ARUBA WIRELESS NETWORKS, INC. AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT Initial Closing: September 6, 2005 Subsequent Closing: September 30, 2005 Second Subsequent Closing: September 30, 2006
Exhibit 4.2
ARUBA WIRELESS NETWORKS, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
Initial Closing: September 6, 2005
Subsequent Closing: September 30, 2005
Second Subsequent Closing: September 30, 2006
TABLE OF CONTENTS
| Page | ||||
1. Registration Rights |
1 | |||
1.1 Definitions |
1 | |||
1.2 Request for Registration |
2 | |||
1.3 Company Registration |
4 | |||
1.4 Form S-3 Registration |
5 | |||
1.5 Obligations of the Company |
6 | |||
1.6 Information from Holder |
8 | |||
1.7 Expenses of Registration |
9 | |||
1.8 Delay of Registration |
9 | |||
1.9 Indemnification |
9 | |||
1.10 Reports Under the 1934 Act |
11 | |||
1.11 Assignment of Registration Rights |
12 | |||
1.12 Limitations on Subsequent Registration Rights |
12 | |||
1.13
“Market Stand-Off” Agreement |
13 | |||
1.14 Termination of Registration Rights |
14 | |||
2. Covenants of the Company |
14 | |||
2.1 Delivery of Financial Statements |
14 | |||
2.2 Inspection |
15 | |||
2.3 Termination of Covenants |
15 | |||
2.4 Right of First Offer |
15 | |||
2.5 Proprietary Information and Inventions Agreements |
17 | |||
2.6 Employee Agreements |
17 | |||
2.7 Compensation Committee |
17 | |||
2.8 Qualified Small Business Stock Status |
17 | |||
2.9 Observer Rights |
17 | |||
2.10 Director Meetings |
19 | |||
3. Miscellaneous |
19 | |||
3.1 Successors and Assigns |
19 | |||
3.2 Governing Law |
19 | |||
3.3 Counterparts |
19 | |||
3.4 Titles and Subtitles |
19 | |||
3.5 Notices |
19 | |||
3.6 Expenses |
19 | |||
3.7 Entire Agreement; Amendments and Waivers |
19 | |||
3.8 Severability |
20 | |||
3.9 Aggregation of Stock |
21 | |||
3.10 Additional Investors |
21 | |||
3.11 Amendment and Restatement of Prior Agreement |
21 | |||
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AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
INVESTORS’ RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of the 6th
day of September, 2005, by and among Aruba Wireless Networks, Inc., a Delaware corporation (the
“Company”), and the investors listed on Schedule A hereto, each of which is herein referred
to as an “Investor.”
RECITALS
WHEREAS, certain of the Investors (the “Existing Investors”) hold shares of the Company’s
Series A Preferred Stock (the “Series A Preferred Stock”) and/or Series B Preferred Stock (the
“Series B Preferred Stock”) and/or Series C Preferred Stock (the “Series C Preferred Stock”) and/or
shares of Common Stock issued upon conversion thereof, and possess registration rights, information
rights, rights of first offer and other rights pursuant to an Amended and Restated Investors’
Rights Agreement dated as of June 24, 2004 by and among the Company and such Existing Investors
(the “Prior Agreement”);
WHEREAS, the Prior Agreement may be amended, and any provision therein waived, with the
consent of the Company and the holders of a majority of the outstanding Registrable Securities (as
such term is defined in the Prior Agreement);
WHEREAS, the Existing Investors as holders of a majority of the outstanding Registrable
Securities (as such term is defined in the Prior Agreement) of the Company desire to amend and
restate the Prior Agreement and to accept the rights created pursuant hereto in lieu of the rights
granted to them under the Prior Agreement; and
WHEREAS, certain Investors are parties to the Series D Preferred Stock Purchase Agreement of
even date herewith by and among the Company and certain of the Investors (the “Series D
Agreement”), which provides that as a condition to the closing of the sale of the Series D
Preferred Stock (the “Series D Preferred Stock” and, collectively with the Series A Preferred
Stock, the Series B Preferred Stock and the Series C Preferred Stock, the “Preferred Stock”), this
Agreement must be executed and delivered by such Investors, Existing Investors holding a majority
of the outstanding Registrable Securities (as such term is defined in the Prior Agreement) of the
Company and the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
Existing Investors and the Company hereby agree that the Prior Agreement shall be superseded and
replaced in its entirety by this Agreement, and the parties hereto further agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term “Act” means the Securities Act of 1933, as amended.
(b) The term “Form S-3” means such form under the Act as in effect on the date hereof or any
registration form under the Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.
(c) The term “Holder” means any person owning or having the right to acquire Registrable
Securities or any assignee thereof in accordance with Section 1.11 hereof.
(d) The term “Initial Offering” means the Company’s first firm commitment underwritten public
offering of its Common Stock pursuant to a registration statement on Form S-1 (or any successor
registration form) under the Act, with gross offering proceeds of not less than $20,000,000 in the
aggregate.
(e) The term “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(f) The terms “register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such registration statement or document.
(g) The term “Registrable Securities” means (i) the Common Stock issuable or issued upon
conversion of the Preferred Stock, and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security that is issued as) a
dividend or other distribution with respect to, or in exchange for, or in replacement of, the
shares referenced in (i) above, excluding in all cases, however, any Registrable Securities sold by
a person in a transaction in which his rights under this Section 1 are not assigned.
(h) The number of shares of “Registrable Securities” outstanding shall be determined by the
number of shares of Common Stock outstanding that are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities that are, Registrable Securities.
(i) The term “Rule 144” shall mean Rule 144 under the Act.
(j) The term “Rule 144(k)” shall mean subsection (k) of Rule 144 under the Act.
(k) The term “SEC” shall mean the Securities and Exchange Commission.
1.2 Request for Registration.
(a) Subject to the conditions of this Section 1.2, if the Company shall receive at any time
after the earlier of (i) three (3) years after the date of this Agreement or (ii) six (6) months
after the effective date of the Initial Offering, a written request
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from the Holders of fifty percent (50%) or more of the Registrable Securities then outstanding (for purposes of this Section
1.2, the “Initiating Holders”) that the Company file a registration statement under the Act
covering the registration of Registrable Securities with an anticipated aggregate offering price of
at least $10,000,000, then the Company shall, within ten (10) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the limitations of this Section 1.2,
use all commercially reasonable efforts to effect, as soon as practicable, the registration under
the Act of all Registrable Securities that the Holders request to be registered in a written
request received by the Company within twenty (20) days of the mailing of the Company’s notice
pursuant to this Section 1.2(a).
(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 1.2 and the Company shall include such information in the written
notice referred to in Section 1.2(a). 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
(unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company (which underwriter or
underwriters shall be reasonably acceptable to a majority in interest of the Initiating Holders).
Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Company
that marketing factors require a limitation of the number of securities 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). In no event shall any Registrable Securities be excluded from such
underwriting unless all other securities are first excluded. 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 1.2:
(i) in any particular jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except
as may be required under the Act; or
(ii) after the Company has effected two (2) registrations pursuant to this Section 1.2, and
such registrations have been declared or ordered effective; or
(iii) during the period starting with the date sixty (60) days prior to the Company’s good
faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days
following the effective date of, a Company-initiated registration
3
subject to Section 1.3 below, provided that the Company is actively employing in good faith all commercially reasonable efforts
to cause such registration statement to become effective; or
(iv) if the Initiating Holders propose to dispose of Registrable Securities that may be
registered on Form S-3 pursuant to Section 1.4 hereof; or
(v) if the Company shall furnish to Holders requesting a registration statement pursuant to
this Section 1.2, a certificate signed by the Company’s Chief Executive Officer or Chairman of the
Board stating that in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its 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 one hundred twenty (120) days after receipt of the request of the
Initiating Holders, provided that such right shall be exercised by the Company not more than once
in any twelve (12)-month period.
1.3 Company Registration.
(a) If the Company proposes to register (including for this purpose a registration effected
pursuant to Section 1.2 or by the Company for stockholders other than the Holders) any of its stock
or other securities under the Act in connection with the public offering of such securities (other
than a registration relating solely to the sale of securities to participants in a Company stock
plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the
Act, a registration on any form that does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the Registrable
Securities, or a registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities that are also being registered), the Company shall, at
such time, promptly give each Holder written notice of such registration. Upon the written request
of each Holder given within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.5, the Company shall, subject to the provisions of Section 1.3(c), use
all commercially reasonable efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
(b) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 1.7 hereof.
(c) Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock, the Company shall not be required under this
Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the
terms of the underwriting as agreed upon between the Company and the underwriters selected by it
(or by other persons entitled to select the underwriters) and enter into an underwriting agreement
in customary form with such underwriters, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the offering by the Company.
If the total amount of securities,
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including Registrable Securities, requested by stockholders to
be included in such offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the success of the offering,
then the Company shall be required to include in the offering only that number of such securities,
including Registrable Securities, that the underwriters determine in their sole discretion will not
jeopardize the success of the offering. In no event shall any Registrable Securities be excluded
from such offering unless all other stockholders’ securities are first excluded. In the event that
the underwriters determine that less than all of the Registrable Securities requested to be
registered can be included in such offering, then the Registrable Securities that are included in
such offering shall be apportioned pro rata among the selling Holders based on the number of
Registrable Securities held by all selling Holders or in such other proportions as shall mutually
be agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall the
amount of securities of the selling Holders included in the offering be reduced below twenty-five
percent (25%) of the total amount of securities included in such offering, unless such offering is
the initial public offering of the Company’s securities, in which case the selling Holders may be
excluded if the underwriters make the determination described above and no other stockholder’s
securities are included. For purposes of the preceding sentence concerning apportionment, for any
selling stockholder that is a Holder of Registrable Securities and that is a venture capital or
other investment fund, partnership or corporation, the affiliated venture capital or other
investment funds, partners, retired partners and stockholders 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 “selling Holder,” and any pro rata reduction
with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable
Securities owned by all such related entities and individuals.
1.4 Form S-3 Registration. In case the Company shall receive from the Holders of at
least fifty percent (50%) of the Registrable Securities (for purposes of this Section 1.4, the
“Initiating Holders”) 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, the Company shall:
(a) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders; and
(b) use all commercially reasonable efforts to effect, as soon as practicable, such
registration and all such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holders’ Registrable
Securities as are specified in such request, together with all or such portion of the Registrable
Securities of any other Holders joining in such request as are specified in a written request given
within 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 1.4:
(i) if Form S-3 is not available for such offering by the Holders;
5
(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 (net of any underwriters’ discounts or commissions) of
less than $3,000,000;
(iii) if the Company shall furnish to Holders requesting a registration statement pursuant to
this Section 1.4, a certificate signed by the Company’s Chief Executive Officer or Chairman of the
Board stating that in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its 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 one hundred twenty (120) days after receipt of the request of the
Initiating Holders, provided that such right shall be exercised by the Company not more than once
in any twelve (12)-month period;
(iv) if the Company has, within the twelve (12) month period preceding the date of such
request, already effected two (2) registrations on Form S-3 for the Holders pursuant to this
Section 1.4; or
(v) in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration,
qualification or compliance.
(c) 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 1.4 and the Company shall include such information in the written
notice referred to in Section 1.4(a). The provisions of Section 1.2(b) shall be applicable to such
request (with the substitution of Section 1.4 for references to Section 1.2).
(d) Subject to the foregoing, the Company shall file a registration statement covering the
Registrable Securities and other securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Initiating Holders. Registrations effected
pursuant to this Section 1.4 shall not be counted as requests for registration or registrations
effected pursuant to Sections 1.2 or 1.3, respectively.
1.5 Obligations of the Company. Whenever required under this Section 1 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use all commercially reasonable 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 a period of up to one hundred
twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement
has been completed;
(b) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such
6
registration statement as may be
necessary to comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement;
(c) furnish to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable Securities owned by them;
(d) use all commercially reasonable 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;
(e) in the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering;
(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 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) cause all such Registrable Securities registered pursuant to this Section 1 to be listed
on a national exchange or trading system and on each securities exchange and trading system on
which similar securities issued by the Company are then listed;
(h) provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of such registration; and
(i) use its best efforts to furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a
registration pursuant to this Section 1, if such securities are being sold through underwriters, or
if such securities are not being sold through underwriters, on the date that the registration
statement with respect to such securities becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purposes of such registration, in form and substance
as is customarily given to underwriters in an underwritten public offering, addressed to the
underwriters and to the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory to the Holders of a majority of the
Registrable Securities being registered, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
7
Notwithstanding the provisions of this Section 1, the Company shall be entitled to defer, for
a period of one hundred twenty (120) days (but not more than once in any twelve (12) month period),
the filing, effectiveness or use of, or trading under, any registration statement if the Company
shall determine (and shall provide a certificate of the Company’s Chief Executive Officer
confirming such determination) that any such filing or the sale of any securities pursuant to such
registration statement would:
(i) in the good faith judgment of the Board of Directors of the Company, materially impede,
delay or interfere with any material pending or proposed financing, acquisition, corporate
reorganization or other similar transaction involving the Company for which the Board of Directors
of the Company has authorized negotiations;
(ii) in the good faith judgment of the Board of Directors of the Company, materially adversely
impair the consummation of any pending or proposed material offering or sale of any class of
securities by the Company; or
(iii) in the good faith judgment of the Board of Directors of the Company, require disclosure
of material nonpublic information that, if disclosed at such time, would be materially harmful to
the interests of the Company and its stockholders; provided, however, that during
any period referenced in the immediately preceding subsections (i) and (ii) above and this
subsection (iii), all executive officers and directors of the Company are also prohibited from
selling securities of the Company (or any security of any of the Company’s subsidiaries or
affiliates).
In the event of the suspension of effectiveness of any registration statement pursuant to this
Section 1.5, the applicable time period during which such registration statement is to remain
effective shall be extended by that number of days equal to the number of days during which the
effectiveness of such registration statement was suspended.
If the Company shall exercise its deferral right under this Section 1.5, such deferral (i)
shall be counted for the purposes of determining whether such right has been exercised under
Section 1.2(c)(v) during any twelve (12)-month period if such registration was initiated pursuant
to Section 1.2 or (ii) shall be counted for the purposes of determining whether such right has been
exercised under Section 1.4(b)(iii) during any twelve (12)-month period if
such registration was initiated pursuant to Section 1.4. Such deferral right under this
Section 1.5 shall not be utilized by the Company during any twelve (12)-month period if a deferral
right has already been exercised by the Company pursuant to Section 1.2(c)(v) (during any
applicable twelve (12)-month period), provided that such registration was initiated pursuant to
Section 1.2. In addition, such deferral right under this Section 1.5 shall not be utilized by the
Company during any twelve (12)-month period if a deferral right has already been exercised by the
Company pursuant to Section 1.4(b)(iii) (during any applicable twelve (12)-month period), provided
that such registration was initiated pursuant to Section 1.4.
1.6 Information from Holder. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method of
8
disposition of such securities as shall be reasonably required to effect the registration of such Holder’s
Registrable Securities.
1.7 Expenses of Registration. All0 expenses other than underwriting discounts and
commissions incurred in connection with registrations, filings or qualifications pursuant to
Sections 1.2, 1.3 and 1.4, including (without limitation) all registration, filing 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 (not to
exceed $25,000) shall be borne by the Company. Notwithstanding the foregoing, the Company shall
not be required to pay for any expenses of any registration proceeding begun pursuant to Section
1.2 or Section 1.4 if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses pro rata based upon the number of Registrable
Securities that were to be included in the withdrawn registration), unless, in the case of a
registration requested under Section 1.2, the Holders of a majority of the Registrable Securities
agree to forfeit their right to one demand registration pursuant to Section 1.2 and provided,
however, that if at the time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company from that known to the Holders at
the time of their request and have withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change, then the Holders shall not be required
to pay any of such expenses and shall retain their rights pursuant to Section 1.2 or 1.4.
1.8 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 1.
1.9 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
the partners, officers, directors and stockholders of each Holder, legal counsel and accountants
for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint
or several) to which they may become subject under the Act, the 1934 Act, any other federal
securities law, any state securities laws or any rule or regulation promulgated under the Act,
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 Act, the 1934
Act, any state securities laws or any rule or regulation promulgated under the Act; the 1934 Act or
any state securities laws, and the Company will reimburse each such Holder, underwriter,
9
controlling person or other aforementioned 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 as such expenses are incurred; provided, however, that the indemnity agreement
contained in this subsection l.9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the extent that it arises out of
or is based upon a Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by any such Holder,
underwriter, controlling person or other aforementioned person; provided further, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter or other aforementioned person, or any person controlling such
Holder or underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent
or given by or on behalf of such Holder or underwriter or other aforementioned person to such
person, if required by law so to have been delivered, at or prior to the written confirmation of
the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, legal counsel and
accountants for the Company, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or other Holder, against
any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act, any other federal securities law, any state
securities laws or any rule or regulation promulgated under the Act, the 1934 Act, any other
federal securities law, or any state securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use in connection with
such registration; and each such Holder will reimburse any person intended to be indemnified
pursuant to this subsection l.9(b) for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the
indemnity agreement contained in this subsection l.9(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
that in no event shall any indemnity under this subsection l.9(b) exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.9 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in and, to
10
the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of liability to the indemnified party under this Section 1.9 to the extent
of such prejudice, but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise than under this
Section 1.9.
(d) If the indemnification provided for in this Section 1.9 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage or expense, as well as any other relevant equitable considerations;
provided, however, that no contribution by any Holder, when combined with any amounts paid by such
Holder pursuant to Section 1.9(b), shall exceed the net proceeds from the offering received by such
Holder. The relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control.
(f) The obligations of the Company and Holders under this Section 1.9 shall survive the
completion of any offering of Registrable Securities in a registration statement under this Section
1, and otherwise.
1.10 Reports Under the 1934 Act. With a view to making available to the Holders the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
11
(a) make and keep public information available, as those terms are understood and defined in
Rule 144, at all times after the effective date of the Initial Offering;
(b) take such action, including the voluntary registration of its Common Stock under Section
12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of
their Registrable Securities, such action to be taken as soon as practicable after the end of the
fiscal year in which the first registration statement filed by the Company for the offering of its
securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other documents required of the
Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports and documents so
filed by the Company, and (iii) such other information as may be reasonably requested in availing
any Holder of any rule or regulation of the SEC that permits the selling of any such securities
without registration or pursuant to such form.
1.11 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities that (i) is an affiliate of
a Holder or a subsidiary, parent, partner, limited partner, retired partner, member, retired member
or stockholder of a Holder, (ii) is a Holder’s family member or trust for the benefit of an
individual Holder, or (iii) after such assignment or transfer, holds at least 375,000 shares of
Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations) (or if the transferring Holder owns less than 375,000
shares of such securities, then all Registrable Securities held by the transferring Holder),
provided: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the
name and address of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees in writing to be
bound by and subject to the terms and conditions of this Agreement, including, without limitation,
the provisions of Section 1.13 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act.
1.12 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 outstanding Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company that would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 1.2, Section 1.3 or Section 1.4
hereof, unless under the terms of such agreement, such holder or
12
prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities
will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to
demand registration of their securities.
1.13 “Market Stand-Off” Agreement.
(a) Each Holder hereby agrees that it will not, without the prior written consent of the
managing underwriter, during the period commencing on the date of the final prospectus relating to
the Company’s Initial Offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (l80) days) (i) lend, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly
or indirectly, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing provisions of this
Section 1.13 (W) shall apply only to the Company’s initial public offering of equity securities,
(X) shall not apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement or to any shares registered in the Initial Offering or purchased in the after market or
any other shares or other securities purchased after the Initial Offering that are not otherwise
subject to similar restrictions, and (Y) shall only be applicable to the Holders if all officers
and directors and greater than one percent (1%) stockholders of the Company enter into similar
agreements, provided that if any such persons or entities are released from the restrictions of
such agreements, all Holders shall be similarly released, pro rata, based on the number of shares
subject to such agreements. The underwriters in connection with the Company’s Initial Offering are
intended third party beneficiaries of this Section 1.13 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto. Each Holder further
agrees to execute such agreements as may be reasonably requested by the underwriters in the
Company’s Initial Offering that are consistent with this Section 1.13 or that are necessary to give
further effect thereto.
In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions
with respect to the Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such period.
(b) Each Holder agrees that a legend reading substantially as follows shall be placed on all
certificates representing all Registrable Securities of each Holder (and the shares or securities
of every other person subject to the restriction contained in this Section 1.13):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF UP
TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE ISSUER’S REGISTRATION STATEMENT FILED
UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
ORIGINAL HOLDER OF THESE SECURITIES,
13
A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S
PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES.
1.14 Termination of Registration Rights. No Holder shall be entitled to exercise any
right provided for in this Section 1 (a) after five (5) years following the consummation of the
Initial Offering, (b) as to any Holder, such earlier time after the Initial Offering at which such
Holder (i) can sell all shares held by it in compliance with Rule 144(k) or (ii) holds one percent
(1%) or less of the Company’s outstanding Common Stock and all Registrable Securities held by such
Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales
under Rule 144) can be sold in any three (3)-month period without registration in compliance with
Rule 144.
2. Covenants of the Company.
2.1 Delivery of Financial Statements. The Company shall, upon request, deliver to
each Investor (or transferee of an Investor) that holds at least 375,000 shares of Registrable
Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations and
other recapitalizations) (a “Major Investor”):
(a) as soon as practicable, but in any event within ninety (90) days after the end of each
fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the
Company and statement of stockholders’ equity as of the end of such year, and a statement of cash
flows for such year, such year-end financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles (“GAAP”), and audited and certified by
independent public accountants of nationally recognized standing selected by the Company;
(b) as soon as practicable, but in any event within forty-five (45) days after the end of each
of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement,
statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of
such fiscal quarter.
(c) within thirty (30) days of the end of each month, an unaudited income statement and
statement of cash flows and balance sheet for and as of the end of such month, in reasonable
detail;
(d) as soon as practicable, but in any event at least thirty (30) days prior to the end of
each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis,
including balance sheets, income statements and statements of cash flows for such months and, as
soon as prepared, any other budgets or revised budgets prepared by the Company;
(e) with respect to the financial statements called for in subsections (b) and (c) of this
Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company
certifying that such financials were prepared in accordance with GAAP consistently applied with
prior practice for earlier periods (with the exception of footnotes that may be required by GAAP)
and fairly present the financial condition of the
14
Company and its results of operation for the
period specified, subject to year-end audit adjustment, provided that the foregoing shall not
restrict the right of the Company to change its accounting principles consistent with GAAP, if the
Board of Directors determines that it is in the best interest of the Company to do so; and
(f) such other information relating to the financial condition, business or corporate affairs
of the Company as the Major Investor may from time to time request, provided, however, that the
Company shall not be obligated under this subsection (f) or any other subsection of Section 2.1 to
provide information that it deems in good faith to be a trade secret or similar confidential
information.
2.2 Inspection. The Company shall permit each Major Investor, at such Major
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 the Major Investor; provided, however, that the
Company shall not be obligated pursuant to this Section 2.2 to provide access to any information
that it reasonably considers to be a trade secret or similar confidential information.
2.3 Termination of Covenants. The covenants set forth in Sections 2.1, 2.2, 2.5 and
2.6 shall terminate and be of no further force or effect (a) upon the consummation of the Company’s
Initial Offering or (b) when the Company first becomes subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall first occur. The
Covenants set forth in Sections 2.7, 2.8 and 2.9 shall terminate and be of no further force or
effect upon the consummation of the Company’s Initial Offering.
2.4 Right of First Offer. Subject to the terms and conditions specified in this
Section 2.4, the Company hereby grants to each Major Investor a right of first offer with respect
to future sales by the Company of its Shares (as hereinafter defined). For purposes of this
Section 2.4, the term “Major Investor” includes any general partners and affiliates of a Major
Investor. A Major Investor shall be entitled to apportion the right of first offer hereby granted
it among itself and its partners and affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities convertible into or
exchangeable or exercisable for any shares of, any class of its capital stock (“Shares”), the
Company shall first make an offering of such Shares to each Major Investor in accordance with the
following provisions:
(a) The Company shall deliver a notice in accordance with Section 3.5 (“Notice”) to the Major
Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares
to be offered, and (iii) the price and terms upon which it proposes to offer such Shares.
(b) By written notification received by the Company within twenty (20) calendar days after
receipt of the Notice, each Major Investor may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares that equals the proportion that
the number of shares of Common Stock issued and held, or
15
issuable upon conversion and exercise of
all convertible or exercisable securities then held by such Major Investor, bears to the total
number of shares of Common Stock of the Company then outstanding (assuming full conversion and
exercise of all convertible and exercisable securities then outstanding). Such purchase shall be
completed at the same closing as that of any third party purchasers or at an additional closing
thereunder. The Company shall promptly, in writing, inform each Major Investor that purchases all
the shares available to it (each, a “Fully-Exercising Investor”) of any other Major
Investor’s failure to do likewise. During the 10-day period commencing after receipt of such
information, each Fully-Exercising Investor shall be entitled to obtain that portion of the Shares
for which Major Investors were entitled to subscribe but which were not subscribed for by the Major
Investors that is equal to the proportion that the number of shares of Common Stock issued and
held, or issuable upon conversion and exercise of all convertible or exercisable securities then
held, by such Fully-Exercising Investor bears to the total number of shares of Common Stock then
outstanding (assuming full conversion and exercise of all convertible or exercisable securities
then outstanding).
(c) If all Shares that Major Investors are entitled to obtain pursuant to subsection 2.4(b)
are not elected to be obtained as provided in subsection 2.4(b) hereof, the Company may, during the
ninety (90) day period following the expiration of the period provided in subsection 2.4(b) hereof,
offer the remaining unsubscribed portion of such Shares to any person or persons at a price not
less than that, and upon terms no more favorable to the offeree than those, specified in the
Notice. If the Company does not enter into an agreement for the sale of the Shares within such
period, or if such agreement is not consummated within sixty (60) days of the execution thereof,
the right provided hereunder shall be deemed to be revived and such Shares shall not be offered
unless first reoffered to the Major Investors in accordance herewith.
(d) The right of first offer in this Section 2.4 shall not be applicable to (i) the issuance
or sale of shares of Common Stock (or options therefor) to employees, directors, consultants and
other service providers pursuant to plans or agreements approved by the Company’s Board of
Directors; (ii) the issuance of securities pursuant the Company’s Initial Offering, (iii) the
issuance of securities pursuant to the conversion or exercise of convertible or exercisable
securities, (iv) the issuance of securities in connection with a bona fide business acquisition of
or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, (v) the issuance and sale of Series D Preferred Stock pursuant to the Series D
Agreement, (vi) the issuance of stock, warrants or other securities to banks or similar financial
institutions, provided such issuances are for other than primarily equity financing purposes or
(vii) the issuance of stock, warrants or other securities in connection with strategic
transactions, provided such issuances are for other than primarily equity financing purposes. In
addition to the foregoing, the right of first offer in this Section 2.4 shall not be applicable
with respect to any Major Investor and any subsequent offering of Shares if (i) at the time of such
offering, the Major Investor is not an “accredited investor,” as that term is then defined in Rule
501(a) of the Act and (ii) such offering of Shares is otherwise being offered only to accredited
investors.
(e) The rights provided in this Section 2.4 may not be assigned or transferred by any Major
Investor; provided, however, that a Major Investor that is a venture
16
capital or other investment
fund may assign or transfer such rights to an affiliated venture capital or other investment fund.
(f) The covenants set forth in this Section 2.4 shall terminate and be of no further force or
effect upon the consummation of the Company’s Initial Offering.
2.5 Proprietary Information and Inventions Agreements. The Company shall require all
employees and consultants with access to confidential information to execute and deliver at the
commencement of such person’s relationship with the Company a Proprietary Information and
Inventions Agreement or a Consulting Agreement (as applicable), in substantially the forms approved
by the Company’s Board of Directors.
2.6 Employee Agreements. Unless approved by the Board of Directors of the Company, all
future employees of the Company who shall purchase, or receive options to purchase, shares of the
Company’s Common Stock following the date hereof shall be required to execute stock purchase or
option agreements providing for (i) vesting of shares over a four-year period with the first 25% of
such shares vesting following twelve (12) months of continued employment or services, and the
remaining shares vesting in equal monthly installments over the following 36 months thereafter and
(ii) a 180-day lockup period in connection with the Company’s initial public offering. The Company
shall retain a right of first refusal on transfers until the Company’s initial public offering and
the right to repurchase unvested shares at cost.
2.7 Compensation Committee. The compensation for the officers and other key
management of the Company will be determined by a compensation committee of the Board of Directors,
which committee shall include the two (2) members of the Board of Directors nominated by the holders of Series A
Preferred Stock.
2.8 Qualified Small Business Stock Status. The Company shall submit to the Internal
Revenue Service, and upon request shall submit to the Investors, any reports that may be required
under Section 1202(d)(1)(C) of the Code and any related Treasury Regulations. In addition, within
ten (10) days after any Investor has delivered to the Company a written request therefor, the
Company shall deliver to such Investor a written statement informing the Investor whether, in the
Company’s good-faith judgment after a reasonable investigation, such Investor’s interest in the
Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code, or
would constitute “qualified small business stock,” if determination of whether stock constitutes
“qualified small business stock” were made by taking into account the modifications set forth in
Section 1045(b)(4) of the Code. Notwithstanding the foregoing, the Company shall incur no
liability to the Investors (or otherwise) as a result of having furnished such written statement
(including in the event that such written statement is inaccurate in any respect) provided that
such written statement is provided in good faith. The Company’s obligation to furnish a written
statement pursuant to this Section 2.9 shall continue notwithstanding the fact that a class of the
Company’s stock may be traded on an established securities market.
2.9 Observer Rights.
17
(a) As long as Trinity Ventures VIII, L.P. and its affiliates (“Trinity Ventures”) own not
less than fifty percent (50%) of the shares of Series B Preferred Stock it originally purchased
pursuant to the Series B Preferred Stock Purchase Agreement, dated as of August 4, 2003, between
the Company and each of the other parties thereto, the Company shall invite a representative of
Trinity Ventures to attend all meetings of its Board of Directors in a nonvoting observer capacity
and, in this respect, shall give such representative copies of all notices, minutes, consents and
other materials that it provides to its directors; provided, however, that such representative
shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all
information so provided; and, provided further, that the Company reserves the right to withhold any
information and to exclude such representative from any meeting or portion thereof if access to
such information or attendance at such meeting could adversely affect the attorney-client privilege
between the Company and its counsel or would result in disclosure of trade secrets to such
representative or if such Investor or its representative is or is affiliated with a direct
competitor of the Company. The Company agrees to reimburse such representative for its reasonable
expenses incurred in connection with attending meetings of the Board of Directors.
(b) As long as WK Technology Fund and its affiliates (“WK Technology Fund”) own not less than
fifty percent (50%) of the shares of Series C Preferred Stock it originally purchased pursuant to
the Series C Preferred Stock Purchase Agreement, dated as of June 24, 2004, between the Company and
each of the other parties thereto, the Company shall invite a representative of WK Technology Fund
to attend all meetings of its Board of Directors in a nonvoting observer capacity and, in this
respect, shall give such representative copies of all notices, minutes, consents and other
materials that it provides to its directors; provided, however, that such representative shall
agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and, provided
further, that the Company reserves the right to withhold any information and to exclude such
representative from any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between the Company and its
counsel or would result in disclosure of trade secrets to such representative or if such Investor
or its representative is or is affiliated with a direct competitor of the Company. The Company
agrees to reimburse such representative for its reasonable expenses incurred in connection with
attending meetings of the Board of Directors.
(c) As long as ▇▇▇▇▇ Capital Management, LLC and its affiliates (“▇▇▇▇▇”) own not less than
fifty percent (50%) of the shares of Series D Preferred Stock it originally purchased pursuant to
the Series D Agreement, the Company shall invite a representative of ▇▇▇▇▇ to attend all meetings
of its Board of Directors in a nonvoting observer capacity and, in this respect, shall give such
representative copies of all notices, minutes, consents and other materials that it provides to its
directors; provided, however, that such representative shall agree to hold in confidence and trust
and to act in a fiduciary manner with respect to all information so provided; and, provided
further, that the Company reserves the right to withhold any information and to exclude such
representative from any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between the Company and its
counsel or would result in disclosure of trade secrets to such representative or if such Investor
or its representative is or is affiliated with
18
a direct competitor of the Company. The Company
agrees to reimburse such representative for its reasonable expenses incurred in connection with
attending meetings of the Board of Directors.
2.10 Director Meetings. Unless otherwise determined by the Board of Directors, the
Board of Directors shall meet at least once per month at such times to be determined by the Board
of Directors.
3. Miscellaneous.
3.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.
3.2 Governing Law. This Agreement shall be governed by and construed under the laws of
the State of California as applied to agreements among California residents entered into and to be
performed entirely within California.
3.3 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
3.5 Notices. All notices and other communications given or made pursuant hereto shall
be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the respective parties at the
addresses set forth on the signature pages attached hereto (or at such other addresses as shall be
specified by notice given in accordance with this Section 3.5).
3.6 Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.
3.7 Entire Agreement; Amendments and Waivers. This Agreement (including the Exhibits
hereto, if any) constitutes the full and entire understanding and agreement among the parties with
regard to the subjects hereof and thereof. Any term of this Agreement (other than Section 2.1,
Section 2.2, Section 2.3 and Section 2.4) may be amended and the
19
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the written consent of the
Company and the holders of a majority of the Registrable Securities; provided, however,
that (a) the written consent of Trinity Ventures shall be necessary for any amendment or waiver of
Section 2.9(a) (but only for so long as Trinity Ventures has an observation right pursuant to
Section 2.9(a)); provided further, that the immediately preceding clause (a) shall be
amended only with the written consent of Trinity Ventures; (b) the written consent of WK Technology
Fund shall be necessary for any amendment or waiver of Section 2.9(b) (but only for so long as WK
Technology Fund has an observation right pursuant to Section 2.9(b)); provided further,
that the immediately preceding clause (b) shall be amended only with the written consent of WK
Technology Fund; and (c) the written consent of ▇▇▇▇▇ shall be necessary for any amendment or
waiver of Section 2.9(c) (but only for so long as ▇▇▇▇▇ has an observation right pursuant to
Section 2.9(c)); provided further, that the immediately preceding clause (c) shall be
amended only with the written consent of ▇▇▇▇▇. The provisions of Section 2.1, Section 2.2,
Section 2.3 and Section 2.4 may be amended or waived (either generally or in a particular instance
and either retroactively or prospectively) only with the written consent of the Company and the
holders of a majority of the Registrable Securities that are held by Major Investors.
Notwithstanding the foregoing, (i) in the event that any amendment or waiver adversely affects the
obligations or rights of the holders of Series B Preferred Stock in a different manner than the
other Holders, such amendment or waiver shall also require the written consent of the holders of at
least 66 2/3 % (sixty-six and two-thirds percent) of the then outstanding shares of Series B
Preferred Stock (voting as a separate class); provided, however, that the immediately
preceding clause shall be amended only with the written consent of the holders of at least
66 2/3 % (sixty-six and two-thirds percent) of the then outstanding shares of Series B
Preferred Stock (voting as a separate class); (ii) in the event that any amendment or waiver
adversely affects the obligations or rights of the holders of Series C Preferred Stock in a
different manner than the other Holders, such amendment or waiver shall also require the written
consent of the holders of at least 66 2/3 % (sixty-six and two-thirds percent) of the then
outstanding shares of Series C Preferred Stock (voting as a separate class); provided,
however, that the immediately preceding clause shall be amended only with the written consent
of the holders of at least 66 2/3 % (sixty-six and two-thirds percent) of the then
outstanding shares of Series C Preferred Stock (voting as a separate class); and (iii) in the event
that any amendment or waiver adversely affects the obligations or rights of the holders of Series D
Preferred Stock in a different manner than the other Holders, such amendment or waiver shall also
require the written consent of the holders of at least 66 2/3 % (sixty-six and two-thirds
percent) of the then outstanding shares of Series D Preferred Stock (voting as a separate class);
provided, however, that the immediately preceding clause shall be amended only with the
written consent of the holders of at least 66 2/3 % (sixty-six and two-thirds percent) of
the then outstanding shares of Series D Preferred Stock (voting as a separate class). Any
amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of
any Regist
rable Securities, each future holder of all such Registrable Securities, and the Company.
3.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
20
3.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated entities (including affiliated venture capital or other investment funds) or persons
shall be aggregated together for the purpose of determining the availability of any rights under
this Agreement.
3.10 Additional Investors. Notwithstanding Section 3.7, no consent shall be necessary
to add additional Investors as signatories to this Agreement, provided that such Investors have
purchased Series D Preferred Stock pursuant to the subsequent closing provisions of Section 1.3 of
the Series D Agreement.
3.11 Amendment and Restatement of Prior Agreement. Upon the effectiveness of this
Agreement, the Prior Agreement shall be amended and restated and be of no further force and effect,
and shall be superseded and replaced in its entirety by this Agreement.
21
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investors’ Rights
Agreement as of the date first above written.
| ARUBA WIRELESS NETWORKS, INC. | ||||
| /s/ ▇▇▇ ▇▇▇▇▇▇ | ||||
| By: ▇▇▇ ▇▇▇▇▇▇, President and Chief Executive Officer | ||||
| Address: | ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. | |||
| ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ |
SIGNATURE PAGE TO ARUBA WIRELESS NETWORKS, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
INVESTOR: |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Address: | ||||
SIGNATURE PAGE TO ARUBA WIRELESS NETWORKS, INC.
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
SCHEDULE A
Investors
Investor
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
Ardmore Ventures
▇▇▇▇▇ Microcap Fund, ▇.▇.
▇▇▇▇▇ Microcap Master Fund, ▇.▇.
▇▇▇▇▇ Technology 2X Ltd.
▇▇▇▇▇ Technology 2X, ▇.▇.
▇▇▇▇▇ Technology Partners Ltd.
▇▇▇▇▇ Technology Partners, ▇.▇.
▇▇▇▇▇ Technology Qualified 2X, ▇.▇.
▇▇▇▇▇ Technology Qualified Partners, L.P.
▇▇▇▇▇▇▇ ▇▇▇
CLEF Fund II, L.P.
CLEF, LP
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Venture Partners I, L.P. (An
“Investor” only for purposes of Section 1 of
this Agreement, and specifically not for
Section 2 of this Agreement)
▇. ▇▇▇ Management Company, LLC
▇▇▇▇▇▇▇ ▇. ▇▇▇ Living Trust
Focus Ventures III, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ Investors III, LP
G&H Partners
Itochu Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Family Foundation
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Lighthouse Capital Partners IV, L.P. (An
“Investor” only for purposes of Section 1 of
this Agreement, and specifically not for
Section 2 of this Agreement)
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
Ardmore Ventures
▇▇▇▇▇ Microcap Fund, ▇.▇.
▇▇▇▇▇ Microcap Master Fund, ▇.▇.
▇▇▇▇▇ Technology 2X Ltd.
▇▇▇▇▇ Technology 2X, ▇.▇.
▇▇▇▇▇ Technology Partners Ltd.
▇▇▇▇▇ Technology Partners, ▇.▇.
▇▇▇▇▇ Technology Qualified 2X, ▇.▇.
▇▇▇▇▇ Technology Qualified Partners, L.P.
▇▇▇▇▇▇▇ ▇▇▇
CLEF Fund II, L.P.
CLEF, LP
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Venture Partners I, L.P. (An
“Investor” only for purposes of Section 1 of
this Agreement, and specifically not for
Section 2 of this Agreement)
▇. ▇▇▇ Management Company, LLC
▇▇▇▇▇▇▇ ▇. ▇▇▇ Living Trust
Focus Ventures III, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ Investors III, LP
G&H Partners
Itochu Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ Family Foundation
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Lighthouse Capital Partners IV, L.P. (An
“Investor” only for purposes of Section 1 of
this Agreement, and specifically not for
Section 2 of this Agreement)
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇
Mak Kit-Ying
Matrix Partners VII, L.P.
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
Mitsui & Co., Ltd.
Mitsui Comtek Corp.
Moonlight LLC
MVC Global Japan Fund II
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Living Trust
▇▇▇▇▇▇ Management LLC
Praia Grande Ventures L.P.
▇▇▇▇ ▇▇▇
Sequoia Capital Growth Fund III
Sequoia Capital X
Sequoia Capital X Principals Fund
Sequoia Technology Partners X
Six Rivers Group Limited
▇▇▇▇▇ ▇▇▇▇
Take Sugimoto
Technology Ventures I Venture Capital
Investment Limited Partnership
The Board of Trustees of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Junior University (SEVF II)
The ▇▇▇▇▇▇▇ Living Trust dated 11/05/1999,
Trustee Krishna ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Trinity Ventures VII, L.P.
Trinity Ventures VIII, L.P.
Trinity VII Side-by-Side Fund, L.P.
Trinity VIII Entrepreneurs’ Fund, L.P.
Trinity VIII Side-by-Side Fund, L.P.
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & Co. VII LLC
WK Global Investment II Limited
WK Global Investment III Limited
WK Global Investment Limited
WK Technology Fund
WK Technology Fund IV
WK Technology Fund V
WK Technology Fund VI
WK Technology Fund VII
WK Technology Fund VIII
▇▇▇▇ Chat Shum
Matrix Partners VII, L.P.
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
Mitsui & Co., Ltd.
Mitsui Comtek Corp.
Moonlight LLC
MVC Global Japan Fund II
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Living Trust
▇▇▇▇▇▇ Management LLC
Praia Grande Ventures L.P.
▇▇▇▇ ▇▇▇
Sequoia Capital Growth Fund III
Sequoia Capital X
Sequoia Capital X Principals Fund
Sequoia Technology Partners X
Six Rivers Group Limited
▇▇▇▇▇ ▇▇▇▇
Take Sugimoto
Technology Ventures I Venture Capital
Investment Limited Partnership
The Board of Trustees of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Junior University (SEVF II)
The ▇▇▇▇▇▇▇ Living Trust dated 11/05/1999,
Trustee Krishna ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Trinity Ventures VII, L.P.
Trinity Ventures VIII, L.P.
Trinity VII Side-by-Side Fund, L.P.
Trinity VIII Entrepreneurs’ Fund, L.P.
Trinity VIII Side-by-Side Fund, L.P.
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & Co. VII LLC
WK Global Investment II Limited
WK Global Investment III Limited
WK Global Investment Limited
WK Technology Fund
WK Technology Fund IV
WK Technology Fund V
WK Technology Fund VI
WK Technology Fund VII
WK Technology Fund VIII
▇▇▇▇ Chat Shum