INVESTORS’ RIGHTS AGREEMENT
Exhibit 4.2
Execution
Version
INVESTORS’ RIGHTS AGREEMENT
TABLE OF CONTENTS
| Page | ||||
1. Definitions |
1 | |||
2. Registration Rights |
4 | |||
2.1 Demand Registration |
4 | |||
2.2 Company Registration |
5 | |||
2.3 Underwriting Requirements |
5 | |||
2.4 Obligations of the Company |
6 | |||
2.5 Furnish Information |
8 | |||
2.6 Expenses of Registration |
8 | |||
2.7 Delay of Registration |
9 | |||
2.8 Indemnification |
9 | |||
2.9 Reports Under Exchange Act |
11 | |||
2.10 Limitations on Subsequent Registration Rights |
11 | |||
2.11 “Market Stand-off” Agreement |
11 | |||
2.12 Restrictions on Transfer |
12 | |||
2.13 Termination of Registration Rights |
13 | |||
3. Information Rights |
13 | |||
3.1 Delivery of Financial Statements |
13 | |||
3.2 Inspection |
15 | |||
3.3 Termination of Information Rights |
15 | |||
3.4 Confidentiality |
15 | |||
4. Rights to Future Stock Issuances |
15 | |||
4.1 Right of First Offer |
15 | |||
4.2 Termination |
17 | |||
5. Additional Covenants |
17 | |||
5.1 Indemnification Agreements; D&O Insurance |
17 | |||
5.2 Board Matters |
17 | |||
5.3 Nondisclosure Agreements |
17 | |||
5.4 Noncompetition Agreements |
17 | |||
5.5 Employment Agreements |
18 | |||
5.6 Successor Indemnification |
18 | |||
5.7 Termination of Covenants |
18 | |||
6. Miscellaneous |
18 | |||
6.1 Successors and Assigns |
18 | |||
6.2 Governing Law |
19 | |||
6.3 Counterparts |
19 | |||
6.4 Titles and Subtitles |
19 | |||
6.5 Notices |
19 | |||
6.6 Amendments and Waivers |
19 | |||
6.7 Severability |
20 | |||
6.8 Aggregation of Stock |
20 | |||
i
TABLE
OF CONTENTS
(continued)
(continued)
| Page | ||||
6.9 Additional Investors |
20 | |||
6.10 Entire Agreement |
20 | |||
6.11 Dispute Resolution |
20 | |||
6.12 Delays or Omissions |
20 | |||
Schedule A — Schedule of Investors
ii
INVESTORS’ RIGHTS AGREEMENT
THIS INVESTORS’ RIGHTS AGREEMENT is made and entered into as of this 13th day of January,
2011, by and among Myriant Technologies, Inc., a Delaware corporation (the “Company”), and each
holder of the Company’s Class A Common Stock and Class B Common Stock listed on Schedule A,
each of which is referred to in this Agreement as an “Investor”, and together the “Investors.”
RECITALS
A. Concurrently with the execution of this Agreement, the Company and one of the Investors
that is the holder of the Class A Common Stock are entering into a Class A Common Stock Purchase
Agreement (the “Purchase Agreement”) providing for the issuance of shares of the Class A Common
Stock.
B. Concurrently with the execution of this Agreement, the Company and the Investors that are
holders of the Class B Common Stock are entering into a Debt Conversion Agreement (the “Conversion
Agreement”) providing for the issuance of shares of the Class B Common Stock.
C. In order (i) to induce the Company to enter into the Purchase Agreement, (ii) to induce the
Holder of the Class A Common to invest funds in the Company pursuant to the Purchase Agreement and
(iii) to induce the Holders of the Class B Common Holders to enter into the Conversion Agreement,
the Investors and the Company hereby agree that this Agreement shall govern the rights of the
Investors to cause the Company to register shares of Common Stock issuable to the Investors, to
receive certain information from the Company, and to participate in future equity offerings by the
Company, and shall govern certain other matters as set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement (and in addition to terms defined
elsewhere in this Agreement):
1.1 “Affiliate” means, with respect to any specified Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with such Person, including
without limitation any general partner, managing member, officer or director of such Person or any
venture capital fund now or hereafter existing that is controlled by one or more general partners
or managing members of, or shares the same management company with, such Person.
1.2 “Charter” means the Company’s Amended and Restated Certificate of Incorporation as may be
amended and/or restated from time to time.
1.3 “Class A Common Stock” means shares of the Company’s Class A Common Stock, par value
US$0.0001 per share.
1.4 “Class B Common Stock” means shares of the Company’s Class B Common Stock, par value
US$0.0001 per share.
1.5 “Common Stock” means shares of the Company’s Common Stock, par value US$0.0001 per share.
-1-
1.6 “Damages” means any loss, damage, or liability (joint or several) to which a party hereto
may become subject under the Securities Act, the Exchange Act, or other federal or state law,
insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any
registration statement of the Company, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto; (ii) an 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 indemnifying party (or
any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law,
or any rule or regulation promulgated under the Securities Act, the Exchange Act, any state
securities law or any other applicable laws.
1.7 “Derivative Securities” means any securities or rights convertible into, or exercisable or
exchangeable for (in each case, directly or indirectly), Common Stock, including options and
warrants.
1.8 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
1.9 “Excluded Registration” means (i) a registration relating to the sale of securities to
employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar
plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) 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 (iv) a registration in
which the only Common Stock being registered is Common Stock issuable upon conversion of debt
securities that are also being registered.
1.10 “Form S-1” means such form under the Securities Act as in effect on the date hereof or
any successor registration form under the Securities Act subsequently adopted by the SEC.
1.11 “Form S-3” means such form under the Securities Act as in effect on the date hereof or
any registration form under the Securities Act subsequently adopted by the SEC that permits
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.
1.12 “GAAP” means generally accepted accounting principles in the United States.
1.13 “Holder” means any holder of Registrable Securities who is a party to this Agreement.
1.14 “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, registered domestic partner, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of
a natural person referred to herein.
1.15 “Initiating Holders” means, collectively, Holders who properly initiate a registration
request under this Agreement.
1.16 “IPO” means the Company’s first underwritten public offering of its Common Stock under
the Securities Act.
1.17 “Major Investor” means any Investor that, individually or together with such Investor’s
Affiliates, holds at least 5% of the Registrable Securities (as adjusted for any stock split, stock
dividend, combination, or other recapitalization or reclassification effected after the date
hereof). For purposes
-2-
hereof, Green Chem Holdings, LLC, Green Chem Second Edition, LLC, Itera Ethanol, LLC and
Specialty Chemicals, LLC shall be deemed to be Affiliates of one another.
1.18 “New Securities” means, collectively, equity securities of the Company, whether or not
currently authorized, as well as rights, options, or warrants to purchase such equity securities,
or securities of any type whatsoever that are, or may become, convertible or exchangeable into or
exercisable for such equity securities.
1.19 “Person” means any individual, corporation, partnership, trust, limited liability
company, association or other entity.
1.20 “Registrable Securities” means (i) the Common Stock held by the Investors and Common
Stock issuable or issued upon conversion of the Class A Common Stock or Class B Common Stock; (ii)
any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion
and/or exercise of any other securities of the Company, acquired by the Investors after the date
hereof; and (iii) any Common Stock 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 clauses (i) and
(ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in
a transaction in which the applicable rights under this Agreement are not assigned pursuant to
Subsection 6.1, and excluding for purposes of Section 2 any shares for which
registration rights have terminated pursuant to Subsection 2.13 of this Agreement.
1.21 “Registrable Securities then outstanding” means the number of shares determined by adding
the number of shares of outstanding Common Stock that are Registrable Securities and the number of
shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or
convertible securities that are Registrable Securities.
1.22 “Restricted Securities” means the securities of the Company required to bear the legend
set forth in Subsection 2.12(b) hereof.
1.23 “SEC” means the Securities and Exchange Commission.
1.24 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
1.25 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
1.26 “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
1.27 “Selling Expenses” means all underwriting discounts, selling commissions, and stock
transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of
counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne
and paid by the Company as provided in Subsection 2.6.
1.28 “Selling Holder Counsel” shall have the meaning given to it in Section 2.6.
-3-
2. Registration Rights. The Company covenants and agrees as follows:
2.1 Demand Registration.
(a) Form S-1 Demand. If at any time after the earlier of (i) three (3) years after
the date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the
registration statement for the IPO, the Company receives a request from Holders of at least thirty
percent (30%) of the Registrable Securities then outstanding that the Company file a Form S-1
registration statement with respect to outstanding Registrable Securities of such Holders having an
anticipated aggregate offering price, net of Selling Expenses, of at least Ten Million
(US$10,000,000) Dollars, then the Company shall (i) within ten (10) days after the date such
request is given, give notice thereof (the “Demand Notice”) to all Holders other than the
Initiating Holders; and (ii) as soon as practicable, and in any event within sixty (60) days after
the date such request is given by the Initiating Holders, file a Form S-1 registration statement
under the Securities Act covering all Registrable Securities that the Initiating Holders requested
to be registered and any additional Registrable Securities requested to be included in such
registration by any other Holders, as specified by notice given by each such Holder to the Company
within thirty (30) days of the date the Demand Notice is given, and in each case, subject to the
limitations of Subsection 2.1(c) and Subsection 2.2.
(b) Form S-3 Demand. If at any time when it is eligible to use a Form S-3
registration statement, the Company receives a request from Holders of at least twenty percent
(20%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration
statement with respect to outstanding Registrable Securities of such Holders having an anticipated
aggregate offering price, net of Selling Expenses, of at least One Million (US$1,000,000) Dollars,
then the Company shall (i) within ten (10) days after the date such request is given, give a Demand
Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in
any event within forty-five (45) days after the date such request is given by the Initiating
Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable
Securities requested to be included in such registration by any other Holders, as specified by
notice given by each such Holder to the Company within thirty (30) days of the date the Demand
Notice is given, and in each case, subject to the limitations of Subsection 2.1(c) and
Subsection 2.2.
(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting
a registration pursuant to this Subsection 2.1 a certificate signed by the Company’s Chief
Executive Officer stating that in the good faith judgment of the Company’s Board of Directors it
would be materially detrimental to the Company and its stockholders for such registration statement
to either become effective or remain effective for as long as such registration statement otherwise
would be required to remain effective, because such action would (i) materially interfere with a
material acquisition, corporate reorganization, or other similar transaction involving the Company;
(ii) require disclosure of material information that has not been, and is otherwise not required to
be, disclosed, the premature disclosure of which would materially adversely affect the Company; or
(iii) render the Company unable to comply with requirements under the Securities Act or Exchange
Act, then the Company shall have the right to defer taking action with respect to such filing, and
any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly,
for a period of not more than ninety (90) days after the request of the Initiating Holders is
given; provided, however, that the Company may not invoke this right more than once in any
twelve (12) month period; and provided further that the Company shall not register any
securities for its own account or that of any other stockholder during such ninety (90) day period
other than an Excluded Registration.
(d) The Company shall not be obligated to effect, or to take any action to effect, any
registration pursuant to Subsection 2.1(a)(i) during the period that is sixty (60) days
before the
-4-
Company’s good faith estimate of the date of filing of, and ending on a date that is one
hundred eighty (180) days after the effective date of, a Company-initiated registration,
provided, that the Company is actively employing in good faith commercially reasonable
efforts to cause such registration statement to become effective; (ii) after the Company has
effected two registrations pursuant to Subsection 2.1(a); or (iii) if the Initiating
Holders propose to dispose of shares of Registrable Securities that may be immediately registered
on Form S-3 pursuant to a request made pursuant to Subsection 2.1(b). The Company shall
not be obligated to effect, or to take any action to effect, any registration pursuant to
Subsection 2.1(b) (i) during the period that is thirty (30) days before the Company’s good
faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the
effective date of, a Company-initiated registration, provided, that the Company is actively
employing in good faith commercially reasonable efforts to cause such registration statement to
become effective; or (ii) if the Company has effected two registrations pursuant to Subsection
2.1(b) within the twelve (12) month period immediately preceding the date of such request.
Subject to Subsection 2.3(c), a registration shall not be counted as “effected” for
purposes of this Subsection 2.1(d) until such time as the applicable registration statement
has been declared effective by the SEC, unless the Initiating Holders withdraw their request for
such registration, elect not to pay the registration expenses therefor, and forfeit their right to
one demand registration statement pursuant to Subsection 2.6, in which case such withdrawn
registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d).
2.2 Company Registration. If the Company proposes to register (including, for this purpose, a
registration effected by the Company for stockholders other than the Holders) any of its securities
under the Securities Act (other than in an Excluded Registration) and such registration may be used
for the registration of Registrable Securities, the Company shall, at such time, promptly give each
Holder notice of such registration. Upon the request of each Holder given within thirty (30) days
after such notice is given by the Company, the Company shall, subject to the provisions of
Subsection 2.2, cause to be registered all of the Registrable Securities that each such
Holder has requested to be included in such registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Subsection 2.2 before the
effective date of such registration, whether or not any Holder has elected to include Registrable
Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn
registration shall be borne by the Company in accordance with Subsection 2.6.
2.3 Underwriting Requirements.
(a) If, pursuant to Subsection 2.1, 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 Subsection 2.1, and the Company
shall include such information in the Demand Notice. The underwriter(s) will be selected by the
Initiating Holders and shall be reasonably acceptable to the Company. In such event, the right of
any Holder to include such Holder’s 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 to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall (together with the Company
as provided in Subsection 2.4(i)) enter into an underwriting agreement with the
underwriter(s) selected for such underwriting. Notwithstanding any other provision of this
Subsection 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing
that marketing factors require a limitation on the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be
underwritten pursuant hereto, and the number of Registrable Securities that may be included in the
underwriting shall be allocated among such Holders of Registrable Securities, including the
Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable
Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all
such selling Holders; provided, however, that the number of Registrable
Securities held by the Holders to be included in such underwriting shall not be reduced unless
all other
-5-
securities are first entirely excluded from the underwriting. To facilitate the
allocation 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.
(b) In connection with any offering involving an underwriting of shares of the Company’s
capital stock pursuant to Subsection 2.2, the Company shall not be required to include any
of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of
the underwriting as agreed upon between the Company and its underwriters, and then only in such
quantity as the underwriters in their sole discretion determine will not jeopardize the success of
the offering by the Company. If the total number of securities, including Registrable Securities,
requested by stockholders to be included in such offering exceeds the number of securities to be
sold (other than by the Company) that the underwriters in their reasonable discretion determine 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, which the
underwriters and the Company in their sole discretion determine will not jeopardize the success of
the offering. If the underwriters determine that less than all of the Registrable Securities
requested to be registered can be included in such offering, then the Registrable Securities that
are included in such offering shall be allocated among the selling Holders in proportion (as nearly
as practicable to) each Holder’s pro rata share of the aggregate number of Registrable Securities
requested to be registered or in such other proportions as shall mutually be agreed to by all such
selling Holders. To facilitate the allocation 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. Notwithstanding the foregoing, in no event shall (i) the number of Registrable
Securities included in the offering be reduced unless all other securities (other than securities
to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of
Registrable Securities included in the offering be reduced below thirty percent (30%) of the total
number of securities included in such offering, unless such offering is the IPO, in which case the
selling Holders may be excluded further if the underwriters make the determination described above
and no other stockholder’s securities are included in such offering. For purposes of the provision
in this Subsection 2.3(b) concerning apportionment, for any selling Holder that is a
partnership, limited liability company, or corporation, the partners, members, retired partners,
retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family
Members of any such partners, retired partners, members, and retired members 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 number
of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in
this sentence.
(c) For purposes of Subsection 2.1, a registration shall not be counted as “effected”
if (i) as a result of an exercise of the underwriter’s cutback provisions in Subsection 2.3(a)
or otherwise, fewer than one hundred percent (100%) of the total number of Registrable
Securities that Holders have requested to be included in such registration statement are actually
included or (ii) in the case of a demand registration that, if effected, would constitute the last
permitted demand registration under this Agreement, if the Initiating Holders are not able to sell
all of the Registrable Securities included in such registration.
2.4 Obligations of the Company. Whenever required under this Section 2 to
effect the registration of any Registrable Securities, the Company shall, as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities, use its commercially reasonable efforts to cause such registration statement to become
effective and keep such registration statement effective for a period of up to one hundred eighty
(180) days; provided, however, that (i) such one hundred eighty (180) day period shall
be extended for a
-6-
period of time equal to the period the Holder refrains, at the request of an
underwriter of Common Stock (or other securities) of the Company, from selling any securities
included in such registration, and (ii) in the case of any registration of Registrable Securities
on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance
with applicable SEC rules, such one hundred eighty (180) day period shall be extended for up to
sixty (60) days, if necessary, to keep the registration statement effective until all such
Registrable Securities are sold;
(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 Securities Act in order to enable the disposition of all securities
covered by such registration statement;
(c) furnish to the selling Holders such numbers of copies of a prospectus, including a
preliminary prospectus, as required by the Securities Act, and such other documents as the Holders
may reasonably request in order to facilitate their disposition of their Registrable Securities;
(d) use its commercially 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 selling Holders; provided that the Company shall not
be required to qualify to do business or to file a general consent to service of process in any
such states or jurisdictions, unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act;
(e) notify the selling Holders and the managing underwriter(s), if any, as promptly as
reasonably practicable, and (if requested) confirm such notice in writing, (i) of the issuance by
the SEC of any stop order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (ii) if the Company becomes aware, at any time
prior to consummation of the share sale and issuance that the representations and warranties of the
Company contained in any underwriting agreement, securities sale agreement, or other similar
agreement relating to the offering cease to be true and correct in any material respect, (iii) of
the receipt by the Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or overt threatening of any proceeding for such purpose, and (iv) of the
happening of any event (but not the nature or the details concerning such event) that makes any
statement made in such registration statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference or any free writing prospectus related thereto
untrue in any material respect or that requires the making of any changes in such registration
statement, prospectus, documents or free writing prospectus so that, in the case of the
registration statement, it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein,
not misleading, and that in the case of any prospectus or free writing prospectus, it will not
contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading;
(f) use its commercially reasonable efforts to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction at the reasonably earliest practical date;
(g) upon the occurrence of any event contemplated by Subsections 2.4(e)(i),
(e)(ii), (e)(iii) or (e)(iv) above, prepare a supplement or post-effective
amendment to the registration
statement or a supplement to the related prospectus or any document incorporated or deemed to
be
-7-
incorporated therein by reference or a free writing prospectus related thereto, or file any
other required document so that, as thereafter delivered to the selling Holders, such prospectus
will not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(h) use commercially reasonable efforts to cause its senior executive officers to support the
marketing of the Registrable Securities covered by the registration statement (including, without
limitation, by participation in “road shows”, holding meetings with potential investors and taking
such other actions as shall reasonably be requested by the managing underwriter(s), if any);
(i) in the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement (including any Company lock-up), in usual and customary form, with
the underwriter(s) of such offering;
(j) use its commercially reasonable efforts to cause all such Registrable Securities covered
by such registration statement to be listed on a national securities exchange or trading system and
each securities exchange and trading system (if any) on which similar securities issued by the
Company are then listed;
(k) provide a transfer agent and registrar for all Registrable Securities registered pursuant
to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not
later than the effective date of such registration;
(l) promptly make available for inspection by the selling Holders, any managing underwriter(s)
participating in any disposition pursuant to such registration statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the selling Holders, all
financial and other records, pertinent corporate documents, and properties of the Company, and
cause the Company’s officers, directors, employees, and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney, accountant, or agent,
in each case, as necessary or advisable to verify the accuracy of the information in such
registration statement and to conduct appropriate due diligence in connection therewith;
(m) notify each selling Holder, promptly after the Company receives notice thereof, of the
time when such registration statement has been declared effective or a supplement to any prospectus
forming a part of such registration statement has been filed; and
(n) after such registration statement becomes effective, notify each selling Holder of any
request by the SEC that the Company amend or supplement such registration statement or prospectus.
2.5 Furnish Information. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 2 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 is reasonably required to effect the registration of such Holder’s Registrable
Securities.
2.6 Expenses of Registration. All expenses (other than Selling Expenses) incurred in
connection with registrations, filings, or qualifications pursuant to Section 2, including
all registration, filing, and qualification fees; printers’ and accounting fees; fees and
disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed
Thirty-Five Thousand (US$35,000)
Dollars, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and
paid by
-8-
the Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Subsection 2.1 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 selling Holders shall bear such expenses
pro rata based upon the number of Registrable Securities that were to be included in the withdrawn
registration), unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one registration pursuant to Subsection 2.1(a) or Subsection 2.1(b),
as the case may be; provided further that if, at the time of such withdrawal, the Holders
shall 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 after learning of such information then the Holders shall not be
required to pay any of such expenses and shall not forfeit their right to one registration pursuant
to Subsection 2.1(a) or Subsection 2.1(b). All Selling Expenses relating to
Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the
Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.
2.7 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any registration pursuant to this Agreement as the
result of any controversy that might arise with respect to the interpretation or implementation of
this Section 2.
2.8 Indemnification. If any Registrable Securities are included in a registration
statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling
Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal
counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act)
for each such Holder; and each Person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to
each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or
other expenses reasonably incurred thereby in connection with investigating or defending any claim
or proceeding from which Damages may result, as such expenses are incurred; provided,
however, that the indemnity agreement contained in this Subsection 2.8(a) shall not
apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable for any Damages to the extent that they arise out of or are based upon actions or
omissions made in reliance upon and in conformity with written information furnished by or on
behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person
expressly for use in connection with such registration.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will
indemnify and hold harmless the Company, and 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 Securities Act, legal counsel and accountants for the Company, any underwriter (as
defined in the Securities Act), any other Holder selling securities in such registration statement,
and any controlling Person of any such underwriter or other Holder, against any Damages, in each
case only to the extent that such Damages arise out of or are based upon actions or omissions made
in reliance upon and in conformity with written information furnished by or on behalf of such
selling Holder expressly for use in connection with such registration; and each such selling Holder
will pay to the Company and each other aforementioned Person any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any claim or proceeding from which
Damages may result, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement
of any such claim or proceeding if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld; and provided
further that in
-9-
no event shall the aggregate amounts payable by any Holder by way of indemnity
or contribution under Subsections 2.8(b) and 2.8(d) exceed the proceeds from the
offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the
case of fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Subsection 2.8 of notice
of the commencement of any action (including any governmental action) for which a party may be
entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Subsection 2.8, give the
indemnifying party notice of the commencement thereof. The indemnifying party shall have the right
to participate in such action and, to the extent the indemnifying party so desires, participate
jointly with any other indemnifying party to which notice has been given, and 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 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 action. The failure to give notice to the indemnifying party within a reasonable time of
the commencement of any such action shall relieve such indemnifying party of any liability to the
indemnified party under this Subsection 2.8, only if and to the extent that such failure
materially prejudices the indemnifying party’s ability to defend such action. The failure to give
notice to the indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Subsection 2.8.
(d) To provide for just and equitable contribution to joint liability under the Securities Act
in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a
claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such indemnification may not be
enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may be required on the
part of any party hereto for which indemnification is provided under this Subsection 2.8,
then, and in each such case, such parties will contribute to the aggregate losses, claims, damages,
liabilities, or expenses to which they may be subject (after contribution from others) in such
proportion as is appropriate to reflect the relative fault of each of the indemnifying party and
the indemnified party in connection with the statements, omissions, or other actions that resulted
in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant
equitable considerations. 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 allegedly
untrue statement of a material fact, or the omission or alleged omission of a material fact,
relates to information supplied by the indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission; provided, however, that, in any such case, (x) no Holder will
be required to contribute any amount in excess of the public offering price of all such Registrable
Securities offered and sold by such Holder pursuant to such registration statement, and (y) no
Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation (as determined by a court of competent jurisdiction); and provided
further that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d),
when combined with the amounts paid or payable by such Holder pursuant to Subsection
2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling
Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e) Unless otherwise superseded by an underwriting agreement entered into in connection with
the underwritten public offering, the obligations of the Company and Holders under
-10-
this
Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a
registration under this Section 2, and otherwise shall survive the termination of this
Agreement.
2.9 Reports Under Exchange Act. With a view to making available to the Holders the
benefits of SEC Rule 144 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 shall:
(a) make and keep available adequate current public information, as those terms are understood
and defined in SEC Rule 144, at all times after the effective date of the registration statement
filed by the Company for the IPO;
(b) use commercially reasonable efforts to file with the SEC 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 the Company has become subject to such reporting requirements); and
(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) to the extent accurate, 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 registration statement filed by the Company for the IPO), the Securities Act,
and the Exchange Act (at any time after the Company 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 the Company so qualifies); and (ii) 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 (at any time after the Company has become
subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time
after the Company so qualifies to use such form).
2.10 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 at least a
majority of the Registrable Securities then outstanding, enter into any agreement with any holder
or prospective holder of any securities of the Company that would provide to such holder the right
to include securities in any registration on other than on a subordinate basis after all Holders
have had the opportunity to include in the registration and offering all shares of Registrable
Securities that they wish to so include.
2.11 “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 IPO registration and ending on the date specified by
the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days,
or such other period as may be requested by the Company or an underwriter to accommodate regulatory
restrictions on (1) the publication or other distribution of research reports and (2) analyst
recommendations and opinions, including, but not limited to, the restrictions contained in FINRA
Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (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 (directly or indirectly) for Common Stock held immediately
before the effective date of the registration statement for such offering 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 such securities, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or
otherwise. The foregoing provisions of this Subsection 2.11 shall be applicable to
the Holders only if all officers, directors and stockholders individually owning more than one
percent (1%) of the Company’s
-11-
outstanding Common Stock (after giving effect to conversion into
Common Stock of all outstanding Class A Common Stock and Class B Common Stock) are subject to the
same restrictions. The underwriters in connection with such registration are intended third-party
beneficiaries of this Subsection 2.11 and shall have the right, power, and authority to
enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to
execute such agreements as may be reasonably requested by the underwriters in connection with such
registration that are consistent with this Subsection 2.11 or that are necessary to give
further effect thereto. Any discretionary waiver or termination of the restrictions of any or all
of such agreements by the Company or the underwriters shall apply pro rata to all Holders and other
stockholders subject to such agreements, based on the number of shares subject to such agreements.
2.12 Restrictions on Transfer.
(a) The Class A Common Stock, Class B Common Stock and the Registrable Securities shall not be
sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue
stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or
transfer, except upon the conditions specified in this Agreement and the Right of First Refusal and
Co-Sale Agreement, which conditions are intended to ensure compliance with the provisions of the
Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of
the Class A Common Stock, Class B Common Stock and the Registrable Securities held by such Holder
to agree to take and hold such securities subject to the provisions and upon the conditions
specified in this Agreement.
(b) Each certificate or instrument representing (i) the Class A Common Stock, (ii) the Class B
Common Stock (iii) the Registrable Securities, and (iv) any other securities issued in respect of
the securities referenced in clauses (i), (ii) and (iii), upon any stock split, stock dividend,
recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the
provisions of Subsection 2.12(c)) be stamped or otherwise imprinted with a legend
substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
The Holders consent to the Company making a notation in its records and giving instructions to any
transfer agent of the Restricted Securities in order to implement the restrictions on transfer set
forth in this Subsection 2.12.
(c) The Holder of each certificate representing Restricted Securities, by acceptance thereof,
agrees to comply in all respects with the provisions of this Section 2. Before any
proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a
registration
statement under the Securities Act covering the proposed transaction, the Holder thereof shall
give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer.
Each such notice shall
-12-
describe the manner and circumstances of the proposed sale, pledge, or
transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at
such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal
opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect
that the proposed transaction may be effected without registration under the Securities Act; (ii) a
“no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such
Restricted Securities without registration will not result in a recommendation by the staff of the
SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory
to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the
Restricted Securities may be effected without registration under the Securities Act, whereupon the
Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted
Securities in accordance with the terms of the notice given by the Holder to the Company. The
Company will not require such a legal opinion or “no action” letter (x) in any transaction in
compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted
Securities to an Affiliate of such Holder for no consideration; provided that each transferee
agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate or
instrument evidencing the Restricted Securities transferred as above provided shall bear, except if
such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in
Subsection 2.12(b), 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 provisions of the Securities Act.
2.13 Termination of Registration Rights. The right of any Holder to request
registration or inclusion of Registrable Securities in any registration pursuant to Subsection 2.1
or Subsection 2.2 shall terminate upon the earliest to occur of:
(a) the closing of a Deemed Liquidation Event, as such term is defined in the Charter;
(b) such time as Rule 144 or another similar exemption under the Securities Act is available
for the sale of all of such Holder’s shares without limitation during a six (6)-month period
without registration; and
(c) the fifth anniversary of the IPO.
3. Information Rights.
3.1 Delivery of Financial Statements. The Company shall deliver to each Major
Investor:
(a) as soon as practicable, but in any event within ninety (90) days after the end of each
fiscal year of the Company, (i) a balance sheet as of the end of such year, (ii) statements of
income and of cash flows for such year, and a comparison between (x) the actual amounts as of and
for such fiscal year and (y) the comparable amounts for the prior year and as included in the
Budget (as defined in Subsection 3.1(e)) for such year, with an explanation of any material
differences between such amounts and a schedule as to the sources and applications of funds for
such year, (iii) a statement of stockholders’ equity as of the end of such year, (iv) a statement
showing the number of shares of each class and series of capital stock and securities convertible
into or exercisable for shares of capital stock outstanding at the end of the period, the Common
Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable
for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of
shares of issued stock options and stock options not yet issued
but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors
to calculate their respective percentage equity ownership in the Company, and certified by the
chief financial officer or chief executive officer of the Company as being true, complete, and
correct; and (v) other information as
-13-
determined by the Board of Directors, all such financial
statements audited and certified by independent public accountants of regionally recognized
standing selected by the Company;
(b) as soon as practicable, but in any event within ten (10) days after the end of each of the
first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of
cash flows for such fiscal quarter, and an unaudited balance sheet, a statement of stockholders’
equity as of the end of such fiscal quarter, and other information as determined by the Board of
Directors, all prepared in accordance with GAAP (except that such financial statements may (i) be
subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be
required in accordance with GAAP);
(c) as soon as practicable, but in any event within seven (7) days of the end of each month,
unaudited statements of income and of cash flows for such month, and an unaudited balance sheet as
of the end of such month, all prepared in accordance with GAAP (except that such financial
statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes
thereto that may be required in accordance with GAAP);
(d) as soon as practicable, but in any event within ten (10) days after the end of each of the
first three (3) quarters of each fiscal year of the Company, a statement showing the number of
shares of each class and series of capital stock and securities convertible into or exercisable for
shares of capital stock outstanding at the end of the period, the Common Stock issuable upon
conversion or exercise of any outstanding securities convertible or exercisable for Common Stock
and the exchange ratio or exercise price applicable thereto, and the number of shares of issued
stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient
detail as to permit the Major Investors to calculate their respective percentage equity ownership
in the Company, and certified by the chief financial officer or chief executive officer of the
Company as being true, complete, and correct;
(e) as soon as practicable, but in any event within thirty (30) days prior to end of each
fiscal year, a budget and business plan forecasting, the Company’s revenues, expenses and cash
position on a month-to-month basis for the next fiscal year (collectively, the “Budget”), approved
by the Board of Directors and prepared on a monthly basis, including balance sheets, income
statements, and statements of cash flow for such months and, promptly after prepared, any other
budgets or revised budgets prepared by the Company; and
(f) 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 reasonably request;
provided, however, that the Company shall not be obligated under this Subsection
3.1 to provide information (i) that the Company reasonably determines in good faith to be a
trade secret or confidential information (unless covered by an enforceable confidentiality
agreement, in form reasonably acceptable to the Company) or (ii) the disclosure of which would
adversely affect the attorney-client privilege between the Company and its counsel.
If, for any period, the Company has any subsidiary whose accounts are consolidated with those of
the Company, then in respect of such period the financial statements delivered pursuant to the
foregoing sections shall be the consolidated and consolidating financial statements of the Company
and all such consolidated subsidiaries.
Notwithstanding anything else in this Subsection 3.1 to the contrary, the Company may cease
providing the information set forth in this Subsection 3.1 during the period starting with
the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a
registration statement if it reasonably concludes it must do so to comply with the SEC rules
applicable to such registration statement and related
-14-
offering; provided that the Company’s
covenants under this Subsection 3.1 shall be reinstated at such time as the Company is no
longer actively employing its commercially reasonable efforts to cause such registration statement
to become effective.
3.2 Inspection. The Company shall permit each Major Investor, at such Major
Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and
records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal
business hours of the Company as may be reasonably requested by the Major Investor; provided,
however, that the Company shall not be obligated pursuant to this Subsection 3.2 to
provide access to any information that it reasonably and in good faith considers to be a trade
secret or confidential information (unless covered by an enforceable confidentiality agreement, in
form reasonably acceptable to the Company,) or the disclosure of which would adversely affect the
attorney-client privilege between the Company and its counsel.
3.3 Termination of Information Rights. The covenants set forth in Subsections
3.1 and 3.2 shall terminate and be of no further force or effect (i) immediately before
but subject to the consummation of the IPO, (ii) when the Company first becomes subject to the
periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a
Deemed Liquidation Event, as such term is defined in the Charter, whichever event occurs first.
3.4 Confidentiality. Each Investor agrees that such Investor will keep confidential
and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the
Company) any confidential information obtained from the Company pursuant to the terms of this
Agreement (including notice of the Company’s intention to file a registration statement), unless
such confidential information (a) is known or becomes known to the public in general (other than as
a result of a breach of this Subsection 3.4 by such Investor), (b) is or has been
independently developed or conceived by the Investor without use of the Company’s confidential
information, or (c) is or has been made known or disclosed to the Investor by a third party without
a breach of any obligation of confidentiality such third party may have to the Company;
provided, however, that an Investor may disclose confidential information (i) to its
attorneys, accountants, consultants, and other professionals to the extent necessary to obtain
their services in connection with monitoring its investment in the Company; (ii) to any prospective
purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to
be bound by the provisions of this Subsection 3.4; (iii) to any existing or prospective
Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the
ordinary course of business, provided that such Investor informs such Person that such
information is confidential and directs such Person to maintain the confidentiality of such
information; or (iv) as may otherwise be required by law, provided that the Investor
promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent
of any such required disclosure.
4. Rights to Future Stock Issuances.
4.1 Right of First Offer. Subject to the terms and conditions of this Subsection
4.1 and applicable securities laws, if the Company proposes to offer or sell any New
Securities, the Company shall first offer such New Securities to each Investor. A Major Investor
shall be entitled to apportion the right of first offer hereby granted to it among itself and its
Affiliates in such proportions as it deems appropriate.
(a) The Company shall give notice (the “Offer Notice”) to each Investor, 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.
-15-
(b) By notification to the Company within twenty (20) days after the Offer Notice is given,
each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified
in the Offer Notice, up to that portion of such New Securities which equals the proportion that the
Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise,
as applicable, of the Class A Common Stock, Class B Common Stock and any other Derivative
Securities then held, by such Investor bears to the total Common Stock of the Company then
outstanding (assuming full conversion and/or exercise, as applicable, of all Class A Common Stock,
Class B Common Stock and other Derivative Securities). At the expiration of such twenty (20) day
period, the Company shall promptly notify each Investor that elects to purchase or acquire all the
shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do
likewise. During the ten (10) day period commencing after the Company has given such notice, each
Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in
addition to the number of shares specified above, up to that portion of the New Securities for
which Investors were entitled to subscribe but that were not subscribed for by the Investors which
is equal to the proportion that the Common Stock issued and held, or issuable (directly or
indirectly) upon conversion and/or exercise, as applicable, of Class A Common Stock, Class B Common
Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the
Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise,
as applicable, of the Class A Common Stock, Class B Common Stock and any other Derivative
Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed
shares. The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the
later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale
of New Securities pursuant to Subsection 4.1(c).
(c) If all New Securities referred to in the Offer Notice are not elected to be purchased or
acquired as provided in Subsection 4.1(b), the Company may, during the ninety (90) day
period following the expiration of the periods provided in Subsection 4.1(b), offer and
sell 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 Offer
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 thirty (30) 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 Investors in accordance with this Subsection
4.1.
(d) The right of first offer in this Subsection 4.1 shall not be applicable to (i)
Exempted Securities (as defined in the Charter); (ii) shares of Common Stock issued in the IPO; and
(iii) securities issued in connection with the acquisition by the Company of voting control or all
or substantially all of the assets of another business entity in a transaction approved by the
Board of Directors.
(e) The right of first offer set forth in this Subsection 4.1 shall be reduced with
respect to any Investor who fails to purchase, in any transaction subject to this Subsection
4.1, all of such Investor’s pro rata amount of the New Securities allocated (or, if less than
such Investor’s pro rata amount is offered by the Company, such lesser amount so offered). to such
Investor pursuant to this Subsection 4.1. Such Investor shall thereafter have the right to
participate in future offers only to the extent of its percentage participation in the previous
offer, if any.
(f) The right of first offer set forth in this Subsection 4.1 may be waived as to the
Investors by PTT Chemical International Private Limited (“PTTCH”).
(g) Any issuance of New Securities not made in compliance with the requirements of this
Agreement shall be null and void ab initio, shall not be recorded on the books of the
-16-
Company or
its transfer agent and shall not be recognized by the Company. Each party hereto acknowledges and
agrees that any breach of this Agreement would result in substantial harm to the other parties
hereto for which monetary damages alone could not adequately compensate. Therefore, the parties
hereto unconditionally and irrevocably agree that any non-breaching party hereto shall be entitled
to seek protective orders, injunctive relief and other remedies available at law or in equity
(including, without limitation, seeking specific performance or the rescission of purchases, sales
and other issuances of New Securities not made in strict compliance with this Agreement).
4.2 Termination. The covenants set forth in Subsection 4.1 shall terminate
and be of no further force or effect (i) immediately before but subject to the consummation of the
IPO, or (ii) upon a Deemed Liquidation Event, as such term is defined in the Charter, whichever
event occurs first.
5. Additional Covenants.
5.1 Indemnification Agreements; D&O Insurance. The Company will enter into standard
indemnification agreements with each of the members of the Board of Directors. The Company shall
use its commercially reasonable efforts to obtain, within ninety (90) days of the date hereof, from
financially sound and reputable insurers Directors and Officers liability insurance in an amount
and on terms and conditions satisfactory to a majority of the Board of Directors, and will use
commercially reasonable efforts to cause such insurance policies to be maintained until such time
as the Board of Directors determines that such insurance should be discontinued.
5.2 Board Matters. Unless otherwise determined by the vote of a majority of the
directors then in office (including at least one director nominated by PTTCH), the Board of
Directors shall meet at least quarterly in accordance with an agreed-upon schedule. A quorum for
any meeting of the Board of Directors shall be a majority of the members of the Board of Directors
then in office, including at least one director nominated by PTTCH and at least one director
nominated by any of Xxxxxxx LDK, LLC, Plainfield Direct LLC. or Green Chem Second Edition, LLC.
The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel
expenses incurred (consistent with the Company’s travel policy) in connection with attending
meetings of the Board of Directors. Each non-employee director shall be entitled in such person’s
discretion to be a member of any Board committee.
5.3 Nondisclosure Agreements. The Company will cause the Chief Executive Officer of
the Company and each person now or hereafter employed by it or by any subsidiary (or engaged by the
Company or any subsidiary as a consultant/independent contractor) with access to confidential
information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment
agreement in the form previously made available to PTTCH and its counsel. In addition, the Company
will revise such form for future use based on PTTCH’s reasonable input and will ensure that all
individuals who are now or are hereafter employees or consultants of the Company with access to
confidential information and/or trade secrets following the Closing will enter into a nondisclosure
and proprietary rights assignment agreement in such revised form.
5.4 Noncompetition Agreements. The Company will cause each officer, management level
employee and key scientific and engineering employee now employed by it or by any subsidiary to
enter into a noncompetition agreement in the form previously made available to PTTCH and its
counsel.
In addition, the Company will revise such form for future use based on PTTCH’s reasonable
input and will ensure that all individuals who hereafter enter into new employment contracts or
become officers, management level employees and key scientific and engineering employees following
the Closing will enter into a noncompetition agreement in such revised form with a term which the
Company believes in its reasonable opinion, is the maximum allowed by the law of the individual’s
employing jurisdiction but in any event not exceeding twenty-four (24) months.
-17-
5.5 Employment Agreements. The Company has or will cause each senior management level
employee of the Company to enter into the form of employment offer letter or agreement in the forms
previously made available to PTTCH and its counsel. In addition, the Company will revise such
forms for future use based on PTTCH’s reasonable input and will ensure that individuals who are now
or are hereafter members of senior management of the Company following the Closing will enter into
offer letters or agreement in such revised forms.
5.6 Successor Indemnification. If the Company or any of its successors or assignees
consolidates with or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger, or transfers all of its assets, the proper
provisions shall be made so that the successors and assignees of the Company assume the obligations
of the Company with respect to indemnification of members of the Board of Directors as in effect
immediately before such transaction, whether such obligations are contained in the Company’s
Bylaws, the Charter, or elsewhere, as the case may be.
5.7 Termination of Covenants. The covenants set forth in this Section 5,
except for Subsection 5.6, shall terminate and be of no further force or effect (i)
immediately before but subject to the consummation of the IPO, (ii) as to any Investor, at such
time as the Investor holds less than 10% of the Registrable Securities it acquires at the Closing
(as defined in the Purchase Agreement) or in the Debt Conversion, or (iii) upon a Deemed
Liquidation Event, as such term is defined in the Charter, whichever event occurs first.
6. Miscellaneous.
6.1 Successors and Assigns. The rights under this Agreement may be assigned (but only
with all related obligations) by a Holder to a transferee that receives Registrable Securities in
compliance with this Agreement and the Right of First Refusal and Co-Sale Agreement that (i) is a
partner or an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the
benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii)
after such transfer, holds at least 500,000 shares of Registrable Securities (subject to
appropriate adjustment for stock splits, stock dividends, combinations, and other
recapitalizations); provided, however, that (w) all such transfers of Registrable Securities have
been made in compliance with this Agreement and the Right of First Refusal and Co-Sale Agreement;
(x) the Company is, within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee and the Registrable Securities with respect to which such
rights are being transferred; and (y) such transferee agrees in a written instrument delivered to
the Company to be bound by and subject to the terms and conditions of this Agreement, including the
provisions of Subsection 2.11. For the purposes of determining the number of shares of
Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate
or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust
for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be
aggregated together with those of the transferring Holder; provided further that
all transferees who would not qualify individually for assignment of rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action
under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are
binding upon the respective successors and permitted assignees
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted assignees any
rights, remedies, obligations or liabilities under or by reason of this Agreement, except as
expressly provided herein.
6.2 Governing Law. This Agreement and any controversy arising out of or relating to
this Agreement shall be governed by and construed in accordance with the internal laws of the State
of New
-18-
York, without regard to conflict of law principles that would result in the application of
any law other than the law of the State of New York.
6.3 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. Counterparts may be delivered via facsimile, electronic mail (including pdf) or other
transmission method and any counterpart so delivered shall be deemed to have been duly and validly
delivered and be valid and effective for all purposes.
6.4 Titles and Subtitles. The titles and subtitles used in this Agreement are for
convenience only and are not to be considered in construing or interpreting this Agreement.
6.5 Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual
receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by
electronic mail or facsimile during the recipient’s normal business hours, and if not sent during
normal business hours, then on the recipient’s next business day, provided in either case, that the
facsimile transmission is promptly confirmed by telephone; (iii) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1)
business day after the business day of deposit with a nationally recognized overnight courier,
freight prepaid, specifying next-day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at their addresses as set forth on
Schedule A hereto, or to the principal office of the Company and to the attention of the
Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or
address as subsequently modified by written notice given in accordance with this Subsection
6.5. If notice is given to the Company, a copy shall also be sent to (a) DLA Piper LLP (US),
0000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxxxxxxxx 00000-0000, XXX, Attention: Xxxxxx X. Mo,
facsimile: 000-000-0000, email: xxxxxx.xx@xxxxxxxx.xxx and (b) Xxxxx X. Xxxxxxxxx, XxXxxxxxx Will &
Xxxxx, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, XXX, facsimile: 000-000-0000;
email:xxxxxxxxxx@xxx.xxx. If notice is given to PTTCH, a copy shall also be given to Xxxxx & Xxxxx
(Thailand) Co., Ltd., 00xx Xxxxx Xxxxxxxx Xxxxxxxx Xxxxx XXX, 130-132 Wireless Road, Lumpini
Pathumwan, Bangkok 10330, Thailand, Attention: Arkrapol Pichedvanichok, facsimile: x00 (0)0 000
0000, email: xxxxxxxx.xxxxxxxxxxxxxx@xxxxxxxxxx.xxx.
6.6 Amendments and Waivers. 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
and the holders of at least a majority of the Registrable Securities then outstanding; provided
that the Company may in its sole discretion waive compliance with Subsection 2.12(c)
(and the Company’s failure to object promptly in writing after notification of a proposed
assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver);
and provided further that any provision hereof may be waived by any waiving party
on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing,
this Agreement may not be amended or terminated and the observance of any term hereof may not be
waived with respect to any Investor without the written consent of such Investor. The Company shall
give prompt notice of any amendment or termination hereof or waiver hereunder, in each case with
respect to a particular Investor, to each other Investor. Any amendment, termination, or waiver
effected in
accordance with this Subsection 6.6 shall be binding only on those parties who have
expressly consented in writing thereto. No waivers of or exceptions to any term, condition, or
provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such term, condition, or provision.
-19-
6.7 Severability. In case any one or more of the provisions contained in this
Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement,
and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it
will be valid, legal, and enforceable to the maximum extent permitted by law.
6.8 Aggregation of Stock. All shares of Registrable Securities held or acquired by
Affiliates shall be aggregated together for the purpose of determining the availability of any
rights under this Agreement and such Affiliated persons may apportion such rights as among
themselves in any manner they deem appropriate.
6.9 Additional Investors. Notwithstanding anything to the contrary contained herein,
if the Company issues additional shares of Class A Common Stock or Class B Common Stock after the
date hereof (provided that such shares are issued in accordance with the Charter and this
Agreement, as applicable), any acquirer of such shares of Class A Common Stock or Class B Common
Stock may become a party to this Agreement by executing and delivering an additional counterpart
signature page to this Agreement and thereafter shall be deemed an “Investor” for all purposes
hereunder. In such case, Schedule A hereto may be amended by the Company to add such
person without the consent of the other parties hereto.
6.10 Entire Agreement. This Agreement (including any Schedules and Exhibits hereto),
the Charter and the other Transaction Agreements (as defined in the Purchase Agreement) constitute
the full and entire understanding and agreement among the parties with respect to the subject
matter hereof, and any other written or oral agreement relating to the subject matter hereof
existing between the parties is expressly canceled.
6.11 Dispute Resolution. Any unresolved controversy or claim arising out of or
relating to this Agreement, except (i) as otherwise provided in this Agreement or (ii) any such
controversies or claims arising out of either party’s intellectual property rights for which a
provisional remedy or equitable relief is sought, shall be submitted to arbitration administered by
the American Arbitration Association (the “AAA”) in accordance with the International Commercial
Arbitration Rules then in effect. There shall be one (1) arbitrator mutually agreed upon by the
parties from the names of potential arbitrators proposed by the AAA. If no agreement on the sole
arbitrator can be reached within thirty (30) days after names of potential arbitrators have been
proposed by the AAA, then the AAA shall select the sole arbitrator, who shall have at least ten
(10) years experience in corporate finance transactions of the type provided for in this Agreement.
The arbitration shall take place in New York, New York, and any award shall be final and binding
and judgment thereon may be entered in any court having jurisdiction thereof. Each party will bear
its own costs in respect of any disputes arising under this Agreement. Each of the parties to this
Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District
Court for the Southern District of New York or any court of the State of New York having subject
matter jurisdiction.
6.12 Delays or Omissions. No delay or omission to exercise any right, power, or
remedy accruing to any party under this Agreement, upon any breach or default of any other party
under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or
nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach
or default, or to 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. All
remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
[Remainder of Page Intentionally Left Blank]
-20-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| COMPANY: MYRIANT TECHNOLOGIES, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chairman and CEO | |||
| Address: 0 Xxxxxxxx Xxxxx Xxxxxxxxxxxx Xxxx II, Suite 301 Quincy, MA 02169-4801 Facsimile: (000) 000-0000 Email: xxxxxx@xxxxxxx.xxx |
||||
| INVESTORS: PTT CHEMICAL INTERNATIONAL PRIVATE LIMITED |
||||
| By: | /s/ Narongsak Jivakanun | |||
| Name: | Narongsak Jivakanun | |||
| Title: | Chief Executive Officer | |||
| GREEN CHEM HOLDINGS, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | President | |||
| GREEN CHEM SECOND EDITION, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | President | |||
| PLAINFIELD FINANCE II LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Co-General Counsel | |||
| PLAINFIELD DIRECT LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Co-General Counsel | |||
| XXXXXXX X. XXXXX |
||||
| /s/ Xxxxxxx X. Xxxxx | ||||
Signature Page to Myriant Technologies, Inc. Investors’ Rights Agreement
SCHEDULE A
Investors
Name and Address
PTT Chemical International Private Limited
000X Xxxxxxx Xxxx, #00-00/00
Xxxx Xxx Xxxx Xxxxx X
Xxxxxxxxx 000000
Attn: Mr. Narongsak Jivakanun
000X Xxxxxxx Xxxx, #00-00/00
Xxxx Xxx Xxxx Xxxxx X
Xxxxxxxxx 000000
Attn: Mr. Narongsak Jivakanun
Fax: x00.0.000.0000
Plainfield Direct LLC and
Plainfield Finance II LLC
c/o Plainfield Asset Management, LLC
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Xxx.xxxxx@xxxx.xxx
Fax: 000.000.0000
Plainfield Finance II LLC
c/o Plainfield Asset Management, LLC
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Xxx.xxxxx@xxxx.xxx
Fax: 000.000.0000
Green Chem Holdings, LLC
0000 Xxxx Xxxxxxx X., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
0000 Xxxx Xxxxxxx X., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Green Chem Second Edition, LLC
0000 Xxxx Xxxxxxx X., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
0000 Xxxx Xxxxxxx X., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxx Xxxx XX, Xxxxx 000
Xxxxxx, XX 00000-0000
xxxxxx@xxxxxxx.xxx
Fax: 000.000.0000
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxx Xxxx XX, Xxxxx 000
Xxxxxx, XX 00000-0000
xxxxxx@xxxxxxx.xxx
Fax: 000.000.0000
