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EXHIBIT 4.02
FOURTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
This Fourth Amended and Restated Investors' Rights Agreement (this
"Agreement") is made and entered into as of June 30, 1999 by and among BroadBase
Information Systems, Inc., a California corporation (the "Company"), and the
persons and entities listed on Exhibit A attached hereto (each hereinafter
individually referred to as an "Investor" and collectively referred to as the
"Investors"), ▇▇▇▇ ▇▇▇▇▇▇ (the "Shareholder") and Lighthouse Capital Partners
II, L.P. ("Lighthouse").
R E C I T A L S
A. Certain Investors, the Shareholder, the Company and Lighthouse
have entered into a Third Amended and Restated Investors' Rights Agreement dated
as of December 9, 1998, as amended and supplemented prior to the date hereof
(the "Amended Rights Agreement") in connection with the purchase by such
Investors of the Company's Series A Preferred Stock ("Series A Stock") pursuant
to that certain Series A Preferred Stock Purchase Agreement dated December 26,
1995, as amended and supplemented, the Company's Series B Preferred Stock (the
"Series B Stock") pursuant to that certain Series B Preferred Stock Purchase
Agreement dated December 16, 1996, as amended and supplemented, the Company's
Series C Preferred Stock (the "Series C Stock") pursuant to that certain Series
C Preferred Stock Purchase Agreement dated February 17, 1998, as amended and
supplemented, and senior unsecured convertible debentures (the "Debentures")
which are convertible into shares of the Company's Series D Preferred Stock
("Series D Stock") on the terms and conditions set forth in that certain Series
D Preferred Stock Convertible Debenture Purchase Agreement, dated December 9,
1998 (the "Debenture Agreement"), as supplemented and amended. The Amended
Rights Agreement replaced earlier Investors' Rights Agreements among various
investors and the Company.
B. Lighthouse has been issued by the Company warrants dated December
16, 1996 and September 11, 1997 (the "Lighthouse Warrants") to purchase Series A
Stock and Series B Stock, respectively, and under which Lighthouse is to have
certain information and registration rights.
C. Certain of the Investors have agreed to purchase from the
Company, and the Company has agreed to sell to such Investors, shares of the
Company's Series E Preferred Stock ("Series E Stock") on the terms and
conditions set forth in that certain Series E Preferred Stock Purchase
Agreement, dated of even date herewith by and among the Company and such
Investors (the "Series E Agreement").
D. The Series E Agreement provides that the Investors under that
Agreement shall be granted certain information and registration rights and
rights of first refusal by amending and restating the Amended Rights Agreement
all as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises
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hereinafter set forth, the Amended Rights Agreement is hereby amended and
restated as follows:
1. INFORMATION RIGHTS.
1.1 Financial Information. The Company covenants and agrees that,
commencing on the date of this Agreement, for so long as any Investor holds at
least 245,000 shares of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and/or Series E Stock ("Preferred Stock") and/or the equivalent number (on
an as-converted basis) of shares of Common Stock of the Company issued upon the
conversion of such shares of Preferred Stock ("Conversion Stock") the Company
will, unless waived by the Board of Directors of the Company:
(a) Annual Reports. Furnish to such Investor, as soon as
practicable and in any event within 120 days after the end of each fiscal year
of the Company, a consolidated Balance Sheet and Statement of Shareholders'
Equity as of the end of such fiscal year, a consolidated Statement of Income and
a consolidated Statement of Cash Flows of the Company and its subsidiaries for
such year, setting forth in each case in comparative form the figures from the
Company's previous fiscal year (if any), all prepared in accordance with
generally accepted accounting principles and practices and audited by nationally
recognized independent certified public accountants;
(b) Quarterly Reports. Furnish to such Investor as soon as
practicable, and in any case within forty-five (45) days of the end of each
fiscal quarter of the Company (except the last quarter of the Company's fiscal
year), quarterly unaudited financial statements, including an unaudited Balance
Sheet and Statement of Shareholders' Equity, an unaudited Statement of Income
and an unaudited Statement of Cash Flows, together with a comparison to the
Company's operating plan and budget and statements of the Chief Financial
Officer of the Company explaining any significant differences in the statements
from the Company's operating plan and budget for the period and stating that
such statements fairly present the consolidated financial position and
consolidated financial results of the Company for the fiscal quarter covered;
(c) Monthly Reports. Furnish to such Investor as soon as
practicable, and in any case within forty-five (45) days of the end of each
calendar month (except the last month of the Company's fiscal year), monthly
unaudited financial statements, including an unaudited Balance Sheet and
Statement of Shareholders' Equity, an unaudited Statement of Income and an
unaudited Statement of Cash Flows, together with a comparison to the Company's
operating plan and budget and statements of the Chief Financial Officer of the
Company explaining any significant differences in the statements from the
Company's operating plan and budget for the month covered and stating that such
statements fairly present the consolidated financial position and consolidated
financial results of the Company for the month covered;
(d) Annual Budget. Furnish to such Investor as soon as
practicable and in any event no later than thirty (30) days after the close of
each fiscal year of the Company, an annual operating plan and budget, prepared
on a monthly basis, for the next immediate fiscal year. The Company shall also
furnish to such Investor, within a reasonable time of its
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preparation, amendments to the annual budget, if any;
(e) Other Information. Furnish to such Investor such other
information relating to the financial condition, business, prospects or
corporate affairs of the Company as the Investor or any assignee of the Investor
may from time to time reasonably request; and
(f) Confidentiality. Each Investor agrees to hold all
information received pursuant to this Section in confidence, and not to use or
disclose any of such information to any third party, except to the extent such
information may be made publicly available by the Company.
1.2 Inspection Rights. The Company shall permit each Investor
holding at least 245,000 shares of Preferred Stock and/or the equivalent number
(on an as-converted basis) of shares of Conversion Stock, or any combination
thereof, at such Investor's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by such Investor. Each Investor agrees to
hold all information received from such inspections in confidence, and not to
use or disclose any of such information to any third party, except to the extent
such information may be made publicly available by the Company.
1.3 Termination of Certain Rights. The Company's obligations under
Sections 1.1 and 1.2 above will terminate (i) immediately before the closing of
the first underwritten sale of Common Stock of the Company to the public
pursuant to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"), covering the offer and sale of Common Stock
to the public, or (ii) upon (a) the acquisition of all or substantially all the
assets of the Company or (b) an acquisition of the Company by another
corporation or entity by consolidation, merger or other reorganization in which
the holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing
less than fifty percent (50%) or more of the voting power of the corporation or
other entity surviving such transaction (or the parent corporation of such
surviving corporation if the surviving corporation is wholly-owned by the
parent).
1.4 Rights of Lighthouse and the Debenture Investors. For purposes
of this Section 1 only, (i) Lighthouse shall be treated as an "Investor" and
shall be considered to hold the number of shares of Series A Stock and Series B
Stock issuable upon exercise of the Lighthouse Warrants, in determining its
rights to the information described in such section and (ii) Investors who have
purchased Debentures (or to whom Debentures have been duly assigned under this
Agreement) (the "Debenture Investors") shall be considered to hold the number of
shares of Series D Stock issuable upon conversion of the Debentures, in
determining their rights to the information described in this Section.
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Registration. The terms "register," "registered," and
"registration"
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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.
(b) Registrable Securities. The term "Registrable Securities"
means: (1) all the shares of Common Stock of the Company issued or issuable upon
the conversion of any shares of Preferred Stock that are now owned or may
hereafter be acquired by any Investor or any Investor's permitted successors and
assigns; (2) the 1,282,500 shares of Common Stock now held by the Shareholder
(the "Shareholder's Shares"); (3) all the shares of Common Stock of the Company
issued or issuable upon conversion of the shares of Series A Stock or Series B
Stock now or hereafter held by Lighthouse (including the Series A Stock or
Series B Stock issuable upon exercise of the Lighthouse Warrants (together, the
"Lighthouse Shares")); and (4) any shares of 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, all such shares of Common Stock
described in clause (1), (2) or (3) of this subsection (b); excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which rights under this Section 2 are not assigned in accordance with this
Agreement or any Registrable Securities sold to the public or sold pursuant to
Rule 144 promulgated under the Securities Act; provided, however, that
notwithstanding anything herein to the contrary, the Shareholder's Shares and
any shares of Common Stock described in clause (4) of this Section 2.1(b) that
are issued in respect of any Shareholder's Shares (which with the Shareholder's
Shares are collectively hereinafter referred to as the "Excluded Shares"), shall
not be Registrable Securities for purposes of Section 2.2, 2.4 or 3 of this
Agreement, and provided further that the Lighthouse Shares and any shares of
Common Stock described in clause (4) of this Section 2.1(b) that are issued in
respect of any Lighthouse Shares shall not be Registrable Securities for
purposes of Section 3 of this Agreement.
(c) Registrable Securities Then Outstanding. The number of
shares of "Registrable Securities then outstanding" shall mean the number of
shares of Common Stock which are Registrable Securities and (1) are then issued
and outstanding or (2) are then issuable pursuant to the exercise or conversion
of then outstanding and then exercisable options, warrants or convertible
securities.
(d) Holder. For purposes of this Section 2 and Sections 3 and
4 hereof, the term "Holder" means any person owning of record Registrable
Securities that have not been sold to the public or pursuant to Rule 144
promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under this Section 2 have been duly
assigned in accordance with this Agreement; provided, however, that for purposes
of this Agreement, a record holder of shares of Preferred Stock convertible into
such Registrable Securities shall be deemed to be the Holder of such Registrable
Securities; provided further, that a Holder of Excluded Shares (as defined in
Section 2.1(b)) shall not be a Holder with respect to such Excluded Shares for
purposes of Sections 2.2, 2.4 or 3 of this Agreement; provided further, that a
Holder of Lighthouse Shares shall not be a Holder with respect to such
Lighthouse Shares for purposes of Section 3 of this Agreement; and provided
further, that the Company shall in no event be obligated to register shares of
Preferred Stock, and that Holders of Registrable Securities will not be required
to convert their shares of Preferred Stock into Common Stock in order to
exercise the registration rights granted hereunder until immediately before the
closing of
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the offering to which the registration relates.
(e) Form S-3. The term "Form S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by the SEC which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(f) SEC. The term "SEC" or "Commission" means the U.S.
Securities and Exchange Commission.
2.2 Demand Registration.
(a) Request by Holders. If the Company shall receive at any
time after the earlier of (i) the date that is eighteen (18) months after the
date of this Agreement, or (ii) six (6) months after the effective date of the
Company's initial public offering of its securities pursuant to a registration
statement filed under the Securities Act, a written request from the Holders of
at least 30% of the Registrable Securities then outstanding that the Company
file a registration statement under the Securities Act covering the registration
of Registrable Securities pursuant to this Section 2.2, then the Company shall,
within ten (10) business days of the receipt of such written request, give
written notice of such request ("Request Notice") to all Holders, and use its
best efforts to effect as soon as practicable, and in any event within ninety
(90) days of the receipt of such Request Notice, the registration under the
Securities Act of all Registrable Securities which Holders request to be
registered and included in such registration by written notice given by such
Holders to the Company within twenty (20) days after receipt of the Request
Notice, subject only to the limitations of this Section 2.2; provided that the
Registrable Securities requested by all Holders to be registered pursuant to
such request must have an anticipated aggregate public offering price (before
any underwriting discounts and commissions) of not less than $7,500,000.
(b) Underwriting. If the Holders initiating the registration
request under this Section 2.2 ("Initiating Holders") intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
then they shall so advise the Company as a part of their request made pursuant
to this Section 2.2 and the Company shall include such information in the
written notice referred to in subsection 2.2(a). In such event, the right of any
Holder to include his Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting by the Company, which agreement
shall be reasonably acceptable to a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 2.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be reduced as
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required by the underwriter(s) and allocated among the Holders of Registrable
Securities on a pro rata basis according to the number of Registrable Securities
then outstanding held by each Holder requesting registration (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 and
withdrawn from such underwriting shall be withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is
obligated to effect only two (2) such registrations pursuant to this Section
2.2.
(d) Deferral. Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting the filing of a registration statement
pursuant to this Section 2.2, a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be filed and it
is therefore essential to defer the filing of such registration statement, then
the Company shall have the right to defer such filing for a period of not more
than 120 days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12) month period.
(e) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.2, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders (but excluding
underwriters' discounts and commissions), shall be borne by the Company. Each
Holder participating in a registration pursuant to this Section 2.2 shall bear
such Holder's proportionate share (based on the total number of shares sold in
such registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to this Section 2.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of a majority of the Registrable Securities then
outstanding agree to forfeit their right to one (1) demand registration pursuant
to this Section 2.2 (in which case such right shall be forfeited by all Holders
of Registrable Securities); provided, further, however, that if at the time of
such withdrawal, the Holders have learned of a material adverse change in the
condition, business or prospects of the Company not known to the Holders at the
time of their request for such registration and have withdrawn their request for
registration with reasonable promptness after learning of such material adverse
change, then the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to this Section 2.2.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least twenty (20) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of
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securities of the Company, but excluding registration statements relating to any
registration under Section 2.2 or Section 2.4 of this Agreement or to any
employee benefit plan or a corporate reorganization) and will afford each such
Holder an opportunity to include in such registration statement all or any part
of the Registrable Securities then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by such Holder shall, within fifteen (15) days after receipt of
the above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration statement. 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 a registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering,
then the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable Securities to be included 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 managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders (other than the Shareholder)
requesting inclusion of their Registrable Securities in such registration
statement on a pro rata basis based on the total number of Registrable
Securities then held by each such Holder and third, to the Shareholder; provided
however, that the right of the underwriters to exclude shares (including
Registrable Securities) from the registration and underwriting as described
above shall be restricted so that the number of Registrable Securities included
in any such registration is not reduced below twenty-five percent (25%) of the
shares included in the registration, except for a registration relating to the
Company's initial public offering from which all Registrable Securities may be
excluded. 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 or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons 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.
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(b) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.3 (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company.
2.4 Form S-3 Registration. In case the Company shall receive from
any Holder or Holders of at least twenty percent (20%) of all Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, then the Company will:
(a) Notice. Promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any related
qualification or compliance, to all other Holders; and
(b) Registration. As soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together 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 twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2.4:
(1) if Form S-3 is not available for such offering by
the Holders;
(2) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $500,000;
(3) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement no more than once during any twelve month period for a period of not
more than 120 days after receipt of the request of the Holder or Holders under
this Section 2.4;
(4) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected a registration on
Form S-3 for the Holders pursuant to this Section 2.4; or
(5) in any particular jurisdiction in which the Company
would
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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) Expenses. Subject to the foregoing, the Company shall file
a Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered pursuant to this Section 2.4 as soon as
practicable after receipt of the request or requests of the Holders for such
registration. The Company shall pay all expenses incurred in connection with the
first three registrations requested pursuant to this Section 2.4 (excluding
underwriters' or brokers' discounts and commissions), including without
limitation all filing, registration and qualification, printers' and accounting
fees and the reasonable fees and disbursements of one counsel for the selling
Holder or Holders and counsel for the Company. All expenses incurred in
connection with any subsequent registration requested pursuant to this Section
2.4 shall be borne by the Holders who participate in such registration on a pro
rata basis according to the number of Registrable Securities owned by the
Holders that are included in such registration at the time it goes effective.
(d) Not Demand Registration. Form S-3 registrations shall not
be deemed to be demand registrations as described in Section 2.2 above.
2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred twenty (120) days,
provided however, that 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.
(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.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided 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.
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(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) 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.
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(h) 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.
(i) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all Registrable
Securities, in each case not later than the effective date of such registration.
2.6 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 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 timely effect
the registration of their Registrable Securities.
2.7 Delay of Registration. 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.
2.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
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(a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended, (the "1934 Act"), against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the Securities Act,
the l934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively a
"Violation"):
(i) any untrue statement or alleged untrue statement of
a material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) any violation or alleged violation by the Company
of the Securities Act, the 1934 Act, any federal or state securities law or any
rule or regulation promulgated under the Securities Act, the 1934 Act or any
federal or state securities law in connection with the offering covered by such
registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this subsection 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, officer, director, underwriter
or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each
selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, 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 within the meaning of the
Securities Act or the 1934 Act, 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, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with
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written information furnished by such Holder expressly 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, partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 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; and provided further, that the total
amounts payable in indemnity by a Holder under this Section 2.8(b) in respect of
any Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) Notice. 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 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 conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 2.8.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 2.8 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in
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such case notwithstanding the fact that this Section 2.8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
2.8; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; provided, however,
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under
this Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
(g) Underwriting Agreement. 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.
2.9 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of the Company then owned by
such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for up to one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act;
provided, however, that:
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to Registrable
Securities sold pursuant to such registration statement;
(b) all executive officers and directors of the Company then
holding Common Stock of the Company enter into similar agreements; and
(c) the foregoing shall not apply to any shares of stock of
the Company purchased by a Holder (i) in the Company's initial public offering
of its securities pursuant to a registration statement filed under the
Securities Act or (ii) in the public securities market following such initial
public offering.
In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop
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transfer instructions with respect to the Registrable Securities and such other
shares of stock of each Holder (and the shares or securities of every other
person subject to the foregoing restriction) until the end of such period.
2.10 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after 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) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the 1934 Act (at any time after it has become subject to such
reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after 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 1934 Act (at any time after it has become
subject to the reporting requirements of the 1934 Act), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company 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 (at any time after the Company has become
subject to the reporting requirements of the 1934 Act).
2.11 Termination of the Company's Obligations. The Company shall
have no obligations pursuant to Sections 2.2 through 2.4 with respect to: (i)
any request or requests for registration made by any Holder on a date more than
five (5) years after the closing date of the Company's initial public offering;
or (ii) any Registrable Securities proposed to be sold by a Holder in a
registration pursuant to Section 2.2, 2.3 or 2.4 if, in the opinion of counsel
to the Company, all such Registrable Securities proposed to be sold by a Holder
may be sold in a three-month period without registration under the Securities
Act pursuant to Rule 144 under the Securities Act.
2.12 Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
2.2 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders which is included, or (b) to make a demand
registration which could result in such registration statement being declared
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effective prior to the earlier of either of the dates set forth in subsection
2.2(a), or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 2.2.
3. RIGHT OF FIRST REFUSAL.
3.1 General. Each Holder (as defined in Section 2.1(d)) and any
party to whom such Holder's rights under this Section 3 have been duly assigned
in accordance with Section 4.1(b) (each such Holder or assignee being
hereinafter referred to as a "Rights Holder") has the right of first refusal to
purchase such Rights Holder's Pro Rata Share (as defined below), of all (or any
part) of any "New Securities" (as defined in Section 3.2) that the Company may
from time to time issue after the date of this Agreement. A Rights Holder's "Pro
Rata Share" for purposes of this right of first refusal is the ratio of (a) the
number of Registrable Securities as to which such Rights Holder is the Holder
(and/or is deemed to be the Holder under Section 2.1(d)), to (b) a number of
shares of Common Stock of the Company equal to the sum of (i) the total number
of shares of Common Stock of the Company then outstanding plus (ii) the total
number of shares of Common Stock of the Company into which all then outstanding
shares of Preferred Stock of the Company are then convertible plus (iii) the
total number of shares of capital stock of the Company (on an as-converted to
Common Stock basis) issuable upon exercise of all outstanding warrants to
purchase shares of the Company's stock or upon conversion of the Debentures plus
(iv) the number of shares of Common Stock of the Company reserved for issuance
under stock purchase and stock option plans of the Company.
3.2 New Securities. "New Securities" shall mean any Common Stock or
Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock; provided, however, that
the term "New Securities" does not include:
(i) any shares of the Company's Common Stock (and/or options
or warrants therefor) issued to employees, officers, directors, contractors,
advisors or consultants of the Company pursuant to incentive agreements or plans
approved by the Board of Directors of the Company;
(ii) the Debentures and any shares of Series D Preferred Stock
issued upon conversion of the Debentures;
(iii) any shares of Series E Stock issued pursuant to the
Series E Agreement, as such agreement may be amended;
(iv) any securities issuable upon conversion of or with
respect to any then outstanding shares of Preferred Stock of the Company or
Common Stock or other securities issuable upon conversion thereof;
(v) shares of the Company's Common Stock or Preferred Stock
issued in connection with any stock split or stock dividend;
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(vi) securities offered by the Company to the public pursuant
to a registration statement filed under the Securities Act;
(vii) any shares of the Company's stock (and/or options or
warrants therefor) issued or issuable to parties providing the Company with
equipment leases, real property leases, loans, credit lines, guaranties of
indebtedness, cash price reductions or similar financing, provided such
issuances are for other than primarily equity financing purposes and provided
that at the time of any such issuance, the aggregate of such issuance and
similar issuances in the preceding twelve month period do not exceed 3% of the
then outstanding Common Stock of the Company (assuming full conversion and
exercise of all convertible and exercisable securities); or
(viii) securities issued pursuant to the acquisition of
another corporation or entity by the Company by consolidation, merger, purchase
of all or substantially all of the assets, or other reorganization in which the
Company acquires, in a single transaction or series of related transactions, all
or substantially all of the assets of such other corporation or entity or fifty
percent (50%) or more of the voting power of such other corporation or entity or
fifty percent (50%) or more of the equity ownership of such other entity.
3.3 Procedures. In the event that the Company proposes to undertake
an issuance of New Securities, it shall give to each Rights Holder written
notice of its intention to issue New Securities (the "Notice"), describing the
type of New Securities and the price and the general terms upon which the
Company proposes to issue such New Securities. Each Rights Holder shall have
fifteen (15) days from the date of mailing of any such Notice to agree in
writing to purchase such Rights Holder's Pro Rata Share of such New Securities
for the price and upon the general terms specified in the Notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased (not to exceed such Rights Holder's Pro Rata Share). If any
Rights Holder fails to so agree in writing within such fifteen (15) day period
to purchase such Rights Holder's full Pro Rata Share of an offering of New
Securities (a "Nonpurchasing Holder"), then such Nonpurchasing Holder shall
forfeit the right hereunder to purchase that part of his Pro Rata Share of such
New Securities that he did not so agree to purchase.
3.4 Failure to Exercise. In the event that the Rights Holders fail
to exercise in full the right of first refusal within such fifteen (15) day
period, then the Company shall have 120 days thereafter to sell the New
Securities with respect to which the Rights Holders' rights of first refusal
hereunder were not exercised, at a price and upon general terms not materially
more favorable to the purchasers thereof than specified in the Company's Notice
to the Rights Holders. In the event that the Company has not issued and sold the
New Securities within such 120 day period, then the Company shall not thereafter
issue or sell any New Securities without again first offering such New
Securities to the Rights Holders pursuant to this Section 3.
3.5 Termination. This right of first refusal shall terminate (i)
immediately before the closing of the first underwritten sale of Common Stock of
the Company to the public pursuant to a registration statement filed with, and
declared effective by, the SEC under the Securities Act, covering the offer and
sale of Common Stock to the public, or (ii) upon (a) the
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acquisition of all or substantially all the assets of the Company or (b) an
acquisition of the Company by another corporation or entity by consolidation,
merger or other reorganization in which the holders of the Company's outstanding
voting stock immediately prior to such transaction own, immediately after such
transaction, securities representing less than fifty percent (50%) or more of
the voting power of the corporation or other entity surviving such transaction
(or the parent corporation of such surviving corporation if the surviving
corporation is wholly-owned by the parent).
3.6 Separate Series E Right of First Refusal. Nothing in this
Agreement shall be deemed to limit or supersede the right of first refusal of
the purchasers of Series E Stock set forth in that certain Series E Rights
Agreement dated of even date herewith by and among the Company and the
purchasers of such Series E Stock (the "Series E Rights Agreement"). In the
event of any conflict between the terms of the Series E Rights Agreement and
this Agreement, the terms of the Series E Rights Agreement shall control.
4. ASSIGNMENT AND AMENDMENT.
4.1 Assignment. Notwithstanding anything herein to the contrary:
(a) Information Rights. The rights of an Investor under
Section 1.1 or 1.2 hereof may be assigned in connection with any transfer of
shares of Preferred Stock or shares of Conversion Stock in accordance with the
applicable provisions of Section 4.7 of the Series E Agreement (i) by an
Investor that is a partnership, corporation or limited liability company to (A)
a partner of such partnership, a shareholder of such corporation or a member of
such limited liability company, (B) a retired partner of such partnership who
retires after the date hereof, (C) the estate of any such partner, shareholder
or member, (ii) by any Investor by way of transfer by gift, will or intestate
succession by such Investor to his or her spouse or lineal descendants or
ancestors or any trust for any of the foregoing, or (iii) by any Investor to a
transferee who acquires thereby a number of shares of Preferred Stock or shares
of Conversion Stock equal to at least the lesser of (1) that number of shares
described in Sections 1.1 and 1.2 hereof and (2) that number of shares that
results from dividing One Million Dollars ($1,000,000) by the then current
Conversion Price for the series of Preferred Stock being transferred (or, with
respect to Conversion Shares, the then current Conversion Price for the series
of Preferred Stock from which such Conversion Shares were converted).
Notwithstanding the foregoing (i) no such transferee shall
have rights under Section 1.1 or 1.2 hereof as a result of such transfer except
to the extent that from time to time after such transfer the transferee holds,
or is deemed to hold for aggregation purposes as set forth in Section 5.11, the
minimum number of shares described in Sections 1.1. and 1.2, (ii) no party may
be assigned any of the foregoing rights unless the Company is given written
notice by the assigning party at the time of such assignment stating the name
and address of the assignee and identifying the securities of the Company as to
which the rights in question are being assigned and (iii) any such assignee
agrees in a writing delivered to the Company to receive such assigned rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 4.
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(b) Registration Rights; Refusal Rights. The registration
rights of a Holder under Section 2 hereof and the rights of first refusal of a
Rights Holder under Section 3 hereof may be assigned in connection with any
transfer of shares of Preferred Stock or shares of Conversion Stock in
accordance with the applicable provisions of Section 4.7 of the Series E
Agreement (i) by an Investor that is a partnership, corporation or limited
liability company to (A) a partner of such partnership, a shareholder of such
corporation or a member of such limited liability company, (B) a retired partner
of such partnership who retires after the date hereof, (C) the estate of any
such partner, shareholder or member, (ii) by any Investor by way of transfer by
gift, will or intestate succession by such Investor to his or her spouse or
lineal descendants or ancestors or any trust for any of the foregoing, (iii) by
an Investor to a transferee who acquires thereby a number of shares of Preferred
Stock or shares of Conversion Stock equal to at least the lesser of (1) 100,000
shares of Preferred Stock (and/or an equivalent number (on an as-converted
basis) of Registrable Securities issued upon conversion thereof and/or
Debentures convertible into an equivalent number of (on an as-converted basis)
of Registrable Securities issued upon conversion of the Preferred Stock issuable
upon conversion thereof and (2) that number of shares that results from dividing
One Million Dollars ($1,000,000) by the then current "Conversion Price" (as
defined the the Company's Articles of Incorporation) for the series of Preferred
Stock being transferred (or, with respect to Conversion Shares, the then current
Conversion Price for the series of Preferred Stock from which such Conversion
Shares were converted), or (iv) by an Investor that is a partnership,
corporation or limited liability company to an affiliate thereof.
Notwithstanding the foregoing (i) no party may be assigned any
of the foregoing rights unless the Company is given written notice by the
assigning party at the time of such assignment stating the name and address of
the assignee and identifying the securities of the Company as to which the
rights in question are being assigned and (ii) any such assignee agrees in a
writing delivered to the Company to receive such assigned rights subject to all
the terms and conditions of this Agreement, including without limitation the
provisions of this Section 4.
4.2 Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors (and/or any of their permitted
successors or assigns) holding shares of Preferred Stock and/or Conversion Stock
representing and/or convertible into a majority of all the Investors' Shares (as
defined below). Notwithstanding the foregoing (i) no amendment or waiver
effected pursuant to the foregoing provisions of this Section 4.2 shall be
binding upon any Investor who does not give written consent thereto (a
"Nonconsenting Investor") if such amendment or waiver, by its express terms,
materially and adversely changes or waives the rights of such Nonconsenting
Investor set forth in this Agreement in a substantially different manner than
the rights of the Investors consenting thereto and (ii) no amendment of Section
3.6, or amendment of Section 2.9 to expand the scope of the market stand-off"
provided for therein, shall be binding upon any Investor with respect to shares
of Series E Stock (or Conversion Stock issued upon conversion of such Series E
Stock) without the consent of the holders of a majority of the then outstanding
shares of such Series E Stock (and Conversions Stock issued upon conversion of
such Series E Stock). As used herein, the term "Investors' Shares" shall mean
the shares of Common Stock then issuable upon conversion of all then outstanding
shares of Preferred Stock held by Investors (and/or any of their permitted
successors or assigns), plus all shares of Common Stock then
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issuable upon conversion of the Preferred Stock that is then issuable upon
conversion of all then outstanding Debentures held by the Investors (and/or any
of their permitted successors or assigns) plus all then outstanding shares of
Conversion Stock held by Investors (and/or any of their permitted successors or
assigns) that were issued upon the conversion of any shares of Preferred Stock.
Any amendment or waiver effected in accordance with this Section 4.2 shall be
binding upon each Investor and each Holder (including Lighthouse), and each
permitted successor or assignee of such Investor or Holder and the Company.
5. GENERAL PROVISIONS.
5.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given upon the earlier of (i) actual receipt, (ii) the day that is one business
day after transmission by facsimile (subject to receipt by the transmitting
party of automatic confirmation of successful transmission of such facsimile to
the number dialed, (iii) the date that is one business day after delivery to a
nationally recognized express overnight courier service for United States
deliveries, or (iv) the date that is three business days after delivery to an
internationally recognized express courier for deliveries outside the United
States, fees prepaid, as follows:
(a) if to an Investor, at such Investor's respective address
as set forth on Exhibit A hereto; with copies, in the case where the Investor is
a holder of shares of Series E Stock or Conversion Stock issued upon conversion
of Series E Stock) to:
▇▇▇▇ ▇▇▇▇▇, Esq.
Buchalter, Nemer, Fields & Younger
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax. (▇▇▇) ▇▇▇-▇▇▇▇
and to
▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax. (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(c) if to the Shareholder, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(d) if to Lighthouse at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Contract Administration, Phone (415)
▇▇▇-▇▇▇▇,
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Fax (▇▇▇) ▇▇▇-▇▇▇▇.
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder.
5.2 Entire Agreement. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes the Amended
Rights Agreement any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof. This Agreement will amend and restate the Amended Rights
Agreement to read as set forth herein, when it has been duly executed by parties
having the right to so amend and restate the Amended Rights Agreement. Nothing
in this Agreement will be deemed to supersede the Series E Rights Agreement.
5.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of California as
applied to agreements among California residents entered into and to be
performed entirely within California, excluding that body of law relating to
conflict of laws and choice of law.
5.4 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
5.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
5.6 Successors And Assigns. Subject to the provisions of Section
4.1, the provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
5.7 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
5.8 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5.9 Costs And Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
5.10 Adjustments for Stock Splits, Etc. Wherever in this Agreement
there is a
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reference to a specific number of shares of Common Stock or Preferred Stock of
the Company of any class or series, then, upon the occurrence of any
subdivision, combination or stock dividend of such class or Series of stock, the
specific number of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the affect on the outstanding shares of such
class or Series of stock by such subdivision, combination or stock dividend.
5.11 Aggregation of Stock. All shares held or acquired by affiliated
entities or persons, or entities or persons under common management, shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
5.12 Amended Rights Agreement Superseded. Pursuant to Section 4.2 of
the Amended Rights Agreement, the undersigned parties who are parties to such
Amended Rights Agreement hereby amend and restate the Amended Rights Agreement
to read in its entirety as set forth in this Agreement, all with the intent and
effect that the Amended Rights Agreement shall be hereby terminated and entirely
replaced and superseded by this Agreement. By such amendment, all rights of
first refusal under Section 3 of the Amended Rights Agreement in respect of the
issuance of any shares of Series E Stock are hereby expressly waived.
5.13 Confidentiality. The following section shall only apply with
respect to the Investors under the Series C Agreement: The terms of this
Agreement, the Series C Agreement and the Investors' investment in the Company
shall be considered confidential information and shall not be disclosed by the
Company or any Investor except in accordance with the provisions of this Section
5.13. From and after the Closing under the Series C Agreement, except as
provided below, the Company and each Investor may disclose the existence of this
Agreement, the Series C Agreement and the general terms thereof, solely to the
Company's or such Investor's investors, investment bankers, lenders,
accountants, legal counsel and bona fide prospective investors, employees and
lenders, in each case only where such persons or entities are under appropriate
nondisclosure obligations. In addition, except as provided below, the Company or
any Investor may disclose solely the fact that the Investors are investors in
the Company to any third parties through any means, including but not limited
to, direct oral communications, written materials and electronic media, such as
through the Company's Web site, without obtaining the consent of any other
party, and without such third parties being bound by nondisclosure obligations.
Within sixty (60) days of the Closing under the Series C Agreement, the Company
may issue a press release disclosing that the Investors have invested in the
Company; provided that the release does not disclose the amount or other
specific terms of the investment and is approved in advance in writing by the
Investors. Intel Corporation ("Intel"), at its sole discretion, may provide an
executive quote or other material regarding its investment in the Company.
Notwithstanding any other provision of this paragraph, no other announcement
regarding any Investor's investment in the Company in a press release, in any
advertisement or announcement in a professional or trade publication or in any
mass marketing materials to the general public (excluding the Company's Web site
as referenced above) may be made without the prior written consent of such
Investor, which consent may be withheld at the sole discretion of such Investor.
Notwithstanding the foregoing, Intel may disclose its investment in the Company
and the terms thereof to third parties or to the public at its discretion, and
the Company and the Investors shall have the right to disclose to third parties
any such information disclosed by Intel in a press release or other public
announcement. In the event that the Company or any
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other party becomes legally compelled (by statute or regulation or by oral
questions, interrogatories, request for information or documents, subpoena,
criminal or civil investigative demand or similar process, including without
limitation, in connection with any public or private offering of the Company's
capital stock) to disclose any confidential information, including the terms of
the Series C Agreement, such party (the "Disclosing Party") shall provide the
other party (the "Non-Disclosing Party") with prompt written notice of that fact
so that the appropriate party may seek (with the cooperation and reasonable
efforts of the other parties) a protective order, confidential treatment or
other appropriate remedy. In such event, the Disclosing Party shall furnish only
that portion of the Confidential Information which is legally required and shall
exercise reasonable efforts to attempt to obtain reliable assurance that
confidential treatment will be accorded the Confidential Information to the
extent reasonably requested by the Non-Disclosing Party. The provisions of this
Section 5.13 shall be in addition to, and not in substitution for, the
provisions of any separate nondisclosure agreement executed by the parties
hereto with respect to the transaction contemplated by the Series C Agreement.
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EXHIBIT A
LIST OF INVESTORS
