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EXHIBIT 10.4
FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
BY AND AMONG
CROSSROADS SYSTEMS, INC.
AND
THE STOCKHOLDERS LISTED ON SCHEDULE A
AND THE INVESTORS LISTED ON SCHEDULE B
DATED AS OF AUGUST 6, 1999
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TABLE OF CONTENTS
Page
1. Registration Rights.....................................................................................1
1.1 Definitions......................................................................................1
1.2 Request for Registration.........................................................................3
1.3 Company Registration.............................................................................4
1.4 Obligations of the Company.......................................................................4
1.5 Furnish Information..............................................................................6
1.6 Expenses of Demand Registration..................................................................7
1.7 Expenses of Company Registration.................................................................7
1.8 Underwriting Requirements........................................................................7
1.9 Delay of Registration............................................................................8
1.10 Indemnification..................................................................................8
1.11 Reports Under Securities Exchange Act...........................................................10
1.12 Form S-3 Registration...........................................................................11
1.13 Assignment of Registration Rights...............................................................11
1.14 Limitations on Subsequent Registration Rights...................................................12
1.15 "Market Stand-Off" Agreement....................................................................12
1.16 Termination of Registration Rights..............................................................13
2. Covenants of the Company...............................................................................13
2.1 Delivery of Financial Statements................................................................13
2.2 Inspection......................................................................................14
2.3 Termination of Information and Inspection Covenants.............................................14
2.4 Right of First Offer............................................................................14
2.5 Stock Option Repurchases........................................................................16
2.6 Key-Man Insurance...............................................................................16
3. Miscellaneous..........................................................................................16
3.1 Certain Confidentiality and Non-Disclosure Provisions Relating to Intel.........................16
3.2 Successors and Assigns..........................................................................17
3.3 Governing Law...................................................................................18
3.4 Counterparts....................................................................................18
3.5 Titles and Subtitles............................................................................18
3.6 Notices.........................................................................................18
3.7 Expenses........................................................................................18
3.8 Amendments and Waivers..........................................................................19
3.9 Severability....................................................................................19
3.10 Aggregation of Stock............................................................................19
3.11 Entire Agreement; Amendment; Waiver.............................................................19
SCHEDULE A - Schedule of Prior Holders
SCHEDULE B - Schedule of Investors
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FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
(the "Agreement") is made as of the 6th day of August, 1999, by and among
Crossroads Systems, Inc., a Delaware corporation formerly known as Crossroads
Holding Corp. (the "Company"), the stockholders of the Company's Common Stock,
including permitted transferees, listed on Schedule A hereto, each of which is
herein referred to as a "Prior Holder," and the investors listed on Schedule B
hereto, each of which is herein referred to as an "Investor."
R E C I T A L S:
WHEREAS, certain of the Investors hold shares of the
Company's Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), Series B Convertible Preferred Stock (the "Series B Preferred Stock"),
the Series C Convertible Preferred Stock (the "Series C Preferred Stock")
and/or the Series D Convertible Preferred Stock (the "Series D Preferred
Stock") and possess registration rights, information rights and other rights
pursuant to the Third Amended and Restated Investors' Rights Agreement dated as
of April 29, 1999, between the Company and such Investors (the "Prior
Agreement");
WHEREAS, the Company and certain Purchasers (as defined in
the Purchase Agreement) are parties to the Series E Convertible Preferred Stock
Purchase Agreement of even date herewith (the "Purchase Agreement") pursuant to
which the Company has agreed to sell, and such Purchasers have agreed to
purchase, shares of the Company's Series E Convertible Preferred Stock (the
"Series E Preferred Stock");
WHEREAS, the Company's and such Purchasers' respective
obligations under the Purchase Agreement are conditioned upon the execution and
delivery of this Agreement; and
WHEREAS, in order to induce the Company to enter into the
Purchase Agreement and to induce such Purchasers to invest funds in the Company
pursuant to the Purchase Agreement, the Investors and the Company hereby agree
that this Agreement shall govern the rights of the Investors to cause the
Company to register shares of Common Stock issuable to the Investors and
certain other matters as set forth herein.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Investors who are parties to the Prior
Agreement hereby amend and restate the Prior Agreement in its entirety and the
parties hereto agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
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(a) The term "Securities Act" means the Securities Act of
1933, as amended.
(b) The term "Form S-3" means such form under the Securities
Act as in effect on the date hereof or any registration form(s) under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof.
(d) The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(e) The term "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(f) The term "Registrable Securities" means (i) the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock or the Series E Preferred Stock of the Company and (ii) any Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the
shares referenced in (i) above, excluding in all cases, however, any
Registrable Securities sold by a Holder in a transaction in which his rights
under this Section 1 are not assigned.
(g) The term "Prior Holder Registrable Securities" means (i)
the Common Stock of the Company issued to the Prior Holders and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the
shares referenced in (i) above, excluding in all cases, however, any Prior
Holder Registrable Securities sold by a Prior Holder in a transaction in which
his rights under this Section 1 are not assigned.
(h) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
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1.2 Request for Registration.
(a) If the Company shall receive at any time after the
earlier of (A) five years after the date hereof or (B) one hundred eighty (180)
days following the consummation of the sale of securities pursuant to a
registration statement filed by the Company under the Securities Act in
connection with the initial firm commitment underwritten offering of its
securities to the general public, a written request from the Holders of at
least two-thirds of the Registrable Securities then outstanding that the
Company file a registration statement under the Securities Act covering the
registration of at least fifty percent (50%) of the Registrable Securities then
outstanding, then the Company shall:
(i) within 10 days of the receipt thereof, give written
notice of such request to all Holders; and
(ii) effect as soon as practicable, and in any event
within 60 days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities which the Holders request to be
registered, subject to the limitations of subsection 1.2(b), within 20 days of
the mailing of such notice by the Company in accordance with Section 3.5.
(b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to subsection
1.2(a) and the Company shall include such information in the written notice
referred to in subsection 1.2(a). The underwriter will be selected by the
Company and shall be reasonably acceptable to a majority in interest of the
Initiating Holders. In such event, the right of any Holder to include such
Holder's Registrable Securities in such registration shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company as
provided in subsection 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder; provided, however, that the number of
shares of Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities are first entirely excluded from the
underwriting.
(c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
1.2, 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 stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
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registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than 90 days after receipt
of the request of the Initiating Holders; provided, however, that the Company
may not utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.2:
(i) After the Company has effected two registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;
(ii) Within twelve months after the effective date of
the first registration made pursuant to this Section 1.2;
(iii) During the period starting with the date 60 days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date 180 days after the effective date of, a registration subject to
Section 1.3 or Section 1.12 hereof; provided, that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective; or
(iv) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.
1.3 Company Registration. If, but without any obligation to do so, the
Company proposes to register (including for this purpose a registration
effected by the Company for the Holders or stockholders other than the Holders)
any of its stock or other securities under the Securities Act in connection
with the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities which are also being registered),
the Company shall, at such time, promptly give each Holder and Prior Holder
written notice of such registration. Upon the written request of each Holder or
Prior Holder given within 20 days after mailing of such notice by the Company
in accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Securities Act all of the
Registrable Securities and Prior Holder Registrable Securities that each such
Holder and Prior Holder, as the case may be, has requested to be registered.
1.4 Obligations of the Company. Whenever required under this Section 1
to effect the registration of any Registrable Securities or Prior Holder
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and Prior Holder Registrable
Securities and use its best efforts to
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cause such registration statement to become effective, and, upon the request of
the holders of a majority of the Registrable Securities and Prior Holder
Registrable Securities registered thereunder, keep such registration statement
effective for a period of up to 120 days or until the distribution contemplated
in the Registration Statement has been completed; provided, however, that (i)
such 120-day period shall be extended for a period of time equal to the period
the Holder or Prior Holder, as the case may be, refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company and (ii) in the case of any
registration of Registrable Securities and Prior Holder Registrable Securities
on Form S-3 which are intended to be offered on a continuous or delayed basis,
such 120-day period shall be extended, if necessary, to keep the registration
statement effective until all such Registrable Securities and Prior Holder
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be
included in (I) and (II) above to be contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders and Prior Holders, as the case may
be, such numbers of copies of a prospectus, including a preliminary prospectus,
in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities and Prior Holder Registrable Securities owned by
them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders or the Prior Holders; provided, that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder and
Prior Holder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities, and each
Prior Holder of Prior Holder Registrable Securities, covered by such
registration statement at any time when a prospectus relating thereto 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
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statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(g) Cause all such Registrable Securities and Prior Holder
Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities and Prior Holder Registrable Securities registered
pursuant hereunder and a CUSIP number for all such Registrable Securities and
Prior Holder Registrable Securities, in each case not later than the effective
date of such registration.
(i) Use its best efforts to furnish, at the request of any
Holder or Prior Holder requesting registration of Registrable Securities or
Prior Holder Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities or Prior Holder Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters,
on the date that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders and Prior Holders requesting
registration of Registrable Securities and Prior Holder Registrable Securities
and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders and
Prior Holders requesting registration of Registrable Securities and Prior
Holder Registrable Securities.
1.5 Furnish Information.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities or Prior Holder Registrable Securities of any selling
Holder or Prior Holder, as the case may be, that such Holder or Prior Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities and Prior Holder Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Holder's Registrable Securities or such Prior Holder's
Prior Holder Registrable Securities, as the case may be.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of subsection 1.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's
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obligation to initiate such registration as specified in subsection 1.2(a) or
subsection 1.12(b)(2), whichever is applicable.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses
pro rata), unless the Holders of a majority of the Registrable Securities agree
to forfeit their right to one demand registration pursuant to Section 1.2;
provided further, however, that if at the time of such withdrawal, the Holders
have learned of a material adverse change in the condition, business, or
prospects of the Company from that known to the Holders at the time of their
request and have withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change, then the Holders
shall not be required to pay any of such expenses and shall retain their rights
pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities and Prior Holder Registrable Securities
with respect to the registrations pursuant to Section 1.3 for each Holder and
Prior Holder (which right may be assigned as provided in Section 1.13),
including (without limitation) all registration, filing and qualification fees,
printers and accounting fees relating or apportionable thereto and the
reasonable fees and disbursements of one counsel for the selling Holders, but
excluding underwriting discounts and commissions relating to Registrable
Securities and Prior Holder Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders' or Prior
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then only
in such quantity as the underwriters determine in their sole discretion will
not jeopardize the success of the offering by the Company. If the total amount
of securities, including Registrable Securities and Prior Holder Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities and Prior
Holder Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders) but in no event shall (i) the amount of
securities of the selling Holders included in the offering be reduced below
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twenty-five percent (25%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities in which case the selling stockholders may be excluded if the
underwriters make the determination described above and no other stockholder's
securities are included or (ii) notwithstanding (i) above, any shares being
sold by a stockholder exercising a demand registration right similar to that
granted in Section 1.2 be excluded from such offering. For purposes of the
preceding parenthetical concerning apportionment, for any selling stockholder
which is a holder of Registrable Securities and which is a partnership or
corporation, the partners, retired partners and stockholders of such holder, or
the estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons shall be deemed to
be a single "selling stockholder," and any pro-rata reduction with respect to
such "selling stockholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "selling stockholder," as defined in this sentence.
1.9 Delay of Registration. No Holder or Prior Holder shall have any
right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities or Prior
Holder Registrable Securities are included in a registration statement under
this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, each Prior Holder, any underwriter (as
defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (each, a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto; (ii) the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any state securities
law or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law; and the Company will pay to each such
Holder, Prior Holder, underwriter or controlling person, as incurred, any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this subsection 1.10(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any such
Holder, Prior Holder underwriter or controlling person.
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(b) To the extent permitted by law, each selling Holder and
each selling Prior Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter, any other Holder or Prior Holder selling
securities in such registration statement and any controlling person of any
such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder or Prior
Holder expressly for use in connection with such registration; and each such
Holder or Prior Holder, will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 1.10(b), in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 1.10(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder or Prior Holder, as
the case may be, which consent shall not be unreasonably withheld; provided,
that, in no event shall any indemnity under this subsection 1.10(b) exceed the
gross proceeds from the offering received by such Holder or such Prior Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such
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proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company, Holders and Prior Holders
under this Section 1.10 shall survive the completion of any offering of
Registrable Securities or Prior Holder Registrable Securities in a registration
statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after 90 days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to
enable the Holders to utilize Form S-3 for the sale of their Registrable
Securities, such action to be taken as soon as practicable after the end of the
fiscal year in which the first registration statement filed by the Company for
the offering of its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), or that
it qualifies as a registrant whose securities may be resold pursuant to Form
S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so
filed by the Company and (iii) such other information as may be
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reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.12 Form S-3 Registration. In case the Company shall receive a
written request from the Holder or Holders of at least twenty-five percent
(25%) of the Registrable Securities then outstanding that the Company effect a
registration on Form S-3, and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other
Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.12: (i)
if Form S-3 is not available for such offering by the Holders; (ii) if the
Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities at an aggregate price to the public (net of any underwriters'
discounts or commissions) of less than $1,000,000; (iii) if the Company shall
furnish to the Holders a certificate signed by the 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 stockholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 90 days after receipt of the request of
the Holder or Holders under this Section 1.12; provided, however, that the
Company shall not utilize this right more than once in any twelve month period;
or (iv) in any particular jurisdiction in which the Company would be required
to qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with
registrations requested pursuant to this Section 1.12, including (without
limitation) all registration, filing, qualification, printer's and accounting
fees and the reasonable fees and disbursements of a single counsel for the
selling Holder or Holders and counsel for the Company, but excluding any
underwriters' discounts or commissions associated with Registrable Securities,
shall be borne by the Company. Registrations effected pursuant to this Section
1.12 shall not be counted as demands for registration or registrations effected
pursuant to Sections 1.2 or 1.3, respectively.
1.13 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 1 may be assigned
(but only with all
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related obligations) by a Holder or Prior Holder to a transferee or assignee of
such securities who, after such assignment or transfer, holds at least 100,000
shares of Registrable Securities or Prior Holder Registrable Securities, as the
case may be (in each case subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations), provided:
(a) the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned;
(b) such transferee or assignee agrees in writing to be bound
by and subject to the terms and conditions of this Agreement, including
(without limitation) the provisions of Section 1.15 below; and
(c) such assignment shall be effective only if immediately
following such transfer, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act.
For the purposes of determining the number of shares of Registrable
Securities or Prior Holder Registrable Securities held by a transferee or
assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities or Prior Holder Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided, that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
1.14 Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any
securities of the Company which would allow such holder or prospective holder
(a) to include such securities in any registration filed under Section 1.2 or
Section 1.3 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of such holder's securities will not reduce the
amount of the Registrable Securities of the Holders which is included or (b) to
make a demand registration which could result in such registration statement
being declared effective prior to the earlier of either of the dates set forth
in subsection 1.2(a) or within 120 days of the effective date of any
registration effected pursuant to Section 1.2.
1.15 "Market Stand-Off" Agreement. Each Holder and Prior Holder hereby
agrees that, during the period of up to 180 days following the date of the
first sale to the public pursuant to a registration statement of the Company
filed under the Securities Act, it shall not, to the extent requested by the
Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound) any
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securities of the Company held by it at any time during such period except
Common Stock included in such registration; provided, however, that:
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers Common Stock (or other
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.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder and the Prior Holder Registrable Securities of each Prior Holder (and
the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-8 or similar forms which may be promulgated in the
future, or a registration relating solely to an SEC Rule 145 transaction on
Form S-4 or similar form which may be promulgated in the future.
1.16 Termination of Registration Rights.
(a) No Holder or Prior Holder shall be entitled to exercise
any right provided for in this Section 1 after five (5) years following the
consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Securities Act in connection with the initial
firm commitment underwritten offering of its securities to the general public.
(b) In addition, the right of any Holder or Prior Holder to
request registration or inclusion in any registration pursuant to this Section
1 shall terminate on the closing of the first Company-initiated registered
public offering of Common Stock of the Company if all shares of Registrable
Securities or Prior Holder Registrable Securities held or entitled to be held
upon conversion by such Holder or Prior Holder may immediately be sold under
Rule 144 during any 90-day period, or on such date after the closing of the
first Company-initiated registered public offering of Common Stock of the
Company as all shares of Registrable Securities or Prior Holder Registrable
Securities held or entitled to be held upon conversion by such Holder or Prior
Holder may immediately be sold under Rule 144 during any 90-day period;
provided, however, that the provisions of this Section 1.16(b) shall not apply
to any Holder or Prior Holder who owns more than two percent (2%) of the
Company's outstanding stock until such time as such Holder or Prior Holder owns
less than two percent (2%) of the outstanding stock of the Company.
2. Covenants of the Company.
2.1 Delivery of Financial Statements. The Company shall deliver to
each Holder of at least 250,000 shares of Registrable Securities (a "Major
Stockholder"):
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(a) as soon as practicable, but in any event within 90 days
after the end of each fiscal year of the Company, a consolidated balance sheet
of the Company and a consolidated statement of stockholders' equity as of the
end of such year, and a consolidated statement of operations and a consolidated
statement of cash flows for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles, and audited and certified by an independent "Big Five" public
accounting firm selected by the Company;
(b) within 30 days of the end of each month, an unaudited
consolidated balance sheet of the Company for and as of the end of such month,
an unaudited consolidated statement of operations and a consolidated statement
of cash flows, in reasonable detail, and a monthly executive summary of the
Company's activities;
(c) as soon as practicable, but in any event at least 30 days
prior to the end of each fiscal year, a budget for the next fiscal year
prepared on a monthly basis, including balance sheets, sources and applications
of funds statements for each of the months therein, and, as soon as prepared,
any other budgets or revised budgets prepared by the Company; and
(d) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the Major
Stockholder may from time to time request, provided, however, that the Company
shall not be obligated under this subsection (d) or any other subsection of
Section 2.1 to provide information which it deems in good faith to be a trade
secret or similar confidential information.
2.2 Inspection. The Company shall permit each Major Stockholder, at
such Major Stockholder's expense, to visit and inspect the Company's and its
wholly owned subsidiary's, Crossroads Systems (Texas), Inc. ("Crossroads
Texas"), properties, to examine their books of account and records and to
discuss the Company's and Crossroads Texas' affairs, finances and accounts with
their officers, all at such reasonable times as may be requested by the Major
Stockholder; provided, however, that the Company and Crossroads Texas shall not
be obligated pursuant to this Section 2.2 to provide access to any information
which they reasonably consider to be a trade secret or similar confidential
information.
2.3 Termination of Information and Inspection Covenants. The covenants
set forth in Sections 2.1 and 2.2 shall terminate as to the Major Stockholders
and be of no further force or effect when the sale of securities pursuant to a
registration statement filed by the Company under the Securities Act in
connection with the firm commitment underwritten offering of its securities to
the general public is consummated or when the Company first becomes subject to
the periodic reporting requirements of Sections 12(g) or 15(d) of the Exchange
Act, whichever event shall first occur.
2.4 Right of First Offer. Subject to the terms and conditions
specified in this Section 2.4, the Company hereby grants to each Investor, so
long as such Investor is a Major Stockholder, a right of first offer with
respect to future sales by the Company of its Shares (as hereinafter defined).
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the
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Company shall first make an offering of such Shares to each Investor in
accordance with the following provisions:
(a) The Company shall deliver a notice ("Offer Notice") to
the Investor (so long as such Investor is a Major Stockholder) at least 30 days
prior to the date on which the Shares are proposed to be sold stating (i) its
bona fide intention to offer such Shares, (ii) the number of such Shares to be
offered, and (iii) the price and terms, if any, upon which it proposes to offer
such Shares.
(b) After the date of the Offer Notice, each Investor (so
long as such Investor is a Major Stockholder) may elect to purchase or obtain,
at the price and on the terms specified in the Offer Notice, up to that portion
of such Shares which equals the proportion that the number of shares of Common
Stock issued and held, or issuable upon conversion of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock then held, by such Investor bears to the
total number of shares of Common Stock of the Company then outstanding
(assuming full conversion or exercise of all outstanding securities convertible
into or exercisable for Common Stock).
(c) If all Shares which the Investors who are Major
Stockholders are entitled to obtain pursuant to subsection 2.4(b) are not
elected to be obtained as provided in subsection 2.4(b) hereof, the Company
may, during the 30-day period following the expiration of the period provided
in subsection 2.4(a) hereof, offer the remaining unsubscribed portion of such
Shares to any person or persons at a price not less than, and upon terms no
more favorable to the offeree than those specified in the Offer Notice. If the
Company does not enter into an agreement for the sale of the Shares within such
period, or if such agreement is not consummated within 30 days of the execution
thereof, the right provided hereunder shall be deemed to be revived and such
Shares shall not be offered unless first reoffered to the Investors who are
Major Stockholders in accordance herewith.
(d) The right of first offer in this Section 2.4 shall not be
applicable (i) to the issuance or sale to employees, consultants, advisors and
non-employee directors of the Company or any subsidiary of shares of the
capital stock of the Company (or options therefor) pursuant to the provisions
of any stock option or other plan or agreement of the Company, including, but
not limited to, the Company's 1996 Stock Option/Stock Issuance Plan, which plan
has been duly adopted and approved by the Board of Directors of the Company,
(ii) to or after consummation of a bona fide, firmly underwritten public
offering of shares of Common Stock, registered under the Securities Act
pursuant to a registration statement on Form S-1, at an offering price of at
least $15.00 per share (appropriately adjusted for any stock split, dividend,
combination or other recapitalization) and with gross proceeds to the Company
and any selling stockholders of at least $10,000,000 in the aggregate, (iii)
the issuance of securities pursuant to the conversion or exercise of
convertible or exercisable securities, (iv) the issuance of securities in
connection with a bona fide business acquisition of or by the Company, whether
by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, or (v) the issuance of shares of Common Stock, or warrants or other
securities convertible into or exercisable for shares of Common Stock, to
persons or entities with which the Company has business relationships,
including (without limitation) under leasing arrangements, broker's or finder's
fee arrangements,
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underwriting arrangements, bank or similar institutional financing arrangements
and other similar transactions, provided such issuances (other than with
respect to the payment of brokers' or finders' fees) are for other than
primarily equity financing purposes.
(e) The right of first refusal set forth in this Section 2.4
may not be assigned or transferred, except that (i) such right is assignable by
each Investor who is a Major Stockholder to any wholly owned subsidiary or
parent of, or to any corporation or entity that is, within the meaning of the
Securities Act, controlling, controlled by or under common control with, any
such Major Stockholder and (ii) such right is assignable between and among any
persons that qualify as Major Stockholders as of the date hereof.
2.5 Stock Option Repurchases. The Company hereby agrees that, in the
event that it shall opt not to exercise its right to repurchase shares of
Common Stock of the Company issued to employees pursuant to the Company's 1996
Stock Option/Stock Issuance Plan (the "Repurchase Right"), the Company shall
assign such Repurchase Right to the Investors so that each Investor shall have
the option to purchase up to that portion of an employee's shares of Common
Stock that is subject to the Repurchase Right and that equals the proportion
that the number of shares of Common Stock issued and held, or issuable upon
conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Series E Preferred Stock then
held, by such Investor bears to the total number of shares of Common Stock
(assuming full conversion and exercise of all convertible and exercisable
securities into Common Stock) owned by all of the Investors.
2.6 Key-Man Insurance. The Company has as of the date hereof or shall
within 90 days of the date hereof use its best efforts to obtain from a
financially sound and reputable insurer term life insurance on the life of
Xxxxx X. Xxxxx in the amount of $2,000,000 except as otherwise decided in
accordance with policies adopted by the Company's Board of Directors. Such
policies shall name the Company as loss payee and shall not be cancelable by
the Company without prior approval of the Board of Directors.
3. Miscellaneous.
3.1 Certain Confidentiality and Non-Disclosure Provisions Relating to
Intel. The terms and conditions of this Agreement, the Purchase Agreement, the
Fourth Amended and Restated Co-Sale and First Refusal Agreement and the Second
Amended and Restated Voting Agreement, each dated as of even date herewith, and
the Letter Agreement dated as of April 29, 1999 (collectively, the "Financing
Terms"), including their existence, shall be considered confidential
information and shall not be disclosed by any party hereto to any third party
except in accordance with the provisions set forth below:
(a) Press Releases, Etc. Within sixty (60) days of the
Closing (as defined in the Purchase Agreement), the Company may issue a press
release in the form provided by Intel Corporation ("Intel") disclosing that
Intel has invested in the Company; provided that the release does not disclose
any of the Financing Terms and the final form of the press release is approved
in advance in writing by Intel. No other announcement regarding Intel in a
press release, conference, advertisement, announcement, professional or trade
publication, mass
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marketing materials or otherwise to the general public may be made without such
Intel's prior written consent.
(b) Permitted Disclosures. Notwithstanding the foregoing, (i)
any party may disclose any of the Financing Terms to its current or bona fide
prospective investors, employees, investment bankers, lenders, accountants and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations; (ii) any party may disclose (other than
in a press release or other public announcement described in subsection 3.1
(b)) solely the fact that Intel is an investor in the Company to any third
parties without the requirement for the consent of any other party or
nondisclosure obligations; and (iii) Intel may disclose its investment in the
Company and the Financing Terms to third parties or to the public at its sole
discretion and, if it does so, the other parties hereto shall have the right to
disclose to third parties any such information disclosed in a press release or
other public announcement by Intel.
(c) Legally Compelled Disclosure. In the event that any party
is requested or becomes legally compelled (including without limitation,
pursuant to securities laws and regulations) to disclose the existence of this
Agreement, the Purchase Agreement, the Fourth Amended and Restated Co-Sale and
First Refusal Agreement, the Second Amended and Restated Voting Agreement or
the Letter Agreement or any of the Financing Terms hereof or thereof in
contravention of the provisions of this Section 3.1, such party (the
"Disclosing Party") shall provide the other parties (the "Non-Disclosing
Parties") with prompt written notice of that fact so that the appropriate party
may seek (with the cooperation and reasonable efforts of the other parties) a
protective order, confidential treatment or other appropriate remedy. In such
event, the Disclosing Party shall furnish only that portion of the information
which is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such
information to the extent reasonably requested by any Non-Disclosing Party.
(d) Other Information. The provisions of this Section 3.1
shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by any of the parties hereto with
respect to the transactions contemplated hereby; provided, however, that the
provisions of this Section 3.1 shall terminate as to the Investors, other than
Intel, sixty (60) days after the Closing (as defined in the Purchase
Agreement).
(e) All notices required under this Section 3.1 shall be made
pursuant to Section 3.6 of this Agreement.
3.2 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities and Prior Holder
Registrable Securities). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
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3.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Texas, without giving effect to conflicts of
laws principles.
3.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.6 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the address for each party set forth beneath each party's name in the
signature pages hereof (or at such other address for a party as shall be
specified by like notice) with copies to: (i) in the case of the Company:
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx XX
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attn: President
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Attn: S. Xxxxxxx Xxxx, P.C.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) in the case of the Investors, to such Investors
at the addresses provided for such Investor on the signature pages hereto.
Notice given by personal delivery, courier service or mail shall be
effective upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any party may change any address to which notice is to be given to it by giving
notice as provided above of such change of address.
3.7 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable
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attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
3.8 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, the holders of at
least a majority of the Registrable Securities then outstanding and the holders
of at least a majority of the Prior Holder Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
shall be binding upon each holder of any Registrable Securities or Prior Holder
Registrable Securities then outstanding, each future holder of all such
Registrable Securities and Prior Holder Registrable Securities, and the
Company. Notwithstanding, Section 3.1 may not be amended, or the observance of
any term thereof waived, unless consented in writing by Intel, which consent
Intel may withhold in its sole discretion.
3.9 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
3.10 Aggregation of Stock. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
3.11 Entire Agreement; Amendment; Waiver. This Agreement (including
the Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof
and supersedes any and all prior agreements relating to the subject matter
hereof, including, without limitation, the Prior Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Fourth
Amended and Restated Investors' Rights Agreement as of the date first above
written.
CROSSROADS SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
CROSSROADS SYSTEMS (TEXAS), INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
23
INVESTORS:
ADVANCED DIGITAL INFORMATION
CORPORATION
By: /s/ Xxxxxx X. Rock
-------------------------------------
Name: Xxxxxx X. Rock
-----------------------------------
Title: Treasurer, CAO
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
24
ADMIRALS LP
By: /s/ Xxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxxxxxx
-----------------------------------
Title: General Partner
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
25
AUSTIN VENTURES IV-A, L.P.
By: AV Partners IV, L.P.
its general partner
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
-----------------------------------
Title: General Partner
----------------------------------
AUSTIN VENTURES IV-B, L.P.
By: AV Partners IV, L.P.
its general partner
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
-----------------------------------
Title: General Partner
----------------------------------
AUSTIN VENTURES VI, L.P.
By: AV PARTNERS VI, L.P.
its general partner
By:
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
-----------------------------------
Title: General Partner
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
26
XXXXXXX XXXXXXX & XXXXXXXX LLP
By: /s/ S. Xxxxxxx Xxxx
-------------------------------------
Name: S. Xxxxxxx Xxxx
-----------------------------------
Title: Partner
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
27
UMB BANK, N.A. AS TRUSTEE FOR THE
XXXXXXX, PHLEGER & XXXXXXXX LLP
RETIREMENT BENEFIT PLAN FOR THE
BENEFIT OF XXXXXXX X. XXXXXXX
By: /s/ Xxxx X. XxXxxxxxxx
-------------------------------------
Name: Xxxx X. XxXxxxxxxx
-----------------------------------
Title: Asst. Vice President
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
28
XXXX XXXXXXXX XXXXXXX
INVESTORS LLC
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------
Title: President Xxxx Xxxxxxxx Xxxxxxx
-----------------------------------
A Division of Xxxx Xxxxxxxx
-----------------------------------
Inc., and managing member of
-----------------------------------
Xxxx Xxxxxxxx Xxxxxxx
-----------------------------------
Investors L.L.C.
-----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
29
ESSEX PRIVATE PLACEMENT
FUND LIMITED PARTNERSHIP
By: ESSEX INVESTMENT
MANAGEMENT COMPANY, LLC
its General Partner
By: /s/ X. X. Xxxxxxxxx
-------------------------------------
Name: X. X. Xxxxxxxxx
-----------------------------------
Title: Principal/VP
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
30
HEWLETT-PACKARD COMPANY
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
-----------------------------------
Title: Corporate Counsel
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
31
HLM/CB FUND, L.P.
By: HLM/CB ASSOCIATES, LLC
its General Partner
By: HLM MANAGEMENT CO., INC.
its Managing Member
By: /s/ Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
-----------------------------------
Title: General Partner
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
32
HYPERTECH CONSULTANTS, LTD. a
British Virgin Islands Company
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
-----------------------------------
Title: Chairman & CEO
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
33
INTEL CORPORATION
By: /s/ Arvind Sathane
-------------------------------------
Name: Arvind Sathane
-----------------------------------
Title: VP & Treasurer
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
34
XXXXXXXX NEW TECHNOLOGIES FUND, INC.
XXXXXXXX INVESTMENT
OPPORTUNITIES (MASTER)
FUND - NTV PORTFOLIO
By: J. & X. XXXXXXXX & CO.
INCORPORATED
As investment adviser
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Managing Director
----------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
35
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
THE MONTAGUE FAMILY LIMITED PARTNERSHIP
/s/ Minor X. Xxxxxxx
----------------------------------------
MINOR X. XXXXXXX
/s/ Xxxx X. Xxxxxx, Xx.
----------------------------------------
XXXX X. XXXXXX, XX.
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
36
TUDOR GLOBAL TRADING
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: Tudor Investment Corporation as
---------------------------------
General Partner
---------------------------------
Raptar Global Fund L.P.
---------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
37
/s/ Park X. Xxxxxx
---------------------------------------
PARK X. XXXXXX
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
38
PROTOTECH, INC.
By: /s/ P.A. Xxxx
------------------------------------
Name: P.A. Xxxx
----------------------------------
Title: Director
---------------------------------
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
39
COMMON STOCKHOLDERS:
/s/ Xxxxx X. Xxxxx
---------------------------------------
XXXXX X. XXXXX
/s/ T. Xxxx Xxxxxxxxxxx
---------------------------------------
T. XXXX XXXXXXXXXXX
PERMITTED TRANSFEREES:
COLIN XXXXX XXXXX GIFT TRUST
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
XXXXXX X. XXXXX, Trustee
CAITLIN XXXXXXXXX XXXXX GIFT TRUST
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
XXXXXX X. XXXXX, Trustee
/s/ Xxxxxx X. Xxxxx
---------------------------------------
XXXXXX X. XXXXX, tenant in common with
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------
XXXXXXX XXXXX, tenant in common with
Xxxxxx X. Xxxxx
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
40
/s/ Xxxxx XxXxxxxx
---------------------------------------
XXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
XXXXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxx
---------------------------------------
XXXXX XXXXXX
/s/ Xxxxxxx X. Xxxxx
---------------------------------------
XXXXXXX X. XXXXX
/s/ Xxxx Xxxxxxx
---------------------------------------
XXXX XXXXXXX
/s/ T. Xxxx Xxxxxxxxxxx
---------------------------------------
XXXXXX XXXXXXXXXXX 1999 GRAT
/s/ T. Xxxx Xxxxxxxxxxx
---------------------------------------
T. XXXX XXXXXXXXXXX 1999 GRAT
/s/ T. Xxxx Xxxxxxxxxxx
---------------------------------------
C.T.Q. 1999 TRUST
/s/ T. Xxxx Xxxxxxxxxxx
---------------------------------------
J.E.Q. 1999 TRUST
[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
41
SCHEDULE A
PRIOR HOLDERS
Xxxxx X. Xxxxx
0000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
T. Xxxx Xxxxxxxxxxx
00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
PERMITTED TRANSFEREE
Colin Xxxxx Xxxxx Gift Trust Xxxxx XxXxxxxx
c/o Xxxxxx X. Xxxxx, Trustee 0000 Xxxxxxxxx Xxxxx
0000 Xxxx Xxxx Xxxxxx, XX 00000
Xxxxxx, Xxxx 00000
Caitlin Xxxxxxxxx Xxxxx Gift Trust Xxxxxxx Xxxxxxxxx
c/o Xxxxxx X. Xxxxx, Trustee 000 Xxxxx Xxxx
0000 Xxxx Xxxx Xxxxxxxxx, XX 00000
Xxxxxx, Xxxx 00000
Xxxxxx X. Xxxxx and Xxxxxxx Xxxxx Xxxxxx Xxxxxxxxxxx 1999 GRAT
0000 Xxxx Xxxx 00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxx 00000 Xxxxxx, Xxxxx 00000
Xxxxxxx X. Xxxxx Xxxx Xxxxxxxxxxx 1999 GRAT
0000 Xxxx Xxxx 00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxx 00000 Xxxxxx, Xxxxx 00000
Xxxx Xxxxxxx C.T.Q. 1999 Trust
0000 Xxxxxxxx Xxxxx Xxxxx 00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxx 00000 Xxxxxx, Xxxxx 00000
Xxxxx Xxxxxx J.E.Q. 1999 Trust
000 Xxxxx Xxxx 00000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxx, Xxxxx 00000
42
SCHEDULE B
Investors
NUMBER OF SHARES OF
SERIES E PREFERRED
STOCK BEING AGGREGATE PURCHASE
NAME OF PURCHASER PURCHASED AT CLOSING PRICE AT CLOSING
----------------- -------------------- ----------------
Admirals LP 120,000 $ 1,800,000
Attn: Xxx Xxxxxxxxxxxx
0000 Xxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Austin Ventures VI, L.P. 200,000 $ 3,000,000
Attn: Xxxx Xxxxxxxx
000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Xxxxxxx Phleger & Xxxxxxxx LLP 4,722 $ 70,830
Attn: S. Xxxxxxx Xxxx, P.C.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Xxxx Xxxxxxxx Xxxxxxx Investors LLC 16,667 $ 250,000
Attn: Xxxx Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Fax: (000) 000-0000
Essex Private Placement Fund Limited Partnership 150,000 $ 2,250,000
Attn: Xxxxx XxXxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
43
HLM/CB Fund, L.P. 80,000 $ 1,200,000
Attn: Xx Xxxxxxx
Xxx Xxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Intel Corporation 66,667 $ 1,000,000
Attn: M&A Portfolio Manager
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Mail Stop: RN6-46
Fax: (000) 000-0000
with copy to:
Intel Corporation
Attn: General Counsel
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Mail Stop: SC4-203
Fax: (000) 000-0000
Xxxxxxxx New Technologies Fund, Inc. 67,200 $ 1,008,000
Attn: Xxxx Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Xxxxxxxx Investment Opportunities 12,800 $ 192,000
(Master) Fund - NTV Portfolio
Attn: Xxxx Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxxx 2,533 $ 38,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxxx 2,533 $ 38,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
44
The Montague Family Limited Partnership 3,333 $ 50,000
Attn: Xxxxxxx X. Xxxxxxxx
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxxx X. Xxxxxxxx 667 $ 10,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Minor X. Xxxxxxx 2,533 $ 38,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Raptor Global Fund L.P. 11,334 $ 170,000
Attn: Xxxx Xxxxxxx
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (617)
Raptor Global Fund LTD. 55,334 $ 830,000
Attn: Xxxx Xxxxxxx
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (617)
Xxxx X. Xxxxxx, Xx. 2,533 $ 38,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
UMB Bank, N.A. as Trustee for the 278 $ 4,170
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Retirement Benefit Plan for the
benefit of Xxxxxxx X. Xxxxxxx
P. O. Box 419692
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Park X. Xxxxxx 2,533 $ 38,000
00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
======= ===========
TOTAL 801,667 $12,025,000
