Exhibit 4.04
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
OF
SILICON IMAGE, INC.
This Third Amended and Restated Investors' Rights Agreement (this
"AGREEMENT") is made and entered into as of July 29, 1998 by and among Silicon
Image, Inc., a California corporation (the "COMPANY"), and the persons and
entities listed on Exhibit A attached hereto (the "INVESTORS"). This Agreement
supersedes and restates in its entirety that certain Second Amended and Restated
Investors' Rights Agreement made and entered into as of June 20, 1997 by and
among the Company and the "Prior Investors" (as defined below) (the "INVESTORS'
RIGHTS AGREEMENT").
R E C I T A L S
---------------
A. The Company has previously sold shares of its Series A
Preferred Stock (the "SERIES A STOCK"), Series B Preferred Stock (the "SERIES B
STOCK") and Series C Preferred Stock (the "SERIES C STOCK") to certain investors
(the "PRIOR INVESTORS") pursuant to a Series A Preferred Stock Purchase
Agreement dated as of October 6, 1995 (the "SERIES A AGREEMENT"), a Series B
Preferred Stock Purchase Agreement dated as of September 20, 1996 (the "SERIES B
AGREEMENT") and a Series C Preferred Stock Purchase Agreement dated as of June
20, 1997 (the "SERIES C AGREEMENT"). In connection with such sales, the Company
granted the Prior Investors certain rights, as set forth in the Investors'
Rights Agreement.
B. Certain investors (the "SERIES D INVESTORS") have purchased
from the Company shares of its Series D Preferred Stock ("SERIES D STOCK")
pursuant to that certain Series D Preferred Stock Purchase Agreement dated of
even date herewith by and among the Company and the Series D Investors (the
"SERIES D AGREEMENT").
C. This Agreement amends and restates the Investors' Rights
Agreement in its entirety. By their execution of this Agreement, the undersigned
Prior Investors agree, on behalf of all of the Prior Investors, to the amendment
and restatement of the Investors' Rights Agreement as provided herein and agree
to be bound by this Agreement.
D. The Prior Investors and Series D Investors will hereinafter
be referred to collectively as the "INVESTORS." The Series A Stock, Series B
Stock, Series C Stock and Series D Stock will hereinafter be referred to
collectively as the "PREFERRED STOCK."
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. INFORMATION RIGHTS.
1.1 FINANCIAL INFORMATION.
(a) The Company covenants and agrees that, commencing
on the date of this Agreement, for so long as any Investor holds at least
100,000 shares of Preferred Stock issued under the Series A Agreement, the
Series B Agreement, the Series C Agreement and/or the Series D Agreement
and/or the equivalent number (on an as-converted basis) of shares of common
stock of the Company ("COMMON STOCK") issued upon the conversion of such
shares of Preferred Stock ("CONVERSION STOCK"), the Company will:
(i) ANNUAL REPORTS. Furnish to such Investor,
as soon as practicable and in any event within 120 days after the end of each
fiscal year of the Company, audited by independent auditors of national
recognition, annual financial statements, including an audited Balance Sheet
as of the end of such fiscal year, an audited Statement of Income and an
audited Statement of Cash Flows, all prepared substantially in accordance
with generally accepted accounting principles and practices by independent
auditors of national recognition; and
(ii) QUARTERLY REPORTS. Furnish to such
Investor as soon as practicable, and in any event within forty-five (45) days
of the end of each fiscal quarter of the Company (except the last quarter of
the Company's fiscal year), quarterly unaudited financial statements,
including an unaudited Balance Sheet as of the end of such fiscal quarter, an
unaudited Statement of Income and an unaudited Statement of Cash Flows, all
prepared substantially in accordance with generally accepted accounting
principles and practices.
(b) The Company further covenants and agrees that,
for so long as any Investor holds at least 2,000,000 shares of Series C Stock
issued under the Series C Agreement and/or 500,000 shares of Series D Stock
issued under the Series D Agreement and/or an equivalent number (on an
as-converted basis) of shares of Common Stock issued upon the conversion of
such shares of Series C Stock ("SERIES C CONVERSION STOCK") and/or Series D
Stock ("SERIES D CONVERSION STOCK"), the Company will, in addition to (a)(i)
and (a)(ii) above:
(i) MONTHLY REPORTS. Furnish to such Investor,
as soon as practicable and in any event within forty-five (45) days of the
end of each calendar month, such financial statements and operating reports
as it prepares for internal use by management;
(ii) ANNUAL BUDGET. Furnish to such Investor
within thirty (30) days prior to the beginning of the fiscal year, an annual
operating plan and budget for the next immediate fiscal year; and
(iii) INSPECTION RIGHTS. Permit such Investor,
at such Investor's expense, to visit and inspect the Company's properties, to
examine its books of account and records and to discuss the Company's
affairs, finances and accounts with its officers, all at such reasonable
times as may be requested by such Investor.
1.2 CONFIDENTIALITY. Each Investor agrees to hold all
information received pursuant to this Section in confidence, and not to use
or disclose any of such information to any third party, except to the extent
such information may be made publicly available by the Company or otherwise
required by law.
2
2. REGISTRATION RIGHTS.
2.1 DEFINITIONS. For purposes of this Section 2:
(a) REGISTRATION. The terms "REGISTER,"
"REGISTERED," and "REGISTRATION" refer to a registration effected by
preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement.
(b) REGISTRABLE SECURITIES. The term "REGISTRABLE
SECURITIES" means: (1) all the shares of Common Stock of the Company issued
or issuable upon the conversion of any shares of Series A Stock issued under
the Series A Agreement, any shares of Series B Stock issued under the Series
B Agreement, any shares of Series C Stock issued under the Series C
Agreement, or any shares of Series D Stock issued under the Series D
Agreement, as such agreements may hereafter be amended from time to time,
that are now owned or may hereafter be acquired by any Investor or any
permitted successors and assigns of Investor; and (2) any shares of 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,
all such shares of Common Stock described in clause (1) of this subsection
(b); EXCLUDING in all cases, however, any Registrable Securities sold by a
person in a transaction in which rights under this Section 2 are not assigned
in accordance with this Agreement or any Registrable Securities sold to the
public or sold pursuant to Rule 144 promulgated under the Securities Act;
PROVIDED, HOWEVER, that notwithstanding anything herein to the contrary, the
shares of Common Stock of the Company issued or issuable upon the conversion
of any shares of Series A Stock issued under the Series A Agreement and any
shares of Series B Stock issued under the Series B Agreement and any shares
of Common Stock described in clause (2) of this Section 2.1(b) that are
issued in respect to any such shares (which Shares are collectively
hereinafter referred to as the "EXCLUDED SECURITIES"), shall not be
Registrable Securities for purposes of Section 2.2 of this Agreement.
(c) REGISTRABLE SECURITIES THEN OUTSTANDING. The
number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the
number of shares of Common Stock which are Registrable Securities and (1) are
then issued and outstanding or (2) are then issuable pursuant to the exercise
or conversion of then outstanding and then exercisable options, warrants or
convertible securities.
(d) HOLDER. For purposes of this Section 2, the term
"HOLDER" means any person owning of record Registrable Securities that have
not been sold to the public or pursuant to Rule 144 promulgated under the
Securities Act or any assignee of record of such Registrable Securities to
whom rights under this Section 2 have been duly assigned in accordance with
this Agreement; PROVIDED, HOWEVER, that for purposes of this Agreement, a
record holder of shares of Series A Stock, Series B Stock, Series C Stock or
Series D Stock convertible into such Registrable Securities shall be deemed
to be the Holder of such Registrable Securities; PROVIDED, FURTHER, that a
holder of Excluded Securities (as defined in Section 2.1(b)) shall not be a
Holder with respect to such Excluded Securities for purposes of Sections 2.2
of this Agreement; and PROVIDED, FURTHER, that the Company shall in no event
be obligated to register shares of Series A Stock, Series B Stock, Series C
Stock or Series D Stock and that Holders of Registrable Securities will not
be required to convert their shares of Series A Stock, Series B Stock, Series
C Stock or Series D Stock into Common Stock in order to exercise the
registration rights granted hereunder, until immediately before the closing
of the offering to which the registration relates.
3
(e) FORM S-3. The term "FORM S-3" means such form
under the Securities Act as is 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.
(f) SEC. The term "SEC" or "COMMISSION" means the
U.S. Securities and Exchange Commission.
2.2 DEMAND REGISTRATION.
(a) REQUEST BY HOLDERS. If the Company shall receive
at any time after the earlier of (i) two (2) years after the date of this
Agreement, or (ii) ninety (90) days after the effective date of the Company's
initial public offering of its securities pursuant to a registration filed
under the Securities Act, a written request from the Holders of at least
fifty percent (50%) of the Registrable Securities (other than Excluded
Securities) then outstanding that the Company file a registration statement
under the Securities Act covering the registration of Registrable Securities
pursuant to this Section 2.2, then the Company shall, within ten (10)
business days of the receipt of such written request, give written notice of
such request ("REQUEST NOTICE") to all Holders, and effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities (other than Excluded Securities) which Holders request to be
registered and included in such registration by written notice given such
Holders to the Company within twenty (20) days after receipt of the Request
Notice, subject only to the limitations of this Section 2.2; PROVIDED, that
the Registrable Securities (other than Excluded Securities) requested by all
Holders to be registered pursuant to such request must (i) be at least twenty
percent (20%) of all Registrable Securities (other than Excluded Securities)
then outstanding and (ii) have an anticipated aggregate public offering price
(before any underwriting discounts and commissions ) of not less than
$5,000,000, or $10,000,000 if such requested registration is the initial
public offering of the Company's stock registered under the Securities Act.
(b) UNDERWRITING. If the Holders initiating the
registration request under this Section 2.2 ("INITIATING HOLDERS") intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, then they shall so advise the Company as a part of their
request made pursuant to this Section 2.2 and the Company shall include such
information in the written notice referred to in subsection 2.2(a). In such
event, the right of any Holder to include his 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
managing underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 2.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors
require a limitation of the number of securities to be underwritten then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be registered and underwritten pursuant hereto, and the number of
Registrable Securities that may be included in the underwriting shall be
reduced as required by the underwriter(s) and allocated among the Holders of
Registrable Securities on a pro rata basis according to the number of
Registrable Securities then outstanding held by each Holder requesting
registration (including the Initiating Holders); PROVIDED, HOWEVER, that the
number of shares of Registrable Securities to be included in such
underwriting and registration shall not be
4
reduced unless all other securities of the Company are first entirely
excluded from the underwriting and registration. Any Registrable Securities
excluded and withdrawn from such underwriting shall be withdrawn from the
registration.
(c) MAXIMUM NUMBER OF DEMAND REGISTRATIONS. The
Company is obligated to effect only two (2) such registrations pursuant to
this Section 2.2.
(d) DEFERRAL. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 2.2, a certificate signed by the President
or Chief Executive Officer of the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of
such registration statement, then the Company shall have the right to defer
such filing for a period of not more than 90 days after receipt of the
request of the Initiating Holders; PROVIDED, HOWEVER, that the Company may
not utilize this right more than once in any twelve (12) month period. In
addition, the Company will not be obligated to effect a registration if the
Company delivers notice within thirty (30) days of receipt of the Request
Notice to the Holders requesting the filing of a registration statement
pursuant to this Section 2.2, a certificate signed by the President or Chief
Executive Officer of the Company stating the Company's good faith intent to
file a registration statement for an initial public offering within ninety
(90) days.
(e) EXPENSES. All expenses incurred in connection
with a registration pursuant to this Section 2.2, including without
limitation all registration and qualification fees, printers' and accounting
fees, fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements of one counsel for the selling Holders (but excluding
underwriters' discounts and commissions), shall be borne by the Company. Each
Holder participating in a registration pursuant to this Section 2.2 shall
bear such Holder's proportionate share (based on the total number of shares
sold in such registration other than for the account of the Company) of all
discounts, commissions or other amounts payable to underwriters or brokers in
connection with such offering. Notwithstanding the foregoing, the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to this Section 2.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered, unless the Holders of a majority of
the Registrable Securities (other than Excluded Securities) then outstanding
agree to forfeit their right to one (1) demand registration pursuant to this
Section 2.2 (in which case such right shall be forfeited by all Holders of
Registrable Securities (other than Excluded Securities)); PROVIDED, FURTHER,
HOWEVER, that if at the time of such withdrawal, the Holders have learned of
a material adverse change in the condition, business, or prospects of the
Company not known to the Holders at the time of their request for such
registration and have withdrawn their request for a registration with
reasonable promptness after learning of such material adverse change, then
the Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to this Section 2.2.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all
Holders of Registrable Securities in writing at least thirty (30) days prior
to filing any registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but EXCLUDING registration statements relating to
any employee benefit plan or a
5
corporate reorganization) and will afford each such Holder an opportunity to
include in such registration statement all or any part of the Registrable
Securities then held by such Holder. Each Holder desiring to include in any
such registration statement all or any part of the Registrable Securities
held by such Holder shall, within twenty (20) days after receipt of the
above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration statement. 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 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.
(a) UNDERWRITING. If a registration statement under
which the Company gives notice under this Section 2.3 is for an underwritten
offering, then the Company shall so advise the Holders of Registrable
Securities. In such event, the right of any such Holder's Registrable
Securities to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Securities in the underwriting
to the extent provided herein. All Holders proposing to distribute their
Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriter(s) selected for such underwriting. Notwithstanding any other
provision of this Agreement, if the managing underwriter determine(s) in good
faith that marketing factors require a limitation of the number of shares to
be underwritten, then the managing underwriter(s) may exclude shares
(including Registrable Securities) from the registration and the
underwriting, and the number of shares that may be included in the
registration and the underwriting shall be allocated, FIRST, to the Company,
and SECOND, to each of the Holders requesting inclusion of their Registrable
Securities in such registration statement on a pro rata basis based on the
total number of Registrable Securities then held by each such Holder;
PROVIDED, HOWEVER, that the right of the underwriters to exclude shares
(including Registrable Securities) from the registration and underwriting as
described above shall be restricted so that (i) the number of Registrable
Securities included in any such registration is not reduced below twenty-five
(25%) of the shares included in the registration, except for a registration
relating to the Company's intital public offering from which all Registrable
Securities may be excluded, (ii) if the registration and the underwriting are
in connection with the Company's initial public offering, no party shall sell
shares in such initial public offering other than the Company or the
Holder(s), if any, invoking a demand registration under Section 2.2 above and
(iii) no shareholder of the Company shall be granted registration rights
under this Section 2.3 if inclusion of such shares would reduce the number of
shares of Registrable Securities of the Holders to be included in such
registration without the consent of the Holders of fifty-percent (50%) of the
Registrable Securities then held by the Holders. If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter, delivered at
least ten (10) business days prior to the effective date of the registration
statement. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration. For any
Holder which is a partnership or corporation, the partners, retired partners
and shareholders of such Holder, or the estates and family members of any
such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "Holder", and any pro
rata reduction with respect to such "Holder" shall be based
6
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "Holder", as defined in this
sentence.
(b) EXPENSES. All expenses incurred in connection
with a registration pursuant to this Section 2.3 (excluding underwriters' and
brokers' discounts and commissions), including, without limitation all
federal and "blue sky" registration and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company and
reasonable fees and disbursements of one counsel for the selling Holders
shall be borne by the Company.
2.4 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 and
any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, then the Company will:
(a) NOTICE. Promptly give written notice of the
proposed registration and the Holder's or Holders' request therefor, and any
related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) REGISTRATION. 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 such twenty (20) days
after receive of such written notice from the Company; PROVIDED, HOWEVER,
that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.4:
(1) if Form S-3 is not available for such
offering by the Holders;
(2) 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 $500,000;
(3) if the Company shall furnish to the Holders
a certificate signed by the President or Chief Executive Officer 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 no more than once during any twelve month period
for a period of not more than 120 days after receipt of the request of the
Holder or Holders under this Section 2.4;
(4) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on form S-3 for the Holders pursuant to this Section 2.4; or
(5) 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.
7
(c) EXPENSES. 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 pursuant to
this Section 2.4 as soon as practicable after receipt of the request or
requests of the Holders for such registration. The Company shall pay all
expenses incurred in connection with each registration requested pursuant to
this Section 2.4 (excluding underwriters' or brokers' discounts and
commissions), including without limitation all filing, registration and
qualification, printers' and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holder of Holders and one
counsel for the Company.
(d) NOT DEMAND REGISTRATION. Form S-3 registrations
shall not be deemed to be demand registrations as described in Section 2.2
above.
2.5 OBLIGATIONS OF THE COMPANY. Whenever required to
effect the registration of any Registrable Securities under this Agreement,
the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
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
ninety (90) days.
(b) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.
(c) Furnish to the Holders 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 the Registrable
Securities owned by them that are included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by
the Holders, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement.
(f) 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.
8
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated 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 reasonably satisfactory to a majority
in interest of the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a "comfort" 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 and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
2.6 FURNISH INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
Section 2.2, 2.3 or 2.4 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 timely effect the registration of their Registrable Securities.
2.7 DELAY OF REGISTRATION. 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 2.
2.8 INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under Section 2.2, 2.3 or
2.4:
(a) BY THE COMPANY. To the extent permitted by law,
the Company will indemnify and hold harmless each Holder, the partners,
officers and directors 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
Securities Exchange Act of 1934, as amended, (the "1934 ACT"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the l934 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"):
(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 1934 Act, any
federal or state securities
9
law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any federal or 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, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED HOWEVER, that the
indemnity agreement contained in this subsection 2.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
(b) BY SELLING HOLDERS. To the extent permitted by
law, each selling Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, 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, directors or officers or any person who controls such Holder within
the meaning of the Securities Act or the 1934 Act, 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,
partner or director, officer or controlling person of such other Holder may
become subject under the Securities Act, the 1934 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 expressly 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, partner, officer, director or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement
contained in this subsection 2.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and PROVIDED FURTHER, that the total amounts
payable in indemnity by a Holder under this Section 2.8(b) in respect of any
Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) NOTICE. Promptly after receipt by an indemnified
party under this Section 2.8 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 2.8, 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
10
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential conflict of interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, 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
2.8.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The
foregoing indemnity agreements of the Company and Holders are subject to the
condition that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with
the SEC at the time the registration statement in question becomes effective
or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the
"FINAL PROSPECTUS"), such indemnity agreement shall not inure to the benefit
of any person if a copy of the Final Prospectus was furnished to the
indemnified party and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(e) CONTRIBUTION. In order to provide for just and
equitable contribution to joint liability under the Securities Act in any
case in which either (i) any Holder exercising rights under this Agreement,
or any controlling person of any such Holder, makes a claim for
indemnification pursuant to this Section 2.8 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 2.8 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required
on the part of any such selling Holder or any such controlling person in
circumstances for which indemnification is provided under this Section 2.8;
then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such
Holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Securities offered by and sold under
the registration statement bears to the public offering price of all
securities offered by and sold under such registration statement, and the
Company and other selling Holders are responsible for the remaining portion;
PROVIDED, HOWEVER, that, in any such case, (A) no such Holder will be
required to contribute any amount in excess of the public offering price of
all such Registrable Securities offered and sold by such Holder pursuant to
such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.
(f) SURVIVAL. The obligations of the Company and
Holders under this Section 2.8 shall survive the completion of any offering
of Registrable Securities in a registration statement, and otherwise.
2.9 RULE 144 REPORTING. With a view to making available
the benefits of certain rules and regulations of the Commission that may at
any time permit the sale of the Registrable 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:
11
(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 of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
(b) Use its best efforts to file with the Commission
in a timely manner all reports and other documents required of the Company
under the Securities Act and the 1934 Act (at any time after it has become
subject to such reporting requirements); and
(c) So long as a Holder owns any Registrable
Securities, to furnish to the Holder 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 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 1934 Act
(at any time after it has become subject to the reporting requirements of the
1934 Act), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without registration
(at any time after the Company has become subject to the reporting
requirements of the 1934 Act).
2.10 TERMINATION OF THE COMPANY'S OBLIGATIONS. The Company
shall have no obligations pursuant to Sections 2.2, 2.3 or 2.4 with respect
to: (i) any request or requests for registration made by any Holder on a date
more than seven (7) years after the closing date of the Company's initial
public offering at a price per share of at least $6.00 per share and for a
total offering of at least $10,000,000 (before deduction of underwriters'
commissions and expenses); or (ii) any Registrable Securities proposed to be
sold by a Holder in a registration pursuant to Section 2.2, 2.3 or 2.4 if, in
the opinion of counsel to the Company, all such Registrable Securities
proposed to be sold by a Holder may be sold in a three-month period without
registration under the Securities Act pursuant to Rule 144 under the
Securities Act.
2.11 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From
and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of a majority of the Registrable
Securities then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder (a) to include such securities in any
registration filed under Section 2.3 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of his securities
will not reduce the amount of the Registrable Securities of the Holders which
is included.
3. MARKET STAND-OFF AGREEMENT. Each Investor hereby agrees in
connection with any registration of the Company's securities under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), that, upon the
request of the Company or the underwriters managing any registered public
offering of the Company's securities, such Investor will not sell or
otherwise dispose of any Preferred Stock or Conversion Stock (or any shares
of the Company's Common Stock issued or issuable as a dividend or other
distribution with respect to, or in replacement of, such Preferred Stock or
Common Stock) without the prior written consent of the Company or such
managing underwriters, as the case may be, for a period of time after the
effective date of such registration requested by such managing underwriters,
but not to exceed 180 days (the "LOCK-UP PERIOD"), and subject to all
restrictions as the Company or the managing
12
underwriters may specify for all executive officers and directors of the
Company, provided that the Lock up Period applicable to each Investor shall
not exceed the Lock up Period for all executive officers and directors of the
Company. In order to enforce the foregoing covenant, the Company shall have
the right to place restrictive legends on the certificates representing the
shares subject to this Section and to impose stop transfer instructions with
respect to such shares (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
4. RIGHT OF FIRST REFUSAL.
4.1 GENERAL. Each Investor has the right of first refusal
to purchase such Investor's Pro Rata Share (as defined below), of all (or any
part) of any "New Securities" (as defined in Section 4.2) that the Company
may from time to time issue after the date of this Agreement. An Investor's
"PRO RATA SHARE" for purposes of this right of first refusal is the ratio of
(a) the number of shares of Preferred Stock and Conversion Stock held by such
Investor, to (b) a number of shares of Common Stock of the Company equal to
the sum of (i) the total number of shares of Common Stock of the Company then
outstanding, plus (ii) the total number of shares of Common Stock of the
Company into which all then outstanding shares of Preferred Stock of the
Company are then convertible, plus (iii) the number of shares of Common Stock
of the Company (A) reserved for issuance under stock purchase and stock
option plans of the Company, (B) subject to outstanding rights, options or
warrants (other than shares included in Subsection (A) above), and (C)
issuable upon the conversion or exchange of preferred stock or other
securities that are subject to outstanding rights, options or warrants.
4.2 NEW SECURITIES. "NEW SECURITIES" shall mean any
Common Stock or Preferred Stock of the Company, whether now authorized or
not, and rights, options or warrants to purchase such Common Stock or
Preferred Stock, and securities of any type whatsoever that are, or may
become, convertible or exchangeable into such Common Stock or Preferred
Stock; PROVIDED, HOWEVER, that the term "New Securities" DOES NOT INCLUDE:
(i) shares of the Company's Common Stock (and/or
options or warrants therefor) issued to employees, officers, or directors,
contractors, advisors or consultants of the Company pursuant to incentive
agreements or plans approved by the Board of Directors of the Company;
(ii) up to 4,000,000 shares of Series D Preferred
Stock issued under the Series D Agreement, as such agreement may be amended;
(iii) any securities issuable upon conversion of or
with respect to any then outstanding shares of Preferred Stock of the Company
or Common Stock or other securities issuable upon conversion thereof;
(iv) any securities issuable upon exercise of any
options, warrants or rights to purchase any securities of the Company
outstanding on the date of this Agreement ("WARRANT SECURITIES"), including
up to 50,000 shares of the Company's Common Stock subject to an option issued
to Xxxxxxxx Xxxxxxxxxxxxx outside of any plan, and any securities issuable
upon the conversion of any Warrant Securities;
13
(v) shares of the Company's Common Stock or
Preferred Stock issued in connection with any stock split or stock dividend;
(vi) any shares of the Company's Common Stock or
Preferred Stock (and/or options or warrants therefor) issued or issuable to
parties providing the Company with equipment leases, real property leases,
loans, credit lines, guaranties of indebtedness, cash price reductions or
similar financing provided such issuances are for other than equity financing
purposes; or
(vii) securities issued pursuant to the acquisition
of another corporation or entity by the Company by consolidation, merger,
purchase of all or substantially all of the assets, or other reorganization
in which the Company acquires, in a single transaction or series of related
transactions, all or substantially all of the assets of such other
corporation or entity or fifty percent (50%) or more of the voting power of
such other corporation or entity or fifty percent (50%) or more of the equity
ownership of such other entity.
4.3 PROCEDURES. In the event that the Company proposes to
undertake an issuance of New Securities, it shall give to each Investor
written notice of its intention to issue New Securities (the "NOTICE"),
describing the type of New Securities and the price and the general terms
upon which the Company proposes to issue such New Securities. Each Investor
shall have ten (10) days from the date of mailing of any such Notice to agree
in writing to purchase such Investor's Pro Rata Share of such New Securities
for the price and upon the general terms specified in the Notice by giving
written notice to the Company and stating therein the quantity of New
Securities to be purchased (not to exceed such Investor's Pro Rata Share). A
written notice to the Company indicating an Investor's intention to exercise
its right of first refusal shall not be binding upon such Investor unless and
until the Company obtains binding commitments to purchase all of the New
Securities specified in the Notice on the terms stated in the Notice. If any
Investor fails to so agree in writing within such ten (10) day period to
purchase such Investor's full Pro Rata Share of an offering of New Securities
(a "NONPURCHASING INVESTOR"), then such Nonpurchasing Investor shall forfeit
the right hereunder to purchase that part of its Pro Rata Share of such New
Securities that he did not so agree to purchase and the Company shall
promptly give each Investor who has timely agreed to purchase his full Pro
Rata Share of such offering of New Securities (a "PURCHASING INVESTOR")
written notice of the failure of any Nonpurchasing Investor to purchase such
Nonpurchasing Investor's full Pro Rata Share of such offering of New
Securities (the "OVERALLOTMENT NOTICE"). Each Purchasing Investor shall have
a right of overallotment such that such Purchasing Investor may agree to
purchase a portion of the Nonpurchasing Investors' unpurchased Pro Rata
Shares of such offering on a pro rata basis according to the relative Pro
Rata Shares of the Purchasing Investors, at any time within five (5) days
after receiving the Overallotment Notice.
4.4 FAILURE TO EXERCISE. In the event that the Investors
fail to exercise in full the right of first refusal within such ten (10) plus
five (5) day period, then the Company shall have 60 days thereafter to sell
the New Securities with respect to which the Investors' rights of first
refusal hereunder were not exercised, at a price and upon general terms not
materially more favorable to the purchasers thereof than specified in the
Company's Notice to the Investors. In the event that the Company has not
issued and sold the New Securities within such 60 day period, then the
Company shall not thereafter issue or sell any New Securities without again
first offering such New Securities to the Investors pursuant to this Section
4.
14
5. ASSIGNMENT, AMENDMENT AND TERMINATION.
5.1 ASSIGNMENT. Notwithstanding anything herein to the
contrary:
(a) INFORMATION RIGHTS. The rights of an Investor
under Section 1.1(a) hereof may be assigned only to a party who acquires from
an Investor (or an Investor's permitted assigns) at least 100,000 shares of
Preferred Stock and/or an equivalent number (on an as-converted basis) of
shares of Conversion Stock. The rights of an Investor under Section 1.1(b)
hereof may be assigned only to a party who acquires from an Investor (or an
Investor's permitted assigns) at least 2,000,000 shares of Series C Stock
and/or an equivalent number (on an as-converted basis) of shares of Series C
Conversion Stock and/or at least 500,000 shares of Series D Stock and/or an
equivalent number (on an as-converted basis) of shares of Series D Conversion
stock.
(b) REGISTRATION RIGHTS; REFUSAL RIGHTS.
(1) Registration rights under Section 2 above
may be assigned by a Holder that is a partnership to a partner or retired
partner, and by a Holder that is an individual to such individual's estate
or, by gift, will or intestate succession, to a spouse or lineal descendant
or ancestors or any trust for any of the foregoing.
(2) Except as set forth in the preceding clause
(1), the registration rights of a Holder under Sections 2.3 and 2.4 hereof
and the rights of first refusal of an Investor under Section 4 hereof may be
assigned only to a party who acquires at least 10,000 shares of Series A
Stock issued under the Series A Agreement and/or 10,000 shares of Series B
Stock issued under the Series B Agreement and/or 10,000 shares of Series C
Stock issued under the Series C Agreement and/or 10,000 shares of Series D
Stock issued under the Series D Agreement and/or an equivalent number (on an
as-converted basis) of shares of Conversion Stock issued upon conversion
thereof.
(3) Except as set forth in the preceding clause
(1), the registration rights of a Holder under Section 2.2 hereof may be
assigned only to a party who acquires at least 500,000 shares of Series C
Stock issued under the Series C Agreement or at least 500,000 shares of
Series D Stock issued under the Series D Agreement and/or an equivalent
number (on an as-converted basis) of shares of Conversion Stock issued upon
conversion thereof.
(4) In each case, no party may be assigned any
of the foregoing rights unless the Company is given written notice by the
assigning party at the time of such assignment stating the name and address
of the assignee and identifying the securities of the Company as to which the
rights in question are being assigned, and any such assignee shall receive
such assigned rights subject to all the terms and conditions of this
Agreement, including without limitation the provisions of this Section 5.
5.2 AMENDMENT OF RIGHTS. Any provision of this Agreement
applying solely to Holders of Series C Stock and/or Series C Conversion Stock
and Series D Stock and/or Series D Conversion Stock (including without
limitation Section 1.1(b), Section 2.2 and so much of Section 5.1 as applies
to the transfer of such rights) 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 Holders holding shares of
15
Series C Stock and/or Series C Conversion Stock representing and/or
convertible into a majority of shares of Series C Stock and Series C
Conversion Stock then outstanding, and the written consent of the Company and
holders holding shares of Series D Stock and/or Series D Conversion Stock
representing and/or convertible into fifty-five (55%) of shares of Series D
Stock and Series D Conversion Stock then outstanding. Any other provision of
this Agreement 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 Holders
holding shares of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and/or Conversion Stock representing and/or convertible into fifty-five
(55%) of all the Investors' Shares (as defined below). As used herein, the
term "INVESTORS' SHARES" shall mean the shares of Common Stock then issuable
upon conversion of all then outstanding shares of Series A Stock issued under
the Series A Agreement and all then outstanding shares of Series B Stock
issued under the Series B Agreement and all then outstanding shares of Series
C Stock issued under the Series C Agreement and all then outstanding shares
of Series D Stock issued under the Series D Agreement plus all then
outstanding shares of Conversion Stock that were issued upon the conversion
of any shares of Series A Stock issued under the Series A Agreement, shares
of Series B Stock issued under the Series B Agreement, shares of Series C
Stock issued under the Series C Agreement and shares of Series D issued under
the Series D Agreement. Any amendment or waiver effected in accordance with
this Section 5.2 shall be binding upon each Investor, each permitted
successor or assignee of such Investor and the Company.
5.3 TERMINATION OF RIGHTS. The Company's obligations
under Section 1 (other than Section 1.1(a)) and Section 4 of this Agreement
will terminate immediately before the closing of the Company's initial public
offering of Common Stock pursuant to an effective registration statement
filed under the Securities Act. Alternatively, the Company's obligations
under Section 1 of this Agreement will terminate immediately before the
closing of an acquisition of the Company by another corporation or entity by
consolidation, merger, acquisition of all or substantially all the assets of
the Company, or other reorganization, where the corporation or other entity
surviving the transaction has a class of stock registered under the
Securities Exchange Act of 1934, as amended.
5.4 NEW INVESTORS. Notwithstanding anything herein to the
contrary, if pursuant to Section 2.2 of the Series D Agreement, additional
parties may purchase shares of Series D Stock as "New Investors" thereunder,
then each such New Investor shall become a party to this Agreement as an
"Investor" hereunder, without the need any consent, approval or signature of
any Investor when such New Investor has both; (i) purchased shares of Series
D Stock under the Series D Agreement and paid the Company all consideration
payable for such shares and (ii) executed one or more counterpart signature
pages to this Agreement as an "Investor", with the Company's consent.
6. GENERAL PROVISIONS.
6.1 NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given if (1) personally delivered or (2) if deposited in the
U.S. mail by registered or certified mail, return receipt requested, postage
prepaid, or (3) if deposited with a return receipt express courier, as
follows:
16
(a) if to an Investor, at such Investor's respective
address as set forth on Exhibit A hereto.
(b) if to the Company, at 00000 Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxx.
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the manner set forth above.
6.2 ENTIRE AGREEMENT. This Agreement, together with all
the Exhibits hereto, constitutes and contains the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the
subject matter hereof.
6.3 GOVERNING LAW. This Agreement shall be governed by
and construed exclusively in accordance with the internal laws of the State
of California as applied to agreements among California residents entered
into and to be performed entirely within California, excluding that body of
law relating to conflict of laws and choice of law.
6.4 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, then such
provision(s) shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision(s) were so excluded and
shall be enforceable in accordance with its terms.
6.5 THIRD PARTIES. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason
of this Agreement.
6.6 SUCCESSORS AND ASSIGNS. Subject to the provisions of
Section 5.1, the provisions of this Agreement shall inure to the benefit of,
and shall be binding upon, the successors and permitted assigns of the
parties hereto.
6.7 CAPTIONS. The captions to sections of this Agreement
have been inserted for identification and reference purposes only and shall
not be used to construe or interpret this Agreement.
6.8 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.
6.9 COSTS AND ATTORNEYS' FEES. In the event that any
action, suit or other proceeding is instituted concerning or arising out of
this Agreement or any transaction contemplated hereunder, the prevailing
party shall recover all of such party's costs and attorneys' fees incurred in
each such action, suit or other proceeding, including any and all appeals or
petitions therefrom.
6.10 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this
Agreement there is a reference to a specific number of shares of Common Stock
or Preferred Stock of the Company of any class or series, then, upon the
occurrence of any subdivision, combination or stock dividend of such class or
series of stock, the specific number of shares so referenced in this
17
Agreement shall automatically be proportionally adjusted to reflect the
effect on the outstanding shares of such class or series of stock by such
subdivision, combination or stock dividend.
6.11 AGGREGATION OF STOCK. All shares 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.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
THE COMPANY: INVESTORS:
Silicon Image, Inc. InveStar Semiconductor Development
Fund, Inc.
By: /s/ Xxxxx X. Xxx By: /s/ Xxxxxx Xxxxx
-------------------------------- ----------------------------------
Xxxxx X. Xxx
Title: Chief Executive Officer Title: Controller
-------------------------------
InveStar Excelsus Venture Capital
(Int'l) Inc., LDC
By: /s/ Xxxxxx Xxxxx
----------------------------------
Title: Controller
-------------------------------
Forefront Venture Partners L.P.
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Title: Partner
-------------------------------
[SIGNATURE PAGE TO SILICON IMAGE, INC. THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
August Capital, L.P. for itself and as
nominee for August Capital Strategic
Partners, L.P. and August Capital
Associates, L.P.
By: August Capital Management LLC,
general partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Xxxx X. Xxxxxx, Member
Fenwick & West Investments 1998
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------
Title: Partner
---------------------------------
Velocity Technology and Communications
Trust B
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
----------------------------------
Title: Investment Advisor
---------------------------------
/s/ Xxxxxx Xxxxxxx
----------------------------------------
Xxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxx Xxx
----------------------------------------
Xxxx Xxx
[SIGNATURE PAGE TO SILCON IMAGE, INC. THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement as of the date first written above.
THE COMPANY: INVESTORS:
Silicon Image, Inc. Intel Corporation
By: By: /s/ Xxxxxx Xxxxxxx
------------------------------ -----------------------------------
Xxxxx X. Xxx
Title: Chief Executive Officer Print Name: Xxxxxx Xxxxxxx
---------------------------
Title: VP & Treasurer
--------------------------------
[SIGNATURE PAGE TO SILICON IMAGE, INC. THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
EXHIBIT A
SCHEDULE OF INVESTORS
NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF
SERIES A SERIES B SERIES C SERIES D
INVESTOR STOCK HELD STOCK HELD STOCK HELD STOCK HELD
-------- ---------- ---------- ---------- ----------
InveStar Semiconductor 428,572
Development Fund, Inc.
Xxxx 0000, TWTC Int'l
Trade Xxxxxxxx 00X
000 Xxxxxxx Xxxx, Xxxxxxx 0
Xxxxxx, Xxxxxx
InveStar Excelsus Venture 285,714
Capital (Int'l) Inc., LDC
Room 1201, TWTC Int'l
Trade Xxxxxxxx 00X
000 Xxxxxxx Xxxx, Xxxxxxx 0
Xxxxxx, Xxxxxx
Forefront Venture Partners L.P. 142,857
0000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 000
Xxx Xxxx, XX 00000
August Capital, L.P. 3,200,000 1,428,572
0000 Xxxx Xxxx Xxxx,
Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxx 350,000 142,494 142,000
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Tel.: (000) 000-0000
Xxxxxx Xxxxxxx 46,068 10,000
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
Fenwick & West 14,286
Investments 0000
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Velocity Technology and 285,715
Communications Trust B
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF
SERIES A SERIES B SERIES C SERIES D
INVESTOR STOCK HELD STOCK HELD STOCK HELD STOCK HELD
-------- ---------- ---------- ---------- ----------
Dr. Sang-Xxxx Xxx 898,925 365,975
Xxxx Xxx Cable System Inc.
Ryukyung Xxxx. 000-0,
Xxxxxxxx-xxxx,
Xxxxxxx-xx,
Xxxxx, Xxxxx 135-010
Tel.: 000-00-0-000-0000
Fax: 000-00-0-000-0000
or
c/o Young Xxx Xxx
0000 Xxxxxxxxxx Xxxxx,
Xxxx X
Xxxxx Xxxxxxxx, XX 00000
Xx. Xxxxx-Xxx Xxxx 36,075 14,687
Xxxxx Xxxxxx 00-0000
Xxxxxx-xxxx, Xxxxxx-Xx
Xxxxx, Xxxxx
Tel: 000-00-0-000-0000
Fax: 000-00-0-000-0000
Techno-Alliance Corporation 100,000
5-30-1 Takinoi
Funabashi-shi
Chiba-Pref., Japan 274
Tel./Fax: 0000-00-0000
copy to:
Xx. Xxxxxx Xxxxx, President
Techno-Alliance Corporation
Xxxx-Xxxxx Kangyo Xxxx. 00X
0-0, Xxxxx 0-Xxxxx
Xxxxxxxxx-Xx, Xxxxx,
Xxxxx, 141
Tel.: 000-00-000-00-0000
Fax: 000-00-000-00-0000
Ki Sub Xxx 100,000 40,712
000 Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Tel.:
Mr. Youkichi Den 40,000
0-00-00-000, Xxx-Xx-Xxxxx
Xxx-Xx, Xxxxx, Xxxxx
Xxxxxxxx Xxxxxxxx 10,000
000 Xxxx Xxxxxxx Xx. #000
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF NUMBER OF SHARES OF
SERIES A SERIES B SERIES C SERIES D
INVESTOR STOCK HELD STOCK HELD STOCK HELD STOCK HELD
-------- ---------- ---------- ---------- ----------
Xxxxxx Xxxxxxx 30,000 12,214
00000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Tel: (000) 000-0000
Korea Technology Investment 200,000 81,425
Corporation
Haeam Xxxx. 00xx Xxxxx
000-0 Xxxxxx-xxxx,
Xxxxxxx-Xx
Xxxxx, Xxxxx 135-280
Attn: Xxx X. Xx
Tel.: 000-00-0-000-0000
Fax: 000-00-0-000-0000
Xxx Law Firm (KTIC USA)
000 Xxxxxxx Xxxxxxx, Xxx 000
Xxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn: Xx. Xxxx X. Xxx
SsangYong (U.S.A.), Inc. 200,000 81,425
000 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X.X. Xxxx, Vice
President
or
000 Xxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Xxxxx X. Xxxxxx 15,000
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Intel Corporation 857,143
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: Treasurer
Fax Number: (000) 000-0000
copies to:
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Fax Number: (000) 000-0000
AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
This Amendment No. 1 to the Third Amended and Restated Investors' Rights
Agreement (the "FIRST AMENDMENT") is dated as of October 15, 1998 and is entered
into by and between Silicon Image, Inc., a California corporation (the
"COMPANY") and the investors listed on Exhibit 1 hereto (the "AMENDING
INVESTORS").
R E C I T A L S:
- - - - - - - -
A. WHEREAS, the Company and certain investors (the "INVESTORS") entered
into a Third Amended and Restated Investors' Rights Agreement (the
"ORIGINAL AGREEMENT") dated as of July 29, 1998 (the "CLOSING DATE")
whereby the Company granted the Investors certain registration rights
for securities defined as "Registrable Securities" under the Original
Agreement.
B. WHEREAS, the Company and Intel Corporation entered into a certain
Warrant No. 1 (the "WARRANT") on September 16, 1998 to purchase
142,857 shares of Common Stock of the Company. The Warrant provided
that all Common Stock issuable upon exercise of the Warrant (the
"WARRANT SHARES") would be Registrable Securities under the Original
Agreement.
C. WHEREAS, the Company and the Amending Investors wish to amend the
definition of Registrable Securities under Section 2.1(b) of the
Original Agreement to include the Warrant Shares.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. AMENDMENT TO SECTION 2.1(b). Section 2.1(b) of the Original Agreement
is hereby amended and restated in its entirety as follows:
(b) REGISTRABLE SECURITIES. The term "REGISTRABLE SECURITIES" means:
(1) all the shares of Common Stock of the Company issued or issuable upon the
conversion of any shares of Series A Stock issued under the Series A Agreement,
any shares of Series B Stock issued under the Series B Agreement, any shares of
Series C Stock issued under the Series C Agreement, or any shares of Series D
Stock issued under the Series D Agreement, as such agreements may hereafter be
amended from time to time, that are now owned or may hereafter be acquired by
any Investor or any permitted successors and assigns of Investor; (2) all shares
of Common Stock of the Company issuable upon exercise of that certain Warrant
No. 1 to purchase 142,857 shares of Common Stock of the Company between the
Company and Intel Corporation dated September 16, 1998; and (3) any shares of
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,
all such shares of Common Stock described in clauses (1) and (2) of this
subsection (b); EXCLUDING
in all cases, however, any Registrable Securities sold by a person in a
transaction in which rights under this Section 2 are not assigned in
accordance with this Agreement or any Registrable Securities sold to the
public or sold pursuant to Rule 144 promulgated under the Securities Act;
PROVIDED, HOWEVER, that notwithstanding anything herein to the contrary, the
shares of Common Stock of the Company issued or issuable upon the conversion
of any shares of Series A Stock issued under the Series A Agreement and any
shares of Series B Stock issued under the Series B Agreement and any shares
of Common Stock described in clause (3) of this Section 2.1(b) that are
issued in respect to any such shares (which Shares are collectively
hereinafter referred to as the "EXCLUDED SECURITIES"), shall not be
Registrable Securities for purposes of Section 2.2 of this Agreement.
2. NO OTHER CHANGES. Except as amended as set forth in this First
Amendment, all other provisions of the Original Agreement shall continue in full
force and effect.
3. COUNTERPARTS. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed and original, but which together
will constitute one and the same instrument.
4. GOVERNING LAW. This First Amendment will be governed by and construed
under the internal laws of the state of California as applied to agreements
among California residents entered into and performed entirely within
California, without reference to principles of conflict of laws or choice of
laws.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this First Amendment as
of the date first written above.
THE COMPANY: AMENDING INVESTORS:
Silicon Image, Inc. August Capital, L.P. for itself and as
nominee for August Capital Strategic
Partners, L.P. and August Capital
Associates, L.P.
By: /s/ Xxxxx X. Xxx
----------------------------
Xxxxx X. Xxx
Title: Chief Executive Officer By: August Capital Management LLC,
general partner
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx, Member
InveStar Semiconductor Development Fund,
Inc.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Title: Controller
------------------------------------
InveStar Excelsus Venture Capital (Int'l)
Inc., LDC
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Title: Controller
------------------------------------
Forefront Venture Partners L.P.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------
Title: Partner
------------------------------------
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SILICON IMAGE, INC.
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
date first written above.
AMENDING INVESTORS:
------------------
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
INTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------------
Title: Vice President and Treasurer
------------------------------------
F & W INVESTMENTS 1998
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
------------------------------------
Title: Partner
------------------------------------
VELOCITY TECHNOLOGY AND
COMMUNICATIONS TRUST B
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------------
Title: Investment Advisor
------------------------------------
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SILICON IMAGE, INC.
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
EXHIBIT 1
---------
Amending Investors
August Capital, L.P.
InveStar Semiconductor Development Fund, Inc.
InveStar Excelsus Venture Capital (Int'l) Inc., LDC
Forefront Venture Partners L.P.
Xxxxxxx Xxxxxxx
Intel Corporation
Velocity Technology and Communications Trust B
Xxx Xxxxxxx
F&W Investments 1998
