreed to purchase 1,230,770 shares of Series D Preferred Stock;
and
WHEREAS, the Stockholders wish to amend and restate the Prior
Agreement and to provide for (i) the basis for electing members of the Board of
Directors of the Company, (ii) certain arrangements with respect to the
registration of shares of capital stock of the Company under the Securities Act
of 1933, as amended (the "Securities Act"), and (iii) a right of first refusal
and co-sale with respect to the sale of the Founders' shares of capital stock of
the Company;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, and the consummation of the transactions
contemplated by the New Purchase Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Commission" means the U.S. Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Initial Public Offering" means the initial public offering of
shares of Common Stock pursuant to a Registration Statement at a price to the
public of at least $11.36 per share (subject to appropriate adjustments for
stock splits, stock dividends, combinations and other similar recapitalizations
affecting such shares) resulting in gross proceeds to the Company (net of all
underwriting discounts and commissions) of at least $20,000,000.
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"IPO Shares" means the total number of shares to be offered by the
Company in the Initial Public Offering as reflected on the Company's final
prospectus.
"Other Registrable Shares" means (i) shares of Common Stock held by
the Founders on the date hereof (the "Founders' Stock") and (ii) any other
shares of Common Stock issued in respect of such shares of Founders' Stock
(because of stock splits, stock dividends, reclassifications, recapitalizations
or similar events), provided, however, that shares of Common Stock which are
Other Registrable Shares shall cease to be Other Registrable Shares (a) upon any
sale pursuant to a Registration Statement or Rule 144 under the Securities Act
("Rule 144"), (b) upon any sale in any manner to a person or entity which, by
virtue of Article VI, Section 2 of this Agreement, is not entitled to the rights
provided by this Agreement or (c) at such time as the holder of such shares may
sell all such shares pursuant to Rule 144 in any three-month period.
"Pro-Rata Share" means the fraction, the numerator of which is equal
to the number of shares of Common Stock issued or issuable upon conversion of
the Series C Shares held by such Series C Purchaser and the denominator of which
is the total number of Voting Shares of the Company.
"Purchaser Registrable Shares" means (i) the shares of Common Stock
issued or issuable upon conversion of the Series A Shares; (ii) the shares of
Common Stock issued or issuable upon conversion of the Series B Shares; (iii)
the shares of Common Stock issued or issuable upon conversion of the Series C
Shares; (iv) the shares of Common Stock issued or issuable upon conversion of
the Series D Shares; (v) any shares of Common Stock, and any shares of Common
Stock issued or issuable upon the conversion or exercise of any other
securities, acquired by the Purchasers pursuant to Articles IV or V of this
Agreement; (vi) solely for the purposes of Article III and Article VI hereof,
the shares of Common Stock issued upon exercise of the SVB Warrant or issued or
issuable upon conversion of shares of Series C Preferred Stock issued upon
exercise of the SVB Warrant; and (vii) any other shares of Common Stock issued
in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Purchaser Registrable Shares shall cease
to be Purchaser Registrable Shares (a) upon any sale pursuant to a Registration
Statement or Rule 144, or (b) upon any sale in any manner to a person or entity
which, by virtue of Article VI, Section 2 of this Agreement, is not entitled to
the rights provided by this Agreement. Wherever reference is made in this
Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Registrable Shares even if such
conversion has not yet been effected.
"Registrable Shares" means the Purchaser Registrable Shares
and the Other Registrable Shares.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-4 or Form S-8, or any successor
form thereto, or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another corporation).
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"Registration Expenses" means the expenses described in Article III,
Section 4 below.
"Series A Shares" shall mean the shares of Series A Preferred Stock
issued and sold pursuant to that certain Series A Convertible Preferred Stock
Purchase Agreement by and among the Company and Xxxx Xxxxxxxx, Xxxxxxx Xxxx,
Xxxxxxx Xxxxxx, Atlas Venture, North Bridge II, Xxxxxx X. Xxxxxxxxxxx, Xxxxxxx
Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxxx Xxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxxxx X.
Xxxxxxxxx dated as of November 14, 1997.
"Series B Shares" shall mean the shares of Series B Preferred Stock
issued and sold pursuant to that certain Series B Convertible Preferred Stock
Purchase Agreement by and among the Company and Sprout, Atlas Venture, North
Bridge II, Xxxxx Xxxxx, Xxxxxxxx Xxxxxx, X. Xxxxxx M. Large, Xxxx Xxxxxx, and
Xxxxxxx Xxxxxxxxx, dated as of November 12, 1998.
"Series C Registrable Shares" shall mean the shares of Common Stock
issued or issuable upon conversion of the Series C Shares; provided, however,
that shares of Common Stock which are Series C Registrable Shares shall cease to
be Series C Registrable Shares (a) upon any sale pursuant to a Registration
Statement or Rule 144, or (b) upon any sale in any manner to a person or entity
which, by virtue of Article VI, Section 2 of this Agreement, is not entitled to
the rights provided by this Agreement.
"Series C Shares" shall mean the shares of Series C Preferred Stock
issued and sold pursuant to that certain Series C Convertible Preferred Stock
Purchase Agreement by and among the Company and the Original Series C
Purchasers, dated as of November 18, 1999, and the shares of Series C Preferred
Stock issued and sold pursuant to that certain Series C Convertible Preferred
Stock Purchase Agreement by and among the Company and the New Series C
Purchasers, dated as of August 9, 2000, as amended by Amendment No. 1 thereto
dated February 6, 2001.
"Series D Shares" shall mean the shares of Series D Preferred Stock
issued and sold to the Original Series D Purchasers pursuant to the Agreement
and Plan of Merger dated as of August 14, 2001 (the "Merger Agreement") by and
among the Company, PF Acquisitions Corporation and Clinsoft Corporation, and the
shares of Series D Preferred Stock issued and sold pursuant to the New Purchase
Agreement.
"Stockholders" means the Purchasers, the Founders and any persons or
entities to whom the rights granted under this Agreement are transferred by any
Purchaser or any Founder, their successors or assigns pursuant to Article VI,
Section 2 below.
"Voting Shares" means any and all shares of Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and/or shares of capital stock of the Company, by whatever name
called, which carry voting rights (including voting rights which arise by reason
of default) which are now held or subsequently acquired by a Stockholder,
however acquired, including, without limitation, shares of capital stock
acquired pursuant to stock splits, stock dividends combinations and other
similar events affecting such shares.
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ARTICLE II
VOTING RIGHTS
1. Voting of Shares.
(a) In any and all elections of directors of the Company
(whether at a meeting or by written consent in lieu of a meeting), each
Stockholder shall vote or cause to be voted all Voting Shares held by him or it,
or over which he or it has voting control, and otherwise use his or its
respective best efforts, so as to fix the number of directors of the Company at
nine (9), and to elect, (i) so long as such Founders holding not less than
750,000 shares (as adjusted for stock splits, stock dividends, combinations,
reclassifications and the like) of Common Stock are employed by the Company, one
member designated by the Founders (by action of the holders of a majority of the
Voting Shares held by the Founders), (ii) one member designated by Atlas
Venture, (iii) one member designated by North Bridge (who, together with the
member designated by Atlas Venture, shall be deemed to be the directors
designated by the holders of the Series A Shares pursuant to the Company's Fifth
Restated Certificate of Incorporation, as amended by the Certificate of
Amendment thereto field with the Delaware Secretary of State on December ___,
2001 (the "Charter")), (iv) one member designated by Sprout (who shall be deemed
to be the director designated by the holders of the Series B Shares pursuant to
the Company's Charter), (v) one member designated by Xxxxxxxx, (vi) one member
designated by Xxxxxx (who, together with the member designated by Xxxxxxxx,
shall be deemed to be the directors designated by the holders of the Series C
Shares pursuant to the Company's Charter), (vii) one member designated by ABS
Capital Partners, L.P. (who shall be deemed to be the director designated by the
holders of the Series D Shares pursuant to the Company's Charter) (viii) the
person then serving as the Company's Chief Executive Officer, and (ix) one
outside member jointly designated by the Board of Directors. The director
initially designated by the Founders shall be Xxxx Xxxxxxxx, the director
initially designated by Atlas Venture shall be Xxxx Xxxxxxx, the director
initially designated by North Bridge shall be Xxxxxxx X'Xxxxx, the director
initially designated by Sprout shall be Xxx Xxxx, the director initially
designated by Xxxxxxxx shall be Xxxxxx X. Xxxx, III, the director initially
designated by Xxxxxx shall be Xxxxxx Xxxxx, the director initially designated by
ABS Capital Partners, L.P. shall be Xxxx X. Xxxxx and the outside director shall
be Xxxxx Xxxx.
(b) As long as Pacific holds at least 100,000 Series C Shares
(as adjusted for any stock splits, stock dividends, recapitalizations or the
like), Pacific shall be entitled to have one representative attend all meetings
of the board of directors of this corporation as a non-voting observer, and in
such capacity, Pacific shall be entitled to receive copies of all notices,
minutes, consents and other materials provided to directors of the Corporation.
(c) The Company shall provide the Stockholders with 30 days'
prior written notice of any intended mailing of a notice to stockholders for a
meeting at which directors are to be elected. The Stockholders shall give
written notice to all other parties to this Agreement, no later than 20 days
prior to such mailing, of the person designated by them as nominee for election
as director. If the Stockholders fail to give notice to the Company as provided
above, it shall be deemed that their designees then serving as directors shall
be their designees for reelection.
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(d) Any director of the Company may be removed from the Board
of Directors in the manner allowed by law and the Company's Charter and Bylaws;
provided, however, that (i) the member designated by the Founders may be removed
only with the consent of the holders of a majority of the Voting Shares held by
the Founders, (ii) the member designated by Atlas Venture may be removed only
with the consent of Atlas Venture, (iii) the member designated by North Bridge
may be removed only with the consent of North Bridge, (iv) the member designated
by Sprout may be removed only with the consent of Sprout, (v) the member
designated by Xxxxxxxx may be removed only with the consent of Xxxxxxxx, (vi)
the member designated by Xxxxxx may be removed only with the consent of Xxxxxx,
(vii) the member designated by ABS Capital Partners, L.P. may be removed only
with the consent of ABS Capital Partners, L.P., (viii) the Company's Chief
Executive Officer may be removed as a director at any time by the vote of a
majority of the Board of Directors, (ix) the outside director may be removed as
a director at any time by the vote of a majority of the Board of Directors.
2. Negative Covenants. So long as at least ten percent (10%) of the
originally issued Series A Shares, Series B Shares, Series C Shares, or Series D
Shares remain outstanding (subject to adjustment for stock splits, stock
dividends, reclassifications, recapitalization or similar events), the Company
shall not, without the prior written consent of at least seventy five percent
(75%) of the designees to the Board of Directors of the Company identified in
Section 1(a)(ii) through (vi) hereof:
(a) establish any employee benefit plan as defined in the
Employee Retirement Income Security Act of 1974, as amended;
(b) adopt an annual business plan and budget, including the
annual budget for management compensation;
(c) make any borrowings, issue any debt securities (whether or
not convertible) or guarantee (directly or indirectly) any indebtedness,
including any such debt, guarantee or obligation secured by accounts receivable,
inventory, real property, fixtures or equipment; provided, that this subsection
2(c) shall not apply to unsecured debt of less than two million dollars
($2,000,000); and
(d) declare or pay any dividends (payable other than in Common
Stock or other securities and rights convertible into or entitling the holder
thereof to receive, directly or indirectly, additional shares of Common Stock of
this corporation) on any class of stock or equity securities of the Company.
3. No Revocation. The voting agreements contained herein are coupled
with an interest and may not be revoked, except by written consent of holders of
a majority of the Voting Shares held by the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers, and the Series D Purchasers voting on an
as-converted basis together as a single class, and holders of twenty-five
percent (25%) of the Voting Shares held by the Founders; provided, however, that
in the event that any such revocation affects the appointment of any director
pursuant to Section 1(a) above, then such revocation shall require the consent
of the Stockholders who have the right to designate such director.
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4. Indemnification. In the event that any director elected pursuant
to Section 1 of this Article II shall be made or threatened to be made a party
to any action, suit or proceeding with respect to which he may be entitled to
indemnification by the Company pursuant to its Charter or Bylaws, or otherwise,
he shall be entitled to be represented in such action, suit or proceeding by
counsel of his choice and the reasonable expenses of such director shall be
reimbursed by the Company to the extent provided in or authorized by said
Charter or Bylaws. Each Stockholder agrees not to take any action to amend any
provisions of the Charter or Bylaws of the Company relating to indemnification
of directors, as presently in effect, to reduce the benefits thereof to any
director without the prior written consent of a sixty-six and two-thirds percent
(66 2/3 %) of the Voting Shares held by the Stockholders.
5. Restrictive Legend. All certificates representing Voting Shares
hereafter acquired by the Stockholders or any transferee of the Stockholders
bound by this Agreement shall have affixed thereto a legend substantially in the
following form:
"The shares of stock represented by this certificate are subject to
certain voting agreements as set forth in a Fifth Amended and
Restated Investors' Rights Agreement, as the same may be amended or
restated from time to time, by and among the registered holder of
this certificate, the corporation and certain other shareholders of
the corporation, a copy of which is available for inspection at the
office of the Secretary of the corporation."
6. Transfers of Voting Rights. Any transferee to whom Voting Shares
are transferred by a Stockholder in accordance with the terms of this Agreement,
whether voluntarily or by operation of law, shall be bound by the voting
obligations imposed upon the transferor under this Agreement, and shall be
entitled to the rights granted to the transferor under this Agreement, to the
same extent as if such transferee were a Stockholder hereunder.
ARTICLE III
REGISTRATION RIGHTS
1. Required Registrations.
(a) At any time after the earlier of November 18, 2002 or six
months after the closing of the Company's first underwritten public offering of
shares of Common Stock pursuant to a Registration Statement, any Purchaser or
Purchasers holding sixty-six and two-thirds percent (66 2/3%) of the Purchaser
Registrable Shares may request, in writing, that the Company effect the
registration on Form S-1 or Form S-2 (or any successor form thereto) of
Purchaser Registrable Shares held by holders having an aggregate offering price
of at least $10,000,000 (based on the then current market price or fair value).
If the Purchaser or Purchasers initiating the registration intend(s) to
distribute the Purchaser Registrable Shares by means of an underwriting, such
Purchasers shall so advise the Company in its request. In the event such
registration is underwritten, all Purchasers proposing to distribute their
securities through such underwriting under this Section 1(a) shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting and the rights of other Purchasers to participate
in such registration shall be conditioned on such Purchasers' participation in
such
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underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all other Purchasers. Such
Purchasers shall have the right, by giving written notice to the Company within
30 days after the Company provides its notice, to elect to have included in such
registration such of their Purchaser Registrable Shares as such Purchasers may
request in such notice of election; provided that, if the underwriter (if any)
managing the offering determines that, because of marketing factors, all of the
Purchaser Registrable Shares requested to be registered by all Purchasers may
not be included in the offering, then all Purchasers who have requested
registration shall participate in the registration pro rata based upon the
number of Purchaser Registrable Shares which they have requested to be so
registered. Thereupon, the Company shall, as expeditiously as possible, use its
best efforts to effect the registration on Form S-1 or Form S-2 (or any
successor form) of all Purchaser Registrable Shares which the Company has been
requested to so register.
(b) Subject to the last sentence of this paragraph (b), at any
time after the earlier of November 18, 2002 or six months after the closing of
the Company's first underwritten public offering of shares of Common Stock
pursuant to a Registration Statement, any Series C Purchaser or Purchasers
holding a majority of the Series C Registrable Shares may request, in writing,
that the Company effect the registration on Form S-1 or Form S-2 (or any
successor form thereto) of Series C Registrable Shares held by holders having an
aggregate offering price of at least $10,000,000 (based on the then current
market price or fair value). If the Series C Purchaser or Purchasers initiating
the registration intend(s) to distribute the Series C Registrable Shares by
means of an underwriting, such Series C Purchasers shall so advise the Company
in its request. In the event such registration is underwritten, all Purchasers
proposing to distribute their securities through such underwriting under this
Section 1(b) shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting and the rights of
other Purchasers to participate in such registration shall be conditioned on
such Series C Purchasers' participation in such underwriting. Upon receipt of
any such request, the Company shall promptly give written notice of such
proposed registration to all other Purchasers. Such Purchasers shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Purchaser Registrable Shares as such Purchasers may request in such notice
of election; provided that, if the underwriter (if any) managing the offering
determines that, because of marketing factors, all of the Purchaser Registrable
Shares requested to be registered by all Purchasers may not be included in the
offering, then all Purchasers who have requested registration shall participate
in the registration pro rata based upon the number of Purchaser Registrable
Shares which they have requested to be so registered. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-1 or Form S-2 (or any successor form) of all Purchaser
Registrable Shares which the Company has been requested to so register.
Notwithstanding the foregoing, the rights granted under this paragraph (b) shall
no longer be in effect if the holders of sixty-six and two-thirds percent (66
2/3%) of the Series C Registrable Shares participate in a registration initiated
pursuant to paragraph (a) above.
(c) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Purchaser or Purchasers or Founder or Founders holding Registrable
Shares may request, in writing, that the Company effect the registration on Form
S-3 (or such successor form), of Registrable Shares held by such holders having
a minimum aggregate offering price of at least
9
$1,000,000 (based on the then current public market price or fair value). In the
event such registration is underwritten, all Purchasers proposing to distribute
their securities through such underwriting under this Section 1(c) shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Upon receipt of any such request,
the Company shall promptly give written notice of such proposed registration to
all Purchasers, Stockholders and Founders. Such Purchasers, Stockholders and
Founders shall have the right, by giving written notice to the Company within 30
days after the Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Purchasers, Stockholders
or Founders may request in such notice of election; provided that, if the
underwriter (if any) managing the offering determines that, because of marketing
factors, all of the Registrable Shares requested to be registered by all
Purchasers, Stockholders or Founders may not be included in the offering, then,
prior to the inclusion of any Other Registrable Shares in such offering, all
Purchasers who have requested registration shall participate in the registration
pro rata based upon the number of Purchaser Registrable Shares which they have
requested to be so registered (the "Requested Purchaser Shares"). In the event
that any Purchaser is not permitted to include all of such Requested Purchaser
Shares in the offering, no Other Registrable Shares shall be included in such
offering. If all of the Requested Purchaser Shares are included in the offering,
the Founders may participate in the registration, to the extent permitted by the
underwriter managing the offering, pro rata based on the number of Other
Registrable Shares which they have requested to be so registered. Thereupon, the
Company shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or any successor form) of all Registrable Shares which
the Company has been requested to so register. After the Company's first public
offering of its securities, the Company will use its best efforts to qualify
(and remain eligible) for Form S-3 registration or a similar short-form
registration.
(d) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a), nor more than 1 registration pursuant
to paragraph (b); provided, however, that such obligation shall be deemed
satisfied only when a registration statement covering the applicable Registrable
Shares shall have (i) become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such Registrable Shares have
been sold pursuant thereto, or (ii) been withdrawn at the request of the
Purchasers requesting such registration (other than as a result of information
concerning the business or financial condition of the Company which is made
known to the Purchasers after the date on which such registration was requested
or if the underwriter for the registration determines that adverse market
conditions exist that would seriously jeopardize the success of the
registration). In addition, the Company shall not be required to effect any
registration within 180 days after the effective date of any other Registration
Statement on Form S-1 or S-3 involving an underwritten offering of the Company
and the Company shall not be required to file more than two Registration
Statements on Form S-3 in any one year period.
(e) If at the time of any request to register Registrable
Shares pursuant to this Article III, Section 1, the Company is engaged or has
plans to engage within 30 days of the time of the request in a registered public
offering of securities as to which the Purchasers, Stockholders or Founders may
include Registrable Shares or is engaged in any other activity which, in the
good faith determination of the Company's Board of Directors, would be
materially adversely affected by the requested registration to the material
detriment of the Company, then the Company may at its option direct that such
request be delayed for a period not in excess of 120
10
days from the effective date of such offering or the date of commencement of
such other material activity, as the case may be, such right to delay a request
to be exercised by the Company not more than once in any two-year period.
2. Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement
(which for purposes of this Section 2(a) shall include a Registration Statement
filed pursuant to Section 1(c) above but shall not include a Registration
Statement filed in connection with the Company's initial public offering) at any
time and from time to time, it will, prior to such filing, give written notice
to all Purchasers and Founders of its intention to do so and, upon the written
request of such a Purchaser or Purchasers or Founder or Founders given within 30
days after the Company provides such notice (which request shall state the
intended method of disposition of such Registrable Shares), the Company shall
use its reasonable best efforts to cause all Registrable Shares which the
Company has been requested by such Purchaser or Purchasers or Founder or
Founders to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the
intended methods of distribution specified in the request of such Purchaser or
Purchasers or Founder or Founders; provided, however, that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Article III, Section 2 without obligation to any Purchaser or Founder.
(b) In connection with any registration under this Article III,
Section 2 involving an underwriting, the Company shall not be required to
include any Registrable Shares in such registration unless the holders thereof
accept the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it. If in the opinion of the managing underwriter it is
desirable because of marketing factors to limit the number of Registrable Shares
to be included in the offering, then the Company shall be required to include in
the registration only that number of Registrable Shares, if any, which the
managing underwriter believes should be included therein; provided however,
that, such limitation shall not decrease the number of Series C Registrable
Shares requested to be registered in the offering to a number less than thirty
percent (30%) of the number of Series C Registrable Shares originally requested
to be registered in the offering; and provided further, that, no persons or
entities other than the Company, the Purchasers, Founders and other persons or
entities holding registration rights shall be permitted to include securities in
the offering. If the number of Registrable Shares to be included in the offering
in accordance with the foregoing is less than the total number of shares which
the Purchasers and Founders have requested to be included, then the Purchasers
and Founders who have requested registration and other holders of securities
entitled to include them in such registration shall participate in the
registration pro rata based upon their total ownership of shares of Common Stock
(giving effect to the conversion into Common Stock of all securities convertible
thereinto); provided, however, that the Registrable Shares held by Founders
shall be excluded from the offering before any Registrable Shares held by
Purchasers are excluded. If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.
11
3. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its reasonable best efforts to effect
the registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) File with the Commission a Registration Statement with
respect to such Registrable Shares and use its reasonable best efforts to cause
that Registration Statement to become and remain effective;
(b) As expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any other
offering, until the earlier of the sale of all Registrable Shares covered
thereby or 180 days after the effective date thereof;
(c) As expeditiously as possible furnish to each selling
Purchaser such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Purchaser may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Shares held by the Purchaser;
(d) As expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of such states as the selling Purchaser
shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Purchaser to consummate the public
sale or other disposition in such states of the Registrable Shares held by the
selling Purchaser; provided, however, that the Company shall not be required in
connection with this paragraph (d) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction; and
(e) Use its best efforts to list the Registrable Shares
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed.
If the Company has delivered preliminary or final prospectuses to
the selling Purchasers and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Purchasers and, if requested, the selling Purchasers shall
immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide each selling
Purchaser with revised prospectuses and, following receipt of the revised
prospectuses, the selling holder shall be free to resume making offers of the
Registrable Shares.
4. Allocation of Expenses. The Company shall pay all Registration
Expenses of all registrations under this Agreement; provided, however, that if a
registration under Article III, Section 1(a) or 1(b) is withdrawn at the request
of the Purchasers requesting such registration (other than as a result of
information concerning the business or financial condition of the Company which
is made known to the Purchasers after the date on which such registration was
12
requested) and if the requesting Purchasers elect not to have such registration
counted as a registration requested under Article III, Section 1(a) or 1(b), the
requesting Purchasers shall pay the Registration Expenses of such registration
pro rata in accordance with the number of their Registrable Shares included in
such registration. For purposes of this Article III, Section 4, the term
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with the provisions of this Article III, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of auditors and counsel for the Company and the fees
and expenses of one counsel selected by the selling Purchaser(s) to represent
the selling Purchaser(s) and state Blue Sky fees and expenses, but excluding
underwriting discounts, selling commissions, the fees and expenses of selling
Purchasers' own counsel (other than the one counsel selected to represent all
selling Purchaser(s)).
5. Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company shall
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller 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 such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or final prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, shall indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable
13
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information relating to such seller furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; provided,
however, that the obligations of such sellers of Registrable Shares hereunder
shall be limited to an amount equal to the proceeds to each seller from the
Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Article
III, Section 5 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article III, Section 5, except
to the extent that such failure to provide notice causes prejudice to the
Indemnified Party. The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall pay such
expense 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 or the existence or availability of different
defenses to the Indemnified Party and any other party represented by such
counsel in such proceeding. 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 of such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Registrable Shares exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Article III, Section 5 but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Article III, Section 5 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
such selling holder or any such controlling person in circumstances for which
indemnification is provided under this Article III, Section 5; then, in each
such case, the Company and such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportions so that such holder is responsible for the
portion represented by the percentage that the public offering price of its
Registrable Shares offered by the Registration Statement bears to the public
offering price of all
14
securities offered by such Registration Statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the proceeds to it of all Registrable Shares sold by it pursuant to such
Registration Statement, and (B) no person or entity guilty of fraudulent
misrepresentation, within the meaning of Section 11(f) of the Securities Act,
shall be entitled to contribution from any person or entity who is not guilty of
such fraudulent misrepresentation.
6. Indemnification with Respect to Underwritten Offering. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Article III, Section 1, the Company shall
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including, without limitation, customary provisions
with respect to indemnification by the Company of the underwriters of such
offering.
7. Information by Holder. Each Purchaser including Registrable
Shares in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
8. "Stand-Off" Agreement. Each Stockholder hereby agrees that it
will not, without the prior written consent of the managing underwriter, during
(a) the period commencing on the date of the final prospectus relating to the
Company's initial public offering and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred
eighty (l80) days) and (b) the period commencing on the date of the final
prospectus relating to any subsequent underwritten public offering of the
Company's Common Stock and ending on the date specified by the Company and the
managing underwriter (such period not to exceed ninety (90) days): (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then held by the Stockholder or re thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
provisions of this Section 8 shall: (A) not apply to the sale of any shares to
an underwriter pursuant to an underwriting agreement; and (B) only be applicable
to the Stockholders if all officers and directors and greater than one percent
(1%) stockholders of the Company enter into similar agreements. The underwriters
in connection with a public offering of the Company's Common Stock are intended
third party beneficiaries of this Section 8 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Shares of each Stockholder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period. Notwithstanding the foregoing, in the event that
the Company or the managing underwriter
15
releases any Stockholder from the requirements of the foregoing market stand-off
provisions in this Section 8, any Purchaser not so released shall be entitled to
a corresponding pro rata release.
9. Limitations on Subsequent Registration Rights. The Company shall
not, without the prior written consent of Purchasers holding at least sixty-six
and two-thirds percent (66 2/3%) of the Purchaser Registrable Shares and
Founders holding at least twenty-five percent (25%) of the Other Registrable
Shares, provided such Founders are employed with the Company, enter into any
agreement (other than this Agreement) with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder to (a) make a demand registration or (b) include securities of the
Company in any Registration Statement, unless under the terms of such agreement,
such holder or prospective holder includes such securities (the "Third Party
Shares") only on terms substantially similar to the terms on which holders of
Registrable Shares may include shares in such registration, including that (x)
if the underwriter (if any) managing the offering determines that, because of
marketing factors, all of the Registrable Shares requested to be registered may
not be included in the offering, then, prior to the inclusion of any Third Party
Shares in such offering, all Stockholders who have requested registration shall
participate in the registration and (y) in the event that any Stockholder is not
permitted to include all Registrable Shares requested by such Stockholder in the
offering, no Third Party Shares shall be included in such offering.
10. Rule 144 Requirements. After the earliest of (a) the closing of
the sale of securities of the Company pursuant to a Registration Statement, (b)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (c) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(i) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(iii) furnish to any holder of Registrable Shares upon request
(A) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), (B) a copy of the most recent annual or quarterly
report of the Company, and (C) such other reports and documents of the Company
as such holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities without
registration.
11. Mergers, Etc. The Company shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Company under this Agreement, and for that
purpose references hereunder to "Registrable Shares" shall be deemed to be
references to the securities which the Purchasers would be entitled to receive
in exchange for Registrable
16
Shares under any such merger, consolidation or reorganization; provided,
however, that the provisions of this Article III, Section 11 shall not apply in
the event of any merger, consolidation or reorganization in which the Company is
not the surviving corporation if all holders are entitled to receive in exchange
for their Registrable Shares consideration consisting solely of (a) cash, (b)
securities of the acquiring corporation which may be immediately sold to the
public without limitations on volume or manner of sale and without registration
under the Securities Act (including pursuant to Rule 144 and/or Rule 145
promulgated thereunder), or (c) securities of the acquiring corporation which
the acquiring corporation has agreed to register within 90 days of completion of
the transaction for resale to the public pursuant to the Securities Act.
ARTICLE IV
PARTICIPATION RIGHTS
1. Participation Rights.
(a) Except as set forth in Section 3 of this Article IV
hereof, until the earlier of (i) the consummation of an Initial Public Offering
or (ii) such time as less than ten percent (10%) of the originally issued
Purchaser Registrable Shares (as adjusted for stock splits, stock dividends,
combinations, reclassifications and the like) remain outstanding, the Company
shall not issue, sell or exchange, agree to issue, sell or exchange, or reserve
or set aside for issuance, sale or exchange, (i) any shares of its Common Stock,
(ii) any other equity securities of the Company, including, without limitation,
shares of preferred stock or other convertible equity securities, (iii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any equity securities of the Company, or (iv) any debt securities convertible
into capital stock of the Company (collectively, the "Offered Securities"),
unless in each such case the Company shall have first complied with this
Agreement. The Company shall deliver to the Purchasers a written notice of any
proposed or intended issuance, sale or exchange of Offered Securities (the
"Offer"), which Offer shall (i) identify and describe the Offered Securities,
(ii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (iii) identify the persons or entities, if known, to which or
with which the Offered Securities are to be offered, issued, sold or exchanged,
and (iv) offer to issue and sell to or exchange with the Purchasers all of the
Offered Securities. The amount of Offered Securities to be offered by the
Company to each Purchaser for issuance, sale or exchange shall be determined as
follows: (A) each Purchaser may subscribe for an amount of the Offered
Securities in proportion to the amount that the Voting Shares then held by such
Purchaser bears to the Voting Shares then held by all Purchasers (the "Basic
Amount"), and (B) such additional amount of the Offered Securities as such
Purchaser indicates it will purchase or acquire should other Purchasers acquire
less than their respective Basic Amounts (the "Undersubscription Amount"). Each
Purchaser shall have the right, for a period of 30 days following delivery of
the Offer, to purchase or acquire, at the price and upon the other terms
specified in the Offer, the number or amount of Offered Securities described
above. To the extent that the consideration proposed to be paid for the Offered
Securities consists of property other than cash or a promissory note, the
consideration required to be paid by the Purchasers exercising their options
under this Article IV may consist of cash equal to the value of such property,
as determined in good faith by the Company and the Purchasers acquiring such
Offered Securities. The Offer by its term shall remain open and irrevocable for
such 30-day period.
17
(b) For purposes of calculating a Purchaser's ownership of
Voting Shares, all shares of convertible Preferred Stock of the Company shall be
deemed to have been converted into shares of Common Stock.
(c) To accept an Offer, in whole or in part, a Purchaser must
deliver a written notice to the Company prior to the end of the 30-day period of
the Offer, setting forth the portion of the Purchaser's Basic Amount that such
Purchaser elects to purchase and, if such Purchaser shall elect to purchase all
of its Basic Amount, the Undersubscription Amount (if any) that such holder
elects to purchase (the "Notice of Acceptance"). If the Basic Amounts subscribed
for by all Purchasers are less than the total Offered Securities, then each
holder who has set forth Undersubscription Amounts in its Notice of Acceptance
shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
all Undersubscription Amounts it has subscribed for; provided, however, that
should the Undersubscription Amounts subscribed for exceed the difference
between the Offered Securities and the Basic Amounts subscribed for (the
"Available Undersubscription Amount"), each Purchaser who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Purchaser bears to the total Undersubscription Amounts subscribed
for by all Purchasers, subject to rounding by the Board of Directors to the
extent it reasonably deems necessary.
(d) In the event that Notices of Acceptance are not given by
the Purchasers in respect of all the Offered Securities, the Company shall have
90 days from the expiration of the period set forth in Article IV, Section 1(a)
to issue, sell or exchange all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the Purchasers (the "Refused
Securities"), but only upon terms and conditions (including, without limitation,
unit prices and interest rates) which are not more favorable, in the aggregate,
to the acquiring person or persons or less favorable to the Company than those
set forth in the Offer.
(e) Upon the closing of the issuance, sale or exchange of all
or less than all the Refused Securities and the balance of the Offered
Securities, the Purchasers shall acquire from the Company, and the Company shall
issue to such Purchasers, the number or amount of Offered Securities specified
in the Notices of Acceptance, upon the terms and conditions specified in the
Offer (provided that such closing may be extended as to any Purchaser for
purposes of obtaining any necessary governmental approvals, if applicable). The
purchase by the Purchasers of any Offered Securities is subject in all cases to
the preparation, execution and delivery by the Company and such Purchasers of a
purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to such holders and their respective counsel.
(f) Any Offered Securities not acquired by the Purchasers or
other persons in accordance with Article IV, Section 1(d) may not be issued,
sold or exchanged until they are again offered to the Purchasers under the
procedures specified in this Article.
2. Excluded Issuances. The rights of the Purchasers under this
Article IV shall not apply to:
(a) Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock;
18
(b) the issuance of any shares of Common Stock upon conversion
of outstanding shares of convertible preferred stock;
(c) up to Five Million Forty-Six Thousand Six Hundred
Sixty-Four (5,046,664) shares of Common Stock, or options exercisable therefor,
including options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company;
(d) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity;
(e) securities issued pursuant to the exercise of the SVB
Warrant; or
(f) except as set forth in Section 3 of this Article IV
hereof, shares of Common Stock sold by the Company in an Initial Public
Offering.
3. Participation Right in an Initial Public Offering. In connection
with the Company's Initial Public Offering, and subject to any applicable
securities laws, the Company shall use its best efforts to cause the managing
underwriter of such Initial Public Offering to offer to each Series C Purchaser
the right to purchase at least that number of shares of capital stock of the
Company determined by multiplying (a) each Series C Purchaser's then current
Pro-Rata Share by (b) the number of IPO Shares, at the price per share offered
to the public and as reflected on the final prospectus of the Company. A Series
C Purchaser shall have the right to apportion its participation in the Initial
Public Offering pursuant to this Section 3 of Article IV among any of its
partners, members, or affiliates. Notwithstanding the foregoing in this Section
3 of Article IV, the managing underwriter, in its sole discretion, may modify or
limit the Series C Purchaser's participation right provided herein by providing
written notice to such Series C Purchaser setting forth such underwriter's
reasons for such limitation or modification, including that such limitation or
modification is necessary, because of marketing factors, for the success of the
Initial Public Offering.
ARTICLE V
FOUNDERS' RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
1. Restrictions on Transfer.
(a) Any sale or other disposition of any Voting Shares by a
Founder, other than according to the terms of this Agreement shall be void and
transfer no right, title or interest in or to any of such Voting Shares to the
purported transferee.
(b) Each Founder agrees to present the certificates
representing the Voting Shares presently held or hereafter acquired by him to
the Secretary of the Company and cause the Secretary to stamp on the certificate
in a prominent manner the following legend:
19
"The sale or other disposition of any of the shares
represented by this certificate is restricted by a Fifth
Amended and Restated Investors' Rights Agreement, as the same
may be amended or restated from time to time, by and among
certain of the shareholders of this corporation and this
corporation (the "Agreement"). A copy of the Agreement is
available for inspection during normal business hours at the
office of the Secretary of the corporation."
2. Transfers Not Subject to Restrictions.
(a) Subject to Section 2 of Article VI hereof, any Founder may
sell, assign or transfer Voting Shares to (i) his spouse, children (natural or
adopted), siblings or parents, or to a trust established for the benefit of his
spouse, children (natural or adopted), siblings, parents or himself, or dispose
of them under his will, or (ii) the other Founders, without compliance with
Sections 3 and 5 of this Article V; provided that the transferee provides the
Company and the Purchasers with a written agreement to be bound hereby to the
same extent as the transferring Founder.
(b) The rights of the holders of the Series A Preferred Stock,
Series B Preferred Stock, the Series C Preferred Stock, or the Series D
Preferred Stock under Section 5 of this Article V shall not apply to any pledge
of Voting Shares by a Founder which creates a mere security interest, provided
the pledgee provides the Company with a written agreement to be bound hereby to
the same extent as the pledging Founder.
3. Offer of Sale; Notice of Proposed Sale. If any Founder desires to
sell, transfer or otherwise dispose of any of his Voting Shares, or of any
interest in such Voting Shares, whether voluntarily or by operation of law, in
any transaction other than pursuant to Section 2 of this Article V, such Founder
(the "Selling Founder") shall first deliver written notice of his desire to do
so (the "Notice") to the Company and the Purchasers, in the manner prescribed in
Section 6 of Article VI hereof. The Notice must specify: (i) the name and
address of the party to which the Selling Founder proposes to sell or otherwise
dispose of the Voting Shares or an interest in the Voting Shares (the
"Offeror"), (ii) the number of Voting Shares the Selling Founder proposes to
sell or otherwise dispose of (the "Offered Shares"), (iii) the consideration per
Voting Share to be delivered to the Selling Founder for the proposed sale,
transfer or disposition, and (iv) all other material terms and conditions of the
proposed transaction.
4. Company's Option to Purchase.
(a) Subject to Section 6(a) of this Article V, the Company
shall have the first option to purchase all or any part of the Offered Shares
for the consideration per share and on the terms and conditions specified in the
Notice. The Company shall be entitled to exercise such option, within 15 days
following delivery of such Notice.
(b) In the event the Company does not exercise its option
within such 15 day period with respect to all of the Offered Shares, the
Secretary of the Company shall, by the last day of such period, give written
notice of that fact to the Purchasers (the "Purchasers Notice").
20
The Purchasers Notice shall specify the number of Offered Shares not purchased
by the Company (the "Remaining Shares").
(c) In the event the Company duly exercises its option to
purchase all or part of the Offered Shares, the closing of such purchase shall
take place at the offices of the Company on the later of (i) the date five days
after the expiration of such 15 day period or (ii) the date that the Purchasers
consummate their purchase of Offered Shares under Section 5(b) of this Article
V.
(d) To the extent that the consideration proposed to be paid
by the Offeror for the Offered Shares consists of property other than cash or a
promissory note, the consideration required to be paid by the Company and/or the
Purchasers exercising their options under Sections 4 and 5 of this Article V may
consist of cash equal to the value of such property, as determined in good faith
by agreement of the Selling Founder and the Company and/or the Purchasers
acquiring such Offered Shares.
(e) Notwithstanding anything to the contrary herein, neither
the Company nor any Purchasers shall have any right to purchase any of the
Offered Shares hereunder unless the Company and/or such Purchasers exercise
their option to purchase all of the Offered Shares.
5. Purchasers' Option to Purchase.
(a) Subject to Section 6(a) of this Article V, each Purchaser
shall have an option, exercisable for a period of 15 days from the date of
delivery of the Purchaser's Notice, to purchase his or its pro rata share
(subject to adjustment pursuant to Section 5(b)), according to the number of
Voting Shares held by such Purchaser, of the Remaining Shares for the
consideration per share and on the terms and conditions set forth in the Notice.
Such option shall be exercised by delivery of written notice to the Secretary of
the Company. In addition to or alternatively, each Purchaser may within the same
15-day period, notify the Secretary of the Company of his or its desire to
participate in the sale of Voting Shares held by him or it on the terms set
forth in the Notice, and the number of Voting Shares he or it wishes to sell
should the Company and/or the Purchasers not exercise their option to purchase
all of the Offered Shares.
(b) In the event options to purchase have been exercised by
the Purchasers with respect to some but not all of the Remaining Shares, those
Purchasers who have exercised their options within the 15-day period specified
in Section 5(a) shall have an additional option, for a period of five days next
succeeding the expiration of such 15-day period, to purchase all or any part of
the balance of such Remaining Shares on the terms and conditions set forth in
the Notice, which option shall be exercised by the delivery of written notice to
the Secretary of the Company. In the event there are two or more such Purchasers
that choose to exercise the last-mentioned option for a total number of Voting
Shares in excess of the number available, the Remaining Shares available for
each such Purchaser's option shall be allocated to such Purchaser pro rata based
on the number of Voting Shares held by the Purchaser so electing.
(c) If the option to purchase the Remaining Shares is
exercised in full by the Purchasers, the closing of the purchase of the
Remaining Shares shall take place at the
21
offices of the Company no later five days after the exercise of such purchase
option by the Purchaser or Purchasers (provided that such closing may be
extended as to any Purchaser for purposes of obtaining any necessary
governmental approvals).
6. Failure to Fully Exercise Options; Co-Sale.
(a) If the Company and the Purchasers do not exercise their
options to purchase all of the Offered Shares within the periods described in
this Agreement (the "Option Period"), then all options of the Company and the
Purchasers to purchase the Offered Shares, whether exercised or not, shall
terminate with respect to that sale only, but each Purchaser which has, pursuant
to Section 5 of this Article V, expressed a desire to sell Voting Shares in the
transaction (a "Participating Purchaser"), shall be entitled to do so pursuant
to this Section 6. The Secretary of the Company shall promptly, on expiration of
the Option Period, notify the Selling Founder of the aggregate number of Voting
Shares the Participating Purchasers wish to sell. The Selling Founder shall use
his best efforts to interest the Offeror in purchasing, in addition to the
Offered Shares, the Voting Shares the Participating Purchasers wish to sell. If
the Offeror does not wish to purchase all of the Voting Shares made available by
the Selling Founder and the Participating Purchasers, then each Participating
Purchaser and the Selling Founder shall be entitled to sell, at the price and on
the terms and conditions set forth in the Notice, a portion of the Voting Shares
being sold to the Offeror, in the same proportion as such Selling Founder or
Participating Purchaser's ownership of Voting Shares bears to the aggregate
number of Voting Shares held by the Selling Founder and the Participating
Purchasers. Any Participating Purchaser may at its option convert the portion of
its Preferred Stock requested to be included in the proposed sale by the Selling
Founder into Common Stock. The Company and the Selling Founder agree to make any
such conversion concurrent with the actual transfer of such shares to the
proposed transferee. The transaction contemplated by the Notice shall be
consummated not later than 60 days after the expiration of the Option Period.
(b) If the Participating Purchasers do not elect to sell the
full number of Voting Shares which they are entitled to sell pursuant to Section
6(a), the Selling Founder shall be entitled to sell to the Offeror, according to
the terms set forth in the Notice, that number of his own Voting Shares which
equals the difference between the number of Voting Shares desired to be
purchased by the Offeror and the number of Voting Shares the Participating
Purchasers wish to sell. If the Selling Founder wishes to sell, transfer or
otherwise dispose of any such Voting Shares at a price per Voting Share which
differs from that set forth in the Notice, upon terms different from those
previously offered to the Purchasers, or more than 60 days after the expiration
of the Option Period, as a condition precedent to such transaction, such Voting
Shares must first be offered to the Purchasers on the same terms and procedures
and time periods set forth above in Sections 4 and 5 and must again be subject
to the co-sale rights in this Section 6.
(c) The proceeds of any sale made by the Selling Founder
without compliance with the provisions of this Section 6 shall be deemed to be
held in constructive trust in such amount as would have been due the
Participating Purchasers if the Selling Founder had complied with this
Agreement.
7. Other Rights Not Affected. Notwithstanding any provision in this
Article V to the contrary, nothing in this Article V shall limit any right of
the Company to repurchase any
22
shares from a Founder or employee which have not yet vested pursuant to the
terms of any other agreement between the Company and such Founder or employee.
ARTICLE VI
GENERAL
1. Termination. Article II of this Agreement shall terminate in its
entirety on the earlier of (a) the closing of an Initial Public Offering or (b)
the tenth anniversary of the date of this Agreement. All of the Company's
obligations to register Registrable Shares under Article III of this Agreement
shall terminate on the later of (a) the fifth anniversary of an Initial Public
Offering or (b) the tenth anniversary of the date of this Agreement. Article IV
and Article V of this Agreement shall terminate in their entirety upon the
earliest of (a) a Liquidation Event (as defined in the Company's Charter), (b)
the closing of an Initial Public Offering, or (c) such time as less than ten
percent (10%) of the originally issued Purchaser Registrable Shares (as adjusted
for stock splits, stock dividends, combinations, reclassifications and the like)
remain outstanding.
2. Transfer of Rights. This Agreement, and the rights and
obligations of the Purchasers hereunder, may be assigned by a Purchaser to any
person or entity to which Shares are transferred by the Purchaser, and such
transferee shall be deemed a "Purchaser" and a "Stockholder" for purposes of
this Agreement; provided that the transferee provides written notice of such
assignment to the Company and agrees to be bound by the terms hereof.
Notwithstanding the foregoing sentence, the rights and obligations of each
Purchaser under Article III of this Agreement may only be assigned by such
Purchaser to any person or entity (i) to which at least 100,000 Shares, or, in
the case of a transfer by Silicon (on one occasion only), 34,330 Shares (in each
case, as adjusted for stock splits, stock dividends, combinations,
reclassifications and the like) are transferred by such Purchaser or (ii) which
is a partner, stockholder or affiliate of such Purchaser or another Purchaser.
No Purchaser may assign any of its rights or obligations hereunder to any person
or entity which is determined in good faith by the Board of Directors to be a
"competitor" of the Company. The Founders may not assign any rights under this
Agreement except to or for the benefit of any spouse, child or grandchild, or to
a trust for their benefit, provided that such rights shall remain subject to
this Agreement (including without limitation the restrictions on transfer set
forth in this Article VI, Section 2) and such permitted assignee shall, as a
condition to such assignment, deliver to the Company a written instrument
confirming that such assignee shall be bound by all of the terms and conditions
of this Agreement.
3. Severability. The provisions of this Agreement are severable, so
that the invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other term or provision of this
Agreement, which shall remain in full force and effect.
4. Specific Performance. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement, the
Stockholders shall be entitled to specific performance of the agreements and
obligations of the Company and the Stockholders hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction.
23
5. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).
6. Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
7. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company:
Phase Forward Incorporated
0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President and General Counsel
or at such other address or addresses as may have been furnished in writing by
the Company to the Purchasers.
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx., Esq.
If to a Series A Purchaser:
at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series A Purchaser.
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
24
If to a Series B Purchaser:
at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series B Purchaser.
With copies to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx and
Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
If to a Series C Purchaser:
at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series C Purchaser.
With copies to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: R. Xxx Xxxxx
If to a Series D Purchaser:
at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series D Purchaser.
With copies to:
25
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
If to IBM:
International Business Machines Corporation
MS 000
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
If to a Founder:
at each such Founder's respective address set forth beneath
his signature on this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing by such Founder. Notices provided
in accordance with this Article VI, Section 6 shall be deemed delivered upon
personal delivery or two business days after deposit in the mail.
8. (a) Waiver of Participation Rights. In accordance with Section
8(b) of Article VI of the Prior Agreement, the Prior Agreement is hereby amended
to provide that any rights any party to the Prior Agreement may have, including
prior notice rights, under, and any failure of the Company to comply with, the
requirements of Article IV, Section 1 of the Prior Agreement with respect to the
sale and issuance of the Series D Preferred Stock pursuant to the New Purchase
Agreement, are hereby waived.
(b) Complete Agreement; Amendments. By such party's execution
below, each party to the Prior Agreement hereby agrees to amend and restate the
Prior Agreement in accordance with Article VI Section 8 thereof. This Agreement
constitutes the full and complete agreement of the parties hereto with respect
to the subject matter hereof, provided, however, that the rights of Purchasers
or Founders that became parties to the Prior Agreement in connection with
permitted transfers thereunder shall be subject to the restrictions contained in
the counterpart signature pages executed in connection therewith. No amendment,
waiver, modification or termination of any provision of this Agreement shall be
valid unless in writing and signed by the Company and the holders of sixty-six
and two-thirds percent (66 2/3%) of the Voting Shares held by the Purchasers and
holders of twenty-five percent (25%) of the Voting Shares held by the Founders,
provided such Founders are employed with the Company; provided, that (i) Article
II, Section 1(a) governing the designation of a member of the Board of Directors
by the Founders may be amended or waived only if the Founders (by action of the
holders of a majority of the Voting Shares held by the Founders) concur in such
amendment or waiver; and (ii) Article III may be amended or waived (A) by the
Company and Purchasers holding 66 2/3% of the Registrable Shares and no consent
of the Founders shall be required to amend or waive such Article; and (B) with
the consent of less than all of the Purchasers only in a manner which affects
all Registrable Shares (to the extent affected) in the same fashion. No waivers
of or exceptions to any term,
26
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision. Any amendment or waiver effected in accordance with this
paragraph 8 of Article VI shall be binding upon each holder of any Registrable
Shares, each future holder of all such Registrable Shares, and the Company,
whether or not such holder consented, agreed to, or signed such amendment or
waiver.
9. Pronouns. Whenever the content may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one Agreement binding on all the parties hereto.
11. Captions. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.
12. Aggregation of Stock. All shares 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.
13. Stock Split. All references to numbers of shares in this
Agreement shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring after
the date of this Agreement.
Signature Pages Follow
27
IN WITNESS WHEREOF, this Fifth Amended and Restated Investors' Rights
Agreement has been executed as of the date first written above.
COMPANY:
PHASE FORWARD INCORPORATED
By:
----------------------------------------
Title:
-------------------------------------
Address: 0000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
FOUNDERS:
------------------------------------------
XXXX XXXXXXXX
Address: 000 Xx. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
XXXX X XXXXXXXX 1999 IRREVOCABLE TRUST
By:
--------------------------------------
Name: Xxxxxx Xxxxxxxxxx, Trustee
Address:
------------------------------------------
XXXXXXX XXXX
Address: 00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxx-Xxxx Children 1999 Irrevocable
Trust, dated July 8, 1999
By:
--------------------------------------
Name: Xxxx Xxx Xxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
------------------------------------------
XXXXX XXXXXXX
Address: 00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
------------------------------------------
XXXXXX XXXX
Address: 00 Xxxxxx Xxxx
Xxxxxx, XX 00000
------------------------------------------
XXXXXXX XXXXXX
Address: 00 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
------------------------------------------
XXXX XXXXXX
Address: 000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
The Xxxxxx Children 1999 Irrevocable
Trust
By:
--------------------------------------
Name: Xxxxxxxxx Xxxxxx, Trustee
Address:
Signature page to the Investors' Rights Agreement
------------------------------------------
XXXXXXX XXXXXX
Address: 000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
------------------------------------------
X. XXXXXX M. LARGE
Address: 238 Winged Xxxx Xxxxx
Xxxx Xxxx, XX 00000
------------------------------------------
XXXXXXX X. XXXXX*
Address: 00 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxx X0 0XX
Xxxxxx Xxxxxxx
*The undersigned acknowledges that she will not receive rights under this
Agreement and hereby agrees to be bound by all the provisions of this Agreement.
Signature page to the Investors' Rights Agreement
PURCHASERS:
Xxxxxxxx Ventures International Life
Sciences Fund II LP1
By Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name: X. Xxxxxx, X. Xxxx
Title: Directors & Vice Presidents
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
Xxxxxxxx Ventures International Life
Sciences Fund II LP2
By Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name: X. Xxxxxx, X. Xxxx
Title: Directors & Vice Presidents
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
Signature page to the Investors' Rights Agreement
Xxxxxxxx Ventures International Life
Sciences Fund II LP3
By Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name: X. Xxxxxx, X. Xxxx
Title: Directors & Vice Presidents
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
Xxxxxxxx Ventures International Life
Sciences FUND II STRATEGIC PARTNERS L.P.
By Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name: X. Xxxxxx, X. Xxxx
Title: Directors & Vice Presidents
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
Signature page to the Investors' Rights Agreement
XXXXXXXX VENTURES INTERNATONAL LIFE
SCIENCES FUND II GROUP CO-INVESTMENT
SCHEME
By SITCO Nominees Ltd. - VC 01903,
as nominee
By:
--------------------------------------
Name: X. Xxxxxx, X. Xxxx
Title: Directors
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
XXXXXXXX VENTURES INVESTMENTS LIMITED
By SV (Nominees) Ltd.,
as nominee
By:
--------------------------------------
Name: X.X. XxXxxxx
Title: Director
Address: 00 Xxxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Signature page to the Investors' Rights Agreement
HLM/UH FUND, L.P.
By: HLM UH Associates, LLC,
its General Partner
By:
--------------------------------------
Name: Xxxxxx X. X'Xxxxxxx, III
Title:
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
PACIFIC VENTURE GROUP II, L.P.
By
------------------------------------
its General Partner
By:
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
Address: 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
PVG ASSOCIATES II, L.P.
By:
---------------------------------------
its General Partner
By:______________________________
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
Address: 000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
BioVentures Investors Limited
Partnership
By BioVentures Investors, LLC,
its General Partner
By:
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Address: 0 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
DLJ CAPITAL CORP.
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation,
Its General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Attorney in fact
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Signature page to the Investors' Rights Agreement
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corp.
Its Managing General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corp.
Its General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corp., Its General
Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Signature page to the Investors' Rights Agreement
NORTH BRIDGE VENTURE PARTNERS II, L.P.
By: North Bridge Venture Management
II, L.P.,
its general partner
By:
-------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: General Partner
Address: 000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
NORTH BRIDGE VENTURE PARTNERS III, L.P.
By: North Bridge Venture Management
III, L.P.,
its general partner
By:
---------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: General Partner
Address: 000 Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
------------------------------------------
XXXXXX X. XXXXXXXXXXX
Address: 0 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
------------------------------------------
XXXXXXX XXXXXXXXX
Address: 00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
------------------------------------------
XXXXXX X. XXXX
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
------------------------------------------
XXXXX XXXXX
Address: 000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
------------------------------------------
XXXXXX X. XXXXXXXXX
Address: 0 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
------------------------------------------
XXXXXXX X. XXXXXXXXX
Address: 00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
------------------------------------------
XXXX XXXXXX
Address: 000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
------------------------------------------
XXXXXXXX XXXXXX
Address: 00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
------------------------------------------
XXXXXX XXXXX
Address: 0000 Xxxxxxxx
XxXxxx, XX 00000
Signature page to the Investors' Rights Agreement
------------------------------------------
X. XXXXXX M. LARGE
Address: 238 Winged Xxxx Xxxxx
Xxxx Xxxx, XX 00000
XXXXXX XXXXXX capital partners, l.p.
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
XXXXXX XXXXXX capital partners
EMPLOYEE FUND, L.P.
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
TWP CEO FOUNDERS CIRCLE (QP), L.P.
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
TWP CEO FOUNDERS CIRCLE (AI), L.P.
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
TWP 2000 CO-INVESTMENT FUND, L.P.
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
XXXXXX XXXXXX capital partners (DUTCH), L.P.
By Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), its general partner
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
XXXXXX XXXXXX capital partners
(DUTCH II), L.P.
By Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), its general partner
By Xxxxxx Xxxxxx Capital Partners LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: Xxx Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
SILICON VALLEY BANK
By:
--------------------------------------
Name:
Title:
Signature page to the Investors' Rights Agreement
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, L.P.
its general partner
By: Atlas Venture Associates III, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
ATLAS VENTURE ENTREPRENEURS' FUND III, L.P.
By: Atlas Venture Associates III, L.P.
its general partner
By: Atlas Venture Associates III, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
ATLAS VENTURE FUND V, L.P.
By: Atlas Venture Associates V, L.P.
its general partner
By: Atlas Venture Associates V, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
ATLAS VENTURE PARALLEL FUND V-A, C.V.
By: Atlas Venture Associates V, L.P.
its general partner
By: Atlas Venture Associates V, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
ATLAS VENTURE PARALLEL FUND V-B, C.V.
By: Atlas Venture Associates V, L.P.
its general partner
By: Atlas Venture Associates V, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.
its general partner
By: Atlas Venture Associates V, Inc.
its general partner
By:
--------------------------------------
Name: Xxxxxx Xxxxxx Xxxxx
Title: Vice President
Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
------------------------------------------
XXXXXXX XXXXXXXXX**
Address:
-------------------------------
-------------------------------
------------------------------------------
XXXXXXX XXXXXX**
Address:
-------------------------------
-------------------------------
------------------------------------------
XXXXXX XXXXXX**
Address:
-------------------------------
-------------------------------
**The undersigned acknowledges that he will not receive rights under Article
III, "Registration Rights," of this Agreement and hereby agrees to be bound by
all provisions of this Agreement.
Signature page to the Investors' Rights Agreement
ABS CAPITAL PARTNERS, L.P.
By: ABS Partners, L.P.
its General Partner
By:
----------------------------------------
Name:
Title:
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ABS CAPITAL PARTNERS II, L.P.
By: ABS Partners II, LLC
By:
----------------------------------------
Name:
Title:
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ST. XXXX FIRE AND MARINE
INSURANCE COMPANY
By:
----------------------------------------
Name:
Title:
Address:
Signature page to the Investors' Rights Agreement
ST. XXXX VENTURE CAPITAL IV, LLC
By:
----------------------------------------
Name:
Title:
Address:
ST. XXXX VENTURE CAPITAL V, LLC
By:
----------------------------------------
Name:
Title:
Address:
ST. XXXX VENTURE CAPITAL VI, LLC
By: SPVC Management VI, LLC
Its: Managing Member
--------------------------------
Its: Managing Director
Address: 00000 Xxxxxx Xxxxx Xxxxx 000
Xxxx Xxxxxxx, XX 00000
HOUSATONIC EQUITY INVESTORS SBIC, L.P.
By: Housatonic Equity Partners SBIC,
LLC, its general partner
By:
----------------------------------------
Name:
Title:
Address: 00 Xxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
ONSET ENTERPRISE ASSOCIATES, LP
By: OEA Management, L.P.
its general partner
By:
----------------------------------------
Name:
Title:
Address:
ONSET ENTERPRISE ASSOCIATES II, LP
By: OEA II Management, L.P.
its general partner
By:
----------------------------------------
Name:
Title:
Address:
ONSET VENTURES SERVICES CORPORATION
By:
----------------------------------------
Name:
Title:
Address:
SALIX VENTURES, L.P.
By: Salix Partners LLC, its general
partner
By:
----------------------------------------
Name:
Title:
Address: 00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Signature page to the Investors' Rights Agreement
NEW ENTERPRISE ASSOCIATES VI, LP
By: NEA Partners VI, Limited Partnership
its general partner
By:
----------------------------------------
Name:
Title:
Address: 0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
------------------------------------------
Xxxxxxxx X. Xxxxxxx
Address:
FSC CORPORATION, INC.
By:
----------------------------------------
Name:
Title:
Address:
------------------------------------------
Xxxxxx X. Xxxxxx
Address:
Signature page to the Investors' Rights Agreement
XXXX X. XXXXXX XX. TRUST
By:
----------------------------------------
Name:
Title:
Address:
PHARMASOFT, INC.
By:
----------------------------------------
Name:
Title:
Address:
------------------------------------------
Xxxxxxx Xxxx
Address:
------------------------------------------
Xxxx X. XxXxxxxxxx
Address:
------------------------------------------
Xxxx X. Xxxxxxxx
Address:
------------------------------------------
Xxxxxxxx Xxxxxxx
Address:
Signature page to the Investors' Rights Agreement
------------------------------------------
Xxxxxx X. Xxxxx
Address:
XXX XXXXX AND COMPANY
By:
----------------------------------------
Name:
Title:
Address:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
----------------------------------------
Name:
Title:
Address:
AMENDMENT NO. 1 TO
FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amendment No. 1 (the "Amendment") to that certain Fifth Amended and
Restated Investors' Rights Agreement, dated December 27, 2001 (the "Agreement"),
among Phase Forward Incorporated, a Delaware corporation (the "Corporation"),
and the Founders and Purchasers as named therein, is made as of this 9th day of
October, 2002 by and among the Corporation and the undersigned Founders and
Purchasers.
WHEREAS, the Corporation deems it desirable to increase the number of
shares of Common Stock that can be granted as stock options, pursuant to the
Corporation's Amended and Restated 1997 Stock Option Plan, to attract and retain
employees, directors and consultants for the Corporation; and
WHEREAS, the undersigned Purchasers and Founders desire to facilitate the
Corporation's ability to attract and retain employees, directors and
consultants.
NOW, THEREFORE, for good and valuable consideration, the validity and
sufficiency of which are hereby acknowledged, Article IV, Section 2(c) of the
Agreement is amended to read in its entirety as follows:
"(c) up to Seven Million Forty-Six Thousand Six Hundred Sixty-Four
(7,046,664) shares of Common Stock, or options exercisable therefor, including
options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company."
Except as provided for in this Amendment, all other terms and conditions
of the Agreement shall continue to be in full force and effect. The Agreement,
as amended by this Amendment, constitutes the entire agreement between the
parties with respect to the subject matter contained herein and therein.
This Amendment may be executed in one or more counterparts, each of which
shall be deemed to constitute an original, but all of which together shall
constitute one (1) instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Signature Page to the Investors' Rights Agreement Amendment
IN WITNESS WHEREOF, this Amendment is executed as of the day and year
first above written.
COMPANY:
PHASE FORWARD INCORPORATED
By:
--------------------------------
Xxxx Xxxxxxxx, Chairman and
Chief Executive Officer
Signature Page to the Investors' Rights Agreement Amendment
FOUNDERS:
---------------------------------------
XXXX XXXXXXXX
Signature Page to the Investors' Rights Agreement Amendment
PURCHASERS:
XXXXXXXX VENTURES INTERNATIONAL LIFE
SCIENCES FUND II LP1
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Xxxxxxxx Ventures International Life
Sciences Fund II LP2
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Xxxxxxxx Ventures International Life
Sciences Fund II LP3
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
Xxxxxxxx Ventures International Life
Sciences FUND II STRATEGIC PARTNERS L.P.
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INTERNATIONAL LIFE
SCIENCES FUND II GROUP CO-INVESTMENT
SCHEME
By: SITCO Nominees Ltd. - VC 01903,
as nominee
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INVESTMENTS LIMITED
By: SV (Nominees) Ltd.,
as nominee
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
PACIFIC VENTURE GROUP II, L.P.
By:
---------------------------------------
as General Partner
By:
--------------------------------------
Name:
Title:
PVG ASSOCIATES ii, L.P.
By:
---------------------------------------
as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
DLJ CAPITAL CORP.
By:
---------------------------------------
Name:
Title:
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation,
as General Manager
By:
---------------------------------------
Name:
Title:
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corp.,
as Managing General Partner
By:
---------------------------------------
Name:
Title:
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corp.,
as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corp., as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
NORTH BRIDGE VENTURE PARTNERS II, L.P.
By: North Bridge Venture Management
II, L.P.,
as General Partner
By:
-------------------------------------
General Partner
NORTH BRIDGE VENTURE PARTNERS III, L.P.
By: North Bridge Venture Management
III, L.P.,
as General Partner
By:
-------------------------------------
General Partner
Signature Page to the Investors' Rights Agreement Amendment
XXXXXX XXXXXX CAPITAL PARTNERS L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX CAPITAL PARTNERS
EMPLOYEE FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
TWP CEO FOUNDERS CIRCLE (QP), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
TWP CEO FOUNDERS CIRCLE (AI), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
TWP 2000 CO-INVESTMENT FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX capital partners (DUTCH), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), as General Partner
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX CAPITAL PARTNERS
(DUTCH II), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), as General Partner
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, L.P.,
as General Partner
By: Atlas Venture Associates III, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE ENTREPRENEURS' FUND III, L.P.
By: Atlas Venture Associates III, L.P.,
as General Partner
By: Atlas Venture Associates III, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE FUND V, L.P.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ATLAS VENTURE PARALLEL FUND V-A, C.V.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE PARALLEL FUND V-B, C.V.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ABS CAPITAL PARTNERS, L.P.
By: ABS Partners, L.P.,
as General Partner
By:
--------------------------------------
Name:
Title:
ABS CAPITAL PARTNERS II, L.P.
By: ABS Partners II, LLC,
By:
--------------------------------------
Name:
Title:
AMENDMENT NO. 2 TO
FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amendment No. 2 (the "Amendment") to that certain Fifth Amended and
Restated Investors' Rights Agreement, dated December 27, 2001 (as amended, the
"Agreement"), among Phase Forward Incorporated, a Delaware corporation (the
"Corporation"), and the Founders and Purchasers as named therein, as amended by
Amendment No. 1 dated October 23, 2002, is made as of this 1st day of May, 2003
by and among the Corporation and the undersigned Founders and Purchasers.
WHEREAS, the Corporation deems it desirable to increase the number of
shares of Common Stock that can be granted as stock options, pursuant to the
Corporation's 2003 Non-Employee Director Stock Option Plan, to attract and
retain directors for the Corporation; and
WHEREAS, the undersigned Purchasers and Founders desire to facilitate the
Corporation's ability to attract and retain directors.
NOW, THEREFORE, for good and valuable consideration, the validity and
sufficiency of which are hereby acknowledged, Article IV, Section 2(c) of the
Agreement is amended to read in its entirety as follows:
"(c) up to Six Million Nine Hundred Ninety-Six Thousand Six Hundred
Sixty-Four (6,996,664) shares of Common Stock, or options exercisable therefor,
including options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company."
Except as provided for in this Amendment, all other terms and conditions
of the Agreement shall continue to be in full force and effect. The Agreement,
as amended by this Amendment, constitutes the entire agreement between the
parties with respect to the subject matter contained herein and therein.
This Amendment may be executed in one or more counterparts, each of which
shall be deemed to constitute an original, but all of which together shall
constitute one (1) instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Signature Page to the Investors' Rights Agreement Amendment
IN WITNESS WHEREOF, this Amendment is executed as of the day and year
first above written.
COMPANY:
PHASE FORWARD INCORPORATED
By: -------------------------------------
Xxxxxx X. Xxxxxx, President and Chief
Executive Officer
Signature Page to the Investors' Rights Agreement Amendment
FOUNDERS:
---------------------------------------
XXXX XXXXXXXX
---------------------------------------
XXXXXXX XXXXXX
Signature Page to the Investors' Rights Agreement Amendment
PURCHASERS:
XXXXXXXX VENTURES INTERNATIONAL
LIFE SCIENCES FUND II LP1
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INTERNATIONAL
LIFE SCIENCES FUND II LP2
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INTERNATIONAL
LIFE SCIENCES FUND II LP3
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
XXXXXXXX VENTURES INTERNATIONAL
LIFE SCIENCES FUND II STRATEGIC
PARTNERS L.P.
By: Xxxxxxxx Venture Managers Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INTERNATIONAL
LIFE SCIENCES FUND II GROUP CO-
INVESTMENT SCHEME
By: SITCO Nominees Ltd. - VC 01903,
as nominee
By:
--------------------------------------
Name:
Title:
XXXXXXXX VENTURES INVESTMENTS
LIMITED
By: SV (Nominees) Ltd.,
as nominee
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
PACIFIC VENTURE GROUP II, L.P.
By:
---------------------------------------
as General Partner
By:
---------------------------------------
Name:
Title:
PVG ASSOCIATES II, L.P.
By:
---------------------------------------
as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
DLJ CAPITAL CORP.
By:
---------------------------------------
Name:
Title:
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation,
as General Manager
By:
---------------------------------------
Name:
Title:
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corp.,
as Managing General Partner
By:
---------------------------------------
Name:
Title:
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corp.,
as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corp., as General Partner
By:
---------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
NORTH BRIDGE VENTURE PARTNERS V-A,
L.P.
By: North Bridge Venture Management V, L.P.,
as General Partner
By:
-------------------------------------
General Partner
NORTH BRIDGE VENTURE PARTNERS V-B, L.P.
By: North Bridge Venture Management V, L.P.,
as General Partner
By:
---------------------------------------
General Partner
Signature Page to the Investors' Rights Agreement Amendment
XXXXXX XXXXXX CAPITAL PARTNERS L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX CAPITAL PARTNERS
EMPLOYEE FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
TWP CEO FOUNDERS CIRCLE (QP), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
TWP CEO FOUNDERS CIRCLE (AI), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
TWP 2000 CO-INVESTMENT FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX CAPITAL PARTNERS
(DUTCH), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), as General Partner
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
XXXXXX XXXXXX CAPITAL PARTNERS
(DUTCH II), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC
(Dutch), as General Partner
By: Xxxxxx Xxxxxx Capital Partners LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ATLAS VENTURE FUND III, L.P.
By: Atlas Venture Associates III, L.P.,
as General Partner
By: Atlas Venture Associates III, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE ENTREPRENEURS' FUND
III, L.P.
By: Atlas Venture Associates III, L.P.,
as General Partner
By: Atlas Venture Associates III, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE FUND V, L.P.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ATLAS VENTURE PARALLEL FUND V-A, C.V.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE PARALLEL FUND V-B, C.V.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.
By: Atlas Venture Associates V, L.P.,
as General Partner
By: Atlas Venture Associates V, Inc.,
as General Partner
By:
--------------------------------------
Name:
Title:
Signature Page to the Investors' Rights Agreement Amendment
ABS CAPITAL PARTNERS, L.P.
By: ABS Partners, L.P.,
as General Partner
By:
--------------------------------------
Name:
Title:
ABS CAPITAL PARTNERS II, L.P.
By: ABS Partners II, LLC,
as General Partner
By:
--------------------------------------
Name:
Title:
