ADEXA, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
AUGUST 24, 2000
TABLE OF CONTENTS
PAGE
1. Registration Rights...........................................................................................2
1.1 Definitions.........................................................................................2
1.2 Request for Registration............................................................................3
1.3 Company Registration................................................................................4
1.4 Form S-3 Registration...............................................................................5
1.5 Obligations of the Company..........................................................................6
1.6 Information from Holder.............................................................................8
1.7 Expenses of Registration............................................................................8
1.8 Delay of Registration...............................................................................8
1.9 Indemnification.....................................................................................9
1.10 Reports Under Securities Exchange Act of 1934.....................................................11
1.11 Assignment of Registration Rights.................................................................11
1.12 Limitations on Subsequent Registration Rights.....................................................12
1.13 "Market Stand-Off" Agreement......................................................................12
1.14 Termination of Registration Rights................................................................13
2. Covenants of the Company.....................................................................................13
2.1 GAAP Accounting....................................................................................13
2.2 Delivery of Financial Statements...................................................................13
2.3 Inspection.........................................................................................14
2.4 Stock Vesting......................................................................................14
2.5 Proprietary Information and Inventions.............................................................15
2.6 Right of First Offer...............................................................................15
2.7 Board of Directors.................................................................................16
2.8 Termination of Certain Covenants...................................................................17
3. Miscellaneous................................................................................................17
3.1 Successors and Assigns.............................................................................17
3.2 Governing Law......................................................................................17
3.3 Counterparts.......................................................................................17
3.4 Titles and Subtitles...............................................................................17
3.5 Notices............................................................................................18
3.6 Expenses...........................................................................................18
3.7 Entire Agreement; Amendments and Waivers...........................................................18
3.8 Severability.......................................................................................18
3.9 Aggregation of Stock...............................................................................18
3.10 Prior Agreement...................................................................................18
3.11 Confidentiality of Records........................................................................18
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AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made
as of the 24th day of August, 2000, by and among Adexa, Inc., a California
corporation (the "Company"), and the investors listed on SCHEDULE A hereto, each
of which is herein referred to as an "Investor" and the holders of Common Stock
listed on SCHEDULE B hereto, each of which is herein referred to as a "Common
Holder."
RECITALS
WHEREAS, certain of the Investors (the "Existing Investors")
hold shares of the Company's Series A Preferred Stock and/or shares of Common
Stock issued upon conversion thereof (the "Series A Preferred Stock"), and/or
shares of the Company's Series B Preferred Stock and/or shares of Common Stock
issued upon conversion thereof (the "Series B Preferred Stock") and possess
registration rights, information rights, rights of first offer, and other rights
pursuant to that certain Amended and Restated Investors' Rights Agreement dated
as of July 2, 1998, among the Company and such Existing Investors (the "Prior
Agreement");
WHEREAS, the Existing Investors are holders of at least a
majority of the "Registrable Securities" of the Company (as defined in the Prior
Agreement), and desire to terminate the Prior Agreement and to accept the rights
created pursuant hereto in lieu of the rights granted to them under the Prior
Agreement; and
WHEREAS, certain Investors are parties to that certain Series
C Preferred Stock Purchase Agreement of even date herewith among the Company and
certain of the Investors (the "Series C Agreement"), which provides that as a
condition to the closing of the sale of the Series C Preferred Stock, this
Agreement must be executed and delivered by such Investors, Existing Investors
holding at least a majority of the "Registrable Securities" of the Company (as
defined in the Prior Agreement) and the Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Existing Investors hereby agree that the Prior
Agreement shall be superseded and replaced in its entirety by this Agreement,
and the parties hereto further agree as follows:
WHEREAS, in order to induce the Company to enter into the
Series C Agreement and to induce certain of the Investors to invest funds in the
Company pursuant to the Series C Agreement, the Prior Investors, the Common
Holders and the Company desire to terminate the Prior Agreement and to accept
the rights created pursuant hereto in lieu of the rights granted to them under
the Prior Agreement;
WHEREAS, the Prior Agreement may be amended with the written
consent of the Company, the holders of a majority of the outstanding Registrable
Securities (as defined in the Prior Agreement) held by the Investors and the
holders of a majority of the Registrable Securities (as defined in the Prior
Agreement) held by the Common Holders; and
WHEREAS, the Company, the holders of a majority of the
outstanding Registrable Securities (as defined in the Prior Agreement) held by
the Investors, and the holders of a majority of the Registrable Securities (as
defined in the Prior Agreement) held by the Common Holders are parties hereto.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS. The Company covenants and agrees as
follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933,
as amended.
(b) The term "Form S-3" means such form under the
Act as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC that permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(c) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.11 hereof.
(d) The term "Initial Offering" means the Company's
first firm commitment underwritten public offering of its Common Stock
pursuant to a registration statement on Form S-1 under the Act.
(e) The term "1934 Act" means the Securities
Exchange Act of 1934, as amended.
(f) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such registration statement
or document.
(g) The term "Registrable Securities" means (i) the
Company's Common Stock ("Common Stock") issuable or issued upon conversion of
the Company's Series A Preferred Stock ("Series A Preferred Stock), Series B
Preferred Stock ("Series B Preferred Stock"), or Series C Preferred Stock
("Series C Preferred Stock") purchased pursuant to the Series A Preferred
Stock and Warrant Purchase Agreement ("Series A Agreement"), Series B
Preferred Stock Purchase Agreement ("Series B Agreement") or Series C
Agreement respectively, (ii) the shares of Common Stock issued to the Common
Holders; (iii) the Common Stock issuable or issued upon conversion of the
Series A Preferred Stock issuable or issued upon the exercise or "net issue
exercise" of the warrant to purchase 228,012 shares of Series A Preferred
Stock issued to Sutro & Co. on August 4, 1997; and (iv) any Common Stock of
the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of, the
shares referenced in (i), (ii) and (iii) above, excluding in all cases,
however,
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any Registrable Securities sold by a person in a transaction in which his
rights under this Agreement are not assigned.
(h) The number of shares of "Registrable Securities"
outstanding shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities that are, Registrable
Securities.
(i) The term "SEC" shall mean the Securities and
Exchange Commission.
1.2 REQUEST FOR REGISTRATION.
(a) Subject to the conditions of this Section 1.2,
if the Company shall receive, at any time after six (6) months after the
effective date of the Initial Offering, a written request from either (i) the
Investors holding fifty percent (50%) or more of the Registrable Securities
then outstanding held by Investors or (ii) Common Holders holding fifty
percent (50%) or more of the Registrable Securities then outstanding held by
Common Holders (in either case, the "Initiating Holders"), that the Company
file a registration statement under the Act covering the registration of at
least thirty percent (30%) of the Registrable Securities with an anticipated
aggregate offering price of at least $5,000,000, then the Company shall,
within ten (10) days of the receipt thereof, give written notice of such
request to all Holders, and subject to the limitations of this Section 1.2,
use its bests efforts to effect, as soon as practicable, and in any even
within 120 days of the receipt of such request, the registration under the
Act of all Registrable Securities that the Holders request to be registered
in a written request received by the Company within twenty (20) days of the
mailing of the Company's notice pursuant to this Section 1.2(a).
(b) If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request
made pursuant to this Section 1.2 and the Company shall include such
information in the written notice referred to in Section 1.2(a). In such
event the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company
(which underwriter or underwriters shall be reasonably acceptable to a
majority in interest of the Initiating Holders). Notwithstanding any other
provision of this Section 1.2, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities
underwritten (including Registrable Securities), then the Company shall so
advise all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of shares that may be included
in the underwriting shall be allocated to the Holders of such Registrable
Securities on a pro rata basis based on the number of Registrable Securities
held by all such Holders (including the Initiating Holders). Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn
from the registration.
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(c) The Company shall not be required to effect a
registration pursuant to this Section 1.2:
(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, unless the Company is already subject to
service in such jurisdiction and except as may be required under the Act; or
(ii) after the Company has effected two (2)
registrations pursuant to this Section 1.2, and such registrations have been
declared or ordered effective; or
(iii) during the period starting with the date
sixty (60) days prior to the Company's good faith estimate of the date of the
filing of, and ending on a date one hundred eighty (180) days following the
effective date of, a registration subject to Section 1.3 below, provided that
the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; or
(iv) if the Initiating Holders propose to
dispose of Registrable Securities that may be immediately registered on Form
S-3 pursuant to Section 1.4 hereof; or
(v) if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the Company's Chief Executive Officer or Chairman of
the Board stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a
period of not more than ninety (90) days after receipt of the request of the
Initiating Holders, provided that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12)-month period.
1.3 COMPANY REGISTRATION.
(a) If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the Act in connection with the public
offering of such securities (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a registration
relating to a corporate reorganization or other transaction under Rule 145 of
the Act, a registration on any form that does not include substantially the
same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities, or a registration
in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being registered), the Company
shall, at least thirty (30) days prior to the filing of such registration
statement, give each Holder written notice of such registration. Upon the
written request of each Holder given within fifteen (15) days after mailing
of such notice by the Company in accordance with Section 3.5, the Company
shall, subject to the provisions of Section 1.3(c), use all reasonable
efforts to cause to be registered
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under the Act all of the Registrable Securities that each such Holder has
requested to be registered.
(b) RIGHT TO TERMINATE REGISTRATION. The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 1.3 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 1.7 hereof.
(c) UNDERWRITING REQUIREMENTS. In connection with
any offering involving an underwriting of shares of the Company's capital
stock, the Company shall not be required under this Section 1.3 to include
any of the Holders' securities in such underwriting unless they accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select the
underwriters) and enter into an underwriting agreement in customary form with
an underwriter or underwriters selected by the Company, and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, that the underwriters determine in their
sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling Holders
according to the total amount of securities entitled to be included therein
owned by each selling Holder or in such other proportions as shall mutually
be agreed to by such selling Holders; provided, that in any case at least
two-thirds (2/3) of the Holders' securities so included are held by Holders
other than Common Holders), but in no event shall (i) the amount of
securities of the selling Holders included in the offering be reduced below
thirty percent (30%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the
Company's securities, in which case the selling Holders may be excluded if
the underwriters make the determination described above and no other
shareholder's securities are included, or (ii) notwithstanding (i) above, any
shares being sold by a shareholder exercising a demand registration right
similar to that granted in Section 1.2 be excluded from such offering. For
purposes of the preceding parenthetical concerning apportionment, for any
selling shareholder that is a Holder of Registrable Securities and that is a
partnership or corporation, the partners, retired partners and shareholders
of such Holder, or the estates and family members of any such partners and
retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling Holder," and any pro rata
reduction with respect to such "selling Holder" shall be based upon the
aggregate amount of Registrable Securities owned by all such related entities
and individuals.
1.4 FORM S-3 REGISTRATION. In case the Company shall
receive from any Holder or Holders of at least three hundred thousand
(300,000) shares of Registrable Securities then outstanding (subject to
appropriate adjustment for stock splits, stock dividends, combinations and
other recapitalizations) a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such
Holder or Holders, the Company shall:
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(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and
(b) use its best efforts to effect as soon as
practicable, such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders' Registrable Securities
as are specified in such request, together with all or such portion of the
Registrable Securities of any other Holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt
of such written notice from the Company, provided, however, that the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to this section 1.4:
(i) if Form S-3 is not available for such
offering by the Holders;
(ii) if the Holders, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000;
(iii) if the Company shall furnish
to the Holders a certificate signed by the Chief Executive Officer or Chairman
of the Board of the Company stating that in the good faith judgment of the Board
of Directors of the Company, it would be seriously detrimental to the Company
and its shareholders for such Form S-3 Registration to be effected at such time,
in which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 1.4;
provided, however, that the Company shall not utilize this right more than once
in any twelve month period;
(iv) if the Company has, within the
six (6) month period preceding the date of such request, already effected one
registration on Form S-3 for the Holders pursuant to this Section 1.4; or
(v) in any particular jurisdiction
in which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt
of the request or requests of the Holders. Registrations effected pursuant to
this Section 1.4 shall not be counted as requests for registration or
registrations effected pursuant to Sections 1.2.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required under
this Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
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(a) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for a
period of up to ninety (90) days provided, however, that such 90 day period
shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the
Company; or, if earlier, until the distribution contemplated in the
Registration Statement has been completed;
(b) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement;
(c) furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them;
(d) use all reasonable efforts to register and
qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions;
(e) in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering;
(f) notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Act or the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing;
(g) cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed; and
(h) provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the effective
date of such registration.
(i) use all reasonable efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a
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registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such Securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities, and (ii) a letter dated
such date, from the independent certified public accountants of the Company,
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed (x)
to the underwriters, if any and (y) to the Holders requesting registration of
Registrable Securities, but only if independent certified public accountants
are permitted by their professional rules and practices to so provide such a
letter to such Holders.
1.6 INFORMATION FROM HOLDER. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.7 EXPENSES OF REGISTRATION. The Company shall pay all
expenses other than underwriting discounts and commissions incurred in
connection with registrations, filings or qualifications pursuant to Sections
1.2, 1.3 and 1.4, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company (including the fees and disbursements of one special
counsel to the selling Holders in an amount not to exceed $20,000).
Notwithstanding the foregoing, the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 or
Section 1.4 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses
pro rata based upon the number of Registrable Securities that were to be
requested in the withdrawn registration), unless, in the case of a
registration requested under Section 1.2, the Holders of a majority of the
Registrable Securities agree to forfeit their right to one demand
registration pursuant to Section 1.2, provided, however, that if at the time
of such withdrawal, the Holders have learned of a material adverse change in
the condition, business, or prospects of the Company from that known to the
Holders at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 1.2 or 1.4. Except
as set forth above, all fees and disbursements of counsel for the selling
Holder or Holders incurred in connection with registrations, filings or
qualifications pursuant to Sections 1.2, 1.3 and 1.4 shall be borne by the
selling Holder or Holders who engaged such counsel, unless otherwise agreed
in writing by and among such selling Holders.
1.8 DELAY OF REGISTRATION. No Holder shall have any
right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 1.
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1.9 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners or officers, directors
and shareholders of each Holder, legal counsel and accountants for each
Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the 1934 Act, against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the Act, the 1934
Act or any state securities laws, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities laws
or any rule or regulation promulgated under the Act, the 1934 Act or any
state securities laws; and the Company will reimburse each such Holder,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection l.9(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation that occurs in reliance
upon and in conformity with written information furnished expressly for use
in connection with such registration by any such Holder, underwriter or
controlling person; provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder
or underwriter, from whom the person asserting any such losses, claims,
damages or liabilities purchased shares in the offering, if a copy of the
prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Holder or underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of the sale
of the shares to such person, and if the prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person,
if any, who controls the Company within the meaning of the Act, legal counsel
and accountants for the Company, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any
such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or any state securities laws,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information
9
furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any person intended to be
indemnified pursuant to this subsection l.9(b), for any legal or other
expenses reasonably incurred by such person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this subsection l.9(b)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld),
provided that in no event shall any indemnity under this subsection l.9(b)
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party
under this Section 1.9 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 1.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.9.
(d) If the indemnification provided for in this
Section 1.9 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or expense, as
well as any other relevant equitable considerations; provided, that in no
event shall any contribution by a Holder under this subsection 1.9(d) exceed
the net proceeds from the offering received by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered
10
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders under
this Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.10 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With
a view to making available to the Holders the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, after ninety (90)
days after the effective date of the Initial Offering;
(b) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and the 1934 Act;
and
(c) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements
of SEC Rule 144 (at any time after ninety (90) days after the effective date
of the first registration statement filed by the Company), the Act and the
1934 Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule
or regulation of the SEC that permits the selling of any such securities
without registration or pursuant to such form.
1.11 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register Registrable Securities pursuant to this Section
1 may be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities that (i) is a subsidiary, parent,
partner, limited partner, retired partner or shareholder of a Holder, (ii) is
a Holder's family member or trust for the benefit of an individual Holder, or
(iii) after such assignment or transfer, holds at least seven hundred
thousand (700,000) shares of Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (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 1.13
below; and (c) such 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 Act.
11
1.12 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From
and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the outstanding
Registrable Securities held by the Investors and a majority of the
Registrable Securities held by the Common Holders, enter into any agreement
with any holder or prospective holder of any securities of the Company that
would allow such holder or prospective holder (a) to include such securities
in any registration filed under Section 1.3 hereof, unless under the terms of
such agreement, such holder or prospective holder may include such securities
in any such registration only to the extent that the inclusion of such
securities will not reduce the amount of the Registrable Securities of the
Holders that are included or (b) to make a demand registration of their
securities.
1.13 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby
agrees that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final prospectus
relating to the Company's initial public offering and ending on the date
specified by the Company and the managing underwriter (such period not to
exceed one hundred eighty (l80) days) (i) lend, offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then owned by the Holder or are thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing provisions of this Section 1.13 shall apply only to the Company's
initial public offering of equity securities, shall not apply to the sale of
any shares to an underwriter pursuant to an underwriting agreement, and shall
only be applicable to the Holders if all officers, directors, one percent
(1%) security holders, and all other persons with registration rights enter
into similar agreements. The underwriters in connection with the Company's
initial public offering are intended third party beneficiaries of this
Section 1.13 and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Registrable Securities of
each Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period. This Section 1.13 shall not
apply to transactions relating to shares of Common Stock or other securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock acquired in connection with the Initial
Offering or in open market transactions after the consummation of the Initial
Offering. The terms of Section 1.13 may not be amended as to any Investor that
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act"), without the consent of such investment
company nor may the terms of Section 1.13 be amended as to Amerindo Investment
Advisors Inc. or its affiliates without the consent Amerindo Investment Advisors
Inc.
In addition, any such lock-up shall provide that any release
from the provisions of such lock-up shall be made pro-rata among shareholders
that are locked-up based on their respective holdings of locked-up shares;
provided, however, that up to 250,000 shares (as
12
adjusted for stock splits, stock dividends, combinations and other
recapitalizations) of Common Stock may be released on a non pro-rata basis.
1.14 TERMINATION OF REGISTRATION RIGHTS. All
registration rights granted under this Section 1 shall terminate and be of no
further force and effect five (5) years after the date of the Company's Initial
Offering. In addition, a Holder's registration rights shall expire if (i) the
Company has completed is Initial Offering and is subject to the provisions of
the 1934 Act, (ii) such Holder (together with its affiliates, partners and
former partners) holds less than 1% of the Company's outstanding common stock
(treating all shares of convertible preferred stock on an as converted basis),
(iii) all Registrable Securities held by and issuable to such Holder may be sold
under Rule 144 during any ninety (90) day period, and (iv) the Company's common
stock is traded on a national exchange or Nasdaq.
2. COVENANTS OF THE COMPANY.
2.1 GAAP ACCOUNTING. The Company will maintain true
books and records of account in which full and correct entries will be made
of all its business transactions pursuant to a system of accounting
established and administered in accordance with generally accepted accounting
principles consistently applied, and will set aside on its books all such
proper accruals and reserves as shall be required under generally accepted
accounting principles consistently applied.
2.2 DELIVERY OF FINANCIAL STATEMENTS. The Company
shall deliver the following:
(a) to each Investor, as soon as practicable, but in
any event within ninety (90) days after the end of each fiscal year of the
Company, an income statement for such fiscal year, a balance sheet of the
Company and statement of shareholder's equity as of the end of such year, and
a statement of cash flows for such year, such year-end financial reports to
be in reasonable detail, prepared in accordance with generally accepted
accounting principles ("GAAP"), and audited and certified by independent
public accountants of nationally recognized standing selected by the Company;
(b) to each Major Investor (as defined below), as
soon as practicable, but in any event within forty-five (45) days after the
end of each of the first three (3) quarters of each fiscal year of the
Company, an unaudited income statement, statement of cash flows for such
fiscal quarter and an unaudited balance sheet as of the end of such fiscal
quarter.
(c) to each Major Investor, as soon as practicable,
but in any event within thirty (30) days of the end of each month, an
unaudited income statement and statement of cash flows and balance sheet for
and as of the end of such month, in reasonable detail and including a
comparison to plan figures for such period;
(d) to each Major Investor, as soon as practicable,
but in any event at least thirty (30) days prior to the end of each fiscal
year, a budget and business plan for the next fiscal year, prepared on a
monthly basis, including balance sheets, income statements and statements of
cash flows for such months and, as soon as prepared, any other budgets or
revised budgets prepared by the Company;
13
(e) to each Major Investor, using its best efforts
within twenty-four (24) hours of such event, a notice via facsimile sent to
such person designated to obtain such notices,
(i) that the Company has filed a
registration statement under the Securities Act for purposes of a public
offering of securities of the Company;
(ii) if the Company issues a press
release;
(iii) if the Company issues
additional shares of capital stock;
(iv) if there is a change in any of
the key personnel of the Company;
(v) if there is a change in control
of the Company; and
(vi) if there is any other material
corporate event.
(f) with respect to the financial statements
called for in subsections (b) and (c) of this Section 2.2, an instrument
executed by the Chief Financial Officer or President of the Company certifying
that such financials were prepared in accordance with GAAP consistently applied
with prior practice for earlier periods (with the exception of footnotes that
may be required by GAAP) and fairly present the financial condition of the
Company and its results of operation for the period specified, subject to
year-end audit adjustment; and
(g) such other information relating to the
financial condition, business, prospects or corporate affairs of the Company as
any Major Investor may from time to time request, provided, however, that the
Company shall not be obligated under this subsection (g) or any other subsection
of Section 2.1 to provide information that it deems in good faith to be a trade
secret or similar confidential information.
2.3 INSPECTION. The Company shall permit each Major
Investor, at such Major Investor's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by the Investor; provided, however, that
the Company shall not be obligated pursuant to this Section 2.3 to provide
access to any information that it reasonably considers to be a trade secret or
similar confidential information.
2.4 STOCK VESTING. Unless otherwise approved by the
Board of Directors, all stock options and other stock equivalents issued after
the date of this Agreement to employees, directors, consultants and other
service providers shall be subject to vesting on terms no more favorable than as
follows: (a) twenty-five percent (25%) of such stock shall vest at the end of
the first year following the earlier of the date of issuance or such person's
services commencement date with the Company, and (b) seventy-five percent (75%)
of such stock shall vest over the remaining three (3) years. With respect to any
shares of stock purchased by any such person, the Company's repurchase option
shall provide that upon such person's termination
14
of employment or service with the Company, with or without cause, the Company
or its assignee (to the extent permissible under applicable securities laws
and other laws) shall have the option to purchase at cost any unvested shares
of stock held by such person.
2.5 PROPRIETARY INFORMATION AND INVENTIONS. The
Company covenants to take appropriate actions, by way of agreements or
instructions, to protect improper disclosure and use of Company confidential
information by its and its subsidiaries' employees and to obtain appropriate
rights in the inventions of such employees.
2.6 RIGHT OF FIRST OFFER. Subject to the terms and
conditions specified in this paragraph 2.6, the Company hereby grants to each
Major Investor (as hereinafter defined) a right of first offer with respect to
future sales by the Company of its Shares (as hereinafter defined). A "Major
Investor" shall mean any Investor or permitted transferee that holds at least
seven hundred thousand (700,000) shares of Registrable Securities or Common
Holder holding at least four million (4,000,000) shares of Registrable
Securities, as adjusted for stock splits, stock dividends, combinations and
other recapitalizations. A Major Investor shall be entitled to apportion the
right of first offer hereby granted it among itself and its partners and
affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or
securities convertible into or exchangeable or exercisable for any shares of,
any class of its capital stock ("Shares"), the Company shall first make an
offering of such Shares to each Major Investor in accordance with the following
provisions.
(a) The Company shall deliver a notice in accordance
with Section 3.5 ("Notice") to the Major Investors stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be offered,
and (iii) the price and terms upon which it proposes to offer such Shares.
(b) By written notification received by the Company,
within fifteen (15) calendar days after receipt of the Notice, the Major
Investor may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Shares that 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 and Series C Preferred Stock then held, by such Major Investor bears to
the total number of shares of Common Stock of the Company then outstanding
(assuming full exercise of all outstanding options and warrants, and full
conversion of all outstanding convertible securities) prior to the issuance
of the Shares. The Company shall promptly, in writing, inform each Major
Investor that elects to purchase all the shares available to it (a
"Fully-Exercising Investor") of any other Major Investor's failure to do
likewise. During the ten (10) day period commencing after such information is
given, each Fully-Exercising Investor may elect to purchase that portion of
the Shares for which Major Investors were entitled to subscribe but which
were not subscribed for by the Major Investors that is equal to the
proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion of Preferred Stock then held, by such
Fully-Exercising Investor bears to the total number of shares of Common Stock
issued and held, or issuable upon conversion of the Preferred Stock then
held, by all Fully-Exercising Investors who wish to purchase some of the
unsubscribed shares.
15
(c) If all Shares that Investors are entitled to
obtain pursuant to subsection 2.6(b) are not elected to be obtained as
provided in subsection 2.6(b) hereof, the Company may, during the ninety (90)
day period following the expiration of the period provided in subsection
2.6(b) hereof, offer the remaining unsubscribed portion of such Shares to any
person or persons at a price not less than, and upon terms no more favorable
to the offeree than those specified in the Notice. If the Company does not
enter into an agreement for the sale of the Shares within such period, or if
such agreement is not consummated within ninety (90) days of the execution
thereof, the right provided hereunder shall be deemed to be revived and such
Shares shall not be offered unless first reoffered to the Major Investors in
accordance herewith.
(d) The right of first offer in this paragraph 2.6
shall not be applicable to (i) the issuance or sale of Common Stock (or
options therefor) to employees, directors and consultants in transactions
approved by the Company's Board of Directors; (ii) the issuance of securities
pursuant to a bona fide, firmly underwritten public offering of shares of
Common Stock, registered under the Act, (iii) the issuance of securities
pursuant to the conversion or exercise of convertible or exercisable
securities, (iv) the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise, (v) the issuance of
stock, warrants or other securities or rights to persons or in connection
with equipment leasing or debt financing transactions with a bank, venture
leasing company or other similar institution, approved by the Company's Board
of Directors, or (vi) securities issued pursuant to any rights or agreements
outstanding as of the date of this Agreement.
2.7 BOARD OF DIRECTOR APPROVAL. The Company shall not
without the approval of a majority of the Board of Directors take the following
actions:
(a) issue any equity securities (other than shares
of Common Stock (or options therefor) to employees, directors and consultants
for the primary purpose of soliciting or retaining their services) or rights
to purchase any equity securities;
(b) declare any dividend with respect to the
Company's equity securities'
(c) incur any long-term debt in the
principal amount in excess of $1,000,000;
(d) sell, lease or otherwise dispose of a
material portion of the Company's assets outside the ordinary course of
business;
(e) incur a capital expense in excess of
$1,000,000 or any other expense in excess of $1,000,000 not included in the
Company's annual budget;
(f) make material changes in the Company's
accounting methods or accounting policies;
(g) amend the Articles of Incorporation or
Bylaws to alter the size of the Board of Directors; or
16
(h) amend this Section 2.7.
2.8 REMUNERATION AND THE 1940 ACT.
(a) The Company shall not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise to any Investor or other shareholder of
the Company as consideration for or as an inducement to entering into by any
Investor or other shareholder of the Company of any waiver or amendment of
any of the terms and provisions of this Agreement, the Ancillary Agreements
or the Amended and Restated Articles of Incorporation which affects any
Investors' rights as an investor, unless such remuneration is concurrently
paid, on the same terms, ratably to all Investors whether or not such
Investors grant such wavier or agree to such amendment.
(b) The Company shall not become an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the 1940 Act. In the event the Company breaches the foregoing, the
Company shall forthwith notify the Investors and shall take immediate
corrective action to remedy such breach.
2.9 TERMINATION OF CERTAIN COVENANTS. The covenants set
forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7 and 2.8 shall terminate
and be of no further force or effect when the sale of securities pursuant to
a registration statement filed by the Company under the Act in connection
with the firm commitment underwritten offering of its securities to the
general public is consummated or when the Company first becomes subject to
the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934
Act, whichever event shall first occur.
3. MISCELLANEOUS.
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
3.2 GOVERNING LAW. This Agreement shall be governed
by and construed under the laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California.
3.3 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
3.4 TITLES AND SUBTITLES. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
17
3.5 NOTICES. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or upon delivery by confirmed facsimile transmission, nationally recognized
overnight courier service, or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified at the address indicated for such party on the signature page
hereof, or at such other address as such party may designate by ten (10) days'
advance written notice to the other parties.
3.6 EXPENSES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
3.7 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement (including the Exhibits hereto, if any) constitutes the full and
entire understanding and agreement among the parties with regard to the subjects
hereof and thereof. Any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company, the holders of a majority of the Registrable Securities
held by the Investors (voting as a separate class) and the holders of a majority
of Registrable Securities held by the Common Holders (voting as a separate
class). Any amendment or waiver effected in accordance with this paragraph shall
be binding upon each holder of any Registrable Securities, each future holder of
all such Registrable Securities, and the Company.
3.8 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law the parties agree to
negotiate the provision in good faith. In the event the parties cannot reach a
mutually agreeable and enforceable replacement for such provision then (a) such
provision shall be excluded from this Agreement and (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
3.9 AGGREGATION OF STOCK. All shares of Registrable
Securities held or acquired by affiliated entities or persons, or investment
companies managed by the same investment advisor, shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.
3.10 PRIOR AGREEMENT The rights under the Prior
Agreement, including without limitation the preemptive rights set forth in
Section 4 of the Prior Agreement with regarding to the Series B Agreement, are
hereby waived. Except for Section 3.11 of the Prior Agreement, the Prior
Agreement is hereby superseded in its entirety and shall be of no further force
and effect.
3.11 CONFIDENTIALITY OF RECORDS. Each Investor agrees
to use, and to use its best efforts to insure that its authorized
representatives use, the same degree of care as such Investor uses to protect
its own confidential information to keep confidential any information furnished
to it which the Company identifies as being confidential or proprietary (so long
as such information is not in the public domain), except that such Investor may
disclose such proprietary
18
or confidential information to any partner, subsidiary or parent of such
Investor for the exclusive purpose of evaluating its investment in the
Company as long as such partner, subsidiary or parent is advised of and
agrees to the confidentiality provisions of this Section 3.11.
19
Schedule A
Schedule of Investors
NAME NUMBER OF SHARES
---- ----------------
SERIES A
Xxxxx X. Xxxxxxxx, Trustee of the Xxxxxxxx Living Trust, 1/22/98 98,120
Arbor Company 42,356
G. Xxxxxxx Xxxxx, Xx. 98,120
Xxxx Xxxxxxxxx 42,352
Y. Xxxx Xxx 84,713
Coxe, Tench, Trustee of the Xxxx/Otus Revocable Trust, 4/23/98 134,759
Daou Tech, Inc. 169,426
Xxxxx X. Xxxxxxx 8,807
Xxxxx Xxxxxxxxx, Xxxxx Fargo Bank, Trustee SHV M/P/T FBO Xxxxx Xxxx 118,369
Xxxxxxx X. Xxxxx 42,356
Xxxxxxx X. Xxxxxxx Xxxxx Fargo Bank, 1,589
Trustee SHV M/P/T
Xxxxxxx and Xxxx Xxxxxx Revocable 42,356
Living Trust
Xxxxxxx Xxxxxxxxxx 4,237
Xxxxxxx Xxxxxxxxxx and Xxxx Xxxx 42,356
Xxxxx Xxxxxxxxxx 42,356
Xxxxxx X. & Xxxxxxxx Xxxxxxx, TTEES, 50,000
Xxxxxxx Revocable Trust
Xxxxxx X. Xxxxxxxx, 42,356
Stanford University 42,356
Sutro Group 42,356
Xxxxxx Hill Associates 723,263
Xxxxxx Xxxx Entrepreneurs Fund (AI), LP 19,572
Xxxxxx Hill Entrepreneurs Fund (QP), LP 49,557
Xxxxxx Xxxx Ventures, A California Limited Partnership 1,978,906
Xxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx, Trustees of the Wythes Living 43,288
Trust, 7/21/87
The Wythes 1999 Grandchildrens' Trust, Xxxxxxxx X. Xxxxxx, Xxxx X. 13,124
Wythes, Jr. and Xxxxx X. Xxxxx, Trustees
Xxxxxxx X. Xxxxxxx, Xx., Trustee, The Younger Living Trust, 1/20/95 98,120
SERIES B
Xxxxx X. Xxxxxxxx 8,771
Trustee of the Xxxxxxxx Living Trust, 1/22/98
Xxxxx X. Xxxxxxxx, Trustee 7,691
NAME NUMBER OF SHARES
---- ----------------
Anvest, L.P. 7,691
G. Xxxxxxx Xxxxx, Xx. 15,382
G. Xxxxxxx Xxxxx, Xx. 8,771
Xxxxx Xxxx, Trustee 3,582
Xxxxx Xxxx, Trustee of the Xxxx/Otus Revocable Trust, 4/23/98 12,047
G & H Partners 7,259
Xxxxx X. Xxxxxxx 000
Xxxxxxx X. Xxxxxxx 48
Xxxx Xxxxx 60,606
Information Technology Ventures II, L.P. 1,751,491
ITV Affiliates Fund II, L.P. 66,691
Xxxxxxx X. Xxxxxxx (Xxxxxx) 145
Xxxxxxx Xxxxx 121,212
Xxxxxx Xxxx Entrepreneurs Fund (AI), LP 1,750
Xxxxxx Hill Entrepreneurs Fund (QP), LP 4,430
Xxxxxx Xxxx Ventures, A California Limited Partnership 176,902
Xxxxx Xxxx (Xxxxxx) 10,743
The Lin Family Trust 60,606
TOW Partners 14,325
Xxxx-Xxx Xxxx 60,606
UMB Bank, Trustee for Xxxxxxxxx 317
Xxxx X. and Xxxxxx X. Xxxxxx, 3,870
Trustees of the Wythes Living Trust, 7/21/87
The Wythes 1999 Grandchildrens' Trust, Xxxxxxxx X. Xxxxxx, Xxxx X. 1,173
Wythes, Jr., and Xxxxx X. Xxxxx, Trustees
Xxxxxxx X. Xxxxxxx, Xx., Trustee, The Younger Living Trust, 1/20/95 8,771
Xxxxxxx X. Xxxxxxx, Xx., Trustee 16,151
Xxx-Xxxx Yuan 60,606
SERIES C
Xxxxxxxx New Technologies Fund, Inc. 98,003
Xxxxxxxx New Technologies Fund II, Inc. 562,080
Xxxxxxxx Investment Opportunities (Master) Fund - NTV Portfolio 32,213
Xxxxxxxx Investment Opportunities (Master) Fund - NTV II Portfolio 50,400
Xxxxxxxx New Technologies Venture Fund LLC 44,705
Amerindo Internet Fund PLC 113,510
Amerindo Technology Growth Fund II Inc. 78,740
Emerging Technology Portfolio 113,510
Xxxxxxxx Xxxxxxxx 1,200
Xxxxxx Xxxxxxxxx 2,400
Xxxxxx Xxxxxx 2,000
Xxxxxxx X. Xxxxxxxx, III 1,600
Xxxxx Xxxxxxxxxx 2,000
Vitria Technology, Inc 236,220
DRW Venture Partners LP 59,055
ii
NAME NUMBER OF SHARES
---- ----------------
Information Technology Ventures II, L.P. 56,889
ITV Affiliates Fund II, L.P 2,166
Xxxxxx Xxxx Ventures, A California Limited Partnership 69,029
Xxxxxx Hill Entrepreneurs Fund (AI), L.P. 683
Xxxxxx Xxxx Entrepreneurs Fund (QP), L.P. 1,729
Xxxx M & Xxxxxx X. Xxxxxx, Trustees, The Wythes Living Trust (7/21/87) 1,510
TOW Partners, A California Limited Partnership 5,513
The Wythes 1999 Grandchildren's Trust Xxxxxxxx X. Xxxxxx, Xxxx X. 458
Wythes, Jr., and Xxxxx X. Xxxxx, Trustees
Xxxxx X. Xxxxxxxx, Trustee, The Xxxxxxxx Living Trust, U/A/D 1/22/98 8,033
G. Xxxxxxx Xxxxx, Xx. 8,033
Xxxxxxx X. Xxxxxxx, Xx. Trustee, The Younger Living Trust, U/A/D 1/20/95 8,287
Xxxxx Xxxx, Trustee, The Xxxx/Otus Revocable Trust, U/A/D 4/23/98 8,781
Xxxxx X. Xxxxxxx 2,953
Xxxxxxx X. and Xxxxx X.X. Xxxxx, Trustees, The Xxxxxxx X. and Xxxxx 1,181
X.X. Xxxxx Trust Agreement dated 2/24/99
Xxxxxxxx Xxxxxxxx 1,181
Xxxxxxx X. Xxxxxxx 295
Xxxxxxx X. Xxxx 148
Xxxxx X. Xxxxx 148
Xxxxxxxx Xxx 148
iii
Schedule B
Common Holders
NAME NUMBER OF SHARES
---- ----------------
Xxxxxx Xxxxxx, 300,000
Dr. K. Xxxxx Xxxxxx 8,700,000
Xxxxxxx Xxxxxx 1,000,000
iv
