ROGUE WAVE SOFTWARE, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
TABLE OF CONTENTS
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PAGE
1. AMENDMENT AND RESTATEMENT............................................... 1
1.1 Amendment and Restatement.......................................... 1
2. GENERAL................................................................. 1
2.1 Definitions........................................................ 1
3. REGISTRATION; RESTRICTIONS ON TRANSFER................................... 2
3.1 Restrictions on Transfer........................................... 2
3.2 Demand Registration................................................ 3
3.3 Piggyback Registrations............................................ 5
3.4 Form S-3 Registration.............................................. 5
3.5 Expenses of Registration........................................... 6
3.6 Obligations of the Company......................................... 6
3.7 Termination of Registration Rights................................. 7
3.8 Delay of Registration.............................................. 8
3.9 Indemnification.................................................... 8
3.10 Assignment of Registration Rights.................................. 10
3.11 Amendment of Registration Rights................................... 10
3.12 Limitation on Subsequent Registration Rights....................... 10
3.13 "Market Stand-Off" Agreement....................................... 10
4. COVENANTS OF THE COMPANY................................................. 11
4.1 Basic Financial Information and Reporting.......................... 11
4.2 Inspection Rights.................................................. 11
4.3 Confidentiality of Records......................................... 11
4.4 Reservation of Common Stock........................................ 12
4.5 Stock Vesting...................................................... 12
4.6 Key Man Insurance.................................................. 12
4.7 Proprietary Information and Inventions Agreement................... 12
4.8 Directors' Expenses................................................ 13
4.9 Real Property Holding Corporation.................................. 13
4.10 Directors and Officers Liability Insurance......................... 13
4.11 Indemnification of Directors and Officers.......................... 13
4.12 Expenditures Subject to Board Approval............................. 13
4.13 Qualified Small Business........................................... 13
4.14 Termination of Covenants........................................... 13
5. RIGHTS OF FIRST REFUSAL.................................................. 13
5.1 Subsequent Offerings............................................... 13
5.2 Exercise of Rights................................................. 14
5.3 Termination of Rights of First Refusal............................. 14
5.4 Transfer of Rights of First Refusal................................ 14
5.5 Excluded Securities................................................ 14
6. MISCELLANEOUS............................................................ 15
6.1 Governing Law...................................................... 15
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TABLE OF CONTENTS
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PAGE
6.2 Survival........................................................... 15
6.3 Successors and Assigns............................................. 15
6.4 Separability....................................................... 15
6.5 Amendment and Waiver............................................... 15
6.6 Delays or Omissions................................................ 16
6.7 Notices............................................................ 16
6.8 Attorneys' Fees.................................................... 16
6.9 Titles and Subtitles............................................... 16
6.10 Counterparts....................................................... 16
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ROGUE WAVE SOFTWARE, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement") is
entered into as of the 10th day of November, 1995 by and among ROGUE WAVE
SOFTWARE, INC., an Oregon corporation (the "Company"), the persons listed on the
attached Exhibit A who became signatories to this Agreement (collectively, the
"Investors" and each individually as an "Investor") and the persons listed on
the attached Exhibit B (collectively, the "Key Shareholders" and individually as
a "Key Shareholder").
RECITALS
WHEREAS, certain of the Investors hold shares of the Company's Series A
Preferred Stock (the "Series A Stock") and possess registration rights,
information rights and other rights pursuant to that certain Investors Rights
Agreement dated as of June 30, 1994 between the Company, the Key Shareholders
and such Investors (the "Prior Agreement");
WHEREAS, the Company and the undersigned Investors who hold Series A Stock
desire to terminate the Prior Agreement and to accept the rights created
pursuant hereto in lieu of the rights granted to them under the Prior Agreement;
and
WHEREAS, the Investors are parties to the Series B Preferred Stock Purchase
Agreement dated as of the date hereof (the "Series B Agreement"), and certain of
the Company's and such Investors' obligations to purchase Series B Preferred
Stock ("Series B Stock") under the Series B Agreement are conditioned upon the
execution and delivery by such Investors, the holders of at least a majority of
the Series A Stock and the Company of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Investors who are parties to the Prior Agreement hereby agree
that the Prior Agreement shall be superseded and replaced in its entirety by
this Agreement, and the parties hereto further agree as follows:
1. AMENDMENT AND RESTATEMENT.
1.1 AMENDMENT AND RESTATEMENT. Effective upon the closing of the sale and
issuance of the Series B Stock pursuant to the Series B Agreement, all
provisions of, rights granted and covenants made in the Prior Agreement and any
other agreement between the Company, the Investors and the Key Shareholders, are
hereby waived released and terminated in their entirety and shall have no
further force or effect whatsoever. The rights and covenants contained in this
Agreement set forth the sole and entire agreement among the Company, the
Investors and the Key Shareholders on the subject matter hereof and supersede
any and all rights granted or covenants made under any prior agreement.
2. GENERAL.
2.1 DEFINITIONS. As used in this Agreement the following terms shall have
the following respective meanings:
"Holder" means any person owning of record Registrable Securities or
any assignee of record of such Registrable Securities in accordance with Section
3.10 hereof.
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"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (i) Common Stock of the Company
acquired from the Company and held by a Key Shareholder, (ii) Common Stock of
the Company issued or issuable upon conversion of the Shares, and (iii) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferror's rights under Article III of this
Agreement are not assigned.
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 3.2, 3.3 and 3.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements not
to exceed Twenty-Five Thousand Dollars ($25,000) of a single special counsel for
the Holders, blue sky fees and expenses and 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).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale.
"Shares" shall mean the Company's Series A Stock and Series B Stock.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"SEC" or "Commission" means the Securities and Exchange Commission.
3. REGISTRATION; RESTRICTIONS ON TRANSFER
3.1 RESTRICTIONS ON TRANSFER.
3.1.1 Each Investor agrees not to make any disposition of all or
any portion of the Shares (or the Common Stock issuable upon the conversion
thereof) unless and until the transferee has agreed in writing for the benefit
of the Company to be bound by this Section 3.1, provided and to the extent such
Sections are then applicable and:
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(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(b) (A) Such Investor 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 (B) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act or any state securities or "blue sky" laws. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by an Investor which is (A) a partnership to its partners in
accordance with partnership interests, or (B) to the Investor's family member or
trust for the benefit of an individual Investor, provided the transferee agrees
in writing to be subject to the terms of this Section 3.1 to the same extent as
if he were an original Investor hereunder.
3.1.2 Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of the Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in the Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT AND ALL STATE SECURITIES OR
BLUE SKY LAWS OR, IN THE OPINION OF COUNSEL OR BASED ON
OTHER WRITTEN EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
3.1.3 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.
3.1.4 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.
3.2 DEMAND REGISTRATION.
3.2.1 Subject to the conditions of this Section 3.2, if the
Company shall receive at any time after the earlier of (i) the date one hundred
eighty (180) days following the effective date of the registration statement
pertaining to the initial public offering of the Company's common stock (the
"Initial
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Offering"), or (ii) May 31, 1997, a written request from Investors holding more
than seventy-five percent (75%) of the Shares then outstanding (the "Initiating
Holders") that the Company file a registration statement under the Securities
Act covering the registration of Registrable Securities having an aggregate
offering price to the public in excess of $2,500,000, then the Company shall,
within thirty (30) days of the receipt thereof, give written notice of such
request to all Holders, and subject to the limitations of Section 3.2.2, effect,
as soon as practicable, the registration under the Securities Act of all
Registrable Securities that the Holders request to be registered.
3.2.2 If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 3.2 and the Company shall include such information in the written
notice referred to in Section 3.2.1. In such event, the right of any Holder to
include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 3.2, if the underwriter
advises the Company in writing that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated, first, to the Initiating
Holders of Registrable Securities on a pro rata basis based on the number of
Registrable Securities held by all such Holders; and second, to all other
Holders of Registrable Securities on a pro rata basis based on the number of
Registrable Securities held by all such Holders. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
3.2.3 The Company shall not be obligated to effect more than two
(2) registrations pursuant to this Section 3.2.
3.2.4 The Company shall not be required to effect a registration
pursuant to this Section 3.2 during the period starting with the date of filing
of, and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to its Initial Offering, provided
that the Company is making reasonable and good faith efforts to cause such
registration statement to become effective. In addition, the Company shall not
be required to effect a registration pursuant to this Section 3.2 if within
thirty (30) days of receipt of a written request from Initiating Holders
pursuant to Section 3.2.1, the Company gives notice to the Holders of the
Company's intention to make its Initial Offering within ninety (90) days.
3.2.5 Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 3.2, a
certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it would be 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 such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Holders; provided that such right to delay a request shall be
exercised by the Company no more than twice in any one-year period.
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3.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans and corporate reorganizations) and will afford each such Holder an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder. Each Holder desiring to include in
any such registration statement all or any part of the Registrable Securities
held by it shall, within twenty (20) days after receipt of the above-described
notice from the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable Securities by such
Holder. If a Holder decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
3.3.1 UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 3.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 3.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Investors who are Holders on a pro rata basis based
on the total number of Registrable Securities held by such Holders; third, to
the Holders (other than the Investors) on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and fourth, to any
shareholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting, except that in no
event shall the amount of securities of the Investors (as defined in this
Agreement) included in the registration be reduced below twenty-five percent
(25%) of the total amount of securities included in such registration, unless
such offering is the Initial Offering and such registration does not include
shares of any other selling shareholders, in which event any or all of the
Registrable Securities of the Investors may be excluded in accordance with the
immediately preceding sentence. In no event will shares of any other selling
shareholder be included in such registration which would reduce the number of
shares which may be included by any Investor without the written consent of
Investors holding not less than 75% of the Shares proposed to be sold in the
offering.
3.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Investor who is a Holder of Registrable Securities a written request or requests
that the Company effect a registration on Form S-3 and any related qualification
or compliance with respect to all or a part of the Registrable Securities owned
by such Holder, the Company will:
3.4.1 promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and
3.4.2 as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
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with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 3.4: (i) if
Form S-3 is not available for such offering by the Holders, (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$500,000, (iii) if the Company shall furnish to the Holders a certificate signed
by the Chairman of the Board of Directors of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 3.4, (iv) if the Company has, within the
twelve (12) month period preceding the date of such request, already effected
two (2) registrations on Form S-3 for the Holders pursuant to this Section 3.4,
or (v) in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
3.4.3 Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All Registration Expenses incurred in
connection with registrations requested pursuant to this Section 3.4 after the
first two (2) registrations shall be paid by the selling Holders pro rata in
proportion to the number of shares sold by each.
3.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 3.2 or any registration under Section 3.3 or Section 3.4 herein shall be
borne by the Company (except as set forth in Section 3.4.3). All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Company shall not, however, be required to
pay for expenses of any registration proceeding begun pursuant to Section 3.2 or
3.4, the request of which has been subsequently withdrawn by the Initiating
Holders unless (a) the withdrawal is based upon material adverse information
concerning the Company of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of 75% of Registrable Securities agree
to forfeit their right to one requested registration pursuant to Section 3.2 or
Section 3.4, in which event such right shall be forfeited by all Holders. If
the Holders are required to pay the Registration Expenses, such expenses shall
be borne by the holders of securities (including Registrable Securities)
requesting such registration in proportion to the number of shares for which
registration was requested. If the Company is required to pay the Registration
Expenses of a withdrawn offering pursuant to Section 3.5(a), then the Holders
shall not forfeit their rights pursuant to Section 3.2 or Section 3.4 to a
demand registration.
3.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
3.6.1 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 75% of the Registrable Securities registered thereunder, keep such
registration statement effective for up to ninety (90) days.
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3.6.2 Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
3.6.3 Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
3.6.4 Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
3.6.5 In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
3.6.6 Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
3.6.7 Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
3.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
to a Holder under this Article III shall terminate and be of no further force
and effect upon the earlier of (i) seven (7) years after the date following the
closing of the Company's Initial Offering, or (ii) the date on which the
Company's Common Stock is publicly traded on a national securities exchange and
all Registrable Securities held by and issuable to such Holder may be sold under
Rule 144 during any ninety (90) day period, provided that such Holder then holds
less than 1% of the then outstanding voting stock of the Company.
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3.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
3.8.1 No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Article III.
3.8.2 It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 3.2, 3.3 or 3.4 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
3.9 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 3.2, 3.3 or 3.4:
3.9.1 To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the 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") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law in connection with the offering covered
by such registration statement; and the Company will reimburse each such Holder,
partner, officer or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by such person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 3.9.1
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner,
officer, director, underwriter or controlling person of such Holder.
3.9.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder selling securities
under such registration statement or any of such other Holder's partners,
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
may become subject under the Securities Act, the 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 under an
instrument duly executed by such Holder and
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stated to be specifically for use in connection with such registration; and each
such Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter or
other Holder, or partner, officer, director or controlling person of such other
Holder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 3.9.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 3.9
exceed the gross proceeds from the offering received by such Holder.
3.9.3 Promptly after receipt by an indemnified party under this
Section 3.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 3.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 3.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 3.9.
3.9.4 If the indemnification provided for in this Section 3.9 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.
3.9.5 The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they relate to any
Violation made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
in question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final Prospectus
was furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Securities Act.
9
3.9.6 The obligations of the Company and Holders under this
Section 3.9 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
3.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Article III may be assigned by
a Holder to a transferee or assignee of Registrable Securities; provided,
however, that no such transferee or assignee shall be entitled to registration
rights under Sections 3.2, 3.3 or 3.4 hereof unless it acquires at least fifty
thousand (50,000) shares of Registrable Securities (as adjusted for stock splits
and combinations) and the Company shall, within twenty (20) days after such
transfer, be 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 and provided further, that such
transferee agrees in writing to be bound by the terms of this Agreement.
Notwithstanding the foregoing, rights to cause the Company to register
securities may be assigned to any subsidiary, parent, general partner or limited
partner of a Holder.
3.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Article III
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least 75% of the
Registrable Securities. Any amendment or waiver effected in accordance with
this Section 3.11 shall be binding upon each Holder and the Company. By
acceptance of any benefits under this Article III, Holders of Registrable
Securities hereby agree to be bound by the provisions hereunder.
3.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of 75% of the Registrable Securities, enter into any agreement with any
holder or prospective holder of any securities of the Company that would permit
such holder to require that the Company register any securities held by such
holder.
3.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, an Investor
holding more than one percent (1%) of the Company's voting securities shall not
sell or otherwise transfer or dispose of 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 underwriters not to exceed one
hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act, provided that:
(a) such agreement shall apply only to the Company's Initial
Offering; and
(b) all officers and directors of the Company and holders of at least
one percent (1%) of the Company's voting securities enter into similar
agreements.
The obligations described in this Section 3.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-
transfer instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
In order to implement the provisions of this Section 3.13, each Investor agrees
to execute and deliver to the Company, upon the Company's request, a "lock-up"
or other similar agreement reasonably requested by an underwriter of the
Company's Common Stock.
10
4. COVENANTS OF THE COMPANY
4.1 BASIC FINANCIAL INFORMATION AND REPORTING.
4.1.1 The Company will maintain true books and records of account
in which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
4.1.2 So long as an Investor (with its affiliates) shall own not
less than two hundred fifty thousand (250,000) shares (as adjusted for stock
splits, combinations and the like) of Registrable Securities (a "Major
Investor"), as soon as practicable after the end of each fiscal year of the
Company, and in any event within 90 days thereafter, the Company will, if
requested, furnish each such Major Investor a consolidated balance sheet of the
Company, as at the end of such fiscal year, and a consolidated statement of
income and a consolidated statement of cash flows of the Company, for such year,
all prepared in accordance with generally accepted accounting principles and
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of
national standing selected by the Company's Board of Directors.
4.1.3 If requested, the Company will furnish each Major Investor,
as soon as practicable after the end of each quarterly accounting period of the
Company, and in any event within thirty (30) days thereafter, an unaudited
consolidated balance sheet of the Company as of the end of each such quarterly
period, and an unaudited consolidated statement of income and a consolidated
statement of cash flows of the Company for such period and for the current
fiscal year to date, prepared internally and 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.
4.1.4 The Company will furnish each such Major Investor (i) at
least thirty (30) days prior to the beginning of each fiscal year an annual
budget of sales and expenses for such fiscal year; and (ii) within thirty (30)
days after the end of each month, an unaudited balance sheet and statements of
income and cash flows, 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, but such statement shall
set forth applicable budget figures and variances from budget.
4.2 INSPECTION RIGHTS. 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 its officers, all at such reasonable times and as often as may
be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 3.2 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
4.3 CONFIDENTIALITY OF RECORDS.
4.3.1 Each Investor agrees not to use Confidential Information (as
hereinafter defined) of the Company for its own use or for any purpose except to
evaluate and enforce its equity investment in the Company. Except as permitted
under subsection 3.3.2 below, each Investor agrees to use its best efforts not
to disclose such Confidential Information to any third parties. Each Investor
shall undertake to treat such Confidential Information in a manner consistent
with the treatment of its own information
11
of such proprietary nature and agrees that it shall protect the confidentiality
of and use reasonable best efforts to prevent disclosure of the Confidential
Information to prevent it from falling into the public domain or the possession
of unauthorized persons. Each transferee of any Investor who receives
Confidential Information shall agree to be bound by such provisions. For
purposes of this Section, "Confidential Information" means any information,
technical data, or know-how, including, but not limited to, the Company's
research, products, software, services, development, inventions, processes,
designs, drawings, engineering, marketing, or finances, disclosed by the Company
either directly or indirectly in writing or confirmed promptly in writing to be
Confidential Information.
4.3.2 Confidential Information does not include information, technical
data or know-how which (i) is in the Investor's possession at the time of
disclosure as shown by Investor's files and records immediately prior to the
time of disclosure; (ii) before or after it has been disclosed to the Investor,
it is part of the public knowledge or literature, not as a result of any action
or inaction of the Investor; or (iii) is approved for release by written
authorization of Company. The provisions of this Section shall not apply (i) to
the extent that an Investor is required to disclose Confidential Information
pursuant to any law, statute, rule or regulation or any order of any court or
jurisdiction process or pursuant to any direction, request or requirement
(whether or not having the force of law but if not having the force of law being
of a type with which institutional investors in the relevant jurisdiction are
accustomed to comply) of any self-regulating organization or any governmental,
fiscal, monetary or other authority; (ii) to the disclosure of Confidential
Information to an Investor's employees, counsel, accountants or other
professional advisors; (iv) to the extent that an Investor needs to disclose
Confidential Information for the protection of any of such Investor's rights or
interest against the Company, whether under this Agreement or otherwise; or (v)
to the disclosure of Confidential Information to a prospective transferee of
securities which agrees in writing to be bound by the provisions of this Section
in connection with the receipt of such Confidential Information.
4.4 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
4.5 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall
be subject to vesting as follows: (i) twenty-five percent (25%) of such stock
shall vest at the end of the first year following the earlier of the date of
issuance or such person's services commencement date with the Company, and (ii)
seventy-five percent (75%) of such stock shall vest over the remaining three (3)
years. With respect to any shares of stock purchased by any such person, the
Company's repurchase option shall provide that upon such person's termination of
employment or service with the Company, with or without cause, the Company or
its assignee (to the extent permissible under applicable securities laws and
other laws) shall have the option to purchase at cost any unvested shares of
stock held by such person.
4.6 KEY MAN INSURANCE. Subject to the approval of the Board of Directors,
the Company will use its best efforts to obtain and maintain in full force and
effect term life insurance in the amount of one million ($1,000,000) dollars on
the lives of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇, naming the Company as
beneficiary.
4.7 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Company shall
require all employees to execute and deliver a Proprietary Information and
Inventions Agreement substantially in the form attached to the Series B
Agreement as Exhibit H.
12
4.8 DIRECTORS' EXPENSES. The Company shall not pay any compensation to any
member of the Company's Board of Directors in connection with the performance of
his or her duties as a Director, provided, however, that the Company shall pay
the reasonable expenses of members of the Company's Board of Directors in
connection with attending Board of Directors meetings (including airfare and
hotels).
4.9 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it will
operate in a manner such that it will not become a "United States real property
holding corporation" ("USRPHC") as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
The Company agrees to make determinations as to its status as a USRPHC, and will
file statements concerning those determinations with the Internal Revenue
Service, in the manner and at the times required under Reg. Section 1.897-2(h),
or any supplementary or successor provision thereto. Within 30 days of a
request from an Investor or any of its partners, the Company will inform the
requesting party, in the manner set forth in Reg. Section 1.897- 2(h)(1) or any
supplementary or successor provision thereto, whether that party's interest in
the Company constitutes a United States real property interest (within the
meaning of Internal Revenue Code Section 897(c)(1) and the regulations
thereunder) and whether the Company has provided to the Internal Revenue Service
all required notices as to its USRPHC status.
4.10 DIRECTORS AND OFFICERS LIABILITY INSURANCE. Subject to the
availability of commercially reasonable rates, the Company will use its best
efforts to obtain and maintain in full force and effect for as long as a
representative of the Investors serves on the Company's Board of Directors,
directors and officers liability insurance in the minimum amount of $1,000,000.
4.11 INDEMNIFICATION OF DIRECTORS AND OFFICERS. As long as any
representative of the Investors serves on the Company's Board of Directors, the
Company will at all times provide in its Articles of Incorporation and Bylaws,
indemnification of its directors and officers to the full extent permitted by
law.
4.12 EXPENDITURES SUBJECT TO BOARD APPROVAL. The Company shall not commit
to expend in excess of $150,000 with respect to any single expenditure, for
capital improvements (including capital leases), without prior written
authorization of the Company's Board of Directors. The Company shall obtain the
unanimous approval of the Board of Directors for payment of any salary in excess
of $90,000 per annum.
4.13 QUALIFIED SMALL BUSINESS. The Company hereby covenants that, so long
as the Series B Stock held by the Holders remains outstanding, the Company will
use its best efforts to cause the Company to continue to qualify as a "Qualified
Small Business" as defined in Section 1202(d) of the Internal Revenue Code of
1986, as amended; provided that, if the Company's Board of Directors determines
that an action or omission which causes such qualification to no longer be
available is in the best interest of the Company, the Company shall no longer be
subject to the foregoing covenant.
4.14 TERMINATION OF COVENANTS. All covenants of the Company contained in
Article IV of this Agreement shall expire and terminate as to each Investor
immediately after the time of effectiveness of the Company's first firm
commitment underwritten public offering registered under the Securities Act.
5. RIGHTS OF FIRST REFUSAL.
5.1 SUBSEQUENT OFFERINGS. Each Investor shall have a right of first
refusal to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time,
13
propose to sell and issue after the date of this Agreement, other than the
Equity Securities excluded by Section 5.6 hereof. Each Investor's pro rata
share is equal to the ratio of (A) the number of shares of the Company's Common
Stock (including all shares of Common Stock issued or issuable upon conversion
of the Shares) of which such Investor is a holder immediately prior to the
issuance of such Equity Securities to (B) the total number of shares of the
Company's outstanding Common Stock (including all shares of Common Stock issued
or issuable upon conversion of the Shares) immediately prior to the issuance of
the Equity Securities. The term "Equity Securities" shall mean (i) any stock or
similar security of the Company, (ii) any security convertible, with or without
consideration, into any stock or similar security (including any option to
purchase such a convertible security), (iii) any security carrying any warrant
or right to subscribe to or purchase any stock or similar security or (iv) any
such warrant or right.
5.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Investor who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.
5.3 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Article V shall terminate upon the closing of an
underwritten public offering of Common Stock of the Company made pursuant to an
effective registration statement under the Securities Act.
5.4 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Investor under this Article V may be transferred to any constituent partner
or affiliate of such Investor, to any successor in interest to all or
substantially all the assets of such Investor, or to a transferee who acquires
at least fifty thousand (50,000) shares (as adjusted for stock splits,
combinations and the like) of Registrable Securities, provided that such
transferee agrees in writing to be bound by the provisions of this Agreement.
5.5 EXCLUDED SECURITIES. The rights of first refusal established by this
Article V shall have no application to any of the following Equity Securities:
5.5.1 shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) 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;
5.5.2 stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, options and warrants outstanding
as of the date of this Agreement, and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Article V applied with respect to the
initial sale or grant by the Company of such rights or agreements;
5.5.3 any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination;
14
5.5.4 any Equity Securities that are issued by the Company as part
of an underwritten public offering referred to in Section 5.3 hereof;
5.5.5 shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
5.5.6 shares of Common Stock issued upon conversion of the Shares;
and
5.5.7 any Equity Securities issued pursuant to any equipment
leasing arrangement or bank financing.
6. MISCELLANEOUS.
6.1 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.
6.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement, and the rights and obligations hereunder, may not be
assigned by any party hereto without the prior written consent of the Company
and the holders of at least a majority in interest of the Shares. The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted 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.
6.4 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.5 AMENDMENT AND WAIVER.
6.5.1 Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the written consent of the Company and the
holders of at least 75% of the Registrable Securities.
6.5.2 Except as otherwise expressly provided, the obligations of
the Company and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of at least 75% of the Registrable
Securities.
15
6.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
6.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or at such other address as such party may designate by ten (10) days advance
written notice to the other parties hereto.
6.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
6.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
-----------------------------------
(PRINT NAME OF INVESTOR)
By:
--------------------------------
(SIGNATURE)
Title:
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ Signature
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
-----------------------------------
(PRINT NAME OF INVESTOR)
By:
--------------------------------
(SIGNATURE)
Title:
--------------------------------
KEY SHAREHOLDERS:
▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ 11/9/95
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
-----------------------------------
(PRINT NAME OF INVESTOR)
By:
--------------------------------
(SIGNATURE)
Title:
--------------------------------
KEY SHAREHOLDERS:
▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
-----------------------------------
(PRINT NAME OF INVESTOR)
By:
--------------------------------
(SIGNATURE)
Title:
--------------------------------
KEY SHAREHOLDERS:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
El Dorado Ventures III, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: El Dorado Venture Partners III,
Its Leneral Partner
By: /s/
--------------------------------
(SIGNATURE)
Title: General Partner
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
El Dorado C&L Fund, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: El Dorado Venture Partners III,
Its General Partner
By: /s/
--------------------------------
(SIGNATURE)
Title: General Partner
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
MENLO VENTURES VI, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: MV Management VI, L.P.
its General Partner
By: /s/
--------------------------------
(SIGNATURE)
Title: General Partner
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
MENLO ENTREPRENEURS FUND VI, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: MV Management VI; L.P.
its General Partner
By: /s/
--------------------------------
(SIGNATURE)
Title: General Partner
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
WA&H Investments, L.L.C.
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Group, L.L.C.
its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CEO/Managing Director
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
IN WITNESS WHEREOF, the parties hereto have executed the AMENDED AND
RESTATED INVESTORS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
ROGUE WAVE SOFTWARE, INC.
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President
INVESTORS:
▇▇▇▇▇▇ Pillar
-----------------------------------
(PRINT NAME OF INVESTOR)
By: /s/ ▇▇▇▇▇▇ Pillar
--------------------------------
(SIGNATURE)
Title:
--------------------------------
KEY SHAREHOLDERS:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
17
EXHIBIT A
INVESTORS
El Dorado Ventures III, L.P.
El Dorado Technology IV, L.P.
El Dorado C&L Fund, L.P.
Menlo Ventures VI, L.P.
Menlo Entrepreneurs Fund VI, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Pillar
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
18
EXHIBIT B
KEY SHAREHOLDERS
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
19
ROGUE WAVE SOFTWARE, INC.
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT (the "Agreement") is made as of June 27, 1996, by
and among ROGUE WAVE SOFTWARE, INC., an Oregon corporation (the "Company"), the
holders of the Company's Series A Preferred Stock and Series B Preferred Stock
(the "Investors") and certain holders of the Company's Common Stock (the "Key
Shareholders").
WHEREAS, the Company, the Investors and the Key Shareholders have entered
into that certain Amended and Restated Investors' Rights Agreement dated
November 10, 1995 attached hereto as Exhibit A (the "Investors' Rights
Agreement"); and
WHEREAS, in accordance with Sections 3.11 and 6.5 of the Investors' Rights
Agreement, the Company, the Investors and the Key Shareholders wish to amend
such agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. AMENDMENT.
Section 3.13 of the Investors' Rights Agreement is hereby amended to read
in its entirety as follows:
3.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act, provided that:
(i) such agreement shall apply only to the Company's Initial
Offering; and
(ii) all officers and directors of the Company enter into similar
agreements.
The obligations described in this Section 3.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-
transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period In order to implement the provisions of this
Section 3.13, each Holder agrees to execute and deliver to the Company, upon the
Company's request, a "lock-up" or similar agreement reasonably requested by an
underwriter of the Company's Common Stock.
2. This Agreement may be executed in two or more components, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
1.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title:
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: By:
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title:
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: By:
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title:
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
MENLO VENTURES VI, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: MV Management VI, L.P.
its General Partner
By: By: /s/ Signature
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: General Partner
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
MENLO ENTREPRENEURS FUND VI, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: MV Management VI, L.P.
its General Partner
By: By: /s/ Signature
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: General Partner
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
El Dorado Ventures III, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: Its General Partner
El Dorado Venture Partners III
By: By: /s/
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: General Partner
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
El Dorado Technology IV, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: Its General Partner
El Dorado Venture Partners III
By: By: /s/ Signature
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: General Partner
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
El Dorado C&L Fund, L.P.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: Its General Partner
El Dorado Venture Partners, III
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ Signature
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: General Partner
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
WA&H Investment, L.L.C.
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Group L.L.C.
-----------------------------------
(PRINT NAME OF INVESTOR)
Its managing member
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ Signature
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title: Managing Director-CFO
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
-----------------------------------
(SIGNATURE)
2.
IN WITNESS WHEREOF, this AMENDMENT AGREEMENT is hereby executed as of the
date first above written.
COMPANY: INVESTOR:
ROGUE WAVE SOFTWARE, INC.
-----------------------------------
(PRINT NAME OF INVESTOR)
By: By:
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, President (SIGNATURE)
Title:
----------------------------
(IF APPLICABLE)
KEY SHAREHOLDER:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
(PRINT NAME OF KEY SHAREHOLDER)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
(SIGNATURE)
2.