TUMBLEWEED COMMUNICATIONS CORP.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
JANUARY 31, 2000
SECTION 1. GENERAL.....................................................1
1.1 DEFINITIONS........................................1
SECTION 2. RESTRICTIONS ON TRANSFER....................................2
SECTION 3. REGISTRATION................................................3
3.1 DEMAND REGISTRATION................................3
3.2 PIGGYBACK REGISTRATIONS............................4
3.3 FORM S-3 REGISTRATION..............................5
3.4 EXPENSES OF REGISTRATION....................................6
3.5 OBLIGATIONS OF THE COMPANY..................................6
3.6 TERMINATION OF REGISTRATION RIGHTS..........................7
3.7 DELAY OF REGISTRATION; FURNISHING INFORMATION...............8
3.8 INDEMNIFICATION.............................................8
3.9 ASSIGNMENT OF REGISTRATION RIGHTS..........................10
3.10 AMENDMENT OF REGISTRATION RIGHTS...........................10
3.11 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS...............10
3.12 "MARKET STAND-OFF" AGREEMENT...............................10
3.13 RULE 144 REPORTING.........................................11
SECTION 4. MISCELLANEOUS..............................................11
4.1 GOVERNING LAW..............................................11
4.2 SURVIVAL...................................................11
4.3 SUCCESSORS AND ASSIGNS.....................................11
4.4 SEVERABILITY...............................................12
4.5 AMENDMENT AND WAIVER.......................................12
4.6 DELAYS OR OMISSIONS........................................12
4.7 NOTICES....................................................13
4.8 ATTORNEYS' FEES............................................13
4.9 TITLES AND SUBTITLES.......................................13
4.10 COUNTERPARTS...............................................13
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amended and Restated Investors' Rights Agreement (the "Agreement")
is entered into as of the 31st day of January, 2000, by and among TUMBLEWEED
COMMUNICATIONS CORP., a Delaware corporation (the "Company"), the Founders (as
hereinafter defined), the persons listed on Exhibit A hereto (the "Investors")
and the persons listed on Exhibit B hereto (collectively, the "Acquisition
Stockholders").
RECITALS
WHEREAS, the Company, the Founders and the persons listed on Exhibit A
hereto are parties to that certain Amended and Restated Investors' Rights
Agreement dated as of February 26, 1999 (the "Prior Agreement") pursuant to
which the Company granted certain of such persons certain participation,
registration and information rights;
WHEREAS, on November 18, 1999, the Company entered into an Agreement
and Plan of Merger by and among the Company, Keyhole Acquisition Corp., a
Delaware corporation and wholly-owned subsidiary of the Company, and Worldtalk
Communications Corporation, a Delaware corporation (the "Merger Agreement"),
pursuant to which the Company agreed to extend registration rights to certain
additional persons as set forth below; and
WHEREAS, the Company, the Founders and the Investors intend that this
Agreement shall supersede the Prior Agreement, and that the Prior Agreement
shall terminate immediately upon the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Merger Agreement, the parties mutually agree as follows:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Founders" shall mean Xxxxxxx X. Xxxxx and Xxxx-Xxxxxxxxxx X. Bandini.
"Holder" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 3.9 hereof, except that the Acquisition
Stockholders shall not be deemed Holders for purposes of Sections 3.1 and 3.3
hereof.
"Initial Offering" means the Company's first firm commitment
underwritten public offering of its Common Stock (the "Common Stock") registered
under the Securities Act.
"Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (i) Common Stock of the Company issued
or issuable upon conversion of the Shares; 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, such above-described
securities. Notwithstanding the foregoing, Registrable Securities shall not
include any securities sold by a person to the public either pursuant to a
registration statement or Rule 144 or sold in a private transaction in which the
transferor's rights under Section 3 of this Agreement are not assigned.
"Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the Company
in complying with Sections 3.1, 3.2 and 3.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, 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). In the case of registration pursuant to Section 3.1, "Registration
Expenses" also shall include the reasonable fees and expenses of a single
special legal counsel for the Holders not to exceed $15,000 and the fees and
expenses of any special audits not to exceed $15,000 related to such
registration.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"Shares" shall mean (i) shares of Common Stock beneficially owned or
held by the Founders, (ii) shares of Common Stock issued to the Investors and
(iii) for purposes of Section 1, Sections 3.2, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9 and
3.10 and Section 4 only, shares of Common Stock (the "Acquisition Shares")
issued to the Acquisition Stockholders.
SECTION 2. RESTRICTIONS ON TRANSFER
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
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(ii) (A) The transferee has agreed in writing to be bound by this
Section 2, (B) such Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (C) if reasonably
requested by the Company, such Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the Securities
Act.
Notwithstanding the provisions of paragraphs (i) and (ii) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by a Holder which is (A) a partnership to its partners or former
partners in accordance with partnership interests, (B) a corporation to its
shareholders in accordance with their interest in the corporation, (C) a limited
liability company to its members or former members in accordance with their
interest in the limited liability company, or (D) to the Holder's family member
or trust for the benefit of an individual Holder, provided the transferee will
be subject to the terms of this Section 2 to the same extent as if he were an
original Holder hereunder.
(b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
SECTION 3. REGISTRATION.
3.1 DEMAND REGISTRATION.
3.1.1 Subject to the conditions of this Section 3.1, if the Company
shall receive a written request from the Holders of more than twenty percent
(20%) of the Registrable Securities then outstanding (the "Initiating Holders")
that the Company file a registration statement under the Securities Act covering
the registration of at least twenty percent (20%) of their Registrable
Securities or a lesser percentage if the Registrable Securities to be registered
will have an aggregate offering price to the public in excess of $2,000,000,
then the Company shall, within thirty (30) days of the receipt thereof, give
written notice of such
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request to all Holders, and subject to the limitations of this Section 3.1,
effect, as soon as practicable, the registration under the Securities Act of all
Registrable Securities that the Holders request to be registered.
3.1.2 If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 3.1
and the Company shall include such information in the written notice referred to
in Section 3.1.1. In such event, the right of any Holder to include its
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 enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 3.1, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities on
a pro rata basis based on the number of Registrable Securities held by all such
Holders (including the Initiating Holders). Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from the registration.
3.1.3 The Company shall not be required to effect a registration
pursuant to this Section 3.1 prior to the earlier of:
(i) August 15, 2001; or
(ii) after the Company has effected two (2) registrations
pursuant to this Section 3.1, and such registrations have been declared or
ordered effective; or
(iii) during the period starting with the date of filing of,
and ending on the date one (1) year following the effective date of, the
registration statement pertaining to the Initial Offering; or
(iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 3.1.1, the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days; or
(v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 3.1, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board of
Directors of the Company, it would be detrimental to the Company and its
shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a period
of not more than ninety (90) days after receipt of the request of the Initiating
Holders; provided that such right to delay a request shall be exercised by the
Company no more than twice in any one-year period.
3.2 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the
filing of any registration statement under the Securities Act for purposes of
a public offering of securities of the Company (including, but not limited
to, registration
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statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of the
Securities Act) and will afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Registrable Securities by such Holder. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent such registration statement
or registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth herein.
3.2.1 UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 3.2 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 3.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement, if the underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
shareholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting.
3.2.2 RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated or withdraw any
registration initiated by it under this Section 3.2 prior to the effectiveness
of such registration whether or not any Holder has elected to include securities
in such registration. The Registration Expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 3.4 hereof.
3.3 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests
that the Company effect a registration on Form S-3 (or any successor to Form
S-3) or any similar short-form registration statement 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:
3.3.1 promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
3.3.2 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
fifteen (15) days after receipt of such written notice from the
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Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section 3.3:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders, or
(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 and such other securities (if any) at an
aggregate price to the public of less than $1,000,000, or
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such 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 ninety (90) days after receipt of the
request of the Holder or Holders under this Section 3.3, provided, that such
right to delay a request shall be exercised by the Company no more than twice in
any one-year period, or
(iv) if the Company has already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 3.3, or
(v) 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.
3.3.3 Subject to the foregoing, the Company shall file a Form S-3
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.
3.4 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 3.1 or any registration under
Section 3.2 or Section 3.3 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be
borne by the holders of the securities so registered pro rata on the basis of
the number of shares so registered. The Company shall not, however, be
required to pay for expenses of any registration proceeding begun pursuant to
Section 3.1 or 3.3, the request of which has been subsequently withdrawn by
the Initiating Holders unless (a) the withdrawal is based upon material
adverse information concerning the Company of which the Initiating Holders
were not aware at the time of such request or (b) the Holders of a majority
of Registrable Securities agree to forfeit their right to one requested
registration pursuant to Section 3.1 or Section 3.3, as applicable, in which
event such right shall be forfeited by all Holders. If the Holders are
required to pay the Registration Expenses, such expenses shall be borne by
the holders of securities (including Registrable Securities) requesting such
registration in proportion to the number of shares for which registration was
requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (a) above, then the Holders shall not
forfeit their rights pursuant to Section 3.1 or Section 3.3 to a demand
registration.
3.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
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3.5.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to sixty (60) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
3.5.2 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.
3.5.3 Furnish to the Holders such number 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 owned by them.
3.5.4 Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
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.
3.5.5 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(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
3.5.6 Notify each Holder of 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 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.
3.5.7 Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, (i) an opinion, dated as of 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 and (ii) a letter dated as of 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 if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
3.6 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 3 shall terminate and be of no further force and effect
five (5) years after the date of the Company's Initial Offering. In addition,
a Holder's registration rights shall expire if (i) the Company has completed
its Initial Offering and is subject to the provisions of the Exchange Act,
(ii) such Holder (together with its affiliates, partners and former partners)
holds less than 1% of the Company's outstanding Common Stock (treating all
7
shares of convertible Preferred Stock of the Company (the "Preferred Stock") on
an as converted basis) and (iii) all Registrable Securities held by such Holder
may be sold under Rule 144 during any one hundred eighty (180) day period.
3.7 DELAY OF REGISTRATION; FURNISHING INFORMATION.
3.7.1 No 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 3.
3.7.2 It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 3.1, 3.2 or 3.3 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
3.8 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 3.1, 3.2 or 3.3:
3.8.1 To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, directors and legal counsel
of each 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 (collectively a "Violation") by the Company: (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 in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for 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 Section 3.8.1 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 such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
3.8.2 To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualifications or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers, and legal counsel and
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners,
8
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
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 under
an instrument duly executed by such Holder and stated to be specifically for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 3.8.2 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, which consent
shall not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 3.8 exceed the proceeds from the offering received
by such Holder.
3.8.3 Promptly after receipt by an indemnified party under this
Section 3.8 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 3.8, 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 shall
have the right to retain its own 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 materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 3.8, 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 3.8.
3.8.4 If the indemnification provided for in this Section 3.8 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such 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 Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law 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; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.
9
3.8.5 The obligations of the Company and Holders under this Section
3.8 shall survive completion of any offering of Registrable Securities in a
registration statement. 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. In the event any offering of Registrable Securities is underwritten,
and the underwriting agreement provides for indemnification and/or contribution
by the Company and the Holders offering securities thereunder, the
indemnification and/or contribution obligations of the Company and the Holders
hereunder shall in no event exceed the obligations of the parties set forth in
such underwriting agreement.
3.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 3 may be assigned by a
Holder to a transferee or assignee of Registrable Securities which (i) is a
subsidiary, parent, general partner, limited partner or retired partner of a
Holder, or an employee of a partner or shareholder of a Holder or, if such
partner or shareholder of Holder is a partnership or corporation, a partner or
shareholder of such partnership or corporation, (ii) is a Holder's family member
or trust for the benefit of an individual Holder, or (iii) acquires at least one
hundred thousand (100,000) shares of Registrable Securities (as adjusted for
stock splits and combinations); PROVIDED, HOWEVER, (A) the transferor shall,
within ten (10) days after such transfer, furnish to the Company 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 and (B) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.
3.10 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 3 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of more than fifty percent (50%)
of the Registrable Securities (excluding the Acquisition Shares) which are not
held by the Founders, unless such amendment or waiver adversely affects the
Founders differently than the other Holders. Any amendment or waiver effected in
accordance with this Section 3.10 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 3, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.
3.11 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of this
Agreement, if the Company shall enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights senior to those granted to the Holders hereunder, then the
Company shall grant the Holders such senior registration rights.
3.12 "MARKET STAND-OFF" AGREEMENT. If requested by the Company as the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
shares of Common Stock (or other securities) of the Company held by such Holder
(other than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that:
(i) such agreement shall apply only to the Company's Initial Offering;
and
10
(ii) all officers and directors of the Company and their affiliates
enter into similar agreements.
The obligations described in this Section 3.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
3.13 RULE 144 REPORTING. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of 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 as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
SECTION 4. MISCELLANEOUS.
4.1 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
4.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
4.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; PROVIDED, HOWEVER,
11
that prior to the receipt by the Company of adequate written notice of the
transfer of any Registrable Securities specifying the full name and address of
the transferee, the Company may deem and treat the person listed as the holder
of such shares in its records as the absolute owner and holder of such shares
for all purposes, including the payment of dividends or any redemption price.
4.4 SEVERABILITY. In case any provision of the Agreement shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
4.5 AMENDMENT AND WAIVER.
4.5.1 Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of more than fifty percent (50%) of the Registrable Securities which are not
held by the Founders unless the Founders would be adversely affected differently
than the other Holders, in which case a vote by a majority of the Founders shall
also be required.
4.5.2 Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of more than fifty percent (50%) of the
Registrable Securities which are not held by the Founders unless the Founders
would be adversely affected differently than the other Holders, in which case a
vote by a majority of the Founders shall also be required.
4.5.3 Notwithstanding the foregoing, this Agreement may be amended
with only the written consent of the Company to (i) include additional
purchasers of the Company's securities as "Holders" and parties hereto or (ii)
to include shares of Common Stock subsequently issued by the Company as
Registrable Securities hereunder.
4.5.4 By execution of this Agreement, the parties to the Prior
Agreement consent to the amendment and termination of the Prior Agreement.
4.5.5 Notwithstanding the foregoing and for avoidance of doubt, no
Holder of Acquisition Shares shall be entitled, directly or indirectly, to
initiate or create any obligation on the part of the Company to file a
registration statement.
4.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise
any right, power, or remedy accruing to any Holder, upon any breach, default or
noncompliance of the Company under this Agreement shall impair any such right,
power, or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent, or approval of any kind or character on any Holder's
part of any breach, default or noncompliance under the Agreement or any waiver
on such Holder's part of any provisions or conditions of this Agreement must be
in writing and shall be effective only to the
12
extent specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
4.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or Exhibit A or Exhibit B hereto or at such other address as such party may
designate by ten (10) days advance written notice to the other parties hereto.
4.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
4.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
13
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
COMPANY: FOUNDERS:
TUMBLEWEED COMMUNICATIONS CORP. _______________________________
Xxxxxxx X. Xxxxx
By: _________________________________
Xxxxxxx X. Xxxxx
President and Chief Executive Officer _______________________________
Xxxx-Xxxxxxxxxx X. Bandini
14
INVESTORS: SOFINNOVA VENTURE PARTNERS III
By: Sofinnova Management L.P.,
HIKARI TSUSHIN, INC. Its General Partner
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
XXXXXX XXXXXX ASSOCIATES FUND III, L.P.
By: _______________________________ ___________________________________
Name: Xxxxxxx X. Xxxxx
Title:
XXXXXX XXXXXX PARTNERS, L.L.C. TOLMI, L.L.C.
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
ADOBE VENTURES II, X.X. XXXXXX VENTURES IV, L.P.
By: H&Q Adobe Ventures Management II, LLC By: Deer IV & Co., LLC,
Its General Partner its General Partner
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
H&Q TUMBLEWEED INVESTORS, L.P. BESSEMER VENTURE PARTNERS IV L.P.
By: Deer IV & Co.,
its General Partner
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
15
AUGUST CAPITAL, L.P., FOR ITSELF AND AS BAYVIEW INVESTORS
NOMINEE FOR:
AUGUST CAPITAL STRATEGIC PARTNERS, L.P.
AUGUST CAPITAL ASSOCIATES, L.P.
By: August Capital Management, L.L.C., By: _______________________________
the general partner for each of the Name:
foregoing Title:
By: _______________________________ XXXXXXX XXXXXXXX LIVING TRUST
Name: U/A 12/19/91
Title:
INNOVACOM 2 By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title: ___________________________________
Xxxx Xxxxxxx
XXXXXX XXXXXXXX X.X.
By: Xxxxxx Xxxxxxxx Management Co.,
its General Partner
___________________________________
Xxxxxx X. Xxxxx
By: _______________________________
Name:
Title: ___________________________________
Xxxxxxx X. Xxxxx
___________________________________ GC&H INVESTMENTS
Xxxx-Xxxxxxxxxx X. Bandini
___________________________________ By: _______________________________
Xxxxxxx X. Xxxxxx Name:
Title:
___________________________________ ___________________________________
Xxxx Hautemont Xxxxxxx X. Xxxxxxx
16
XXXXXX ASSOCIATES, L.P.
___________________________________ By: __________, its General Partner
Xxxxxx X. Xxxxxxxx III
___________________________________ By: _______________________________
Xxxxxxx X. Xxxxxx Name:
Title:
XXXXXXXXX & XXXXX EMPLOYEE VENTURE UNITED PARCEL SERVICE GENERAL
FUND, L.P. SERVICES CO.
By: H&Q Venture Management, L.L.C.
Its: General Partner
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
___________________________________ HILAL CAPITAL, LP
Xxxxxx X. Consul
By: _______________________________
___________________________________ Name:
Xxxxxxx X. Xxxxxxxx Title:
HILAL CAPITAL, QP, LP
___________________________________
Xxxx Xxxxx
HILAL CAPITAL ASSOCIATES, LLC By: _______________________________
Name:
Title:
By: _______________________________ HILAL CAPITAL INTERNATIONAL, LTD.
Name:
Title:
By: _______________________________
Name:
Title:
17
HIGHBRIDGE INTERNATIONAL NARRAGANSETT I, LP
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
NARRAGANSETT OFFSHORE LTD.
By: _______________________________
Name:
Title:
18
EXHIBIT A
SCHEDULE OF EXISTING PARTIES
NAMES AND ADDRESSES
Adobe Ventures II, L.P.
x/x Xxxxxxxxx & Xxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
August Capital, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxx-Xxxxxxxxxx X. Bandini
0000 Xxxxxxx Xxxxxx, #00
Xxx Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxx
Xxxx Xxxx Xxx, XX 00000
Bayview Investors Ltd.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Bessec Ventures IV, L.P.
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners IV L.P.
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Consul
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx Living Trust u/a 12/19/91
000 Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
A-1
Xxxxxx Associates, X.X.
Xxxxxx Xxxxxx Associates Fund III
Xxxxxx Xxxxxx Partners, L.L.C.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxxxx X.X.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Xxxxxx X. Xxxxx
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
GC&H Investments
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxxxxx & Xxxxx Employee Venture Fund, X.X. XX
H&Q Tumbleweed Investors, L.P.
x/x Xxxxxxxxx & Xxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxx Hautemont
0000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Hikari Tsushin, Inc.
00X Xxxxxxxxx Xxxxxx Xxxx.
0-0-0 Xxxxxxxxx, Xxxxxxx-xx, Xxxxx
Xxxxx
Innovacom 2
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxxx III
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
A-2
Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 9412
Xxxxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Sofinnova Venture Partners III
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Tolmi, L.L.C.
c/o National Registered Agents
of NV, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
with a copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Xxxxxxxxx Xxxxx Morosoli & Maser
200 Page Mill Road, 2nd Floor
Palo Alto, CA 94306
United Parcel Service General Services Co.
00 Xxxxx Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
A-3
EXHIBIT B
SCHEDULE OF NEW PARTIES
NAMES AND ADDRESSES
Hilal Capital, LP Xxxx Xxxxx
00 Xxxx 00xx Xxxxxx - Xxxxx 0000 c/o Hilal Capital Management LLC
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxx 00xx Xxxxxx - Xxxxx 0000
Telephone: 000-000-0000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000
Hilal Capital QP, LP Highbridge International
00 Xxxx 00xx Xxxxxx - Xxxxx 0000 c/o Hilal Capital Management LLC
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxx 00xx Xxxxxx - Xxxxx 0000
Telephone: 000-000-0000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000
Hilal Capital Associates LLC Narragansett I, LP
00 Xxxx 00xx Xxxxxx - Xxxxx 0000 c/o Narragansett Asset Management, LLC
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxx Xxxxxx - Xxxxx 0000
Telephone: 000-000-0000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000
Hilal Capital International, Ltd. Narragansett Offshore Ltd.
c/o Hilal Capital Management LLC c/o Xxx Holdings, LLC
00 Xxxx 00xx Xxxxxx - Xxxxx 0000 000 Xxxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
B-1
