EXHIBIT 4.5
OCCAM NETWORKS, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Second Amended and Restated Investors' Rights Agreement (this
"Agreement") is made and entered into as of March 8, 2004 by and among Occam
Networks, Inc., a Delaware corporation (the "Company"), and the undersigned
purchasers (each, an "Investor" and collectively, the "Investors") of the
Company's Series A Preferred Stock (as defined herein) originally issued
pursuant to the Series A Preferred Stock Purchase Agreement dated as of December
19, 2002 (the "2002 Purchase Agreement") and/or shares of the Company's Series
A-2 Preferred Stock (as defined herein) issued pursuant to the Series A-2
Preferred Stock Purchase Agreement (the "2003 Purchase Agreement") dated as of
November 19, 2003 as amended by Amendment No. 1 to Series A-2 Preferred Stock
Purchase Agreement of even date herewith (the "Amendment" and together with the
2003 Purchase Agreement, the "Amended Purchase Agreement"). This Agreement
amends and restates in its entirety the First Amended and Restated Investors'
Rights Agreement dated as of November 19, 2003 (the "Prior Agreement") in
accordance with Section 21(e) thereof and shall become effective at such time as
it has been executed and delivered by the Company and the requisite Investors
(as constituted pursuant to the Prior Agreement) specified in such Section
21(e).
Recitals
WHEREAS, certain of the Investors propose to purchase, and the Company
proposes to issue and sell to such Investors, additional shares of Series A-2
Preferred in accordance with the Amended Purchase Agreement;
WHEREAS, the Company and the Investors as then constituted entered the
Investors' Rights Agreement dated as of December 9, 2002 (the "First Agreement")
in connection with the sale and issuance of the Series A Preferred pursuant to
the 2002 Purchase Agreement, and such shares of Series A Preferred have since
been converted into shares of Common Stock (as defined herein);
WHEREAS, in connection with the sale and issuance of the Series A-2
Preferred, the Company and the Investors as then constituted entered the Prior
Agreement, which remains in effect with respect to such Investors and which
amended and restated the First Agreement in its entirety.
WHEREAS, as an inducement to investment funds affiliated with Alta Partners
to purchase shares of Series A-2 Preferred pursuant to the Amended Purchase
Agreement, the Company and the existing Investors have agreed to amend and
restate the Prior Agreement as set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Investors and the Company agree that the Prior
Agreement is hereby amended and restated, and replaced in its entirety, as
follows:
1. Definitions. As used in this Agreement:
(a) "Alta Warrant" shall have the meaning set forth in the Amendment.
(b) "Commitment Warrant" shall have the meaning set forth in the
Amendment.
(c) "Convertible Notes" shall have the meaning set forth in the
Amendment.
(d) "Common Stock" shall mean the Company's common stock, par value
$0.001 per share.
(e) "Closing" shall mean the date of the initial sale of shares of
Series A-2 Preferred pursuant to the Amendment.
(f) "Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as amended.
(g) "Holder" shall mean (i) an Investor or (ii) a transferee to whom
registration rights granted under this Agreement are assigned in accordance with
this Agreement.
(h) "New Securities" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not, and
rights, options or warrants to purchase such capital stock, and securities of
any type whatsoever that are, or may become, convertible into such capital stock
and that are issued after the Closing; provided, however, that "New Securities"
shall in no event be deemed to include: (i) any shares of capital stock,
including any rights, options, or warrants to purchase shares of capital stock,
that have been subject to the rights contained in Section 12 of this Agreement
where such rights have either been exercised or waived or have expired in
accordance with this Agreement; (ii) any securities issued pursuant to the 2003
Purchase Agreement or the Amended Purchase Agreement; (iii) the Convertible
Notes and any equity securities of the Company issued or issuable upon
conversion thereof; (iv) the Commitment Warrants and any equity securities of
the Company issued or issuable upon exercise thereof; (iv) the Alta Warrant and
any equity securities of the Company issued or issuable upon exercise thereof
(including any Common Stock issuable upon conversion of the shares of Series A-2
Preferred issuable upon exercise of the Alta Warrant); (v) rights to acquire
shares of Series A-2 Preferred offered pursuant to the Rights Offering and any
shares of Series A-2 Preferred sold and issued in accordance therewith; (vi) any
shares of the Company's capital stock issued or issuable upon conversion of the
Series A-2 Preferred or any other right, option, or warrant outstanding as of
the date of this Agreement (provided such other right, option, or warrant is
described in Section 3.3 of the 2003 Purchase Agreement) to acquire shares of
the Company's capital stock; (vii) securities issued by the Company in one or
more transactions where the securities issued in the transaction or transactions
have been unanimously approved by directors present at a properly noticed
meeting of the board of directors or unanimously approved by a written consent
of the directors as securities that should not be deemed to be "New Securities";
(viii) securities offered to the public by the Company pursuant to a
registration statement filed under the Securities Act; (ix) securities issued to
customers, commercial partners (including technology partners, marketing
partners or distribution
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partners), vendors, lenders, and equipment lessors of the Company, other than in
a transaction whose principal purpose is to raise additional working capital for
the Company, provided that such issuance is unanimously approved by directors
present at a properly noticed meeting of the board of directors or unanimously
approved by a written consent of the directors; (x) securities issued in
connection with the Company's acquisition of any business, product, or
technology by way of merger, asset purchase, reorganization, or other means,
provided that such issuance is unanimously approved by directors present at a
properly noticed meeting of the board of directors or unanimously approved by a
written consent of the directors; (xi) shares of Common Stock (or options,
warrants or rights therefor) granted or issued hereafter to employees, officers,
directors, contractors, consultants or advisers to, the Company or any
subsidiary pursuant to incentive agreements, stock purchase or stock option
plans, stock bonuses or awards, warrants, contracts or other arrangements that
are approved by the Company's board of directors or by the compensation
committee of the board of directors; and (xii) securities issued in connection
with any proportionate stock split, stock dividend or distribution,
recapitalization, or similar event by the Company.
(i) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
(j) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, expenses of any regular or special audits incident to or required
by any such registration, and the reasonable fees and disbursements of one
special counsel for the Holders.
(k) "Registrable Securities" shall mean for each Holder, (i) shares
of Common Stock of the Company issued to such Holder upon conversion of the
Series A Preferred; (ii) shares of Common Stock of the Company issued or
issuable to such Holder upon conversion of the Series A-2 Preferred; (iii)
shares of Common Stock of the Company issued or issuable to such Holder upon
conversion of the Series A-2 Preferred issued or issuable upon exercise of the
Alta Warrant; (iv) shares of Common Stock issued or issuable upon the
Convertible Notes; (v) shares of Common Stock issued or issuable upon exercise
of the Commitment Warrants; and (vi) any Common Stock issued as a dividend or
other distribution with respect to or in exchange for or in replacement of the
shares referenced in (i), (ii), (iii), (iv), or (v) above; provided, however,
that such shares of Common Stock shall cease to be Registrable Securities at
such time as (i) they have been registered for resale pursuant to a prospectus
included in the effective registration statement contemplated pursuant to
Section 2 hereof, which registration statement has been effective for the
periods specified in Section 2(b) and 2(c), or (ii) they are otherwise available
for resale under Rule 144 of the Securities Act within a single 90 day period.
(l) "Rights Offering" shall mean the offer, sale, and/or issuance of
rights to purchase shares of Series A-2 Preferred to stockholders of the Company
pursuant to a registration statement filed with and declared effective by the
SEC, as contemplated by Section 2.1(f) of the 2003 Purchase Agreement, such
Rights Offering to be effected after the Closing on terms and conditions to be
approved by the Company's Board of Directors.
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(m) "SEC" shall mean the United States Securities and Exchange
Commission.
(n) "Securities Act" shall mean the United States Securities Act of
1933, as amended.
(o) "Series A Preferred Stock" or "Series A Preferred" shall mean the
Series A Convertible Preferred Stock of the Company, par value $0.001 per share,
issued pursuant to the 2002 Purchase Agreement, which Series A Preferred is no
longer outstanding and of which no shares of authorized Preferred Stock of the
Company are currently designated.
(p) "Series A-2 Preferred Stock" or "Series A-2 Preferred" shall mean
the Series A-2 Convertible Preferred Stock of the Company, par value $0.001 per
share.
(q) "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities.
(r) "Significant Holder" shall mean a Holder who holds at least at
least 100,000 shares of Series A-2 Preferred (subject to adjustments for stock
splits, stock dividends, reverse stock splits and the like), or at least such
number of shares of Common Stock as were issued upon conversion of 100,000
shares of Series A-2 Preferred Stock (each subject to adjustments for stock
splits, stock dividends, reverse stock splits and the like).
2. Holder Registration.
(a) The Company will use commercially reasonable efforts to cause the
Registrable Securities held by the Holders to be registered under the Securities
Act so as to permit the resale thereof, and in connection therewith shall
prepare and file with the SEC in accordance with Section 2(b) below a
registration statement on such form as may then be available to effect the
registration of the Registrable Securities. The offering made pursuant to such
registration shall not be underwritten.
(b) The Company shall (i) prepare and file with the SEC the
registration statement in accordance with Section 2 hereof with respect to the
Registrable Securities on or before the date 45 days after Closing and shall use
commercially reasonable efforts to cause such registration statement to become
effective as promptly as practicable after filing and to keep such registration
statement effective until the sooner to occur of (A) the date on which all
Registrable Securities included within such registration statement have been
sold; (B) the date on which Holders of all Registrable Securities are able to
sell such Registrable Securities immediately without restriction pursuant to the
volume limitation provisions of Rule 144 under the Securities Act within a
single 90 day period, provided, however, that the Company shall provide each
Holder with 10 trading days' notice before rescinding the effectiveness of such
registration statement pursuant to this subparagraph 2(b)(i)(B); or (C) two
years following the effective date of the registration statement; (ii) in the
event the SEC determines not to review such registration statement, request the
declaration of the effectiveness of such registration statement as of a date
within 5 days of such determination by the SEC; (iii) prepare and file with the
SEC such amendments to such registration statement and amendments or supplements
to the prospectus used in connection therewith as may be necessary to
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comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities to be registered by such
registration statement; (iv) furnish to each Holder such number of copies of any
prospectus (including any amended or supplemented prospectus) in conformity with
the requirements of the Securities Act, and such other documents, as such Holder
may reasonably request in order to effect the offering and sale of the
Registrable Securities to be offered and sold, but only while the Company shall
be required under the provisions hereof to cause the registration statement to
remain effective; (v) use commercially reasonable efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request (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 jurisdiction where it
has not been qualified), and do any and all other acts or things which may be
necessary or advisable to enable each Holder to consummate the public sale or
other disposition of such Registrable Securities in such jurisdictions; and (vi)
notify each Holder, promptly after it shall receive notice thereof, of the date
and time the registration statement and each post-effective amendment thereto
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed; provided, further, that the Company shall
not be obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Section 2 after the Company has
effected one such registration pursuant to this Section 2 and such registration
has been declared or ordered effective.
(c) Notwithstanding subsection (b) above, if upon a termination of
the effectiveness of the registration statement pursuant to Section 2(b), any
Holder(s) would not otherwise be able to sell all Registrable Securities then
held by such Holder within a single 90-day period under Rule 144, the Company
shall take such actions as may be necessary, whether by filing a new
registration statement or amending an existing registration statement, to extend
the effectiveness of such registration statement and keep such registration
statement effective until such time as all such shares may be sold by such
Holder under Rule 144 within a single 90-day period.
3. Piggyback Registration.
(a) The Company may from time to time determine to register for sale
shares of Common Stock for its own account, other than (i) a registration
relating solely to employee benefit plans or (ii) a registration relating solely
to a transaction pursuant to Rule 145 promulgated under the Securities Act, and
in connection with such determination, shall file with the SEC a registration
statement to register such Common Stock (a "Registered Sale"). In the event of
such determination, the Company will give to each Holder written notice thereof
at least 20 days (but not more than 60 days) prior to the filing of such
registration statement, and will include in the Registered Sale (and any related
qualification under blue sky laws or other related compliance) all the
Registrable Securities specified by the Holders in their written request or
requests to the Company, made within 15 days after receipt of such written
notice from the Company, subject, however, to the marketing limitation set forth
in subsection (b) below. If the registration statement under which the Company
gives notice under this subsection (a) is for an underwritten offering, the
Company shall so advise the Holders. A Registered Sale, including (if
applicable) the form of underwriting agreement to be entered into by the
Company, the underwriter(s) and any selling stockholders, shall be on customary
terms. The underwriter(s) for an underwritten offering shall be selected by the
Company in its sole discretion.
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(b) The right of any Holder to registration pursuant to this section
shall be conditioned upon such Holder's participation in the Registered Sale and
the inclusion of Registrable Securities in the Registered Sale to the extent
provided herein. All Holders shall (together with the Company and the other
holders distributing their securities through the Registered Sale) enter into an
underwriting agreement in customary form with the managing underwriter.
Notwithstanding any other provision of this section, if the managing underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration and underwriting; provided,
however, that (i) all shares that are not Registrable Securities and are held by
other selling stockholders, including, without limitation, persons who are
employees or directors of the Company (or any subsidiary of the Company), shall
first be excluded from such registration and underwriting before any Registrable
Securities are so excluded, (ii) all securities requested to be included by the
Holders shall share pro rata in the number of shares to be excluded from such
registration, such sharing to be based on the respective numbers of shares owned
by each stockholder, and (iii) any such limitation shall not prevent the Holders
of Registrable Securities requesting to be included in such registration from
including Registrable Securities representing up to 30% of the total number of
shares registered thereby. In such event, the Company shall so advise all
Holders of Registrable Securities which would otherwise be registered pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the registration shall be allocated among the Holders in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities
requested to be included by such Holders in accordance with subsection (a)
above. To facilitate the allocation of shares in accordance with the above
provision, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares. If any Holder disapproves of
the terms of the Registered Sale, he or she may elect to withdraw therefrom by
written notice to the Company and the managing underwriter. If a Holder decides
not to include all of its Registrable Securities in any registration statement
filed by the Company, such Holder shall nevertheless continue to have the right
to include any Registrable Securities in any subsequent registration statement
as may be filed by the Company, all upon the terms hereof.
(c) Termination of Piggyback Rights. Notwithstanding any other
provision of this Agreement, the Company's obligations pursuant to this Section
3 shall terminate at such time as it has effected two (2) registrations in
accordance herewith.
4. Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under Section 3 prior to
the effectiveness of the registration whether or not any Holder has elected to
include securities in such registration.
5. Notice to the Company; Suspension of Prospectus. Each Holder shall
provide the compliance officer designated by the Company with written notice at
least two business days prior to any transfer, sale or other disposition of
Registrable Securities under any registration statement filed pursuant to
Section 2 of this Agreement (a "Requesting Holder"). The Company may by written
notice to such Requesting Holder delivered within two business days of receipt
of such notice restrict the proposed offer, sale, transfer, or disposition of
such Registrable Securities if the Company, in its reasonable judgment, has
determined that such transactions would require public disclosure by the Company
of material non-public information that is not included in such registration.
The notice referred to in the preceding sentence shall set forth the Company's
good
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faith estimate of the number of days during which the Requesting Holder is to
refrain from the proposed offer, sale, transfer of disposition of Registrable
Securities. Upon receipt of such notice, the Requesting Holder agrees not to
effect any offer, sale, transfer, or other disposition of Registrable Securities
pursuant to such registration statement for the period of days set forth in the
Company's notice. In the event the Company determines that the Requesting Holder
is able to effect a transfer, sale or other disposition as requested prior to
the date the Company estimated, the Company shall provide an updated notice to
the Requesting Holder. In any event, in the event of a delivery of the notice
described above by the Company, for a period of 15 trading days following the
expiration of the time period stated in the notice, a Holder may effect an
offer, sale, transfer or other disposition of Registrable Securities without
restriction under this Section 5. Notwithstanding the foregoing, the Company may
not, without the consent of the holders of a majority of the then-outstanding
Registrable Securities, restrict the transfer, sale or other disposition of the
Registrable Securities under any registration statement filed pursuant to this
Agreement for more than 20 consecutive trading days or 90 trading days during
any 365-day period.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Holder, each of
its officers, directors, partners, members, stockholders, legal counsel and any
underwriter (as defined in the Securities Act) for the Holder, and each person
controlling such Holder or underwriter within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation promulgated
thereunder applicable to the Company or any state securities law applicable to
the Company in connection with any such registration, qualification or
compliance, and the Company will reimburse (on an as incurred basis), each
Holder, each of its officers, directors, partners, members, and each person
controlling such Holder, for any reasonable legal and other expenses incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information with regard to a Holder furnished to the
Company by such Holder for use by the Company in connection with a registration
as required by Section 8 hereof; and provided further, however, that the Company
will not be liable to any such person or entity with respect to any such untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus that is corrected in the final prospectus filed with the
SEC pursuant to Rule 424(b) promulgated under the Securities Act (or any
amendment or supplement to such prospectus) if the person asserting any such
loss, claim, damage or liability purchased securities but was not sent or given
a copy of the prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such securities to
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such person in any case where such delivery of the prospectus (as amended or
supplemented) is required by the Securities Act, unless such failure to deliver
the prospectus (as amended or supplemented) was a result of the Company's
failure to provide such prospectus (as amended or supplemented).
(b) Each Holder shall indemnify the Company, each of its directors
and officers and each person who controls the Company within the meaning of
Section 15 of the Securities Act against all claims, losses, damages, and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and will
reimburse the Company and such directors, officers and partners and members,
persons, or control persons of the Company for any reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information with regard to the Holder furnished to the Company by such Holder
for use by the Company in connection with a registration as required by Section
8 hereof. The liability of a Holder under this Section 6(b) shall not exceed the
proceeds from the offering received by such Holder, prior to deduction of any
commissions, transfer taxes or other selling expenses incurred with respect to
such sale.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further, however, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6 unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action (and then only to the extent of such prejudice). 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. Any
Indemnified Party shall reasonably cooperate with the Indemnifying Party in the
defense of any claim or litigation brought against such Indemnified Party.
(d) If the indemnification provided for in this Section 6 is for any
reason not available to an Indemnified Party with respect to any loss,
liability, claim, damage, or expense referred to therein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the
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relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage or expense as will as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or the 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. The liability of a Holder under this Section 6(d) shall
not exceed the proceeds from the offering received by such Holder less any
amounts paid pursuant to Section 6(b), prior to deduction of any commissions,
transfer taxes or other selling expenses incurred with respect to such sale.
7. Expenses. The Company shall bear all Registration Expenses incurred in
connection with (i) a registration declared effective by the SEC pursuant to
Section 2 here and (ii) of any registration, qualification or compliance
pursuant to Section 3 hereof. All Selling Expenses relating to securities so
registered shall be borne by the holders of such securities pro rata on the
basis of the number of shares of securities so registered on their behalf,
provided, that any applicable taxes with respect to stock sold by a particular
Holder shall be borne entirely by such Holder.
8. Information by Holder. Each Holder shall furnish to the Company such
information regarding such Holder, the Registrable Securities held by it, the
manner in which such Holder holds any securities of the Company and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
9. Reports Under the Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration, the Company agrees to use commercially reasonable
efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after the date hereof;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to avail any Holder
of any rule or regulation of the SEC that permits the selling of any such
securities without registration or pursuant to such form.
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10. Limitation on Assignment of Registration Rights. The rights to cause
the Company to register Registrable Securities pursuant to this Agreement may
not be assigned or transferred, except that such right is assignable by each
Holder to (i) an "affiliate" of such Holder (as defined in Rule 12b-2 under the
Exchange Act), or (ii) to a partner, active or retired of such Holder. As a
condition to any permitted transfer hereunder, such transferee shall agree in
writing for the benefit of the Company to be bound by this Agreement.
11. Limitation on Subsequent Registration Rights.
(a) 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 (i) to include such securities in any
registration filed under Section 2 or Section 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
are included, or (ii) to make a demand registration which could result in such
registration statement being declared effective prior to the date that is 120
days after the effective date of a registration effected pursuant to Section 2
hereof.
(b) Notwithstanding the foregoing, each Holder acknowledges and
agrees that the Company has granted Silicon Valley Bank pari passu registration
rights pursuant to Section 3.3 of the Warrant to Purchase Stock dated as of June
16, 2003. Each Holder acknowledges and agrees that such registration rights
shall remain effective after the date hereof and hereby waives any breach,
default, or other violation that may have existed under the First Agreement in
connection with the grant of such registration rights and any remedy or remedies
that may exist with respect thereto.
12. Right of Participation. The Company hereby grants to each Significant
Holder the right to purchase its pro rata share of any New Securities which the
Company may, from time to time, propose to sell and issue. A Significant
Holder's pro rata share, for purposes of this right of participation, is the
ratio that the number of shares of Common Stock issued or issuable upon
conversion of the Series A Preferred Stock or the Series A-2 Preferred Stock
owned by such Significant Holder, immediately prior to the issuance of New
Securities, bears to the total number of shares of Common Stock outstanding as
reported in the Company's most recent Form 10-K or Form 10-Q, as the case may
be, filed with the SEC under the Exchange Act. This right to participate shall
be subject to the following provisions:
(a) In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Significant Holder written notice of its bona
fide intention, describing the type of New Securities, and their price and the
general terms upon which the Company proposes to issue the same. Each
Significant Holder shall have ten days after any such notice is effective as
determined pursuant to Section 22(b) hereof to agree to purchase such
Significant Holder's pro rata share of such New Securities for the price and
upon the terms specified in the notice by giving written notice to the Company
and stating therein the quantity of New Securities to be purchased.
-10-
(b) In the event the Significant Holders fail to exercise fully the
right to participate within said ten day period, the Company shall have 90 days
thereafter to sell or enter into an agreement (pursuant to which the sale of New
Securities covered thereby shall be closed, if at all, within 30 days from the
date of said agreement) to sell the New Securities respecting which the
Significant Holders' right to participate set forth herein was not exercised, at
a price and upon terms no more favorable to the purchasers thereof than
specified in the Company's notice to Significant Holders pursuant to subsection
(a) above. In the event the Company has not sold within such 90-day period or
entered into an agreement to sell the New Securities in accordance with the
foregoing within 30 days from the date of said agreement, the Company shall not
thereafter issue or sell any New Securities, without first again offering such
securities to the Significant Holders in the manner provided in subsection (a)
above.
(c) Each Significant Holder (as constituted pursuant to the Prior
Agreement) hereby waives the application of this provision pursuant to the First
Agreement, and waives all applicable notice provisions relating thereto, in
connection with the sale and issuance of (i) Series A-2 Preferred pursuant to
the 2003 Purchase Agreement or the Amended Purchase Agreement; (ii) the Alta
Warrant pursuant to the Amendment; and (iii) the Convertible Notes and the
Commitment Warrants, when and if issued.
13. Limitation on Assignment of Right to Participate. The rights of the
Significant Holders to participate in sales of New Securities may not be
assigned or transferred, except that such right is assignable by each
Significant Holder to (i) an "affiliate" of such Significant Holder (as defined
in Rule 12b-2 under the Exchange Act) or (ii) to a partner (active or retired),
parent, child or spouse of such Holder, or to a trust for the direct or indirect
benefit of any of the foregoing, provided, that in the case of either (i) or
(ii) such transferee together with its affiliates holds after such transfer at
least 66,667 shares of Series A Preferred Stock or 50,000 shares of Series A-2
Preferred Stock or at least the number of shares of Common Stock as were issued
upon conversion of 66,667 shares of Series A Preferred Stock or 50,000 shares of
Series A-2 Preferred Stock (subject, in each case, to adjustments for stock
splits, stock dividends, reverse stock splits and the like).
14. Termination of Right to Participate. The rights of the Significant
Holders to participate in sales of New Securities shall terminate upon the
earlier of (i) the second anniversary of this Agreement or (ii) when such Holder
ceases to be a Significant Holder.
15. Transfer Restrictions of the Registrable Securities. Each Holder
further agrees not to sell or otherwise make any disposition or transfer of all
or any portion of the Registrable Securities held by such Holder except (i) to
an "affiliate" of such Holder (as defined in Rule 12b-2 under the Exchange Act),
or (ii) to a partner (active or retired), parent, child or spouse of such
Holder, or to a trust for the direct or indirect benefit of any of the foregoing
(and in each case under subsection (i) and (ii) hereof, as a condition to
transfer, such transferee shall agree in writing for the benefit of the Company
to be bound by this Agreement), or unless:
(a) 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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(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, 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 foregoing, a Holder may, without restriction, transfer
all or any portion of such Holder's Registrable Securities (i) pursuant to a
statutory merger or statutory consolidation of the Company with or into another
corporation or corporations in which the stockholders of the Company receive
distributions in cash or securities of another entity or entities as a result of
such transaction, and in which the stockholders of the Company, immediately
prior to such merger or consolidation hold, immediately after such merger or
consolidation, less than a majority of the outstanding voting securities of the
surviving or successor corporation or its parent, (ii) pursuant to the winding
up and dissolution of the Company, (iii) pursuant to a registration effected in
accordance with Section 2 or Section 3 hereof, or (iv) in compliance with Rule
144.
16. Restrictive Legends. Each certificate representing Registrable
Securities shall (unless otherwise permitted by the provisions of this
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):
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, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE
ACT.
COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR VOTING AND TRANSFER MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE COMPANY.
17. Market Stand-Off Agreement. Each Investor and any permitted transferee
hereunder agrees, in connection with the first registration of the Company's
securities in connection with an underwritten public offering following the date
hereof, upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any option for the purchase of or otherwise dispose of any
securities of the Company without the prior written consent of the Company or
such underwriters, as the case may be, for such period of time (not to exceed
180 days) from the effective date of such registration as the Company or the
underwriters may specify; provided that (i) all officers and directors of the
Company then holding capital stock of the Company and (ii) all stockholders
holding in the
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aggregate at least 5% of the fully-diluted equity securities of the Company are
bound by similar agreements. The foregoing restriction shall not apply to any
securities of the Company held by an Investor that are included in such
registration. Each Investor agrees that the Company may instruct its transfer
agent to place stop-transfer notations in its records to enforce the provisions
of this Section. Notwithstanding any other provision of this Agreement, the
Company may assign the obligations of each Investor under this Section 17 to any
underwriter of the Company's securities.
18. Covenant Against Indebtedness. The Company agrees, that prior to
December 19, 2005, the approval of the Holders of two-thirds of the then
outstanding "Investor Securities" (as defined below) will be required for: (i)
any debt financing, including convertible debt financings, in excess of
$750,000, in the aggregate, other than (a) financing for the purchase or lease
of capital equipment that is secured by the capital equipment, (b) accounts
receivable financing that is secured by the accounts receivable of the Company,
(c) normal trade debt, (d) borrowings under the Loan and Security Agreement
dated as of June 16, 2003 between the Company and Silicon Valley Bank (the "Loan
Agreement"); or (e) the Convertible Notes; or (ii) any grant of a security
interest in the intellectual property of the Company. "Investor Securities"
shall mean the Series A Preferred Stock and Series A-2 Preferred Stock issued
pursuant to the 2002 Purchase Agreement, 2003 Purchase Agreement and the Amended
Purchase Agreement, respectively, and any Common Stock issued upon conversion
thereof, or as a dividend, distribution, exchange or replacement in respect
thereof; provided, however, that "Investor Securities" shall not include any
shares of Common Stock that are transferred to a person or entity that is not an
"Investor" under the 2002 Purchase Agreement or the 2003 Purchase Agreement or a
partner (including former partners) or affiliate of the same. Each holder of
Investor Securities hereby waives any breach, default, or other violation that
may exist under the First Agreement or the Prior Agreement with respect to the
Loan Agreement and any remedy or remedies that may exist with respect thereto.
19. Negative Covenants.
(a) The Company agrees that the approval of the Holders of two-thirds
of the then outstanding A-2 Securities will be required to (i) increase to the
number of shares designated by the Company's Certificate of Designation as
Series A-2 Preferred Stock; (ii) designate, authorize, or issue, or obligate
itself to designate, authorize, or issue, any equity security (including any
other security convertible into or exercisable for any such equity security)
having a preference over, or being on a parity with, the Series A-2 Preferred
Stock with respect to dividends, liquidation or redemption (other than issuances
of Series A-2 Preferred Stock pursuant to the 2003 Purchase Agreement and the
Amendment, issuances of the Convertible Notes, and in accordance with the Rights
Offering); (iii) pay any dividend or make any distribution upon any share or
shares of Preferred Stock or Common Stock of the Company; (iv) redeem, purchase
or otherwise acquire (or pay into or set aside for a sinking fund for such
purpose) any share or shares of Preferred Stock or Common Stock of the Company;
provided, however, that this restriction shall not apply to the repurchase of
shares of Common Stock from employees, officers, directors, consultants or other
persons performing services for the Company or any subsidiary pursuant to
agreements under which the Company has the option to repurchase such shares upon
the occurrence of certain events, such as the termination of employment or
service, or pursuant to a right of first refusal.
-13-
(b) "A-2 Securities" shall mean shares of Series A-2 Preferred Stock
issued pursuant to the 2003 Purchase Agreement and the Amendment or upon
exercise of the Alta Warrant.
(c) The Company acknowledges and agrees that it would be impossible
to measure in money the damages a holder of A-2 Securities may incur in the
event the Company fails to comply with its obligations under this Section 19,
and in the event of such failure to comply, a holder of A-2 Securities will not
have an adequate remedy at law for damages. Accordingly, with respect only to
compliance with this Section 19, the Company hereby agrees that injunctive
relief or other equitable relief, in addition to remedies at law for damages, is
the appropriate remedy for any such failure, and the Company will not oppose the
granting of such relief on the basis that such holders have an adequate remedy
at law.
20. Covenant About Investment Advisors Act. The Company agrees that it
will take such actions as may from time to time be necessary to insure that the
Company does not become subject to the Investment Advisors Act of 1940, as
amended.
21. Covenants of the Investors. Each Investor agrees that it will not,
without the written consent of Alta California Partners III, L.P., effect or
permit any person under the control of such Investor to effect any Series A-2
Consent (as defined herein) that would reasonably be expected to result in a
Series A-2 Event (as defined herein). For purposes of this Agreement, (i) a
"Series A-2 Event" means either (A) the automatic conversion into Common Stock
of the outstanding shares of Series A-2 Preferred pursuant to Section 6(b) of
the Company's Certificate of Designation of Series A-2 Convertible Preferred
Stock as filed with the Delaware Secretary of State (the "Certificate of
Designation") or (B) the waiver of the treatment of any specified transaction as
a "Liquidation" pursuant to Section 4(b) of the Certificate of Designation, and
(ii) a "Series A-2 Consent" shall mean the voting of shares of Series A-2
Preferred held by such Investor, the submission of any proxy with respect to the
voting of Series A-2 Preferred held by such Investor, or the execution or
delivery of any written consent with respect to any shares Series A-2 Preferred
held by such Investor. Notwithstanding any other provision of this Agreement
imposing restrictions on transfer, each Investor agrees that it will not sell,
pledge, hypothecate, or otherwise transfer any shares of Series A-2 Preferred
unless the transferee thereof agrees to be bound by the provisions of this
Section 21. Each Investor acknowledges and agrees that it would be impossible to
measure in money the damages that Alta may incur in the event such Investor
fails to comply with its obligations under this Section 21, and in the event of
such failure to comply, Alta will not have an adequate remedy at law for
damages. Accordingly, with respect only to compliance with this Section 21, each
Investor hereby agrees that injunctive relief or other equitable relief, in
addition to remedies at law for damages, is the appropriate remedy for any such
failure, and no Investor will oppose the granting of such relief on the basis
that Alta has an adequate remedy at law.
22. Miscellaneous.
(a) Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties to this Agreement, and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
-14-
(b) Governing Law. This Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of California,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. With respect to any disputes arising out of or
related to this Agreement, the parties consent to the exclusive jurisdiction of,
and venue in, the state courts in the County of Santa ▇▇▇▇▇ in the State of
California (or in the event of exclusive federal jurisdiction, the courts of the
Northern District of California).
(c) Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
(d) Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, sent by facsimile, or otherwise delivered by
hand or by messenger addressed:
(i) if to an Investor, at the Investor's address or facsimile
number as shown on Exhibit B to the Amendment; or
(ii) if to the Company, at its address at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or facsimile number at (▇▇▇) ▇▇▇-▇▇▇▇ and
addressed to the attention of the President, or at such other address or
facsimile number as the Company shall have furnished to the Investors; with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and addressed to the attention to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid or, if
sent by facsimile, upon confirmation of facsimile transfer. Any party may amend
its address for receipt of notice by delivering written instructions to the
other party in accordance with this Section 22(d).
(e) Amendment and Waiver. This Agreement may be amended, or any
provision waived, only upon the written consent of the Company and two-thirds in
interest of the Holders; provided, however, that any amendment to, or waiver
under, (i) Sections 12, 13, or 14 shall require the written consent of the
Company and a majority-in-interest of the Significant Holders; (ii) Section 18
shall require the written consent of the Company and holders of two-thirds of
the then-outstanding Investor Securities; (iii) Section 19 shall require the
written consent of holders of two-thirds of the then-outstanding A-2 Securities;
and (iv) Section 21 shall require the written consent of Alta and Investors
(excluding Alta) holding a majority of then outstanding Series A-2 Preferred;
and provided further, however, that any amendment adversely affecting one or
more Holders or Significant Holders, as applicable, that does not so affect all
Holders or Significant Holders, as applicable, shall require the written consent
of such adversely affected Holder or Significant Holder.
-15-
(f) Confidentiality. Anything in this Agreement to the contrary
notwithstanding, no Holder by reason of this Agreement shall have access to any
trade secrets or classified information of the Company. Each Holder acknowledges
that the information received by them pursuant to this Agreement may be
confidential and for its use only, and it will not use such confidential
information in violation of the Exchange Act or reproduce, disclose or
disseminate such information to any other person (other than its employees or
agents having a need to know the contents of such information who are subject to
confidentiality obligations to such Holder, and its attorneys), except in
connection with the exercise of rights under this Agreement, unless the Company
has made such information available to the public generally or such Holder is
required to disclose such information by a governmental authority.
(g) 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.
(h) Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic transmission device pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
[Remainder of Page Intentionally Left Blank]
-16-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amended
and Restated Investors' Rights Agreement effective as of the day and year first
above written.
"COMPANY" OCCAM NETWORKS, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
"ALTA" ALTA CALIFORNIA PARTNERS III, L.P.
(also Investors hereunder)
By: Alta California Management
Partners III, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Director
ALTA EMBARCADERO PARTNERS III, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
V.P. of Finance and Administration
[Signature Page to Second Amended Investors' Rights Agreement]
"INVESTOR"
U.S. Venture Partners VII, L.P.
2180 Associates Fund VII, L.P.
USVP Entrepreneur Partners VII-A, L.P.
USVP Entrepreneur Partners VII-B, L.P.
By Presidio Management Group VII, L.L.C.
The General Partner of Each
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Attorney-In-Fact
-------------------------------------
U.S. Venture Partners V, L.P.
USVP V International, L.P.
2180 Associates Fund V, L.P.
USVP V Entrepreneur Partners, L.P.
By Presidio Management Group V, L.L.C.
The General Partner of Each
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Attorney-In-Fact
-------------------------------------
[Signature Page to Second Amended Rights Agreement]
"INVESTOR"
Norwest Venture Partners VIII, L.P.
By: Itasca VC Partners VIII, LLP
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Managing Partner
-------------------------------------
NVP Entrepreneurs Fund VIII, L.P.
By: Itasca VC Partners VIII, LLP
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Managing Partner
-------------------------------------
[Signature Page to Second Amended Rights Agreement]
"INVESTOR"
Hook Partners V, L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇, General Partner
[Signature Page to Second Amended Rights Agreement]
"INVESTOR"
New Enterprise Associates 9, L.P.
By: NEA Partners 9, L.P.
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: General Partner
-------------------------------------
[Signature Page to Second Amended Rights Agreement]
"INVESTOR"
Windward Ventures, L.P.
By: Windward Ventures Management, L.P.
Title: General Partner
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
Windward Ventures 2000, L.P.
By: Windward 2000, LLC
Title: General Partner
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Member
Windward Ventures 2000-A, L.P.
By: Windward 2000, LLC
Title: General Partner
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Member
[Signature Page to Second Amended Rights Agreement]
