EXHIBIT 4.5
ACCENT OPTICAL TECHNOLOGIES, INC.
INVESTOR RIGHTS AGREEMENT
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CONTENTS
SECTION 1 GENERAL.......................................................................... 1
1.1 Definitions...................................................................... 1
SECTION 2 REGISTRATION; RESTRICTIONS ON TRANSFER........................................... 3
2.1 Restrictions on Transfer......................................................... 3
2.2 Piggyback Registrations.......................................................... 6
2.3 Form S-3 Registration............................................................ 7
2.4 Expenses of Registration......................................................... 9
2.5 Obligations of the Company....................................................... 9
2.6 Termination of Registration Rights............................................... 10
2.7 Delay of Registration; Furnishing Information.................................... 11
2.8 Indemnification.................................................................. 11
2.9 Assignment of Registration Rights................................................ 13
2.10 Amendment of Registration Rights................................................. 13
2.11 "Market Stand-Off" Agreement; Agreement to Furnish Information................... 14
SECTION 3 COVENANTS OF COMPANY............................................................. 14
3.1 Basic Financial Information and Reporting........................................ 14
3.2 Inspection Rights................................................................ 15
3.3 Termination of Information and Inspection Rights................................. 15
SECTION 4 MISCELLANEOUS.................................................................... 15
4.1 Governing Law.................................................................... 15
4.2 Successors and Assigns........................................................... 16
4.3 Entire Agreement................................................................. 16
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4.4 Severability..................................................................... 16
4.5 Amendment and Waiver............................................................. 16
4.6 Notices.......................................................................... 16
4.7 Attorneys' Fees.................................................................. 17
4.8 Titles and Subtitles............................................................. 17
4.9 Counterparts..................................................................... 17
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ACCENT OPTICAL TECHNOLOGIES, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of
the 9th day of November 2000 (the "Execution Date"), by and among ACCENT OPTICAL
TECHNOLOGIES, INC., a Delaware corporation (the "Company") and the purchasers of
the Company's Convertible Preferred Stock ("Convertible Preferred Stock") each
of whom is set forth on Exhibit A of, and defined in, that certain Convertible
Preferred Stock Purchase Agreement of even date herewith (the "Purchase
Agreement") and also set forth on Exhibit A attached hereto (collectively, the
purchasers of the Convertible Preferred Stock shall be referred to hereinafter
as the "Investors" and each individually as an "Investor").
THE PARTIES ENTER THIS AGREEMENT ON THE BASIS OF THE FOLLOWING FACTS,
UNDERSTANDINGS AND INTENTIONS:
A. The Company proposes to sell and issue up to 9,756,098 shares
of its Convertible Preferred Stock pursuant to the Purchase Agreement; and
B. As a condition of entering into the Purchase Agreement, the
Investors have requested that the Company extend to them registration rights and
information rights as set forth below; and
C. The Company and the Investors desire to set forth certain
agreements relating to the transfer of the Shares.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase Agreement, the parties mutually agree as follows:
SECTION 1 GENERAL
1.1 DEFINITIONS
As used in this Agreement the following terms shall have the following
respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on the
Execution Date or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
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substantial information by reference to other documents filed by the Company
with the SEC.
"Holder" means any person owning of record any Shares or Registrable
Securities that have not been sold to the public.
"Major Investor" means an Investor (with its affiliates) who owns not
less than 25% of the common stock in the share capital of the Company ("Common
Stock") issued or issuable upon conversion of the Convertible Preferred Stock.
"Qualified IPO" means a public offering (whether or not underwritten,
but excluding any offering pursuant to Form S-8 under the Securities Act or any
other publicly registered offering pursuant to the Securities Act solely
pertaining to an issuance of shares of Common Stock of the Company or securities
exercisable therefor under any benefit plan, employee compensation plan, or
employee or director stock purchase plan) of the Common Stock of the Company
pursuant to an effective registration statement under the Securities Act in
which Company receives aggregate gross proceeds of at least $35,000,000.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (a) Common Stock of the Company issued
or issuable upon conversion of the Shares; and (b) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, such above-described
securities.
"Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the Company
in complying with Sections 2.2 and 2.3 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company), but excluding the Selling Expenses and the legal fees and
other costs and expenses incurred by the selling Investors in connection with
the registration.
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"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholders Agreement" shall mean that certain Securityholders
Agreement dated as of July 31, 2000, by and among the Company and its existing
securityholders, as such agreement may be amended, restated, supplemented or
modified from time to time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of securities.
"Shares" shall mean the Company's Convertible Preferred Stock issued
pursuant to the Purchase Agreement and held by the Investors listed on Exhibit A
hereto or their permitted transferees or assigns.
SECTION 2 REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all
or any portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound
by the terms of this Agreement, (B) such Holder shall have notified the
Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the
proposed disposition, and (C) if reasonably requested by the Company,
such Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition
will not require registration under the Securities Act.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) immediately above, no such registration statement or opinion of
counsel shall be necessary for a transfer by a Holder which is (A) a
partnership to its partners or former partners in accordance with
partnership interests, or (B) a limited liability company to its
members or former members in accordance with their interest in the
limited liability company; provided that in each case the transferee
will be subject to the terms of this Agreement to the same extent as if
he were an original Holder hereunder, subject to Section 2.9.
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(b) Notwithstanding any provision in Section 2.1(a) of
this Agreement, subject to the terms and conditions set forth in Section 2.1(b),
each Holder hereby grants a right of first refusal with respect to future sales
or dispositions of its Shares or Registrable Securities to the Company until the
initial Qualified IPO. As used in Sections 2.1(b), 2.1(c) and 2.1(d), references
to "Shares" shall mean "Shares and / or Registrable Securities." Each time a
Holder proposes to offer any Shares, the Holder shall first make an offering of
such Shares to the Company, in accordance with the following provisions:
(i) The Holder shall deliver a notice by certified mail
(a "Notice") to the Company stating (i) its bona fide intention to
offer such Shares, (ii) the number of such Shares to be offered and
(iii) the price and terms, if any, upon which it proposes to offer such
Shares. Within thirty (30) calendar days after receipt of the Notice,
the Company may elect to purchase all or a portion of the Shares at the
price and on the terms specified in the Notice.
(ii) After the expiration of the thirty (30) calendar day
period set forth in Section 2.1(b)(i), the Holder may offer the then
remaining unsubscribed portion of such Shares (if any) during the
ensuing thirty (30) calendar day period to any person or persons at a
price not less than, and upon terms no more favorable to the offeree
than, those specified in the Notice. If the Holder does not enter into
an agreement for the sale of the Shares within such period, or if such
agreement is not consummated within thirty (30) calendar days of the
execution thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to
the Company in accordance herewith.
(c) If at any time prior to the initial Qualified IPO,
one or more Securityholder(s) (as defined in the Securityholders Agreement;
each, a "Selling Securityholder" or collectively, the "Selling Securityholders")
proposes to sell or otherwise dispose of any of its, his or their Common Stock
(including without limitation by way of a purchase agreement, tender offer,
merger or other business combination or otherwise), which equal in the aggregate
at least 50% (fifty percent) of the then outstanding Common Stock of the Company
(any such sale a "Drag-Along Sale"), then, upon the request of any such Selling
Securityholder, each of the Holders shall sell the Applicable Drag Percentage
(as defined below) of its Shares at a per share price of no less than US$2.05
plus all accrued and unpaid dividends per Share, but otherwise on the same terms
and conditions as applied to the Selling Securityholder(s)' disposition. For the
avoidance of doubt, nothing in this provision shall limit the rights of the
Selling Securityholders to sell their securities at a per share price of less
than US$2.05 in any Drag-Along Sale. If the offer price in the Drag-Along Sale
consists in whole or in part of consideration other than cash, the value of such
consideration shall be the fair market value of such non-cash consideration as
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determined by an investment banker of national reputation acceptable to the
Company. The Selling Securityholder(s) shall provide written notice of such
Drag-Along Sale to each Holder not later than ten (10) business days prior to
the proposed Drag-Along Sale. Such notice shall identify the proposed purchaser,
the number and type of securities proposed to be sold, the consideration offered
and any other material terms and conditions of the Drag-Along Sale. The Selling
Securityholder(s) shall have 180 days from the expiration of such ten (10)
business day period to consummate the proposed Drag-Along Sale; provided that
the Selling Securityholder(s) shall in any event endeavor to consummate the
proposed Drag-Along Sale as expeditiously as practicable. "Applicable Drag
Percentage" means, in connection with any Drag-Along Sale, the higher of (i) 50%
and (ii) the percentage of the total number of Common Stock then held by the
Selling Securityholder selling the highest number of shares of Common Stock in
the Drag-Along Sale to be sold in the Drag-Along Sale. For the purpose of this
Section 2.1(c), number of shares of Common Stock shall be calculated on an
as-converted basis and shall include Common Stock issuable upon the exercise of
vested options.
(d) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF SO REGISTERED OR IN A MANNER EXEMPT FROM REGISTRATION
UNDER SUCH ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ALSO ARE
SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE
INVESTOR RIGHTS AGREEMENT OF ACCENT OPTICAL TECHNOLOGIES, INC. (THE
"COMPANY"), DATED AS OF NOVEMBER 9, 2000, COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY. NO TRANSFER OF THESE SECURITIES WILL BE MADE
ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF
COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT.
(e) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any Holder thereof if the Holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
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(f) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.
2.2 PIGGYBACK REGISTRATIONS
Beginning six months after the Qualified IPO, the Company shall notify
all Investors in writing at least fifteen (15) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (excluding registration statements (i)
relating to any securities issued to one or more employees of the Company
pursuant to and in accordance with any employee benefit plan, agreement or
arrangement that has been approved by the Board, or (ii) with respect to
corporate reorganizations or other transactions under Rule 145 of the Securities
Act) and will afford each such Investor an opportunity to include in such
registration statement all or part of such Registrable Securities held by such
Investor; provided that Investors holding at least 75% of the Registrable
Securities then outstanding participate. Each Investor desiring to include in
any such registration statement all or any part of the Registrable Securities
held by it shall, within fifteen (15) days after the above-described notice from
the Company, so notify the Company in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such Investor.
If an Investor decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Investor 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 the registration statement under
which the Company gives notice under Section 2.2 is for an underwritten
offering, the Company shall so advise the Investors. In such event, the right of
any Investor to be included in a registration pursuant to Section 2.2 shall be
conditioned upon such Investor's participation in such underwriting and the
inclusion of such Investor's Registrable Securities in the underwriting to the
extent provided herein. All Investors proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company and provide representations, warranties,
indemnifications and opinions as may be requested by the Company.
Notwithstanding any other provision of this Agreement, if the underwriter
determines in good faith that marketing or other factors require a limitation of
the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Securityholders (as defined in the Securityholders Agreement)
participating in such registration; third,
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Investors on a pro rata basis based on the total number of Registrable
Securities held by the Investors participating in the underwriting. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting. If any Investor
disapproves the terms of any such underwriting, such Investor 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 and the
withdrawing Investor shall nevertheless bear its pro rata costs of the Selling
Expenses in accordance with Section 2.4 as if it were included in the
registration.
(b) Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated by it under
Section 2.2 prior to the effectiveness of such registration whether or not any
Investor has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.4 hereof.
2.3 FORM S-3 REGISTRATION
In case the Company shall receive from 75% of the Investors (the
"Initiating Holders") a written request or requests that the Company effect a
registration on Form S-3 (or any successor to Form S-3) or any similar
short-form registration statement and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such
Initiating Holder(s), the Company will:
(a) as soon as reasonably practicable, give written
notice of the proposed registration, and any related qualification or
compliance, to all other Investors and other holders that may be entitled to
participate in such proposed registration; and
(b) as soon as reasonably 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 Initiating Holders' Registrable Securities or other eligible
holders' securities as are specified in such request, together with all or such
portion of the Registrable Securities of any other Investors joining in such
request as are specified in a written request given within fifteen (15) days
after receipt of such written notice from the Company; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to Section 2.3:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering requested by the Initiating Holders, or
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(ii) if the Investors, 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
US$5,000,000, or
(iii) if within thirty (30) days after receipt of a written
request from the Initiating Holder(s) pursuant to Section 2.3, the
Company gives written notice to such Initiating Holder(s) of the
Company's good faith intention to make a public offering within ninety
(90) days;
(iv) if the Company shall furnish to the Initiating
Holders a certificate signed by the Chairman of the Board of Directors
of the Company stating that in the judgment of the Board of Directors
of the Company, it would not be in the best interest of the Company for
such Form S-3 registration to be effected at such time, in which event
the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than one hundred twenty
(120) days after receipt of the request of the Initiating Holder(s)
under Section 2.3;
(v) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected one
registration on Form S-3 for any Investor pursuant to Section 2.3;
(vi) if the Company has effected two (2) registrations
pursuant to Section 2.3 and such registrations have been declared
effective;
(vii) during the period ending 180 days after the effective
date of any registration statement subject to Section 2.2; or
(viii) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as reasonably practicable after
receipt of the written request or requests of the Initiating Holder(s). If the
underwriter determines in good faith that marketing or other factors require a
limitation of the number of shares to be underwritten in such offering, the
number of shares that may be included in the underwriting shall be reduced on a
pro rata basis based on the total number of securities held by the all Investors
or holders participating in the underwriting.
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2.4 EXPENSES OF REGISTRATION
Except as specifically provided herein, all Registration Expenses
incurred in connection with any registration under Section 2.2 or Section 2.3
shall be borne by the Company. All Selling Expenses incurred in connection with
any registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered. The
Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.3, the request of which has been
subsequently withdrawn by the Initiating Holders, in which case such expenses
shall be borne by the Initiating Holders, unless (a) the withdrawal is based
upon material adverse information concerning the Company of which the Initiating
Holders were not aware at the time of such request or (b) the Investors holding
75% of Registrable Securities agree to forfeit their right to one requested
registration, in which event such right shall be forfeited by all Investors. If
the Investors are required to pay the Registration Expenses, such expenses shall
be borne by the Investors requesting such registration in proportion to the
number of shares for which registration was requested. If the Company is
required to pay the Registration Expenses of a withdrawn offering pursuant to
clause (a) above, then the Investors shall not forfeit their rights pursuant to
Section 2.3 to a registration.
2.5 OBLIGATIONS OF THE COMPANY
Whenever required to effect the registration of any Registrable
Securities, the Company shall, within a commercially reasonable time frame:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use commercially
reasonable efforts to cause such registration statement to become effective,
and, upon the request of the Investors holding 75% of the Registrable Securities
registered thereunder, use commercially reasonable efforts to keep such
registration statement effective for up to thirty (30) days or, if earlier,
until the Investor(s) have completed the distribution related thereto, but in no
event shall the Company be obligated to do so for longer than thirty (30) days.
The Company shall not be required to file, cause to become effective or maintain
the effectiveness of any registration statement that contemplates a distribution
of securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
(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 for the period set forth in
paragraph (a) immediately above.
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(c) Furnish to the Investors holding Registrable
Securities 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 regarding their disposition of
Registrable Securities owned by them.
(d) 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
Investor participating in such underwriting shall also enter into and perform
its obligations under such agreement and provide the representations,
warranties, indemnifications and opinions as may be requested by the Company.
(e) Notify each Investor holding 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 known to the Company, as a result of which event 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.
(f) Use commercially reasonable efforts to furnish, on
the date that such Registrable Securities are delivered to the underwriters for
sale, if such securities are being sold through underwriters, (i) an opinion,
dated as of such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and (ii) a letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.
2.6 TERMINATION OF REGISTRATION RIGHTS
All registration rights granted under Section 2 shall terminate and be
of no further force and effect at the earlier of (i) three (3) years after the
date of the Company's Qualified IPO, and (ii) with respect to any Investor
(together with affiliates and partners), such time as such Investor may sell
under Rule 144k or sell all such shares during any one quarter period under Rule
144.
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2.7 DELAY OF REGISTRATION; FURNISHING INFORMATION
(a) No Investor 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 Section 2.
(b) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to Section 2.2 or 2.3 that the
selling Investors shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
(c) The Company shall have no obligation with respect to
any registration requested pursuant to Section 2.3 if, due to the operation of
Section 2.3, the number of shares or the anticipated aggregate offering price of
the Registrable Securities to be included in the registration does not equal or
exceed the number of shares or the anticipated aggregate offering price required
to originally trigger the Company's obligation to initiate such registration as
specified in Section 2.3.
(d) The Company may, by written notice to each Investor
holding Registrable Securities, suspend for up to 120 consecutive days the
filing of any registration statement under this Agreement or up to 180
consecutive days the right of all Investors to sell Registrable Securities
pursuant to an effective registration statement in any calendar year if the
Board of Directors of the Company determines that such suspension is in the best
interest of the Company.
2.8 INDEMNIFICATION
In the event any Registrable Securities are included in a registration
statement under Sections 2.2 or 2.3:
(a) To the extent permitted by law, each Investor will,
if Registrable Securities held by such Investor are included in the securities
as to which such registration is being effected, indemnify and hold harmless the
Company, each of its directors, its officers, its affiliates, its stockholders
and each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other securityholder of the Company
selling securities under such registration statement or any of such other
securityholder's partners, directors, officers, affiliates or stockholders or
any person who controls such securityholder, against any losses, claims, damages
or liabilities (joint or several) to which the Company or any such director,
officer, affiliates, stockholders, controlling person, underwriter or other such
securityholder, or partner, director, officer, affiliate, stockholder or
controlling person of such other securityholder may become subject under the
Securities Act, the
PAGE 11
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any of the following statements, omissions or violations (collectively a
"Violation") by such Investor: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; 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 Investor under an instrument duly executed
by such Investor and stated to be specifically for use in connection with such
registration; and each such Investor will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such director, officer,
affiliate, stockholder, controlling person, underwriter or other securityholder,
or partner, officer, director, affiliate, stockholder or controlling person of
such other securityholder in connection with investigating or defending any such
loss, claim, damage, liability or action if it is judicially determined that
there was such a Violation.
(b) Promptly after receipt by an indemnified party under
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 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 the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under 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 Section 2.8.
PAGE 12
(c) If the indemnification provided for in Section 2.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(d) The obligations of the Investors under Section 2.8
shall survive the closing of any offering of Registrable Securities in a
registration statement and the termination of this Agreement and shall not be
modified by any underwriting agreement subsequently entered into by the Company
and the Investors. The Investors, in the defense of any such claim or
litigation, shall not, 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.
2.9 ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities
pursuant to Section 2 may not be assigned by any Investor.
2.10 AMENDMENT OF REGISTRATION RIGHTS
Any provision of Section 2 may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Investors holding at least a majority of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with Section 2.10
shall be binding upon each Investor and the Company. By acceptance of any
benefits under Section 2, Investors hereby agree to be bound by the provisions
hereunder.
PAGE 13
2.11 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH
INFORMATION.
Each Investor hereby agrees that such Investor shall not sell,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any Common Stock (or other securities) of the Company held by such Investor
(other than those included in the registration) for a period specified by the
Company (or the representative of the underwriters of Common Stock (or other
securities) upon the consent of the Company), not to exceed one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Securities Act. The Company may impose stop-transfer
instructions with respect to the shares of Common Stock (or other securities)
subject to the foregoing restriction until the end of said one hundred eighty
(180) day period, except that for offerings other than (x) a Qualified IPO, (y)
relating solely to an employee benefit plan (including any option plan) or (z)
relating to a transaction of the type to which Rule 145 under the Securities Act
or any successor provision is applicable, such market stand-off agreement shall
apply only to the extent requested by the lead underwriter in such offering
based on its good faith determination. Each Investor agrees to execute and
deliver such other agreements as may be requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Investor shall provide, within ten (10) days of such request, such
information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company's
securities pursuant to a registration statement filed under the Securities Act
and such representations, warranties, indemnifications and opinions as may be
requested by the Company in connection with such registration statement.
SECTION 3 COVENANTS OF COMPANY
3.1 BASIC FINANCIAL INFORMATION AND REPORTING
(a) The Company will maintain true books and records of
account of all its material business transactions pursuant to a system of
accounting established and administered in accordance with generally accepted
accounting principles consistently applied (or such other method approved by the
Board of Directors of the Company), and will set aside on its books all such
proper accruals and reserves as shall be required under generally accepted
accounting principles consistently applied.
(b) As soon as reasonably practicable after the end of
each fiscal year of the Company, and in any event within ninety (90) days
thereafter, the Company will furnish each Major Investor a balance sheet of the
Company, as at the
PAGE 14
end of such fiscal year, and a statement of income and a statement of cash flows
of the Company, for such year, all prepared in accordance with generally
accepted accounting principles consistently applied (or such other method
approved by the Board of Directors of the Company) and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail. Such financial statements (other than the figures for the
previous fiscal year set forth for comparative purposes) shall be accompanied by
a report and opinion thereon by independent public accountants of national
standing selected by the Company's Board of Directors.
(c) The Company will furnish each Major Investor, as soon
as practicable after the end of each quarterly accounting periods in each fiscal
year of the Company, and in any event within forty-five (45) days thereafter, a
balance sheet of the Company as of the end of each such quarterly period, and a
statement of income and a statement of cash flows of the Company for such period
and for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles, with the exception that no notes need be
attached to such statements and year-end audit adjustments may not have been
made, and setting forth in each case in comparative form the figures for the
period in the previous year.
3.2 INSPECTION RIGHTS
Upon prior written notice to the President or the Chief Financial
Officer of the Company, each Major Investor shall have the right to visit and
inspect any of the properties of the Company or any of its subsidiaries, and to
discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with the President or the Chief Financial Officer, and to review
such information as is reasonably requested, all at reasonable times during
normal business hours; provided, however, that the Company shall not be
obligated under Section 3.2 with respect to a competitor of the Company or with
respect to information which the Board of Directors of the Company determines in
good faith is confidential and should not, therefore, be disclosed.
3.3 TERMINATION OF INFORMATION AND INSPECTION RIGHTS
All information and inspection rights granted under Section 3 shall
terminate and be of no further force and effect upon a Qualified IPO.
SECTION 4 MISCELLANEOUS
4.1 GOVERNING LAW
This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents entered
into and to be performed entirely within California.
PAGE 15
4.2 SUCCESSORS AND ASSIGNS
Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors, and administrators of the parties hereto and shall inure to
the benefit of and be enforceable by each person who shall be a holder of
Registrable Securities from time to time; provided, however, that prior to the
receipt by the Company of adequate written notice of the transfer of any
Registrable Securities specifying the full name and address of the transferee,
the Company may deem and treat the person listed as the holder of such shares in
its records as the absolute owner and holder of such shares for all purposes,
including the payment of dividends or any redemption price.
4.3 ENTIRE AGREEMENT
This Agreement and the Exhibit hereto, the Purchase Agreement, the
Exhibits and the documents delivered pursuant thereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and no party shall be liable or bound to any other in any manner
by any covenants and agreements except as specifically set forth herein and
therein.
4.4 SEVERABILITY
In the event one or more of the provisions of this Agreement should,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
4.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this
Agreement may be amended or modified only upon the written consent of the
Company and the holders of at least a majority of the Registrable Securities.
(b) Except as otherwise expressly provided, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived only with the written consent of the holders of at least a
majority of the Registrable Securities.
4.6 NOTICES
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the
PAGE 16
recipient; if not, then on the next business day, (c) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt.
All communications shall be sent to the party to be notified at the
address appearing on the books of the Company or at such other address as such
party may designate by ten (10) days advance written notice to the other parties
hereto. Notices to the Company shall be sent to 000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx,
XX 00000, attention: President, with copy to O'Melveny & Xxxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxxxxxxxx Center West, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000-0000,
attention: Xxxxx X. Xxxxx, Esq. and 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000,
attention: Xxxx X. Xxxxxxxxxxx, Esq.
4.7 ATTORNEYS' FEES
In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
4.8 TITLES AND SUBTITLES
The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
4.9 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
PAGE 17
In Witness Whereof, the parties hereto have executed this Investor
Rights Agreement as of the date set forth in the first paragraph hereof.
"INVESTOR"
RS COINVESTMENT FUND, L.L.C.
By: /s/
------------------------------------------
Name: Xxxx Xxxxx
Title: CAO/General Counsel
PAGE 18
"INVESTOR"
MCP GLOBAL CORPORATION LTD.
By: /s/
------------------------------------------
Name: Xxx X. Xxxxx
Title: Director
PAGE 19
"INVESTOR"
IVISIONARY FUND I, L.P.
By: /s/
------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chief Operating Officer
PAGE 20
"INVESTOR"
CLOVER HILL L.L.C
By: /S/
__________________________________________
Name:_________________________________________
Title:________________________________________
PAGE 21
"INVESTOR"
NETNET VENTURES FUND I, L.P.
By: /s/
------------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Portfolio Manager
PAGE 22
"INVESTOR"
WINFIELD CAPITAL CORP.
By: /s/
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
PAGE 23
"INVESTOR"
TENNYSON FUND II, L.L.L.P.
By: /s/
------------------------------------------
Name: Xxxxxx Whitena
Title: Member
PAGE 24
"COMPANY"
ACCENT OPTICAL TECHNOLOGIES, INC.
By: /s/
__________________________________________
Name:_________________________________________
Title:________________________________________
PAGE 25
EXHIBIT A
SCHEDULE OF INVESTORS
NAME AND ADDRESS NUMBER OF SHARES
RS Coinvestment Fund, L.L.C. 3,573,170
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
MCP Global Corporation Ltd. 1,463,414
c/x Xxxxx Capital Management, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxx
iVisionary Fund I, L.P. 731,708
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Xxxxxxxx Capital Corp. 585,366
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
NetNet Ventures Fund I, L.P. 365,853
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Clover Hill, L.L.C. 336,585
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Maolemzadeh
Tennyson Fund II, L.L.L.P. 731,708
Timonium Two
0000 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Whitena
PAGE 26
