Exhibit 4.2
NEOMAGIC CORPORATION
______________________________________________________________________________
SECOND AMENDED AND RESTATED RIGHTS AGREEMENT
June 30, 1995
______________________________________________________________________________
Table of Contents
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Page
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Section 1 - Restrictions on Transferability; Registration Rights .................. 1
1.1 Certain Definitions.................................................... 1
1.2 Restrictions........................................................... 3
1.3 Restrictive Legend..................................................... 3
1.4 Notice of Proposed Transfers........................................... 3
1.5 Requested Registration................................................. 4
1.6 Company Registration................................................... 6
1.7 Registration on Form S-3............................................... 7
1.8 Limitations on Subsequent Registration Rights.......................... 8
1.9 Expenses of Registration............................................... 8
1.10 Registration Procedures................................................ 8
1.11 Indemnification........................................................ 9
1.12 Information by Holder.................................................. 10
1.13 Rule 144 Reporting..................................................... 10
1.14 Transfer of Registration Rights........................................ 11
1.15 Standoff Agreement..................................................... 11
1.16 Termination of Rights.................................................. 11
Section 2 - Rights of First Refusal and Participation.............................. 12
2.1 Investor's Right of Participation...................................... 12
2.2 Company's Right of First Refusal....................................... 13
2.3 Termination of Participation and Rights of First Refusal............... 14
SECTION 3 - Affirmative Covenants of the Company................................... 15
3.1 Financial Information.................................................. 15
3.2 Additional Information................................................. 15
3.3 Transfer of Information Rights......................................... 16
3.4 Termination of Covenants............................................... 16
Section 4 - Miscellaneous.......................................................... 17
4.1 Assignment............................................................. 17
4.2 Third Parties.......................................................... 17
4.3 Governing Law.......................................................... 17
4.4 Counterparts........................................................... 17
4.5 Notices................................................................ 17
4.6 Severability........................................................... 17
4.7 Amendment and Waiver................................................... 17
4.8 Effect of Amendment or Waiver.......................................... 17
4.9 Rights of Holders...................................................... 18
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Table of Contents
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4.10 Delays or Omissions.................................................... 18
4.11 Aggregation of Stock................................................... 18
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SECOND AMENDED AND RESTATED RIGHTS AGREEMENT
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THIS SECOND AMENDED AND RESTATED RIGHTS AGREEMENT is entered into as of the
30th day of June, 1995, by and among NeoMagic Corporation, a California
corporation (the "Company"), persons holding at least a majority of the
Registrable Securities under the Amended and Restated Rights Agreement dated
July 6, 1994 (the "Existing Rights Agreement") (as "Registrable Securities" is
defined under the Existing Rights Agreement) and the Purchasers under the Series
D Preferred Stock Purchase Agreement (the "Series D Agreement") of even date
herewith (the "Series D Purchasers"). As used in this Agreement, the term
"Investors" shall refer to all holders of Registrable Securities listed on
Exhibit A to this Agreement as such Exhibit A may be amended from time to time.
RECITALS
WHEREAS, the Company wishes to raise additional capital by issuing Series D
Preferred Stock with the rights, privileges and preferences set forth in the
Amended and Restated Articles of Incorporation attached as Exhibit B to the
Series D Agreement;
WHEREAS, pursuant to Section 4.7 of the Existing Rights Agreement, the
Existing Rights Agreement may be amended by written consent of the holders of a
majority in interest of the then outstanding Registrable Securities and the
Company; and
WHEREAS, the Company wishes to amend the Existing Rights Agreement in order
to give the Series D Purchasers registration and other rights that are parallel
to and pooled with those of the currently outstanding Registrable Securities;
NOW, THEREFORE, the parties hereby agree that the Existing Rights Agreement
is amended and restated in its entirety as follows:
SECTION 1
Restrictions on Transferability;
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Registration Rights
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1.1 Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act.
"Conversion Shares" means the Common Stock issued or issuable upon
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conversion of the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock of the Company.
"Exercise Shares" means the Series A Preferred Stock, Series B
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Preferred Stock, Series C Preferred Stock and Series D Preferred Stock issued or
issuable upon exercise of warrants issued to equipment lessors or other entities
with which the Company has a commercial relationship.
"Holder" shall mean any Investor holding Registrable Securities and
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any person holding Registrable Securities to whom the rights under this
Agreement have been transferred in accordance with Section 1.14 hereof.
"Initiating Holders" shall mean any Investors or transferees of
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Investors under Section 1.14 hereof who in the aggregate are Holders of not less
than forty percent (40%) of the Registrable Securities.
The terms "register," "registered" and "registration" refer to a
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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
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Company in complying with Sections 1.5, 1.6 and 1.7 of this Agreement,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, 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).
"Registrable Securities" means (i) the Conversion Shares and (ii) any
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Common Stock of the Company issued or issuable in respect of the Conversion
Shares or other securities issued or issuable with respect to the Conversion
Shares upon any stock split, stock dividend, recapitalization or similar event,
or any Common Stock otherwise issued or issuable with respect to the Conversion
Shares; provided, however, that shares of Common Stock or other securities shall
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only be treated as Registrable Securities if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale.
"Restricted Securities" shall mean the securities of the Company
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required to bear the legend set forth in Section 1.3 of this Agreement.
"Securities" shall mean the Series A Preferred Stock, Series B
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Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and warrants
to purchase Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock.
"Securities Act" shall mean the Securities Act of 1933, as amended,
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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.
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"Selling Expenses" shall mean all underwriting discounts, selling
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commissions and stock transfer taxes applicable to the securities registered by
the Holders and all fees and disbursements of counsel for the Holders (except as
provided by Section 1.9).
1.2 Restrictions. The Securities, the Exercise Shares and the Conversion
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Shares shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act. The Investors will cause
any proposed purchaser, assignee, transferee or pledgee of the Securities, the
Exercise Shares and the Conversion Shares to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Agreement.
1.3 Restrictive Legend. Each certificate representing (i) the
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Securities, (ii) the Exercise Shares; (iii) the Conversion Shares and (iv) any
other securities issued in respect of the securities referenced in clauses (i),
(ii) and (iii) upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 1.4 below) be stamped or otherwise imprinted with legends
in substantially 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, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
Each Investor and Holder consents to the Company making a notation on its
records and giving instructions to any transfer agent of the Restricted
Securities in order to implement the restrictions on transfer established in
this Section 1.
1.4 Notice of Proposed Transfers. The holder of each certificate
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representing Restricted Securities, by acceptance thereof, agrees to comply in
all respects with the provisions of this Section 1. Prior to any proposed sale,
assignment, transfer or pledge 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, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied at such holder's expense by either (i) an unqualified written
opinion of legal counsel who shall, and whose legal opinion shall be, reasonably
satisfactory to
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the Company, addressed to the Company, 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 transfer 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. The Company will not require such a
legal opinion or "no action" letter (a) in any transaction in compliance with
Rule 144, (b) in any transaction in which an Investor which is a corporation
distributes Restricted Securities after six (6) months after the purchase
thereof solely to its majority-owned subsidiaries or affiliates for no
consideration, or (c) in any transaction in which an Investor which is a
partnership distributes Restricted Securities after six (6) months after the
purchase thereof solely to partners thereof for no consideration, provided that
each transferee agrees in writing to be subject to the terms of this Section
1.4. Each certificate evidencing the Restricted Securities transferred as above
provided shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in Section 1.3 above, except that such
certificate shall not bear such restrictive legend if, in the opinion of counsel
for such holder and the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act.
1.5 Requested Registration.
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(a) Request for Registration. In case the Company shall receive
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from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to the Registrable
Securities, the anticipated aggregate offering price, net of underwriting
discounts and commissions, which would exceed $5,000,000, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) 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 received
by the Company within twenty (20) days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to take
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any action to effect any such registration, qualification or compliance pursuant
to this Section 1.5:
(1) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration,
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qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act;
(2) Prior to the earlier of June 30, 1998 or six (6)
months following the initial public offering of the Company's Common Stock;
(3) During the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and ending on the date
six (6) months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective and
that the Company's estimate of the date of filing such registration statement is
made in good faith;
(4) After the Company has effected two (2) such
registrations pursuant to this subparagraph 1.5(a), such registrations have been
declared or ordered effective and the securities offered pursuant to such
registrations have been sold; or
(5) If the Company shall furnish to such Holders a
certificate, signed by the President of the Company, stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 1.5 shall be deferred for a single period
not to exceed one hundred-twenty (120) days from the date of receipt of written
request from the Initiating Holders.
Subject to the foregoing clauses (1) through (5), 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 or requests of
the Initiating Holders.
(b) Underwriting. In the event that a registration pursuant to
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Section 1.5 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 1.5(a)(i). The right of any Holder to registration pursuant to Section
1.5 shall be conditioned upon such Holder's participation in the underwriting
arrangements required by this Section 1.5 and the inclusion of such Holder's
Registrable Securities in the underwriting, to the extent requested, to the
extent provided in this Agreement.
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 managing underwriter selected for such underwriting by a
majority in interest of the Initiating Holders (which managing underwriter shall
be reasonably acceptable to the Company). Notwithstanding any other provision
of this Section 1.5, if the managing underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders thereof in proportion, as nearly as practicable,
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to the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement; 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. No Registrable Securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest one hundred (100) shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to one hundred eighty (180) days
after the effective date of such registration.
1.6 Company Registration.
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(a) Notice of Registration. If at any time or from time to time,
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the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Commission Rule 145 transaction, 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), and in any underwriting
involved in such registration, all the Registrable Securities specified in a
written request or requests made within twenty (20) days after receipt of such
written notice from the Company by any Holder.
(b) Underwriting. If the registration of which the Company gives
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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 1.6(a)(i). In such event, the right of any Holder to
registration pursuant to Section 1.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of 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
managing underwriter selected for such underwriting by the Company (or by the
holders who have demanded such registration). Notwithstanding any other
provision of this Section 1.6, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities to
be included in such registration to a minimum of twenty-five percent (25%) of
the offering or exclude them entirely in the case of the Company's initial
public offering. The Company shall so advise all Holders and the other holders
distributing their securities through such underwriting pursuant to piggyback
registration rights similar to this Section 1.6, and the number of shares of
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Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among all Holders and other
holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders and other securities held by other
holders at the time of filing the registration statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder or other
holder to the nearest one hundred (100) shares. If any Holder or other holder
disapproves of the terms of any such underwriting, he or she may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to one hundred eighty (180) days after the effective date of
the registration statement relating thereto.
(c) Right to Terminate Registration. The Company shall have the
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right to terminate or withdraw any registration initiated by it under this
Section 1.6 prior to the effectiveness of such registration, whether or not any
Holder has elected to include securities in such registration.
1.7 Registration on Form S-3.
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(a) In case the Company shall receive from a Holder or Holders a
written request that the Company file a registration statement on Form S-3 (or
any successor form to Form S-3) for a public offering of shares of the
Registrable Securities, the reasonably anticipated aggregate price to the public
of which, net of underwriting discounts and commissions, would exceed $250,000,
and the Company is a registrant entitled to use Form S-3 to register the
Registrable Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered for the offering
on such form; provided, however, that the Company shall not be required to
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effect more than two registrations pursuant to this Section 1.7 in any twelve
(12) month period. The Company will (i) promptly give written notice of the
proposed registration to all other Holders, and (ii) as soon as practicable, use
its best efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) 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 received
by the Company within twenty (20) days after receipt of such written notice from
the Company. The substantive provisions of Section 1.5(b) shall be applicable
to each registration initiated under this Section 1.7.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 1.7: (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
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jurisdiction and except as may be required by the Securities Act, (ii) during
the period starting with the date sixty (60) days prior to the filing of, and
ending on a date six (6) months following the effective date of, a registration
statement (other than with respect to a registration statement relating to a
Rule 145 transaction, an offering solely to employees or any other registration
which is not appropriate for the registration of Registrable Securities),
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective, or (iii) if
the Company shall furnish to such Holder a certificate signed by the president
of the Company stating that, in the good faith judgment of the Board of
Directors, it would be seriously detrimental to the Company or its shareholders
for registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a single period not to exceed one hundred twenty (120) days from
the receipt of the request to file such registration by such Holder or Holders.
1.8 Limitations on Subsequent Registration Rights. From and after the
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date of this Agreement, the Company shall not enter into any agreement granting
any holder or prospective holder of any securities of the Company registration
rights with respect to such securities unless (i) such new registration rights,
including standoff obligations, are on a pari passu basis with those rights of
the Holders under this Agreement, or (ii) such new registration rights,
including standoff obligations, are subordinate to the registration rights
granted Holders under this Agreement; provided, however, that new holders of
Conversion Shares or Exercise Shares may be added to Exhibit A as Investors from
time to time.
1.9 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration pursuant to Sections 1.5, 1.6 and 1.7 and the
reasonable cost of one special legal counsel to represent all of the Holders
together in any such registration shall be borne by the Company, provided that
the Company shall not be required to pay the Registration Expenses of any
registration proceeding begun pursuant to Section 1.5, the request of which has
been subsequently withdrawn by the Initiating Holders. In such case, the
Holders of Registrable Securities to have been registered shall bear all such
Registration Expenses pro rata on the basis of the number of shares to have been
registered. Notwithstanding the foregoing, however, if at the time of the
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, of which the Company had knowledge at the time of
the request, then the Holders shall not be required to pay any of said
Registration Expenses. Unless otherwise stated, all other Selling Expenses
relating to securities registered on behalf of the Holders shall be borne by the
Holders of the registered securities included in such registration pro rata on
the basis of the number of shares so registered.
1.10 Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this Section 1,
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) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and
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remain effective for at least one hundred eighty (180) days or until the
distribution described in the registration statement has been completed; and
(b) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
1.11 Indemnification.
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(a) The Company will indemnify each Holder, each of its officers
and directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 1, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or 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 any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, 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, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses as reasonably incurred in connection with investigating, preparing 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 or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person 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 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 Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling each such other Holder within the meaning of Section 15 of the
Securities Act, 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 document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements
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therein not misleading, and, out of the proceeds received by such Holder from
the offering of the securities covered by such a registration statement, will
reimburse the Company, such Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other expenses as
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. In
no event shall any indemnity under this Section 1.11(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Each party entitled to indemnification under this Section 1.11
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, 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, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No settlement of any such claim, loss, damage, liability or action shall be made
by the Indemnified Party without the prior consent of the Indemnifying Party.
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.
1.12 Information by Holder. The Holder or Holders of Registrable
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Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them 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 1.
1.13 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 use its best efforts to:
(a) 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 that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
-10-
(b) 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 (at any time after it has become subject to such reporting
requirements); and
(c) So long as an Investor owns any Restricted Securities, to
furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said 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), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as an Investor may reasonably request in
availing itself of any rule or regulation of the Commission allowing an Investor
to sell any such securities without registration.
1.14 Transfer of Registration Rights. The rights to cause the Company to
-------------------------------
register securities granted Investors under Sections 1.5, 1.6 and 1.7 may be
assigned to a transferee or assignee reasonably acceptable to the Company in
connection with any transfer or assignment of Registrable Securities by an
Investor (together with any affiliate); provided, that (a) such transfer may
--------
otherwise be effected in accordance with applicable securities laws, (b) notice
of such assignment is given to the Company, and (c) such transferee or assignee
(i) is a wholly-owned subsidiary or constituent partner (including limited
partners) of such Investor, or (ii) acquires from such Investor the lesser of
(a) 250,000 or more shares of Restricted Securities (as appropriately adjusted
for stock splits and the like) or (b) all of the Restricted Securities then
owned by such Investor.
1.15 Standoff Agreement. Each Holder agrees in connection with any
------------------
registration of the Company's securities that, upon request of the Company or
the underwriters managing any underwritten offering of the Company's securities,
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days from the effective date of such registration) as may
be requested by the Company or such managing underwriters; provided, that the
--------
officers and directors of the Company who own stock of the Company also agree to
such restrictions.
1.16 Termination of Rights. The rights of any particular Holder to cause
---------------------
the Company to register securities under Sections 1.5, 1.6 and 1.7 shall
terminate with respect to such Holder five (5) years following a bona fide firm
underwritten public offering of shares of the Company's Common Stock registered
under the Securities Act (provided the aggregate offering price, net of
underwriting discounts and commissions, exceeds ten million dollars
($15,000,000) and the public offering price per share exceeds $4.25 (as adjusted
for stock splits, recombinations, recapitalizations and the like)) or at such
time as such Holder is able to dispose of all its Registrable Securities in one
three-month period pursuant to the provisions of Rule 144;
-11-
provided, that such Holder holds Registrable Securities constituting less than
--------
1% of the outstanding voting stock of the Company.
SECTION 2
Rights of First Refusal and Participation
-----------------------------------------
2.1 Investor's Right of Participation.
---------------------------------
(a) Right of Participation. Subject to the terms and conditions
----------------------
contained in this Section 2.1, the Company hereby grants to each Investor who
holds at least 250,000 shares of Restricted Securities the right of first
refusal to purchase its Pro Rata Portion of any New Securities (as defined in
subsection 2.1(b)) which the Company may, from time to time, propose to sell and
issue. An Investor's "Pro Rata Portion" for purposes of this Section 2.1 is the
ratio that (x) the sum of the number of shares of the Company's Common Stock
then held by such Investor and the number of shares of the Company's Common
Stock issuable upon conversion of the Preferred Stock then held by such Investor
bears to (y) the sum of the total number of shares of the Company's Common Stock
then outstanding and the number of shares of the Company's Common Stock issuable
upon conversion of the then outstanding Preferred Stock.
(b) Definition of New Securities. Except as set forth below, "New
----------------------------
Securities" shall mean any shares of capital stock of the Company, including
Common Stock and Preferred Stock, whether authorized or not, and rights, options
or warrants to purchase said shares of Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible into said
shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, "New
Securities" does not include (i) the Securities, the Exercise Shares or the
Conversion Shares, (ii) securities offered to the public generally pursuant to a
registration statement under the Securities Act, (iii) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or shares or other reorganization
whereby the Company or its shareholders own not less than a majority of the
voting power of the surviving or successor corporation, (iv) shares of the
Company's Common Stock or related options convertible into or exercisable for
such Common Stock issued to employees, officers and directors of, and
consultants, customers, and vendors to, the Company, pursuant to any arrangement
approved by the Board of Directors of the Company, (v) shares of the Company's
Common Stock or related options convertible into or exercisable for such Common
Stock issued to banks, commercial lenders, lessors and other financial
institutions in connection with the borrowing of money or the leasing of
equipment by the Company pursuant to agreements approved by the Board of
Directors, (vi) stock issued pursuant to any rights or agreements, including,
without limitation, convertible securities, options and warrants, provided that
the Company shall have complied with the rights of participation established by
this Section 2.1 with respect to the initial sale or grant by the Company of
such rights or agreements, or (vii) stock issued in connection with any stock
split, stock dividend or recapitalization by the Company.
(c) Notice of Right. In the event the Company proposes to
---------------
undertake an issuance of New Securities, it shall give each Investor written
notice of its intention, describing
-12-
the type of New Securities and the price and terms upon which the Company
proposes to issue the same. The Investors shall have fifteen (15) days from the
date of receipt of any such notice to agree to purchase shares of such New
Securities (up to the amount referred to in subsection 2.1(a)), for the price
and upon the terms specified in the notice, by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased. The
Company shall promptly, in writing, inform each Investor which purchases all the
shares of such New Securities available to it ("Fully-Exercising Investor") of
any other Investor's failure to do likewise. During the ten-day period
commencing after such information is given, each Fully-Exercising Investor shall
be entitled to obtain that portion of the shares of such New Securities for
which Investors were entitled to subscribe but which were not subscribed for by
the Investors which is equal to the proportion that the number of shares of
Common Stock issued and held, or issuable upon conversion of the Preferred Stock
then held by such Fully-Exercising Investor bears to the total number of shares
of Common Stock issued and held or issuable upon conversion of the Preferred
Stock then held by all Fully-Exercising Investors who wish to purchase some of
the unsubscribed shares.
(d) Exercise of Right. If any Investor exercises its right of
-----------------
first refusal under this Agreement, the closing of the purchase of the New
Securities with respect to which such right has been exercised shall take place
within ninety (90) calendar days after the Investor gives notice of such
exercise, which period of time shall be extended in order to comply with
applicable laws and regulations. Upon exercise of such right of first refusal,
the Company and the Investor shall be legally obligated to consummate the
purchase contemplated thereby and shall use their best efforts to secure any
approvals required in connection therewith.
(e) Lapse and Reinstatement of Right. In the event an Investor
--------------------------------
fails to exercise the right of first refusal provided in this Section 2.1 within
the period specified in Section 2.1(c), the Company shall have ninety (90) days
thereafter to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within sixty (60) days
from the date of said agreement) to sell the New Securities not elected to be
purchased by such Investor at the price and upon the terms no more favorable to
the purchasers of such securities than specified in the Company's notice. In the
event the Company has not sold the New Securities or entered into an agreement
to sell the New Securities within said ninety (90) day period (or sold and
issued New Securities in accordance with the foregoing within sixty (60) days
from the date of said agreement), the Company shall not thereafter issue or sell
any New Securities without first offering such securities to the Investors in
the manner provided above.
(f) Assignment. The right of the Investors to purchase any part of
----------
the New Securities may be assigned in whole or in part to any partner,
subsidiary, affiliate or shareholder of an Investor, or other persons or
organizations who acquire the lesser of (i) 250,000 or more shares of Restricted
Securities (as adjusted for stock splits and the like) or (ii) all of the
Restricted Securities then owned by such Investor.
2.2 Company's Right of First Refusal.
--------------------------------
-13-
(a) Right of First Refusal. Should an Investor desire to sell or
----------------------
transfer any of the Restricted Securities held by such Investor, other than
sales or transfers to a partner, affiliate or wholly-owned subsidiary of such
Investor, the Investor shall give the Company the opportunity to purchase such
Restricted Securities in accordance with this Section 2.2.
(b) Notice of Right. The Investor shall give notice (the "Transfer
---------------
Notice") to the Company in writing of such intention, specifying the amount of
Restricted Securities proposed to be sold or transferred, the proposed price per
share therefor (the "Transfer Price") and the other material terms upon which
such disposition is proposed to be made. The Company shall have fifteen (15)
days from the date of receipt of the Transfer Notice to agree to purchase such
shares at the Transfer Price and upon the terms specified in the Transfer Notice
by giving written notice to the Investor and stating therein the quantity of
shares to be purchased.
(c) Exercise of Right. If the Company exercises its right of first
-----------------
refusal under this Agreement, the closing of the purchase of the shares with
respect to which such right has been exercised shall take place within ninety
(90) calendar days after the Company gives notice of such exercise, which period
of time shall be extended in order to comply with applicable laws and
regulations. Upon exercise of its right of first refusal, the Company and the
Investor shall be legally obligated to consummate the purchase contemplated
thereby and shall use their best efforts to secure any approvals required in
connection therewith.
(d) Lapse and Reinstatement of Right. In the event the Company
--------------------------------
fails to exercise the right of first refusal within said fifteen (15) day
period, the Investor shall have ninety (90) days thereafter to sell or enter
into an agreement (pursuant to which the sale of shares covered thereby shall be
closed, if at all, within sixty (60) days from the date of said agreement) to
sell the shares not elected to be purchased by the Company at the price and upon
the terms no more favorable to the purchasers of such securities than specified
in the Transfer Notice. In the event the Investor has not sold the shares or
entered into an agreement to sell the shares within said ninety (90) day period
(or sold the shares in accordance with the foregoing within sixty (60) days from
the date of said agreement), the Investor shall not thereafter sell or transfer
any Restricted Securities without first offering such securities to the Company
in the manner provided above.
(e) Assignment. The right of the Company to purchase any part of
----------
the Restricted Securities may be assigned in whole or in part to any shareholder
or shareholders of the Company or other persons or organizations.
2.3 Termination of Participation and Rights of First Refusal. The rights
--------------------------------------------------------
of participation and first refusal granted under Sections 2.1 and 2.2 of this
Agreement shall terminate on and be of no further force or effect upon the
earlier of (i) the consummation of the Company's sale of its Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed under the Securities Act (provided the aggregate offering price, net of
underwriting discounts and commissions, exceeds ten million dollars
($15,000,000) and the public offering price per share exceeds $4.25 (as adjusted
for stock splits, recombinations, recapitalizations and the like)) immediately
subsequent to which the Company shall be obligated
-14-
to file annual and quarterly reports with the Commission pursuant to Section 13
or 15(d) of the Exchange Act or (ii) the registration by the Company of a class
of its equity securities under Section 12(b) or 12(g) of the Exchange Act.
SECTION 3
Affirmative Covenants of the Company
------------------------------------
The Company hereby covenants and agrees as follows:
3.1 Financial Information. The Company will mail the following reports to
---------------------
each Holder for so long as such Holder is a holder of any Securities, Exercise
Shares or Conversion Shares:
(a) As soon as practicable after the end of each fiscal year, and in
any event within ninety (90) days thereafter, consolidated balance sheets of the
Company and its subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of income, consolidated statements of changes in
financial position and consolidated statements of shareholders' equity of the
Company and its subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles and setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and audited by independent public accountants of national standing
selected by the Company.
(b) Contemporaneously with delivery to holders of Common Stock, a copy
of each report of the Company delivered to holders of the Company's Common
Stock.
3.2 Additional Information. As long as a Holder (together with any
----------------------
affiliate of such Holder) holds not less than 575,000 Securities, Exercise
Shares or Conversion Shares (or any combination thereof), as adjusted for
recapitalizations, stock splits, stock dividends and the like, the Company will
mail the following reports to such Holder:
(a) 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 forty-five (45) days thereafter, an unaudited consolidated balance
sheet of the Company and its subsidiaries, if any, as of the end of each such
quarterly period, and unaudited consolidated statements of income, unaudited
consolidated statements of cash flow and unaudited consolidated statements of
shareholders' equity 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 (other than for accompanying notes and
subject to normal year-end audit adjustments), all in reasonable detail.
(b) As soon as practicable after the end of each fiscal month, and in
any event within thirty (30) days thereafter, an unaudited consolidated balance
sheet of the Company and its subsidiaries, if any, as at the end of such month,
and unaudited consolidated statements of income, unaudited consolidated
statements of cash flow and unaudited consolidated statements of shareholders'
equity of the Company and its subsidiaries, if any, for such month and for the
-15-
current fiscal year to date. Such financial statements shall be prepared in
accordance with generally accepted accounting principles consistently applied
(other than for accompanying notes and subject to normal year-end audit
adjustments), all in reasonable detail.
(c) For so long as a Holder is eligible to receive reports under this
Section 3.2, it shall also have the right, at its expense, to discuss the
affairs, finances and accounts of the Company with the Company's officers, all
at such reasonable times and as often as may be reasonably requested; provided,
however, that the Company shall not be obligated to provide any information that
it reasonably considers to be a trade secret or to contain confidential
information.
(d) As soon as practicable, but in any event prior to the end of each
fiscal year, a budget for the next fiscal year, prepared on a monthly basis,
including balance sheets and sources and applications of funds statements for
such months and, as soon as prepared, any other budgets or revised budgets
prepared by the Company.
(e) For so long as entities affiliated with JAFCO America Ventures,
Inc. hold in the aggregate not less than 1,000,000 shares of Series C Preferred
Stock of the Company, a representative of JAFCO America Ventures, Inc. shall be
entitled to attend all regular and special meetings of the Board of Directors of
the Company (other than sessions of such meetings at which all persons other
than directors or legal counsel are excluded), and to receive advance notice and
copies of all materials provided to members of the Board of Directors at the
same time and on the same basis as the members of the Board of Directors. The
representative of JAFCO America Ventures, Inc. shall also be entitled to visit
and inspect any of the properties of the Company and to discuss its affairs,
finances and accounts with its officers, all at such reasonable times and as
often as may reasonably be requested.
3.3 Transfer of Information Rights. The information rights set forth in
------------------------------
Sections 3.1 and 3.2 may be transferred in any nonpublic transfer of Securities,
Exercise Shares or Conversion Shares, provided that the Company is given written
notice of such transfer, and provided further that the right to receive the
information set forth in Section 3.2 may only be transferred to a holder of, or
affiliated holders who in the aggregate hold, at least 575,000 Securities,
Exercise Shares or Conversion Shares (or any combination thereof), as
appropriately adjusted for recapitalizations, stock splits, stock dividends and
the like. In the event that the Company reasonably determines that provision of
information to a transferee pursuant to this Section 3.3 would materially
adversely affect its proprietary position, such information may be edited in the
manner necessary to avoid such effect.
3.4 Termination of Covenants. The covenants set forth in this Section 3
------------------------
shall terminate on and be of no further force or effect upon the earlier of (i)
the consummation of the Company's sale of shares of its Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed under the Securities Act, immediately subsequent to which the Company
shall be obligated to file annual and quarterly reports with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") or
-16-
(ii) the registration by the Company of a class of its equity securities under
Section 12(b) or 12(g) of the Exchange Act.
SECTION 4
Miscellaneous
-------------
4.1 Assignment. Except as otherwise provided in this Agreement, 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 to this Agreement.
4.2 Third Parties. Nothing in this Agreement, express or implied, is
-------------
intended to confer upon any party, other than the parties to this Agreement, and
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.
4.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California in the United States of America.
4.4 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4.5 Notices. Any notice required or permitted by this Agreement shall be
-------
in writing and shall be sent by prepaid registered or certified mail, return
receipt requested, or otherwise delivered by hand or by messenger addressed to
the other party at the address shown below or at such other address for which
such party gives notice under this Agreement. Such notice shall be deemed to
have been given when delivered if delivered personally, or, if sent by mail, at
the earlier of its receipt or three (3) days after deposit in the mail.
4.6 Severability. If one or more provisions of this Agreement are held to
------------
be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
4.7 Amendment and Waiver. Any provision of this Agreement may be amended
--------------------
or waived with the written consent of the Company and the Holders of at least a
majority of the outstanding shares of the Registrable Securities. Any amendment
or waiver effected in accordance with this paragraph shall be binding upon each
Holder of Registrable Securities and the Company. In addition, the Company may
waive performance of any obligation owing to it, as to some or all of the
Holders of Registrable Securities, or agree to accept alternatives to such
performance, without obtaining the consent of any Holder of Registrable
Securities. In the event that an underwriting agreement is entered into between
the Company and any Holder, and such underwriting agreement contains terms
differing from this Agreement, as to any such Holder the terms of such
underwriting agreement shall govern.
-17-
4.8 Effect of Amendment or Waiver. The Investors and their successors and
-----------------------------
assigns acknowledge that by the operation of Section 4.7 of this Agreement the
holders of a majority of the outstanding Registrable Securities, acting in
conjunction with the Company, will have the right and power to diminish or
eliminate any or all rights or increase any or all obligations pursuant to this
Agreement.
4.9 Rights of Holders. Each holder of Registrable Securities 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, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such holder shall not incur any liability to any other
holder of any securities of the Company as a result of exercising or refraining
from exercising any such right or rights.
4.10 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any party to this Agreement, upon any breach or
default of the other party, shall impair any such right, power or remedy of such
non-breaching party 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 thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made 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.
4.11 Aggregation of Stock. All shares of the Preferred Stock 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.
-18-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
NEOMAGIC CORPORATION
a California corporation
By:
---------------------------
Title:
------------------------
Address:
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
INVESTORS:
------------------------------
Xxxxxxx Xxxxxxx
Address:
------------------------------
------------------------------
------------------------------
Xxxxxxxxx Xxxxx Xxxxx
Address:
------------------------------
------------------------------
-19-
-------------------------------------
Xxxx Basseti
Address:
-------------------------------------
-------------------------------------
-------------------------------------
Xxxx Xxxxx
Address:
Xxxxx International
Xxx Xxxxx Xxxxxx
Xxxxx 0
Xxx Xxxxx, XX 00000
-------------------------------------
Xxxxxx X. Xxxxxxxx, Trustee, or the
Successor Trustee, under the Xxxxxx X.
Xxxxxxxx Trust dated May 8, 1989
Address:
-------------------------------------
-------------------------------------
-------------------------------------
Xxxxxxx X. Dell
Address:
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
-20-
-------------------------------------
Xxxxxx Xxxxxxx
Address:
-------------------------------------
-------------------------------------
INTEGRAL CAPITAL PARTNERS II, L.P.
By: Integral Capital Management II, L.P.,
its General Partner
By:
----------------------------------,
its General Partner
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
INTEGRAL CAPITAL PARTNERS INTERNATIONAL II C.V.
By: Integral Capital Management II, L.P.,
its Investment General Partner
By:
----------------------------------,
its General Partner
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-21-
JAFCO G-5 INVESTMENT ENTERPRISE PARTNERSHIP
By:
----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Its Executive Partner
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx,
Xxxxx, Xxxxx 105
JAFCO R-1(A) INVESTMENT ENTERPRISE PARTNERSHIP
By:
----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Its Executive Partner
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-Xx,
Xxxxx, Xxxxx 105
JAFCO R-1(B) INVESTMENT ENTERPRISE PARTNERSHIP
By:
----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Its Executive Partner
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-Xx,
Xxxxx, Xxxxx 105
-22-
JAFCO R-2 INVESTMENT ENTERPRISE PARTNERSHIP
By:
----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Its Executive Partner
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-Xx,
Xxxxx, Xxxxx 000
XXXXX ASSOCIATED FINANCE CO., LTD.
By:
----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-Xx,
Xxxxx, Xxxxx 105
-------------------------------------
Xxxxxxx X. Xxxxxx
Address:
-------------------------------------
-------------------------------------
-23-
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VI
By:
--------------------------------
Title:
-----------------------------
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB VI FOUNDERS FUND
By:
--------------------------------
Title:
-----------------------------
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
------------------------------------
Xxxxxxx Xxxxx
Address:
------------------------------------
------------------------------------
LOR, Inc.
By:
---------------------------------
Title:
------------------------------
Address:
c/o Xxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
-24-
MARITIME CAPITAL PARTNERS
By:
---------------------------------
Title:
------------------------------
Address:
c/o Xxxx Xxxxx
00000 Xxxxxxxx Xxxxx, XX
Xxxx Xxxxx, XX 00000
------------------------------------
Xxxx XxXxxxxxxx
Address:
------------------------------------
------------------------------------
MITSUBISHI CORPORATION
By:
---------------------------------
Title:
------------------------------
Address:
0-0 Xxxxxxxxxx, 0-xxxxx
Xxxxxxx-xx, Xxxxx Xxxxx 100-86
-25-
MITSUBISHI INTERNATIONAL CORPORATION
By:
------------------------------
Title:
---------------------------
Address:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
---------------------------------
Xxxxxxxxxxx Parameswaraiyer
Address:
---------------------------------
---------------------------------
---------------------------------
Xxxxxxx X. Xxxx
Address:
---------------------------------
---------------------------------
---------------------------------
R. Xxxxxxxx Xxxxx
Address:
000 Xxxxxxxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
-00-
XXXXXX XXXXXXXX XX, X.X.
By: Presidio Management Group IV, L.P.
Its General Partner
By:
------------------------------------
Title: General Partner
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
SEQUOIA XXIII
SEQUOIA XXIV
By:
------------------------------------
Title:
---------------------------------
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx 000, Xxxxxxxx 0
Xxxxx Xxxx, XX 00000
-27-
------------------------------------
Xxxxxxx Xxxxx
Address:
------------------------------------
------------------------------------
U.S. VENTURE PARTNERS IV, L.P.
By Presidio Management Group IV, L.P.
Its General Partner
By:
---------------------------------
Title: General Partner
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
USVP ENTREPENEUR PARTNERS II, L.P.,
A Delaware Limited Partnership
By Presidio Management Group IV, L.P.
Its General Partner
By:
-----------------------------------
Title: General Partner
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
-28-
USVP III
By:
---------------------------------
Title:
------------------------------
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
VENTURE LENDING & LEASING, INC.
By:
---------------------------------
Title:
------------------------------
Address:
------------------------------------
------------------------------------
------------------------------------
VLG INVESTMENTS 1993
By:
---------------------------------
Title:
------------------------------
Address:
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-29-
U.S. INFORMATION TECHNOLOGY
INVESTMENT ENTERPRISE PARTNERSHIP
By:
-----------------------------------
Xxxxxx Xxxxxxx, President
Japan Associated Finance Co., Ltd.
Address:
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-Xx,
Xxxxx, Xxxxx 105
-30-
-----------------------------------
Xxx Xxxx
Address: Compal Electronics, Inc.
0xx Xxxxx
000 Xxxxx Xxxx
Sec. 4, Taipei (105) Taiwan R.D.C.
CYGNUS INVESTMENT S.A.
By:
--------------------------------
Title
-----------------------------
Address: c/o Xxxxx Worth, Deputy Manager
Barclays Bank, Plc.
Road Town, Tortola
British Virgin Islands
XXXX X. XXXXX TRUST U/T/D 3/30/88
By:
-------------------------------
Xxxx X. Xxxxx
Title: Trustee
Address: 000 Xxxxxxxx
Xxxxxxx, XX 00000
XXXXXX X. DERBY TRUST U/T/D 3/30/88
By:
-------------------------------
Xxxxxx X. Derby
Title: Trustee
Address: 000 Xxxxxxxx
Xxxxxxx, XX 00000
-31-
---------------------------------------
Xxxxx Xxxxxxxx
Address: Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
----------------------------------------
Xxxxx Xxxx Xxx
Address: c/o Xxxxxxx X. Xxx
Pillsbury, Madison & Sutro
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
----------------------------------------
Xxxxxxx Xxxxx-Xxx Xxxxx
Address: Montgomery Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
----------------------------------------
Xxxx X. Xxxxxx
Address: Montgomery Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
-32-
--------------------------------------
Xxxxxx Xxxxxxxxx
Address: Montgomery Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx Xxxxxxx
Address: Montgomery Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
WK TECHNOLOGY FUND
By:
-----------------------------------
Title:
--------------------------------
Address: 10th Floor, 115, Xxx 0
Xxxx Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxx, X.X.X.
-------------------------------------
Xxx Xxxxxxxx
Address: 1-11-45 Mita
Minato-Icu, Tokyo
Japan 108
-33-
------------------------------------
Xxxx Xxxxxxxx
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
-34-
WK TECHNOLOGY FUND II
By:
---------------------------------
Title:
------------------------------
Address: 10th Floor, 115, Xxx 0
Xxxx Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxx, X.X.X.
WK TECHNOLOGY FUND III
By:
---------------------------------
Title:
------------------------------
Address: 10th Floor, 115, Xxx 0
Xxxx Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxx, X.X.X.
-35-
EXHIBIT A
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
Xxxxxxx Xxxxxxx 2,800
c/o NeoMagic
Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxxxx Xxxxx Xxxxx 200
c/o NeoMagic
Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxx Xxxxxxxx 1,800
c/o NeoMagic
Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxx Xxxxx 5,833
Xxxxx International
Xxx Xxxxx Xxxxxx
Xxxxx 0
Xxx Xxxxx, XX 00000
Comdisco, Inc. 91,200* 16,667* 15,789*
Comdisco Venture Group
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx 10,000*
-------------------
-------------------
Cygnus Investment S.A. 17,544
c/o Xxxxx Worth,
Deputy Manager
Barclays Bank, Plc.
Road Town, Tortola
British Virgin Islands
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
Xxxxxxx X. Dell 263,158
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxx X. Xxxxx, 17,500
Trustee of the Xxxx
X. Xxxxx Trust
U/T/D 3/30/88
000 Xxxxxxxx
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx, 1,750
Trustee of the Xxxxxx X. Xxxxx Trust
U/T/D 3/30/88
000 Xxxxxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx 1,800
c/o NeoMagic Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxx X. Xxxxxxxx, Xx. 17,544
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Integral Capital Partners II, L.P. 120,933 315,022
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Integral Capital Partners International 45,733 123,575
II, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
JAFCO G-5 Investment Enterprise 338,654 59,413
Partnership
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 105
-2-
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
JAFCO R-1(A) Investment Enterprise 158,223 27,758
Partnership
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 105
JAFCO R-1(B) Investment Enterprise 158,223 27,758
Partnership
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 105
JAFCO R-2 Investment Enterprise 144,900 25,421
Partnership
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 000
Xxxxx Associated Finance Co., Ltd. 200,000 35,088
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 105
Xxxxx Xxxxxxx 8,000
c/o Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxx 10,000*
-------------------
-------------------
Kleiner, Perkins, Xxxxxxxx 1,300,500 722,500 725,000 304,211
& Xxxxx VI
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB VI Founders Fund 199,500 110,833 108,333 46,666
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-3-
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- ---------- ---------- ---------- ----------
Xxxxx Xxxx Xxx 52,632
c/o Xxxxxxx X. Xxx
Pillsbury Madison & Sutro
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx Xxxxx-Xxx Xxxxx 3,509
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxx 1,800
c/o NeoMagic Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
LOR, Inc. 87,719
c/o Xxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxx X. Xxxxxx 3,509
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Maritime Capital Partners 263,158
c/o Xxxx Xxxxx
00000 Xxxxxxxx Xxxxx, XX
Xxxx Xxxxx, XX 00000
Xxxx Xxxxxxxx 8,772
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxx XxXxxxxxxx 100,000*
-------------------
-------------------
-4-
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
Mitsubishi Corporation 83,333
0-0 Xxxxxxxxxx, 0-xxxxx
Xxxxxxx-xx
Xxxxx, Xxxxx 100-86
Mitsubishi International Corporation 83,334
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxx Xxxxxxx 3,029
c/o NeoMagic Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxxxxxx Parameswaraiyer 250
c/o NeoMagic Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxx Xxxx 1,800
c/o NeoMagic Corporation
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
R. Xxxxxxxx Xxxxx 30,000
000 Xxxxxxxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Second Ventures II, L.P. 83,333 83,333 42,105
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Sequoia Capital VI 1,365,000 758,333 758,333 319,298
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Sequoia Technology Partners VI 75,000 41,667 41,667 17,544
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
-5-
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
Sequoia XXIII 60,000 33,333
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Sequoia XXIV 33,333 14,035
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxxx Xxxxx 20,000
------------------
------------------
Xxxxxx Xxxxxxxxx 8,772
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxx X.X. Xxxxxxx and Xxxx X. 8,772
Tschudi, Trustees of the Xxxx X. and
Xxxxxx X.X. Xxxxxxx Revocable Living
Trust dated September 1988
c/o Xxxx X. Xxxxxx
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
U.S. Information Technology 175,439
Investment Enterprise Partnership
00X, Xxxxxxx Xxxx.
0-0-0 Xxxxxxxx, Xxxxxx-xx
Xxxxx, Xxxxx 105
U.S. Venture Partners IV, L.P. 733,333 733,333 370,527
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
USVP Entrepreneur 16,667 16,667 8,421
Partners II, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-6-
Series A Series B Series C Series D
Name and Address of Investor Preferred Preferred Preferred Preferred
---------------------------- --------- --------- --------- ----------
VLG Investments 1993 32,000
c/o Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
WK Technology Fund 40,000
Attn: Xxxxxxx Xxxxx
10th Floor, 115, Sec. 3
Xxxx Xxxxx East Road
Taipei, Taiwan, R.O.C.
WK Technology Fund II 29,000
Attn: Xxxxxxx Xxxxx
10th Floor, 115, Sec. 3
Xxxx Xxxxx East Road
Taipei, Taiwan, R.O.C.
WK Technology Fund III 71,351
Attn: Xxxxxxx Xxxxx
10th Floor, 115, Sec. 3
Xxxx Xxxxx East Road
Taipei, Taiwan, R.O.C.
Xxx Xxxxxxxx 10,000
1-11-45 Mita
Minato-Icu, Tokyo
Japan 108
-----------------------
* Shares are issuable upon exercise of warrants.
-7-
