EXHIBIT 4.2
ALTEON WEBSYSTEMS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
1. General........................................................................................... 1
1.1 Definitions.............................................................................. 1
2. Registration; Restrictions on Transfer............................................................ 2
2.1 Restrictions on Transfer................................................................. 2
2.2 Demand Registration...................................................................... 3
2.3 Piggyback Registrations.................................................................. 5
2.4 Form S-3 Registration.................................................................... 5
2.5 Expenses of Registration................................................................. 6
2.6 Obligations of the Company............................................................... 7
2.7 Termination of Registration Rights....................................................... 8
2.8 Delay of Registration; Furnishing Information............................................ 8
2.9 Indemnification.......................................................................... 8
2.10 Assignment of Registration Rights........................................................ 10
2.11 Amendment of Registration Rights......................................................... 11
2.12 Limitation on Subsequent Registration Rights............................................. 11
2.13 "Market Stand-Off" Agreement............................................................. 11
2.14 Rule 144 Reporting....................................................................... 11
3. Covenants of the Company.......................................................................... 12
3.1 Basic Financial Information and Reporting................................................ 12
3.2 Confidentiality of Records............................................................... 12
3.3 Reservation of Common Stock.............................................................. 12
3.4 Proprietary Information and Inventions Agreement......................................... 12
3.5 Real Property Holding Corporation........................................................ 12
3.7 Termination of Covenants................................................................. 13
3.8 Transfer of Rights....................................................................... 13
4. Rights of First Refusal........................................................................... 14
4.1 Subsequent Offerings..................................................................... 14
4.2 Exercise of Rights....................................................................... 14
4.3 Issuance of Equity Securities to Other Persons........................................... 14
4.4 Termination of Rights of First Refusal................................................... 15
4.5 Transfer of Rights of First Refusal...................................................... 15
4.6 Excluded Securities...................................................................... 15
5. Miscellaneous..................................................................................... 15
5.1 Governing Law............................................................................ 15
5.2 Survival................................................................................. 16
5.3 Successors and Assigns................................................................... 16
5.4 Severability............................................................................. 16
5.5 Amendment and Waiver..................................................................... 16
5.6 Delays or Omissions...................................................................... 16
5.7 Notices.................................................................................. 17
5.8 Attorneys' Fees.......................................................................... 17
5.9 Titles and Subtitles..................................................................... 17
5.10 Counterparts............................................................................. 17
5.11 Amendment of Prior Agreement............................................................. 17
i.
ALTEON WEBSYSTEMS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (the "Agreement") is
entered into as of the [__]th day of June, 1999, by and among Alteon WebSystems,
Inc., a Delaware corporation (the "Company"), and the persons and entities set
forth on Exhibit A attached hereto. Such persons and entities shall be referred
to hereinafter as the "Investors" and each individually as an "Investor."
Recitals
Whereas, the Company granted certain purchasers (the "Prior Investors") of
its Common Stock, Series A Preferred Stock (the "Series A Stock"), Series B
Preferred Stock (the "Series B Stock") and Series C Preferred Stock (the "Series
C Stock") certain registration and other rights pursuant to the Amended and
Restated Investor Rights Agreement, dated June 30, 1998, between the Company and
the Prior Investors (the "Prior Agreement"); and
Whereas, the Company proposes to sell and issue up to two million five
hundred thousand (2,500,000) shares of its Series D Preferred Stock (the "Series
D Stock") pursuant to that certain Series D Preferred Stock Purchase Agreement
of even date herewith (the "Purchase Agreement"); and
Whereas, as a condition of entering into the Purchase Agreement, the
purchasers of the Series D Stock (the "Series D Purchasers") have requested that
the Company extend to them registration rights, information rights and other
rights as set forth below; and
Whereas, the Company and the Prior Investors desire to amend the Prior
Agreement to grant such rights to the Series D Purchasers;
Now, Therefore, in consideration of the mutual promises, representations,
warranties, covenants, and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:
1. General.
1.1 Definitions. As used in this Agreement the following terms shall have
the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any person owning of record Shares or Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.10 hereof.
"Initial Offering" means the Company's first firm commitment underwritten
public offering of its Common Stock registered under the Securities Act.
1.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (i) Common Stock of the Company issued or
issuable upon conversion of the Shares; (ii) Common Stock of the Company issued
to Essential pursuant to the License and Stock Purchase Agreement between the
Company and Essential, dated as of April 19, 1996 (the "Essential Agreement");
and (iii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, such above-described securities. Notwithstanding the foregoing,
Registrable Securities shall not include any securities sold by a person to the
public either pursuant to a registration statement or Rule 144 or sold in a
private transaction in which the transferor's rights under Section 2 of this
Agreement are not assigned.
"Registrable Securities then outstanding" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (i) are then issued and
outstanding or (ii) are issuable pursuant to then exercisable or convertible
securities.
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with Sections 2.2, 2.3, and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements not to exceed Twenty
Thousand Dollars ($20,000) of a single special counsel for the Holders, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"Shares" shall mean the Company's Series A Stock, Series B Stock, Series C
Stock and Series D Stock.
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"SEC" or "Commission" means the Securities and Exchange Commission.
2. Registration; Restrictions on Transfer.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
2.
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by the
terms of this Agreement, (B) such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder which is (A) a partnership to its affiliated
partnerships or its partners or former partners in accordance with partnership
interests, (B) a corporation to its affiliates or shareholders in accordance
with their interest in the corporation, (C) a limited liability company to its
members or former members in accordance with their interest in the limited
liability company, or (D) to the Holder's family member or trust for the benefit
of an individual Holder, provided the transferee will be subject to the terms of
this Agreement to the same extent as if he were an original Holder hereunder.
(b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification, or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of a majority of the
Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act covering the
3.
registration of Registrable Securities having an aggregate offering price to the
public in excess of $10,000,000 (a "Qualified Public Offering"), then the
Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.2, use its best efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2(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 a
majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding
any other provision of this Section 2.2, if the underwriter advises the Company
that marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which 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). Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) prior to the earlier of (A) May 10, 2000; or (B) or one
hundred eighty (180) days following the effective date of the registration
statement pertaining to the Initial Offering; provided that the Company makes
reasonable good faith efforts to cause such registration statement to become
effective;
(ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;
(iii) if within thirty (30) days of receipt of a written request
from Initiating Holders pursuant to Section 2.2(a), the Company gives notice to
the Holders of the Company's intention to make its Initial Offering within
ninety (90) days; or
(iv) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a period
of not more than ninety (90) days after receipt of the request of the Initiating
Holders; provided that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period.
4.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within fifteen (15) days after the above-described notice from the
Company, so notify the Company in writing. Such notice shall state the intended
method of disposition of the Registrable Securities by such Holder. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(a) Underwriting. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to 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 underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Company; second, to the Holders on a pro rata
basis based on the total number of Registrable Securities held by the Holders;
and third, to any shareholder of the Company (other than a Holder) on a pro rata
basis; provided that, no such reduction shall reduce the securities being
offered by the Company for its own account to be included in the registration
and underwriting, and provided further that, in no event shall the amount of
securities of the selling Holders included in the registration be reduced below
twenty-five percent (25%) of the total amount of securities included in such
registration, unless such offering is the Initial Offering and such registration
does not include shares of any other selling shareholders, in which event any or
all of the Registrable Securities of the Holders may be excluded in accordance
with the immediately preceding sentence. In no event will shares of any other
selling shareholder be included in such registration which would reduce the
number of shares which may be included by Holders without the written consent of
Holders of not less than at least two-thirds of the Registrable Securities
proposed to be sold in the offering.
(b) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration Expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 2.5 hereof.
2.4 Form S-3 Registration. The Company shall use its best efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms. In case the Company shall receive from any Holder or Holders of
Registrable Securities a written request or requests that the Company effect a
registration on Form S-3 (or any successor to Form S-3) or any similar short-
form registration statement
5.
and any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders, or
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than $500,000, or
(iii) if the Company shall furnish to the Holders a certificate
signed by the Chairman of the Board of Directors of the Company stating that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 2.4: provided, that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12)
month period, or
(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 2.4, 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) subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All such Registration Expenses incurred in
connection with registrations requested pursuant to this Section 2.4 after the
first two (2) registrations shall be paid by the selling Holders pro rata in
proportion to the number of shares sold by each.
2.5 Expenses of Registration. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders
6.
of the securities so registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay for expenses of
any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of
which has been subsequently withdrawn by the Initiating Holders unless (a) the
withdrawal is based upon material adverse information concerning the Company of
which the Initiating Holders were not aware at the time of such request or (b)
the Holders of a majority of Registrable Securities agree to forfeit their right
to one requested registration pursuant to Section 2.2 or Section 2.4, as
applicable, in which event such right shall be forfeited by all Holders. If the
Holders are required to pay the Registration Expenses, such expenses shall be
borne by the holders of securities (including Registrable Securities) requesting
such registration in proportion to the number of shares for which registration
was requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (a) above, then the Holders shall not
forfeit their rights pursuant to Section 2.2 or Section 2.4 to a demand
registration.
2.6 Obligations of the Company. Whenever required 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 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 up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
(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 Registrable Securities owned by them.
(d) Use all 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(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.
7.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.7 Termination of Registration Rights. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (i) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act, (ii) such
Holder (together with its affiliates, partners and former partners) holds less
than 1% of the Company's outstanding Common Stock (treating all shares of
convertible Preferred Stock on an as converted basis), and (iii) all Registrable
Securities held by and issuable to such Holder may be sold under Rule 144 during
any ninety (90) day period.
2.8 Delay of Registration; Furnishing Information.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3, or 2.4 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2(b), the number of shares or the anticipated aggregate
offering price of the Registrable Securities to be included in the registration
does not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company's obligation to
initiate such registration as specified in Section 2.2 or Section 2.4, whichever
is applicable.
2.9 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.2, 2.3, or 2.4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, directors and legal counsel
of each Holder, any underwriter (as defined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the
8.
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, 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 Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will reimburse each such
Holder, partner, officer or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 2.9(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 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) To the extent permitted by law, each Holder will, severally and
not jointly, if Registrable Securities held by such Holder are included in the
securities as to which such registration qualifications or compliance is being
effected, indemnify and hold harmless the Company, each of its directors, its
officers, and legal counsel and each person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, directors or officers or any person who controls such Holder,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, controlling person, underwriter or
other such Holder, or partner, director, officer or controlling person of such
other Holder may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder under an instrument duly executed by such Holder and
stated to be specifically for use in connection with such registration; and each
such Holder, severally and not jointly, will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director
or controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; provided, however, that the
indemnity agreement contained in this Section 2.9(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; provided further, that in no event shall any
indemnity or contribution under this Section 2.9 exceed the net proceeds from
the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.9 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 2.9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other
9.
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9.
(d) If the indemnification provided for in this Section 2.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any indemnity or any
contribution by a Holder hereunder exceed the net proceeds from the offering
received by such Holder.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution hereunder from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company and Holders under this Section 2.9
shall survive completion of any offering of Registrable Securities in a
registration statement. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
2.10 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 2 and the rights herein
related thereto may be assigned by a Holder to a transferee or assignee of
Registrable Securities which (i) is a subsidiary, affiliate, parent, general
partner, limited partner or retired partner of a Holder, (ii) is a Holder's
family member or trust for the benefit of an individual Holder, or (iii)
acquires at least two hundred thousand (200,000) shares of Registrable
Securities (as adjusted for stock splits and combinations); provided, however,
(A) the transferor shall, within ten (10) days after such transfer, furnish to
the Company written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned and (B) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.
10.
2.11 Amendment of Registration Rights. Any provision of this Section 2 may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.
2.12 Limitation on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not, without the prior written consent of the
Holders of at least a majority the Registrable Securities, enter into any
agreement with any holder or prospective holder of any securities of the Company
that would grant such holder registration rights senior to or on a parity with
those granted to the Holders hereunder.
2.13 "Market Stand-Off" Agreement. If requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of the initial registration statement of the
Company filed under the Securities Act, provided that all officers, directors
and holders of at least one percent (1%) of the Company's capital stock of the
Company enter into similar agreements. Any securities of the Company purchased
by a Holder in or following the Company's Initial Offering are specifically
excluded from the requirements of this Section 2.13.
The obligations described in this Section 2.13 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
2.14 Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act;
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
11.
3. Covenants of the Company.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, the Company will
furnish each Investor upon request a consolidated balance sheet of the Company,
as at the end of such fiscal year, and a consolidated statement of income and a
consolidated statement of cash flows of the Company, for such year, all prepared
in accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
audited by, and accompanied by a report and opinion thereon by independent
public accountants of national standing selected by the Company's Board of
Directors.
(c) The Company will furnish each Investor upon request, as soon as
practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, and in any event within forty-five
(45) days thereafter, a consolidated balance sheet of the Company as of the end
of each such quarterly period, and a consolidated statement of income and a
consolidated statement of cash flows of the Company for such period and for the
current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made.
3.2 Confidentiality of Records. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Company
identifies as being confidential or proprietary which shall be deemed to include
all information regarding the Company disclosed to the Investors in connection
with the purchase of the Shares (so long as such information is not in the
public domain), except that such Investor may disclose such proprietary or
confidential information to any affiliate, partner, subsidiary, parent,
attorney, accountant or financial advisor of such Investor for the purpose of
evaluating its investment in the Company as long as such affiliate, partner,
subsidiary, parent, attorney, accountant, or financial advisor is advised of the
confidentiality provisions of this Section 3.2.
3.3 Reservation of Common Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.4 Proprietary Information and Inventions Agreement. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in the form attached to the Purchase
Agreement.
3.5 Real Property Holding Corporation. The Company covenants that it will
operate in a manner such that it will not become a "United States real property
holding corporation" as that term is defined in Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended, and the regulations
12.
thereunder ("FIRPTA"). The Company agrees to make determinations as to its
status as a USRPHC, and will file statements concerning those determinations
with the Internal Revenue Service, in the manner and at the times required under
Reg. (S) 1.897-2(h), or any supplementary or successor provision thereto. Within
30 days of a request from an Investor or any of its partners or affiliates, the
Company will inform the requesting party, in the manner set forth in Reg. (S)
1.897-2(h)(1)(iv) or any supplementary or successor provision thereto, whether
that party's interest in the Company constitutes a United States real property
interest (within the meaning of Internal Revenue Code Section 897(c)(1) and the
regulations thereunder) and whether the Company has provided to the Internal
Revenue Service all required notices as to its USRPHC status.
3.6 Company Right of First Refusal. The Company's right of first refusal
set forth in Section 45 of the Bylaws of the Company, shall be terminated with
respect to the Shares upon the occurrence of any of the following events and the
Company covenants it shall amend its Bylaws as necessary to reflect such
termination:
(a) any consolidation or merger of the Company with or into any other
corporation or other entity or person, or any other corporate reorganization, in
which the stockholders of the Company immediately prior to such consolidation,
merger or reorganization, own, directly or indirectly, less than 50% of the
surviving corporation or entity's voting power immediately after such
consolidation, merger or reorganization, or any transaction or series of related
transactions in which in excess of fifty percent (50%) of the Company's voting
power is transferred to stockholders other than the Company's stockholders
immediately prior to such transaction or transactions (an "Acquisition");
(b) a sale, transfer, lease or other disposition of all or
substantially all of the assets of the Company in which stockholders of the
Company immediately prior to such disposition, own less than 50% of the
acquiring corporation or entities' voting power immediately after such
disposition (an "Asset Transfer");
(c) the Company's Initial Offering.
3.7 Termination of Covenants. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor on
the closing of the Company's Initial Offering.
3.8 Transfer of Rights. The rights of each Investor under this Section 3
may be transferred to the same parties, subject to the same restrictions as any
transfer of registration rights pursuant to Section 2.10.
3.9 Qualified Small Business Stock. The Company covenants that so long as
any of the shares of Series D Preferred Stock, or the Common Stock into which
such shares are converted, are held by an Investor (or a transferee in whose
hands such shares or Common Stock are eligible to qualify as Qualified Small
Business Stock as defined in Section 1201(c) of the Code), it will use its
reasonable efforts (including complying with any applicable filing or reporting
requirements imposed by the Code on issuers of Qualified Small Business Stock)
to cause such shares, or the Common Stock into which they are converted, to
qualify as Qualified Small Business Stock; provided, however, that "reasonable
efforts" as used in this Section 3.9 shall not be construed to require the
Company to operate its business in a manner which would adversely affect its
business, limit its future prospects or alter the timing or resource allocation
related to its planned operations or financing activities. The Company shall
submit to the Investors and to the Internal Revenue Service any reports that may
be required under Section
13.
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 certificate
informing the Investor whether such Investor's interest in the Company
constitutes a "qualified small business stock" as defined in Section 1202(c) of
the Code. The Company's obligation to furnish this QSBS Certificate pursuant to
this Section 3.9 shall continue notwithstanding the fact that a class of the
Company's stock may be traded on an established securities market.
4. Rights of First Refusal.
4.1 Subsequent Offerings. Each Investor (together with its affiliates)
holding not less than one hundred thousand (100,000) shares of Registrable
Securities (as adjusted for stock splits and combinations) (a "Major Investor")
shall have a right of first refusal to purchase its pro rata share of all Equity
Securities, as defined below, that the Company may, from time to time, propose
to sell and issue after the date of this Agreement, other than the Equity
Securities excluded by Section 4.6 hereof. Each Major Investor's pro rata share
is equal to the ratio of (A) the number of shares of the Company's Common Stock
(including all shares of Common Stock issued or issuable upon conversion of the
Shares) of which such Major Investor is deemed to be a holder immediately prior
to the issuance of such Equity Securities to (B) the total number of shares of
the Company's outstanding Common Stock (including all shares of Common Stock
issued or issuable upon conversion of the Shares or upon the exercise of any
outstanding warrants or options) immediately prior to the issuance of the Equity
Securities. The term "Equity Securities" shall mean (i) any Common Stock,
Preferred Stock or other security of the Company, (ii) any security convertible,
with or without consideration, into any Common Stock, Preferred Stock or other
security (including any option to purchase such a convertible security), (iii)
any security carrying any warrant or right to subscribe to or purchase any
Common Stock, Preferred Stock or other security, or (iv) any such warrant or
right.
4.2 Exercise of Rights. If the Company proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Major Investor shall have
fifteen (15) days from the giving of such notice to agree to purchase its pro
rata share of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company and
stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to any Major Investor who would cause the Company to
be in violation of applicable federal securities laws by virtue of such offer or
sale.
4.3 Issuance of Equity Securities to Other Persons. If not all of the
Major Investors elect to purchase their pro rata share of the Equity Securities,
then the Company shall promptly notify in writing the Major Investors who do so
elect and shall offer such Major Investors the right to acquire such
unsubscribed shares. The Major Investors shall have ten (10) days after receipt
of such notice to notify the Company of its election to purchase all or a
portion thereof of the unsubscribed shares. If the Major Investors fail to
exercise in full the rights of first refusal, the Company shall have ninety (90)
days thereafter to sell the Equity Securities in respect of which the Major
Investor's rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Company's notice to the Major Investors pursuant to Section 4.2 hereof.
If the Company has not sold such Equity Securities within ninety (90) days of
the notice provided pursuant to Section 4.2, the Company shall not thereafter
issue or sell any Equity Securities, without first offering such securities to
the Major Investors in the manner provided above.
14.
4.4 Termination of Rights of First Refusal. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the
closing of the Company's Initial Public Offering.
4.5 Transfer of Rights of First Refusal. The rights of first refusal of
each Major Investor under this Section 4 may be transferred to the same parties,
subject to the same restrictions as any transfer of registration rights pursuant
to Section 2.10.
4.6 Excluded Securities. The rights of first refusal established by this
Section 4 shall have no application to any of the following Equity Securities:
(a) shares of Common Stock (and/or options, warrants or other Common
Stock purchase rights issued pursuant to such options, warrants or other rights)
issued or to be issued to employees, officers or directors of, or consultants or
advisors to the Company or any subsidiary, pursuant to stock purchase or stock
option plans or other arrangements that are approved by the Board of Directors;
(b) stock issued pursuant to any rights or agreements outstanding as
of the date of this Agreement (as disclosed in the Purchase Agreement), options
and warrants outstanding as of the date of this Agreement; and stock issued
pursuant to any such rights or agreements granted after the date of this
Agreement, provided that the rights of first refusal established by this Section
4 applied with respect to the initial sale or grant by the Company of such
rights or agreements;
(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the any
Preferred Stock of the Company;
(f) any Equity Securities issued pursuant to any equipment leasing or
loan arrangement, or debt financing from a bank or similar financial institution
approved by the Board; and
(g) any Equity Securities that are issued by the Company pursuant to
a registration statement filed under the Securities Act.
(h) up to ten thousand (10,000) shares of Common Stock approved by
the Company's Board of Directors for issuance of gifts to certain of the
Company's current or potential customers or strategic partners.
5. Miscellaneous.
5.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
15.
5.2 Survival. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
5.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
5.4 Severability. In case any provision of the Agreement shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
5.5 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding, provided that the
rights of any Holder of at least 600,000 Registrable Securities shall not be
adversely affected without such Holder's consent, provided, however, that the
addition of persons or entities as Holders or of capital stock of the Company as
Registrable Securities shall not be deemed to adversely affect the rights of any
such Holder.
(b) Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of a majority of the Registrable
Securities then outstanding, provided that the rights of any Holder of at least
600,000 Registrable Securities shall not be adversely affected without such
Holder's consent, provided, however, that the addition of persons or entities as
Holders or of capital stock of the Company as Registrable Securities shall not
be deemed to adversely affect the rights of any such Holder.
(c) Notwithstanding the foregoing, this Agreement may be amended with
only the written consent of the Company solely to include additional purchasers
of Series D Stock as "Investors," "Holders" and parties hereto.
5.6 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in
16.
such writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
5.8 Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
5.9 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
5.11 Amendment of Prior Agreement. Effective upon the execution of this
Agreement by the Company and the Holders of a majority of the Registrable
Securities covered by the Prior Agreement, the Prior Agreement shall be null and
void and shall be superseded by the provisions of this Agreement. Each Investor
that was a party to the Prior Agreement hereby waives all rights of first
refusal contained in Section 4 of the Prior Agreement with respect to the sale
and issuance of the Series D Stock and the Common Stock issuable upon conversion
thereof, including any notice requirements related to such rights of first
refusal.
5.12 Aggregation of Shares. Shares of affiliates may be aggregated for the
purpose of satisfying the minimum 200,000 share requirement in Section 2.10 and
any other minimum share requirements contained herein.
17.
In Witness Whereof, the parties hereto have executed this Amended and
Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
COMPANY: INVESTORS:
Alteon WebSystems, Inc.
Signed by investors listed on Exhibit A
----------------------------------------
[Print Name of Investor]
BY: /s/ βββββββ β. βββ By:_____________________________________
-------------------------
President
Name:___________________________________
TITLE:__________________________________
Address: ββ βββββ ββββ ββββ.
βββ ββββ, ββ βββββ
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
18.
EXHIBIT A
SCHEDULE OF INVESTORS
βββββββ β. ββββ
ββββ ββββββββ ββ.
ββββ ββββ, ββ βββββ
ββββ βββββββ
ββββ βββββ ββββββββ
βββββββββββ, ββ βββββ
TCV III (GP)
ββββββ ββββββ
ββ ββββ ββββββ, βββββ βββ
ββββββββ, ββ βββββ
TCV III, L.P.
ββββββ ββββββ
ββ ββββ ββββββ, βββββ βββ
ββββββββ, ββ βββββ
TCV III (Q), L.P.
ββββββ ββββββ
ββ ββββ ββββββ, βββββ βββ
ββββββββ, ββ βββββ
TCV III Strategic Partners, L.P.
ββββββ ββββββ
ββ ββββ ββββββ, βββββ βββ
ββββββββ, ββ βββββ
Velocity Technology and Communications Trust B
βββ ββββββββ ββββββ, βββββ βββ
ββββ ββββ, ββ βββββ
ββββ β. βββββββ
βββ ββββββββ ββββββ, βββββ βββ
ββββ ββββ, ββ βββββ
ββββββ β. βββββββ βββ
βββ ββββββββ ββββββ, βββββ βββ
ββββ ββββ, ββ βββββ
ββββ ββββββββ
3I Technology Partners Ltd.
ββββ βββββ β, βββββ βββ
β.β. βββ ββββ
βββββ, ββββββ ββββ ββββββββ
1.
ββββββ βββββ ββ βββ
βββ-β, #βββ, βββββββ β, ββ-βββ ββββ
ββββββ, ββββββ
Dapknow LLC
Attn: J.M.D. Cha
βββ ββββββββββ ββββββ, βββββ ββββ
ββββ ββββ, ββ βββββ
Matrix Partners IV, L.P.
ββββ ββββ ββββ ββββ, βββββ βββ
βββββ ββββ, ββ βββββ
Matrix IV Entrepreneurs Fund, L.P.
ββββ ββββ ββββ ββββ, βββββ βββ
βββββ ββββ, ββ βββββ
ββββββ ββββ Ventures, a California Limited Partnership
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
Tow Partners,
a California Limited Partnership
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
Anvest, L.P.
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
βββββ β. ββββββββ
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
ββββββββ Holdings, L.P.
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
G. βββββββ βββββ, ββ.
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
βββββββ β. βββββββ, ββ.,
Trustee of the Younger Living Trust
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
βββββ ββββ
2.
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
ββββββ β. βββββββ
βββ ββββ ββββ ββββ, βββββ β-βββ
ββββ ββββ, ββ βββββ
βββββ Fargo Bank, Trustee
SHV M/P/T FBO βββββββ β. βββββββ, ββ.
Attn: βββββ ββββββ
P. O. Box 63050 MAC 0101-021
βββ βββββββββ, ββ βββββ
βββββ Fargo Bank, Trustee
SHV M/P/T FBO βββββββ βββββββ
Attn: βββββ ββββββ
P. O. Box 63050 MAC 0101-021
βββ βββββββββ, ββ βββββ
βββββ Fargo Bank, Trustee
SHV M/P/T FBO βββββ ββββ
Attn: βββββ ββββββ
P. O. Box 63050 MAC 0101-021
βββ βββββββββ, ββ βββββ
Essential Communications Corporation
ββββ βββββββββ ββββ., βββββ β
βββββββββββ, ββ βββββ
βββββββ β. ββββ Family Trust
ββββ βββββββ ββββββ
ββββ ββββ, ββ βββββ
The Louis & ββββββ ββββ 1988
Revocable Trust dated November 7, 1988
c/o Legato Systems
ββββ ββββββ βββββ
ββββ ββββ, ββ βββββ
ββββ β. ββββββββ, Trustee of
Controller Solutions Pension Plan
βββ βββββββ βββββ
ββββββββ, ββ βββββ
GC&H Investments
Attn: ββββ βββββββ
βββ ββββββββ βββββ, ββββ βββββ
βββ βββββββββ, ββ βββββ-ββββ
βββββββ βββββββββ and ββββ β. βββββ
3.
JT TEN
βββ βββββ βββββ
βββββββββ, ββ βββββ
βββββββ β. βββββ
βββ ββββββ ββββββ
ββββ ββββ, ββ βββββ
βββββββ β. βββββββ
βββ ββββ ββββ
ββββββββ, ββ βββββ
βββββββ β. Keenly
ββββ ββββββ βββββ
βββββββββ, ββ βββββ
βββββ β. ββββββ and ββββββ β. ββββββ
TTEES F/T ββββββ Family Trust
βββ ββββ βββββ βββββ
ββββ, ββ βββββ
ββββββ β. βββ
15221 Piedmont
ββββββββ, ββ βββββ
Don & ββββ ββββββββ
βββ βββ βββ
ββββββββββ, ββ βββββ
ββββ βββββββββ
ββββ β. βββββββββ ββββββ
βββββββ, ββ βββββ
βββββ ββββ ββββββ & ββββββββ βββ ββββ
ββββ ββββ ββββ βββ
βββ ββββ, ββ βββββ
ββββ & ββββ βββββ
P. O. βββ βββ
ββββββ βββββββ, ββ βββββ
ββββββ β. and βββββββββ β. βββββββββββ,
Trustees of the Warmenhoven 1987 Revocable
Trust UTA 12/16/87, as Amended
βββββ ββββ βββββ
ββββββββ, ββ βββββ
New Enterprise Associates VII,
Limited Partnership
βββββ ββββββ
4.
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
NEA Ventures 1997,
Limited Partnership
βββββ ββββββ
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
NEA Presidents Fund, L.P.
βββββ ββββββ
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
Onset Enterprise Associates II, L.P.
ββ. βββ βββββββ
ββββ ββββ ββββ ββββ
βββββ ββββ, ββ βββββ
ββββ βββββ
βββ ββββ ββββ ββββ, βββββ ββββ
ββββ ββββ, ββ βββββ
MV Venture Partners II
βββββ β. βββββββ
c/o ββββ βββββ & Sons, Inc.
βββ ββββββββββ ββββββ, βββββ ββββ
βββ βββββββββ, ββ βββββ
Meritech AG - βββββ ββββββββ
c/o Mericom AG
βββββββββββββ ββ
ββ ββββ βββββ
βββββββββββ
ββββββ βββββ
βββ βββββ ββββββ
βββββββ, βββββ ββββββ
ββββββββ βββββββββ
ββ βββββββββ ββββ
ββββββββββ, ββ βββββ
βββββββ β. βββββ & βββββββ β. βββββββ
βββ ββββββ ββββββ
ββββ ββββ, ββ βββββ
βββββ Ventures III
ββββ β. βββββ, ββ.
ββββ ββββ ββββ ββββ
5.
Building 4, βββββ βββ
βββββ ββββ, ββ βββββ
ββββββ β. ββββββββ
βββββ βββββ βββββ
βββ βββββ, ββ βββββ
Korea Technology Banking Corp.
ββ. ββββ-ββββ ββββ
KTB Building
ββ-ββ βββββ-ββββ, ββββββββββββ-ββ
βββββ βββ-βββ, βββββ
Fuji-Xerox Company Ltd.
ββ. ββββ βββββ
Kokusai Shin-Akasaka Building
West 13F
ββ βββββββ β-βββββ ββββββ-ββ
βββββ, βββ βββββ
Lim Guat Swee
c/o β.β. ββββ
International Manufacturing Services Ltd.
ββ βββ ββββ ββββββ
βββ ββββ, ββββ ββββ
βββββββ β. βββββββ
βββββ βββββββ βββββ
ββββββββ, ββ βββββ
ββββββββ ββββββ
Red Brick Japan Co., Ltd.
Shiroyama ββ ββββ , Building 16F
β-β-β βββββββββ ββββββ-ββ
βββββ βββ, βββββ
βββββββ ββββββ
ID Networks, Inc.
βββββββ ββββββββ ββ
β-ββ-β βββββ βββββββ
Shinagawa-Ku
Tokyo 141 Japan
βββββ βββββββββ
StarNet Co., Ltd.
ββββββββββ-βββββββββ, ββββββββ ββ
β-β-β βββββ, ββββββ-ββ
βββββ βββ βββββ
6.
βββββββ β. ββββββββ
ββ βββββ ββββ
ββββββββ, ββ βββββ
Seven Seas Group Limited
Attn: ββ. βββ ββββ Ho
Room 908 Dominion Center
ββ-ββ βββββ'β ββββ ββββ
βββββββ ββββ ββββ
Trailhead Ventures
Attn: ββ. ββββ βββββ
ββββ ββββββ ββββ, βββββ ββββ
ββββββ, ββ βββββ
βββββ and βββββββ βββββββββ
TTEES βββββ and βββββββ
βββββββββ 1995 Trust
DTD 12-9-95 βββ βββββββββ ββββ
βββββββ ββββββ, ββ βββββ
WK Technology Fund
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Technology Fund II
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Technology Fund III
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Technology Fund IV
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Technology Fund V
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Technology Fund VI
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
WK Global Investment Limited
10th Floor, No. 115, Sec. 3, ββββ βββββ E. Road
Taipei, Taiwan, R.O.C.
7.
ββββββ β. ββββ
c/o Charter Growth Capital
βββ ββββββββββ ββββββ, βββββ ββββ
ββββ ββββ, ββ βββββ
βββ βββββββββ
βββ ββββββ βββββ
βββββ ββββ, ββ βββββ
General Electric Capital Corporation
βββ ββββ βββββ ββββ
ββββββββ, ββ βββββ
Attn: ββ. βββββ Case
8.