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EXHIBIT 10.9
PLX TECHNOLOGY, INC.
STOCK RESTRICTION, INFORMATION RIGHTS AND -
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of the __________ day of __________1989,
among PLX Technology, Inc., a California corporation (the "Company") and the
persons and entities listed on the "Schedule of Holders of Registrable
Securities" attached hereto (the "Purchasers").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:
SECTION 1.
Affirmative Covenants of the Company
Notwithstanding any provision of the Company's Bylaws regarding
delivery or nondelivery of financial information to shareholders of the Company,
the Company hereby covenants and agrees as follows:
1.1 Basic Financial Information. The Company will furnish the following
reports to each Purchaser for so long as it is a holder of any shares of the
Company's Series A Preferred Stock or Series B Preferred Stock or Series C
Preferred Stock (collectively "Shares") or Common Stock into which the Shares
are convertible:
(a) As soon as practicable after the end of each fiscal year,
and in any event within 90 days thereafter, a consolidated balance sheet of the
Company and its subsidiaries, if any, as of the end of such fiscal year, and a
consolidated statement of income and a consolidated statement of changes in
financial position of the Company and its subsidiaries, if any, for such year,
prepared in accordance with generally accepted accounting principles (subject to
such reasonable exceptions as may be disclosed by Company) and setting forth in
each case in comparative form the figures for the previous fiscal year, all in
reasonable detail and compiled and reviewed by independent public accountants of
recognized national standing selected by the Company.
(b) As soon as practicable after the end of the first, second
and third quarterly accounting periods in each fiscal year of the Company, and
in any event within 45 days thereafter, a consolidated balance sheet of the
Company and its subsidiaries, if any, as of the end of each such quarterly
period, and, if requested by holders of a majority of the Shares, a consolidated
statement of income and a consolidated statement of changes in financial
position of the Company and its subsidiaries, if any, for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles (subject to such reasonable exceptions as may be disclosed
by Company). Said financial statements shall be signed by an officer of the
Company who shall state that such financial statements are in accordance with
generally accepted accounting principals (subject to such reasonable exceptions
as may be disclosed by Company).
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1.2 Additional Information.
(a) As long as Purchaser holds at least 150,000 Shares (or an
equivalent number of Shares and/or Common Stock issued upon conversion of -the
Shares), as adjusted for recapitalizations, stock splits, stock dividends, and
the like, and the Company is not subject to the reporting requirements Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Company will deliver to such Purchaser the following reports:
(i) As soon as practicable after the end of each
month beginning with April 1989, and in any event within 30 days thereafter,
consolidated balance sheets of the Company and its subsidiaries, if any, at the
end of such month, and consolidated statements of income and, if requested by
holders of a majority of the Shares, sources and uses of funds for each month
and for the current year to date, prepared in accordance with generally accepted
accounting principles (subject to such reasonable exceptions as may be disclosed
by Company).
(ii) Within 30 days of the end of each fiscal year,
an operating plan for the upcoming fiscal year.
(b) For so long as a Purchaser is eligible to receive such
reports, it shall have the right to visit and inspect any of the properties of
the Company or any of its subsidiaries, and to discuss their affairs, finances
and ac - counts with their officers, all at such reasonable times and as often
as may be reasonably requested.
1.3 Assignment of Rights to Information. The rights granted pursuant to
Section 1.1 and 1.2 may be assigned or otherwise conveyed by any Purchaser or by
any subsequent transferee of any such rights, subject to the satisfaction of the
requirements prescribed for the rights set forth in Section 1.2; provided that
the Company is given written notice by such transferee at the time of the
transfer, or within a reasonable time after such transfer, of the name and
address of such transferee and said transferee's agreement to be bound by the
provisions of Section 1.4 hereto; and provided further that the Company may
refuse such assignment or conveyance if the proposed transferee is a competitor
of the Company.
1.4 Confidentiality. Each Purchaser agrees that he or it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Purchaser may obtain from the Company, and which
is prominently marked "confidential", "proprietary" or "secret", pursuant to
financial statements, reports and other materials submitted by the Company as
required hereunder, or pursuant to visitation or inspection rights granted
hereunder unless such information is known, or until such information becomes
known, to the public, or unless the Company gives its written consent to the
Purchaser's release of such information, except that no such written consent
shall be required (and Purchaser shall be free to release such information) if
such information is to be provided to Purchaser's lawyer or accountant, or to an
officer, director or general or limited partner of a Purchaser provided that
each such person agrees to keep such information confidential pursuant to the
terms of this Section 1.4.
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1.5 Market Standoff. The Company shall obtain a market standoff
agreement in the form of Section 2.9 of this agreement from all the holders of
securities of the Company.
SECTION 2.
Registration Rights
2.1 Certain Definitions. As used in this Section 2, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Registrable Securities" means (i) shares of the Company's
Common Stock issued or issuable pursuant to the conversion of the Series A
Preferred Stock or Series B Preferred Stock or Series C Preferred Stock of the
Company (the "Existing Shares") and (ii) any Common Stock of the Company issued
as a dividend or other distribution with respect to, or in exchange or in
replacement of, the Shares, the Existing Shares or such Common Stock.
The terms "register", "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 2.2, 2.3 and 2.10 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, fees and disbursements of a single
counsel for the Holders, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company which shall be paid in any
event by the Company).
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale.
"Holder" shall mean any holder of outstanding shares of
Registrable Securities.
"Initiating Holders" shall mean any Holder or Holders of not
less than 50% of the Registrable Securities then outstanding and not registered
at the time of any request for registration pursuant to Section 2.2 of this
agreement.
2.2 Requested Registration. In case the Company shall receive from
Initiating Holders a written request that the Company effect any registration
(other than a registration on Form S-3 or any related form of Registration
Statement), with respect to at least twenty percent
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(20%) of all the Registrable Securities the outstanding (or any lesser
percentage if the anticipated gross offering price would exceed $5,000,000), the
Company will:
(a) promptly give written notice of the proposed registration
to all other Holders; and
(b) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file posteffective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company;
provided that the Company shall not be obligated to take any action to effect
any such registration, qualification or compliance pursuant to this Section 2.2:
(i) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(ii) Prior to the earlier of (A) January 1, 1990 or
(B) one year following the effective date of the Company's first registered
underwritten offering to the general public of its securities for its own
account;
(iii) Within four (4) months immediately following
the effective date of any registration statement pertaining to an underwritten
public offering of securities of the Company for its own account (other than a
registration relating solely to a Commission Rule 145 transaction or a
registration relating solely to employee benefit plans or a registration on any
registration form which does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities); and
(iv) After the Company has effected an aggregate of
two registrations pursuant to this Section 2.2 and such registrations have been
declared or ordered effective.
Subject to the foregoing clauses (i) through (iv) and to
Section 2.2(d), the Company shall file a registration statement covering the
Registrable Securities so requested to be registered as soon as practicable
after receipt of the request of the Initiating Holders, and in any event within
one hundred twenty (120) days of such request; provided, however, that if the
Company shall furnish to such Initiating Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be filed on or before the
date filing would be required and it is therefore essential to defer the date of
such filing, the Company shall have the right to defer such filing for a period
of not more than one hundred twenty (120) days after receipt of the request of
the Initiating Holders; provided,
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however that the Company may not make such certification more than once in any
12 month period.
(c) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2.2 and the Company shall include such information in the
written notice referred to in Section 2.2(a). The right of any Holder to
registration pursuant to Section 2.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders.
Notwithstanding any other provision of this Section 2.2, if the underwriter (or
the managing underwriter on behalf of the underwriters) determines that
marketing factors require a limitation of the number of shares to be
underwritten and so advises the Initiating Holders in writing, then the
Initiating Holders shall so advise all Holders (except those Holders who have
indicated to the Company their decision not to distribute any of their
Registrable Securities through such underwriting) and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities owned by such
Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of the underwriting, such person
may elect to withdraw therefrom by written notice to the Company, the
underwriter (or managing underwriter on behalf of all of the underwriters) and
the Initiating Holders. The Registrable Securities and/or other securities so
withdrawn from such underwriting shall also be withdrawn from such registration;
provided, however, that, if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other Holders may be included
in such registration (up to the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 2.2(c).
If the underwriter (or managing underwriter on behalf of all of the
underwriters) has not limited the number of Registrable Securities to be
underwritten, the Company may include securities for its own account in such
registration if the underwriters so agree and if the number of Registrable
Securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
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(d) Delay of Registration. If at the time of any request to
register Registrable Securities pursuant to this Section 2.2 the Company is
engaged or has fixed plans to engage within sixty (60) days of the time of the
request in a registered public offering as to which the Holders may include
Registrable Securities pursuant to Sections 2.2 or 2.3, then the Company may at
its option direct that such request be delayed for a period not in excess of six
months from the effective date of such offering, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and, provided further, that no other
person or entity could require the Company to file a registration statement
during such period. Such right to delay a request may be exercised by the
Company not more than once in any two-year period.
2.3 Company Registration.
(a) If at any time or from time to time, the Company shall
determine to register any of its Common Stock, for its own account or for the
account of stockholders (other than the Holders) exercising any demand
registration rights which they may have, other than a registration relating
solely to employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction or any Rule adopted by the Commission in
substitution thereof or in amendment thereto, or a registration on any
registration form which does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice
thereof and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance therewith), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within fifteen (15) days af ter receipt of
such written notice from the Company, by any Holder or Holders.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.3(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 2.3, if the
underwriter (or managing underwriter on behalf -of all of the underwriters)
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter (or managing underwriter on behalf of all of
the underwriters) may exclude some or all Registrable Securities from such
registration and underwriting. The Company shall so advise all Holders (except
those Holders who have indicated to the Company their decision not to distribute
any of their Registrable Securities through such underwriting), and the number
of shares of Registrable
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Securities that may be included in the registration and underwriting shall be
allocated among such Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities owned by such Holders at the time
of filing the registration statement. No Registrable Securities excluded from
the underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. If any Holder disapproves of the terms of any
such underwriting, such person may elect to withdraw therefrom by written notice
to the Company and the underwriter. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration.
2.4 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.10 shall be borne
by the Company; and all Selling Expenses shall be borne by the holders of the
securities so registered prorata on the basis of the number of shares so
registered; provided, however, that if a request for registration pursuant to
Section 2.2 is made at a time when the Company is unable to use year-end
financial statements in the registration statement filed pursuant to such
request and a special audit is required because of such inability, then the
Company shall bear up to $15,000 of the costs and fees of the Company's auditors
resulting from such special audit, and any additional costs and fees in excess
of $15,000 resulting from Such special audit shall be allocable to the sellers,
including the Company, of the securities so registered, borne pro rata on the
basis of the number of shares registered.
2.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Keep such registration, qualification or compliance
effective for a period of one hundred twenty (120) days or until the Holder or
Holders have completed the distribution described in the registration statement
relating thereto, whichever first occurs;
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request;
(c) Use its best efforts and qualify the securities covered by
such registration statement under such securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
such states or jurisdictions;
(d) 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 underwriter or underwriters of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement; and
(e) Notify each Holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
covered by such registration statement
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is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
2.6 Indemnification.
(a) The Company will indemnify each Holder, each of its
officers and directors and partners, and such Holder's legal counsel and
independent accountants and each person controlling such Holder, with respect to
whose Registrable Securities registration, qualification or compliance has been
effected pursuant to this Section 2, and each underwriter, if any, and each
person who controls any underwriter against all claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other similar
document (including any amendment or supplement thereto and any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, or (ii) any violation by the Company
of any federal, state or common law rule or regulation applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder each of its officers, directors and partners, and such Holder's legal
counsel and independent accountants and each person controlling such Holder,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by such Holder or underwriter and stated
to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each legal counsel and independent accountant of the
Company, each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of the Securities Act, and each other such Holder, each of
its officers and directors and each person controlling such Holder, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other similar document (including any amendment or supplement
thereto), or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the
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light of the circumstances under which they were made, and will reimburse the
Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of such Holders hereunder shall be limited to an amount equal to the
proceeds to each such Holder of Registrable Securities sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section
2.6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has received written notice of any claim as to which indemnity may be s ought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, provided, however that the Indemnifying Party
shall bear the expense of such Indemnified Party if the Indemnified Party
reasonably determines that representation of both parties by the same counsel
would be inappropriate due to actual or potential conflicts of interest. The
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 2 unless
such failure to give notice shall materially adversely affect the Indemnifying
Party in the defense of any such claim or any such litigation. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
2.7 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 2.
2.8 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to:
(a) Use its best efforts to facilitate the sale of the
Restricted Securities to the public, without registration under the Securities
Act, pursuant to Rule 144 under the Securities Act ("Rule 144"), provided that
this shall not require the Company to file reports under the
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Securities Act and the Exchange Act at anytime prior to the Company's being
otherwise required to file such reports.
(b) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(c) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act, as amended (at any time after it has become
subject to such reporting requirements);
(d) So long as a Purchaser owns any Restricted Securities, to
furnish to the Purchaser forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents so filed by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.
2.9 "Market Stand-off" Agreement. Purchasers hereby agree, if requested
by the Company and the- underwriter managing the offering of Common Stock (or
other securities) of the Company, not to sell or otherwise transfer or dispose
of any Common Stock (or other securities) of the Company held by Purchasers,
without the prior consent of the Company or of such underwriter during any
period requested by the Company and such underwriter (not to exceed one hundred
fifty (150) days) following the effective date of a registration statement of
the Company filed under the Securities Act provided that:
(a) such agreement shall only apply to the first such
registration statement of the Company including shares (or securities) to be
sold on its behalf to the public in an underwritten offering; and
(b) all officers and directors of the Company enter into
similar agreements. The Company may impose stop- transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said period.
2.10 Form S-3. The Company shall use its best efforts to qualify for
registration on Form S-3 and to that end the Company shall register (whether or
not required by law to do so) its Common Stock under the Exchange Act within one
hundred twenty (120) days following the end of the fiscal year in which the
Company first registered any securities of the Company on Form S-1. After the
Company has qualified for the use of Form S-3, the Holders of Registrable
Securities shall have the right to request up to two (2) registrations on Form
S-3 in each twelve
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month period thereafter under this Section 2.10 (such requests shall be in
writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended method of disposition of such shares by such Holder
or Holders), provided that the Company shall not be required to effect a
registration pursuant to this Section 2.10 unless the Holder or Holders
requesting registration propose to dispose of shares of Registrable Securities
which they reasonably anticipate will have an aggregate disposition price
(before deduction of underwriting discounts and expenses of sale) of at least
$500,000.
The Company shall give notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this Section
2.10 and shall provide a reasonable opportunity for other Holders to participate
in the registration. In the event a registration pursuant to this Section 2.10
shall be underwritten, the substantive provisions of Section 2.2(c) shall apply
to such underwritten registration. Subject to the foregoing, the Company will
use its best efforts to effect promptly the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by the Holder or
Holders thereof for purposes of disposition, and in any event within ninety (90)
days of such request; provided, however, that if the Company shall furnish to
such Initiating Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such registration statement to be filed on or before the date filing would
be required and it is therefore essential to defer the date of such filing, the
Company shall have the right to defer such filing for a period of not more than
sixty (60) days after receipt of the request of the Initiating Holders;
provided, however that the Company may not make such certification more than
once in any 12 month period.
2.11 Transfer of Registration Rights. The rights to cause the Company
to register securities granted Purchasers under Sections 2.2, 2.3 and 2.10 may
be assigned or otherwise conveyed by any Holder; provided, that the Company is
given written notice by such transferee at the time of or within a reasonable
time after said transfer, stating the name and address of said transferee and
said transferee's agreement to be bound by the provisions of Section 2 of this
agreement. Each Purchaser will cause any proposed transferee of the Shares (or
of the Common Stock into which the Shares are convertible) held by a Purchaser
to agree to -take and hold such securities subject to the provisions and upon
the conditions specified in this Section 2.
2.12 Certain Limitations in Connection with Future Grants of
Registration Rights. From and after the date of this agreement, the Company
shall not, without the consent of at least 67% of the Registrable Securities
then held by Holders, enter into any agreement with any holder or prospective
holder of any securities of the Company providing for the granting to such
holder of registration rights except that the Company may, without such consent,
amend this Agreement to provide any prospective holder which acquires securities
in a financing to raise capital for the Company may have Common Stock issuable
as a result of such financing included in the definition of "Registrable
Securities" hereunder, provided that the rights thereby granted are shared pro
rata with the existing Holders.
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2.13 Termination of Registration Rights. The rights granted to any
holder under Section 2.3 to include Registrable Securities in any registration
shall terminate ten (10) years from the date of the Company's initial
registration statement including shares on its behalf to be sold to the public
is declared effective by the Commission and shall also terminate earlier (but in
no event prior to one year after the date of the Company's initial public
offering, as to any Holder who could sell all shares of Common Stock in any 90
day period pursuant to Rule 144.
SECTION 3.
Restrictions on Transferability of Notes; Compliance with Securities Act
3.1 Restrictions on Transferability. The Series B Preferred Stock which
certain Purchasers are receiving upon the conversion of certain convertible
promissory notes and the Series C Preferred Stock which certain Purchasers are
receiving in exchange for cash (collectively "Shares"), and the Common Stock
into which Series B and Series C Preferred Stock is convertible, shall not be
transferable except upon the conditions specified in this Section 3 " which
conditions are intended to insure compliance with the provisions of the
Securities Act. Each Purchaser will cause any proposed transferee of Shares or
of the Common Stock into which the Shares are convertible held by a Purchaser to
agree to take and hold such securities subject to the provisions and upon the
conditions specified in this Section 3. Each Purchaser represents that it (i) is
experienced in evaluating and investing in high technology companies such as the
Company, (ii) is experienced in investing in private placement transactions,
(iii) is capable of evaluating the risks and merits of its investment in the
Company and has the capacity to protect its own interests, (iv) is acquiring the
Shares for investment for its own account and not with a view to, or for resale
in connection with, any distribution thereof, and it has no present intention of
selling or distributing the Shares or any of the Common Stock into which the
Shares are convertible, (v) understands that the shares have not been registered
under the Securities Act and must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from registration is
available and that no public market now exists for any securities of the Company
and that a public market may never exist for the Shares or the Common Stock into
which they are convertible, and (vi) has had an opportunity to discuss-the
Company's business, management and financial affairs with its management and
obtain any additional information it considered necessary or desirable.
3.2 Restrictive Legend. Each certificate representing (i) the Shares or
shares of the Company's Common Stock issued upon conversion of the Series B or
Series C Preferred Stock and (iii) any securities issued in respect of such
Preferred Stock or Common Stock (collectively, "Restricted Securities"), shall
(unless otherwise permitted by the provisions of Section 3.3 below) be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT OR AS PROVIDED IN THE AGREEMENT COVERING THE
PURCHASE OF
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THESE SHARES AND RESTRICTING THEIR TRANSFER. COPIES OF THE AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE CORPORATION'S PRINCIPAL
PLACE OF BUSINESS.
3.3 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 3.3. Prior to any proposed transfer
of any Restricted Securities, unless there is in effect a registration statement
under the Securities Act covering the proposed transfer, the holder thereof
shall give written notice to the Company of such holder's intention to effect
such transfer. Each such notice shall describe the manner and circumstances of
the proposed transfer in sufficient detail, and shall be accompanied (except in
the following cases, with respect to which the requirements set forth in the
balance of this sentence need not be complied with: transactions in compliance
with Rule 1-,44 so long as the Company is furnished with evidence of compliance
with such Rule; transactions involving the distribution of Restricted Securities
by any Purchaser which is a general or limited partnership to any of its
partners, or retired partners, or to the estate of any of its partners or
retired partners, so long as such transaction does not involve the disposition
of such Restricted Securities for value; transactions involving the transfer of
Restricted Securities by any holder who is an individual to a trust for the
benefit of such shareholder or his family members; or transfer by gift, will or
intestate succession by any holder who is an individual- to his spouse, lineal
descendants or ancestors) by either (i) an unqualified written opinion of legal
counsel who shall be reasonably satisfactory to the Company addressed to the
Company and reasonably satisfactory in form and substance to the Company's
counsel, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (ii) a "no
action" letter from the Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, whereupon the
holder of such Restricted Securities shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
the holder to the Company. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear the appropriate restrictive legend set
forth in Section 3.2 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for the Company such legend is
not required in order to establish compliance with any provisions of the
Securities Act.
SECTION 4.
Miscellaneous
4.1 Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.
4.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby.
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4.3 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
4.4 Entire Agreement; Amendment, This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
Any term of this Agreement may be amended and the observance of any term of this
agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the
holders of at least 67% of the outstanding Existing Shares, as defined in
Section 2.1, (including, for such purposes, on a proportional basis, any shares
of Common Stock into which any of the Existing Shares have been converted that
have not been sold to the public). Any amendment or waiver effected in
accordance with this -section shall be binding upon each holder of any
securities purchased under this agreement at the time outstanding (including
securities into which such securities have been converted), each future holder
of all such securities, and the Company.
4.5 Effect of Amendment or Waiver. Each Purchaser acknowledges that by
the operation of Section 4.4 hereof the holders of 67% of the outstanding
Existing Shares (and Common Stock issued upon conversion thereof) will have the
right and power to diminish or eliminate all rights of such Purchaser under this
Agreement.
4.6 Rights of Purchasers. Each holder of the Shares (and Common Stock
issued upon conversion thereof) shall have the absolute right to exercise or
refrain from exercising any right or rights that such holder may have by reason
of this Agreement or the Existing Shares, including without limitation the right
to consent to the waiver of any obligation of the Company under this Agreement
and to enter into an Agreement with the Company for the purpose of modifying
this Agreement or any agreement effecting any such modification, and such holder
shall not incur any liability to any other holder or holders of the Existing
Shares with respect to exercising or refraining from exercising any such right
or rights.
4.7 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or otherwise delivered by hand or by messenger, addressed (a)
if to a Purchaser, at such Purchaser's address set forth in the Schedule of
Holders of Registrable Securities, or at such other address as such Purchaser
shall have furnished to the Company in writing, or (b) if to any other holder of
any Shares, at such address as such holder shall have furnished the Company in
writing, or, until any such holder so furnishes an address to the Company, then
to and at the address of the last holder of such Shares who has so furnished an
address to the Company, or (c) if to the Company, at 000 Xxxxx Xxxxxx, Xxxxxxxx
Xxxx, Xxxxxxxxxx 00000 or at such other address as the Company shall have
furnished to each Purchaser and each such other holder in writing and shall be
deemed to have been received (a) upon delivery if delivered by hand or by
messenger or (b) five (5) days after mailing, if mailed.
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4.8 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Existing Shares, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power or remedy of such holder nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereunder occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
4.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
4.10 Severability. In the case any provision of this Agreement shall
the remaining provisions shall not in any way be affected or impaired thereby.
4.11 Gender. The use of the neuter gender herein shall be deemed to
include the masculine and the feminine gender, if the context so requires.
4.12 Effectiveness. This Agreement shall be effective upon execution by
holders of at least eighty percent (80%) of the Existing Shares.
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The foregoing Agreement is hereby executed as of the date first above
written.
PLX TECHNOLOGY, INC.
By:__________________________
Xxxxxxx X. Xxxxxxx
President
Schedule of Holders of Registrable
Securities
("PURCHASERS")
CALIFORNIA PARTNERS
XXXXXX ASSOCIATES,
a California Limited Partnership
By:_____________________________________
Xxxxxxx X. Xxxxxx
Chief Financial Officer
ARBOR FINANCIAL CORPORATION
By:_____________________________________
D. Xxxxx Xxxx President
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L.S. & Co.
By:_____________________________________
Xxxxxxxx X. Xxxxxxxx
BEAGLE LTD.
By:_____________________________________
Xxxx Xxxxxxx
By:_____________________________________
Xxxxxxx X. Xxxxxxx
By:_____________________________________
Xxxxxxx X. Xxxxxx III
GC&H PARTNERS
By:_____________________________________
Xxxxxxx Xxxxxxxx
By:_____________________________________
Xxxxxxx Xxxxxxx
By:_____________________________________
Xxxxxx Xxxxxxx
By:_____________________________________
Wei-Ti Liu
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OTHER SERIES C HOLDERS:
FIRM NAME: __________________________
SIGNATURE: By: ______________________
NAME: __________________________
FIRM NAME: __________________________
SIGNATURE: By: ______________________
NAME: __________________________
FIRM NAME: __________________________
SIGNATURE: By: ______________________
NAME: __________________________
FIRM NAME: __________________________
SIGNATURE: By: ______________________
NAME: __________________________
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