LENDINGCLUB CORPORATION AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT MARCH 13, 2009
EXHIBIT 99.2
Final Execution Version
LENDINGCLUB CORPORATION
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT
MARCH 13, 2009
LENDINGCLUB CORPORATION
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (the “Agreement”) is entered into
as of the 13th day of March 2009, by and among LendingClub Corporation, a
Delaware corporation (the “Company”) and the investors listed on Exhibit A hereto, referred
to hereinafter as the “Investors” and each individually as an “Investor.”
Recitals
Whereas, certain Investors (the “Prior Investors”) are holders of outstanding shares
of the Company’s Series A Preferred Stock (the “Series A Stock”) issued by the Company to such
Prior Investors pursuant to the Series A Preferred Stock Purchase Agreement by and among the
Company and the Prior Investors dated August 21, 2007, as amended from time to time, and have also
been granted certain registration rights, information rights and other rights under that certain
Investor’ Rights Agreement by and among the Company and the Prior Investors dated August 21, 2007
(the “Prior Agreement”);
Whereas, certain Investors (the “Series B Investors”) have agreed to purchase shares
of the Company’s Series B Preferred Stock (the “Series B Stock” together with the Series A Stock
the “Preferred Stock”) pursuant to that certain Series B Preferred Stock Purchase Agreement (the
“Purchase Agreement”) of even date herewith (the “Financing”);
Whereas, the obligations in the Purchase Agreement are conditioned upon the execution
and delivery of this Agreement by the Investors and the Company; and
Whereas, in connection with the consummation of the Financing, the Company and Prior
Investors hereby agree that the Prior Agreement shall be amended and restated in its entirety by
this Agreement, and the parties hereto desire to enter into this Agreement in order to grant
registration, information rights and other rights to the Investors as set forth below.
Now, Therefore, in consideration of these premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Agreement
SECTION 1. GENERAL.
1.1 Definitions. As used in this Agreement the following terms shall have the following
respective meanings:
(a) “Acquisition” shall have the meaning ascribed to such term in the Company’s Amended and
Restated Certificate of Incorporation as in effect on the date hereof.
(b) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(c) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any
successor or similar 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.
(d) “Holder” means any person owning of record Registrable Securities that have not been sold
to the public or any assignee of record of such Registrable Securities in accordance with Section
2.9 hereof.
(e) “Initial Offering” means the Company’s first firm commitment underwritten public offering
of its Common Stock registered under the Securities Act.
(f) “Major Investor” means an Investor that, together with its affiliates, including
investment funds under common management, owns at least 2,000,000 shares of Registrable Securities;
provided, however, that Bay Partners XI, L.P., and its affiliated funds (collectively, “Bay
Partners”) shall be deemed to be a Major Investor for the purposes of this Agreement, so long as
Bay Partners holds at least 900,000 shares of Registrable Securities.
(g) “Qualified Public Offering” shall have the meaning ascribed to such term in the Company’s
Amended and Restated Certificate of Incorporation as in effect on the date hereof.
(h) “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.
(i) “Registrable Securities” means:
(1) Common Stock of the Company issuable or issued upon conversion of the Shares;
(2) 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;
(3) shares of Common Stock that are issued or issuable upon conversion of the Preferred Stock
issuable upon the exercise of those certain Warrants to Purchase Stock held by SVB Financial Group
(“SVB”) dated October 29, 2007 and October 7, 2008, respectively (each an “SVB Warrant” and
collectively, the “SVB Warrants”) solely with respect to Sections 2.1, 2.3, 2.4 through 2.8, 2.11,
2.12, 2.13, 2.14, and 5.1 through 5.13 hereof (in all cases only to the extent related to a
registration pursuant to Sections 2.3 and 2.4 hereof; provided, that SVB’s obligations under
Section 2.11 of this Agreement exist independently of any registration under Sections 2.3 or 2.4
hereof) (it being acknowledged that in connection with any amendment or restatement of such
sections or this Agreement, the number of shares of the Company’s capital stock issuable to SVB
upon exercise of the SVB Warrants will not be counted or included as shares entitled to participate
in any vote, agreement or consent approving same for so long as such SVB Warrant has not been
exercised with respect to such shares). SVB agrees to
be bound by and comply with Sections 2.1 (provided that the restrictions on transfer in
Section 2.1 shall only be applicable to the shares issued upon exercise of the SVB Warrants but
shall not restrict the transfer of the SVB Warrants themselves), 2.3, 2.4 through 2.8, 2.11, 2.12,
2.13, 2.14, and 5.1 through 5.13 of this Agreement (in all cases only to the extent related to a
registration pursuant to Sections 2.3 or 2.4 hereof); and
2
(4) shares of Common Stock that are issued or issuable upon conversion of the Preferred Stock
issuable upon the exercise of that certain Warrant to Purchase Stock held by Gold Hill Venture
Lending 03, LP (“Gold Hill”) dated February 19, 2008 (the “Gold Hill Warrant”) solely with respect
to Sections 2.1, 2.3, 2.4 through 2.8, 2.11, 2.12, 2.13, 2.14, and 5.1 through 5.13 of the hereof
(in all cases only to the extent related to a registration pursuant to Sections 2.3 and 2.4 hereof;
provided, that Gold Hill’s obligations under Section 2.11 of this Agreement exist independently of
any registration under Sections 2.3 or 2.4 hereof) (it being acknowledged that in connection with
any amendment or restatement of such sections or this Agreement, the number of shares of the
Company’s capital stock issuable to Gold Hill upon exercise of the Gold Hill Warrant will not be
counted or included as shares entitled to participate in any vote, agreement or consent approving
same for so long as such Gold Hill Warrant has not been exercised with respect to such shares).
Gold Hill agrees to be bound by and comply with Sections 2.1 (provided that the restrictions on
transfer in Section 2.1 shall only be applicable to the shares issued upon exercise of the Gold
Hill Warrant but shall not restrict the transfer of the Gold Hill Warrant itself), 2.3, Sections
2.4 through 2.8, 2.11, 2.12, 2.13, 2.14, and 5.1 through 5.13 of this Agreement (in all cases only
to the extent related to a registration pursuant to Sections 2.3 or 2.4 hereof).
Notwithstanding the foregoing, Registrable Securities shall not include any securities (i)
sold by a person to the public either pursuant to a registration statement or Rule 144 or (ii) sold
in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not
assigned
(j) “Registrable Securities then outstanding” shall be the number of shares of the Company’s
Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b)
are issuable pursuant to then exercisable or convertible securities.
(k) “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Sections 2.2, 2.3 and 2.4 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).
(l) “SEC” or “Commission” means the Securities and Exchange Commission.
(m) “Securities Act” shall mean the Securities Act of 1933, as amended.
3
(n) “Selling Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale.
(o) “Shares” shall mean the Company’s Preferred Stock held by the Investors listed on
Exhibit A hereto and their permitted assigns.
(p) “Special Registration Statement” shall mean (i) a registration statement relating to any
employee benefit plan or (ii) with respect to any corporate reorganization or transaction under
Rule 145 of the Securities Act, any registration statements related to the issuance or resale of
securities issued in such a transaction or (iii) a registration related to stock issued upon
conversion of debt securities.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any portion of the Shares or
Registrable Securities unless and until:
(i) there is then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such registration statement;
or
(ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B)
such Holder shall have notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (C) if requested by the Company, such Holder shall have furnished the Company with an opinion
of counsel, reasonably satisfactory to the Company, that such disposition will not require
registration of such shares under the Securities Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144, except in unusual
circumstances. After its Initial Offering, the Company will not require any transferee pursuant to
Rule 144 to be bound by the terms of this Agreement if the shares so transferred do not remain
Registrable Securities hereunder following such transfer.
(b) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to
a transfer by a Holder that is (A) a partnership transferring to any affiliated partnership or to
its partners or former partners in accordance with partnership interests, (B) a corporation
transferring to any affiliated corporation or to a wholly-owned subsidiary or a parent corporation
that owns all of the capital stock of the Holder, (C) a limited liability company transferring to
any affiliated limited liability company or to its members or former members in accordance with
their interest in the limited liability company, or (D) an individual transferring to the Holder’s
family member or trust for the benefit of an individual Holder; provided that in each case the
transferee will agree in writing to be subject to the terms of this Agreement to the same extent as
if he were an original Holder hereunder.
4
(c) Each certificate representing Shares or Registrable Securities shall be stamped or
otherwise imprinted with legends substantially similar to the following (in addition to any legend
required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE
STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
(d) The Company shall be obligated to reissue promptly unlegended certificates at the request
of any Holder thereof if the Company has completed its Initial Offering and 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 and legend, provided that the second legend listed
above shall be removed only at such time as the Holder of such certificate is no longer subject to
any restrictions hereunder.
(e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be removed upon receipt by the
Company of an order of the appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company shall receive a written
request from the Holders of a majority of the Registrable Securities (the “Initiating Holders”)
that the Company file a registration statement under the Securities Act covering the registration
of a majority of the Registrable Securities then outstanding and for which the anticipated
aggregate offering price, net of underwriting discounts and commissions, would exceed $10,000,000,
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 this Section 2.2, use reasonable best
efforts to effect, as expeditiously as reasonably possible, the registration under the Securities
Act of all Registrable Securities that all Holders request to be registered.
5
(b) 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 2.2 or any request pursuant to Section 2.4 and the Company shall
include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as
applicable. In such event, the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or underwriters selected for
such underwriting by the Company, subject to the approval of the Holders of at least fifty-five
percent (55%) of the Registrable Securities held by all Initiating Holders, which approval shall
not be unreasonably withheld or delayed. Notwithstanding any other provision of this Section 2.2
or Section 2.4, if the underwriter advises the Company 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 that would otherwise be underwritten pursuant
hereto, and the number of shares that may be included in the underwriting shall be allocated to the
Holders of such Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders); provided, however, that the
number of shares of Registrable Securities to be included in such underwriting and registration
shall not be reduced unless all other securities of the Company are first entirely excluded from
the underwriting and registration. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration pursuant to this Section 2.2:
(i) prior to the earlier of (A) the third anniversary of the date of this Agreement or (B) the
expiration of the restrictions on transfer set forth in Section 2.11 following the Initial
Offering;
(ii) after the Company has effected two (2) registrations pursuant to this Section 2.2, and
such registrations have been declared or ordered effective;
(iii) 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
the Initial Offering (or such longer period as may be determined pursuant to Section 2.11 hereof);
provided that the Company makes reasonable good faith efforts to cause such registration statement
to become effective;
(iv) if within thirty (30) days after receipt of a written request from Initiating Holders
pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to
file a registration statement for its Initial Offering within ninety (90) days;
6
(v) if the Company shall furnish to Holders requesting a registration statement pursuant to
this Section 2.2 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
detrimental to the Company and its stockholders for such registration statement to be effected at
such time, in which event 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 not more than once in any twelve
(12) month period;
(vi) if the Initiating Holders propose to dispose of shares of Registrable Securities that may
be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or
(vii) 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.
2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities
in writing at least fifteen (15) days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of securities of the Company,
but excluding registration pursuant to Sections 2.2 and 2.4 and Special Registration Statements)
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
fifteen (15) days after the above-described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition of the Registrable Securities
by such 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.
(a) Underwriting. If the registration statement of which the Company gives notice under this
Section 2.3 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 include Registrable Securities in a
registration pursuant to this Section 2.3 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 by the Company. Notwithstanding any
other provision of this 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 and, second, to the
Holders on a pro rata basis based on the total number of Registrable Securities held by the
Holders; provided, however, that no such reduction shall reduce the amount of securities of the
selling Holders included in the registration below thirty percent (30%) of the total amount of
securities included in such registration,
7
unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be
excluded in accordance with the immediately preceding clause. In no event will shares of any other
selling stockholder be included in such registration if the inclusion of such shares would reduce
the number of shares that may be included by Holders without the written consent of Holders of not
less than sixty-six and two-thirds percent (66-2/3%) of the Registrable Securities proposed to be
sold in the offering. If any Holder disapproves of the terms of any such underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at
least ten (10) business days prior to the effective date of the registration statement. Any
Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a partnership, limited liability company or
corporation, the partners, retired partners, members, retired members and stockholders of such
Holder, or the estates and family members of any such partners, retired partners, members and
retired members and any trusts for the benefit of any of the foregoing person shall be deemed to be
a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities and individuals
included in such “Holder,” as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.3 whether or not any Holder has
elected to include securities in such registration, and shall promptly notify any Holder that has
elected to include shares in such registration of such termination or withdrawal. The Registration
Expenses of such withdrawn registration shall be borne by the Company in accordance with Section
2.5 hereof.
2.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of
Registrable Securities a written request or requests that the Company effect a registration on Form
S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders of Registrable Securities; and
(b) as soon as practicable, use reasonable best efforts to 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 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 2.4:
(i) if Form S-3 is not available for such offering by the Holders, or
(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 one million
dollars ($1,000,000);
8
(iii) if within thirty (30) days after receipt of a written request from any Holder or
Holders pursuant to this Section 2.4, the Company gives notice to such Holder or Holders of the
Company’s intention to make a public offering within ninety (90) days, other than pursuant to a
Special Registration Statement;
(iv) 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 detrimental to the Company and its stockholders 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 2.4; provided, that such
right to delay a request shall be exercised by the Company not more than once in any twelve (12)
month period; 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.
(c) Subject to the foregoing, the Company shall use its reasonable best efforts to 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 requests of the Holders. Registrations
effected pursuant to this Section 2.4 shall not be counted as demands for registration or
registrations effected pursuant to Section 2.2.
2.5 Expenses of Registration. Except as specifically provided herein, all Registration
Expenses incurred in connection with any registration, qualification or compliance pursuant to
Section 2.2, 2.3 or 2.4 herein shall be borne by the Company, including the expense of one special
counsel of the selling Holders not to exceed Twenty-Five Thousand Dollars ($25,000.00). All
Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the
holders of the securities so registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.2 or 2.4, 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 at least fifty-five percent (55%) of Registrable Securities
agree to deem such registration to have been effected as of the date of such withdrawal for
purposes of determining whether the Company shall be obligated pursuant to Section 2.2(c)(ii) to
undertake any subsequent registration, 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 clause (a) above, then such
registration shall not be deemed to have been effected for purposes of
determining whether the Company shall be obligated pursuant to Section 2.2(c)(ii) to undertake
any subsequent registration.
9
2.6 Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities, the Company shall use its reasonable best efforts to, as expeditiously as
reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and cause such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep such registration
statement effective for up to sixty (60) days or, if earlier, until the Holder or Holders have
completed the distribution related thereto; provided, however, that at any time, upon written
notice to the participating Holders and for a period not to exceed ninety (90) days thereafter (the
“Suspension Period”), the Company may delay the filing or effectiveness of any registration
statement or suspend the use or effectiveness of any registration statement (and the Initiating
Holders hereby agree not to offer or sell any Registrable Securities pursuant to such registration
statement during the Suspension Period) if the Company reasonably believes that there is or may be
in existence material nonpublic information or events involving the Company, the failure of which
to be disclosed in the prospectus included in the registration statement could result in a
Violation (as defined below). In the event that the Company shall exercise its right to delay or
suspend the filing or effectiveness of a registration hereunder, the applicable time period during
which the registration statement is to remain effective shall be extended by a period of time equal
to the duration of the Suspension Period. The Company may extend the Suspension Period for an
additional consecutive ninety (90) days with the consent of the holders of at least fifty-five
percent (55%) of the Registrable Securities registered under the applicable registration statement.
No more than two (2) such Suspension Periods shall occur in any twelve (12) month period. In no
event shall any Suspension Period, when taken together with all prior Suspension Periods, exceed
one hundred eighty (180) days in the aggregate. If so directed by the Company, all Holders
registering shares under such registration statement shall (i) not offer to sell any Registrable
Securities pursuant to the registration statement during the period in which the delay or
suspension is in effect after receiving notice of such delay or suspension; and (ii) use their
reasonable best efforts to deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holders’ possession, of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice. Notwithstanding the
foregoing, the Company shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement other than a registration statement on Form S-3 (or any
comparable or successor form or forms) that contemplates a distribution of securities on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act.
(b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for the period set forth in subsection (a)
above.
10
(c) Furnish to the Holders such number of copies of a 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.
(d) 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.
(e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(f) When the Company has knowledge, 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 and
amend or supplement such prospectus in order to cause such prospectus not to include any 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 in the light of the circumstances then
existing.
(g) Furnish, on the date that such Registrable Securities are delivered to the underwriters
for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public offering, addressed to
the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering addressed to the
underwriters.
(h) 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.
(i) 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.
(j) 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 (12) months, but not more than eighteen (18) months,
beginning with the first month after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.
11
2.7 Delay of Registration; Furnishing Information.
(a) 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 Section 2.
(b) It shall be a condition precedent to the obligations of the Company to take any action
pursuant to Section 2.2, 2.3 or 2.4 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.
(c) The Company shall have no obligation with respect to any registration requested pursuant
to Section 2.2 or Section 2.4 if the number of shares or the anticipated aggregate offering price
of the Registrable Securities to be included in the registration does not equal or exceed the
number of shares or the anticipated aggregate offering price required to originally trigger the
Company’s obligation to initiate such registration as specified in Section 2.2 or Section 2.4,
whichever is applicable.
2.8 Indemnification. In the event any Registrable Securities are included in a registration
statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
the partners, members, 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 Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the Securities Act, the
Exchange 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 or
incorporated by reference therein, including any prospectus or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities
law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, member, officer, director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner, member, officer,
director, underwriter or controlling person of such Holder.
12
(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration qualifications or compliance is
being effected, indemnify and hold harmless the Company, each of its directors, its officers and
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
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any of the following statements: (i)
any untrue statement or alleged untrue statement of a material fact contained in such registration
statement or incorporated by reference therein, including any prospectus 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 (collectively, a “Holder
Violation”), in each case to the extent (and only to the extent) that such Holder Violation occurs
in reliance upon and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and 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 Holder Violation; provided, however, that the indemnity agreement
contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall
any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such
Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 2.8,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses thereof 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 shall relieve such
indemnifying party of any liability to the indemnified party under this Section 2.8 to the extent,
and only to the extent, prejudicial to its ability to defend such action, 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 2.8.
13
(d) If the indemnification provided for in this Section 2.8 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the Violation(s) or Holder
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; provided, that in no event shall any contribution by a Holder hereunder,
together with any amount paid or required to be paid pursuant to Section 2.8(b) above, exceed the
net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 2.8 shall survive completion
of any offering of Registrable Securities in a registration statement and, with respect to
liability arising from an offering to which this Section 2.8 would apply that is covered by a
registration filed before termination of this Agreement, such termination. No indemnifying party,
in the defense of any such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.
2.9 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or
assignee of Registrable Securities (for so long as such shares remain Registrable Securities) that
(a) is a subsidiary, parent, affiliated fund, general partner, limited partner, retired partner,
member or retired member, or stockholder of a Holder that is a corporation, partnership or limited
liability company, (b) is a Holder’s family member or trust for the benefit of an individual
Holder, (c) following such transfer is a Major Investor, or (d) is an entity affiliated by common
control (or other related entity) with such Holder; provided, however, (i) the transferor shall,
within ten (10) days after such transfer, furnish to the Company 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 (ii) such transferee shall agree to be subject to all restrictions
set forth in this Agreement.
14
2.10 Limitation on Subsequent Registration Rights. After the date of this Agreement, the
Company shall not enter into any agreement with any holder or prospective
holder of any securities of the Company that would grant such holder rights to include such
shares in a registration statement that would reduce the number of shares includable by the Holders
unless consented to by the Holders of at least fifty-five percent (55%) of the Registrable
Securities then outstanding.
2.11 “Market Stand-Off” Agreement. Each Holder hereby agrees that such Holder shall not sell,
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the registration)
during the 180-day period following the effective date of the Initial Offering (or such longer
period, not to exceed 18 days after the expiration of the 180-day period, as the underwriters or
the Company shall request in order to facilitate compliance with NASD Rule 2711); provided, that
all officers, directors and holders of at least one percent (1%) of the Company’s voting securities
are bound by and have entered into similar agreements. The obligations described in this Section
2.11 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 transaction on Form S-4 or similar forms that may be promulgated in the future.
2.12 Agreement to Furnish Information. Each Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter that are consistent
with the Holder’s obligations under Section 2.11 or that are necessary to give further effect
thereto. In addition, if requested by the Company or the representative of the underwriters of
Common Stock (or other securities) of the Company, each Holder shall provide, within ten (10) days
of such request, such information as may be required by applicable law in connection with the
completion of any public offering of the Company’s securities pursuant to a registration statement
filed under the Securities Act. The obligations described in Section 2.11 and this Section 2.12
shall not apply to a Special Registration Statement. 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 180-day period. Each Holder agrees that any transferee
of any shares of Registrable Securities shall be bound by Sections 2.11 and 2.12. The underwriters
of the Company’s stock are intended third party beneficiaries of Sections 2.11 and 2.12 and shall
have the right, power and authority to enforce the provisions hereof as though they were a party
hereto.
2.13 Rule 144 Reporting. With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to
the public without registration, the Company agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and
15
(c) so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request: a written statement by the Company as to its compliance with the reporting requirements
of said Rule 144 of the Securities Act, and of 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 filed with the Commission; and such other reports and documents as a Holder may
reasonably request in connection with availing itself of any rule or regulation of the SEC allowing
it to sell any such securities without registration.
2.14 Termination of Registration Rights. The right of any Holder to request registration or
inclusion of Registrable Securities in any registration pursuant to Section 2.2, Section 2.3, or
Section 2.4 hereof shall terminate upon the earlier of: (i) the date three (3) years following an
initial public offering that results in the automatic conversion of all outstanding shares of
Preferred Stock; or (ii) such time as such Holder, as reflected on the Company’s list of
stockholders, holds less than one percent (1%) of the Company’s outstanding Common Stock (treating
all shares of Preferred Stock on an as converted basis), the Company has completed its Initial
Offering and all Registrable Securities of the Company issuable or issued upon conversion of the
Shares held by and issuable to such Holder (and its affiliates) may be sold pursuant to Rule 144
during any ninety (90) day period. Upon such termination, such shares shall cease to be
“Registrable Securities” hereunder for all purposes.
SECTION 3. COVENANTS OF THE COMPANY.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain proper books and records of account in accordance with generally
accepted accounting principles consistently applied (except as noted therein), including all such
proper accruals and reserves as shall be required under generally accepted accounting principles
consistently applied.
(b) So long as an Investor holds shares of Preferred Stock or shares of Common Stock issued
upon conversion thereof, the Company shall:
(i) as soon as practicable after the end of each fiscal year of the Company, and in any event
within ninety (90) days thereafter (or such shorter period as required by the rules and regulations
of the Exchange Act for filing the Company’s annual report on Form 10-K), furnish such Investor a
balance sheet of the Company, as at the end of such fiscal year, and a statement of income and a
statement of cash flows of the Company, for such year, all prepared in accordance with generally
accepted accounting principles consistently applied (except as noted therein) 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; and
(ii) furnish such Investor, 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 balance sheet of the Company as of the end of each such
quarterly period, and a statement of income and a statement of cash flows of the
Company for such period and for the current fiscal year to date, prepared in accordance with
generally accepted accounting principles consistently applied (except as noted therein), with the
exception that no notes need be attached to such statements and year-end audit adjustments may not
have been made.
16
(c) 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 and operating plans for such fiscal year (and as
soon as available, any subsequent written revisions thereto); and (ii) as soon as practicable after
the end of each month, and in any event within thirty (30) days thereafter, a balance sheet of the
Company as of the end of each such month, and a statement of income and a statement of cash flows
of the Company for such month and for the current fiscal year to date, including a comparison to
plan figures for such period, prepared in accordance with generally accepted accounting principles
consistently applied (except as noted thereon), with the exception that no notes need be attached
to such statements and year-end audit adjustments may not have been made.
3.2 Inspection Rights. Each 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, and to review such
information as is reasonably requested, all with reasonable prior notice and at such reasonable
times during normal business hours 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 or attorney-client privileged and should not, therefore, be disclosed.
3.3 Confidentiality of Records. Each Investor agrees to use at least the same degree of care
as such Investor uses to protect its own confidential information but in no event less than
reasonable due care to keep confidential any information furnished to such Investor pursuant to
Section 3.1 and 3.2 hereof that the Company identifies as being confidential or proprietary (so
long as such information is not in the public domain), except that such Investor may disclose such
proprietary or confidential information (i) to any partner, subsidiary or parent of such Investor
as long as such partner, subsidiary or parent is advised of and has agreed to be bound by the
confidentiality provisions of this Section 3.3 or comparable restrictions; (ii) at such time as it
enters the public domain through no fault of such Investor; (iii) that is communicated to it free
of any obligation of confidentiality; (iv) that is developed by Investor or its agents
independently of and without reference to any confidential information communicated by the Company;
or (v) as required by applicable law.
3.4 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.
17
3.5 Stock Vesting. Unless otherwise approved by the Board of Directors (including a
representative of the holders of Preferred Stock), 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: (a) 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 (b) seventy-five percent (75%) of such
stock shall vest monthly over the remaining three (3) years. If employees are permitted to
purchase (by exercise of an option or otherwise) unvested shares, the Company shall have the right
to repurchase such unvested shares, and the repurchase option shall provide that upon termination
of service by the stockholder, with or without cause, the Company or its assignee (to the extent
permissible under applicable securities law qualification) retains the option to repurchase at cost
any unvested shares held by such holder.
3.6 Director and Officer Insurance. As soon as practicable following the Closing (as defined
in the Purchase Agreement), but in no event later then ninety (90) days thereafter, the Company
shall add the Series B Director (as defined in the Company’s Amended and Restated Certificate as in
effect on the date hereof) to the Company’s director and officer liability insurance policy.
3.7 Proprietary Information and Inventions Agreement. The Company shall require all employees
and consultants to execute and deliver a Proprietary Information and Inventions Agreement
substantially in a form approved by the Company’s counsel or Board of Directors.
3.8 Assignment of Right of First Refusal. In the event the Company elects not to exercise any
right of first refusal or right of first offer the Company may have on a proposed transfer of any
of the Company’s outstanding capital stock pursuant to the Company’s charter documents, by contract
or otherwise, the Company shall, unless otherwise prohibited by applicable law, assign such right
of first refusal or right of first offer to each Major Investor. In the event of such assignment,
each Major Investor shall have a right to purchase its pro rata portion of the capital stock
proposed to be transferred. Each Major Investor’s pro rata portion shall be equal to the product
obtained by multiplying (i) the aggregate number of shares proposed to be transferred by (ii) a
fraction, the numerator of which is the number of shares of Registrable Securities held by such
Major Investor at the time of the proposed transfer and the denominator of which is the total
number of Registrable Securities owned by all Major Investors at the time of such proposed
transfer. Notwithstanding the foregoing, in the event that this Section 3.8 conflicts with the
terms of that certain Amended and Restated Right of First Refusal by and between the Company and
the other parties thereto of even date herewith (the “Co-Sale Agreement”), the terms of the Co-Sale
Agreement shall govern.
3.9 Directors’ Liability and Indemnification. The Company’s Certificate of Incorporation and
Bylaws shall provide (a) for elimination of the liability of directors to the maximum extent
permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the
maximum extent permitted by law. In addition, the Company shall enter into and use its reasonable
best efforts to at all times maintain indemnification agreements substantially in the form attached
to the Purchase Agreement as an exhibit with each of its directors to indemnify such directors to
the maximum extent permissible under applicable law.
18
3.10 Qualified Small Business. The Company will use reasonable best efforts to comply with
the reporting and recordkeeping requirements of Section 1202 of the Internal Revenue Code of 1986,
as amended (the “Code”), any regulations promulgated thereunder and
any similar state laws and regulations, and agrees not to repurchase any stock of the Company
if such repurchase would cause the Shares not to so qualify as “Qualified Small Business Stock,” so
long as the Company’s Board of Directors determines that it is in the best interests of and not
unduly burdensome to the Company to comply with the provisions of Section 1202 of the Code.
3.11 Reimbursement of Board of Director Expenses. The Company shall reimburse each member of
the Company’s Board of Directors for his or her reasonable out-of-pocket travel costs incurred in
attending meetings of the Board of Directors and other meetings or events attended at the request
of and on behalf of the Company.
3.12 Approval. (a) Without the prior approval of the Board of Directors, the Company shall
not (i) spend more than two hundred fifty thousand dollar ($250,000) on any single item or series
of related items, (ii) incur any debt or guarantee any liability in excess of one hundred thousand
dollars ($100,000), (iii) make any loan, or (iv) enter into any agreement with any party affiliated
with the Company or its officers, directors or stockholders; and (b) without the prior unanimous
approval of the Board of Directors, the Company shall not make any voluntary petition for
bankruptcy or assignment for the benefit of creditors.
3.13 Termination of Covenants. All covenants of the Company contained in Section 3 of this
Agreement (other than the provisions of Section 3.3, 3.6 and 3.9) shall expire and terminate as to
each Investor upon a Qualified Public Offering.
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings. Subject to applicable securities laws, each Major 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, propose to sell and issue after the date of this
Agreement, other than the Equity Securities excluded by Section 4.6 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 issuable or issued upon conversion of the Shares or upon the
exercise of outstanding warrants or options) of which such Investor is deemed to be 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 or upon the exercise of any outstanding warrants or options)
immediately prior to the issuance of the Equity Securities. The term “Equity Securities” shall
mean (i) any Common Stock, Preferred Stock or other security of the Company, (ii) any security
convertible into or exercisable or exchangeable for, with or without consideration, any Common
Stock, Preferred Stock or other security of the Company (including any option to purchase such a
convertible security), (iii) any security carrying any warrant or right to subscribe to or purchase
any Common Stock, Preferred Stock or other security of the Company and (iv) any such warrant or
right.
19
4.2 Exercise of Rights. If the Company proposes to issue any Equity Securities, it shall give
each Major 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 Major
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 Major Investor who would cause the Company
to be in violation of applicable federal securities laws by virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons. If not all of the Major Investors elect
to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify
in writing the Major Investors who do so elect and shall offer such Major Investors the right to
acquire such unsubscribed shares on a pro rata basis. The Major Investors shall have five (5) days
after receipt of such notice to notify the Company of its election to purchase all or a portion
thereof of the unsubscribed shares. The Company shall have ninety (90) days thereafter to sell the
Equity Securities in respect of which the Major Investor’s rights were not exercised, at a price
not lower and upon general terms and conditions not materially more favorable to the purchasers
thereof than specified in the Company’s notice to the Major Investors pursuant to Section 4.2
hereof. If the Company has not sold such Equity Securities within ninety (90) days of the notice
provided pursuant to Section 4.2, the Company shall not thereafter issue or sell any Equity
Securities, without first offering such securities to the Major Investors in the manner provided
above.
4.4 Termination and Waiver of Rights of First Refusal. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon a Qualified Public
Offering. Notwithstanding Section 5.5 hereof, the rights of first refusal established by this
Section 4 may be amended, or any provision waived with and only with the written consent of the
Company and the Major Investors holding at least fifty-five percent (55%) of the Registrable
Securities held by all Major Investors.
4.5 Assignment of Rights of First Refusal. The rights of first refusal of each Major Investor
under this Section 4 may be assigned to the same parties and subject to the same restrictions as
any transfer of registration rights pursuant to Section 2.9.
4.6 Excluded Securities. The rights of first refusal established by this Section 4 shall have
no application to any of the following Equity Securities:
(a) up to an aggregate of 6,548,000 shares (provided, however, that such number shall be
increased to reflect any shares of Common Stock (i) not actually issued pursuant to the rights,
agreements, option or warrants (“Unexercised Options”) as a result of the termination of such
Unexercised Options or (ii) reacquired by the Company from employees, directors or consultants at
cost (or the lesser of cost or fair market value) pursuant to agreements which permit the Company
to repurchase such shares upon termination of services to the Company) of Common Stock and/or
options, warrants or other Common Stock purchase rights and the Common Stock issued pursuant to
such options, warrants or other rights (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like after the date hereof) previously issued or to be issued after the
date hereof to employees, officers or directors of, or consultants or advisors to, the Company or
any subsidiary pursuant to (x) the 2007 Stock Incentive Plan of the Company or (y) stock purchase
or stock option plans or other arrangements that are approved by the Board of Directors (including
at least a majority of the Preferred
Directors (as defined in the Company’s Amended and Restated Certificate of Incorporation as in
effect on the date hereof)) (the “Option Pool”);
20
(b) stock issued or issuable pursuant to any rights or agreements, options, warrants or
convertible securities 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, so long as the rights of
first refusal established by this Section 4 were complied with, waived, or were inapplicable
pursuant to any provision of this Section 4.6 with respect to the initial sale or grant by the
Company of such rights or agreements;
(c) any Equity Securities issued for consideration other than cash pursuant to a merger,
consolidation, acquisition, strategic alliance or similar business combination approved by the
Board of Directors (including at least a majority of the Preferred Directors);
(d) any Equity Securities actually issued in connection with any stock split, stock dividend
or recapitalization by the Company;
(e) Equity Securities issued to third-party service providers in exchange for or as partial
consideration for services rendered to the Company;
(f) any Equity Securities issued pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement, or debt financing from a bank or similar financial or lending
institution approved by the Board of Directors (including at least a majority of the Preferred
Directors);
(g) any Equity Securities that are issued by the Company pursuant to a registration statement
filed under the Securities Act;
(h) any Equity Securities issued in connection with strategic transactions involving the
Company and other entities, including, without limitation (i) joint ventures, manufacturing,
marketing or distribution arrangements or (ii) technology transfer or development arrangements;
provided that the issuance of shares therein has been approved by the Company’s Board of Directors
(including at least a majority of the Preferred Directors); and
(i) any Equity Securities, issued or issuable hereafter that are (i) approved by a majority of
the Board (including at least a majority of the Preferred Directors), and (ii) approved by the vote
of the holders of at least fifty-five percent (55%) of the Preferred Stock, voting together as a
single class.
Notwithstanding the foregoing, if the Company shall issue any shares of Common Stock and/or
options, warrants or other Common Stock purchase rights to employees, officers or directors of, or
consultants or advisors to, the Company or any subsidiary in excess of the Option Pool after the
date hereof without the approval of the holders of at least fifty-five percent (55%) of the shares
of Preferred Stock then outstanding (including a majority of the shares of Series B Preferred then
outstanding), then such shares shall be subject to a right of first refusal by the Major Investors
in accordance with this Section 4.
21
SECTION 5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of California in all respects as such laws are applied to agreements among California
residents entered into and to be performed entirely within California, without reference to
conflicts of laws or principles thereof. The parties agree that any action brought by either party
under or in relation to this Agreement, including without limitation to interpret or enforce any
provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit
to the jurisdiction and venue of, any state or federal court located in the County of Santa Clara,
California.
5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective
successors, assigns, heirs, executors, and administrators 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.
5.3 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Purchase
Agreement and the other documents delivered pursuant thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and supersedes
in its entirety the Prior Agreement, which shall have no further force or effect. No party shall
be liable or bound to any other in any manner by any oral or written representations, warranties,
covenants and agreements except as specifically set forth herein and therein. Each party expressly
represents and warrants that it is not relying on any oral or written representations, warranties,
covenants or agreements outside of this Agreement.
5.4 Severability. In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions of this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
5.5 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be amended or modified, and the
obligations of the Company and the rights of the Holders under this Agreement may be waived, only
upon the written consent of the Company and the holders of at least fifty-five percent (55%) of the
then-outstanding Registrable Securities.
(b) For the purposes of determining the number of Holders or Investors entitled to vote or
exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record
holders of its stock as maintained by or on behalf of the Company.
22
5.6 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power,
or remedy accruing to any party, upon any breach, default or noncompliance by another party 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 party’s part of any breach, default or
noncompliance under the Agreement or any waiver on such party’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 any party, shall be cumulative and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if
not, then on the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the address as set forth
on the signature pages hereof or Exhibit A hereto or at such other address or electronic
mail address as such party may designate by ten (10) days advance written notice to the other
parties hereto.
5.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation
to this Agreement, including without limitation to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
5.9 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.
5.10 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.
5.11 Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated entities or persons or persons or entities under common management or control shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement.
5.12 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.
5.13 Termination. This Agreement shall terminate and be of no further force or effect upon
the earlier of (i) an Acquisition or (ii) the date three (3) years following the Closing of a
Qualified Public Offering.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
In Witness Whereof, the parties hereto have executed this Amended and Restated
Investor Rights Agreement as of the date set forth in the first paragraph hereof.
| COMPANY: | INVESTORS: | |||||||||||||
| LendingClub Corporation | Norwest Venture Partners X, LP | |||||||||||||
| By: | Genesis VC Partners X, LLC, its General Partner |
|||||||||||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||||||||||||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||||||||||||
| Title: | President and CEO | By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||||||||||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||||||||||||
| Title: | General Partner | |||||||||||||
| Canaan VII L.P. | ||||||||||||||
| By: | Canaan Partners VII LLC | |||||||||||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||||||||||||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||||||||||||
| Title: | Member/Manager | |||||||||||||
| ▇▇▇▇▇▇▇▇▇▇▇▇ Ventures IX, L.P. | ||||||||||||||
| By: | ▇▇▇▇▇▇▇▇▇▇▇▇ Management Partners IX,
LLC, Its Managing Partner |
|||||||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||||||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||||||||
| Title: | Member | |||||||||||||
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||||||||||||||
| By: | ||||||||||||||
| Name: | ||||||||||||||
| Title: | ||||||||||||||
| Sagax Development Corp. | ||||||||||||||
| By: | ||||||||||||||
| Name: | ||||||||||||||
| Title: | ||||||||||||||
Signature Page to
Amended and Restated Investor Rights Agreement
Amended and Restated Investor Rights Agreement
In Witness Whereof, the parties hereto have executed this Amended and Restated
Investor Rights Agreement as of the date set forth in the first paragraph hereof.
| INVESTORS: | ||||||
| Bay Partners XI, L.P. By Bay Management Company XI, LLC, General Partner |
||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|||||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Manager | ||||||
| Bay Partners XI Parallel Fund, L.P. By Bay Management Company XI, LLC, General Partner |
||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|||||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Manager | ||||||
Signature Page to
Amended and Restated Investor Rights Agreement
Amended and Restated Investor Rights Agreement
In Witness Whereof, the parties hereto have executed this Amended and Restated
Investor Rights Agreement as of the date set forth in the first paragraph hereof.
| INVESTOR(S): | ||||||||
| Pierre Latecoere | ||||||||
| By: | /s/ Pierre Latecoere | |||||||
| Name: | Pierre Latecoere | |||||||
| Title: | ||||||||
Signature Page to
Amended and Restated Investor Rights Agreement
Amended and Restated Investor Rights Agreement
In Witness Whereof, the parties hereto have executed this Amended and Restated
Investor Rights Agreement as of the date set forth in the first paragraph hereof.
| INVESTOR(S): | ||||||||
| Name | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
Signature Page to
Amended and Restated Investor Rights Agreement
Amended and Restated Investor Rights Agreement
SCHEDULE OF INVESTORS
Norwest Venture Partners X, LP
Canaan VII ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇▇ Ventures, IX, LP
Bay Partners XI, L.P.
Bay Partners XI Parallel Fund, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Sagax Development Corp.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Living Trust
F&W Investments II LLC — Series 2008
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
Pierre Latecoere
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
The ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust
SCHEDULE OF INVESTORS