QUINSTREET, INC. SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT MAY 28, 2003
Table Of Contents
Page | ||||||||
1. | Definitions | 1 | ||||||
2. | Registration Rights | 3 | ||||||
2.1 | Restrictions on Transfer | 3 | ||||||
2.2 | Required Registration | 5 | ||||||
2.3 | Incidental Registration | 6 | ||||||
2.4 | Underwriting Arrangements Applicable to Required and Incidental Registrations | 7 | ||||||
2.5 | Registration Procedures | 8 | ||||||
2.6 | Expenses | 10 | ||||||
2.7 | Indemnification | 10 | ||||||
2.8 | Exceptions to and Termination of Registration Obligations | 12 | ||||||
2.9 | Cooperation | 12 | ||||||
2.10 | “Market Standoff” Agreement | 13 | ||||||
2.11 | Limitations on Additional Registration Rights | 13 | ||||||
3. | Covenants of the Company | 13 | ||||||
3.1 | Corporate Existence | 13 | ||||||
3.2 | Books of Account | 13 | ||||||
3.3 | Furnishing of Financial Statements and Information | 14 | ||||||
3.4 | Inspection | 15 | ||||||
3.5 | Subsidiaries | 15 | ||||||
3.6 | Board Observation Rights | 15 | ||||||
3.7 | Key-Person Insurance | 15 | ||||||
3.8 | Stock Options Vesting | 15 | ||||||
3.9 | Equity Incentive Plan Share Reserve | 15 | ||||||
3.10 | Payment of Taxes | 15 | ||||||
3.11 | Negative Covenants | 16 | ||||||
4. | Rights Of First Refusal And Co-Sale | |||||||
4.1 | Right of First Refusal | 16 | ||||||
4.2 | Right of Co-Sale on Sales by Principal Shareholder | 17 | ||||||
4.3 | Transfers in Violation Void | 20 |
Table Of Contents
(CONTINUED)
(CONTINUED)
Page | ||||||||
4.4 | Legend | 20 | ||||||
(c) Removal of Legend | 20 | |||||||
5. | Voting; Board Composition, Etc. | 20 | ||||||
5.1 | Voting Obligations | 20 | ||||||
5.2 | Limitation | 21 | ||||||
5.3 | Waiver of Right to Abstain or be Absent from a Meeting | 21 | ||||||
5.4 | Limitations on Transfer | 21 | ||||||
6. | Termination | 21 | ||||||
6.1 | Termination of Certain Covenants | 21 | ||||||
6.2 | Termination of Rights of First Refusal and Co-Sale | 21 | ||||||
7. | Miscellaneous | 22 | ||||||
7.1 | Waivers, Amendments and Approvals | 22 | ||||||
7.2 | Oral Changes, Waivers, Etc. | 24 | ||||||
7.3 | Notices | 24 | ||||||
7.4 | Governing Law | 24 | ||||||
7.5 | Survival of Representations, Warranties, Agreements, Etc. | 24 | ||||||
7.6 | Delays or Omissions | 24 | ||||||
7.7 | Other Remedies | 25 | ||||||
7.8 | Attorneys’ Fees | 25 | ||||||
7.9 | Entire Agreement | 25 | ||||||
7.10 | Severability | 25 | ||||||
7.11 | Successors and Assigns | 25 | ||||||
7.12 | Counterparts | 26 | ||||||
7.13 | Aggregation of Series Preferred and Voting Preferred | 26 |
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Second Amended and Restated Investor Rights Agreement (the “Agreement”) is made
and entered into as of May 28, 2003, by and among QuinStreet, Inc., a California Corporation (the
“Company”), Xxxxxxx X. Xxxxxxx (the “Principal Shareholder”), and the investors listed on Schedule
1 attached hereto and as amended from time to time (each, an “Investor” and collectively, the
“Investors”).
Recitals
Whereas, the Company, the Principal Shareholder and certain of the Investors (the
“Investors”) are parties to that certain Amended and Restated Investor Rights Agreement, dated as
of October 29, 2001 (the “Prior Agreement”);
Whereas, the Company, the Principal Shareholder and certain of the Investors wish to
amend Section 5 of the Prior Agreement to provide that the Board of Directors of the Company will
consist of between five (5) and nine (9) directors and to provide procedures for the election of
the directors;
Whereas, pursuant to Section 7.1(d) of the Prior Agreement, the Principal Shareholder
and Investors holding sixty-six and two-thirds percent (66 2/3%) of the Voting Preferred then
outstanding may amend Section 5 of the Prior Agreement;
Whereas, the Company, the Principal Shareholder and Investors holding sixty-six and
two-thirds percent (66 2/3%) of the outstanding Voting Preferred have executed this Agreement so as
to amend, restate and supersede the Prior Agreement in its entirety.
Agreement
Now, Therefore, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the
Holders hereby agree as follows.
1. Definitions. As used in this Agreement, the following terms not otherwise defined
elsewhere in this Agreement shall have the meanings as set forth herein
1.1 “Affiliate” means any Person that controls, is controlled by or is under common control
with any other Person or Persons. For the purposes of this definition, “control” has the meaning
specified as of the date of this Agreement for that word in Rule 405 promulgated by the Commission
under the Securities Act.
1.1 “Board” means the Board of Directors of the Company.
1.2 “Series B Closing Date” shall mean May 20, 2000.
1.
1.3 “Commission” means the United States Securities and Exchange Commission, and any successor
thereto.
1.4 “Common Stock” means the Company’s common stock.
1.5 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated from time to time thereunder.
1.6 “Holders” means (a) holders as of the date of this Agreement of Registrable Securities,
each of whom is a party to this Agreement, and (b) any subsequent legal or beneficial owner of
Registrable Securities who has become a party to this Agreement in accordance with Section 2.1 of
this Agreement.
1.7 “Major Investor” shall mean any Investor and its affiliates, if any, owning (individually
or collectively) at least 500,000 shares of Registrable Securities (subject to appropriate
adjustment to reflect stock splits, stock dividends, reorganizations and other capitalization
changes).
1.8 “Person” means an individual, partnership, limited partnership, corporation, business
trust, limited liability company, an association, joint stock company, a trust, unincorporated
organization, joint venture, or other entity of whatever nature.
1.9 “Principal Shareholder” means Xxxxxxx X. Xxxxxxx.
1.10 “Purchase Agreement” has the meaning specified in the Recitals.
1.11 “Qualified Public Offering” means the closing of an underwritten public offering of
Common Stock by the Company at a price per share of $5.90 and gross proceeds to the Company of not
less than $25,000,000 (before deduction of underwriters’ commissions and expenses).
1.12 “Registrable Securities” means (a) any shares of Common Stock which have been issued or
are issuable upon the conversion of the Series Preferred and (b) any shares of Common Stock issued
as a dividend, stock split, reclassification, recapitalization or other distribution with respect
to or in exchange for or replacement of any Registrable Securities, provided, however, that shares
of Common Stock shall no longer be Registrable Securities when they shall have been effectively
registered under the Securities Act and sold by the Holder thereof in accordance with such
registration or sold by the Holder pursuant to Section 4(1) of the Securities Act or Rule 144, or
when registration under the Securities Act would no longer be required for the immediate public
distribution of such shares of Common Stock as a result of the provisions of Rule 144.
1.13 “Register,” “registered” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act and the declaration or
ordering of the effectiveness of such Registration Statement.
2.
1.14 “Registration Rights Agreement” means that certain Registration Rights Agreement by and
among the Company and purchasers of the Company’s Series A Preferred Stock, dated as of July 15,
1999.
1.15 “Right of Co-Sale Agreement” means that certain Right of Co-Sale Agreement by and among
the Company, the Principal Shareholder and purchasers of the Company’s Series A Preferred Stock,
dated as of July 15, 1999.
1.16 “Rule 144” means Rule 144 promulgated by the Commission under the Securities Act, as such
rule may be amended from time to time, or any successor rule thereto.
1.17 “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated from time to time thereunder.
1.18 “Series A Preferred Stock Purchase Agreement” means that certain Series A Preferred Stock
Purchase Agreement by and among the Company and purchasers of the Company’s Series A Preferred
Stock, dated as of July 15, 1999.
1.19 “Series Preferred” (a) the Series A Preferred Stock, the Series B Preferred Stock and the
Series C Preferred Stock of the Company purchased by or issued to the Investors (subject to
appropriate adjustment to reflect stock splits, stock dividends, reorganizations and other
capitalization changes effected after the Series B Closing Date), (b) any shares of Series
Preferred issued in payment of a dividend upon any share of Series Preferred and (c) any other
Registrable Securities issued as a dividend or other distribution with respect to, or in
replacement of, any Series Preferred.
1.20 “Voting Agreement” means that certain Voting Agreement by and among the Company and
purchasers of the Company’s Series A Preferred Stock, dated as of July 15, 1999.
1.21 “Voting Preferred” (a) the Series A Preferred Stock and the Series B Preferred Stock of
the Company purchased by or issued to the Investors (subject to appropriate adjustment to reflect
stock splits, stock dividends, reorganizations and other capitalization changes effected after the
Series B Closing Date), (b) any shares of Voting Preferred issued in payment of a dividend upon any
share of Voting Preferred and (c) any other Registrable Securities issued as a dividend or other
distribution with respect to, or in replacement of, any Voting Preferred.
2. Registration Rights.
2.1 Restrictions on Transfer.
3.
(a) Each Holder agrees not to make any disposition of all or any portion of the Series
Preferred or Registrable Securities unless and until:
(i) There is then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such registration statement;
or
(ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B)
such Holder shall have notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii) above, no such registration
statement or opinion of counsel shall be necessary for a transfer by a Holder (A) which is (1) a
partnership to its partners or former partners in accordance with partnership interests, (2) a
corporation to its stockholders in accordance with their interests in the corporation, or (3) a
limited liability company to its members or former members in accordance with their interests in
the limited liability company, or (B) to a member of the Holder’s member or to a trust for the
benefit of an individual Holder; provided that in each case the transferee will be subject to the
terms of this Agreement to the same extent as if he were an original Holder hereunder.
(b) Each certificate representing Series Preferred or Registrable Securities shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise imprinted with a
legend substantially similar to the following (in addition to any legend required under applicable
state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended certificates at the request
of any holder thereof if the holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration, qualification or
legend.
4.
(d) Any legend endorsed on an instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be removed upon receipt by the
Company of an order of the appropriate blue sky authority authorizing such removal.
2.2 Required Registration.
(a) If, at any time after the closing of the Company’s initial public offering of its Common
Stock, the Company shall receive a written request from the record Holder or Holders of an
aggregate of at least a majority of the Registrable Securities for registration under the
Securities Act of the then Registrable Securities not previously registered under the Securities
Act and sold (a “Registration Request”):
(i) the Company shall promptly give written notice to all other record Holders of Registrable
Securities that such registration is to be effected (“Registration Notice”).
(ii) subject to the limitations and requirements set forth in this Section 2.2, the Company
shall use its best efforts to prepare and file a registration statement under the Securities Act,
covering the Registrable Securities that are the subject of the Registration Request and such
additional Registrable Securities for which it has received written requests to register by such
other record Holders within thirty (30) days after the delivery of the Registration Notice, and
shall use its best efforts to cause such registration statement to become effective as soon as is
practicable after receipt of the Registration Request.
(b) If the Company is required to use Form S-1 (or equivalent form), the Company shall be
obligated to (a) proceed with filing the Registration Statement only if (i) the Registration
Request demands registration of at least 20% of the then Registrable Securities not previously
registered under the Securities Act or (ii) the anticipated gross offering proceeds based upon the
public offering price per share proposed by the underwriters or based upon the current trading
price is at least $5,000,000 and (b) prepare, file and use its best efforts to cause to become
effective no more than one (1) registration statement on Form S-1 pursuant to Registration Requests
made under this Section 2.2. If the Company meets the requirements for using Form S-3 (or
equivalent form), the Company shall be obligated to (a) proceed with filing the Registration
Statement only if the anticipated gross offering proceeds based upon the public offering price per
share proposed by the underwriters or based upon the current trading price is at least $1,000,000
and (b) prepare, file and use its best efforts to cause to become effective no more than one (1)
registration statement on Form S-3 each twelve (12) months measured from the date of the
Registration Request.
(c) If the Company shall furnish to such Holder(s) within thirty (30) days of a Registration
Notice a certificate signed by the Chief Executive Officer of the Company stating that (i) the
Company, pursuant to an action approved by the Board of Directors, has already a present plan to
commence preparation of a Registration Statement and to file the same within ninety (90) days, or
(ii) in the good faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement to be filed on or
before the date filing would be required under this Agreement and it is therefore essential to
defer the filing of such registration statement, then the Company shall have
5.
the right to defer such filing for a period ending not later than one hundred twenty (120)
days from the latest filing date of such offering as required herein (the “Delay”). The Company
may delay a request for registration not more than once in any one (1) year period.
(d) All shares of Series Preferred proposed to be included in the registration statement shall
be converted into Common Stock or such Holder(s) shall deliver a written commitment to the Company
to convert such Series Preferred into shares of Common Stock simultaneously with the effective date
of such registration statement.
(e) If the Holders submitting the Registration Request (the “Initiating Holders”) intend to
distribute the Registrable Securities covered by such request by means of an underwriting, the
Registration Request shall so indicate and the Company shall include such information in the
Registration Notice. The Company shall select the underwriter, with the approval of a majority in
interest of the Initiating Holders, which approval shall not be unreasonably withheld.
Notwithstanding any other provision of this Section 2, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require reducing the number of shares to be
underwritten, then the number of shares of Registrable Securities included in the underwriting
shall be reduced pro rata among all participating Holders in proportion (as nearly as practicable)
to the amount of Registrable Securities owned by each participating Holder; provided, however that
such reduction shall be made only if all other securities to be included (other than the
Registrable Securities) already have been entirely excluded from the underwriting.
(f) In the event that the Holders of a majority of the Registrable Securities for which
registration has been requested pursuant to this Section 2.2 determine for any reason not to
proceed with a registration at any time before a registration statement has been declared effective
by the Commission, and such registration statement, if theretofore filed with the Commission, is
withdrawn with respect to the Registrable Securities covered thereby, and, unless the withdrawal is
based on a materially adverse change in the condition, business or prospects of the Company from
that known to the Holders at the time of their registration request, the Holders of such
Registrable Securities agree to bear their own expenses incurred in connection therewith and to
reimburse the Company for the expenses incurred by it attributable to the registration of such
Registrable Securities, and, if such Holders in fact so reimburse the Company, then the Holders of
such Registrable Securities shall not be deemed to have exercised their right to require the
Company to register Registrable Securities pursuant to this Section 2.2.
(g) If, at the time a Registration Request is received by the Company, the Company has already
determined (by the vote or written consent of the Board) to proceed with the actual preparation and
filing of a registration statement under the Securities Act in connection with the Company’s
proposed offer and sale for cash of its securities, the Registration Request shall be deemed to
have been given pursuant to Section 2.3 rather than this Section 2.2, and the rights and
obligations of the Holders and the Company with respect to the Registration Request shall be
governed by Section 2.3 hereof.
2.3 Incidental Registration.
6.
(a) Each time the Company shall determine to proceed with the actual preparation and filing of
a registration statement under the Securities Act in connection with the proposed offer and sale
for cash of any of its securities by it or any of its security holders (other than in response to a
Registration Request or a registration on Form S-8 or Form S-4 or their equivalents or the
Company’s initial public offering), the Company shall give written notice of its determination to
all record Holders of Registrable Securities not theretofore registered under the Securities Act
and sold (a “Participation Notice”). Upon the written request of a record Holder of any
Registrable Securities given within twenty (20) days after receipt of a Participation Notice, the
Company will, except as herein provided, cause all such Registrable Securities, the record Holders
of which have so requested registration thereof, to be included in such registration statement,
provided that all shares of Series Preferred proposed to be included in such Registration Statement
shall be converted into Common Stock or such Holder shall deliver a written commitment to the
Company to convert such Series Preferred into shares of Common Stock immediately prior to the
effective time of such registration statement, all to the extent requisite to permit the sale or
other disposition by the prospective seller or sellers of the Registrable Securities to be so
registered. If any registration pursuant to this Section 2.3 shall be underwritten in whole or in
part, the Company may require that the Registrable Securities requested for inclusion pursuant to
this Section 2.3 be included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters.
(b) Nothing contained in this Agreement shall prevent the Company from, at any time,
abandoning or delaying any such registration initiated by it. If the Company determines not to
proceed with a registration after the registration statement has been filed with the Commission and
the Company’s decision not to proceed is primarily based upon the anticipated public offering price
of the securities to be sold by the Company, the Company shall promptly complete the registration
for the benefit of those selling security Holders who wish to proceed with a public offering of
their securities and who bear all expenses incurred by the Company thereafter as the result of such
registration arising after the Company has decided not to proceed.
(c) If in the good faith judgment of the managing underwriter of such public offering, the
inclusion of all of the Registrable Securities originally covered by a request for registration
would interfere with the successful marketing of the shares of stock offered by the Company, the
number of Registrable Securities otherwise to be included in the underwritten public offering may
be excluded or reduced; provided that any reduction shall be pro rata (by number of shares) among
the Holders thereof requesting such registration; provided, further, that, if reduced, no security
holder shall sell shares of Registrable Securities in such registration other than the Company and
the Initiating Holders, if any, who invoked the registration under Section 2.3.
2.4 Underwriting Arrangements Applicable to Required and Incidental Registrations. The right
of any Holder to include Registrable Securities in any underwritten registration pursuant to this
Agreement shall be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting. All Holders proposing to
distribute their securities through such underwriting shall (together with the Company) enter into
an underwriting agreement in customary form with the underwriter or underwriters selected.
7.
2.5 Registration Procedures. When the Company is required by the terms of this Agreement to
effect the registration of Registrable Securities under the Securities Act, the Company will do the
following:
(a) Filing. Prepare and file with the Commission a registration statement with respect to
such securities, and use its best efforts to cause such registration statement to become and remain
effective for such period as may be reasonably necessary to effect the sale of such securities,
provided, however, such period shall not exceed the earlier to occur of one hundred and twenty
(120) days (provided that such 120-day period shall be extended for the period of time equal to the
period the Holder is precluded from selling any securities included in such registration pursuant
to the provision of subsection (i) of this Section 2.5) or the completion of the distribution
pursuant to such registration statement.
(b) Period of Effectiveness. Prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as may be necessary to
keep such registration statement effective for such period as may be reasonably necessary to effect
the sale of such securities, provided, however, such period shall not exceed the earlier to occur
of one hundred and twenty (120) days or the completion of the distribution pursuant to such
registration statement.
(c) Copies. Furnish to the Holders participating in such registration and to the underwriters
of the securities being registered such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such underwriters or Holders
may reasonably request in order to facilitate the public offering of such securities.
(d) Blue Sky. Use its best efforts to register or qualify the securities covered by such
registration statement under such state securities or blue sky laws of such jurisdictions as such
participating Holders may reasonably request in writing, except that the Company shall not for any
purpose be required to execute a general consent to service of process or to qualify to do business
as a foreign corporation in any jurisdiction wherein it is not so qualified.
(e) Notification. Notify the Holders participating in such registration, promptly after it
shall receive notice thereof, of the time when such registration statement has become effective or
a supplement to any prospectus forming a part of such registration statement has been filed.
(f) Amendment Notice. Notify such Holders promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus or for additional
information.
(g) Amendment. Prepare and file with the Commission, promptly upon the request of any such
Holders, any amendments or supplements to such registration statement or prospectus which, in the
opinion of counsel for such Holders (and concurred in by counsel for the Company), is required
under the Securities Act or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by such Holders.
8.
(h) Update. Prepare and promptly file with the Commission and promptly notify such Holders of
the filing of such amendment or supplement to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event shall have occurred as
the result of which any such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not misleading.
(i) Stop Orders. Advise such Holders, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness
of such registration statement or the initiation or threatening of any proceeding for that purpose
and promptly use its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
(j) Compliance Issues. Not file any amendment or supplement to such registration statement or
prospectus to which a majority in interest of such Holders shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or the rules and regulations promulgated thereunder, after
having been furnished with a copy thereof at least two (2) business days prior to the filing
thereof, unless in the opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any liabilities under any applicable
federal or state law and such filing will not violate applicable law.
(k) Opinion of Counsel, Conflict Letter. At the request of any such Holder, furnish: (i) an
opinion, dated as of the closing date of the offering, of the counsel representing the Company for
the purposes of such registration, addressed to the underwriters, if any, and to the Holder or
Holders making such request; and (ii) letters, dated as of the effective date of the registration
statement and as of the closing date of the offering, from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and to the Holder or Holders
making such request, in each case in form and substance as is customary in an underwritten public
offering.
(l) Underwriting Agreement. 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. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such agreement.
(m) Listing. 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.
(n) Transfer Agent and CUSIP Number. 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.
9.
2.6 Expenses. With respect to each registration requested pursuant to Section 2.1 hereof
(except as otherwise provided in such Section) and with respect to each inclusion of Registrable
Securities in a registration statement pursuant to Section 2.2 hereof (except as otherwise provided
in such Section), the Company shall bear the following fees, costs and expenses: all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for the
Company, fees and disbursements of counsel for the underwriter or underwriters of such securities
(if the Company and or selling security Holders are required to bear such fees and disbursements),
all internal Company expenses, all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the securities to be offered
are to be registered or qualified, the reasonable fees and disbursements of one special counsel for
the selling security Holders, not to exceed Fifteen Thousand Dollars ($15,000), and the premiums
and other costs of policies of insurance obtained by the Company against liability (if any) arising
out of such public offering. All other fees and disbursements of any accountants or advisors for
the selling security Holders, underwriting discounts and commissions and transfer taxes relating to
the shares included in the offering by the selling security Holders, and any other expenses
incurred by the selling security Holders not expressly included above, shall be borne by the
selling security Holders.
2.7 Indemnification. In the event that any Registrable Securities are included in a
registration statement under Section 2.2 or 2.3 hereof:
(a) Indemnification by Company. To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder of Registrable Securities that are included in a
registration statement pursuant to the provisions hereof, its directors and officers, and any
underwriter (as defined in the Securities Act) for such Holder and each Person, if any, who
controls such Holder or such underwriter within the meaning of the Securities Act, from and
against, and will reimburse such Holder and each such underwriter and controlling Person with
respect to, any and all loss, damage, liability (collectively, “Losses”) to which such Holder or
any such underwriter or controlling Person may become subject under the Securities Act, state
securities laws or otherwise, and the Company will pay to each such Holder, underwriter or
controlling person any legal or other costs or expenses reasonably incurred by such person in
connection with investigating or defending any such Loss, insofar as such Losses are caused by any
untrue statement or alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with information furnished
by such Holder, such underwriter or such controlling Person in writing specifically for use in the
preparation thereof, provided however, that the indemnity agreement in this Section 2.7(a) shall
not apply to amounts paid in settlement of any such Loss if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably withheld, and that the foregoing
indemnity obligation with respect to any preliminary prospectus shall not inure to the benefit of
any Holder on account of any Loss whatsoever arising from the sale of any Registrable Securities by
such Holder to any person if (A) a copy of the final prospectus (as amended or supplemented if such
amendments or
10.
supplements shall have been furnished to such Holder prior to the confirmation of the sale
involved) shall not have been sent or given by or on behalf of such Holder to such person, if
required by law, with or prior to the written confirmation of the sale involved, and (B) the untrue
statement or alleged untrue statement or omission or alleged omission of a material fact contained
in such preliminary prospectus from which such Loss arose was corrected in the final prospectus (as
amended or supplemented if such amendments or supplements thereto shall have been furnished as
aforesaid).
(b) Indemnification by Holders. To the fullest extent permitted by law, each Holder of
Registrable Securities that are included in a registration statement pursuant to the provisions
hereof will indemnify and hold harmless the Company, its directors and officers, each Person, if
any, who controls the Company within the meaning of the Securities Act, any other Holder selling
securities pursuant to such registration statement, any controlling Person of any such selling
Holder, any underwriter and any controlling Person of any such underwriter (including any broker or
dealer through whom such of the shares may be sold) (each, an “Indemnitee”) from and against, and
will reimburse any Indemnitee with respect to, any and all Losses to which such Indemnitee may
become subject under the Securities Act, state securities laws or otherwise, and the Company will
pay to each such Holder, underwriter or controlling person any legal or other costs or expenses
reasonably incurred by such person in connection with investigating or defending any such Loss,
insofar as such Losses are caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon and in conformity with written information furnished
by such Holder specifically for use in the preparation thereof, and provided, however, that the
indemnity agreement in this Section 2.7(b) shall not apply to amounts paid in settlement of any
such Loss if such settlement is effected without the consent of the indemnifying Holder, which
consent shall not be unreasonably withheld, and that the foregoing indemnity obligation with
respect to any preliminary prospectus shall not inure to the benefit of the Company on account of
any Loss whatsoever arising from the sale of any Registrable Securities by the Holder to any person
if (A) a copy of the final prospectus (as amended or supplemented if such amendments or supplements
shall have been furnished to such Holder prior to the confirmation of the sale involved) shall not
have been sent or given by or on behalf of such Holder to such person, if required by law, with or
prior to the written confirmation of the sale involved, and (B) the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in such preliminary
prospectus from which such Loss arose was corrected in the final prospectus (as amended or
supplemented if such amendments or supplements thereto shall have been furnished as aforesaid);
provided, further that the obligations of such Holders under this Section 2.7(b) shall be limited
to an amount equal to the net proceeds to each such Holder of Registrable Securities sold as
contemplated herein, unless such claim, loss, damage, liability or action resulted from such
Holder’s fraudulent misconduct.
(c) Indemnification Procedures. Promptly after receipt by a party entitled to indemnification
pursuant to this Section 2.7 (each, an “Indemnified Party”) of notice of the
11.
commencement of any action involving the subject matter of the foregoing indemnity provisions
such Indemnified Party will, if a claim is to be made against the party obligated to provide
indemnification pursuant to this section (each, an “Indemnifying Party”), promptly notify the
Indemnifying Party of the commencement thereof; but the omission to provide such notice will not
relieve the Indemnifying Party from any liability hereunder, except to the extent that the delay in
giving, or failing to give, such notice has a material adverse effect upon the ability of the
indemnifying party to defend against the claim. In case such action is brought against an
Indemnified Party, the Indemnifying Party shall have the right to participate in and, at the
Indemnifying Party’s option, to assume the defense thereof, singly or jointly with any other
Indemnifying Party similarly notified, with counsel satisfactory to the Indemnified Party;
provided, however, that if the defendants in any action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded based on advice of
counsel that there may be legal defenses available to any Indemnified Parties that are different
from or additional to those available to the Indemnifying Party, or if there is a conflict of
interest which would prevent counsel for the Indemnifying Party from also representing the
Indemnified Party, the Indemnified Party shall have the right to select counsel to participate in
the defense of such action on behalf of such Indemnified Party at the expense of the Indemnifying
Party; provided that the Indemnifying Party shall be responsible for the expense of only one such
special counsel selected jointly by the Indemnified Parties, if there is more than one Indemnified
Party. After notice from an Indemnifying Party to any Indemnified Party of such Indemnifying
Party’s election to assume the defense of the action, the Indemnifying Party will not be liable to
such Indemnified Party pursuant to this Section 2.7 for any legal or other expense subsequently
incurred by such Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the Indemnified Party shall have employed counsel in accordance
with the proviso of the preceding sentence, or (ii) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after the notice of the commencement of the action, or (iii) the Indemnifying
Party has authorized the employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party.
2.8 Exceptions to and Termination of Registration Obligations. The Company shall not be
obligated to (a) honor a demand to register its Registrable Securities under this Agreement if all
such Registrable Securities that could be registered pursuant to such demand are otherwise eligible
for immediate sale by the Holder thereof under Rule 144(k) promulgated under the Securities Act or
(b) effect a registration if the Company delivers to the holders of the Registrable Securities
within thirty (30) days of any Registration Request notice permitted by Section 2.2(a) and so files
within such period described in the notice. The registration rights set forth herein, shall
terminate upon the earlier to occur of (a) the expiration of three (3) years following the
Company’s initial public offering or (b) with respect to any Holder of the Company’s Series
Preferred or Common Stock issued upon conversion thereof, that time following the Company’s initial
public offering that such Holder is able to sell all of such Holder’s Registrable Securities issued
upon conversion thereof under Rule 144 promulgated under the Securities Act during any 91-day
period, and such Holder owns less than two percent (2%) of the Company’s outstanding capital stock.
2.9 Cooperation. Any Holder whose Registrable Securities are to be included in a Registration
Statement either filed pursuant to a demand or as part of a Company registration
12.
agrees to cooperate with all reasonable requests by the Company necessary to effectuate the
purposes of this Agreement, including by timely providing the Company with all information
necessary to file a registration statement.
2.10 “Market Standoff” Agreement. Each Holder hereby agrees that, following the effective
date of a registration of the Company’s securities under the Securities Act, for the period of time
and to the extent reasonably requested by the underwriter(s) and the Company, such Holder shall not
sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of any Registrable Securities of the Company
held by such Holder, directly or indirectly, except securities covered by the registration
statement and transfers to donees who agree to be similarly bound, for the period; provided
however, that (i) the executive officers and directors of the Company, as well as any holder of at
least 1% of the Company’s Common Stock (on an as-if-converted basis), shall have agreed to be bound
by substantially the same terms and conditions, (ii) such agreement shall be required only in
connection with the Company’s initial public offering, (iii) the time period requested for such
market stand-off shall not exceed one hundred eighty (180) days, (iv) the restriction shall not
apply to a registration relating solely to employee, consultant or advisor benefit plans on Form
S-1 or Form S-8 (or similar forms promulgated after the date hereof) or a registration relating
solely to a transaction pursuant to Rule 145 promulgated under the Securities Act on Form S-4 (or
similar forms promulgated after the date hereof) and (v) the restriction shall not apply to any
shares of capital stock of the Company offered or traded in the public market (including pursuant
to the initial public offering or any market that may develop pursuant to Rule 144A promulgated
under the Securities Act). The Company may impose stop-transfer instructions during such stand-off
period with respect to the securities of each Holder subject to this restriction if necessary to
enforce such restrictions.
2.11 Limitations on Additional Registration Rights. From and after the date of this
Agreement, unless holders of at least a majority of the Registrable Securities have consented, the
Company shall not enter into any agreement granting any holder or prospective holder of any
securities of the Company registration rights with respect to such securities except for agreements
granting new registration rights which are subordinate to the registration rights granted to
Holders herein.
3. Covenants of the Company. Subject to the provisions of Section 3.11, the Company
covenants and agrees as follows:
3.1 Corporate Existence. The Company will maintain its corporate existence in good standing
and comply with all applicable laws and regulations of the United States or of any state or
political subdivision thereof and of any government authority where failure to so comply would have
a Material Adverse Effect.
3.2 Books of Account. The Company will keep books of record and account in which full, true
and correct entries are made of all of its dealings, business and affairs, in accordance with
generally accepted accounting principles. The Company will employ certified public accountants
from one of the “Big 5” firms as selected by the Board of Directors of the Company who are
“independent” within the meaning of the accounting regulations of the Commission (the
“Accountants”). Commencing with the year ending June 30, 2000, the
13.
Company will have annual audits made by such Accountants in the course of which such
Accountants shall make such examinations, in accordance with generally accepted auditing standards,
as will enable them to give such reports or opinions with respect to the financial statements of
the Company as will satisfy the requirements of the Commission in effect at such time with respect
to reports or opinions of accountants.
3.3 Furnishing of Financial Statements and Information. The Company will:
(a) Deliver to each Major Investor as soon as available, 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 balance sheet of the Company, together with the related statements of operations,
retained earnings and cash flow statements for such quarter (provided, however, that such
statements need not include footnotes, but otherwise shall comply with generally accepted
accounting principles (subject to normal year-end adjustments)) which financial statements shall
compare the financial information contained therein with the Company’s operating plan and budget
for such period.
(b) Deliver to each Investor as soon as available, but in any event within ninety (90) days
after the end of each fiscal year, a balance sheet of the Company, as of the end of such fiscal
year, together with the related statements of operations, retained earnings and cash flow
statements for such fiscal year, all in reasonable detail and duly certified by the Accountants.
The engagement of the Accountants shall be unqualified as to the scope of their audit.
(c) Prepare and submit to the Board of Directors and each Major Investor at least thirty (30)
days before the beginning of each fiscal year, the operating plan and budget for the upcoming year
and within thirty (30) days after the end of each month and within forty-five (45) days after the
end of each fiscal quarter along with an update on the Company’s actual performance against the
plan and budget.
(d) Deliver to each Major Investor, with reasonable promptness, such other financial
information and projections relating to the business, affairs and financial condition of the
Company as are reasonably available to the Company and as from time to time such Major Investors
may reasonably request.
(e) Deliver to each Major Investor, within ten (10) days after the Company learns of the
commencement or written threats of the commencement of any material lawsuit, legal or equitable, or
of any material administrative, arbitration or other proceeding against the Company or its
business, assets or properties, written notice of the nature and extent of such suit or proceeding.
(f) Deliver to each Major Investor, with reasonable promptness, notice of any default in any
agreement involving obligations of or payments to the Company in excess of One Hundred Thousand
Dollars ($100,000) in the aggregate.
(g) Deliver to each Major Investor, at the same time as they are released to the public,
copies of material press releases as well as notification of the filing of registration statements
and other major corporate events.
14.
3.4 Inspection. The Company will permit each Major Investor, or any other representatives
designated by each such Major Investor and reasonably satisfactory to the Company, to visit and
inspect, at such Major Investor’s expense, any of the properties of the Company, including its
books and records (and to make photocopies thereof or make extracts therefrom), and to discuss its
affairs, finances and accounts with its officers, lawyers and accountants, all to such reasonable
extent and at such reasonable times and intervals as such Major Investor may reasonably request;
provided, however, that the Major Investor’s foregoing rights are limited to exercising such rights
only for purposes related to such Major Investor’s stock ownership in the Company and nothing
herein will require the Company to take action or provide information (i) that would be subject to
attorney-client privilege, (ii) to a party with which the Company is at the time engaged in a
dispute or litigation or (iii) which would cause the Company to breach a confidentiality agreement
with a third party. The Major Investors shall maintain, and shall require their representatives to
maintain, all confidential information obtained from the Company on a confidential basis and shall
execute a confidentiality agreement in a form reasonably satisfactory to the Company and approved
by the Board of Directors of the Company.
3.5 Subsidiaries. If the Company establishes or maintains any subsidiary corporations, it
shall cause each such subsidiary corporation to comply with the applicable covenants set forth in
this Section 3.
3.6 Board Observation Rights. The Company shall permit each Major Investor, or any
representative designated by each such Investor, to have usual and customary Board visitation
rights, subject to the reasonable approval of such individual designee by the Preferred Directors
so long as such Major Investor continues to own at least 1,300,000 shares of Registrable
Securities.
3.7 Key-Person Insurance. The Company shall us its best efforts to maintain key-person life
insurance, with the Company named as beneficiary, for Xxxxxxx X. Xxxxxxx in the amount of Two
Million Dollars ($2,000,000), naming the Company as beneficiary.
3.8 Stock Options Vesting. Unless otherwise determined by a vote of at least 80% of the
members of the Board of Directors, including the affirmative vote at least one of the Preferred
Directors, and except for shares issued pursuant to follow-on option grants to existing
optionholders, the Company will ensure that all stock and stock equivalents issued to employees and
directors will be subject to the following vesting requirements: (a) twenty-five percent (25%) of
a holders stock options shall vest on the date twelve (12) months from the date of grant, and (b)
the remaining seventy-five percent (75%) shall vest in equal increments in the thirty-six month
(36) period following the initial 12-month cliff vesting date. The maximum size of the stock award
pool will be subject to Section 3.9.
3.9 Equity Incentive Plan Share Reserve. Immediately following the Series B Closing Date, the
share reserve available for issuance under the 1999 Equity Incentive Plan (the “Option Pool”) shall
be increased to 6,706,164 shares.
3.10 Payment of Taxes. The Company will pay all taxes (other than taxes based upon income)
and other governmental charges that may be imposed with respect to the issue or
15.
delivery of Conversion Shares, other than any tax or other charge imposed in connection with
any transfer involved in the issue and delivery of shares of Common Stock in a name other than that
in which the shares of Series Preferred so converted were registered.
3.11 Negative Covenants. Without the consent of the Board of Directors and the affirmative
vote of at least a majority of the outstanding shares of the Voting Preferred, the Company will not
hereafter:
(a) issue any shares of its capital stock or grant any options, warrants or other conversion
rights other than pursuant to employee, consultant, advisor stock plans; provided however, that the
Company may issue the Conversion Shares;
(b) repurchase any capital stock of the Company (except for isolated repurchases from
employees approved in advance by a majority of the Board of Directors and required redemptions of
the Series Preferred pursuant to the Articles of Incorporation); or
(c) change the fundamental line of business or enter into a new line of business not currently
conducted by the Company.
4. Rights of First Refusal and Co-Sale.
4.1 Right of First Refusal. In the event that the Company proposes to issue any additional
shares of its capital stock, other than through a registered public offering under the Securities
Act, each Major Investor shall have a right of first refusal on the terms and conditions specified
herein, provided that any shares held by a Major Investor shall be aggregated to determine
eligibility of a Major Investor to participate in this Right of First Refusal. Each Major Investor
shall have a right of first refusal, for a period of twenty (20) days after notice from the
Company, to purchase all or any portion of such additional shares of such capital stock to maintain
such Major Investor’s pro rata ownership in the Company. The purchase price for such additional
shares of capital stock under this right of first refusal shall be the price offered to or proposed
to be paid to the Company by any purchasers. Each Major Investor shall have ten (10) days
following such notice to agree, by giving written notice to the Company, to purchase up to its Pro
Rata Share of any additional shares of capital stock, subject to pro rata increase if any other
Major Investor of such right of first refusal elects not to participate. (“Pro Rata Share” shall
be determined by multiplying the total number of additional shares subject to this Section 4.1 by a
fraction, the numerator of which shall be the number of shares of Series Preferred or Common Stock
owned by such Major Investor of the right of first refusal; and the denominator of which shall be
the total number of shares of capital stock of the Company outstanding and issuable upon exercise
of all outstanding options, warrants and conversion rights.) Such right of overallotment shall be
exercised by giving written notice to the Company agreeing to purchase up to the overallotment
amount within five (5) days after notice from the Company of the Major Investor’s Pro Rata Series
Preferred of the available overallotment. The Company may elect to sell to each Major Investor its
Pro Rata Share of such additional shares at any time up to ninety (90) days following the initial
closing of the sale of such additional shares. A majority in interest of the Major Investors,
voting together as a single class, may agree to waive this right of first refusal as to all Major
Investors. Failure to respond in writing to the Company’s written notice
16.
of such sale, within the twenty (20) day period shall be deemed to be a waiver of this right
of first refusal.
The above rights of first refusal shall not apply to any additional shares of capital stock
(a) purchased under this Agreement or issuable upon conversion of any shares of Series Preferred or
any of the Company’s outstanding convertible securities (including, without limitation, any class
or series of preferred stock), (b) issued to employees, consultants, advisors or management of the
Company, or issuable upon exercise of stock options granted to such employees, consultants,
advisors and management pursuant to stock-based compensation plans, all as approved by the Board of
Directors of the Company, (c) issued or issuable in a corporate partnering transaction on terms
approved by the Board of Directors, including the affirmative vote of at least one of the Preferred
Directors, (d) issued or issuable by way of stock split or stock dividend or similar capital
modification, (e) issued in connection with any merger, acquisition or other reorganization, or (f)
issued upon authorization of the Board of Directors in connection with business conducted by the
Company with vendors, landlords, lessors or financial institutions in connection with financing
transactions, provided such shares came out of the Option Pool unless the Board of Directors by
majority vote, including the affirmative vote of at least one of the Preferred Directors, shall
otherwise agree. For purposes of such right of first refusal, the issuance by the Company of any
warrant or right to purchase or subscribe to another security, or the issuance of a security which
gives the holder a present or future right or privilege to convert the security into another
security, shall be deemed to include the issuance of the underlying security at the time of the
issuance of the warrant or right or convertible security, but the exercise of the right to purchase
or subscribe or to convert shall not be deemed an additional “issuance” subject to such right of
first refusal.
4.2 Right of Co-Sale on Sales by Principal Shareholder.
(a) Notice of Bona Fide Offer. If the Principal Shareholder receives a bona fide offer (the
“Purchase Offer”) from any person or entity (“Offeror”) to purchase from such Principal Shareholder
any shares of the Company’s capital stock (the “Offered Shares”), including, without limitation,
shares of Common Stock and Series Preferred, and any right or option to acquire any of such capital
stock, held by such Principal Shareholder upon specific terms and conditions (including a specified
purchase price payable in cash or other property), and if such Principal Shareholder proposes to
accept such Purchase Offer, then such Principal Shareholder (the “Selling Shareholder”) shall
notify the Company and the other Shareholders within ten (10) calendar days, of the terms and
conditions of such Purchase Offer (the “Offer Notice”) pursuant to provisions of this Agreement and
the Bylaws of the Company.
(b) Right of First Refusal/Right of Participation.
(i) If the Company and the other shareholders of the Company do not intend to exercise the
Right of First Refusal contained in the Bylaws in full, the Selling Shareholder shall promptly
notify the Investors of their rights hereunder (the “Expiration Notice”).
(ii) Upon receipt of the Expiration Notice, the Investors shall have the right, exercisable
only upon written notice given to the Selling Shareholder within twenty (20)
17.
days after receipt of the Expiration Notice (the “Participation Notice”), to participate in
such Selling Shareholder’s sale of the Offered Shares, as provided herein, pursuant to the
specified terms and conditions of the Purchase Offer (the “Right of Participation”).
(iii) Each Participation Notice shall state that such Investor elects pursuant to Section
4.2(b)(ii), to participate in such sale either (a) to the maximum extent permitted by this
Agreement, or (b) up to a specified number of shares, but not to exceed the maximum extent
permitted by this Agreement to be sold by such Investor. A Participation Notice shall constitute a
binding agreement of such Investor to sell to the Offeror the number of Offered Shares so stated in
such notice (in accordance with the preceding sentence) upon the specified terms and conditions of
such Purchase Offer. To the extent an Investor exercises its Right of Participation in accordance
with the terms and conditions set forth in Section 4.2(c), the number of Offered Shares which the
Selling Shareholder may sell pursuant to such Purchase Offer shall be reduced as provided in
Section 4.2(c). The exercise or non-exercise of the right of any Investor of the Investors’ Right
of Participation in one or more sales of the capital stock of the Company shall not adversely
affect such Investor’s rights hereunder in any subsequent sales of capital stock of the Company by
the Principal Shareholder relating to another offer.
(iv) For purposes of this Agreement, the shareholdings of a particular Investor may be
aggregated with the shareholdings of any Affiliate(s) who are also Investors hereunder, in
calculating any such Investor’s “pro rata portion” (as defined in Section 4.2(c) below). Such
Affiliates of the Investors may allocate the shareholdings (either bought or sold) by and among
themselves in any manner, whether or not pro-rated.
(c) Limitations on the Right of Participation. The Right of Participation of each Investor
shall be subject to the following terms and conditions:
(i) Each Investor may sell its pro rata portion (as defined below) of the number of Offered
Shares. An Investor’s “pro rata portion” for purposes of this Section 4.2(c)(i) shall be
determined by multiplying (i) the aggregate number of Offered Shares (on an as-if-converted basis)
by (ii) a fraction, the numerator of which is (x) the number of shares of Common Stock and Common
Stock Equivalents owned by such Investor immediately prior to the Purchase Offer; and the
denominator of which is (y) the sum of the number of shares of Common Stock (or equivalents) owned
by all of the Shareholders immediately prior to the Purchase Offer.
(ii) After receipt of all Participation Notices, the Selling Shareholder named in the Offer
Notice may, not later than ninety (90) days following delivery of the Offer Notice, complete, along
with the participating Investors, the transfer of the remaining Offered Shares for the price
specified in such Offer Notice on terms and conditions not more favorable to the transferor, when
taken as a whole, than those described in the Offer Notice. Any other proposed transfer, including
transfers after such ninety (90) day period or on terms other than those specified, shall remain
subject to the terms of this Agreement, including the Investors’ rights of participation and the
procedures described in this Section 4.2.
(iii) The Investor may effect its participation in the sale by delivering to a closing agent
reasonably acceptable to such Investor and the Selling Shareholder (“Agent”) for
18.
transfer to the Offeror one or more certificates, properly endorsed for transfer, which
represent (i) the number of shares of Common Stock and/or Series Preferred which the Investor
elects and agrees to sell pursuant to this Section; or (ii) if the Purchase Offer relates to Common
Stock, that number of shares of Series Preferred that is at such time convertible into the number
of shares of Common Stock which the Investor elects and agrees to sell pursuant to this Section;
provided, however, that if the Offeror objects to the delivery of Series Preferred in lieu of
Common Stock, the participating Investor shall convert the Series Preferred and deliver Common
Stock as provided above. Additionally, the Investor electing to participate in the sale shall enter
into such agreements with the Offeror relating to the sale as the Selling Shareholder enters into
(it being agreed that the terms and conditions of the sale shall be equivalent with respect to both
the Selling Shareholder and the Investor), and the failure by the Investor to execute and deliver
to the Offeror any such agreements within ten (10) business days after such agreements are given to
the Investor shall, at the Offeror’s election, be deemed a revocation of such Investor’s election
to participate in such sale.
(d) Delivery of Stock Certificates. Any stock certificates which the Investors deliver to the
Agent pursuant to Section 4.2(c)(iii) shall be transferred by the Agent to the Offeror upon
consummation of the sale of the Common Stock and/or Series Preferred pursuant to the terms and
conditions specified in Section 4.2(b) and any agreements entered into pursuant to Section 4.2(c).
The Selling Shareholder agrees to direct the Offeror to make payment to the Agent and the Agent
shall promptly thereafter remit to the Investors that portion of the sale proceeds to which the
Investors are entitled by reason of said participation in such sale.
(e) Transactions Excluded. The Investors’ Rights of Participation contained in this Agreement
shall not pertain or apply to (i) any pledge of Common Stock or Series Preferred made by the
Principal Shareholder which creates a mere security interest, provided the pledgee shall furnish
the Principal Shareholder with a written agreement to be bound by and comply with all provisions of
this Agreement applicable to the Principal Shareholder, (ii) if applicable, any sales or transfers
of Common Stock or Series Preferred by the Principal Shareholder, either during such Principal
Shareholder’s lifetime or on death by will or intestacy, to such Principal Shareholder’s spouse,
family members, or (in the case of transfer only by will or intestacy) other beneficiary, or any
custodian or trustee for the account of such Principal Shareholder or such Principal Shareholder’s
spouse, family members, or (in the case of transfer only by will or intestacy) other beneficiary,
or to entities which are controlled, or the beneficial interests of which are owned, exclusively by
such Principal Shareholder or such Principal Shareholder’s family members, provided that in each
case, the transferee shall receive and hold such Common Stock or Series Preferred subject to the
provisions of this Agreement and shall furnish to the parties hereto a written agreement to be
bound by and comply with all provisions of this Agreement applicable to such Principal Shareholder
in respect of such Common Stock or Series Preferred so transferred, or (iii) any isolated sales by
the Principal Shareholder up to an aggregate of 1,929,995 shares (20% of the shares owned by the
Principal Shareholder as of the Series B Closing Date) as adjusted for stock splits, dividends and
the like and (iv) any other transfer approved by the Board, including the affirmative vote of the
Preferred Director(s). Unless approved by the Board of Directors, the Principal Shareholder shall
not sell, transfer or assign his shares to a direct competitor or a former employee of the Company.
19.
4.3 Transfers in Violation Void. Any sale, transfer or assignment or attempted sale, transfer
or assignment of Common Stock or Series Preferred by the Principal Shareholder (except as permitted
by Section 4.2, including the exceptions in Section 4.2(e)) shall be void or voidable, and the
Company agrees that it will not reissue any new stock certificates for those assigned in
contravention of the terms of this Agreement.
4.4 Legend.
(a) Each certificate representing shares of the capital stock of the Company (including any
options or other rights to acquire capital stock of the Company), now or hereafter owned by the
Principal Shareholder shall be endorsed with the following legend:
“THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF AN INVESTOR RIGHTS AGREEMENT AMONG THE
COMPANY, THE HOLDER OF THIS CERTIFICATE AND CERTAIN PURCHASERS OF CAPITAL STOCK OF
THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT
THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.”
(b) Submission of Existing Certificates. The Principal Shareholder shall promptly submit any
existing certificate(s) in his possession to the Company for placement of the legend on such
certificate(s).
(c) Removal of Legend. The legend shall be removed upon termination of this Agreement in
accordance with the provisions of Section 6.
5. Voting; Board Composition, Etc.
5.1 Voting Obligations. Each Investor and the Principal Shareholder hereby agree, on behalf
of itself and any of such Parties’ heirs, beneficiaries, successors or assigns, to vote all shares
of Common Stock and Voting Preferred of the Company now owned or hereafter acquired of record or
beneficially by each such Principal Shareholder and Investor and to take such other actions as are
reasonably necessary to ensure:
(a) that the membership of the Board of Directors of the Company (the “Board”) shall be
comprised of between five (5) persons and nine (9) persons, with the exact number of directors
within such range being determined from time to time by resolution approved by not less than
sixty-five percent (65%) of the then current members of the Board of Directors; provided, however,
that no reduction of the authorized number of directors shall remove any director prior to the
expiration of such director’s term of office;
(b) that, with respect to any election or maintenance of the members of the Board and pursuant
to and subject to the provisions of the Company’s Articles of Incorporation, (a) the holders of a
majority in interest of the Series B Preferred, voting together as a single class, shall elect to
the Board one person, who shall be nominated by Xxxxxxxxx Partners so long as it
20.
and its Affiliates continue to own at least 40% of the aggregate number of Series B Preferred purchased at the Series
B Closing Date, and who will initially be Xxxxxxx Xxx; (b) the holders of a majority in interest of
the Series A Preferred, voting together as a single class, shall elect to the Board two persons,
one of whom shall be nominated by St. Xxxx Venture Capital V, LLC, as long as it and its affiliates
continue to own at least 40% of the aggregate number of shares of Series A Preferred that they
purchased, and who will initially be Xxxxx X. Xxxxxx, and one of whom shall be nominated by Xxxxxx
Xxxx Ventures, a California Limited Partnership, as long as it and its affiliates continue to own
at least 40% of the aggregate number of shares of Series A Preferred that they purchased, and who
will initially be Xxxxxxx X. Xxxxx (the “Preferred Directors”); (c) the holders of a majority in
interest of the Voting Preferred and the Common Stock, voting together as a single class on an
as-if-converted basis, shall elect to the Board two persons, one of whom shall be the Chief
Executive Officer of the Company, who will initially be Xxxxxxx X. Xxxxxxx, and the other of whom
will be an independent member designated by the Chief Executive Officer of the Company, subject to
the reasonable approval of the Preferred Directors; and (d) the holders of a majority in interest
of the Voting Preferred and the Common Stock, voting together as a single class on an
as-if-converted basis, shall elect to the Board such number of additional persons to any remaining
vacant positions on the Board, each of whom shall be nominated by not less than sixty-five percent
(65%) of the then current members of the Board; and
(c) that, any vote taken to remove any director elected pursuant to this Section 5.1, or to
fill any vacancy created by the resignation or removal of a director elected pursuant to this
Section 5.1., shall also be subject to the provisions of this Section 5.1.
5.2 Limitation. Except as set forth in this Agreement, the Principal Shareholder and each
Investor shall retain at all times the right to vote its respective shares of the Company’s capital
stock, in such Principal Shareholder’s or Investor’s sole discretion, on all matters which are, at
any time and from time to time, presented for a vote to the Company’s holders of Common and
Preferred Stock generally.
5.3 Waiver of Right to Abstain or be Absent from a Meeting. The Principal Shareholder and
each Investor hereby expressly waive any right that such Principal Shareholder or Investor would
otherwise have to abstain, except as expressly provided herein, from any action taken at, or to be
absent from, a duly held meeting of the Company’s common shareholders related to an election of the
members of the Board.
5.4 Limitations on Transfer. Neither the Principal Shareholder nor any Investor shall sell,
transfer, assign, distribute or otherwise dispose of such party’s Series Preferred to any person or
entity, other than to the Company, unless and until such person or entity shall agree in writing to
take such Series Preferred subject to, and shall accept and agree to be bound in writing by, the
terms and conditions of this Agreement.
21.
6. Termination.
6.1 Termination of Certain Covenants. The obligations of the Company under Section 3 of this
Agreement, notwithstanding any provisions hereof to the contrary, shall terminate and shall be of
no further force or effect on the earlier to occur:
(a) the closing date of a Qualified Public Offering; or
(b) the date that the Investors or any of them sell, transfer or convert any Series Preferred,
if following such sale, transfer or conversion, the Investors, in the aggregate, own less than
twenty percent (20%) of the Series Preferred issued at their respective closings.
6.2 Termination of Rights of First Refusal and Co-Sale. The rights enumerated in Section 4 of
this Agreement shall terminate upon the first to occur of the following events:
(a) the liquidation or dissolution of the Company;
(b) the execution by the Company of a general assignment for the benefit of creditors or the
appointment of a receiver or trustee to take possession of the property and assets of the Company;
(c) the registration of a class of the Company’s securities under Section 12 of the Securities
Exchange Act of 1934 or immediately prior to the closing of a Qualified Public Offering (it being
agreed that the rights herein shall not apply to such offering);
(d) the tenth anniversary of the date of this Agreement;
(e) immediately prior to any merger, sale, exchange or other reorganization approved by the
Board, in which the shareholders of the Company do not own at least fifty percent (50%) of the
voting power of the surviving corporation; or
(f) upon the written approval of the Principal Shareholder and Investors holding sixty-six and
two-thirds percent (66-2/3%) of the Series Preferred then outstanding.
6.3 Termination of Voting Obligations. The rights enumerated in Section 5 of this Agreement
shall terminate upon the first to occur of the following events:
(a) the date that the Investors or any of them sell, transfer or convert any Series Preferred,
if following such sale, transfer or conversion, the Investors, in the aggregate, own less than 20%
of the Series Preferred originally issued at the respective closings;
(b) the closing date of a Qualified Public Offering;
(c) the tenth anniversary of the date of this Agreement;
(d) the date which is agreed to by the Principal Shareholder and Investors holding a majority
of the Series Preferred then outstanding; or
22.
(e) the sale, assignment or other transaction in which the shareholders of the Company prior
to the transaction do not own at least fifty percent (50%) of the outstanding voting power of the
surviving corporation.
7. Miscellaneous.
7.1 Waivers, Amendments and Approvals.
(a) If the approval of the Holders is required by the terms of Section 2 of this Agreement,
such requirement shall be satisfied by a vote or the written action of the Holders of at least a
majority of the Registrable Securities then outstanding; provided, however, that Section 2.10 may
not be amended as to any Holder that is an “investment company” within the meaning of the
Investment Company Act of 1940 without the written consent of such Holder. Any term or provision
of Section 2 of this Agreement requiring performance by or binding upon the Company or the Holders
may be amended, and the observance of any term of Section 2 of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only by the
approval of the Company and the Holders of a majority of the Registrable Securities then
outstanding.
(b) If the approval of the Major Investors is required by the terms of Section 3 of this
Agreement, such requirement shall be satisfied by a vote or the written action of the Major
Investors holding at least a majority of the Series Preferred then outstanding. Any term or
provision of Section 3 of this Agreement requiring performance by or binding upon the Company or
the Major Investors may be amended, and the observance of any term of Section 3 of this Agreement
may be waived (either generally or in a particular instance and either retroactively or
prospectively), only by the approval of the Company and the Major Investors holding a majority of
the Series Preferred then outstanding.
(c) If the approval of the Major Investors is required by the terms of Section 4.1 of this
Agreement, such requirement shall be satisfied by a vote or the written action of the Major
Investors holding a majority of the Series Preferred then outstanding. If the approval of the
Principal Shareholder and the Investors is required by the terms of Section 4.2, such requirement
shall be satisfied by a vote or the written action of the Principal Shareholder and Investors
holding a majority of the Series Preferred then outstanding. Any term or provision of Section 4 of
this Agreement requiring performance by or binding upon the Company, the Principal Shareholder, the
Major Investors or the Investors, as the case may be, may be amended, and the observance of any
term of Section 4 of this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only by the approval of the Company and the Major Investors
holding a majority of the Series Preferred then outstanding (in the case of Section 4.1) or the
Company, the Principal Shareholder and the Investors holding a majority of the Series Preferred
then outstanding (in the case of Section 4.2). Notwithstanding the foregoing, in order to
terminate the rights under Section 4, the written approval of the Principal Shareholder and
Investors holding sixty-six and two-thirds percent (66-2/3%) of the Series Preferred then
outstanding is required pursuant to the terms of Section 6.2(f).
(d) If the approval of the Principal Shareholder and the Investors is required by the terms of
Section 5, such requirement shall be satisfied by a vote or the written action of
23.
the Principal Shareholder and Investors holding sixty-six and two-thirds percent (66-2/3%) of the Voting
Preferred then outstanding. Any term or provision of Section 5 of this Agreement requiring
performance by or binding upon the Company, the Principal Shareholder or the Investors may be
amended, and the observance of any term of Section 5 of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only by the
approval of the Company, the Principal Shareholder and Investors holding sixty-six and two-thirds
percent (66-2/3%) of the Voting Preferred then outstanding. Notwithstanding the foregoing, in
order to terminate the rights under Section 5, the written approval of the Principal Shareholder
and Investors holding a majority of the Voting Preferred then outstanding is required pursuant to
the terms of Section 6.3(d).
Any amendment or waiver effected in accordance with this Section shall be binding upon the
Company, the Principal Shareholder and the Investors (including permitted assigns pursuant to
Section 7.11 hereof). The waiver by a party of any breach hereof or default in payment of any
amount due hereunder or default in the performance hereof shall not be deemed to constitute a
waiver of any other default or succeeding breach or default. Written notice of any such waiver,
consent or agreement of amendment, modification or supplement shall be given to the Principal
Shareholder and the record Holders of Registrable Securities who did not give written consent
thereto.
7.2 Oral Changes, Waivers, Etc. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by a statement in writing signed by the
party against which enforcement of the change, waiver, discharge or termination is sought, except
to the extent provided in Section 6.
7.3 Notices. All notices, requests, consents and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All notices shall be addressed to each holder of
record as follows:
If to a Holder: | If to the Company: | If to the Principal Shareholder: | ||
To the address listed
on Schedule 1 with a copy to: Xxxxxxxx Chance Xxxxxx & Xxxxx LLP Attn: Xxxxx Xxxxx 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000-0000 |
QuinStreet, Inc. [to be completed after Parkside Towers lease is signed] Attn: Xxxxxxx X. Xxxxxxx with a copy to: Xxxxxx Godward LLP Attn: Xxxxxxxxxxx X. Xxxxxxxx Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx Xxx Xxxxxxxxx, XX 00000 |
Xxxxxxx X. Xxxxxxx [to be completed after Parkside Towers lease is signed] |
24.
7.4 Governing Law. This Agreement shall be governed by and construed in accordance with, the
laws of the State of California as such laws are applied to agreements among California residents
entered into and to be performed entirely in California.
7.5 Survival of Representations, Warranties, Agreements, Etc. All representations,
warranties, covenants and agreements contained herein or in any certificate or document delivered
pursuant to this Agreement, including all statements contained in any certificate or document
prepared by or on behalf of the Company and delivered pursuant to this Agreement, (other than any
legal opinion) shall survive for a period of two (2) years after the execution and delivery of this
Agreement or such certificate or document, as the case may be and shall constitute representations
and warranties by the Company hereunder.
7.6 Delays or Omissions. Except as expressly provided herein, no delay or omission to
exercise any right, power or remedy accruing to any party under this Agreement shall impair any
such right, power or remedy of such party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence thereto, or of a 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.
7.7 Other Remedies. Any and all remedies herein expressly conferred upon a party shall be
deemed cumulative with, and not exclusive of, any other remedy conferred hereby or by law on such
party, and the exercise of any one remedy shall not preclude the exercise of any other.
7.8 Attorneys’ Fees. Should suit be brought to enforce or interpret any part of this
Agreement, the prevailing party shall be entitled to recover, as an element of the costs of suit
and not as damages, reasonable attorneys’ fees to be fixed by the court (including, without
limitation, costs, expenses and fees on any appeal). The prevailing party shall be the party
entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgment.
A party not entitled to recover its costs shall not be entitled to recover attorneys’ fees. No sum
for attorneys’ fees shall be counted in calculating the amount of a judgment for purposes of
determining if a party is entitled to recover costs or attorneys’ fees.
7.9 Entire Agreement. This Agreement, the schedules hereto, the documents referenced herein
and the exhibits thereto, constitute the entire understanding and agreement of the parties hereto
with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto, including without limitation the Prior
Agreement, the Term Sheet, Section 9 of the Series A Preferred Stock Purchase Agreement, the
Registration Rights Agreement, the Voting Agreement and the Right of Co-Sale Agreement. The
express terms hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
7.10 Severability. Should any one or more of the provisions of this Agreement or of any
agreement entered into pursuant to this Agreement be determined to be illegal or unenforceable, all
other provisions of this Agreement and of each other agreement entered into pursuant to this
Agreement, shall be given effect separately from the provision or provisions
25.
determined to be
illegal or unenforceable and shall not be affected thereby. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and enforceable provision which
will relieve, to the extent possible, the economic, business and other purposes of the void or
unenforceable provision.
7.11 Successors and Assigns. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon and be enforceable by the respective heirs, successors and assigns
of the parties hereto; provided, however, that with notice given to the Company within thirty (30)
days following any assignment, the rights of a Holder hereunder may be assigned only (i) to a
partner or member or retired partner or member of the assigning Holder if such assigning Holder is
a partnership or limited liability company, if such assignee is an accredited investor within the
meaning of the Securities Act, (ii) to any affiliate of the assigning Holder, if such assignee is
an accredited investor within the meaning of the Securities Act, (iii) to any family member of, or
trust for the benefit of, the assigning Holder or (iv) concurrent with the sale or transfer to such
assignee of at least 100,000 shares (subject to adjustment for any stock dividend, stock split, subdivision,
combination or other recapitalization of the Company effected after the Series B Closing Date) of
the Series Preferred (including, for such purpose, on a proportionate basis, any shares of Common
Stock into which any shares of the Series Preferred have been converted), then held by such Holder
or Registrable Securities then held by such holder; provided, however, that such assignee or
transferee agrees in writing to be bound by all of the provisions of this Agreement, including.
Any Holder making an assignment in connection with the sale or transfer of only a portion of its
shares of Registrable Securities shall retain its rights under this Agreement for the shares not
sold or transferred.
7.12 Counterparts. This Agreement may be executed concurrently in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instruments.
7.13 Aggregation of Series Preferred and Voting Preferred. All shares of Series Preferred or
Voting Preferred, as applicable, held or acquired by affiliated entities or persons or held by
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.
26.
In Witness Whereof, this Investor Rights Agreement is hereby executed as of
the date first written above.
Company:
|
QuinStreet, Inc. | |
/s/ Xxxxxxx X. Xxxxxxx | ||
Xxxxxxx X. Xxxxxxx, President and CEO | ||
Principal Shareholder:
|
/s/ Xxxxxxx X. Xxxxxxx | |
Xxxxxxx X. Xxxxxxx | ||
Investors: |
||
Xxxx X. Xxxxxx | ||
Xxxxxxxx Investment Opportunities (Master) Fund-NTV II Portfolio |
||
By: | J.&W. Xxxxxxxx & Co. Incorporated, its investment advisor | |||
By: | ||||
Name: | ||||
Title: | ||||
Xxxxxxxx New Technologies Fund, Inc. | ||||
By: | J.&W. Xxxxxxxx & Co. Incorporated, its investment advisor | |||
By: | ||||
Name: | ||||
Title: | ||||
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Venture Strategy Partners II LP | ||||
By: | Venture Strategy Management Company LLC, Its General Partner |
|||
By: | /s/ Xxxxxx Xxxx Gallanter | |||
Xxxxxx Xxxx Xxxxxxxxx, Managing Member | ||||
Venture Strategy Affiliate Fund LP | ||||
By: | Venture Strategy Management Company LLC, Its General Partner |
|||
By: | /s/ Xxxxxx Xxxx Gallanter | |||
Xxxxxx Xxxx Xxxxxxxxx, Managing Member | ||||
St. Xxxx Venture Capital V, LLC | ||||
By: | /s/ Xxxxx Xxxxxx | |||
Name: | ||||
Title: | ||||
Xxxxxx Hill Ventures, a California Limited Partnership |
||||
By: | /s/ Xxxxxxx Xxxxx | |||
Name: | ||||
Managing Director of the General Partner | ||||
Xxxxxx Hill Entrepreneurs Fund (AI), L.P. | ||||
By: | /s/ Xxxxxxx Xxxxx | |||
Name: | ||||
Managing Director of the General Partner |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxx Hill Entrepreneurs Fund (QP), L.P. | ||||
By: | /s/ Xxxxxxx Xxxxx | |||
Name: | Xxxxxxx Xxxxx | |||
Managing Director of the General Partner | ||||
The Xxxxxxxx Living Trust, U/A/D 1/22/98 | ||||
By: | ||||
Xxxxx X. Xxxxxxxx, Trustee | ||||
G. Xxxxxxx Xxxxx, Xx. | ||||
The Younger Living Trust, U/A/D 1/20/95 | ||||
By: | ||||
Xxxxxxx X. Xxxxxxx, Xx., Trustee | ||||
Xxxxx Xxxx, Trustee, The Xxxxxxxxx Charitable Remainder Unitrust |
||||
By: | ||||
Xxxxx Xxxx, Trustee | ||||
Xxxxxxx X. and Xxxxx X.X. Xxxxx, Trustees, the Xxxxxxx X. and Xxxxx X.X. Xxxxx Trust Agreement dated 2/24/99 | ||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxx, Trustee |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxxxx Xxxxxxxx | ||||||||
Xxxxx X. Xxxxxxx | ||||||||
Xxxxx Fargo Bank, Trustee | ||||||||
SHV S/P/T FBO Xxxxxxx X. Xxxxxxx | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
Xxxxx Fargo Bank, Trustee | ||||||||
SHV S/P/T FBO Xxxxxxx X. Xxxx | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Rosewood Capital III, L.P. | ||||||
By: | Rosewood Capital Associates LLC, | |||||
Its General Partner | ||||||
By: | /s/ Xxxxx Xxxxxx | |||||
Xxxxx Xxxxxx, Vice President | ||||||
GC& H Investments | ||||||
By: | ||||||
Xxxx X. Xxxxxxx, Executive Partner | ||||||
Xxxx X. Xxxxx |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxxxxx Partners IV, L.P. | ||||||
By: | Xxxxxxxxx Managing Partner IV, L.L.C. | |||||
its General Partner | ||||||
By: | CP4 Principals, L.L.C., its Managing Member | |||||
By: | /s/ J. Xxxxxxx Xxx | |||||
Name: J. Xxxxxxx Xxx | ||||||
Title: Managing Partner | ||||||
Xxxxxxxxx Partners IV-A, L.P. | ||||||
By: | Xxxxxxxxx Managing Partner IV, L.L.C. its General Partner | |||||
By: | CP4 Principals, L.L.C., its Managing Member | |||||
By: | /s/ J. Xxxxxxx Xxx | |||||
Name: J. Xxxxxxx Xxx | ||||||
Title: Authorized Person | ||||||
Xxxxxxxxx Partners IV-B, L.P. | ||||||
By: | Xxxxxxxxx Managing Partner IV, L.L.C. its General Partner | |||||
By: | CP4 Principals, L.L.C., its Managing Member | |||||
By: | /s/ J. Xxxxxxx Xxx | |||||
Name: J. Xxxxxxx Xxx | ||||||
Title: Authorized Person | ||||||
Xxxxxxxxx Partners Offshore, L.P. | ||||||
By: | Xxxxxxxxx Managing Partner IV, L.L.C. its General Partner | |||||
By: | CP4 Principals, L.L.C., its Managing Member | |||||
By: | /s/ J. Xxxxxxx Xxx | |||||
Name: J. Xxxxxxx Xxx | ||||||
Title: Authorized Person |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxxxxx Partners Special Purpose, L.P. | ||||||
By: | Xxxxxxxxx Managing Partner IV, L.L.C. its General Partner | |||||
By: | CP4 Principals, L.L.C., its Managing Member | |||||
By: | /s/ J. Xxxxxxx Xxx | |||||
Name: J. Xxxxxxx Xxx | ||||||
Title: Authorized Person |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxx X. or Xxxx X. Xxxxx, Trustees, | ||||||||
Xxxxx Family Trust, DTD 1/24/90 | ||||||||
By: | ||||||||
Xxxxx X. Xxxxx, Trustee | ||||||||
Stanford University | ||||||||
By: | ||||||||
Xxxxxxx Venture Partners | ||||||||
By: | ||||||||
Xxxx Xxxxxxx XxXxxx | ||||||||
Xxxxx Xxxxxxxxxxxx | ||||||||
Xxxxx X. Xxxxxx |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxxx X. Xxxxxxx | ||||||||
Xxxxxx X. Xxxxxxxx | ||||||||
Xxxxx Xxxxxx | ||||||||
Xxxxx X. Xxxxxxx | ||||||||
Xxxxxxx X. Xxxxxxxxx | ||||||||
Xxxxxxx Xxxxxxx | ||||||||
Xxxxx Xxxx | ||||||||
Xxxxxxx X. Xxxxxx |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Xxxxxxx X. Xxxxxx | ||||||||
Xxxxxxx Xxxxx | ||||||||
Xxxx X. Xxxx | ||||||||
Xxxxx Xxxxxxxxxxx | ||||||||
Venture Lending & Leasing II | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Anvest, L.P. | ||||||||
By: | ||||||||
Xxxxx X. Xxxxxxxx, General Partner | ||||||||
Xxxxxxxx Holdings, L.P. | ||||||||
By: | ||||||||
G. Xxxxxxx Xxxxx, Xx., General Partner | ||||||||
Xxxxx Xxxx, Trustee, The Xxxx/Otus | ||||||||
Revocable Trust | ||||||||
By: | ||||||||
Xxxxx Xxxx, Trustee | ||||||||
/s/ Xxxxxxx X. Xxxxx | ||||||||
Xxxxxxx X. Xxxxx | ||||||||
Xxxxxxx X. Xxxxxxx | ||||||||
Venture Strategy Partners | ||||||||
By: | /s/ Xxxxxx Xxxx Xxxxxxxxx | |||||||
Xxxxxx Xxxx Gallanter, Managing Member |
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
St. Xxxx Venture Capital Affiliates Fund I, LLC | ||||||||
By: | St. Xxxx Venture Capital, Inc., its Manager | |||||||
By: | /s/ Xxxxx Xxxxxx | |||||||
Name: | ||||||||
Title: | ||||||||
QuinStreet — Investor Rights Agreement
Signature Page
Signature Page
Schedule 1
List of Investors
List of Investors
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Seligman Investment Opportunities (Master) |
0 | 3,223,729 | 0 | |||
Fund-NTV II Portfolio c/o J. & X. Xxxxxxxx & Co. 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000 |
||||||
Seligman New Technologies Fund, Inc. |
0 | 166,102 | 0 | |||
c/o J. & X. Xxxxxxxx & Co. 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000 |
||||||
Xxxxxxxxx Partners IV, L.P. |
0 | 2,033,899 | 0 | |||
Xxxxxxxxx Partners IV Offshore, X.X. Xxxxxxxxx Partners IV Special Purpose, X.X. Xxxxxxxxx Partners IV-A, X.X. Xxxxxxxxx Partners IV-B, L.P. c/x Xxxxxxxxx Partners Attn: Xxxxxxx Xxx 0 Xxxxxxxxx Xxxxxx Xxxx, 0xx Xx. Xxxxxxxxx, XX 00000 |
||||||
Venture Strategy Partners (same address |
58,824 | 0 | 0 | |||
for all related entities below) Attn: Xxxxxx Xxxx Xxxxxxxxx Venture Strategy Group LLC 000 Xxxxx Xxxxxx Xxx Xxxxxxxxx, XX 00000 (000) 000-0000 phone (000) 000-0000 fax xxxxxxxxxx@xxxxxxxxxxxxxxx.xxx |
||||||
Venture Strategy Partners II LP |
0 | 1,280,000 | 0 | |||
Venture Strategy Affiliate Fund LP |
0 | 75,932 | 0 | |||
St. Xxxx Venture Capital V, LLC |
2,145,220 | 1,271,187 | 0 | |||
c/o St. Xxxx Venture Capital, Inc. Suite 550 00000 Xxxxxx Xxxxx Xxxx Xxxxxxx, XX 00000 |
||||||
St. Xxxx
Venture Capital Affiliates Fund I, LLC |
60,662 | 0 | 0 | |||
c/o St. Xxxx Venture Capital, Inc. Suite 550 00000 Xxxxxx Xxxxx Xxxx Xxxxxxx, XX 00000 |
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Xxxxxx Hill Ventures, a California Limited |
1,598,569 | 921,210 | 0 | |||
Partnership (same address for all related entities below) Attn: Xxxxxxx Xxxxxxx 000 Xxxx Xxxx Xxxx, Xxxxx X-000 Xxxx Xxxx, XX 00000 (000) 000-0000 |
||||||
Xxxxxx Hill
Entrepreneurs Fund (AI), L.P. |
15,810 | 9,111 | 0 | |||
Xxxxxx Xxxx
Entrepreneurs Fund (QP), L.P. |
40,033 | 23,070 | 0 | |||
Xxxxx X. Xxxxxxxx, Trustee, The |
54,486 | 44,926 | 0 | |||
Xxxxxxxx Living Trust, U/A/D
1/22/98 |
||||||
G. Xxxxxxx Xxxxx, Xx. |
0 | 44,926 | 0 | |||
Xxxxxxx X. Xxxxxxx, Xx., |
108,971 | 37,469 | 0 | |||
Trustee, The Younger Living Trust, U/A/D 1/20/95 |
||||||
Xxxx Xxxxxxx |
0 | 7,457 | 0 | |||
Xxxxx X. Xxxxxxx, Custodian |
0 | 7,457 | 0 | |||
FBO Xxxxx X. Younger CUTMA |
||||||
Xxxxx X. Xxxxxxx, Custodian |
0 | 7,457 | 0 | |||
FBO Xxxxx Xxxxxxx |
||||||
Xxxxxxxxx Charitable Remainder |
0 | 101,729 | 0 | |||
Unitrust, Xxxxx Xxxx, Trustee |
||||||
Xxxxxxx X. Xxxxx and Xxxxx X.X. |
0 | 1,528 | 0 | |||
Sands, Trustee, The Xxxxxxx X. and Xxxxx X.X. Xxxxx Trust Agreement dated 2/24/99 |
||||||
Xxxxxxx X. Xxxxx Custodian FBO |
0 | 3,728 | 0 | |||
Xxxxxxx X. Xxxxx |
||||||
Xxxxxxx X.
Xxxxx Custodian FBO Xxxx X. Xxxxx |
0 | 3,728 | 0 | |||
Xxxxxxx X. Xxxxx FBO Xxxxxx X. Xxxxx |
0 | 3,728 | 0 | |||
Xxxxxxxx Xxxxxxxx |
0 | 12,712 | 0 | |||
Xxxxx X. Xxxxxxx |
10,896 | 6,356 | 0 |
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Xxxxx Fargo Bank, Trustee, SHV |
0 | 3,178 | 0 | |||
M/P/T FBO Xxxxxxx X. Xxxxxxx Attn: Xxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx Xxx Xxxxxxxxx, XX 00000 Phone: (000) 000-0000 Fax: (000) 000-0000 xxxxx.xxxxxx@xxxxxxxxxx.xxx |
||||||
Xxxxx Fargo Bank, Trustee, SHV |
2,205 | 1,589 | 0 | |||
M/P/T FBO Xxxxxxx X. Xxxx |
||||||
Anvest, L.P. |
54,485 | 14,914 | 0 | |||
Xxxxxxxx Holdings, L.P. |
108,971 | 14,914 | 0 | |||
Xxxxx Xxxx, Trustee, The Xxxx/Otus |
185,250 | 0 | 0 | |||
Revocable Trust |
||||||
Xxxxxxx X. Xxxxx |
21,794 | 0 | 0 | |||
Xxxxxxx X. Xxxxxxx |
4,412 | 0 | 0 | |||
Rosewood Capital III, L.P. |
588,235 | 338,984 | 0 | |||
Attn: Xxxxx Xxxxxx Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx Xxx Xxxxxxxxx, XX 00000 |
||||||
GC&H Investments |
19,721 | 16,950 | 0 | |||
Attn: Xxx Xxxxxxx Xxxxxx Godward LLP Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx Xxx Xxxxxxxxx, XX 00000 (000) 000-0000 |
||||||
P. Xxxx Xxxxx |
0 | 16,950 | 0 | |||
0000 Xxxxx Xx. Xxx Xxxxxxxxx, XX 00000 (000)000-0000 (000) 000-0000 xxxxxx@xxxx.xxx |
||||||
Xxxxx X. Xxxxx |
58,824 | 0 | 0 | |||
000 X. Xx Xxxxxx Xxxx, 000 Xxx Xxxxx, XX 00000 |
||||||
Xxxx X. Xxxxx |
58,823 | 0 | 0 | |||
0000 Xxxxxxx Xxxxxx Xxxx Xxxxxxx, XX 00000 |
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Stanford University |
29,412 | 0 | 0 | |||
Attn: Xxxxx Xxxxxx Stanford Management Company 0000 Xxxx Xxxx Xxxx Xxxxx Xxxx, XX 00000-0000 (000) 000-0000 xxxxxxx@xxxxxxxx.xxx |
||||||
Xxxxxxx Venture Partners |
5,882 | 0 | 0 | |||
Attn: Xx. Xxxxxx Xxxxxxx 0000 Xxxxxxx Xxxxxxx Xxxx., Xxxxx 000 Xxxxx Xxxxx, XX 00000 (000) 000-0000 xxxxxxxx@xxxxxxxxxx.xxx |
||||||
Xxxx Xxxxxxx XxXxxx |
735 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 xxxxxxxx@xxxxxxxxxxxxx.xxx |
||||||
Xxxxx Xxxxxxxxxxxx |
5,882 | 0 | 0 | |||
McKinsey & Company, Inc. Suite 4600, Georgia-Pacific Center 000 Xxxxxxxxx Xxxxxx, X.X. Xxxxxxx, XX 00000 (000) 000-0000 x0000 xxxxx_xxxxxxxxxxxx@xxxxxxxx.xxx |
||||||
Xxxxx X. Xxxxxx |
1,029 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 |
||||||
Xxxxxxx X. Xxxxxxx |
1,029 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 |
||||||
Xxxxxx X. Xxxxxxxx |
1,029 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 |
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Xxxxx Xxxxxx |
5,882 | 0 | 0 | |||
000 Xxxxxxx Xxxxxx Xxxxxxx Xxxx, XX 00000 (000) 000-0000 (x212) xxxxx@xxxxxxxx.xxx |
||||||
Xxxxx X. Xxxxxxx |
50,000 | 0 | 0 | |||
0000 X. Xxxxxxx Xxxxxxxxxx, Xxx. 000 Xxxxxx, XX 00000 (000) 000-0000 xxxxxxxx@xxxxxxxxxxxx.xxx |
||||||
Xxxxxxx X. Xxxxxxxxx |
5,882 | 0 | 0 | |||
McKinsey & Company, Inc. Suite 4600, Georgia-Pacific Center 000 Xxxxxxxxx Xxxxxx, X.X. Xxxxxxx, XX 00000 (000) 000-0000 xxx_xxxxxxxxx@xxxxxxxx.xxx |
||||||
Xxxxxxx Xxxxxxx |
2,941 | 0 | 0 | |||
Xxxxx Xxxx |
5,882 | 0 | 0 | |||
c/o QuinSteet, Inc. 0000-X Xx Xxxxxx Xxxx Xxxxxxx Xxxx, XX 00000 |
||||||
Xxxxxxx Xxxxx,
Trustee, 2002 Faden Family Trust |
29,412 | 0 | 0 | |||
000-00xx Xxx. Xxx Xxxxx, XX 00000 |
||||||
Xxxxxxx X. Xxxxxx |
1,029 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 |
||||||
Xxxxxxx Xxxxx |
5,882 | 0 | 0 | |||
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Xxxx X. Xxxx |
1,029 | 0 | 0 | |||
Xxxxxxx Xxxxxx Attn: Xxxxxxxxx Xxxxxxx 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxx. 000 Xxxxx Xxxx, XX 00000 (000) 000-0000 |
||||||
Xxxxx Xxxxxxxxxxx |
5,882 | 0 | 0 | |||
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxxxx, XX 00000 (000) 000-0000 xxxxxx.xxxxxxxxxxx@xxxxxxx.xxx |
||||||
Venture Lending & Leasing II |
Warrant for 14,706 shares | 0 | 0 | |||
Attn: Xxx Xxxxx 0000 X. Xxxxx Xxxxxx, Xxxxx 000 Xxx Xxxx, XX 00000 (000) 000-0000 x00 xxx@xxxxxxxxxxx.xxx |
||||||
Xxxx Xxxxxx |
500,000 | |||||
Xxxxx Hall Xxxxxxxxxxxx Xxxx Xxxxxxxxx Xxxxx XX0 0XX XXXXXXX |
QuinStreet — Investor Rights Agreement
Schedule 1
Schedule 1