EXHIBIT 4.3
INVESTORS' RIGHTS AGREEMENT
This Investors' Rights Agreement (this "Agreement") is made and entered
into as of the 21st day of May, 1993, by and among OVERLAND DATA INC., a
California corporation (the "Company"), the parties identified on Exhibit A
attached hereto (collectively, the "Shareholders"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as Trustee for the ▇▇▇▇▇▇▇▇ Family Trust (the
"Founders").
The Founders, the Company and certain of the Shareholders (the "1992
Shareholders") are parties to an Investors' Rights Agreement (the "1992
Investors' Rights Agreement") dated as of July 2, 1992. As an inducement to
Archive Corporation, a Delaware corporation ("Archive"), to purchase shares of
Series C Preferred Stock of the Company, the Founders, the Company and the 1992
Shareholders desire to amend and restate the 1992 Investors' Rights Agreement to
provide, among other things, for the grant of rights to the Shareholders as set
forth herein.
The parties hereby agree as follows:
SECTION 1
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES:
REGISTRATION RIGHTS: AMENDMENT AND
RESTATEMENT OF INVESTORS' RIGHTS AGREEMENT
1.1 CERTAIN DEFINITIONS. The 1992 Investors' Rights Agreement is hereby
amended and restated in its entirety, as set forth herein, and is superseded in
its entirety by this Agreement; except that (i) the Investors' Rights Agreement
dated as of May 30, 1989 among the Company and the Founders and Shareholders
referenced therein shall remain in full force and effect solely with respect to
the obligations of ▇▇▇▇▇▇ ▇. ▇▇▇▇ as set forth in Section 1.12 thereof and (ii)
the 1992 Investors' Rights Agreement shall remain in full force and effect
solely with respect to the obligations of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. as set forth in
Section 1.12 thereof. As used in this Agreement, the following terms shall have
the meanings set forth below:
(a) "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the securities Act.
(b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(c) "Holder" shall mean any investor who holds Registrable Securities
and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section
1.11 hereof.
(d) "Initiating Holders" shall mean either the Initiating Series A
Holders, the Initiating Series B Holders or the Initiating Series C Holders.
(e) "Initiating Series A Holders" shall mean any Holder or Holders
who in the aggregate hold not less than fifty percent (50%) of the outstanding
Registrable Series A Securities. For purposes of such calculation, holders of
Series A Shares shall be considered to hold the shares of Common Stock then
issuable upon conversion of such Series A Shares.
(f) "Initiating Series B Holders" shall mean any Holder or Holders
who in the aggregate hold not less than fifty percent (50%) of the outstanding
Registrable Series B Securities. For purposes of such calculation, holders of
Series B Shares shall be considered to hold the shares of Common Stock then
issuable upon conversion of such Series B Shares.
(g) "Initiating Series C Holders" shall mean any Holder or Holders
who in the aggregate hold not less than fifty percent (50%) of the outstanding
Registrable Series C Securities. For purposes of such calculation, holders of
Series C Shares shall be considered to hold the shares of Common Stock then
issuable upon conversion of such Series C Shares.
(h) "Other Shareholders" shall mean persons other than Holders who,
by virtue of agreements with the Company, are also entitled to include their
securities in certain registrations referenced hereunder.
(i) "Registrable Securities" shall mean the Registrable Series A
Securities, the Registrable Series B Securities and the Registrable Series C
Securities.
(j) "Registrable Series A Securities" shall mean (i) shares of Common
Stock issued or issuable pursuant to the conversion of the Series A Shares and
(ii) any Common Stock issued as a dividend or other distribution with respect to
or in exchange for or in replacement of the shares referenced in (i) above,
provided, however, that Registrable Series A Securities shall not include any
shares of Common Stock which have previously been registered or which have been
sold to the public.
(k) "Registrable Series B Securities" shall mean (i) shares of Common
Stock issued or issuable pursuant to the conversion of the Series B Shares and
(ii) any Common Stock issued as a dividend or other distribution with respect to
or in exchange for or in replacement of the shares referenced in (i) above,
provided, however, that Registrable Series B Securities shall not include any
shares of Common Stock which have previously been registered or which have been
sold to the public.
(l) "Registrable Series C Securities" shall mean (i) shares of Common
Stock issued or issuable pursuant to the conversion of the Series C Shares and
(ii) any Common Stock issued as a dividend or other distribution with respect to
or in exchange for or in replacement of the shares referenced in (i) above,
provided, however, that Registrable Series C Securities shall not include any
shares of Common Stock which have previously been registered or which have been
sold to the public.
(m) The terms "register," "registered" and "registration" shall refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(n) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of any regular or special audits incident to or
required by any such registration, but shall not include Selling Expenses and
fees and disbursements of counsel for the Holders (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
(o) "Rule 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(p) "Rule 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(q) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the
rules and regulations thereunder, all as the same shall be in effect from time
to time.
(r) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).
(s) "Series A Agreement" shall mean the Series A Preferred Stock
Purchase Agreement between the Company and certain of the Shareholders dated as
of May 30, 1989.
(t) "Series B Agreement" shall mean the Series B Preferred Stock
Purchase Agreement between the Company and certain of the Shareholders dated as
of July 2, 1992.
(u) "Series C Agreement" shall mean the Series C Preferred Stock
Purchase Agreement between the Company and Archive dated as of the date hereof.
(v) "Series A Shares" shall mean the Company's Series A Preferred
Stock issued pursuant to the Series A Agreement.
(w) "Series B Shares" shall mean the Company's Series B Preferred
Stock issued pursuant to the Series B Agreement.
(x) "Series C Shares" shall mean the Company's Series C Preferred
Stock issued pursuant to the Series C Agreement.
(y) "Shares" shall mean the Series A Shares, the Series B Shares and
the Series C Shares.
1.2 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. If the Company shall receive from
Initiating Holders at any time or times not earlier than the earlier of (i) July
1, 1995 or (ii) one year after the effective date of the first registration
statement filed by the Company covering an underwritten offering of any of its
securities to the general public, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities having
an aggregate offering price, net of underwriting discounts and expenses, equal
to or exceeding Four Dollars ($4.00) per share of Common Stock (as adjusted for
any stock dividends, combinations or splits with respect to such shares) and the
aggregate proceeds to the Company and/or any selling shareholders (after
deduction for underwriting discounts but excluding expenses
related to the issuance of such securities) exceed Five Million Dollars
($5,000,000) the Company will:
(i) promptly give written notice of the proposed registration to
all other Holders; and
(ii) as soon as practicable, use its best efforts to effect
such registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws, and appropriate compliance with the Securities Act) as
would permit or facilitate the sale and distribution of all or such portion
of such Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
received by the Company within twenty (20) days after such written notice
from the Company is given.
The Company shall not be obligated to effect, or to take
any action to effect, any such registration pursuant to this Section 1.2:
(A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act and applicable Blue Sky laws;
(B) As to a request by the Initiating Series A Holders,
after the Company has initiated one such registration pursuant to this Section
1.2(a) at the request of the Initiating Series A Holders, and, as to a request
by the Initiating Series B Holders, after the Company has initiated one such
registration pursuant to this Section 1.2(a) at the request of the Initiating
Series B Holders and, as to a request by the Initiating Series C Holders, after
the Company has initiated one such registration pursuant to this Section 1.2(a)
at the request of the Initiating Series C Holders (counting for these purposes
only (x) a registration which has been declared or ordered effective and
pursuant to which securities have been sold and (y) registrations which have
been withdrawn by the Holders as to which the Holders have not elected to bear
the Registration Expenses pursuant to Section 1.4 hereof and would, absent such
election, have been required to bear such expenses);
(C) During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the
date of filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a Company-initiated registration; provided that the Company
is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(D) If the Initiating Holders propose to dispose of shares
of Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 1.5 hereof;
(E) If the Initiating Holders do not request that such
offering be firmly underwritten by underwriters selected by the Initiating
Holders (subject to the consent of the Company, which consent will not be
unreasonably withheld); or
(F) If the Company and the Initiating Holders are unable to
obtain the commitment of the underwriter described in clause (E) above to firmly
underwrite the offer.
(b) FILING. Subject to the foregoing clauses (A) through (F), the
Company shall file a registration statement covering the Registrable Securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Initiating Holders; provided, however, that if (i) in
the good faith judgment of the Board of Directors of the Company, such
registration would be seriously detrimental to the Company and the Board of
Directors of the Company concludes, as a result, that it is essential to defer
the filing of such registration statement at such time, and (ii) the Company
shall furnish to such 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 for such registration
statement to be filed in the near future and that it is, therefore, essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for the period during which such disclosure would be
seriously detrimental, provided that (except as provided in clause (C) above)
the Company may not defer the filing for a period of more than one hundred
eighty (180) days after receipt of the request of the Initiating Holders, and,
provided further, that the Company shall not defer its obligation in this manner
more than once in any twelve-month period.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Sections 1.2(d) and 1.13
hereof, include other securities of the Company, with respect to which
registration rights have been
granted, and may include securities of the Company being sold for the account of
the Company.
(c) UNDERWRITING. The right of any Holder to registration pursuant to
Section 1.2 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 with respect to such participation and
inclusion) to the extent provided herein. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities he holds.
(d) PROCEDURES. If the Company shall request inclusion in any
registration pursuant to Section 1.2 of securities being sold for its own
account, or if other persons shall request inclusion in any registration
pursuant to Section 1.2, the Initiating Holders shall, on behalf of all Holders,
offer to include such securities in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this Section 1
(including Section 1.12). The Company shall (together with all Holders and other
persons proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by a majority
in interest of the Initiating Holders, which underwriters are reasonably
acceptable to the Company. Notwithstanding any other provision of this Section
1.2, if the representative of the underwriters advises the Initiating Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the number of shares to be included in the underwriting or
registration shall be allocated as set forth in Section 1.13 hereof. If a person
who has requested inclusion in such registration as provided above does not
agree to the terms of any such underwriting, such person shall be excluded
therefrom by written notice from the Company, the underwriter or the Initiating
Holders. The securities so excluded shall also be withdrawn from registration.
Any Registrable Securities or other securities excluded shall also be withdrawn
from such registration. If shares are so withdrawn from the registration and if
the number of shares to be included in such registration was previously reduced
as a result of marketing factors pursuant to this Section 1.2(d), then the
Company shall offer to all holders who have retained rights to include
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn,
with such shares to be allocated among such Holders requesting additional
inclusion in accordance with the provisions of Section 1.13.
1.3 COMPANY REGISTRATION.
(a) If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders
exercising their respective demand registration rights (other than pursuant to
Section 1.2 or 1.5 hereof), other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
transaction, or a registration on any registration form that does not permit
secondary sales, the Company will:
(i) promptly give to each Holder written notice
thereof: and
(ii) use its best efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as set
forth in Section 1.3(b) below, and in any underwriting involved therein, all the
Registrable Securities specified in a written recluse or requests made by any
Holder within twenty (20) days after the written notice from the Company
described in clause (i) above is given. Such written request may specify the
inclusion of all or a part of a Holder's Registrable Securities in such
registration.
(b) UNDERWRITING. 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 a part of the written notice given
pursuant to Section 1.3(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.3 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 securities through such underwriting shall
(together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.
Notwithstanding any other provision of this Section 1.3, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. If the registration is the first
Company-initiated registered offering of the Company's
securities to the general public, the Company may limit, to the extent so
advised by the underwriters, the amount of securities (including Registrable
Securities) to be included in the registration by the Company's shareholders
(including the Holders), or may exclude, to the extent so advised by the
underwriters, such underwritten securities entirely from such registration. If
such registration is the second or any subsequent Company-initiated registered
offering of the Company's securities to the general public, the Company may
limit, to the extent so advised by the underwriters, the amount of securities to
be included in the registration by the Company's shareholders (including the
Holders); provided, however, that the aggregate value of securities (including
Registrable Securities) to be included in such registration by the Company's
shareholders (including the Holders) may not be so reduced to less than twenty-
five percent (25%) of the total value of all securities included in such
registration; PROVIDED FURTHER, however, that the aforementioned 25% shall be
reduced, pro rata, to accommodate the comparable rights of Other Shares as
referenced in Section 1.13 of this Agreement.
The Company shall so advise all holders of securities requesting
registration, and the number of securities that are entitled to be included in
the registration and underwriting shall be allocated first to the Company for
securities being sold for its own account and thereafter as set forth in Section
1.13. If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
If shares are so withdrawn from the registration or if the
number of shares of Registrable Securities to be included in such registration
was previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion in accordance
with Section 1.13 hereof.
1.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 1.2, 1.3, and 1.5 hereof, and reasonable fees of one counsel for the
selling shareholders in the case of registrations pursuant to Section 1.2 or
Section 1.3, shall be borne by the Company except as otherwise required by law;
provided, however, that if the Holders bear the Registration Expenses
for any registration proceeding begun pursuant to Section 1.2 and subsequently
withdrawn by the Holders registering shares therein, such registration
proceeding shall not be counted as a requested registration pursuant to Section
1.2 hereof, except in the event that such withdrawal is based upon material
adverse information relating to the Company that is different from the
information known or available (upon request from the Company or otherwise) to
the Holders requesting registration at the time of their request for
registration under Section 1.2, in which event such registration shall not be
treated as a counted registration for purposes of Section 1.2 hereof, even
though the Holders do not bear the Registration Expenses for such registration.
Except as provided in the first sentence of this Section 1.4, all Selling
Expenses relating to securities so registered shall be borne by the holders of
such securities pro rata on the basis of the number of shares of securities so
registered on their behalf.
1.5 REGISTRATION ON FORM S-3.
(a) After its initial public offering, the Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms. After the Company has qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of this Section 1,
the Holders of Registrable Securities shall have the right to request
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
methods of disposition of such shares by such Holder or Holders); provided,
however, that the Company shall not be obligated to effect any such registration
if (i) 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) on Form S-3 at an aggregate price
to the public of less than One Million Dollars ($1,000,000), or (ii) in the
event that the Company shall furnish the certification described in Section
1.2(b) (but subject to the limitations set forth therein) or (iii) in a given
twelve (12)-month period, after the Company has effected two (2) such
registrations in any such period or (iv) it is to be effected more than five (5)
years after the Company's initial public offering.
(b) If a request complying with the requirements of Section 1.5(a)
hereof is delivered to the Company, the provisions of Sections 1.2(a)(i) and
(ii) and Section 1.2(b) hereof shall apply to such registration. If the
registration is for an underwritten offering, the provisions of Sections 1.2(c)
and 1.2(d) hereof shall apply to such registration.
1.6 REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to Section 1, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for a period of one hundred
twenty (120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such 120-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 320-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold. provided that Rule 145, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment that (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (I) and (II) above to be contained in periodic reports filed pursuant to
Section 13 or l5 (d) of the Exchange Act in the registration statement:
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request;
(d) Notify each seller 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 or is incomplete in the light of the circumstances then
existing, and at the request of any such seller, prepare and furnish to such
seller a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in the light of the circumstances then existing;
(e) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
(f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration;
(g) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the Registration Statement,
which earnings statement shall satisfy the provisions of Section ll(a) of the
Securities Act: and
(h) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 1.2 hereof, the Company will
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests the underwriting agreement will contain customary contribution
provisions.
1.7 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 1, and each underwriter, if any, and each
person who
controls within the meaning of Section 15 of the Securities Act any underwriter,
against all expenses, claims, losses, damages, and liabilities (or actions,
proceedings, or settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter and stated
to be specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 1.7(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 has not been
unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and Other shareholders
participating in such registration, and each of their officers, directors, and
partners, and each person controlling such Holder or Other Shareholder, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and such Holders, Other Shareholders, directors, officers, partners,
legal counsel, and accountants, persons, underwriters, or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending or settling any such claim, loss, damage, liability,
or action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular, or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder; provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld). Notwithstanding the foregoing, the liability of
each Holder under this Section 1.7 shall be limited to an amount equal to the
aggregate public offering price of the Registrable Securities sold by such
Holder, unless such liability arises out of or is based upon willful misconduct
by such Holder.
(c) Each party entitled to indemnification under this Section 1.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 1, to the extent such failure is not prejudicial. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.7 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or 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.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
1.8 INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any
registration, qualification, or compliance referred to in this Section 1.
1.9 LIMITATIONS ON REGISTRATION OF ISSUES OF SECURITIES. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of a majority in interest of the Holders, enter into any agreement with any
holder or prospective holder of any securities of the Company giving such holder
or prospective holder any registration rights the terms of which are more
favorable than the registration rights granted to the Holders hereunder.
1.10 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to
(a) Make and keep public information regarding the Company available
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements;
(c) So long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a holder to sell any such
securities without registration.
1.11 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register securities granted to a Holder by the Company under this
Section 1 may be transferred or assigned by a Holder only to (i) a transferee or
assignee of not less than fifty thousand (50,000) shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments for
stock splits, stock dividends, reverse stock splits, and the like) or (ii) an
affiliate of a Holder, provided that the Company is given written notice at the
time of or within a reasonable time after said transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned, and, provided further, that the transferee or assignee of such
rights assumes the obligations of such Holder under this Section 1.
1.12 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, each
Shareholder and Founder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Shareholder
(other than those included in the registration) during the one hundred eighty
(180) day period following the effective date of a registration statement of the
Company filed under the Securities Act, provided that:
(a) such agreement shall only apply to the first such registration
statement of the Company, including securities to be sold on its behalf to the
public in an underwritten offering; and
(b) all Holders and officers and directors of the Company enter into
similar agreements.
The obligations described in this Section 1.12 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 stoptransfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period.
1.13 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any circumstance in
which all of the Registrable Securities and other shares of Common Stock of the
Company (including shares of Common Stock issued or issuable upon conversion of
shares of any currently unissued series of Preferred Stock of the Company) with
registration rights (the "Other Shares") requested to be included in a
registration on behalf of the Holders or other selling shareholders
cannot be so included as a result of limitations on the aggregate number of
shares of Registrable Securities and Other Shares that may be so included, the
number of shares of Registrable Securities and Other Shares that may be so
included shall be allocated among the Holders and other selling shareholders
requesting inclusion of shares pro rata on the basis of the number of shares of
Registrable Securities and Other Shares that would be held by such Holders and
other selling shareholders, assuming conversion into Common Stock; provided,
however, that such allocation shall not operate to reduce the aggregate number
of Registrable Securities and Other Shares to be included in such registration.
If any Holder or other selling shareholder does not request inclusion of the
maximum number of shares of Registrable Securities and Other Shares allocated to
him pursuant to the above-described procedure, the remaining portion of his
allocation shall be reallocated among those requesting Holders and other selling
shareholders whose allocations did not satisfy their requests pro rata on the
basis of the number of shares of Registrable Securities and Other Shares which
would be held by such Holders and other selling shareholders, assuming
conversion into Common Stock, and this procedure shall be repeated until all the
shares of Registrable Securities and Other Shares which may be included in the
registration on behalf of the Holders and other selling shareholders have been
so allocated. The Company shall not limit the number of Registrable Securities
to be included in a registration pursuant to this Agreement in order to include
shares held by shareholders with no registration rights or to include founder's
stock or any other shares of stock issued to employees, officers, directors, or
consultants, or with respect to registrations under Section 1.2 or 1.5 hereof,
in order to include in such registration securities registered for the Company's
own account.
1.14 DELAY OF REGISTRATION. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.15 TERMINATION OF REGISTRATION RIGHTS. The right of any Holder to request
registration or inclusion in any registration pursuant to Section 1.2, 1.3 or
1.5 shall terminate on the closing of the first Company-initiated registered
public offering of Common Stock of the Company, provided that all shares of
Registrable Securities held or entitled to be held upon conversion by such
Holder may immediately be sold under Rule 144 during any 90-day period, or on
such date after the closing of the first Companyinitiated registered public
offering of Common Stock of the Company as all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may immediately be
sold under Rule 144 during any 90-day period; provided, however, that the
provisions
of this Section 1.15 shall not apply to any Holder who owns more than two
percent (2%) of the Company's outstanding stock until the earlier of (x) such
time as such Holder owns less than two percent (2%) of the outstanding stock of
the Company, or (y) the expiration of five (5) years after the closing of the
first registered public offering of Common Stock of the Company.
SECTION 2
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, so long as any Holder owns any
Registrable Securities, as follows:
2.1 BASIC FINANCIAL INFORMATION. The Company will furnish the following
reports to any Holder, so long as such Holder (or its representative) owns at
least 191,000 Shares, or such number of shares of Common Stock issued upon
conversion of 191,000 or more Shares, or any combination thereof (as presently
constituted and subject to subsequent adjustment for stock splits, stock
dividends, reverse stock splits, recapitalizations and the like (a "Significant
Holder"):
(a) As soon as practicable after the end of each fiscal] year of the
Company, and in any event within ninety (90) days thereafter, a consolidated
balance sheet of the Company and its subsidiaries, if any, as at the end of such
fiscal year, and consolidated statements of income and sources and applications
of funds of the Company and its subsidiaries, if any, for such year, prepared in
accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and certified by independent public
accountants of recognized national standing selected by the Company, and a
Company-prepared comparison to the Company's operating plan for such year.
(b) As soon as practicable after the end of the first, second, and
third quarterly accounting periods in each fiscal year of the Company, and in
any event within forty-five (45) days thereafter, a consolidated balance sheet
of the Company and its subsidiaries, if any, as of the end of each such
quarterly period, and consolidated statements of income and sources and
applications of funds of the Company and its subsidiaries for such period and
for the current fiscal year to date, prepared in accordance with generally
accepting accounting principles consistently applied and setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year subject to changes resulting from normal year-end audit adjustments,
all in reasonable detail and certified by the principal financial or accounting
officer of the Company, except that such financial statements need not contain
the notes required by generally accepted accounting principles.
(c) From the date the Company becomes subject to the reporting
requirements of the Exchange Act (which shall include any successor federal
statute), and in lieu of the financial information required pursuant to Sections
2.1(a) and (b), copies of its
annual reports on Form 10-K and its quarterly reports on Form 10-Q,
respectively.
2.2 ADDITIONAL INFORMATION AND RIGHTS.
(a) The Company will permit any Significant Holder (or a
representative of a Significant Holder) to visit and inspect any of the
properties of the Company, including its books of account and other records (and
make copies thereof and take extracts therefrom), and to discuss its affairs,
finances and accounts with the Company's officers and its independent public
accountants, all at such reasonable times and as often as any such person may
reasonably request.
(b) The Company will deliver the reports described below in this
Section 2.2 to each Significant Holder:
(i) Annually (but in any event at least thirty (30) days prior
to the commencement of each fiscal year of the Company) the financial plan of
the Company, in such manner and form as approved by the Board of Directors of
the Company, which financial plan shall include a projection of income and a
projected cash flow statement for such fiscal year and a projected balance sheet
as of the end of such fiscal year. Any material changes in such business plan
shall be submitted as promptly as practicable after such changes have been
approved by the Board of Directors of the Company.
(ii) With reasonable promptness, such other information and data
with respect to the Company and its subsidiaries as any such person may from
time to time reasonably request.
(iii) As soon as practicable after the end of each fiscal year and
in any event within ninety (90) days thereafter, (a) a report from the Company
reporting on compliance with the terms and conditions of this Agreement and any
other agreement pursuant to which the Company has borrowed money or sold its
securities and (b) a copy of the annual management review letter of the
Company's independent public accountants.
(iv) As soon as practicable after transmission or occurrence and
in any event within ten (10) days thereof, copies of any reports or
communications delivered to any class of the Company's security holders or
broadly to the financial community, including any filings by the Company with
any securities exchange, the Securities and Exchange Commission or the National
Association of Securities Dealers, Inc.
(c) The provisions of Section 2.1 and this Section 2.2 shall not be
in limitation of any rights which any Holder or Significant Holder may have with
respect to the books and records of the Company and its subsidiaries, or to
inspect their properties or discuss their affairs, finances and accounts, under
the laws of the jurisdictions in which they are incorporated.
(d) Anything in Section 2 to the contrary notwithstanding, no Holder
or Significant Holder by reason of this Agreement shall have access to any trade
secrets or classified information of the Company. Each Significant Holder hereby
agrees to hold in confidence and trust and not to misuse or disclose any
confidential information provided pursuant to this Section 2.2. The Company
shall not be required to comply with this Section 2.2 in respect of any Holder
whom the Company reasonably determines to be a competitor or an officer,
employee, director or greater than five percent (5%) shareholder of a
competitor.
(e) Each Holder who represents to the Company that it is a "venture
capital operating company" for purposes of Department of Labor Regulation
Section 2510.3-101 shall in addition have the right to consult with and advise
the officers of the Company as to management of the Company.
2.3 RIGHT OF FIRST REFUSAL. The Company hereby grants ;o each of Matrix
Partners II, L.P. ("Matrix"), The ▇▇▇▇▇▇ Organization III, L.P. ("▇▇▇▇▇▇")
and Archive and their respective successors and assignees holding at least
one hundred thousand (100,000) shares of Common Stock of the Company
(assuming conversion into Common Stock of Shares held by it) (Matrix, ▇▇▇▇▇▇
Archive and such successors and assignees are referred to collectively herein
as the "Matrix/▇▇▇▇▇▇/Archive Holders") the right of first refusal to
purchase a pro rata share of New Securities (as defined in this Section 2.3)
which the Company ,may, from time to time, propose to sell and issue. A
Matrix/▇▇▇▇▇▇/Archive Holder's pro rata share, for purposes of this right of
first refusal, is the ratio of the number of shares of Common Stock owned by
such Matrix/▇▇▇▇▇▇/Archive Holder immediately prior to the issuance of New
Securities, assuming conversion into Common Stock of the Shares, to the total
number of shares of Common Stock outstanding immediately prior to the
issuance of New Securities, assuming full conversion of the Shares and
exercise of all outstanding rights, options and warrants to acquire Common
Stock of the Company. Each Matrix/▇▇▇▇▇▇/Archive Holder shall have a right of
over-allotment such that if any Matrix/▇▇▇▇▇▇/Archive Holder fails to
exercise its right hereunder to purchase its pro rata shares of New
Securities, the other Matrix/▇▇▇▇▇▇/Archive Holders may purchase the
nonpurchasing Matrix/▇▇▇▇▇▇/Archive Holder's portion on a pro rata basis
within
ten (10) days from the date such Matrix/▇▇▇▇▇▇/Archive Holders are notified by
the Company that such nonpurchasing Matrix/▇▇▇▇▇▇/Archive Holder has failed to
exercise its right hereunder to purchase its pro rata share of New Securities.
This right of first refusal shall be subject to the following provisions:
(a) "New Securities" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not, and
rights, options or warrants to purchase such capital stock, and securities of
any type whatsoever that are, or may become, convertible into capital stock;
provided that the term "New Securities" does not include (i) securities
purchased under the Series C Agreement: (ii) securities issued upon conversion
of the Shares; (iii) securities issued pursuant to the acquisition of another
business entity or business segment of any such entity by the Company by merger,
purchase of substantially all the assets or other reorganization whereby the
Company will own not less than fifty-one percent (51%) of the voting power of
such business entity or business segment of any such entity; (iv) any
borrowings, direct or indirect, from financial institutions or other persons by
the Company, whether or not presently authorized, including any type of loan or
payment evidenced by any type of debt instrument, provided such borrowings do
not have any equity features including warrants, options or other rights to
purchase capital stock and are not convertible into capital stock of the
Company; (v) securities issued to employees, consultants, officers or directors
of the Company pursuant to any stock option, stock purchase or stock bonus plan,
agreement or arrangement approved by the Board of Directors; (vi) securities
issued to vendors or customers or to other persons in similar commercial
situations with the Company if such issuance is approved by the Board of
Directors; (vii) securities issued in connection with obtaining lease financing,
whether issued to a lessor, guarantor or other person; (viii) securities issued
in a firm commitment underwritten public offering pursuant to a registration
under the Securities Act other than a registration relating solely to a
transaction under Rule 145 under such Act (or any successor thereto) or to an
employee benefit plan of the Company, at a public offering price (prior to
underwriting discounts and expenses) equal to or exceeding Five Dollars and
Twenty Five Cents ($5.25) per share of Common Stock (as adjusted for any stock
dividends, combinations or splits with respect to such shares) and the aggregate
proceeds to the Company and/or any selling shareholders (after deduction for
underwriting discounts but excluding expenses relating to the issuance) of which
exceed Five Million Dollars ($5,000,000) (a "Qualified Public Offering"); (ix)
securities issued in connection with any stock split, stock dividend or
recapitalization of the Company; and (x) any right, option or warrant to acquire
any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections (i)
through (ix) above.
(b) In the event the Company proposes to undertake an issuance of
New Securities, it shall give each Matrix/▇▇▇▇▇▇/ Archive Holder written notice
of its intention, describing the type of New Securities, and their price and the
general terms upon which the Company proposes to issue the same. Each
Matrix/▇▇▇▇▇▇/Archive Holder shall have twenty (20) days after any such notice
is effective to agree to purchase such Matrix/▇▇▇▇▇▇/Archive Holder's pro rata
share of such New Securities for the price and upon the terms specified in the
notice by giving written notice to the Company and stating therein the quantity
of New Securities to be purchased.
(c) In the event a Matrix/▇▇▇▇▇▇/Archive Holder fails to exercise
fully the right of first refusal within said twenty (20) day period and after
the expiration of the ten-day period for the exercise of the over-allotment
provisions of this Section 2.3, the Company shall have one hundred twenty (120)
days thereafter to sell or enter into an agreement (pursuant to which the sale
of New Securities covered thereby shall be closed, if at all, within one hundred
twenty (120) days from the date of said agreement) to sell the New Securities
respecting which said Matrix/▇▇▇▇▇▇/Archive Holder's right of first refusal
option set forth in this Section 2.3 was not exercised, at a price and upon
terms no more favorable to the purchasers thereof than specified in the
Company's notice to the Matrix/▇▇▇▇▇▇/Archive Holders pursuant to Section
2.3(b). In the event the Company has not sold within said 120-day period or
entered into an agreement to sell the New Securities in accordance with the
foregoing within one hundred twenty (120) days from the date of said agreement),
the Company shall not thereafter issue or sell any New Securities, without first
again offering such securities to the Matrix/▇▇▇▇▇▇/Archive Holders in the
manner provided in Section 2.3(b) above.
(d) The right of first refusal granted under this Agreement shall
expire upon, and shall not be applicable to, the first sale of Common Stock of
the Company to the public effected pursuant to a Qualified Public Offering, as
defined in Section 2.3(a)(viii) above.
2.4 TRANSACTIONS WITH AFFILIATES. The Company shall not, without the
approval of the disinterested members of the Company's Board of Directors,
engage in any loans, leases, contracts or other transactions with any director,
officer or key employee of the Company, or any member of any such person's
immediate family, including the parents, spouse, children and other relatives of
any such person, on terms less favorable than the Company would obtain
in a transaction with an unrelated party, as determined in good faith by the
Board of Directors.
2.5 TERMINATION OF COVENANTS. The covenants set forth in this Section
2 shall terminate and be of no further force and effect after the time of
effectiveness of the Company's first Qualified Public offering, as defined in
Section 2.3(a)(viii) above.
SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of California, as if entered into by and between California
residents exclusively for performance entirely within California.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.3 ENTIRE AGREEMENT: AMENDMENT: WAIVER. This Agreement (including the
Exhibits hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated,
except by a written instrument signed by the Company and the holders of at least
seventy-five percent (75%) of the Registrable Securities and any such amendment,
waiver, discharge or termination shall be binding on all the Holders; provided,
however, that in no event shall the obligations of any Holder hereunder be
materially increased, except upon the written consent of such Holder; and,
provided further, that the provisions of Section 2.4(b) hereof may not be
amended waived, discharged or terminated without the written consent of Archive.
3.4 NOTICES. ETC., All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, or delivered personally addressed by hand or
special courier (a) if to a Holder or Founder, as indicated on the list of
Holders and Founders attached hereto as Exhibit A, or at such other address as
such Holders or permitted assignee shall have furnished to the Company in
writing, or (b) if to the Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, or at such other address as the Company shall have furnished to each
Holder in writing. All such notices and other written communications shall be
effective (i) if mailed, five (5) days after mailing and (ii) if delivered, upon
delivery.
3.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any Holder, upon any breach or default of the Company
under this Agreement shall impair any such right, power or remedy of such Holder
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder of any breach or default under this
Agreement or any waiver on the part of any Holder of any provisions or
conditions of this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
3.6 RIGHTS. SEPARABILITY. Unless otherwise expressly provided herein, a
Holder's rights hereunder are several rights, not rights jointly held with any
of the other Holders. 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.
3.7 INFORMATION CONFIDENTIAL. Each Holder acknowledges that the information
received by it pursuant hereto may be confidential and for its use only, and it
will not use such confidential information in violation of the Exchange Act or
reproduce, disclose or disseminate such information to any other person (other
than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body.
3.8 TITLES AND SUBTITLES. The titles of the sections and paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
3.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Investors' Rights 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 Investors' Rights 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.
3.10 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.
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement effective as of the day and year first above written.
OVERLAND DATA INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE ▇▇▇▇▇▇ ORGANIZATION III L.P.
By: ▇▇▇▇▇▇ Partner L.P.,
General Partner
By:
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MATRIX PARTNERS II, L.P.
By:
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
FOUNDERS:
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Address:
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/s/▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as Trustee for the ▇▇▇▇▇▇▇▇ Family Trust By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Under Power of Attorney
Address:
-------------------
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---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
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WS INVESTMENT COMPANY 92B
By:
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Title:
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Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Address: ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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ARCHIVE CORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A TO
INVESTORS' RIGHTS AGREEMENT
1. THE ▇▇▇▇▇▇ ORGANIZATION III L.P.
2. MATRIX PARTNERS II L.P.
3. SHAREHOLDERS PARTY TO THE INVESTORS' RIGHTS AGREEMENT DATED AS OF MAY
30, 1989 AMONG THE COMPANY AND THE FOUNDERS AND SHAREHOLDERS
REFERENCED THEREIN
4. FOUNDERS
5. WS INVESTMENT COMPANY 92B
6. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
7. ▇▇▇▇▇▇ ▇▇▇▇▇▇
8. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
9. ARCHIVE CORPORATION