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EXHIBIT 4.2
▇▇▇.▇▇▇, INC.
THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
Dated as of
March __, 2000
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CONTENTS
Section 1. Registration Rights .........................................2
1.1 Definitions .................................................2
1.2 Request for Registration ....................................3
1.3 Company Registration ........................................5
1.4 Obligations of the Company ..................................5
1.5 Furnish Information .........................................7
1.6 Expenses of Demand Registration .............................7
1.7 Expenses of Company Registration ............................8
1.8 Underwriting Requirements ...................................8
1.9 Delay of Registration .......................................8
1.10 Indemnification .............................................9
1.11 Reports Under Securities Exchange Act of 1934 ..............11
1.12 Form S-3 Registration ......................................12
1.13 "Market Stand-Off" Agreement ...............................13
1.14 Assignment of Registration Rights ..........................13
1.15 Limitations on Subsequent Registration Rights ..............14
1.16 Termination ................................................14
Section 2. Covenants of the Company ...................................14
2.1 Delivery of Annual Financial Statements and Other
Information ................................................14
2.2 Delivery of Interim Financial Statements ...................15
2.3 Inspection .................................................15
2.4 Confidentiality ............................................16
2.5 Right of First Refusal .....................................16
2.6 Initial Public Offering; Right of First Refusal ............18
2.7 Life Insurance .............................................20
2.8 Reservation of Common Stock ................................20
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2.9 Assignment of Inventions and Confidentiality Agreements ....20
2.10 Compensation Committee .....................................20
2.11 Termination of Covenants ...................................20
Section 3.
Miscellaneous ..............................................21
3.1 Successors and Assigns .....................................21
3.2 Governing Law ..............................................21
3.3 Counterparts ...............................................21
3.4 Headings ...................................................21
3.5 Notices ....................................................22
3.6 Amendments and Waivers .....................................22
3.7 Severability ...............................................22
3.8 Entire Agreement ...........................................22
3.9 Attorneys' Fees ............................................23
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THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this
"Agreement") is made as of March __, 2000, by and between ▇▇▇.▇▇▇, INC., an
Oregon corporation (the "Company"), and the Investors listed on the signature
pages hereof (such investors being referred to herein, collectively, as the
"Investors" and, individually, each as an "Investor").
RECITALS
A. The Company issued and sold 4,000,000 shares of its Series A
Preferred Stock, $0.01 par value per share("Series A Stock"), pursuant to the
Series A Preferred Stock Purchase Agreement dated as of October 30, 1998, among
the Company and the Investors party thereto (the "Series A Stock Purchase
Agreement"). Such Series A Preferred Stock may, pursuant to the terms of the
Company's Fourth Amended and Restated Articles of Incorporation (the "Restated
Articles"), be converted into shares of Common Stock, $0.01 par value per share
("Common Stock"), of the Company.
B. The Company issued and sold 7,262,442 shares of its Series B
Preferred Stock, $0.01 par value per share (the "Series B Stock"), pursuant to
the Series B Preferred Stock Purchase Agreement dated as of March 22, 1999,
among the Company and the Investors party thereto (the "Series B Stock Purchase
Agreement"). Such Series B Stock may, pursuant to the terms of the Restated
Articles, be converted into shares of Common Stock.
C. The Company issued and sold 8,720,983 shares of its Series C
Preferred Stock, $0.01 par value per share (the "Series C Stock"), pursuant to
the Series C Preferred Stock Purchase Agreement dated as of October 19, 1999,
among the Company and the Investors party thereto (the "Series C Stock Purchase
Agreement"). Such Series C Stock may, pursuant to the terms of the Restated
Articles, be converted into shares of Common Stock.
D. The Company proposes to issue and sell shares of its Series D
Preferred Stock, $0.01 par value per share (the "Series D Stock"), pursuant to
the Series D Preferred Stock Purchase Agreement dated as of the date hereof,
among the Company and the Investors party thereto (the "Series D Stock Purchase
Agreement"). Such Series D Stock may, pursuant to the terms of the Restated
Articles, be converted into shares of Common Stock.
E. As a condition precedent to the closing of the transactions
contemplated in the Series D Stock Purchase Agreement, the Company has agreed to
enter into this Agreement.
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AGREEMENT
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereby agree
as follows:
SECTION 1. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
1.1 DEFINITIONS
For purposes of this Agreement:
(a) The term "Holder" means any party hereto owning of record
Registrable Securities or any assignee of record of such Registrable Securities
in accordance with Section 1.14 hereof.
(b) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"1933 Act"), and the declaration or ordering of effectiveness of such
registration statement or document.
(c) The term "Registrable Securities" means (i) Common Stock of the
Company issuable or issued upon conversion of the Series A Stock, Series B
Stock, Series C Stock and/or Series D Stock at any time outstanding and (ii) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for, or in replacement of,
such Series A Stock, Series B Stock, Series C Stock, Series D Stock or Common
Stock; provided, however, that shares of Common Stock shall no longer be treated
as Registrable Securities when (x) a registration statement covering such
Registrable Securities has been declared effective and such Registrable
Securities have been disposed of pursuant to such effective registration
statement, (y) such Registrable Securities are sold by a person in a transaction
in which the rights under this Section 1 are not assigned in accordance with
Section 1.14 hereof or (z) the Holder of such Registrable Securities is able to
dispose of all Registrable Securities held by such Holder in one three-month
period pursuant to Rule 144 (or any similar provision then in force) under the
1933 Act without registration under the 1933 Act.
(d) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable pursuant
to
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then exercisable or convertible securities that upon issuance would be,
Registrable Securities.
(e) The term "Form S-3" means such form under the 1933 Act as in
effect on the date hereof or any successor registration form under the 1933 Act
subsequently adopted by the SEC.
(f) The term "SEC" means the Securities and Exchange Commission.
(g) The term "1933 Act" means the Securities Act of 1933, as
amended.
1.2 REQUEST FOR REGISTRATION
(a) If the Company shall receive at any time after the earlier of
(i) three years from the date of this Agreement or (ii) six (6) months after the
effective date of the first registration statement for a public offering of
securities of the Company to the general public, a written request from (x) the
Holders of at least fifty percent (50%) of the Registrable Securities then
outstanding or (y) the holders of at least fifty percent (50%) of the combined
total number of shares of Series C Stock and Series D Stock then outstanding,
that the Company file a registration statement under the Act in which the
aggregate proceeds are in excess of $7,500,000, then the Company shall, within
twenty (20) days of the receipt thereof, give written notice of such request to
all Holders and shall, subject to the limitations of subsection 1.2(b), effect
as soon as practicable, and in any event shall use its best efforts to effect
within one hundred twenty (120) days of the receipt of such request, the
registration under the 1933 Act of all Registrable Securities that the Holders
request to be registered within twenty (20) days of the mailing of such notice
by the Company.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by the Company and shall be reasonably
acceptable to the Initiating Holders. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company.
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Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all such Holders, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Holder; provided, however, that the number of shares
of Registrable Securities to be included in such underwriting shall not be
reduced unless all other securities, including any shares offered by the
Company, are first entirely excluded from the underwriting. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder to the nearest 100 shares.
(c) The Company is obligated to effect only two (2) such
registrations pursuant to this Section 1.2 (counting for this purpose only
registrations that have been declared or ordered effective and pursuant to which
Registrable Securities have been sold and registrations that have been withdrawn
by the Holders as to which the Holders have not elected to bear the expenses of
such registration pursuant to Section 1.6 and would, absent such election, have
been required to bear such expenses), one of which shall only be initiated if
requested by the holders of at least fifty percent (50%) of the combined total
number of shares of Series C Stock and Series D Stock then outstanding pursuant
to Section 1.2(a).
(d) Notwithstanding the foregoing (i) the Company shall not be
obligated to effect a registration pursuant to this Section 1.2 during the
period starting with the date 60 days prior to the Company's good faith
estimated date of filing of, and ending on the date 120 days following the
effective date of, a registration statement pertaining to an underwritten public
offering of securities for the account of the Company, provided the Company is
at all times during such period diligently pursuing such registration, (ii) the
Company shall not be obligated to effect a registration pursuant to this Section
1.2 with respect to any Registrable Securities that are, at the time of the
request for such registration, freely transferable under the provisions of Rule
144(k) promulgated under the 1933 Act, and (iii) if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 1.2 a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than ninety (90) days after
receipt of the request of the Initiating Holders;
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provided, however, that this right to delay any requested registration shall not
be utilized more than twice (for a total of up to 120 days) in any 12-month
period.
1.3 COMPANY REGISTRATION
If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its stock or other securities under
the 1933 Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale of securities to
participants in a Company employee stock plan, or a registration on any form
that does not include substantially the same information as would be required to
be included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after the mailing of such notice by the Company, the
Company shall, subject to the provisions of Section 1.8, use its best efforts to
cause to be registered under the 1933 Act all of the Registrable Securities that
each such Holder has requested to be registered. If the registration of which
the Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as part of the written
notice given pursuant to this Section 1.3. The Holders' rights under this
Section 1.3 may be exercised an unlimited number of times.
1.4 OBLIGATIONS OF THE COMPANY
Whenever required under this Section 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
1933
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Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided, however, that the Company shall not be required to effect a
registration or qualification in any particular jurisdiction in which the
Company would be required, in connection with such registration or qualification
or as a condition thereto, to qualify to do business or to file a general
consent to service of process, unless the Company is already so qualified to do
business or subject to service in such jurisdiction.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and, at the
request of any such Holder, prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated 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 to the Holders requesting
registration of Registrable Securities and (ii) a letter dated 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
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an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
1.5 FURNISH INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 with respect to the Registrable
Securities of any selling Holder, that such Holder shall furnish to the Company
such information regarding it, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be required to effect
the registration of such Holder's Registrable Securities and to execute such
documents in connection with such registration as the Company may reasonably
request.
1.6 EXPENSES OF DEMAND REGISTRATION
All expenses (other than underwriting discounts, commissions and stock
transfer taxes relating to Registrable Securities) incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including,
without limitation, all registration, filing and qualification fees, printers
and accounting fees, and fees and disbursements of counsel for the Company and
of one special counsel for all the selling Holders (which counsel shall be
selected by the Holders and shall be reasonably acceptable to the Company),
shall be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one demand registration pursuant to Section 1.2; provided
further, however, that if at the time of such withdrawal, the Holders have
learned of a material adverse change in the condition, business, or prospects of
the Company from that known to the Holders at the time of their request and have
withdrawn the request with reasonable promptness following disclosure by the
Company of such material adverse change, then the Holders shall not be required
to pay any of such expenses otherwise payable by the Company and shall retain
their rights pursuant to Section 1.2.
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1.7 EXPENSES OF COMPANY REGISTRATION
All expenses (other than underwriting discounts, commissions and stock
transfer taxes relating to Registrable Securities) incurred in connection with
registrations, filings or qualifications pursuant to Section 1.3 and Section
1.12, including, without limitation, all registration, filing, and qualification
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company and of one special counsel for all the selling Holders (which
counsel shall be selected by the Holders and shall be reasonably acceptable to
the Company), shall be borne by the Company.
1.8 UNDERWRITING REQUIREMENTS
In connection with any offering involving an underwriting of shares of
capital stock pursuant to Section 1.3, the Company shall not be required under
Section 1.3 to include any of the Holders' securities in such underwriting
unless such Holders accept the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it (or by other persons entitled to
select the underwriters). If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe is compatible with the success of the
offering, then the underwriters, in their sole discretion, may exclude up to a
maximum of (i) in a registration relating to an initial underwritten firm
commitment public offering of the Company for its own account, 100% of the
Registrable Securities so requested to be included in such registration, and
(ii) in any other registration, 75% of the Registrable Securities so requested
to be included in such registration (the securities so included to be
apportioned pro rata among the selling Holders according to the total amount of
securities entitled to be included therein owned by each selling Holder or in
such other proportion as shall mutually be agreed to by such selling Holders).
The Company shall advise all Holders of Registrable Securities which would
otherwise be registered and underwritten pursuant hereto of any such limitations
and the number of shares of Registrable Securities that may be included in the
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company may round the number of shares allocated to any
Holder to the nearest 100 shares.
1.9 DELAY OF REGISTRATION
No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 1.
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1.10 INDEMNIFICATION
In the event any Registrable Securities are included in a registration
statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers and directors of each Holder,
any underwriter (as defined in the ▇▇▇▇ ▇▇▇) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the 1933 Act
or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the 1933 Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any state securities law
or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any
state securities law in connection with such registration and sale of
securities; and the Company will pay to each such Holder, partner, officer,
director, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, partner, officer,
director, underwriter or controlling person or their respective agents.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the 1933 Act, each agent and any
underwriter, any other Holder selling securities in such registration statement
and any officer, director, or controlling person of any such underwriter or
other Holder, against any losses,
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claims, damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder or its
agents expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder (which consent shall not be unreasonably
withheld); and, provided further, that in no event shall any indemnity under
this subsection 1.10(b) exceed the net proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, 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
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with reasonable 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 prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) To the extent the indemnification provided for in this Section
1.10 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
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hereunder, 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 allegedly 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.
(e) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the Holders the benefits of Rule 144
promulgated under the 1933 Act 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 or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act; and
(d) furnish to any Holder forthwith upon request, so long as the
Holder owns any Registrable Securities, (i) a written statement by the Company
that it has complied with the reporting requirements of SEC Rule 144 (at any
time after ninety (90) days after the effective date of the first registration
statement filed by the
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Company), the 1933 Act and the 1934 Act (at any time after it has become subject
to such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (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 in availing 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.
1.12 FORM S-3 REGISTRATION
In the event that the Company receives a written request from the
Holders of at least thirty percent (30%) of the Registrable Securities then
outstanding, that the Company effect a registration on Form S-3 and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holders'
Registrable Securities as are specified in each such request, together with all
or such portion of the Registrable Securities of any other Holders joining in
such request as are specified in a written request given within twenty (20) 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 this Section 1.12 (i) if Form S-3 is
not available for such offering by the Holders; (ii) if the anticipated
aggregate offering price of the Registrable Securities to be registered (before
deductions for underwriters' discounts and commissions) does not exceed
$1,000,000; (iii) if the Company shall have effected a registration under this
Section 1.12 within the 12-month period preceding such request for registration
under this Section 1.12; or (iv) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such Form S-3 Registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holders under this
Section 1.12; provided, however, that the Company shall not utilize this right
to delay any requested registration more than twice (for a total of up to 120
days) in any 12-month period.
PAGE 12
16
(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 practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 1.12 shall not be counted as demands for registration or registrations
effected pursuant to Sections 1.2 or 1.3, respectively.
1.13 "MARKET STAND-OFF" AGREEMENT
Each Holder hereby agrees that, during the period specified by the
Company and an underwriter of common stock or other securities of the Company
(such period not to exceed 180 days), following the effective date of a
registration statement of the Company filed under the 1933 Act, it shall not, to
the extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell, grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company held by it at any time during such period except
Common Stock (i) included in such registration, (ii) acquired pursuant to
Section 2.6 or (iii) acquired by holders of Series C Stock or Series D Stock in
the Public Offering or on the open market after the Public Offering (as such
term is defined in Section 2.11); provided, however, that all officers and
directors of the Company enter into similar agreements. In order to enforce the
foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Registrable Securities of each Holder until the end of such
period.
1.14 ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities
pursuant to this Section 1 may be assigned by a Holder to a transferee or
assignee of such securities that, together with all affiliates (as such term is
defined in Rule 405 promulgated under the ▇▇▇▇ ▇▇▇) of such transferee or
assignee, acquires at least 200,000 shares of Registrable Securities, 50,000
shares of Series C Stock (or Common Stock issued upon conversion of Series C
Stock) or 50,000 shares of Series D Stock (or Common Stock issued upon
conversion of Series D Stock) (in each case appropriately adjusted for any stock
dividend, stock split, or combination applicable to the Registrable Securities)
or, if less, all of Holder's Registrable Securities, and who assumes the
transferor's or assignor's obligations hereunder; provided the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; provided, further,
in each of the foregoing instances, that such assignment shall be effective only
if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act; and,
provided further, that any of the following
PAGE 13
17
transfers shall not be subject to the foregoing limitations on the minimum
number of shares to be transferred: (i) a transfer to any partner or retired
partner of any Holder which is a partnership, (ii) a transfer to any family
member or trust for the benefit of any individual Holder, (iii) a transfer to
any shareholder of any Holder which is a corporation, or (iv) a transfer to any
member of any Holder which is a limited liability company.
1.15 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS
From and after the date of this Agreement, the Company shall not,
without (a) the prior written consent of the Holders of a majority of the
outstanding Registrable Securities and (b) the prior written consent of the
holders of a majority of the combined total number of outstanding shares of
Series C Stock and Series D Stock, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to (x) include such securities in any registration
filed under Section 1.2, 1.3 or 1.12, 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 its securities will not
reduce the amount of the Registrable Securities of the Holders which is included
or (y) make a demand registration which could result in such registration
statement being declared effective prior to the earlier of either of the dates
set forth in Section 1.2(a) or within 120 days of the effective date of any
registration effected pursuant to Section 1.2.
1.16 TERMINATION
The registration rights described in this Section 1 shall terminate five
years from the effective date of the Company's first registration statement for
a firm commitment, underwritten public offering of securities of the Company to
the general public.
SECTION 2. COVENANTS OF THE COMPANY
2.1 DELIVERY OF ANNUAL FINANCIAL STATEMENTS AND OTHER INFORMATION
The Company shall deliver to the Investors and the transferees or
assignees thereof, provided that such Investor, transferee or assignee and the
affiliates (as such term is defined in Rule 405 promulgated under the ▇▇▇▇ ▇▇▇)
of or entities under common investment management with such Investor, transferee
or assignee, as the case may be, hold in the aggregate at least 200,000 shares
of Series A Stock or Series B Stock or at least 50,000 shares of Series C Stock
or Series D Stock (in each case appropriately adjusted for stock dividends,
splits or combinations) (each, an "Interested Holder"):
PAGE 14
18
(a) as soon as practicable, but in any event within 90 days after
the end of each fiscal year of the Company, an income statement, statement of
shareholders' equity and statement of cash flows for such fiscal year, and a
balance sheet of the Company as of the end of such year, such financial
statements to be prepared in accordance with generally accepted accounting
principles ("GAAP") and audited by independent certified public accountants of
nationally recognized standing selected by the Company; and
(b) as soon as practicable, but in any event prior to the end of
each fiscal year, a budget and business plan approved by the Board of Directors
for the next fiscal year and income and loss projections for the Company in
respect of such fiscal year, all prepared on a monthly basis, and promptly after
preparation thereof any other budgets or revised budgets prepared by the Company
and delivered to the Board of Directors; and
(c) such other information relating to the financial condition,
business, prospects or corporate affairs of the Company as any Interested Holder
may from time to time reasonably request.
2.2 DELIVERY OF INTERIM FINANCIAL STATEMENTS
The Company shall deliver to each Interested Holder:
(a) as soon as practicable, but in any event within 45 days after
the end of each fiscal quarter of the Company, an unaudited income statement and
balance sheet for and as of the end of such quarter and for the fiscal year to
date, in reasonable detail; and
(b) within 30 days after the end of each month, an unaudited income
statement and balance sheet for and as of the end of such month and for the
fiscal year to date, in reasonable detail.
2.3 INSPECTION
The Company shall permit each Interested Holder, at such party's
expense, to visit and inspect the Company's properties, to examine its books of
accounts and records and to discuss the Company's affairs, finances and accounts
with its officers, all at such reasonable times as may be requested by such
Interested Holder; provided, however, that the Company shall not be obligated
pursuant to this Section 2.3 to provide access to any information that it
reasonably considers to be a trade secret or similar confidential information
unless such Interested Holder provides reasonable assurances in writing that it
will maintain the confidentiality of the information.
PAGE 15
19
2.4 CONFIDENTIALITY
The information provided pursuant to Sections 2.1, 2.2 and 2.3 shall be
used by the Interested Holders solely in furtherance of their interests as
Interested Holders in the Company. Each Interested Holder agrees that it will
keep confidential and will not disclose or divulge any confidential, proprietary
or secret information which such Interested Holder may obtain from the Company,
pursuant to financial statements, reports and other materials submitted by the
Company as required hereunder or pursuant to visitation or inspection rights
granted hereunder or otherwise, unless such information is already known to the
Interested Holder or is or becomes publicly known (other than by means of the
Interested Holder in violation of this Section 2.4), or unless the Company gives
its written consent to the Interested Holder's release of such information,
except that no such written consent shall be required if such information is
only to be provided to the Interested Holder's lawyer or accountant, or to an
officer, director or partner of an Interested Holder, in furtherance of the
Interested Holder's interest in the Company and such other party shall have
agreed to keep such information confidential and to not further disclose or
divulge it.
2.5 RIGHT OF FIRST REFUSAL
Subject to the terms and conditions specified in this Section 2.5, the
Company hereby grants to each Interested Holder a right of first refusal with
respect to future sales by the Company of its Shares (as hereinafter defined).
Each time the Company proposes to offer any shares of, or securities convertible
into or exercisable for, any class or series of its capital stock ("Shares"),
the Company shall first make an offering of such Shares to the Interested
Holders in accordance with the following provisions:
(a) The Company shall deliver a notice ("Notice") to each Interested
Holder stating (i) its bona fide intention to offer or issue such Shares, (ii)
the number of such Shares to be offered, (iii) the price, if any, for which it
proposes to offer such Shares, and (iv) the names of proposed offerees, if
known.
(b) Within 20 calendar days after delivery of the Notice, each
Interested Holder may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Shares which equals the
proportion that the number of shares of Common Stock Equivalents (as hereinafter
defined) then held by the Interested Holder bears to the total number of shares
of Common Stock Equivalents then held by all shareholders of the Company.
"Common Stock Equivalents" means shares of (i) Common Stock then outstanding
plus (ii) Common Stock issuable upon conversion or exercise of all convertible
securities, options, warrants and other such rights then outstanding. If any
Interested Holder does not elect to purchase Shares to which such Interested
Holder is entitled under this Section 2.5(b), the other Interested Holders that
have elected to purchase Shares may purchase
PAGE 16
20
the non-purchasing Interested Holder's portion on a pro rata basis within 10
days from the date such non-purchasing Interested Holder fails to exercise its
right hereunder.
(c) If all such Shares referred to in the Notice are not elected to
be purchased as provided in subsection 2.5(b), the Company may, during the 90
day period following the expiration of the 20-day period provided in subsection
2.5(b) (or, if applicable, the 10-day period set forth in such subsection,
whichever expires later), offer the remaining unsubscribed Shares to any person
or persons at a price not less, and upon general terms no more favorable to the
offeree, than those specified in the Notice. If the Company does not enter into
an agreement for the sale of any such remaining Shares within such period, the
right provided hereunder shall be deemed to be revived and such Shares shall not
be offered unless first reoffered to the Interested Holders in accordance
herewith.
(d) The right of first refusal in this Section 2.5 shall not be
applicable to (i) the issuance of Shares on a pro rata basis to all of the
Company's shareholders in connection with any stock split, dividend, reverse
stock split or recapitalization, (ii) shares of Common Stock (and/or options,
warrants or other Common Stock purchase rights issued pursuant to such plans or
other arrangements) issued or to be issued to employees, officers or directors
of, or consultants or advisors to the Company or any subsidiary, pursuant to
stock purchase or stock option plans or other arrangements that are approved by
the Board of Directors, (iii) the issuance of up to (A) 2,171,128 shares of
Common Stock and (B) 200,000 shares of Series C Stock (in each case adjusted
appropriately for stock dividends, splits, combinations and similar
transactions) issued or issuable upon the exercise of warrants outstanding as of
the date hereof or hereafter, provided, however, with respect to such warrants
exercisable for Series C Stock, that the exercise price thereof is at least
$6.61 per share (adjusted appropriately for stock dividends, splits,
combinations and similar transactions), (iv) any Shares offered to the public
pursuant to a registration statement filed under the 1933 Act, (v) any Shares
issued for consideration other than cash pursuant to a merger, consolidation,
acquisition or similar business combination, (vi) shares of Common Stock issued
upon conversion of any Shares at any time outstanding, (vii) any Shares issued
pursuant to any equipment leasing arrangement or bank financing, (viii) Shares
issued in connection with strategic transactions involving the Company and other
entities, including (A) joint ventures, marketing or distribution arrangements
or (B) technology transfer or development arrangements other than those
primarily for capital raising purposes, provided that such strategic
transactions and the issuance of Shares in connection therewith have been
approved by the Company's Board of Directors, or (ix) the issuance of Series D
Stock pursuant to the Series D Stock Purchase Agreement.
PAGE 17
21
2.6 INITIAL PUBLIC OFFERING; RIGHT OF FIRST REFUSAL
(a) Notwithstanding the provisions of Section 2.5(d)(iv), each
Interested Holder that owns at least 50,000 shares of Series C Stock and/or
50,000 shares of Series D Stock (collectively, "Participating Holders") shall
have the right, subject to the other provisions of this Section 2.6, to purchase
shares of Common Stock at the price the shares are offered to the public in the
Public Offering. If a Participating Holder exercises its right of first refusal
in the Public Offering (the "IPO Purchase Option"), it shall have the right to
purchase a pro rata portion of the shares offered in the Public Offering which
equals the proportion that the number of shares of Common Stock Equivalents then
held by the Participating Holder bears to the total number of shares of Common
Stock Equivalents held by all securityholders of the Company. The Company shall
deliver notice of the Public Offering to each Participating Holder within 10
days following the filing of a registration statement relating to the Public
Offering. Such notice shall set forth the number of shares of Common Stock that
each Participating Holder shall have the right to purchase pursuant to this
Section 2.6 as well as the basis for the computation of such number. Within five
days following delivery of such notice, each Participating Holder may exercise
the IPO Purchase Option (by delivery of notice to such effect to the Company
within such five-day period) for a number of shares up to the maximum number set
forth in such notice. To the extent a Participating Holder does not exercise the
IPO Purchase Option for the total number of shares set forth in the notice
within such five-day period, the other Participating Holders that have elected
to purchase shares may purchase the non-purchasing Participating Holder's
portion on a pro rata basis within five days from the date such non-purchasing
Participating Holder fails to exercise its right hereunder. To the extent a
Participating Holder does not exercise its IPO Purchase Option within the time
period set forth in this Section 2.6, the Company shall have no further
obligation to such Participating Holder under this Section 2.6.
(b) Each Participating Holder's exercise of the IPO Purchase Option
shall be deemed an expression of interest in receiving an offer by the Company
to purchase the number of shares indicated in such Participating Holder's
notice. The Company's offer to sell such shares to the Participating Holders
shall be deemed to occur automatically upon the completion of the earlier to
occur of (i) the Company's providing each participating Participating Holder
with a copy of the final prospectus filed with the SEC with respect to the
Public Offering and (ii) two hours after the latest to occur of (A) notice to
such Participating Holder of the effectiveness of the Public Offering
registration statement and (B) notice to such Participating Holder of the
Company's determination of the offering price (the completion of the last to
occur of the foregoing, the "Offer Commencement"). Such Participating Holder
shall have an unconditional right to terminate its IPO Purchase Option and
revoke its exercise thereof by written notice to the Company on or before the
Offer Commencement.
PAGE 18
22
Once revoked by such Participating Holder, the IPO Purchase Option shall become
null and void.
(c) A Participating Holder's exercise of the IPO Purchase Option shall,
unless revoked on or before the Offer Commencement, automatically be deemed to
be a binding commitment to purchase the shares indicated by such Participating
Holder in its notice to the Company upon the Offer Commencement. Such
Participating Holder's purchase of the shares shall occur simultaneously with
the closing of the purchase and sale of the other shares distributed in the
Public Offering. It is the intent of the parties that any shares issued to such
Participating Holder shall be fully registered shares, offered and sold in the
Public Offering. Shares purchased by any Participating Holder pursuant to its
exercise of the IPO Purchase Option shall not be subject to the provisions of
Section 1.13 of this Agreement.
(d) The IPO Purchase Option shall be subject to compliance with all
applicable security laws, the rules and regulations promulgated thereunder, and
rules and regulations of the National Association of Securities Dealers, Inc. In
the event that the IPO Purchase Option is infeasible due to applicable
regulatory restrictions or prohibited by such laws, rules or regulations, then
the right of first refusal set forth in this Section 2.6, including the IPO
Purchase Option, shall not be available to the Participating Holders.
(e) Notwithstanding any other provision of this Section 2.6, if the
managing underwriter or underwriters of the Public Offering determine, in their
sole discretion, that marketing or other factors necessary to the successful
completion of the Public Offering require a limitation of the number of shares
that Participating Holders would otherwise be entitled to purchase in the Public
Offering pursuant to this Section 2.6, and the managing underwriter delivers
notice that reasonably sets forth such factors no later than five business days
prior to the anticipated effective date of the Public Offering registration
statement, then the underwriters may, in their sole discretion, exclude from the
IPO Purchase Option any or all of the shares that would otherwise be subject
thereto, and any shares that continue to be subject to the IPO Purchase Option
shall be allocated among all Participating Holders electing to exercise the IPO
Purchase Option in the same proportion (as nearly as practicable) as the number
of shares of Participating Stock held by each such Participating Holder.
2.7 LIFE INSURANCE
The Company agrees to maintain valid policies of workers' compensation
insurance and of insurance with respect to its properties and business of the
kinds and in the amounts not less than is customarily obtained by corporations
engaged in the same or similar business and similarly situated, including,
without limitation, insurance against loss, damage, fire, theft, public
liability and other risks. The
PAGE 19
23
Company agrees to maintain key-man life insurance policies, in the amount of at
least $2,000,000, on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and in the amount of at least
$1,000,000 on the life of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, respectively, so long as such
individual is an employee of the Company. The Company shall be the beneficiary
of such policies.
2.8 RESERVATION OF COMMON STOCK
The Company will at all times reserve and keep available, solely for
issuance and delivery upon the conversion of (a) Series A Stock, all shares of
Common Stock issuable from time to time upon such conversion, (b) Series B
Stock, all shares of Common Stock issuable from time to time upon such
conversion, (c) Series C Stock, all shares of Common Stock issuable from time to
time upon such conversion and (d) Series D Stock, all shares of Common Stock
issuable from time to time upon such conversion. The Company will at all times
reserve and keep available shares of Common Stock issuable upon exercise of the
Company's outstanding stock options.
2.9 ASSIGNMENT OF INVENTIONS AND CONFIDENTIALITY AGREEMENTS
The Company shall require all employees hired on or after the date
hereof to execute and deliver an Assignment of Inventions and Confidentiality
Agreement.
2.10 COMPENSATION COMMITTEE
The Company agrees to maintain a Compensation Committee of the Board of
Directors. The majority of the members of the Compensation Committee shall not
be employees of the Company. So long as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ is a Director of the
Company, he shall be a member of the Compensation Committee.
2.11 TERMINATION OF COVENANTS
Except for the covenants set forth in Section 2.6, the covenants set
forth in this Section 2 shall terminate and be of no further force or effect
upon the earlier of:
(a) the closing of a firmly underwritten, public offering by the
Company of shares of Common Stock, registered under the 1933 Act, in which the
offering price per share is $5.00 or above and the aggregate offering proceeds
paid to the Company are in excess of $10,000,000 (before deduction of
underwriters' discounts and commissions and expenses of the offering) (a "Public
Offering"), or
(b) the date the Company first becomes subject to the periodic
reporting requirements of Section 15(d) of the 1934 Act.
The covenants set forth in Section 2.6 shall terminate and be of no
further force or effect immediately after the closing of the Public Offering.
PAGE 20
24
SECTION 3. MISCELLANEOUS
3.1 SUCCESSORS AND ASSIGNS
Except to the extent that the application of certain provisions of this
Agreement to transferees and assignees of the Series A Stock, the Series B
Stock, Series C Stock, Series D Stock and the Common Stock (including, without
limitation, Common Stock issuable upon conversion of the Series A Stock, Series
B Stock, Series C Stock or Series D Stock) is expressly limited, the terms and
conditions of this Agreement shall be freely assignable and shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
3.2 GOVERNING LAW
This Agreement shall be governed by and construed under the laws of the
State of Oregon as applied to agreements among Oregon residents entered into and
to be performed entirely within the State of Oregon.
3.3 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which, together, shall constitute
one and the same instrument.
3.4 HEADINGS
The headings used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
3.5 NOTICES
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or three days after deposit in the
United States Mail, postage prepaid, registered or certified with return receipt
requested and addressed to the party to be notified, if to the Company, at ▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, or if to an Investor, at the address
indicated for such Investor on Schedule A hereto, or at such other address as
such party may designate by 10 days' advance written notice to the other parties
given in the foregoing manner. Copies of any notices sent to the holders of
Series D Stock shall also be sent to ▇▇▇▇ ▇▇▇▇▇, Esq. of Buchalter, Nemer,
Fields & Younger, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
PAGE 21
25
3.6 AMENDMENTS AND WAIVERS
This Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the holders of a majority of the Common Stock Equivalents held by the Investors;
provided, however, that any amendment or modification that is detrimental to the
holders of Series C Stock or Series D Stock shall require the written consent of
the holders of a majority of the Series C Stock or Series D Stock, respectively,
then outstanding; and, provided further, that any amendment or modification that
is detrimental to a holder of Preferred Stock in a manner different from the
other holders of Preferred Stock shall require the written consent of such
holder.
3.7 SEVERABILITY
If one or more provisions of this Agreement is held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
3.8 ENTIRE AGREEMENT
This Agreement constitutes the full and entire understanding and
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect to the subject matter hereof. This
Agreement amends and restates in its entirety the Second Amended and Restated
Investors' Rights Agreement dated as of October 19, 1999 between the Company and
the holders of Series A Stock, Series B Stock and Series C Stock.
3.9 ATTORNEYS' FEES
If any suit or action arising out of or related to this Agreement is
brought by any party, the prevailing party or parties shall be entitled to
recover the costs and fees (including, without limitation, reasonable attorney
fees, the fees and costs of experts and consultants, copying, courier and
telecommunication costs, and deposition costs and all other costs of discovery)
incurred by such party or parties in such suit or action, including, without
limitation, any post-trial or appellate proceeding.
[Remainder of this page intentionally left blank.]
PAGE 22
26
IN WITNESS WHEREOF, the parties have executed this Third Amended and
Restated Investors' Rights Agreement as of the date first above written.
▇▇▇.▇▇▇, INC.
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
INVESTORS:
OLYMPIC VENTURE PARTNERS IV, L.P.
By: OVMC IV, LLC, its General Partner
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Member
OVP IV ENTREPRENEURS FUND
By: OVMC IV, LLC, its General Partner
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Member
PAGE ▇-▇
▇▇
▇▇ (▇▇▇▇▇▇▇) CAPITAL LLC
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ASSOCIATES, INC.
its Managing Member
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INVESTORS LLC
By:
--------------------------------------
Name:
Title:
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
PAGE S-2
28
▇.▇. ▇▇▇▇▇▇▇▇ & CO., CUSTODIAN FBO
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
By:
--------------------------------------
Name:
Title:
▇.▇. ▇▇▇▇▇▇▇▇ & CO., CUSTODIAN FBO
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
By:
--------------------------------------
Name:
Title:
------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
TWB INVESTMENT PARTNERSHIP
By:
--------------------------------------
Name:
Title:
PAGE S-3
29
THE ▇▇▇▇▇ ▇▇▇▇▇▇ REVOCABLE LIVING
TRUST DTD. 12/15/90
By:
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Trustee
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LAZARUS FAMILY INVESTMENTS, LLC
By:
--------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Manager
TRINITY VENTURES VI, L.P.
By: TRINITY TVL PARTNERS VI, LLC,
its General Partner
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Manager
PAGE ▇-▇
▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇-▇▇-▇▇▇▇ FUND, L.P.
By: TRINITY TVL PARTNERS VI, LLC,
its General Partner
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Manager
APV TECHNOLOGY PARTNERS II, L.P.
By: APV MANAGEMENT CO. II, LLC,
its Managing General Partner
By:
--------------------------------------
Name:
Title: Managing Member
APV TECHNOLOGY PARTNERS, L.P.
By: APV MANAGEMENT CO., LLC,
its Managing General Partner
By:
--------------------------------------
Name:
Title: Managing Member
APV TECHNOLOGY PARTNERS U.S., L.P.
By: APV MANAGEMENT CO., LLC,
its Managing General Partner
By:
--------------------------------------
Name:
Title: Managing Member
PAGE S-5
31
HGI VENTURES, LLC
By:
--------------------------------------
Name:
Title:
WPS, LLC
By:
--------------------------------------
Name:
Title: Managing Member
VULCAN VENTURES INCORPORATED
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
STANFORD UNIVERSITY
By:
--------------------------------------
Name:
Title:
PAGE S-6
32
ATGF II
By:
--------------------------------------
Name:
Title:
VERTEX CAPITAL II LLC
By:
--------------------------------------
Name:
Title:
------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ MASTER TRUST
By Amerindo Investment Advisors Inc.
its Attorney-in-Fact
By:
----------------------------------
Name:
Title:
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Q INVESTMENT PARTNERS LLC
By:
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
PAGE ▇-▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LTD.
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President of Attractor Investment
Management, its Investment Manager
ATTRACTOR INSTITUTIONAL LP
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member of Attractor
Ventures LLC, General Partner of
Attractor Institutional LP
ATTRACTOR VENTURES LLC
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
ATTRACTOR LP
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member of Attractor
Ventures LLC, General Partner of
Attractor LP
ATTRACTOR QP LP
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member of Attractor
Ventures LLC, General Partner of
Attractor QP LP
PAGE S-8
34
BEIJING TECHNOLOGY DEVELOPMENT FUND, LDC
By:
--------------------------------------
Name:
Title:
INTERNATIONAL NETWORK CAPITAL CORP.
By:
--------------------------------------
Name:
Title:
INTERNATIONAL NETWORK CAPITAL, LDC
By:
--------------------------------------
Name:
Title:
TEAM HUNTER LLC
By:
--------------------------------------
Name:
Title:
PAGE ▇-▇
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
D'INNOVATION INC.
By:
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President
By:
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
DIGITAL MEDIA & COMMUNICATIONS II LIMITED
PARTNERSHIP
By: Advent International Limited
Partnership, General Partner
By: Advent International Corporation,
General Partner
By:
--------------------------------------
Name:
Vice President/Senior Vice President
ADVENT CROWN FUND II C.V.
By: Advent International Limited
Partnership, General Partner
By: Advent International Corporation,
General Partner
By:
--------------------------------------
Name:
Vice President/Senior Vice President
OAKSTONE VENTURES LIMITED PARTNERSHIP
By: Advent International Limited
Partnership, General Partner
By: Advent International Corporation,
General Partner
By:
--------------------------------------
Name:
Vice President/Senior Vice President
PAGE S-10
36
ADVENT PARTNERS LIMITED PARTNERSHIP
By: Advent International Corporation,
General Partner
By:
--------------------------------------
Name:
Vice President/Senior Vice President
LEVRICK LIMITED
By:
--------------------------------------
▇▇▇▇▇ ▇▇▇▇
Director
PORTAGE FOUNDERS L.P.
By: Portage Venture Partners, LLC, its
General Partner
By:
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
CB (BERKMAN) CAPITAL II LLC
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ASSOCIATES, INC.
its Managing Member
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
PAGE S-11
37
WI ▇▇▇▇▇▇ GROUP
By:
--------------------------------------
Name:
Title:
OLYMPIC VENTURE PARTNERS V, L.P.
By: OVMC V, L.L.C., its General Partner
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Member
PAGE S-12
38
[SERIES D SHAREHOLDERS]
PAGE S-13
