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EXHIBIT 4.8
SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
This Seventh Amended and Restated Investors' Rights Agreement (this
"Agreement") is made and entered into effective as of December 3, 1997 by and
among Brocade Communications Systems, Inc., a California corporation (the
"Company"), and the persons and entities listed on Exhibit A attached hereto
(the "Investors").
RECITALS
A. The existing Investors and warrantholders who are identified
on the signature page to this Agreement as "Previous Investors Who Are Not
Investing in the Second Series D Transaction" or "Previous Investors Who Are
Investing in the Second Series D Transaction" (collectively, the "Previous
Investors") are parties to the Sixth Amended and Restated Investors' Rights
Agreement entered into as of October 24, 1997 (the "Prior Rights Agreement");
such Previous Investors include persons who purchased Series D Preferred Stock
of the Company on or about September 29, 1997, pursuant to which purchase such
investors were granted warrants to purchase shares of the Company's Series D
Preferred Stock equal to ten percent (10%) of the number of shares of Series D
Preferred Stock purchased by each such Investor (the "First Series D Transaction
Investors").
B. The Company desires for those certain Investors who are or
will be identified on the signature page to this Agreement as either "Previous
Investors Who Are Investing in the Second Series D Transaction" or "Second
Series D Transaction Investors" (collectively, the "Second Series D Transaction
Investors") to purchase shares of the Company's Series D Preferred Stock
pursuant to that certain Series D Preferred Stock Purchase Agreement made
effective on or about the date hereof between the Company and the Second Series
D Transaction Investors, as may be amended from time to time (the "Second Series
D Agreement").
C. As a condition of such investment by the Second Series D
Transaction Investors, and to induce such investment, the Investors and the
Company wish to enter into this Agreement which shall supersede the Prior Rights
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. INFORMATION RIGHTS.
1.1 Financial Information. The Company covenants and agrees that,
commencing on the date of this Agreement, for so long as any Investor holds
shares of Preferred Stock convertible into at least 50,000 shares of Common
Stock of the Company issued pursuant to that certain Series A Preferred Stock
Purchase Agreement dated August 28, 1995 (the "Series A Agreement"), that
certain Series B Preferred Stock Purchase Agreement dated June 17, 1996 (the
"Series B Agreement"), that certain Series C Preferred Stock Purchase Agreement
dated December 6, 1996, that certain Series D Preferred Stock Purchase Agreement
dated September 29, 1997 and/or the Second Series D Agreement (such agreements,
including any future amendments thereto, are collectively referred to as the
"Preferred Stock Purchase
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Agreements" and any single such agreement is referred to as a "Preferred Stock
Purchase Agreement") and/or the equivalent number (on an as-converted basis) of
shares of Common Stock of the Company ("Common Stock") issued upon the
conversion of such shares of Preferred Stock ("Conversion Stock"), or any
combination thereof, the Company will:
(a) Annual Reports. Furnish to such Investor, as soon as
practicable and in any event within 120 days after the end of each fiscal year
of the Company, a consolidated Balance Sheet as of the end of such fiscal year,
a consolidated Statement of Income and a consolidated Statement of Cash Flows of
the Company and its subsidiaries for such year, setting forth in each case in
comparative form the figures from the Company's previous fiscal year (if any),
all prepared in accordance with generally accepted accounting principles and
practices and audited by nationally recognized independent certified public
accountants;
(b) Quarterly Reports. Furnish to such Investor as soon as
practicable, and in any case within forty-five (45) days of the end of each
fiscal quarter of the Company (except the last quarter of the Company's fiscal
year), quarterly unaudited financial statements, including an unaudited Balance
Sheet and an unaudited Statement of Income and an unaudited Statement of Cash
Flows;
(c) Monthly Reports. Furnish to such Investor as soon as
practicable, and in any case within forty-five (45) days of the end of each
calendar month (except the last month of the Company's fiscal year), monthly
unaudited financial statements, including an unaudited Balance Sheet and an
unaudited Statement of Income and an unaudited Statement of Cash Flows; and
(d) Annual Budget. Furnish to such Investor as soon as
practicable and in any event no later than thirty (30) days after the close of
each fiscal year of the Company, an annual operating plan and budget, prepared
on a monthly basis, for the next immediate fiscal year. The Company shall also
furnish to such Investor, within a reasonable time of its preparation,
amendments to the annual budget, if any.
(e) Confidentiality. Each Investor agrees to hold all
information received pursuant to this Section in confidence, and not to use or
disclose any of such information to any third party, except to the extent such
information may be made publicly available by the Company.
1.2 Inspection Rights. The Company shall permit each Investor
holding shares of the Company's Preferred Stock convertible into at least
500,000 shares of Common Stock of the Company issued pursuant to any one or more
of the Preferred Stock Purchase Agreements and/or the equivalent number (on an
as-converted basis) of shares of Conversion Stock, or any combination thereof,
at such Investor's expense and at such reasonable times as may be requested by
such Investor, to visit and inspect the Company's properties, to examine its
books of account and records and to discuss the Company's affairs, finances and
accounts with its officers. Each Investor agrees to hold all information
received from such inspections in confidence, and not to use or disclose any of
such information to any third party, except to the extent such information may
be made publicly available by the Company. The Company shall have no obligation
under this Section 1.2 to disclose any information to an Investor who is a
competitor, works or consults for or is an investor in a competitor, and further
shall have no obligation to disclose confidential information to any Investor.
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1.3 Termination of Rights. The Company's obligations under
Sections 1.1 and 1.2 above will terminate upon the earlier of (i) the closing of
the Company's initial public offering of Common Stock pursuant to an effective
registration statement filed under the U.S. Securities Act of 1933, as amended
(the "Securities Act") or (ii) upon (a) the acquisition of all or substantially
all the assets of the Company or (b) an acquisition of the Company by another
corporation or entity by consolidation, merger or other reorganization in which
the holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing
less than fifty percent (50%) of the voting power of the corporation or other
entity surviving such transaction.
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(b) Registrable Securities. The term "Registrable
Securities" means: (1) all the shares of Common Stock of the Company issued or
issuable upon the conversion of: (A) any shares of Preferred Stock issued under
any Preferred Stock Purchase Agreement, (B) any shares of Series A Preferred
Stock that are issued or issuable upon exercise of those certain warrants issued
by the Company as of December 26, 1995 to purchase 35,444 and 15,753 shares of
the Company's Series A Preferred Stock (which warrant to purchase 15,753 shares
of Series A Preferred Stock was amended and restated as of October 3, 1996) (the
"Series A Warrants"), (C) any shares of Series B Preferred Stock that are issued
or issuable upon exercise of that certain warrant issued by the Company as of
September 11, 1996 (the "Series B Warrant"), (D) any shares of Series C
Preferred Stock that are issued or issuable upon exercise of that certain
warrant issued by the Company as of June 13, 1997 (the "Series C Warrant"), and
(E) any shares of Series D Preferred Stock that are issued or issuable upon
exercise of those certain warrants issued by the Company pursuant to the Series
D Agreement (the "Series D Warrants") and (2) any shares of Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, all such shares of
Common Stock described in clause (1) of this subsection (b); excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which rights under this Section 2 are not assigned in accordance with this
Agreement or any Registrable Securities sold to the public or sold pursuant to
Rule 144 promulgated under the Securities Act.
(c) Registrable Securities Then Outstanding. The number of
shares of "Registrable Securities then outstanding" shall mean the number of
shares of Common Stock which are Registrable Securities and (1) are then issued
and outstanding or (2) are then issuable pursuant to the exercise or conversion
of then outstanding and then exercisable options, warrants or convertible
securities.
(d) Holder. For purposes of this Section 2 and Sections 3
and 4 hereof, the term "Holder" means any person owning of record Registrable
Securities that have not been sold to the public or pursuant to Rule 144
promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under this Section 2 have been
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duly assigned in accordance with this Agreement; provided, however, that for
purposes of this Agreement, a record holder of shares of Preferred Stock shall
be deemed to be the Holder of Registrable Securities into which such Preferred
Stock is convertible solely for the purposes of Sections 2 and 3 of this
Agreement; provided, further, that for purposes of this Agreement, a record
holder of Series A Warrants, the Series B Warrant or the Series D Warrants
exercisable for such Registrable Securities shall be deemed to be the Holder of
such Registrable Securities solely for purposes of Section 2 of this Agreement;
and provided further, that for purposes of this Agreement, a record holder of
the Series C Warrant exercisable for such Registrable Securities shall be deemed
to be the Holder of such Registrable Securities solely for purposes of Section 2
of this Agreement excluding Subsection 2.2; provided, further, that the Company
shall in no event be obligated to register shares of Preferred Stock, the Series
A Warrants, the Series B Warrant, the Series C Warrant or the Series D Warrants,
and that Holders of Registrable Securities will not be required to convert their
shares of Preferred Stock into Common Stock or exercise their Series A Warrants,
Series B Warrant, Series C Warrant or Series D Warrants in order to exercise the
registration rights granted hereunder, until immediately before the closing of
the offering to which the registration relates.
(e) Form S-3. The term "Form S-3" means such form under
the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
(f) SEC. The term "SEC" or "Commission" means the U.S.
Securities and Exchange Commission.
2.2 Demand Registration.
(a) Request by Holders. If the Company shall receive at
any time after six (6) months after the effective date of the Company's initial
public offering of its securities pursuant to a registration filed under the
Securities Act, a written request from the Holders of at least a majority of the
Registrable Securities then outstanding that the Company file a registration
statement under the Securities Act covering the registration of Registrable
Securities pursuant to this Section 2.2, then the Company shall, within ten (10)
business days of the receipt of such written request, give written notice of
such request ("Request Notice") to all Holders, and effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities which Holders request to be registered and included in such
registration by written notice given such Holders to the Company within twenty
(20) days after receipt of the Request Notice, subject only to the limitations
of this Section 2.2; provided that the Registrable Securities requested by all
Holders to be registered pursuant to such request must either (i) be at least
fifty percent (50%) of all Registrable Securities then outstanding or (ii) have
an anticipated aggregate public offering price (before any underwriting
discounts and commissions) of not less than $2,000,000.
(b) Underwriting. If the Holders initiating the
registration request under this Section 2.2 ("Initiating Holders") intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, then they shall so advise the Company as a part of their request
made pursuant to this Section 2.2 and the Company shall include such information
in the Request Notice. In such event, the right of any Holder to include his
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Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the managing underwriter or underwriters selected for such underwriting by
the Company. Notwithstanding any other provision of this Section 2.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be reduced as required
by the underwriter(s) and allocated among the Holders of Registrable Securities
on a pro rata basis according to the number of Registrable Securities then
outstanding held by each Holder requesting registration (including the
Initiating Holders); provided, however, that the number of shares of Registrable
Securities to be included in such underwriting and registration shall not be
reduced unless all other securities of the Company are first entirely excluded
from the underwriting and registration. Any Registrable Securities excluded and
withdrawn from such underwriting shall be withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is
obligated to effect only two (2) such registrations pursuant to this Section
2.2.
(d) Deferral. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 2.2, a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such registration statement to be filed and
it is therefore essential to defer the filing of such registration statement,
then the Company shall have the right to defer such filing for a period of not
more than 180 days after receipt of the request of the Initiating Holders;
provided, however, that the Company may not utilize this right more than once in
any twelve (12) month period.
(e) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.2, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders (but excluding
underwriters' discounts and commissions), shall be borne by the Company. Each
Holder participating in a registration pursuant to this Section 2.2 shall bear
such Holder's proportionate share (based on the total number of shares sold in
such registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to this Section 2.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of a majority of the Registrable Securities then
outstanding agree to forfeit their right to one (1) demand registration pursuant
to this Section 2.2 (in which case such right shall be forfeited by all Holders
of Registrable Securities); provided, further, however, that if at the time of
such withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the
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Company not known to the Holders at the time of their request for such
registration and have withdrawn their request for registration with reasonable
promptness after learning of such material adverse change, then the Holders
shall not be required to pay any of such expenses and shall retain their rights
pursuant to this Section 2.2.
2.3 Piggyback Registrations. The Company shall notify all Holders
of Registrable Securities in writing at least thirty (30) days prior to filing
any registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to any registration
under Section 2.2 or Section 2.4 of this Agreement or to any employee benefit
plan or a corporate reorganization) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to include
in any such registration statement all or any part of the Registrable Securities
held by such Holder shall, within twenty (20) days after receipt of the
above-described notice from the Company, so notify the Company in writing, and
in such notice shall inform the Company of the number of Registrable Securities
such Holder wishes to include in such registration statement. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(a) Underwriting. If a registration statement under which
the Company gives notice under this Section 2.3 is for an underwritten offering,
then the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder;
provided however, that the right of the underwriters to exclude shares
(including Registrable Securities) from the registration and underwriting as
described above shall be restricted so that the number of Registrable Securities
included in any such registration is not reduced below twenty percent (20%) of
the shares included in the registration, except for a registration relating to
the Company's initial public offering from which all Registrable Securities may
be excluded. If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to the Company and
the underwriter, delivered at least ten (10) business days prior to the
effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a
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partnership or corporation, the partners, retired partners and shareholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "Holder", and any pro rata reduction with respect to such
"Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder", as defined in this sentence.
(b) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.3 (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company.
2.4 Form S-3 Registration. In case the Company shall receive from
any Holder or Holders of at least twenty percent (20%) of all Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, then the Company will:
(a) Notice. Promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any related
qualification or compliance, to all other Holders of Registrable Securities; and
(b) Registration. As soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2.4:
(1) if Form S-3 is not available for such offering by
the Holders;
(2) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $500,000;
(3) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement no more than once during any twelve month period for a period of not
more than 120 days after receipt of the request of the Holder or Holders under
this Section 2.4;
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(4) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected any registration on
Form S-3 for the Holders pursuant to this Section 2.4; or
(5) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) Expenses. Subject to the foregoing, the Company shall
file a Form S-3 registration statement covering the Registrable Securities and
other securities so requested to be registered pursuant to this Section 2.4 as
soon as practicable after receipt of the request or requests of the Holders for
such registration. The Company shall pay all expenses incurred in connection
with registrations requested pursuant to this Section 2.4 (excluding
underwriters' or brokers' discounts and commissions), including without
limitation all filing, registration and qualification, printers' and accounting
fees and the reasonable fees and disbursements of one counsel for the selling
Holder or Holders and counsel for the Company.
(d) Not Demand Registration. Form S-3 registrations shall
not be deemed to be demand registrations as described in Section 2.2 above.
2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
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(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
2.6 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2, 2.3 or
2.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the registration of their Registrable Securities.
2.7 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.
2.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended, (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue
statement of a material fact contained in such
registration statement, including any preliminary
prospectus or final prospectus contained therein or any
amendments or supplements thereto;
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(ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading,
or
(iii) any violation or alleged violation by the
Company of the Securities Act, the 1934 Act, any federal
or state securities law or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any
federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this subsection 2.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law,
each selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the 1934 Act, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
2.8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by a Holder under this
Section 2.8(b) in respect of any Violation shall not exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 2.8 of notice of the commencement of any action (including
any governmental action),
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such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 2.8, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.8, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.8.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final
Prospectus), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
(e) Contribution. 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 exercising rights under this Agreement, or any
controlling person of any such Holder, makes a claim for indemnification
pursuant to this Section 2.8 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 Section 2.8 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 Section 2.8; then, and 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 proportion so that such Holder is responsible for the portion represented
by the percentage that the public offering price of its Registrable Securities
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement, and the Company and other selling Holders are 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 public offering price
of all such Registrable Securities offered and sold by such Holder 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)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
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(f) Survival. The obligations of the Company and Holders
under this Section 2.8 shall survive the completion of any offering of
Registrable Securities in a registration statement, and otherwise.
2.9 "Market Stand-Off" Agreement. Each Holder hereby agrees that
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of the Company then owned by
such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for up to one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act;
provided, however, that:
(a) such agreement shall be applicable only to the first
such registration statement of the Company which covers securities to be sold on
its behalf to the public in an underwritten offering but not to Registrable
Securities sold pursuant to such registration statement; and
(b) all executive officers and directors of the Company
then holding Common Stock of the Company enter into similar agreements.
In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the
Registrable Securities and such other shares of stock of each Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.
2.10 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to the general
public;
(b) 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 1934 Act (at any time after it has become subject to such
reporting requirements); and
(c) So long as a Holder owns any Registrable Securities,
to furnish to the Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the 1934 Act (at any time after it has
become subject to the reporting requirements of the 1934 Act), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell any
such securities without registration (at any time after the Company has become
subject to the reporting requirements of the 1934 Act).
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2.11 Termination of the Company's Obligations. The Company shall
have no obligations pursuant to Sections 2.2 through 2.4 with respect to: (i)
any request or requests for registration made by any Holder on a date more than
five (5) years after the closing date of the Company's initial public offering;
or (ii) any Registrable Securities proposed to be sold by a Holder in a
registration pursuant to Section 2.2, 2.3 or 2.4 if, in the opinion of counsel
to the Company, all such Registrable Securities proposed to be sold by a Holder
may be sold in a three-month period without registration under the Securities
Act pursuant to Rule 144 under the Securities Act.
3. RIGHT OF FIRST REFUSAL.
3.1 General. Each Holder (as defined in Section 2.1(d) but not
including any parties that are not under such Section deemed Holders for
purposes of this Section 3) and any party to whom such Holder's rights under
this Section 3 have been duly assigned in accordance with Section 4.1(b) (each
such Holder or assignee being hereinafter referred to as a "Rights Holder") has
the right of first refusal to purchase such Rights Holder's Pro Rata Share (as
defined below), of all (or any part) of any "New Securities" (as defined in
Section 3.2) that the Company may from time to time issue after the date of this
Agreement. A Rights Holder's "Pro Rata Share" for purposes of this right of
first refusal is the ratio of (a) the number of Registrable Securities as to
which such Rights Holder is the Holder (and/or is deemed to be the Holder under
Section 2.1(d)), to (b) a number of shares of Common Stock of the Company equal
to the sum of (i) the total number of shares of Common Stock of the Company then
outstanding plus (ii) the total number of shares of Common Stock of the Common
Stock of the Company into which all then outstanding shares of Preferred Stock
of the Company are then convertible plus (iii) the number of shares of Common
Stock of the Company reserved for issuance under outstanding options and
warrants plus (iv) the number of shares of Common Stock of the Company reserved
for issuance upon conversion of Preferred Stock issuable under outstanding
options or warrants.
3.2 New Securities. "New Securities" shall mean any Common Stock
or Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock; provided, however, that
the term "New Securities" does not include:
(i) shares of the Company's Common Stock (and/or
options or warrants therefor) issued to employees,
officers, directors, contractors, advisors or consultants
of the Company pursuant to agreements or plans approved by
the Board of Directors of the Company;
(ii) shares of Preferred Stock and Series D
Warrants issued under the Preferred Stock Purchase
Agreements, as such agreements may be amended, or any
securities issued or issuable upon conversion or exercise
with respect to any Preferred Stock or Series D Warrants
issued under the Preferred Stock Agreements, as such
agreements may be amended;
(iii) any securities issuable upon conversion of
or with respect to any then outstanding shares of
Preferred Stock of the Company or Common Stock or other
securities issuable upon conversion thereof;
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(iv) any securities issuable upon exercise of any
options, warrants or rights to purchase any securities of
the Company outstanding on the date of this Agreement
("Warrant Securities") and any securities issuable upon
the conversion of any Warrant Securities;
(v) shares of the Company's Common Stock or
Preferred Stock issued in connection with any stock split
or stock dividend;
(vi) securities offered by the Company to the
public pursuant to a registration statement filed under
the Securities Act;
(vii) shares of the Company's stock (and/or
options or warrants therefor) issued or issuable to
parties providing the Company with equipment leases, real
property leases, loans, credit lines, guaranties of
indebtedness, cash price reductions or similar financing;
or
(viii) securities issued pursuant to the
acquisition of another corporation or entity by the
Company by consolidation, merger, purchase of all or
substantially all of the assets, or other reorganization
in which the Company acquires, in a single transaction or
series of related transactions, all or substantially all
of the assets of such other corporation or entity or fifty
percent (50%) or more of the voting power of such other
corporation or entity or fifty percent (50%) or more of
the equity ownership of such other entity.
3.3 Procedures. In the event that the Company proposes to
undertake an issuance of New Securities, it shall give to each Rights Holder
written notice of its intention to issue New Securities (the "Notice"),
describing the type of New Securities and the price and the general terms upon
which the Company proposes to issue such New Securities. Each Rights Holder
shall have fifteen (15) days from the date of mailing of any such Notice to
agree in writing to purchase such Rights Holder's Pro Rata Share of such New
Securities for the price and upon the general terms specified in the Notice by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased (not to exceed such Rights Holder's Pro Rata Share).
If any Rights Holder fails to so agree in writing within such fifteen (15) day
period to purchase such Rights Holder's full Pro Rata Share of an offering of
New Securities (a "Nonpurchasing Holder"), then such Nonpurchasing Holder shall
forfeit the right hereunder to purchase that part of his Pro Rata Share of such
New Securities that he did not so agree to purchase.
3.4 Failure to Exercise. In the event that the Rights Holders
fail to exercise in full the right of first refusal within such fifteen (15) day
period, then the Company shall have 120 days thereafter to sell the New
Securities with respect to which the Rights Holders' rights of first refusal
hereunder were not exercised, at a price and upon general terms not materially
more favorable to the purchasers thereof than specified in the Company's Notice
to the Rights Holders. In the event that the Company has not issued and sold the
New Securities within such 120 day period, then the Company shall not thereafter
issue or sell any New Securities without again first offering such New
Securities to the Rights Holders pursuant to this Section 3.
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3.5 Termination. This right of first refusal shall terminate (and
not be applicable to such terminating transaction) upon the earlier of (i)
immediately before the closing of the first underwritten sale of Common Stock of
the Company to the public pursuant to a registration statement filed with, and
declared effective by, the SEC under the Securities Act, covering the offer and
sale of Common Stock to the public, or (ii) upon (a) the acquisition of all or
substantially all the assets of the Company or (b) an acquisition of the Company
by another corporation or entity by consolidation, merger or other
reorganization in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction.
4. ASSIGNMENT AND AMENDMENT.
4.1 Assignment. Notwithstanding anything herein to the contrary:
(a) Information Rights. The rights of an Investor under
Section 1.1 or 1.2 hereof may be assigned only to a party who acquires from an
Investor (or an Investor's permitted assigns) at least that number of shares of
Preferred Stock and/or an equivalent number (on an as-converted basis) of shares
of Conversion Stock described in Section 1.1 or 1.2 hereof, respectively.
(b) Registration Rights; Refusal Rights. The registration
rights of a Holder under Section 2 hereof and the rights of first refusal of a
Rights Holder under Section 3 hereof may be assigned only to a party who
acquires shares of Preferred Stock issued under any Preferred Stock Purchase
Agreement or pursuant to the Series A Warrants, Series B Warrant, Series C
Warrant or Series D Warrants which are convertible into at least 50,000 shares
of Common Stock and/or an equivalent number (on an as-converted basis) of
Registrable Securities issued upon conversion thereof.
(c) Notice. Notwithstanding Section 4.1(a) and (b) no
party may be assigned any of the foregoing rights unless the Company is given
written notice by the assigning party at the time of such assignment stating the
name and address of the assignee and identifying the securities of the Company
as to which the rights in question are being assigned; and provided further that
any such assignee shall receive such assigned rights subject to all the terms
and conditions of this Agreement, including without limitation the provisions of
this Section 4.
4.2 Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors (and/or any of their permitted
successors or assigns) holding shares of Preferred Stock and/or Conversion Stock
representing and/or convertible into a majority of all the Investors' Shares (as
defined below); provided, however, that no such amendment shall affect any
Investor in any manner different from other Investors without such Investor's
consent; provided, further, that no such amendment shall affect the rights of
holders of the Company's Series D Preferred Stock without the consent of the
holders of a majority of the Series D Preferred Stock and Common Stock issued
upon conversion of Series D Preferred Stock outstanding. As used herein, the
term "Investors' Shares" shall mean (i) the shares of Common Stock then issuable
upon conversion of all (x) then outstanding shares of Preferred Stock issued
under the any Preferred Stock Purchase Agreement or (y) shares of Preferred
Stock issuable and/or then issued upon exercise of the
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Series A Warrants, the Series B Warrant, the Series C Warrant or the Series D
Warrants, plus (ii) all then outstanding shares of Conversion Stock that were
issued upon the conversion of any shares of Preferred Stock issued under any
Preferred Stock Purchase Agreement, the Series A Warrants, the Series B Warrant,
the Series C Warrant or the Series D Warrants. Any amendment or waiver effected
in accordance with this Section 4.2 shall be binding upon each Investor, each
Holder, each permitted successor or assignee of such Investor or Holder and the
Company.
5. GENERAL PROVISIONS.
5.1 Notices. Any notice, request or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) if to an Investor, at such Investor's respective
address as set forth on Exhibit A hereto.
(b) if to the Company, at 0000 Xxxxxxxxx Xxxxxxx, Xxx
Xxxx, Xxxxxxxxxx 00000.
Any party hereto (and such party's permitted assigns) may
by notice so given change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
5.2 Entire Agreement. This Agreement, together with all the
Exhibits hereto, constitutes and contains the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersedes any and
all prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof. This
Agreement will amend and restate the Prior Rights Agreement to read as set forth
herein, when it has been duly executed by parties having the right to so amend
and restate the Prior Rights Agreement.
5.3 Governing Law. This Agreement shall be governed by and
construed exclusively in accordance with the internal laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California, excluding that body of law relating
to conflict of laws and choice of law.
5.4 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
5.5 Third Parties. Nothing in this Agreement, express or implied,
is intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
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5.6 Successors And Assigns. Subject to the provisions of Section
4.1, the provisions of this Agreement shall insure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
5.7 Captions. The captions to sections of this Agreement have
been inserted for identification and reference purposes only and shall not be
used to construe or interpret this Agreement.
5.8 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5.9 Costs And Attorneys' Fees. In the event that any action, suit
or other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
5.10 Adjustments for Stock Splits, Etc. Wherever in this
Agreement there is a reference to a specific number of shares of Common Stock or
Preferred Stock of the Company of any class or series, then, upon the occurrence
of any subdivision, combination or stock dividend of such class or series of
stock, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
5.11 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.
5.12 Prior Rights Agreement Superseded and Waived. Pursuant to
Section 4.2 of the Prior Rights Agreement, the undersigned parties who are
parties to such Prior Rights Agreement hereby (i) amend and restate the Prior
Rights Agreement to read in its entirety as set forth in this Agreement, all
with the intent and effect that the Prior Rights Agreement shall be hereby
terminated and entirely replaced and superseded by this Agreement and (ii) waive
any rights under such Prior Rights Agreement or any predecessor to such Prior
Rights Agreement relating to the purchase of the Series D Preferred Stock, or
the Series D Warrants.
[The rest of this page left intentionally blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
THE COMPANY
BROCADE COMMUNICATIONS
SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name:
-------------------------
Title:
------------------------
SIGNATURE PAGE #1 TO SEVENTH AMENDED AND RESTATED
INVESTOR'S RIGHTS AGREEMENT
18
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PREVIOUS INVESTORS WHO ARE NOT ALSO INVESTING
IN THE SECOND SERIES D TRANSACTION
XXXX, XXXXXXX VENTURES IV, L.P. CROSSPOINT VENTURE PARTNERS 1993
By: Fourth MDV Partners, By: /s/ Xxxx X. Xxxxxx
L.L.C., General Partner ________________________________
____________________________
Name: /s/ Xxxxxxxx X. Fei Name: Xxxx X. Xxxxxx
____________________________ ______________________________
Title: Member Title:_____________________________
___________________________
MDV IV ENTREPRENEURS' CROSSPOINT 1993 ENTREPRENEURS' FUND
NETWORK FUND, L.P.
By: Fourth MDV Partners, By: /s/ Xxxx X. Xxxxxx
L.L.C., General Partner ________________________________
____________________________
Name: /s/ Xxxxxxxx X. Fei Name: Xxxx X. Xxxxxx
____________________________ ______________________________
Title: Member Title:_____________________________
___________________________
XXXXXXX X. XXX VENTURE LENDING & LEASING, INC.
/s/ W. N. Joy By:________________________________
_________________________________
Name:______________________________
Title:_____________________________
JAPAN ASSOCIATED FINANCE CO., LTD.
By: /s/ Xxxxxxxxx Xxxxxx
________________________________
Name: Xxxxxxxxx Xxxxxx
Title: President
JAFCO Co., Ltd.
Its Executive Partner
SIGNATURE PAGE #2 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
19
20
BAY PARTNERS SBIC, L.P. J.F. XXXX CO. INC,
By: Bay Management Company 1995
General Partner By: /s/ X. X. XXXX, XX.
----------------------------
By: /s/ [SIG] Name:
-------------------------------- --------------------------
Title: General Partner Title: Vice President
-------------------------
JAFCO R-2 INVESTMENT JAFCO R-3 INVESTMENT
ENTERPRISE PARTNERSHIP ENTERPRISE PARTNERSHIP
By: /s/ XXXXXXXXX XXXXXX By: /s/ XXXXXXXXX XXXXXX
-------------------------------- ----------------------------
Name: Xxxxxxxxx Xxxxxx Name: Xxxxxxxxx Xxxxxx
Title: President Title: President
JAFCO Co., Ltd. JAFCO Co., Ltd.
Its Executive Partner Its Executive Partner
LSI LOGIC CORPORATION U.S. INFORMATION TECHNOLOGY
INVESTMENT ENTERPRISE
PARTNERSHIP
By: /s/ X. X. XXXXX By: /s/ XXXXXXXXX XXXXXX
-------------------------------- ---------------------------
Name: Xxxxxxxxx Xxxxxx
Name: R. Xxxxxxx Xxxxx Title: President
------------------------------ JAFCO Co., Ltd.
Title: Executive Vice President/CFO Its Executive Partner
-----------------------------
F&W INVESTMENTS 1996 II
By: /s/ XXXX X. XXXXXX
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SIGNATURE PAGE #3 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
20
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WPG ENTERPRISE FUND III, X.X. XXXXX, XXXX & XXXXX VENTURE
ASSOCIATES IV, L.P.
By: WPG Venture Partners IV, L.L.C., By: WPG Venture Partners IV, L.L.C.,
General Partner General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------- ---------------------------------
Xxxxxxxxxxx X. Xxxxxxx, Xxxxxxxxxxx X. Xxxxxxx,
Managing Member Managing Member
XXXXX, XXXX & XXXXX VENTURE NORWEST EQUITY PARTNERS V
ASSOCIATES IV CAYMAN, L.P. A Minnesota Limited Partnership
By: WPG Venture Advisors, Ltd., By: Itasca Partners V, L.L.P.,
Administrative General Partner General Partner
By: /s/ Xxx Xxxxxxx By: /s/ Xxxxx Xxxx
---------------------------------- ---------------------------------
Xxx Xxxxxxx, Xxxxx Xxxx, Partner,
Director General Partner
(strike out name of non-signatory)
THE XXXX X. XXXX AND IMPERIAL VENTURES, INC.
XXXXX X. XXXX TRUST
By: /s/ Xxxx Xxxx By: /s/ Xxxxxxxxx Xxxxx
Name:________________________________ Name:_______________________________
Title: Trustee Title: VP
SIGNATURE PAGE #4 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
21
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JAFCO CO., LTD.
By: /s/ XXXXXXXXX XXXXXX
--------------------------
Name: Xxxxxxxxx Xxxxxx
Title: President
JAFCO Co., Ltd.
Its Executive Partner
SIGNATURE PAGE #5 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
22
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PREVIOUS INVESTORS WHO ARE INVESTING
IN THE SECOND SERIES D TRANSACTION
ANDREAS V. BECHTOLSHEIM
/s/ Andreas V. Bechtolsheim
-----------------------------------
TPK UNITRUST
By: /s/ Andreas V. Bechtolsheim
-------------------------------
Andreas V. Bechtolsheim, Trustee
SIGNATURE PAGE #6 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
24
SECOND SERIES D TRANSACTION INVESTORS
CROSSPOINT VENTURE PARTNERS L.S. 1997 FUND
By: /s/ XXXX XXXXXX
------------------------
Name: Xxxx Xxxxxx
-----------------------
Title: General Partner
----------------------
SIGNATURE PAGE #7 TO SEVENTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
25
EXHIBIT A
LIST OF INVESTORS
INVESTOR NUMBER OF SHARES
WPG Enterprise Fund III, L.P. 537,111 (Series D)
c/x Xxxxx, Xxxx & Xxxxx, LLC 53,711 (Series D Warrants)
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
General Partner
Ph. (000) 000-0000
Fax: (000) 000-0000
Xxxxx, Xxxx & Xxxxx Venture 596,453 (Series D)
Associates IV, L.P. 59,645 (Series D Warrants)
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
General Partner
Ph. (000) 000-0000
Fax: (000) 000-0000
Xxxxx, Xxxx & Xxxxx Venture 77,509 (Series D)
Associates IV Cayman, L.P. 7,750 (Series D Warrants)
c/o Mr. Xxxxxxx Xxxxxxx
BankAmerica Trust & Banking Corporation
(Cayman) Limited
Fort Street
Xxxxxx Town, Grand Cayman
British West Indies
Ph. (000) 000-0000
Fax: (000) 000-0000
WPG Information Services Entrepreneur Fund, 20,762 (Series D)
L.P. 2,076 (Series D Warrants)
c/x Xxxxx, Xxxx & Xxxxx, LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
General Partner
Ph. (000) 000-0000
Fax: (000) 000-0000
26
INVESTOR NUMBER OF SHARES
RHB Management 152,248 (Series D)
000 Xxxxx Xxxxxx 15,224 (Series D Warrants)
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
Norwest Equity Partners, V 1,000,000 (Series D)
A Minnesota Limited Partnership 100,000 (Series D Warrants)
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xxxxx Xxxx, Partner
at Norwest Venture Capital
Ph. (000) 000-0000
Fax: (000) 000-0000
The Xxxx X. Xxxx and 43,253 (Series D)
Xxxxx X. Xxxx Trust 4,325 (Series D Warrants)
00000 Xxxxx Xxxxx
Xxx Xxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxx
Bay Partners SBIC, L.P. 114,187 (Series D)
00000 X. Xx Xxxx Xxxx., Xxxxx 000 666,667 (Series C)
Xxxxxxxxx, XX 00000 11,418 (Series D Warrants)
Attn: Bay Management Company, 1995
Xxxx Xxxxxxxxxxx, General Partner
X.X. Xxxx Co. Inc. 86,505 (Series D)
000 Xxxx Xxxxxx Xxxx 333,333 (Series C)
Xxxxxx, XX 00000 8,650 (Series D Warrants)
Attn: Xxxxxx Xxxx
JAFCO Co., Ltd. (formerly known as Japan 5,190 (Series D)
Associated Finance Co., Ltd.) 26,667 (Series C)
000 Xxxxxxxx Xxxxxx, Xxx. 000 519 (Series D Warrants)
Xxxx Xxxx, XX 00000
Contact: Xxxxxxxxx Xxxxxx, President
Tekko Building
0-0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
2
27
INVESTOR NUMBER OF SHARES
JAFCO R-2 Investment Enterprise 10,640 (Series D)
Partnership 54,481 (Series C)
000 Xxxxxxxx Xxxxxx, Xxx. 000 1,064 (Series D Warrants)
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, President
Tekko Building
0-0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
JAFCO R-3 Investment Enterprise 10,122 (Series D)
Partnership 52,185 (Series C)
000 Xxxxxxxx Xxxxxx, Xxx. 000 1,012 (Series D Warrants)
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, President
Tekko Xxxxxxxx
0-0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
U.S. Information Technology 103,806 (Series D)
Investment Enterprise Partnership 533,333 (Series C)
000 Xxxxxxxx Xxxxxx, Xxx. 000 10,380 (Series D Warrants)
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, President
Tekko Xxxxxxxx
0-0-0 Xxxxxxxxxx, Xxxxxxx-xx
Xxxxx 000, Xxxxx
Xxxx, Xxxxxxx Ventures IV, L.P. 315,959 (Series C)
600,000 (Series B)
MDV IV Entrepreneurs' Network Fund, L.P. 13,164 (Series C)
25,000 (Series B)
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
3
28
INVESTOR NUMBER OF SHARES
Andreas V. Bechtolsheim 105,650 (Series D)
0000 Xxxxxxxx Xxxxxx 1,000,000 (Series C)
Xxxx Xxxx, XX 00000
Xxxxxxx X. Xxx 13,164 (Series C)
0000 Xxxxx Xxxxx 75,000 (Series B)
Xxxxx, XX 00000
TPK Unitrust 13,164 (Series C)
0000 Xxxxxxxx Xxxxxx 25,000 (Series B)
Xxxx Xxxx, XX 00000
Crosspoint Venture Partners L.S. 1997 Fund 586,392 (Series D)
Crosspoint Venture Partners 1993 283,932 (Series C)
56,250 (Series B)
Crosspoint 1993 Entrepreneurs' Fund 1,381,906 (Series A)
8,854 (Series C)
One First Street, Suite Two 43,094 (Series A)
Xxx Xxxxx, XX 00000
LSI Logic Corporation 173,010 (Series D)
0000 XxXxxxxx Xxxx. 16,456 (Series C)
Xxxxxxxx, XX 00000 31,250 (Series B)
Attn: Xxxx Xxxxxxx 17,301 (Series D Warrants)
F&W Investments 1996 II 3,460 (Series D)
Xxx Xxxx Xxxx Xxxxxx, Xxxxx 000 1,974 (Series C)
Xxxx Xxxx, XX 00000 3,750 (Series B)
346 (Series D Warrants)
Venture Lending & Leasing, Inc. 51,197 (Series A Warrants)
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 17,500 (Series B Warrants)
Xxx Xxxx, XX 00000
Imperial Ventures, Inc. 34,602 (Series D)
0000 X. Xx Xxxxxxx Xxxx., 14th Floor 25,000 (Series C Warrants)
Xxxxxxxxx, XX 00000 3,460 (Series D Warrants)
Attn: Xxxxxxxxx Xxxxx
TOTAL 1,476,197 (SERIES A OR EQUIVALENTS)
833,750 (SERIES B OR EQUIVALENTS)
3,358,333 (SERIES C OR EQUIVALENTS)
3,957,781 (SERIES D OR EQUIVALENTS)
4
