EXHIBIT 4.2
AMENDMENT AGREEMENT
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This Amendment Agreement ("Agreement") is entered into as of January 14,
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2000 by and between (i) Numerical Technologies, Inc., a California corporation
(the "Company"), (ii) the purchasers of the Company's Series A Preferred Stock
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(the "Series A Purchasers") pursuant to the Company's Series A Preferred Stock
-------------------
Purchase Agreement dated October 19, 1996, (iii) the purchasers of the Company's
Series B Preferred Stock (the "Series B Purchasers") pursuant to the Series B
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Preferred Stock Purchase Agreement dated June 27, 1997, (iv) the purchasers of
the Company's Series C Preferred Stock (the "Series C Purchasers") pursuant to
-------------------
the Series C Preferred Stock Purchase Agreement dated June 5, 1998, (v) the
purchasers of the Company's Series D Preferred Stock (the "Series D Purchasers")
-------------------
pursuant to the Series D Preferred Stock Purchase Agreement dated June 4, 1999,
(vi) the former shareholders of Transcription Enterprises Limited who acquired
shares of the Company's Series E Preferred Stock (the "Series E Purchasers")
-------------------
(collectively, the Series A Purchasers, the Series B Purchasers, the Series C
Purchasers, the Series D Purchasers and the Series E Purchasers are referred to
as the "Purchasers") pursuant to an Agreement and Plan of Reorganization dated
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December 21, 1999, and (vii) Xxxxxxxx X. Xxxx, Yao-Xxxx Xxxx, Xxxxxx Xxxxxxx and
Xxxxxxx X Xxxxx (collectively, the "Founders").
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RECITALS
The Company desires to amend the 1999 Second Amended and Restated
Shareholders Rights Agreement, dated January 1, 2000 (the "Rights Agreement"),
----------------
attached hereto as Exhibit A, to amend Sections 4 and 5 of the Rights Agreement
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to provide (i) the right of first refusal granted to the Purchasers in Section 4
shall terminate of the Company's initial public offering (the "IPO"), and (ii)
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the Board of Directors (the "Board") observer rights and Board representation
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rights in Section 5 shall terminate on the IPO.
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
1. Amendments.
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(a) A new Section 4.2 shall be added to Section 4 which shall provide
as follows:
"4.2 Termination. The rights and obligations granted under
-----------
this Section 4 shall terminate and be of no further force and effect
upon the initial public offering of the Company."
(b) A new Section 5.3 shall be added to Section 5 which shall provide
as follows:
"5.3 Termination. The rights and obligations granted under this
-----------
Section 5 shall terminate and be of no further force and effect upon
the initial public offering of the Company."
2. Miscellaneous.
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(a) Waiver. By execution of this Agreement, the undersigned hereby
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waives any registration rights such person or entity may have in connection
with the Company's proposed initial public offering and related
Registration Statement on Form S-1 to be filed with the Securities and
Exchange Commission.
(b) Governing Law. This Agreement shall be governed in all respects by
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the internal laws of the Sate of California.
(c) 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 instrument.
(d) Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.
(e) Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not considered in
construing or interpreting this Agreement.
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The foregoing Agreement is hereby executed as of the date first above
written.
"COMPANY"
NUMERICAL TECHNOLOGIES, INC.,
a California corporation
/s/ Xxxxxxxx X. Xxxx
------------------------------------------
Xxxxxxxx X. Xxxx
Chief Executive Officer and President
"SERIES A PURCHASERS"
ABBAS EL GAMAL - XXXXX XXXXXX INC. SEP
CUSTODIAN ACCT. #000-00000-00
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Title: VP Investments
------------------------------------
/s/ Xxxxxx Xxxxx-Xx
------------------------------------------
Xxxxxx Xxxxx-Xx
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, As Custodian for Anneka
Xxxxxx Xxxxx under the California Uniform
Transfers to Minors Act
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, As Custodian for Serena
Xxxxx Xxxxx under the California Uniform
Transfers to Minors Act
------------------------------------------
Xxxxxx Xxxxxxx, Trustee of the Xxxx X.
Xxxxxxx Irrevocable Trust UAD 10/1/89
/s/ X. Xxxxxxx (Trustee)
------------------------------------------
Xxxxxx Xxxxxxx, Trustee of the Priya X.
Xxxxxxx Irrevocable Trust UAD 10/1/89
/s/ Xxxxx Xxx
------------------------------------------
Hsin-Xxxxx Xxxxx Lan
/s/ Xxxx Xxxxxxxx
------------------------------------------
Xxxx X. Xxxxxxxx
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/s/ Li-Xxxxxx Xxx
------------------------------------------
Li-Xxxxxx Xxx
ROUNDSWAY CORPORATION
By: /s/ Xxx-Xxxxx Xxx
---------------------------------------
Title: Chairman
------------------------------------
/s/ Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx and
/s/ Xxx Xxxxxxx
------------------------------------------
Xxx Xxxxxxx
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"SERIES B PURCHASERS"
INTEL CORPORATION
By:
---------------------------------------
Title:
------------------------------------
/s/ Xxxx X. Xxxx
------------------------------------------
Xxxx X. Xxxx
WS INVESTMENT COMPANY 97B
By:
---------------------------------------
Title:
------------------------------------
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"SERIES C PURCHASERS"
/s/ Xxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxx &
/s/ Xxxxx Xxxxxxx
------------------------------------------
Xxxxx Xxxxxxx, Trustees of the Mahmoud &
Xxxxx Xxxxxxx Revocable Trust Deed, Dated
5/31/89
GOEL FAMILY PARTNERSHIP
By: /s/ Xxxxxx Xxxx
---------------------------------------
Title: G.P.
------------------------------------
/s/ Xxx Xxxxx
------------------------------------------
Xxx Xxxxx &
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx Xxxxx
/s/ Xxx Xxxxx
------------------------------------------
Xxx Xxxxx as Custodian for Xxxxxx Xxxxx
Under the New York Uniform Transfers to
Minors Act
/s/ Xxx Xxxxx
------------------------------------------
Xxx Xxxxx as Custodian for Xxxx Xxxxx Under
the New York Uniform Transfers to Minors Act
XXXXX AND XXXXXX XXXXX LIVING TRUST DATED
12/2/94
By: /s/ Xxxxx Xxxxx
---------------------------------------
Title: Trustee
------------------------------------
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THE XXXXX LIVING TRUST
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Title: Co-Trustee
------------------------------------
/s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
/s/ Kailath
------------------------------------------
Xxxx Xxxxxxx &
/s/ Xxxxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Hua-Xx Xxx
------------------------------------------
Hua-Xx Xxx
THE XXXXX 1996 CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Title: Trustee
------------------------------------
XXXXXX & XXXX, INC.
By: /s/ signature illegible
---------------------------------------
Title: President and CEO
------------------------------------
MARKETECH INTERNATIONAL CORPORATION
By: /s/ Xxxxxxxx Xxx
---------------------------------------
Title: President
------------------------------------
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XXXX, XXXXXXX VENTURES V, L.P.
BY: FIFTH MDV PARTNERS, L.L.C., GENERAL
PARTNER
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Title: Member
------------------------------------
XXXX, XXXXXXX VENTURES V, L.P. As nominee
for MDV ENTREPRENEUR'S NETWORK FUND II (A),
L.P. AND MDV ENTREPRENEURS' NETWORK FUND II
(B), L.P.
BY: FIFTH MDV PARTNERS, L.L.C., GENERAL
PARTNER
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Title: Member
------------------------------------
/s/ Xxxxxx Xxxx
------------------------------------------
Xxxxxx Xxxx and
/s/ Xxxxxxx Xxxx
------------------------------------------
Xxxxxxx Xxxx
TECHNO PRECISION, INC.
By: /s/ signature illegible
---------------------------------------
Title: President
------------------------------------
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx X. Xxxxx and
/s/ Xxxx Xxxxx
------------------------------------------
Xxxx Xxxxx, Trustees, Xxxxx Trust Dated
11/26/90
/s/ Xxxxxx X. Xxxxx
------------------------------------------
Xxxxxx X. Xxxxx
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"SERIES D PURCHASERS"
THE XXXXXXX SACHS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
STONE STREET FUND 1999, L.P.
By: Stone Street 1999 Corp.,
its general partner
By: /s/ Xxxxxxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxxx
Title: Vice President
INDEX VENTURES I (Jersey) L.P.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxx. Xxxxx Xxxxxxx
Title: Director of the General Partner
Index Venture Associates I Limited
INDEX VENTURES I (Delaware) L.P.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxx. Xxxxx Xxxxxxx
Title: Director of the General Partner
Index Venture Associates I Limited
-9-
"FOUNDERS"
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Xxxxxxx X. Xxxxx
/s/ X. Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxx X. Xxxx
------------------------------------------
Xxxxxxxx X. Xxxx
/s/ Yao-Xxxx Xxxx
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Yao-Xxxx Xxxx
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SECOND CLOSING "SERIES D PURCHASERS"
CHAIRMAN ENTERPRISES CO., LTD.
By: /s/ Ching Xxxx Xxx
---------------------------------------
Name: Ching Xxxx Xxx
Title: Chairman of the Board
/s/ Xxxx X. Xxx
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Xxxx X. Xxx and
/s/ Lily Xxx Xxx
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Lily Xxx Xxx, as Trustees, or any Successor
Trustee, under the Xxxx and Xxxx Xxx Family
Trust created by Xxxx X. Xxx and Lily Xxx
Xxx, as Trustors, dated November 8, 1980
INDUSTRIAL TECHNOLOGY INVESTMENT CORPORATION
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman
KANEMATSU ELECTRONICS LTD.
By: /s/ K. Izumi
---------------------------------------
Name: Katsuhiko Izumi
Title: General Manager
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
TAIWAN MASK CORPORATION
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name:
Title:
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X.X. XXXXX FAMILY PARTNERSHIP
DATED 03/21/88
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name:
Title:
GATEHOUSE INVESTORS, LLC
By: /s/ X. Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Managing Member
/s/ Xxxx X. Xxxxx
------------------------------------------
Xxxx X. Xxxxx or
/s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx
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"SERIES E PURCHASERS"
/s/ Xxxxx XxxXxxx
------------------------------------------
Xxxxx XxxXxxx
/s/ Xxxxx Xxxxxxxx
------------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxx
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Xxxxxx and Xxxxx Xxxxxxxx
/s/ Xxxxxx Nation
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Xxxxxx Nation
/s/ Xxxxx XxXxxxxx
------------------------------------------
Xxxxx XxXxxxxx
/s/ X.X. Xxxxxxxx
------------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxxx Xxxxxxx-Xxxxx
------------------------------------------
Xxxxxxx Xxxxxxx-Xxxxx
/s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
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NUMERICAL TECHNOLOGIES, INC.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
1999 SECOND AMENDED AND RESTATED
SHAREHOLDER RIGHTS AGREEMENT
January 1, 2000
TABLE OF CONTENTS
Page
----
SECTION 1 Information Rights.................................................................... 2
1.1 Financial Information................................................................ 2
1.2 Termination of Covenants............................................................. 3
SECTION 2 Restrictions on Transferability of Securities; Compliance with Securities Act;
Registration Rights.......................................................................... 4
2.1 Restrictions on Transferability...................................................... 4
2.2 Certain Definitions.................................................................. 4
2.3 Restrictive Legend................................................................... 6
2.4 Restrictions on Transfer; Notice of Proposed Transfers............................... 7
2.5 Requested Registration............................................................... 8
2.6 Company Registration................................................................. 10
2.7 Registration on Form S-3............................................................. 11
2.8 Limitations on Subsequent Registration Rights........................................ 12
2.9 Expenses of Registration............................................................. 12
2.10 Registration Procedures.............................................................. 13
2.11 Indemnification...................................................................... 13
2.12 Information by Holder................................................................ 14
2.13 Rule 144 Reporting................................................................... 15
2.14 Transfer of Registration Rights...................................................... 15
2.15 Standoff Agreement................................................................... 15
2.16 Termination of Registration Rights................................................... 16
2.17 Suspension of Sales.................................................................. 16
SECTION 3 Co-Sale Rights........................................................................ 16
3.1 Right to Participate................................................................. 16
3.2 Qualified Participation.............................................................. 17
3.3 Continuing Rights.................................................................... 17
3.4 Termination.......................................................................... 17
SECTION 4 Right of First Refusal................................................................ 18
4.1 Right of First Refusal............................................................... 18
SECTION 5 Board Rights.......................................................................... 19
5.1 Board Visitation Right............................................................... 19
5.2 Board Representation................................................................. 20
SECTION 6 Miscellaneous......................................................................... 21
6.1 Governing Law........................................................................ 21
6.2 Survival............................................................................. 21
6.3 Successors and Assigns............................................................... 21
6.4 Entire Agreement; Amendment.......................................................... 21
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6.5 Notices, etc......................................................................... 22
6.6 Delays or Omissions.................................................................. 22
6.7 Counterparts......................................................................... 22
6.8 Severability......................................................................... 22
6.9 Titles and Subtitles................................................................. 23
6.10 Confidentiality...................................................................... 23
6.11 Entire Agreement; Effect on 1999 Rights Agreement.................................... 23
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NUMERICAL TECHNOLOGIES, INC.
1999 SECOND AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
This 1999 Second Amended and Restated Shareholder Rights Agreement (the
"Agreement") is made as of January 1, 2000 by and among (i) Numerical
Technologies, Inc., a California corporation (the "Company"), (ii) the
purchasers of the Company's Series A Preferred Stock (the "Series A Purchasers")
pursuant to the Company's Series A Preferred Stock Purchase Agreement dated
October 19, 1996 (the "Series A Agreement"), (iii) the purchasers of the
Company's Series B Preferred Stock (the "Series B Purchasers") pursuant to the
Company's Series B Preferred Stock and Warrant Purchase Agreement dated June 27,
1997 (the "Series B Agreement"), (iv) the purchasers of the Company's Series C
Preferred Stock (the "Series C Purchasers") pursuant to the Company's Series C
Preferred Stock and Warrant Purchase Agreement dated June 5, 1998 (the "Series C
Agreement"), (v) the purchasers of the Company's Series D Preferred Stock (the
"Series D Purchasers") pursuant to the Company's Series D Preferred Stock
Purchase Agreement dated June 4, 1999 (the "Series D Agreement"), (vi) the
shareholders of Transcription Enterprises Limited ("TE") who acquire the
Company's Series E Preferred Stock (the "Series E Purchasers," and collectively
with the Series A Purchasers, the Series B Purchasers, the Series C Purchasers,
and the Series D Purchasers, collectively referred to herein as the
"Purchasers") pursuant to the Reorganization Agreement (as defined below), and
(vii) Xxxxxxxx X. Xxxx, Yao-Xxxx Xxxx, Xxxxxx Xxxxxxx and Xxxxxxx X. Xxxxx
(collectively, the "Founders").
R E C I T A L S
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A. The Company, the Series A Purchasers and the Founders are parties to
the Shareholder Rights Agreement, dated as of October 19, 1996 (the "Original
Rights Agreement"), pursuant to which the Series A Purchasers and the Founders
were granted certain rights, including but not limited to registration rights.
B. The Company, the Series A Purchasers, the Series B Purchasers and the
Founders are parties to the Amended and Restated Shareholder Rights Agreement,
dated as of June 27, 1997 (the "Prior Rights Agreement"), pursuant to which the
Series A Purchasers, the Series B Purchasers and the Founders were granted
certain rights, including but not limited to registration rights. The Prior
Rights Agreement superseded and replaced the Original Rights Agreement in its
entirety.
C. The Company, the Series A Purchasers, the Series B Purchasers, the
Series C Purchasers and the Founders are parties to the 1998 Amended and
Restated Shareholder Rights Agreement, dated as of June 5, 1998 (the "1998
Rights Agreement"), pursuant to which the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers and the Founders were granted certain
rights, including but not limited to registration rights. The 1998 Rights
Agreement superseded and replaced the Prior Rights Agreement in its entirety.
D. The Company, the Series A Purchasers, the Series B Purchasers, the
Series C Purchasers, the Series D Purchasers, and the Founders are parties to
the 1999 Amended and Restated Shareholder Rights Agreement, dated as of June 4,
1999 (the "1999 Rights Agreement"), pursuant to which the Series A Purchasers,
the Series B Purchasers, the Series C Purchasers, the Series D Purchasers and
the Founders were granted certain rights, including but not limited to
registration rights. The 1999 Rights Agreement superseded and replaced the Prior
Rights Agreement in its entirety.
E. Pursuant to the Agreement and Plan or Reorganization, dated December
21, 1999, among the Company, Transcription Enterprises Limited, Inc., a wholly
owned subsidiary of the Company ("Sub"), TE and certain shareholders of TE (the
"Reorganization Agreement"), TE merged with and into Sub ("Merger"), with Sub as
the surviving corporation (the "Surviving Corporation"), and in connection with
the Merger, the shareholders of TE exchanged all of the outstanding shares of
capital stock of TE (the "TE Shares") owned by such shareholders for shares of
Series E Preferred Stock of the Company, amounts in cash and indebtedness
evidenced by promissory notes of the Company (the "Notes").
F. In order to induce the shareholders of TE to approve the Merger and to
accept the Series E Preferred Stock as part of the Merger Consideration (as
defined in the Reorganization Agreement), the Series E Purchasers and the
Company agree to provide for the rights set forth herein.
G. The Company has requested and the holders, holding at least a majority
of the shares of the Company's Common Stock issued or issuable upon conversion
of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, and Series D Preferred Stock have agreed, pursuant to Section 6.4 of the
1999 Rights Agreement to amend and restate in its entirety the 1999 Rights
Agreement, in the manner set forth herein.
H. The Purchasers agree to be bound by all of the terms and conditions of
this Agreement. The Founders are parties to this Agreement for purposes of
Sections 2.6, 2.9 through 2.17, 3 and 6 only.
NOW, THEREFORE, the parties agree as follows:
SECTION 1
Information Rights
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1.1 Financial Information
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(a) Within ninety (90) days after the end of each fiscal year, the Company
shall deliver to each Purchaser audited consolidated balance sheets of the
Company and its subsidiaries, if any, as of the end of such fiscal year, and
audited consolidated statements of income and consolidated statements of changes
in financial position of the Company and its subsidiaries, if any,
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for such year, prepared in accordance with generally accepted accounting
principles, all in reasonable detail.
(b) Within forty-five (45) days after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Company, the
Company shall deliver to each Series A Purchaser, each Series B Purchaser, each
Series C Purchaser, each Series D Purchaser and each Series E Purchaser who
continues to hold at least an aggregate of 50,000 shares (appropriately adjusted
for any recapitalizations, stock combinations, stock dividends, stock splits and
the like with respect to such shares (a "Recapitalization")) of the Company's
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
(including the shares of Series C Preferred Stock issuable upon exercise of the
Series C Warrants (as such term is defined in the Series D Agreement)), Series D
Preferred Stock, or Series E Preferred Stock, as the case may be, or Common
Stock issued or issuable pursuant to conversion of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, or
Series E Preferred Stock, as the case may be, an unaudited consolidated balance
sheet of the Company and its subsidiaries, if any, as of the end of each such
quarterly period, and unaudited consolidated statements of income and
consolidated statements of changes in financial condition of the Company and its
subsidiaries for such period prepared in accordance with generally accepted
accounting principles (other than for accompanying notes), subject to changes
resulting from year-end audit adjustments, all in reasonable detail and signed
by the principal financial or accounting officer of the Company.
(c) The rights granted pursuant to Section 1.1 may not be assigned or
otherwise conveyed by any Purchaser, or by any subsequent transferee of any such
rights without the prior written consent of the Company except as authorized in
this Section. After giving notice to the Company, the Series A Purchasers, the
Series B Purchasers, the Series C Purchasers, the Series D Purchasers, or the
Series E Purchasers, without the Company's consent, may assign the rights
granted pursuant to Section 1.1 to any transferee, other than a competitor of
the Company, who acquires (or acquires a warrant exercisable for) Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, or Series E Preferred Stock, as the case may be, convertible
into at least an aggregate of 50,000 shares of the Company's Common Stock
(appropriately adjusted for any Recapitalization).
1.2 Termination of Covenants.
------------------------
The obligations of the Company set forth in this Section 1 shall
terminate and be of no further force or effect at such time as the Company is
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
SECTION 2
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Restrictions on Transferability of Securities;
----------------------------------------------
Compliance with Securities Act; Registration Rights
---------------------------------------------------
2.1 Restrictions on Transferability. The Series A Preferred Stock, the
-------------------------------
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock, the Series E Preferred
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Stock and the Conversion Stock (as defined below) shall not be sold, assigned,
transferred or pledged except upon the conditions specified in this Section 2.
The Series A Purchasers, the Series B Purchasers, the Series C Purchasers, the
Series D Purchasers, and the Series E Purchasers will cause any proposed
purchaser, assignee, transferee, or pledgee of any such shares held by the
Series A Purchasers, the Series B Purchasers, the Series C Purchasers, the
Series D Purchasers, or the Series E Purchasers, as the case may be, to agree to
take and hold such securities subject to the provisions and upon the conditions
specified in this Section 2.
2.2 Certain Definitions. As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
"Closing Date" shall mean the Effective Date (as defined in the
Reorganization Agreement) of the Merger.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Conversion Stock" means the Common Stock issued or issuable pursuant to
conversion of the Preferred Stock, including without limitation the Common Stock
issuable upon conversion of the Series C Preferred Stock issuable upon exercise
of the Series C Warrants. For purposes only of Sections 2.6, 2.9 through 2.17,
3 and 6 hereof, "Conversion Stock" shall also be deemed to mean any Common Stock
held by a Founder.
"Holder" shall mean (i) any Purchaser holding Registrable Securities
(including Preferred Stock) and (ii) any person holding Registrable Securities
to whom the rights under this Section 2 have been transferred in accordance with
Section 2.14 hereof. For purposes only of Sections 2.6, 2.9 through 2.16 and 5
hereof, "Holder" shall also be deemed to mean any Founder.
"Initiating Holders" shall mean Holders in the aggregate of greater than
25% of the Registrable Securities.
"Preferred Stock" shall mean the Series A Preferred Stock issued pursuant
to the Series A Agreement, the Series B Preferred Stock issued pursuant to the
Series B Agreement, the Series C Preferred Stock issued pursuant to the Series C
Agreement or upon exercise of the Series C Warrants, the Series D Preferred
Stock issuable pursuant to the Series D Agreement, the Series E Preferred Stock
issuable pursuant to the Reorganization Agreement, and any additional shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, or Series E Preferred Stock, as the case may be,
issued in respect of such shares upon a Recapitalization. For purposes of this
Agreement, Series C Preferred Stock shall be deemed to include any shares of
Series C Preferred Stock issuable or issued upon exercise of the Series C
Warrants, and all rights of the Series C Purchasers with respect to their shares
of capital stock of the Company contained herein shall apply to such shares of
Series C Preferred Stock issuable or issued upon exercise of the Series C
Warrants.
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"Registrable Securities" means (i) the Conversion Stock and (ii) any Common
Stock of the Company issued or issuable in respect of the Conversion Stock upon
any Recapitalization, or similar event, or any Common Stock otherwise issuable
with respect to the Conversion Stock; provided, however, that shares of Common
Stock or other securities shall only be treated as Registrable Securities if and
so long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold or are, in the opinion of counsel for the Company, available for sale in a
single transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale.
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 the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as otherwise stated
below, incurred by the Company in complying with Sections 2.5, 2.6, 2.7 and 2.10
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company) and the reasonable fees and disbursements of one counsel for all
Holders.
"Restricted Securities" shall mean the securities of the Company required
to bear the legend set forth in Section 2.3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and, except as set forth above, all reasonable fees and
disbursements of counsel for any Holder.
"Series E Conversion Stock" shall mean the Common Stock issued or issuable
pursuant to conversion of the Series E Preferred Stock.
"Series E Restricted Securities" shall mean the securities of the Company
required to bear the legend set forth in Section 2.3(b) hereof.
"Series E Registrable Securities" means (i) the Series E Conversion Stock
and (ii) any Common Stock of the Company issued or issuable in respect of the
Series E Conversion Stock upon any Recapitalization, or similar event, or any
Common Stock otherwise issuable with respect to the Series E Conversion Stock;
provided, however, that shares of Common Stock or other securities shall only be
treated as Series E Registrable Securities if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities
-5-
transaction, or (B) sold or are, in the opinion of counsel for the Company,
available for sale in a single transaction exempt from the registration and
prospectus delivery requirements of the Securities Act so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale.
2.3 Restrictive Legend.
------------------
(a) Series A Preferred, Series B Preferred, Series C Preferred, and
---------------------------------------------------------------
Series D Preferred Legend. Each certificate representing (i) the Preferred
-------------------------
Stock (other than the Series E Preferred Stock), or (ii) the Registrable
Securities (other than the Series E Registrable Securities) shall (unless
otherwise permitted by the provisions of Section 2.4 below) be stamped or
otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
(b) Series E Preferred Legend. Each certificate representing (i) the
-------------------------
Series E Preferred or (ii) the Series E Registrable Securities shall (unless
otherwise permitted by the provisions of Section 2.4(b) below) be stamped or
otherwise imprinted with legends in the following form (in addition to any
legend required under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SAID ACT. THE SECURITES DURING A PERIOD OF NINE
MONTHS FROM DATE OF ISSUANCE OF SUCH SECURITIES MAY ONLY BE RESOLD TO PERSONS
RESIDENT WITHIN THE STATE OF CALIFORNIA AND IN ACCORDANCE WITH RULE 147 OF THE
SECURITIES ACT OF 1933. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION. SUCH
TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SECURITIES.
(c) Consent. Each Holder consents to the Company making a notation on
-------
its records and giving instructions to any transfer agent of the Preferred Stock
or the Common Stock in order to implement the restrictions on transfer
established in this Section 2.
-6-
2.4 Restrictions on Transfer; Notice of Proposed Transfers.
------------------------------------------------------
(a) Series A Preferred, Series B Preferred, Series C Preferred and
--------------------------------------------------------------
Series D Preferred Restrictions on Transfer. The holder of each certificate
-------------------------------------------
representing Restricted Securities (other than the Series E Restricted
Securities) by acceptance thereof agrees to comply in all respects with the
provisions of this Section 2.4. Prior to any proposed sale, assignment,
transfer or pledge of any Restricted Securities (other than (i) a transfer not
involving a change in beneficial ownership, (ii) in transactions involving the
distribution without consideration of Restricted Securities by the Holder to any
of its partners, or retired partners, or to the estate of any of its partners or
retired partners, (iii) any transfer by any Holder to (A) any individual or
entity controlled by, controlling, or under common control with, such Holder or
(B) any individual or entity with respect to which such Holder (or any person
controlled by, controlling, or under common control with, such Holder) has the
power to direct investment decisions, (iv) in transactions in compliance with
Rule 144 or (v) a transfer involving any Series E Restricted Securities), and
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to
the Company of such holder's intention to effect such transfer, sale, assignment
or pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied, at such holder's expense by either (i) a written opinion of legal
counsel, who shall be, and whose legal opinion shall be, reasonably satisfactory
to the Company, addressed to the Company, to the effect that the proposed
transfer of the Restricted Securities may be effected without registration under
the Securities Act, or (ii) a "no action" letter from the Commission to the
effect that the transfer of such securities without registration will not result
in a recommendation by the staff of the Commission that action be taken with
respect thereto, whereupon the holder of such Restricted Securities shall be
entitled to transfer such Restricted Securities in accordance with the terms of
the notice delivered by the holder to the Company. Each certificate evidencing
the Restricted Securities transferred as above provided shall bear, except if
such transfer is made pursuant to Rule 144, the appropriate restrictive legend
set forth in Section 2.3(a) above, except that such certificate shall not bear
such restrictive legend if in the opinion of counsel for such holder and the
Company such legend is not required in order to establish compliance with any
provision of the Securities Act.
(b) Series E Preferred Restrictions on Transfer. Notwithstanding
-------------------------------------------
anything to the contrary contained in Section 2.4(a) hereof, each holder of each
certificate representing any Series E Restricted Securities agrees to comply in
all respects with the provisions of this Section 2.4(b). Prior to any proposed
sale, assignment, transfer or pledge of any Series E Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer or such transfer is made after a date which is
nine months after the Effective Date of the Merger, the holders of such Series E
Restricted Securities shall give the written notice to the Company of such
holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall, if the Company so requests, be accompanied by
either (i) a written opinion of legal counsel who shall be satisfactory to the
Company, addressed to the Company and satisfactory in form and substance to the
Company's counsel, to the effect that the proposed transfer of the Series E
Restricted Securities is made in compliance with Rule 147 and may be effected
without registration under the Securities Act, or (ii) a "No Action" letter from
the Commission to the effect that the transfer of such Series E Restricted
-7-
Securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, whereupon the
holder of such Series E Restricted Securities shall be entitled to transfer such
Series E Restricted Securities in accordance with the terms of the notice
delivered by the holder to the Company. Each certificate evidencing the Series
E Restricted Securities transferred as above provided shall bear the appropriate
restrictive legend as set forth in Section 2.3(b) above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
of such holder and the Company such legend is not required in order to establish
compliance with any provision of the Securities Act.
2.5 Requested Registration.
----------------------
(a) General Request for Registration.
--------------------------------
(1) Request For Registration. In case the Company shall receive
------------------------
from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to (1) at least twenty
five percent (25%) of the issued and outstanding Registrable Securities or (2)
not less than that number of shares of Registrable Securities which would result
in an anticipated aggregate offering price, net of underwriting discounts and
commissions, greater than two million dollars ($2,000,000) (an "IPO"), the
Company will:
(ii) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(iii) as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within twenty (20) days after receipt of such written notice from
the Company;
Provided, however, that the Company shall not be obligated to
take any action to effect any such registration, qualification or compliance
pursuant to this Section 2.5(a)(1):
(A) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(B) Prior to six (6) months after the effective date
of the Company's first registered public offering of its stock;
-8-
(C) During the period starting with the date sixty
(60) days prior to the Company's estimated date of filing of, and ending on the
date six (6) months immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective;
(D) After the Company has effected two (2) such
registrations pursuant to this subparagraph 2.5(a)(l), and such registrations
have been declared or ordered effective; or
(E) If the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 2.5 shall be deferred for a period not to
exceed one hundred twenty (120) days from the date of receipt of written request
from the Initiating Holders; provided that the Company may not exercise this
-------- ----
deferral right more than once per twelve (12) month period.
Subject to the foregoing clauses (A) through (E), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable, after receipt of the request
or requests of the Initiating Holders.
(2) Underwriting. In the event that a registration pursuant to
------------
Section 2.5(a) is for a registered public offering involving an underwriting,
the Company shall so advise the applicable Holders as part of the notice given
pursuant to Section 2.5(a)(1)(i). In such event, the right of any such Holder to
registration pursuant to Section 2.5 shall be conditioned upon such Holder's
participation in the underwriting arrangements required by this Section 2.5, and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested shall be limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by a
majority in interest of the Initiating Holders if registration is requested
pursuant to Section 2.5(a)(1), but subject to the Company's reasonable approval.
Notwithstanding any other provision of this Section 2.5, if the managing
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise all holders of Registrable Securities and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. To facilitate the
allocation
-9-
of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the
nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to one hundred eighty (180) days
after the effective date of such registration, or such other shorter period of
time as the underwriters may require.
2.6 Company Registration.
--------------------
(a) Notice of Registration. If at any time or from time to time the
----------------------
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within twenty (20) days after receipt of such written notice from
the Company, by any Holder.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.6(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2.6, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, then: (i) if such registration is the first
offering by the Company to the general public of its securities for its account,
the managing underwriter may exclude some or all Registrable Securities from
such registration and underwriting (provided the securities of other
shareholders are not included therein), and (ii) if such registration is other
than the first offering by the Company to the general public of its securities
for its account, the managing underwriter may (subject to the allocation
priority set forth below) limit the number of Registrable Securities to be
included in such registration and underwriting to an aggregate of not less than
thirty percent (30%) of the total number of the securities to be registered in
such registration and underwriting; provided that any shares of stock held by
-------- ----
the Founders proposed to be included in the registration and underwriting shall
be reduced to zero prior to any reductions with respect to Registrable
Securities held by any other Holders. The Company shall so advise all Holders
and other holders distributing their securities
-10-
through such underwriting and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be allocated
among all the Holders in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by such Holder at the time of filing the
Registration Statement. To facilitate the allocation of shares in accordance
with the above provisions, the Company may round the number of shares allocated
to any Holder or holder to the nearest 100 shares. If any Holder or holder
disapproves of the terms of any such underwriting, he or she may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to one hundred eighty (180) days after the effective date of
the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
(c) Right to Terminate Registration. The Company shall have the right
-------------------------------
to terminate or withdraw any registration initiated by it under this Section 2.6
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
2.7 Registration on Form S-3.
------------------------
(a) If any Holder or Holders hold Registrable Securities equal or
convertible in the aggregate to not less than 1% of the then outstanding Common
Stock request that the Company file a registration statement on Form S-3 (or any
successor form to Form S-3) for a public offering of shares of the Registrable
Securities the reasonably anticipated aggregate price to the public of which,
net of underwriting discounts and commissions, would exceed $1,000,000, and the
Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall use its best efforts to cause
such Registrable Securities to be registered for the offering on such form and
to cause such Registrable Securities to be qualified in such jurisdictions as
such Holder or Holders may reasonably request; provided, however, that the
Company shall not be required to effect more than two (2) registrations pursuant
to this Section 2.7 in any twelve (12) month period. The Company shall inform
other Holders of the proposed registration and offer them the opportunity to
participate. The substantive provisions of Section 2.5(a)(2) and 2.5(b)(2)
shall be applicable to each registration initiated under this Section 2.7.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.7 (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) prior to the Company's
first registered public offering of its stock; (iii) if the Company, within ten
(10) days of the receipt of the request of the Initiating Holders, gives notice
of its bona fide intention to effect the filing of a registration statement
---- ----
with the Commission within ninety (90) days of receipt of such request (other
than with respect to a registration statement relating to a Rule 145
transaction, an offering solely to employees or any other registration which is
not appropriate for the registration of Registrable Securities); (iv) during the
period starting with the date sixty (60) days prior to the Company's estimated
date of filing of, and ending on the date six (6) months immediately following
the effective date of, any registration statement pertaining to securities of
the Company (other than a registration of securities in a
-11-
Rule 145 transaction or with respect to an employee benefit plan), provided that
the Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective; or (v) if the Company shall
furnish to such Holder a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors it would be
seriously detrimental to the Company or its shareholders for registration
statements to be filed in the near future, then the Company's obligation to use
its best efforts to file a registration statement shall be deferred for a period
not to exceed one hundred and twenty (120) days from the receipt of the request
to file such registration by such Holder; provided that the Company may not
-------- ----
exercise this deferral right more than once per twelve (12) month period.
2.8 Limitations on Subsequent Registration Rights. From and after the
---------------------------------------------
Closing Date, the Company shall not enter into any agreement granting any holder
or prospective holder of any securities of the Company registration rights with
respect to such securities unless (i) such new registration rights, including
standoff obligations, are on a pari passu basis with those rights of the
---- -----
Holders hereunder, or (ii) such new registration rights, including standoff
obligations, are subordinate to the registration rights granted Holders
hereunder.
2.9 Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with (i) two (2) registrations pursuant to Section 2.5(a), (ii) all
registrations pursuant to Section 2.6, and (iii) all registrations pursuant to
Section 2.7 shall be borne by the Company. Unless otherwise stated, all Selling
Expenses relating to securities registered on behalf of the Holders and all
other Registration Expenses shall be borne by the Holders of such securities pro
rata on the basis of the number of shares so registered.
2.10 Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense, the Company will:
(a) Prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for at least one hundred eighty (180)
days or until the distribution described in the Registration Statement has been
completed; and
(b) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
2.11 Indemnification
---------------
(a) The Company will indemnify each Holder, each of its officers,
directors, partners and shareholders, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 2, and each underwriter, if any, and each person who controls any
-12-
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act, the
Exchange Act, state securities law or any rule or regulation promulgated under
such laws applicable to the Company in connection with any such registration,
qualification or compliance, and within a reasonable period the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action as such expenses are incurred; provided that the
-------- ----
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person or underwriter and
stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and within a reasonable
period will reimburse the Company, such Holders, such directors, officers,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred, as such expenses are incurred, in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited in an amount equal to the
gross proceeds before expenses and commissions to each Holder received for the
shares sold by such Holder, unless such liability arises out of or is based on
willful misconduct by such Holder.
-13-
(c) Each party entitled to indemnification under this Section 2.11
(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 unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 2 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation or which includes an admission of fault on behalf of the Indemnified
Party.
2.12 Information by Holder. The Holder or Holders of Registrable
---------------------
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 2.
2.13 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 Restricted 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 use its best efforts 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 that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act;
(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 Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) So long as a Holder owns any Restricted 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
ninety (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 Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any
-14-
rule or regulation of the Commission allowing the Holder to sell any such
securities without registration.
2.14 Transfer of Registration Rights. The rights to cause the Company to
-------------------------------
register securities granted Holders under Sections 2.5, 2.6 and 2.7 may be
assigned to a transferee or assignee reasonably acceptable to the Company which
acquires at least 50,000 shares (appropriately adjusted for any
Recapitalization) of Registrable Securities in connection with any transfer or
assignment of Registrable Securities by the Holders.
2.15 Standoff Agreement. In connection with any public offering of the
------------------
Company's securities, the Holder agrees, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days in the case of an initial public offering or ninety
(90) days in the case of any other public offering) from the effective date of
such registration as may be requested by the underwriters; provided that the
-------- ----
officers and directors and all 1% shareholders of the Company who own stock of
the Company also agree and remain subject to such restrictions. Notwithstanding
the foregoing, the provisions of this Section 2.15 shall not be interpreted to
restrict Xxxxxxx, Xxxxx & Co. and its affiliates in the normal course of their
brokerage, advisory, financing, trading, arbitrage and other of their ordinary
course activities.
2.16 Termination of Registration Rights. The registration rights granted
----------------------------------
pursuant to Section 2 shall terminate as to each Holder at such time as a public
market for the Company's Common Stock exists and all Registrable Securities held
by such Holder may, in the opinion of counsel to the Company (which opinion
shall be addressed and rendered to Holder), be sold within a given three month
period pursuant to Rule 144.
2.17 Suspension of Sales. The Company shall have the right to suspend
-------------------
sales of Registrable Securities by Holders who propose to sell such Registrable
Securities pursuant to Sections 2.5 and 2.7 hereof in the event the Company
determines, in its good faith judgment, that there exists material information
regarding the Company that has not been disclosed to the public and which is not
disclosed (or incorporated by reference) in the registration statement covering
such Registrable Securities (the "Undisclosed Material Information"). In
furtherance of the foregoing, prior to making any such sale, any such Holder
shall furnish to the Company a written notice stating that it intends to make a
sale. Within two (2) days of receipt of such notice, the Company shall provide
written notice to the Holders proposing to sell Registrable Securities as to
whether the Company shall suspend such sale due to the existence of Undisclosed
Material Information. The Holders shall suspend any further sale of Registrable
Securities pursuant to the registration statement until the Company advises such
Holders that the registration statement has been amended. In such event, the
Company shall cause the registration statement to be amended as soon as
reasonably practicable, provided that the Company shall not be required to amend
the registration statement during any time when the Company's officers and
directors are prohibited from buying or selling the Company's Common Stock
pursuant to the Company's xxxxxxx xxxxxxx policy. Notwithstanding the
-15-
foregoing sentence, the Company shall file any amendment necessary for the
Holders to recommence their sales under the registration statement concurrently
with the commencement of any period in which directors and officers of the
Company are allowed to buy or sell Common Stock pursuant to the Company's
xxxxxxx xxxxxxx policy.
SECTION 3
---------
Co-Sale Rights
--------------
3.1 Right to Participate. At any time a Founder (a "Seller") proposes to
--------------------
sell or otherwise dispose of for value to a third party (the "Proposed
Transferee") any Common Stock of the Company held by such Founder (the "Offered
Securities"), such Founder shall notify the Company in writing. The Company
shall notify each Purchaser in writing (the "Sale Notice") and each Purchaser
shall have the right to participate in the sale to the Proposed Transferee upon
the same terms and conditions as the Seller, subject to the terms and conditions
set forth in this Section 3. A Purchaser shall exercise its right by delivering
to the Seller, within fifteen (15) days of the date of the Sale Notice, (i)
written notice of its intention to participate, specifying the amount of shares
Purchaser desires to sell to the Proposed Transferee, and (ii) one or more
certificates representing the number of shares of Common Stock which Purchaser
elects to sell hereunder, duly endorsed for transfer to the Proposed Transferee.
3.2 Qualified Participation. Each Purchaser (and its permitted
-----------------------
transferees) shall have the right to sell up to that number of shares of Common
Stock equal to the product of (i) the amount of Offered Securities multiplied by
(ii) a fraction, the numerator of which is the number of shares of Common Stock
(including Conversion Stock) owned by such Purchaser, and the denominator of
which is the total number of shares of Common Stock (including Conversion Stock)
owned by the Seller and the Purchasers as a group. In the event that the
Proposed Transferee desires to purchase a number of shares of Common Stock
different from the amount of the Offered Securities (the "New Amount"), the New
Amount shall be substituted for Offered Securities in the above equation for the
purpose of determining each Purchaser's participation rights. In the event of
Purchaser participation, the amount of Offered Securities which Seller is
entitled to sell on Seller's own behalf shall be reduced accordingly, and Seller
shall include such Purchaser shares in the sale of the Offered Securities.
3.3 Continuing Rights. The exercise or non-exercise of the right to
-----------------
participate hereunder with respect to a particular sale by a Seller shall not
adversely affect a Purchaser's right to participate in subsequent sales by the
same or other Sellers pursuant to this Section 3.
3.4 Termination. This Section 3 regarding Co-Sale Rights of the Agreement
shall terminate upon the earliest to occur of:
(a) the closing of the sale of Common Stock in a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act (other than a registration relating solely to an
employee benefit plan of the Company) at a public offering price
-16-
(prior to underwriting commissions and expenses) of at least $16.00 per share
(appropriately adjusted for any Recapitalization) and in which the aggregate
gross proceeds received by the Company from the underwriters in such offering
equal or exceed $15,000,000.
(b) the date ten (10) years from the date of this Agreement.
(c) the consolidation, merger (but only with respect to a
consolidation or merger pursuant to which shareholders of the Company
(determined immediately prior to such consolidation or merger) hold less than
50% of the voting securities of the surviving or acquiring corporation) or sale
of all or substantially all of the assets of the Company.
SECTION 4
---------
Right of First Refusal
----------------------
4.1 Right of First Refusal. Subject to the terms and conditions specified
----------------------
in this Section 4.1, the Company hereby grants to each Purchaser a right of
first refusal with respect to future sales by the Company of its New Securities
(as hereinafter defined). A Purchaser shall be entitled to apportion the right
of first refusal hereby granted it among itself and any individual or entity
controlled by, controlling, or under common control with, such Purchaser in such
proportions as it deems appropriate. For purposes of this Section 4 only, the
term "Purchaser" or "Purchasers" shall mean any Purchaser who is an "accredited
investor" within the meaning of Regulation D, Rule 501(A), promulgated by the
Commission.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock (the "New Securities"), the Company shall first make an offering of such
New Securities to each Purchaser in accordance with the following provisions:
(a) The Company shall deliver a notice ("Notice") to the Purchasers
stating, (i) its bona fide intention to offer such New Securities, (ii) the
number of such New Securities to be offered, and (iii) the price and terms, if
any, upon which it proposes to offer such New Securities.
(b) Within twenty (20) days after giving of the Notice, each Purchaser
may elect to purchase or obtain, at the price and on the terms specified in the
Notice, up to that portion of such New Securities which equals the proportion
that the number of shares of Common Stock issued and held, or issuable upon
conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock, or Series E Preferred Stock then
held, by such Purchaser bears to the total number of shares of Common Stock of
the Company then outstanding (determined on a fully diluted basis (assuming the
conversion of convertible securities and the exercise of outstanding and
unexercised options and warrants)).
(c) If all New Securities referred to in the Notice which the
Purchasers are entitled to obtain pursuant to subsection 4.1(b) are not elected
to be obtained as provided in subsection 4.1(b) hereof, the Company may, during
the ninety (90) day period following the expiration of the period
-17-
provided in subsection 4.1(b) hereof, offer the remaining unsubscribed portion
of such New Securities to any person or persons at a price not less than, and
upon terms no more favorable to the offeree than, those specified in the Notice.
If the Company does not enter into an agreement for the sale of the New
Securities within such period, or if such agreement is not consummated within
sixty (60) days of the execution thereof, the right provided hereunder shall be
deemed to be revived and such New Securities shall not be offered unless first
reoffered to the Purchasers in accordance herewith.
(d) Notwithstanding the foregoing, New Securities do not include (i)
securities offered to the public generally pursuant to a registration statement
under the Securities Act, (ii) securities issued in connection with a bona fide
business acquisition of or by the Company approved by the Board of Directors
(and approved by a majority of the non-employee members of the Board of
Directors (the "Outside Directors")), whether by merger, consolidation, sale of
assets, sale or exchange of stock or otherwise, (iii) shares of the Company's
Common Stock, or related options exercisable for such Common Stock, issued to
employees, officers, directors, OEMs (or other strategic partners), customers
and suppliers of, and consultants to, the Company, pursuant to any arrangement
approved by the Board of Directors of the Company (and approved by the Outside
Directors), (iv) the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities either (A) outstanding on the
date of this Agreement or (B) issued after the date of this Agreement (provided,
in the case of clause (B), the original convertible or exercisable securities
were subject to or exempt from the right of first refusal), (v) securities
issued in connection with any Recapitalization, or (vi) shares of currently
authorized Series E Preferred Stock pursuant to the terms of the Reorganization
Agreement or shares issued or issuable upon conversion of the Series E Preferred
Stock.
(e) The right of first refusal set forth in this Section 4.1 may not
be assigned or transferred, except that such right is assignable by each
Purchaser (i) to a transferee or assignee that acquires at least 50,000 shares
of Registrable Securities from a Purchaser (appropriately adjusted for any
Recapitalization), or (ii) to any individual or entity controlled by,
controlling, or under common control with, such Purchaser, provided that (a) the
-------- ----
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such right of first refusal is
being transferred or assigned; (b) such transferee or assignee agrees in writing
to be bound by and subject to the terms and conditions of this Agreement,
including without limitation the provisions of Section 2.15; and (c) such
transfer or assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. For the purposes of
determining the number of shares of Registrable Securities held by a holder of
Registrable Securities, the holdings of any individual or entity controlled by,
controlling, or under common control with, such holder shall be aggregated
together; provided that all assignees and transferees who would not qualify
-------- ----
individually for assignment of the right of first refusal shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 4.1.
-18-
SECTION 5
---------
Board Rights
------------
5.1 Board Visitation Right. One representative of each of (i) The Xxxxxxx
Xxxxx Group, Inc. ("GS"), (ii) Index Ventures I (Delaware), L.P. ("Index"), and
(iii) the Series E Purchasers shall have reasonable Board of Directors'
visitation rights. The representative of the Series E Purchasers shall be
designated by the holders of a majority of the then issued and outstanding
Series E Preferred Stock. Such visitation rights shall include (i) the right to
receive reasonable notice in advance of all Board of Directors meetings and
Board committee meetings, (ii) the right to receive, concurrently with receipt
by members of the Board of Directors, all materials, reports and other written
communications received by members of the Board of Directors, (iii) the right to
attend all Board of Directors meetings and meetings of committees thereof and
(iv) the right of the representatives to be reimbursed for their reasonable out-
of-pocket expenses in attending such Board of Director meetings, not to exceed
an aggregate of $7,000 per meeting; provided, however, that the Company shall
-------- -------
require as a condition precedent to the rights under this Section 5.1 that each
person proposing to attend any meeting of the Board of Directors or committee
thereof and each person to have access to any of the information provided by the
Company to the Board of Directors agree to hold in confidence information so
received during such meetings or otherwise (except in connection with a person's
obligations to inform GS, Index, or the Series E Purchasers so each of GS,
Index, and the Series E purchasers will have sufficient information to monitor
its investment in the Company), and provided further, however, that the Company
-------- -------
reserves the right not to provide information and to exclude such representative
from any meeting or portion thereof if delivery of such information or
attendance at such meeting or portion thereof by such representative would
result in disclosure of trade secrets to such representative and would
materially adversely impact the Company or would adversely affect the attorney-
client privilege between the Company and its counsel.
Notwithstanding anything to the contrary contained in this Section 5.1
hereof, the Series E Purchasers shall have such board visitation rights set
forth herein only at such time that the Series E Holders no longer have the
right to elect, as a class, one member of the Board of Directors in accordance
with Section 5.2 of this Agreement.
The rights set forth in this Section 5.1 shall terminate and be of no
further force or effect on the date, (i) with respect to GS, that GS (including
the holdings of any individual or entity controlled by, controlling, or under
common control with GS) holds less than 297,282 shares of the Common Stock
issued or issuable upon conversion of the Series D Preferred (appropriately
adjusted for any Recapitalization), (ii) with respect to Index, that Index
(including the holdings of any individual or entity controlled by, controlling,
or under common control with Index) holds less than 297,282 shares of the Common
Stock issued or issuable upon conversion of the Series D Preferred
(appropriately adjusted for any Recapitalization), or (iii) with respect to the
Series E Purchasers, that the Series E Purchasers (including the holdings of any
individual or entity controlled by, controlling, or under common control with
any Series E Purchaser) holds less than 50% of the shares of the Common Stock
issued or issuable upon conversion of the Series E Preferred (appropriately
adjusted for any Recapitalization).
-19-
5.2 Board Representation. Except as may otherwise be consented to by the
holders of a majority of the outstanding Common Stock and Preferred Stock of the
Company, the Company shall fix and maintain the number of directors on the Board
of Directors of the Company at seven (7) members. At each election of directors
the Purchasers and the Founders (and their permitted transferees) shall vote all
of their respective capital stock so as to elect: (a) one (1) member designated
by a majority of the outstanding shares of Series E Preferred, so long as more
than 50% of the number of shares of Series E Preferred originally issued are
outstanding; and (b) the remaining six (6) directors shall be elected by a
majority of the outstanding shares of Common Stock, the Series A Preferred, the
Series B Preferred, the Series C Preferred, and the Series D Preferred together
as a class. In the event that not more than 50% of the number of shares of
Series E Preferred originally issued are outstanding, all directors shall be
elected by a majority of the Common Stock and the Preferred Stock voting
together. Any vote taken to remove any director elected pursuant to this Section
5.2, or to fill any vacancy created by the resignation or death of a director
elected pursuant to this Section 5.2, shall also be subject to the provisions of
this Section 5.2.
SECTION 6
---------
Miscellaneous
-------------
6.1 Governing Law. This Agreement shall be governed in all respects by
-------------
the internal laws of the State of California.
6.2 Survival. The covenants and agreements made herein shall survive any
--------
investigation made by the Purchasers and the closing of the transactions
contemplated hereby.
6.3 Successors and Assigns. Except as otherwise provided herein, the
----------------------
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
6.4 Entire Agreement; Amendment. This Agreement, the Series A Agreement,
the Series B Agreement, the Series C Agreement, the Series D Agreement, the
Reorganization Agreement and the other documents delivered pursuant hereto on
the Closing Date constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and no party
shall be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought; provided, however, that holders of a
majority of the Common Stock issued or issuable upon conversion of the Preferred
Stock may, with the Company's prior written consent, waive, modify or amend on
behalf of all such holders, any provisions hereof. Notwithstanding the
foregoing, Section 3 of this Agreement may not be amended in a manner that
adversely affects the Founders without the written consent of the Founders, and
Section 5 of this Agreement may only be amended with the written consent of GS,
Index and a majority of the issued and outstanding shares of Series E Preferred
Stock.
-20-
6.5 Notices, etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser, at such Purchaser's address, as shown on the
stock records of the Company, or at such other address as such Purchaser shall
have furnished to the Company in writing, or (b) if to any other holder of
Preferred Stock, at such address as such holder shall have furnished the Company
in writing, or, until any such holder so furnishes an address to the Company,
then to and at the address of the last holder of such Preferred Stock who has so
furnished an address to the Company, or (c) if to the Company, one copy should
be sent to its address set forth on the front page of this Agreement and
addressed to the attention of the President, or at such other address as the
Company shall have furnished to the Purchasers.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.
6.6 Delays or Omissions. Except as expressly provided herein, no delay or
-------------------
omission to exercise any right, power or remedy accruing to any party to this
Agreement upon any breach or default of any other party under this Agreement,
shall impair any such right, power or remedy of such nondefaulting party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
6.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
6.8 Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
-------- ----
it materially changes the economic benefit of this Agreement to any party.
6.9 Titles and Subtitles. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not considered in construing or
interpreting this Agreement.
6.10 Confidentiality. Each Purchaser and Founder agrees not to use the
---------------
names of Intel Corporation, a Delaware corporation ("Intel") and Holder of
Series B Preferred Stock, or the names of Intel's affiliates or refer to Intel
or its affiliates directly or indirectly in connection with Intel's or its
affiliates' equity investment in the Company in any advertisement, news release
or professional or trade publication, or in any other manner, unless otherwise
required by law or with Intel's prior
-21-
written consent, which consent will generally not be granted. Each Purchaser and
Founder further agrees to keep the terms and conditions of this Agreement in
strictest confidence, it being understood that this restriction shall not
prohibit disclosure to the parties' counsel, accountants and professional
advisors.
6.11 Entire Agreement; Effect on 1999 Rights Agreement.
----------------
(a) Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties regarding the subject matter
hereof and supersedes and cancels all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
(b) Effect on Prior Rights Agreement. The provisions of this
--------------------------------
Agreement amend and supersede any rights or obligations under the 1999 Rights
Agreement.
-22-
The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
NUMERICAL TECHNOLOGIES, INC.
a California Corporation
By: /s/ Xxxxxxxx X. Xxxx
----------------------------------------
Xxxxxxxx X. Xxxx, President and Chief
Executive Officer
-23-
"SERIES A PURCHASERS"
ABBAS EL GAMAL - XXXXX XXXXXX INC.
SEP CUSTODIAN ACCT. #000-00000-00
By: /s/ X. Xxxxxxx
-------------------------------------
Title: VP Investments
----------------------------------
/s/ Xxxxxx Xxxxx-Xx
-----------------------------------------
Xxxxxx Xxxxx-Xx
/s/ Xxxxx Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx, As Custodian for Anneka
Xxxxxx Xxxxx under the California Uniform
Transfers to Minors Act
/s/ Xxxxx Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx, As Custodian for Serena Xxxxx
Xxxxx under the California Uniform Transfers to
Minors Act
/s/ X. Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx, Trustee of the Xxxx X. Xxxxxxx
Irrevocable Trust UAD 10/1/89
/s/ X. Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx, Trustee of the Priya X. Xxxxxxx
Irrevocable Trust UAD 10/1/89
_________________________________________
Hsin-Xxxxx Xxxxx Lan
/s/ Xxxx Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx
_________________________________________
Li-Xxxxxx Xxx
-00-
XXXXXXXXX XXXXXXXXXXX
By: /s/ Xxx-Xxxxx Xxx
------------------------------------
Title: Chairman
---------------------------------
/s/ Xxxxxx Xxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxx and
/s/ Xxx Xxxxxxx
---------------------------------------
Xxx Xxxxxxx
-25-
"SERIES B PURCHASERS"
INTEL CORPORATION
By: /s/ Xxxx Xxxx
------------------------------------
Title: Assistant Treasurer
_________________________________
/s/ Xxxx X. Xxxx
---------------------------------------
Xxxx X. Xxxx
WS INVESTMENT COMPANY 97B
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Title:
---------------------------------
-26-
"SERIES C PURCHASERS"
/s/ Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxxx &
/s/ Xxxxx Xxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxx, Trustees of the Mahmoud & Xxxxx
Xxxxxxx Revocable Trust Deed, Dated 5/31/89
GOEL FAMILY PARTNERSHIP
By:_____________________________________________
Title:__________________________________________
/s/ Xxx Xxxxx
-----------------------------------------------
Xxx Xxxxx &
/s/ Xxxxx Xxxxx
-----------------------------------------------
Xxxxx Xxxxx
/s/ Xxx Xxxxx
-----------------------------------------------
Xxx Xxxxx as Custodian for Xxxxxx Xxxxx
Under the New York Uniform Transfers to Minors Act
/s/ Xxx Xxxxx
-----------------------------------------------
Xxx Xxxxx as Custodian for Xxxx Xxxxx
Under the New York Uniform Transfers to Minors Act
XXXXX AND XXXXXX XXXXX LIVING
TRUST DATED 12/2/94
By: /s/ Xxxxx Xxxxx
--------------------------------------------
Title: Trustee
-----------------------------------------
-27-
THE XXXXX LIVING TRUST
By:
--------------------------------------------
Title:
-----------------------------------------
-----------------------------------------------
Xxxx Xxxxxxx
-----------------------------------------------
Xxxx Xxxxxxx &
-----------------------------------------------
Xxxxxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxxx Xxxxxxxx
-----------------------------------------------
Hua-Xx Xxx
THE XXXXX 1996 CHARITABLE TRUST
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Title: Trustee
-----------------------------------------
XXXXXX & XXXX, INC.
By: /s/ Xxxxxxxx X. Xxxx
--------------------------------------------
Title: COO
-----------------------------------------
MARKETECH INTERNATIONAL CORPORATION
By: /s/ Xxxxxxxx Xxx
--------------------------------------------
Title: President
-----------------------------------------
-28-
XXXX, XXXXXXX VENTURES V, L.P.
BY: FIFTH MDV PARTNERS, L.L.C.,
GENERAL PARTNER
By: /s/ X.X. Xxxxxxx
--------------------------------------------
Title: Member
-----------------------------------------
XXXX, XXXXXXX VENTURES V, L.P. As
nominee for MDV ENTREPRENEUR'S
NETWORK FUND II (A), L.P. AND MDV
ENTREPRENEURS' NETWORK FUND II (B), L.P.
BY: FIFTH MDV PARTNERS, L.L.C.,
GENERAL PARTNER
By: /s/ X.X. Xxxxxxx
--------------------------------------------
Title: Member
-----------------------------------------
/s/ Xxxxxx Xxxx
-----------------------------------------------
Xxxxxx Xxxx and
/s/ Xxxxxxx Xxxx
-----------------------------------------------
Xxxxxxx Xxxx
TECHNO PRECISION, INC.
By: /s/ signature illegible
--------------------------------------------
Title: President
-----------------------------------------
-29-
_______________________________________________
Xxxxx X. Xxxxx and
_______________________________________________
Xxxx Xxxxx, Trustees, Xxxxx Trust Dated
11/26/90
_______________________________________________
Xxxxxx X. Xxxxx
-30-
"SERIES D PURCHASERS"
THE XXXXXXX XXXXX GROUP, INC.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Attorney-in-fact
STONE STREET FUND 1999, L.P.
By: Stone Street 1999 Corp.,
its general partner
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Attorney-in-fact
BRIDGE STREET FUND 1999, L.P.
By: Stone Street 1999 Corp.,
its general partner
By:
--------------------------------------------
Name:
Title:
INDEX VENTURES I (Jersey) L.P.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxx. Xxxxx Xxxxxxx
Title: Director of the General Partner Index
Venture Associates I Limited
INDEX VENTURES I (Delaware) L.P.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxx. Xxxxx Xxxxxxx
Title: Index Venture Associates I Limited
-31-
"FOUNDERS"
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxx
/s/ X. Xxxxxxx
-----------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxx X. Xxxx
-----------------------------------------------
Xxxxxxxx X. Xxxx
/s/ Yao-Xxxx Xxxx
-----------------------------------------------
Yao-Xxxx Xxxx
-32-
SECOND CLOSING "SERIES D PURCHASERS"
CHAIRMAN ENTERPRISES CO., LTD.
By: /s/ Ching-Xxxx Xxx
--------------------------------------------
Name: Ching-Xxxx Xxx
Title: Chairman
/s/ Xxxx X. Xxx
-----------------------------------------------
Xxxx X. Xxx and
/s/ Lily Xxx Xxx
-----------------------------------------------
Lily Xxx Xxx, as Trustees, or any Successor
Trustee, under the Xxxx and Xxxx Xxx Family
Trust created by Xxxx X. Xxx and Lily Xxx Xxx,
as Trustors, dated November 8, 1980
INDUSTRIAL TECHNOLOGY
INVESTMENT CORPORATION
By: /s/ Xxxxx Xxx Xxxxxxx Xxxxx
--------------------------------------------
Name: Xxxxx Xxx Xxxxxxx Xxxxx
Title: President
KANEMATSU ELECTRONICS LTD.
By: /s/ K. Izumi
--------------------------------------------
Name: Katsuhiko Izumi
Title: General Manager
/s/ Xxxxxxx X. Xxxx
-----------------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxx X. Monahand
TAIWAN MASK CORPORATION
By: /s/ Xxxxxxx Xxxx
--------------------------------------------
Name: Xxxxxxx Xxxx
Title:
-33-
X.X. XXXXX FAMILY PARTNERSHIP
DATED 03/21/88
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name:
Title:
GATEHOUSE INVESTORS, LLC
By:____________________________________________
Name:
Title:
/s/ Xxxx X. Xxxxx
-----------------------------------------------
Xxxx X. Xxxxx or
/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Xxxxx X. Xxxxx
-34-
"SERIES E PURCHASERS"
/s/ Xxxxx XxxXxxx
-----------------------------------------------
Xxxxx XxxXxxx
/s/ Xxxxx Xxxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx / /s/ Xxxxx Xxxxxxxx
-----------------------------------------------
Xxxxxx and Xxxxx Xxxxxxxx
/s/ Xxxxxx Nation
-----------------------------------------------
Xxxxxx Nation
/s/ Xxxxx XxXxxxxx
-----------------------------------------------
Xxxxx XxXxxxxx
/s/ X.X. Xxxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxxx Xxxxxxx-Xxxxx
-----------------------------------------------
Xxxxxxx Xxxxxxx-Xxxxx
/s/ Xxxx X. Xxxxxx
-----------------------------------------------
Xxxx Xxxxxx
/s/ Xxxx X. Xxxxxxx
-----------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxxx Xxxx
-----------------------------------------------
Xxxxxxx Xxxx
-35-
