EXHIBIT 10.5
INTERVIDEO, INC.
AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT
July 2, 1999
INTERVIDEO, INC.
AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
TABLE OF CONTENTS
1. CERTAIN DEFINITIONS ............................................... 1
1.1 "1934 Act" ............................................... 1
1.2 "Affiliate" .............................................. 1
1.3 "Commission" ............................................. 2
1.4 "Common Stock" ........................................... 2
1.5 "Conversion Shares" ...................................... 2
1.6 "Holder" or "Holders" .................................... 2
1.7 "Preferred Agreement" .................................... 2
1.8 "Preferred Stock" ........................................ 2
1.9 "Register", "Registered" and "Registration" .............. 2
1.10 "Registrable Securities" ................................. 2
1.11 "Registration Expenses" .................................. 2
1.12 "Restricted Securities" .................................. 2
1.13 "Securities" ............................................. 2
1.14 "Securities Act" ......................................... 2
1.15 "Selling Expenses" ....................................... 3
2. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
COMPLIANCE WITH SECURITIES ACT .................................... 3
2.1 Restrictions on Transferability .......................... 3
2.2 Restrictive Legend ....................................... 3
2.3 Notice of Proposed Transfers ............................. 3
2.4 Company Registration ..................................... 4
2.5 S-3 Registrations ........................................ 5
2.6 Expenses of Registration ................................. 5
2.7 Registration Procedures .................................. 6
2.8 Indemnification .......................................... 6
2.9 Information by Holder .................................... 7
2.10 Rule 144 Reporting ....................................... 7
2.11 Assignment of Registration Rights ........................ 8
2.12 Termination of Registration Rights ....................... 8
2.13 "Market Stand-Off" Agreement ............................. 8
3. NEW ISSUANCE RIGHT OF FIRST REFUSAL ............................... 9
3.1 Right .................................................... 9
3.2 Notification ............................................. 9
3.3 Waiver ................................................... 9
3.4 Issuance ................................................. 10
3.5 Excluded Securities ...................................... 10
3.6 Termination .............................................. 10
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3.7 Assignment ................................................... 10
4. FINANCIAL INFORMATION ............................................... 10
4.1 Financial Information ........................................ 10
4.2 Operating Plan ............................................... 11
4.3 Visitation Rights ............................................ 11
4.4 Assignment ................................................... 11
4.5 Termination .................................................. 11
5. MISCELLANEOUS ....................................................... 12
5.1 Governing Law ................................................ 12
5.2 Survival ..................................................... 12
5.3 Successors and Assigns ....................................... 12
5.4 Entire Agreement; Amendment .................................. 12
5.5 Notices, Etc ................................................. 12
5.6 Delay or Omissions ........................................... 12
5.7 Expenses ..................................................... 13
5.8 Counterparts ................................................. 13
5.9 Severability ................................................. 13
EXHIBIT A
PREFERRED INVESTORS ................................................. 14
ii
INTERVIDEO, INC.
AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
This Amended and Restated Investors Rights Agreement is made as of
July 2, 1999 (the "Agreement") by and among InterVideo, Inc., a California
corporation (the "Company"), and each of the persons listed on Exhibit A to this
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Agreement (the "Investors" or the "Holders").
RECITALS
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A. The Company and certain of the Investors (the "Existing Holders")
have previously entered into an Investors Rights Agreement dated as of June 29,
1998 and Amendment No.1 to the Investors Rights Agreement dated July 29, 1998,
providing certain registration and other rights to the Existing Investors (the
"Prior Agreement").
B. The Company desires to sell and issue to certain Investors (the
"Additional Investors") and the Additional Investors desire to purchase up to an
aggregate of 2,000,000 shares of Series C Preferred Stock (the "Shares") of the
Company pursuant to the Preferred Agreement (as defined herein).
C. To induce the Additional Investors to purchase shares of Series C
Preferred Stock of the Company pursuant to the Preferred Agreement, the Company
and the Existing Investors desire that the Company grant to the Additional
Investors the registration and other rights set forth herein, and further desire
to amend and restate the Prior Agreement as set forth below.
D. The Company and all Investors agree that this Agreement will govern
the registration and other rights of all Investors.
In consideration of the foregoing and the promises and covenants
contained herein, the parties agree as follows:
SECTION 1
CERTAIN DEFINITIONS
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As used in this Agreement the following terms shall have the following
respective meanings:
1.1 "1934 Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
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1.2 "Affiliate" shall mean any entity who is controlled by, who
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controls or who is under common control with a person.
1.3 "Commission" shall mean the Securities and Exchange Commission or
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any other federal agency at the time administering the Securities Act.
1.4 "Common Stock" shall mean the Common Stock of the Company.
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1.5 "Conversion Shares" means the Common Stock issued or issuable upon
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conversion of the Preferred Stock.
1.6 "Holder" or "Holders" shall mean any person or persons owning or
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having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 2 hereof.
1.7 "Preferred Agreement" shall collectively mean Preferred Stock
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Subscription Agreements among the Company and the Investors under such
subscription agreements.
1.8 "Preferred Stock" shall mean shares of the Company's Preferred
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Stock issued pursuant to the Preferred Agreement.
1.9 "Register", "Registered" and "Registration" refer to a
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registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
1.10 "Registrable Securities" shall mean (i) Conversion Shares and (ii)
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any Common Stock issued in respect of, in exchange for or in replacement of the
Conversion Shares or other securities issued pursuant to the conversion of the
Preferred Stock upon any stock split, stock combination, stock dividend,
recapitalization, consolidation or similar event. Securities previously sold to
the public pursuant to a registered public offering or Rule 144 of the
Securities Act shall cease to be Registrable Securities.
1.11 "Registration Expenses" shall mean all expenses incurred in
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complying with registrations, filings or qualifications under Sections 2.4 and
2.5 hereof, including, without limitation, all registration, qualification and
filing fees, accounting fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company and Selling
Expenses).
1.12 "Restricted Securities" shall mean the securities of the Company
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required to bear the legend set forth in Section 2.2 hereof (or any similar
legend).
1.13 "Securities" shall mean (i) the Company's equity or debt
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securities, (ii) rights, options or warrants to subscribe for, purchase or
otherwise acquire any equity or debt security of the Company and (iii) any
agreement or commitment to issue any of the foregoing.
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1.14 "Securities Act" shall mean the Securities Act of 1933, as
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amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.15 "Selling Expenses" shall mean all underwriting discounts and
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selling commissions applicable to the sale and all fees and disbursements of
counsel for any Holder.
SECTION 2
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
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COMPLIANCE WITH SECURITIES ACT
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2.1 Restrictions on Transferability. The Preferred Stock and the
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Conversion Shares shall not be transferable except upon the conditions specified
in this Section 2, which conditions are intended to ensure compliance with the
provisions of the Securities Act, or, in the case of Section 2.13 hereof, to
assist in an orderly distribution. Each Investor will cause any proposed
transferee of the Preferred Stock and the Conversion Shares held by such
Investor to agree to take and hold such securities subject to the provisions and
upon the conditions specified in this Section 2 (including the "market
stand-off" provisions of Section 2.13).
2.2 Restrictive Legend. Each certificate representing (i) the
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Preferred Stock, (ii) Conversion Shares and (iii) any other securities issued in
respect of the Preferred Stock or Conversion Shares or Common Stock issuable
upon any stock split, stock combination, stock dividend, recapitalization,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 2.3 below) be stamped or otherwise imprinted with a legend
in substantially the following form (in addition to any legend required under
applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE
AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICE.
2.3 Notice of Proposed Transfers. The holder of each certificate
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representing Restricted Securities agrees to comply in all respects with the
provisions of this Section 2.3. Prior to any proposed transfer of any Restricted
Securities (unless there is in effect a registration statement under the
Securities Act covering the proposed transfer), the holder thereof shall give
written notice to the Company of such holder's intention to effect such
transfer. Each such notice
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shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and (except in transactions in compliance with Rule 144)
shall be accompanied by either (i) a written opinion of legal counsel who shall
be reasonably satisfactory to the Company addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act, or (ii) a "no action" letter from
the Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the holder to the
Company. Each certificate evidencing the Restricted Securities transferred
pursuant to the above shall bear the legend set forth in Section 2.2 above,
except that such certificate shall not bear such restrictive legend, if in the
opinion of counsel for the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act.
2.4 Company Registration.
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(a) Registration. If at any time or from time to time, the Company
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shall determine to register any of its securities, either for its own account or
the account of a security holder or holders exercising their respective demand
registration rights, other than (i) a registration on Form S-8 (or a similar or
successor form) relating solely to employee stock option, stock purchase or
other benefit plans, or (ii) a registration on Form S-4 (or similar or successor
form) relating solely to a Securities and Exchange Commission Rule 145
transaction, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within twenty (20) days after mailing of written notice by the
Company, by any Holder or Holders, except as set forth in Section 2.4(b) below.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.4(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.4 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
2.5, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
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the number of Registrable Securities to be included in the registration and
underwriting, on a pro rata basis based on the total number of securities
(including, without limitation, Registrable Securities) entitled to registration
pursuant to registration rights granted to the participating Holders by the
Company; provided, however, that no such reduction may reduce the number of
securities being sold by the Company for its own account. The number of
securities includable by any Holder or other person may, in the discretion of
the underwriters, be rounded to the nearest one hundred (100) shares. No
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration.
If the underwriter has not limited the number of shares to be
underwritten for the Company's account and the account of the Holders, the
Company may include securities for the account of employees, officers, directors
and consultants.
2.5 S-3 Registrations. If the Company is requested (and qualifies
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under applicable SEC rules) to undertake a Form S-3 or equivalent short-form
registration, regardless of its designation, and any related qualification or
compliance, of its securities by the Holders of Registrable Securities holding
in aggregate at least 2% of the Company's Common Stock for an offering estimated
to result in aggregate offering proceeds of at least $500,000, net of
allowances, discounts, and underwriting expenses, the Company shall promptly
give notice of such proposed registration to all Holders of Registrable
Securities and the Company shall, as expeditiously as possible, use its best
efforts to effect the registration on Form S-3 of the Registerable Securities
which the Company has been requested to register (i) in each request and (ii) in
any response given within twenty (20) days to a notice from the Company pursuant
to this Section 2.5. Notwithstanding the foregoing, however, such registration
shall be subject to the following:
(a) The Company shall not be required to effect more than one such
registration pursuant to this Section 2.5 in any 12 month period.
(b) The Company shall not be required to effect a registration
pursuant to this Section 2.5 within one hundred eighty (180) days of the
effective date of any registration referred to in Section 2.4.
The Company may include in the registration under this Section 2.5 any
other shares of Common Stock (including issued and outstanding shares of Common
Stock as to which the holders thereof have contracted with the Company for
"piggyback" registration rights) so long as the inclusion in such registration
of such shares will not, in the opinion of the managing underwriter (or in the
reasonable opinion of the Company in the event that the offering is not
underwritten), interfere with the successful marketing in accordance with the
intended method of sale or other disposition of all the shares of Registrable
Securities sought to be registered by the Holder or Holders of Registrable
Securities pursuant to this Section 2.5. If it is determined as provided above
that there will be such interference, the other shares of Common Stock sought to
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be included by the Company shall be excluded to the extent deemed necessary by
the managing underwriter (or the Company if the offering is not underwritten),
and all other shares of Common Stock held by other parties shall be excluded
before the exclusion of any shares of Registrable Securities held by the Holders
who desire to have their shares included in the registration and offering. If,
as contemplated above, and after excluding all other shares of Common Stock held
by other parties, shares of the Common Stock of the Holders are to be excluded,
the number of shares of Common Stock of each participating Holder which are to
be excluded shall be proportionate to the number of shares which such party is
seeking to register.
2.6 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company; and, unless otherwise stated, all
Selling Expenses relating to securities registered by the Holders shall be borne
by the Holders of such securities pro rata on the basis of the number of shares
so registered.
2.7 Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Keep such registration, qualification or compliance effective for
a period of one hundred twenty (120) days or until the Holder or Holders have
completed the distribution described in the registration statement relating
thereto, whichever first occurs; and
(b) Furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request.
2.8 Indemnification.
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(a) The Company will, and does hereby undertake to, indemnify and hold
harmless each Holder, each of its officers, directors and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and liabilities
(or actions in respect thereof), including settlement of any litigation,
commenced or threatened, to which they may become subject under the Securities
Act, the 1934 Act, or other federal or state law, arising out of or based on
compliance with, any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus (preliminary
or final), offering circular or other document or amendments thereto, or arising
out of or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or arising out of or any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each person
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controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument executed by such Holder or
underwriter expressly for use in connection with such registration.
(b) Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors and officers, agents and employees, each underwriter, if any, of
the Company's securities covered by such a registration statement, each person
who controls the Company or such underwriter within the meaning of Section 15 of
the Securities Act, and each other such Holder, each of its officers, directors
and partners and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof to which they may become subject)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document, or amendments thereto, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
in light of the circumstances in which they were made, or necessary to make the
statements therein, not misleading, and will reimburse the Company, such
Holders, such directors, officers, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument executed by such Holder expressly for use in connection
with such registration; provided, however, that the obligations of such Holders
hereunder shall be limited to an amount equal to the proceeds to each such
Holder of Registrable Securities from the sale of such Registrable Securities as
contemplated herein.
(c) Each party entitled to indemnification under this Section 2.8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
deliver written notice to the Indemnifying Party of commencement thereof. The
Indemnifying Party, at its sole option, may participate in or assume the defense
of any such claim or any litigation resulting therefrom with counsel reasonably
satisfactory to the Indemnified Party, and the Indemnified Party may participate
in such defense at Indemnified Party's expense. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Section 2 except to the extent that such failure
to give notice shall materially adversely affect the Indemnifying Party in the
defense of any such litigation. 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
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term a release from all liability in respect to such claim or litigation by
the claimant or plaintiff to such Indemnified Party.
2.9 Information by Holder. Each Holder of Registrable Securities
---------------------
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this Section
2.
2.10 Rule 144 Reporting. With a view to making available the benefits
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of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, the
Company agrees to:
(a) Register its Common Stock under Section 12(g) of the 1934 Act, as
amended, as soon as practicable, but in any event not later than ninety (90)
days after the close of the Company's first fiscal year following the effective
date of the first registration statement filed by the Company, relating to a
public offering other than to employees of the Company under an employee option
plan or employee stock purchase plan;
(b) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
(c) Will file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the 1934
Act (at any time after it has become subject to such reporting requirements);
and
(d) Furnish to the Holder, so long as Holder owns any Restricted
Securities, written notice of the Company's qualification as a registrant, as
soon as practicable after the such qualification; the Company further shall
furnish forthwith upon request a written statement as to its compliance with the
reporting requirements of said Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public), and of its
compliance with the Securities Act and the Securities Exchange Act (at any time
after it has become subject to such reporting requirements); the Company shall
provide forthwith upon written request a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as Purchaser may reasonably request in availing itself of any rule or
regulation of the Commission allowing Purchaser to sell any such securities
without registration.
2.11 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register securities and related rights granted each Investor under
Section 2 may not be assigned except: (i) to a purchaser of more than 200,000
shares of the Common Stock (as determined in the manner contemplated by Section
3.1(b) below) purchased by an Investor, (ii) to a successor entity to an
Investor pursuant to a reorganization or recapitalization of an Investor, (iii)
to an Affiliate, (iv) to the partners of an Investor (provided that such holder
owns at least 200,000
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shares following such distribution) or (v) pursuant to an intervivos
transfer to Investor's ancestors or descendants or spouse or to a trustee for
their benefit; provided, that the Company receives notice within twenty (20)
days following such assignment.
2.12 Termination of Registration Rights. The registration rights and
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related rights granted pursuant to Section 2 shall terminate as to each Holder
(and permitted transferee under Section 2.12 above) upon the occurrence of any
of the following:
(a) Following the Company's first registered offering to the public,
at such time as all Restricted Securities held by such Investor or permitted
transferee can be sold within a given six (6) month period without compliance
with the registration requirements of the Securities Act pursuant to Rule 144
(or its successor provision); or
(b) Eight (8) years from the date of this Agreement.
2.13 "Market Stand-Off" Agreement. Any Holder of more than one percent
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(1%) of the outstanding Common Stock of the Company (determined in the manner of
Section 3.1(b)), if required by the Company and an underwriter of Common Stock
(or other securities) of the Company, shall agree not to sell or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by such Holder during the period not to exceed one hundred and eighty (180)
days as requested by the managing underwriter following the effective date of
the first registration statement of the Company filed under the Securities Act,
provided that all officers, directors of the Company and holders of one percent
(1%) or more of the Company's outstanding shares enter into similar agreements.
Such agreement shall be in writing in the form satisfactory to the Company and
such underwriter. The Company may impose a stop-transfer instruction with
respect to the shares (or other securities) subject to the foregoing restriction
until the end of such period.
SECTION 3
NEW ISSUANCE RIGHT OF FIRST REFUSAL
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3.1 Right.
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(a) If, at any time prior to the expiration of the period set forth
in Section 3.6 below, the Company should desire to issue any Securities in a
transaction not registered under the Securities Act, it shall give each Investor
the first right to purchase such Investor's Pro Rata Share (as defined below),
of all of such Securities on the same terms and same price as the Company is
willing to sell such Securities to any other person. Such Investor's "Pro Rata
Share" of the Securities shall be equal to that percentage of the outstanding
Common Stock of the Company held by such Investor, on the date of the Company's
written notification referred to in Section 3.2 below.
(b) For purposes of this Section 3.1, the Common Stock of the Company
held by such Investor shall be adjusted for stock dividends, stock splits, stock
combinations, recapitalizations and the like, and shall be deemed to include
shares of Common Stock issued or
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issuable upon conversion of the Preferred Stock or any other stock of the
Company on an as-converted basis.
3.2 Notification. Prior to any sale or issuance by the Company of any
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Securities, the Company shall notify each Investor, in writing, of its intention
to sell and issue such securities, setting forth in reasonable detail the terms,
price and description under which it proposes to make such sale. Within fifteen
(15) days there after, Investor shall notify the Company whether Investor
exercises Investor's option and elects to purchase such Investor's Pro Rata
Share (or any part thereof) of the Securities so offered.
3.3 Waiver. If, within fifteen (15) days after the Company gives
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notice pursuant to Section 3.2 above, the Investor does not notify the Company
that such Investor desires to purchase all of its Pro Rata Share of the
Securities described in such notice upon the terms and conditions set forth
therein, the Company may, during a period of ninety (90) days following the end
of such fifteen (15) day period, sell and issue such Securities as to which
Investor does not indicate a desire to purchase to another person upon the same
terms and conditions as those set forth in the notice to Investor but at a price
at least as great as the price offered to the Investors; provided, that failure
by the Investor to exercise its option to purchase with respect to one offering,
sale and issuance shall not affect its option to purchase Securities in any
subsequent offering, sale and purchase. In the event the Company has not sold
the Securities, or entered into a binding agreement to sell the Securities,
within such ninety (90) day period, the Company shall not thereafter issue or
sell any Securities without first offering such securities to Investor in the
manner provided above.
3.4 Issuance. If an Investor gives the Company notice that such
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Investor desires to purchase any of the Securities offered by the Company,
payment for the Securities shall be by check or wire transfer, against delivery
of the Securities at the executive offices of the Company within ten (10) days
after giving the Company such notice, or if later, the closing date for the sale
of such Securities. The Company shall take all such action as may be required by
any regulatory authority in connection with the exercise by Investor of the
right to purchase Securities as set forth in this Section 3, but the right of an
Investor is subject to the Company's reasonable compliance with regulatory
requirements.
3.5 Excluded Securities. The right of first refusal contained in this
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Section 3 shall not apply to the following: (a) the issuance by the Company of
(i) up to 6,000,000 shares of Common Stock to officers, directors, or employees
of, or consultants or contractors to, the Company pursuant to a stock grant,
option plan or purchase plan or other stock incentive program approved by the
Company's Board of Directors of such person, (ii) any shares held by employees
or consultants which were repurchased and reissued by the Company and (iii) any
additional shares unanimously approved by the Board of Directors; (b) the
issuance of Securities in connection with the acquisition of a third party, by
merger, acquisition of more than fifty-one percent (51%) of the outstanding
shares or substantially all of the assets of such third party; (c) the issuance
of Common Stock of the Company upon conversion of the Preferred or upon
conversion or exercise of any security which was not subject to the right of
first refusal set forth in this Section 3 or for which the right of first
refusal was not exercised; or (d) the issuance of Securities pursuant to any
bank financing or leasing arrangements.
11
3.6 Termination. The right of first refusal contained in this Section
-----------
3 shall terminate as to an Investor upon the earlier of: (i) the time when such
Investor ceases to own 100,000 shares of Common Stock (determined in the manner
contemplated by Section 3.1(b) above); (ii) the closing of the Company's first
underwritten public offering registered under the Securities Act; or (iii) eight
(8) years after the date of this Agreement.
3.7 Assignment. The rights specified in this Section 3 may not be
----------
assigned except: (i) to a purchaser of more than 200,000 shares of Common Stock
(as determined in the manner contemplated by Section 3.1(b) above); (ii) to an
Affiliate; (iii) to a successor entity to an Investor pursuant to a
reorganization or recapitalization of an Investor; (iv) to the partners of an
Investor (provided that such holder owns at least 200,000 shares following such
distribution) or (v) pursuant to an intervivos transfer to Investor's ancestors
or descendants or spouse or to a trustee for their benefit; provided, that the
Company receives notice within twenty (20) days following such assignment.
SECTION 4
FINANCIAL INFORMATION
---------------------
4.1 Financial Information. The Company will mail the following
---------------------
reports to Investor:
(a) Within 90 days after the end of each fiscal year, consolidated
balance sheets of the Company and its subsidiaries, if any, as of the end of
such fiscal year, and consolidated statements of income and consolidated
statements of changes financial position of the Company and its subsidiaries, if
any, for such year, prepared in accordance with generally accepted accounting
principles, all in reasonable detail and audited by independent public
accountants selected by the Company; and
(b) As soon as practicable after the end of the first, second and
third quarterly accounting periods in each fiscal year, and in any event within
forty-fifty (45) days thereafter, consolidated balance sheets of the Company and
its subsidiaries, if any, as of the end of each such quarterly period, and
period and for the current fiscal year to day, prepared in accordance with
generally accepted accounting principles (without footnotes) together with a
comparison of such statements to the Company's operating plan then in effect to
be prepared under Section 4.2 and to the prior fiscal year, together with
operational and financial highlights.
4.2 Operating Plan. Within a reasonable time after the commencement
--------------
of each fiscal year, the Company will furnish Investor with the Company's budget
and operating plan (including projected balance sheets and profit and loss and
cash flow statements) for such fiscal year.
4.3 Visitation Rights. Investor shall have the right to visit and
-----------------
inspect any of the properties of the Company of any of its subsidiaries,
including its and their books of account, and to discuss its and their affairs,
finances and accounts with its and their officers, all at such
12
reasonable times and upon reasonable notice and as often as may be
reasonably requested; provided, however, that the Company shall not be required
at any time to disclose (i) any manufacturing or trade secret or secret process,
or any information or data classified by the United States government, or (ii)
other data the disclosure of which the Board of Directors of the Company
reasonably believes may adversely affect the business of the Company. All
confidential information obtained by Investor or its representative shall be
kept confidential, shall not be disclosed to any third party and shall not be
used by Investor for any purpose except for evaluation of Investor's equity
investment in the Company.
4.4 Assignment. The rights granted pursuant to Section 4.1, 4.2 and
----------
4.3 may be assigned by Investor (i) to a third party who acquires at least
200,000 shares of Common Stock of the Company (as adjusted for any stock splits,
consolidations and the like) from Investor and who is not a competitor, or
affiliated in any manner with a competitor, of the Company or (ii) to a
successor entity to Investor pursuant to a reorganization of Investor; provided
that the Company receives notice within twenty (20) days of such assignment.
4.5 Termination. The covenants set forth in Sections 4.1 through 4.3
-----------
shall terminate on and be of no further force or effect (i) upon the
consummation of the Company's sale of its Common Stock in an underwritten public
offering pursuant to an effective registration statement filed under the
Securities Act; or (ii) as to any Investor when such Investor no longer holds at
least 100,000 shares of Common Stock of the Company (determined in the amount of
Section 3.1(b)).
13
SECTION 5
MISCELLANEOUS
-------------
5.1 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California.
5.2 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive any investigation made by any Investor and
the closing of the transactions contemplated hereby.
5.3 Successors and Assigns. Except as otherwise 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.
5.4 Entire Agreement; Amendment.
---------------------------
(a) This Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. This Agreement may only be
amended or waived by a writing signed by all parties to this Agreement;
provided, however, that holders of a majority of the Preferred Stock and the
-------- -------
Conversion Shares held by the Investors acting together may waive or amend, on
behalf of all Investors, any provisions hereof benefitting Investors so long as
the effect thereof will be that all such Investors will be treated equally.
(b) The Company may add additional parties to this Agreement and to
Exhibit A under this Agreement who execute counterparts of, or agree to be bound
by, this Agreement, in connection with future Preferred Agreements, and such
parties shall be treated as Investors in all respects; provided, that the
Company shall provide prompt notice of such change to the Investors.
5.5 Notices, Etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to an Investor, at such Investor's address set forth on Exhibit
-------
A, or at such other address as Investor shall have furnished to the Company in
-
writing, or (b) if to any other holder of any Restricted Securities, at such
address as such holder shall have furnished the Company in writing, or, until
any such holder so furnishes an address to the Company, then to and at the
address of the last holder of such Restricted Securities who has so furnished an
address to the Company, or (c) if to the Company, one copy should be sent to its
address set forth on the cover page of this Agreement and addressed to the
attention of the Corporate Secretary, or at such other address as the Company
shall have furnished to the Investors. If notice is provided by mail, notice
shall be deemed to be given upon proper deposit in the mail (and if outside the
United States, sent by airmail).
5.6 Delay or Omissions. No delay or omission to exercise any right,
------------------
power or remedy accruing to any holder of any Restricted Securities upon any
breach or default of the
14
Company under this Agreement, shall impair any such right, power or remedy
of such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing or as provided in Section 4.5 of this
Agreement. All remedies, either under this Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
5.7 Expenses. Except as provided in Section 2, the Company and each
--------
Investor shall bear its own expenses and legal fees incurred on its behalf with
respect to this Agreement and the transactions contemplated hereby.
5.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which together shall constitute one instrument, and each of
which may be executed by less than all of the parties to this Agreement.
5.9 Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
The foregoing agreement is hereby executed as of the date first above
written.
INVESTORS: COMPANY:
INTERVIDEO, INC.
By:_______________________ By:____________________________
15
EXHIBIT A
PREFERRED INVESTORS
-------------------
Existing Holders:
----------------
Number of Number of Number of
Shares of Shares of Shares of
Name and Address Series A Preferred Series B Preferred Series C Preferred
---------------- -------------------- ------------------- ------------------
Spot Master Investment Limited 5,000,000
#3 ▇▇▇▇ ▇▇, ▇▇▇▇-▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ R.O.C.
Ming-▇▇▇ ▇▇▇▇ 800,000
▇▇. ▇▇-▇, ▇▇▇ ▇▇▇▇ ▇/▇▇/ ▇▇▇▇
▇▇▇▇-▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ R.O.C.
K. N. ▇▇▇▇▇ 200,000
▇▇▇, ▇▇. ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇-▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ R.O.C.
Additional Investors:
---------------------
Azam Corporation 75,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Leadtek Research Inc. 100,000
▇▇▇, ▇▇. ▇▇▇, ▇▇▇▇▇-▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇ City
Taipei Hsien, Taiwan, ROC
ATTN: K. S. ▇▇
▇▇▇▇▇▇ Holdings Limited 100,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Nichimen America, Inc. 100,000
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Richmond Holdings Global Limited 115,000
▇▇▇, ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇.▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, R.O.C.
16
Teraokakosan, Ltd. 12,500
▇-▇-▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 532-0033
ATTN: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chieh & ▇▇▇▇ ▇▇▇▇▇ Living Trust 50,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇▇
The ▇▇▇▇▇▇▇▇▇ Trust UDT 12/22/98 400,000
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇. ▇▇▇▇▇▇▇▇▇
Chen ▇▇▇ ▇▇▇▇▇ 50,000
▇▇, #▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇. ▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇.▇.
c/o ▇▇▇ ▇▇▇
-----------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
K. S. Chay 50,000
203 Wing ▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 50,000
▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ Hua 25,000
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 25,000
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇,
▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ 659-0011
Yoichi Kuga 12,500
8-1 Krekawa-cho,
Ahiya-shi
Hyogo, Japan 659-0051
▇▇▇▇▇ ▇▇▇▇▇▇ 12,500
▇-▇-▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 545-0053
▇▇▇▇▇ ▇▇▇▇ 12,500
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ 659-0011
17
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ 12,500
▇-▇▇ ▇▇▇▇▇▇-▇▇▇,
▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ 659-0096
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 12,500
▇-▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ 531-0071
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 25,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ 50,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇ 35,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ #▇▇, ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇
c/o ▇▇▇▇▇▇▇ ▇▇▇
---------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Nichmen Electronic Components Corporation
▇▇▇▇▇▇ ▇▇▇▇., ▇▇, ▇-▇,
▇▇▇▇▇▇▇ 1-chome
▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇
18
INTERVIDEO, INC.
AMENDMENT NO. 1 TO THE AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT
This Amendment No. 1 (the "Amendment") to the Amended and Restated
Investor's Rights Agreement dated as of July 2, 1999 (the "Agreement"), attached
as Exhibit I, is made as of this ______ day of March 2000 by and among
---------
InterVideo, Inc., a California corporation (the "Company"), the persons listed
on Exhibit A to the Agreement under the captions "Existing Holders" and
---------
"Additional Investors" (collectively, the "Existing Investors"), and the
additional individuals and/or entities listed on Exhibit II (the "New
----------
Investors"). The New Investors and the Existing Investors are collectively
referred to as "Investors" for the purposes of the Agreement, as amended.
RECITALS
--------
A. The Company desires for those New Investors listed on Exhibit II under
----------
the caption "New Investors" to purchase the Company's Series D Preferred Stock
pursuant to the Series D Preferred Stock Purchase Agreement of even date (as
defined herein).
B. As a condition thereof and to induce such investment, the Company and
the Existing Investors are willing to enter into this Agreement.
In consideration of the foregoing premises and the promises and covenants
contained herein, the parties agree as follows:
1. Additional Parties to the Agreement
-----------------------------------
The New Investors hereby enter into and become parties to the
Agreement. Exhibit A to the Agreement is amended to include the New Investors on
---------
Exhibit II to this Amendment and to add the number of shares of Preferred Stock
----------
pursuant to this Amendment for all Investors.
2. Waiver
------
With regard to the Series D Preferred Financing in connection with
which this Amendment No. 1 is being executed, the Existing Investors executing
this Amendment No. 1, on behalf of all Existing Investors, hereby waive notice
and compliance by the Company of the provisions under Section 3 of the
Agreement.
3. Effect of Amendment
-------------------
Section 3.5 of the Agreement is amended by deleting the word "or" which
appears before subsection (d) and adding the following at the end of subsection
(d):
1
"or (e) the issuance of Securities pursuant to a joint venture,
research, development or product distribution agreement, licensing or a
strategic relationship approved by the Board of Directors."
Except as amended as set forth above, the Agreement shall continue in
full force and effect.
4. Counterparts
------------
This Amendment may be executed in any number of counterparts, all of
which together shall constitute one instrument, and each of which may be
executed by less than all of the Investors, each of which shall be enforceable
against Company and all Investors once this Amendment has been executed by the
Company, the Existing Investors holding a majority of the shares listed on
Exhibit A to the Agreement, and all of the New Investors listed on Exhibit II to
--------- ----------
this Amendment.
This Amendment is hereby executed as of the date first above written.
EXISTING INVESTOR: COMPANY:
_______________________________ INTERVIDEO, INC.
By:____________________________ By:______________________________
Title:_________________________ Title:___________________________
_______________________________
Print Investor Name
NEW INVESTOR:
By:____________________________
Title:_________________________
_______________________________
Print Investor Name
2
EXHIBIT I
---------
AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
3
EXHIBIT II
----------
NEW INVESTORS
--------------------------------------------------------------------------------
Name Shares
Issued
================================================================================
Cardamon Class Ltd. 250,000
--------------------------------------------------------------------------------
Wei Min ▇▇▇▇▇ 10,000
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ 20,000
--------------------------------------------------------------------------------
Chen ▇▇-▇▇▇▇ 25,000
--------------------------------------------------------------------------------
Cheng, ▇▇▇ ▇▇▇▇ 25,000
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 20,000
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ 5,000
--------------------------------------------------------------------------------
Concord III Venture Capital 50,000
--------------------------------------------------------------------------------
Concord VI Venture Capital Co., Ltd. 50,000
--------------------------------------------------------------------------------
Concord II Venture Capital Co., Ltd. 50,000
--------------------------------------------------------------------------------
Concord IV Venture Co., Ltd. 50,000
--------------------------------------------------------------------------------
Concord VII Venture Capital Co., Ltd. 50,000
--------------------------------------------------------------------------------
Enrichment Venture Capital Corp. 150,000
--------------------------------------------------------------------------------
Fubon Venture Capital Co., Ltd. 75,000
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Asset Enterprises Ltd. 150,000
--------------------------------------------------------------------------------
Hanbase Technologies, Inc. 250,000
--------------------------------------------------------------------------------
Ho, Ai-Tang 25,000
--------------------------------------------------------------------------------
▇▇▇▇▇, ▇▇▇-▇▇▇▇ 10,000
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇ Ko 25,000
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ Ming 25,000
--------------------------------------------------------------------------------
Hung, ▇▇▇▇-▇▇▇ 25,000
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 25,000
--------------------------------------------------------------------------------
Kan ▇▇▇▇ ▇▇▇▇▇▇ 37,500
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
Name Shares
Issued
================================================================================
▇▇▇▇▇▇ ▇▇▇▇ 37,500
--------------------------------------------------------------------------------
▇▇▇ ▇▇▇-Yuan 5,000
--------------------------------------------------------------------------------
Ting-▇▇▇▇▇ ▇▇▇ 25,000
--------------------------------------------------------------------------------
▇▇▇, ▇▇▇▇▇-Ho 25,000
--------------------------------------------------------------------------------
▇▇▇-▇▇▇▇ ▇▇▇▇ 12,500
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10,000
--------------------------------------------------------------------------------
Sharming Lin 2,500
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇ ▇▇▇ DTD 4/21/97 25,000
--------------------------------------------------------------------------------
Liu, Bi-Lin 25,000
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇ 25,000
--------------------------------------------------------------------------------
Yu-▇▇▇▇▇ ▇▇▇ 10,000
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇.▇. Lok 12,500
--------------------------------------------------------------------------------
Cheng-▇▇▇▇▇ ▇▇ 10,000
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 62,500
--------------------------------------------------------------------------------
Minaji Hashimoto 25,000
--------------------------------------------------------------------------------
Naluwan Corporation 20,000
--------------------------------------------------------------------------------
NCTU Spring Venture Capital Co., Ltd. 75,000
--------------------------------------------------------------------------------
Chi-Lei Ni 20,000
--------------------------------------------------------------------------------
Nority Investment Limited 250,000
--------------------------------------------------------------------------------
Pai, Chin-Chih 36,250
--------------------------------------------------------------------------------
Chun ▇▇▇ ▇▇▇ 25,000
--------------------------------------------------------------------------------
Ping-▇▇▇ ▇▇▇▇ 10,000
--------------------------------------------------------------------------------
Phoenix International Management Holdings Limited 125,000
--------------------------------------------------------------------------------
Prodeal Investment Co., Ltd. 25,000
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ Raza and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Raza, Trustees 250,000
N & A Raza Revocable Trust UAD 3/22/97
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ 250,000
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
Name Shares
Issued
================================================================================
SinoStar Venture Capital Co., Ltd. 75,000
--------------------------------------------------------------------------------
The ▇▇▇▇▇▇▇▇▇ E. Trust, UDT 12/22/98 162,500
--------------------------------------------------------------------------------
Ta Ya Venture Capital Co., Ltd. 75,000
--------------------------------------------------------------------------------
Taiwan Special Opportunities Fund III 750,000
--------------------------------------------------------------------------------
TMO Investment Limited Partnership 25,000
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 12,500
--------------------------------------------------------------------------------
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ 25,000
--------------------------------------------------------------------------------
▇▇ ▇▇▇▇ Hwa 10,000
--------------------------------------------------------------------------------
Eng ▇▇▇ ▇▇ 25,000
--------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇ 25,000
--------------------------------------------------------------------------------
Her-▇▇▇▇▇ ▇▇ 12,500
--------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇ 25,000
--------------------------------------------------------------------------------
TOTAL 4,023,750
--------------------------------------------------------------------------------
6
